<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NORCAN VENTURES, INC.
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 6770 13-400420
- ------------------------------------------------------------------------------
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Identification No.)
incorporation Code Number)
or organization)
Suite 3132-595 Burrand Street, Vancouver, B.C. Canada V7X 1J1, (604) 609-6110
- ------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices and place of business)
Copy to:
Joseph Sierchio, Esq.
Sierchio & Albert, P.C.
41 East 57th Street, 39th Floor
New York, New York 10022
(212) 446-9500
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered
on a continuous or delayed basis pursuant to Rule 415 of the
Securities Act of 1933, check the following box [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
number the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Maximum Maximum Aggregate Amount of
Title of Each Class of Amount to be Offering Price Offering Registration
Securities to be Registered Registered Per Share(1) Price Fee(2)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value
per share 4,000,000 $.03 $120,000 $35.40
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) The shares will be offered and sold as follows: (a) by Mr. Gordon Keep, the
Company's President and sole director, who will not receive any
compensation or commissions with respect to such offers and sales, to the
extent such offers and sales are made to the Company's officers, directors,
stockholders and their affiliates; and (b) otherwise in (i) the United
States by registered broker/dealers or third parties not otherwise required
to register as broker/dealer under applicable federal and state securities
laws, and (ii)jurisdictions outside the United States by brokers/dealers
registered in such jurisdictions or other third parties otherwise permitted
to offer and sell such securities under applicable local law. The Company
reserves the right to pay commissions and finders fees in an amount up to
5% of the gross Offering proceeds in connection with any sales of shares
effected through or by such brokers/dealers and finders.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
CROSS REFERENCE SHEET
Furnished Pursuant to Item 501(b) of Regulation S-K
under the Securities Act of 1933, as amended
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION
IN REGISTRATION STATEMENT CAPTION IN PROSPECTUS
- ------------------------- ---------------------
<S> <C>
1. Forepart of the Registration Statement and Front of Registration Statement;
Outside Front Cover Page of Prospectus Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus Inside Front and Outside Back Cover Pages
3. Summary Information and Risk Factors Prospectus Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Cover Page; Determination of Offering
Price
6. Dilution; Risk Factors Dilution; Risk Factors
7. Selling Security Holders Not Applicable
8. Plan of Distribution Cover Page; Distribution of Securities
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers, Directors, Executive Officers,
Promoters and Controlling Persons Promoters and Controlling Persons
11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts and Counsel Legal Opinions; Experts
14. Disclosure of Commission's Distribution of Securities
Position on Indemnification of
Securities Act Liabilities
15. Organization within Last Five Years The Company; Plan of Operation; Risk Factors
16. Description of Business Plan of Operation
17. Management's Discussion and Plan of Operation
Analysis or Plan of Operation
18. Description of Property Proposed Business
19. Certain Relationships and Certain Transactions
Related Transactions
20. Market for Common Equity Cover Page; Description of Securities; and
Related Stockholder Matters Risk Factors
21. Executive Compensation Directors, Executive Officers,
Promoters and Control Persons
22. Financial Statements Financial Statements
23. Changes in and Disagreements Not Applicable
with Accountants on Accounting
and Financial Disclosure
</TABLE>
<PAGE> 3
PROSPECTUS
NORCAN VENTURES, INC.
(A DELAWARE CORPORATION)
THE OFFER AND SALE OF UP TO 4,000,000 SHARES OF COMMON STOCK
OFFERING PRICE - $.03 PER SHARE
Norcan Ventures, Inc. (the "Company") is a recently organized corporation,
formed for the purpose of acquiring or merging with an unspecified operating
business. As such, the Company is a blank check company as defined in Rule 419
of Regulation C ("Rule 419") as promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus relates to the offer and sale by the Company of a
maximum of 4,000,000 and a minimum of 1,000,000 Shares (the "Shares") of common
stock, $.001 par value ("Common Stock"). SEE "DESCRIPTION OF SECURITIES."
THIS BLANK CHECK OFFERING IS SUBJECT TO THE PROVISIONS OF RULE 419.
ACCORDINGLY, THE OFFERING PROCEEDS AND THE SECURITIES PURCHASED BY INVESTORS
(RESPECTIVELY, THE "DEPOSITED FUNDS" AND "DEPOSITED SECURITIES"), LESS 10% OF
THE DEPOSITED FUNDS, WHICH WILL BE DELIVERED TO THE COMPANY AS PERMITTED BY RULE
419, WILL BE HELD IN ESCROW (THE "RULE 419 ESCROW") SUBJECT TO THE SATISFACTION
OF THE PROVISIONS OF THE RULE 419 ESCROW.
The Deposited Funds and the Deposited Securities may not be released until
an acquisition meeting certain specified criteria has been made and a sufficient
number of investors reconfirm their investment in accordance with the procedures
set forth in Rule 419. Pursuant to Rule 419, a new prospectus (the "Re-Offer
Prospectus"), which describes an acquisition candidate and its business and
includes audited financial statements, will be delivered to all investors prior
to consummation of an acquisition. Unless a sufficient number of investors
(representing at least 80% of the maximum Offering Proceeds) elect to remain
investors, all investors will be entitled to the return of a pro-rata portion of
the Deposited Funds (and any interest earned or dividends paid thereon) and none
of the Deposited Securities will be issued to investors. If a sufficient number
of investors elect to remain investors the acquisition described in the Re-Offer
Prospectus will be consummated; however, the Company must return the pro-rata
portion of the Deposited Funds (and any interest earned or dividends paid
thereon) to any investor who does not elect to remain an investor. In the event
an acquisition is not consummated within 18 months of the effective date of the
Registration Statement of which this prospectus is a part, the Deposited Funds
(and any interest earned or dividends paid thereon) will be returned on a
pro-rata basis to all investors. SEE "INVESTORS' RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419."
------------------------
THESE SECURITIES ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND
IMMEDIATE SUBSTANTIAL DILUTION. SEE "RISK FACTORS"
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Price to the Maximum Proceeds to the
Public (1) Commissions (1) Company (2)(3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share
Total - 1,000,000 Shares (Minimum) $ .03 $ .0015 $ .03
4,000,000 (Maximum) 30,000.00 1,500.00 28,500.00
120,000.00 6,000.00 114,000.00
- ---------------------------------------------------------------------------------------------
</TABLE>
(See notes on following page)
-------------------
The date of this Prospectus is , 1998
<PAGE> 4
(Footnotes for cover page)
(1) The Shares are being offered (the "Offering" or "Blank Check Offering")
directly by the Company on a "best efforts, all or none basis" with
respect to the first 1,000,000 Shares and on a "best efforts basis" with
respect to the remaining 3,000,000 Shares. Proceeds of the offering will
be held in escrow pursuant to the terms of the Rule 419 Escrow (as defined
below). SEE "DISTRIBUTION OF SECURITIES."
Unless at least 1,000,000 Shares are sold within 150 days of the date of
this Prospectus, which period may be extended for an additional 30 days
(collectively, the "Offering Period"), in the sole discretion of the
Company, the Offering will terminate and all funds theretofore received
from subscribers will be promptly returned (along with any interest earned
or dividends paid thereon). Therefore, in the event that the minimum
number of Shares is not sold, prospective investors' funds may be held in
escrow for as long as 180 days before they are returned by the Escrow
Agent.
The terms of the Escrow Agreement which have been included therein to
comply with Rule 419 (the "Rule 419 Escrow Provisions") will govern the
treatment of the Shares purchased by investors and the investors's funds
tendered in payment thereof. Pursuant to the Rule 419 Escrow Provisions,
the certificates evidencing the Shares will be promptly deposited into the
Rule 419 Escrow upon issuance. The proceeds of the Offering, after payment
of commissions and finders fees and the release to the Company of an
amount equal to 10%, on an aggregate basis, of the remaining proceeds of
the Offering (up to an aggregate of $11,400 if the maximum number of
Shares is sold), will remain deposited in the Rule 419 Escrow pending (i)
consummation of an acquisition in accordance with Rule 419 or (ii) the
expenditure of 18 months from the date of this Prospectus. SEE "INVESTORS'
RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419." Consequently, as the
Company may be paying commissions of up to 5% of the gross proceeds of the
Offering with respect to the offer and sale of Shares, after delivery to
the Company of 10% of the proceeds, as permitted by Rule 419, the net
amount to be maintained in the Rule 419 Escrow is $25,650 if the minimum
number of Shares is sold and $102,600 if the maximum number of Shares is
sold (plus any interest earned or dividends paid thereon). SEE "NOTE 3"
BELOW.
(2) All offers and sales of Shares will be effected as follows: (a) by Mr.
Keep, the Company's President and sole director, to the extent such offers
and sales are directed to the Company's officers, directors, stockholders
and their respective affiliates (the "Related Group"); and (b) otherwise
in (i) the United States by registered broker/dealers or third parties not
otherwise required to register as broker/dealer under applicable federal
and state securities laws, and (ii)jurisdictions outside the United
States, by brokers/dealers registered in such jurisdictions or other third
parties otherwise permitted to offer and sell such securities under
applicable local law. Mr. Keep will not receive any compensation for his
services in connection with the sales of Shares. However, the Company
reserves the right to pay commissions and finders fees in an amount up to
5% of the gross Offering proceeds in connection with any sales of shares
effected through registered brokers/dealers and/or finders otherwise
permitted to receive such compensation under applicable local laws. The
Company's officers and directors may, but are not obligated to, purchase
Shares on the same terms and conditions as all other investors. However,
any Shares purchased by the Company's officers and directors will not be
included in determining whether the minimum offering criteria has been
satisfied. However, Shares purchased by the Company's existing
stockholders and their affiliates (other than the Company's officers and
directors) will be included in determining whether the minimum offering
criteria has been satisfied. There is no minimum or maximum
2
<PAGE> 5
number of Shares that the officers and directors of the Company and/or
their affiliates including the Company's existing stockholders may
purchase. SEE "RISK FACTORS."
(3) To date the Company has incurred organizational costs of approximately
$500 and expects to incur filing, printing, legal, accounting and
miscellaneous expenses relating to the Offering estimated at $30,000. The
Company may pay up to 5% of the gross offering proceeds as commissions
and/or finders fees. Thus, if the Company pays full commissions and/or
finders fees in connection with the sales of shares effected through or by
broker/dealers and finders, the proceeds to the Company will be $28,500 if
the minimum number of Shares are sold and $114,000 if the maximum number
of Shares are sold. Ten (10%) percent of the Offering proceeds remaining
after payment of such commissions and fees ($2,850 if the minimum number
of Shares is sold and $11,400 if the maximum number of Shares is sold)
will be delivered to the Company and will be used to pay a portion of
these expenses. The balance of the expenses will be paid from the
Company's working capital derived from private placements of equity
securities previously consummated; or, if necessary, from borrowed funds
to the extent available to the Company on terms it deems acceptable. The
Company anticipates incurring additional expenses of approximately $40,000
to effectuate a Business Combination (as hereinafter defined) and to
prepare a post-effective amendment to the registration statement. SEE
"PLAN OF OPERATION."
3
<PAGE> 6
PROHIBITION AGAINST SELLING DEPOSITED SECURITIES
RULE 15g-8 PROMULGATED PURSUANT TO THE EXCHANGE ACT MAKES IT UNLAWFUL FOR ANY
PERSON TO SELL OR OFFER TO SELL THE DEPOSITED SECURITIES (OR ANY INTEREST IN OR
RELATED TO THE DEPOSITED SECURITIES). THUS, INVESTORS ARE PROHIBITED FROM MAKING
ANY ARRANGEMENTS TO SELL THE DEPOSITED SECURITIES UNTIL THEY ARE RELEASED FROM
THE ESCROW ACCOUNT (SEE "RISK FACTORS - "PROHIBITIONS PURSUANT TO RULE 15G-8
UNDER THE EXCHANGE ACT TO SELL OR OFFER TO SELL SHARES IN THE RULE 419 ACCOUNT.
Prior to this offering there has been no public market for the Shares. No
trading in the Shares can be effected during the term of the Rule 419 Escrow.
There can be no assurance that any trading market in the Shares will develop
hereafter or if it does develop, that it will be sustained. The Company has no
present plans, proposals, arrangements or understandings with any person with
regard to the development of a trading marking for the Shares of Common Stock
offered hereby.
The public offering price has been arbitrarily determined by the Company and
bears no relationship to the Company's assets, prospective earnings, book value
or any other recognized criteria of value. This offering will be conducted by
the Company without use of a professional underwriter or securities dealer. SEE
"RISK FACTORS" AND "DISTRIBUTION OF SECURITIES."
STATE SECURITIES REGULATION
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION.
THE COMPANY HAS FILED FORM M-11 WITH THE STATE OF NEW YORK REGISTERING THE
SHARES FOR OFFER AND SALE IN NEW YORK.
THE COMPANY WILL OFFER SHARES IN (i) THE STATE OF FLORIDA PURSUANT TO THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 517.061(11)(a) OF THE FLORIDA
SECURITIES ACT (ii) THE PROVINCE OF BRITISH COLUMBIA, CANADA PURSUANT TO THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 128(a) & (b) OF THE BRITISH
COLUMBIA SECURITIES RULES BC REG 194/97 AND (iii) CERTAIN OTHER NON US
JURISDICTIONS PURSUANT TO AVAILABLE EXEMPTIONS FROM REGISTRATION OF SECURITIES
IN SUCH JURISDICTIONS. PURCHASERS OF THE SHARES IN THIS OFFERING MUST BE
RESIDENTS OF SUCH JURISDICTIONS. THE FOREIGN JURISDICTIONS OTHER THAN CANADA IN
WHICH THE COMPANY INTENDS TO OFFER ITS SECURITIES ARE NOT PRESENTLY KNOWN. PRIOR
TO EFFECTING ANY SALES OF THE SHARES IN ANY JURISDICTION OTHER THAN FLORIDA, NEW
YORK, OR BRITISH COLUMBIA, CANADA, THE COMPANY WILL AMEND THIS PROSPECTUS FOR
THE PURPOSE OF DISCLOSING SUCH ADDITIONAL JURISDICTIONS.
PROSPECTIVE INVESTORS RESIDING IN THE STATE OF FLORIDA SHOULD NOTE THAT THE
SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT AND ARE BEING
OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION
4
<PAGE> 7
THEREUNDER AFFORDED BY SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES ACT. IN
THE EVENT THAT SALES ARE MADE TO FIVE (5) OR MORE PERSONS IN THE STATE OF
FLORIDA PURSUANT TO THE EXEMPTION FOR LIMITED OFFERS OR SALES OF SECURITIES SET
FORTH IN SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES ACT AND INVESTOR
PROTECTION ACT, ANY SALE IN FLORIDA MADE PURSUANT TO SUCH SECTION IS VOIDABLE BY
THE PURCHASER IN SUCH SALE EITHER WITHIN THREE (3) DAYS AFTER THE FIRST TENDER
OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE COMPANY, AN AGENT OF THE
COMPANY, OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF
THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER. TO
ACCOMPLISH THIS, IT IS SUFFICIENT FOR A FLORIDA INVESTOR TO SEND A LETTER OR
TELEGRAM TO THE COMPANY WITHIN SUCH THREE (3) DAY PERIOD STATING THAT IT IS
VOIDING AND RESCINDING THE PURCHASE. IF AN INVESTOR SENDS SUCH A LETTER, IT IS
PRUDENT TO DO SO BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO INSURE THAT THE
LETTER IS RECEIVED AND TO EVIDENCE THE TIME OF MAILING.
--------------
THE SHARES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER,
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY OFFER IN WHOLE OR
IN PART, FOR THE PURCHASE OF ANY OF THE SHARES OFFERED HEREBY.
5
<PAGE> 8
IN ORDER TO SUBSCRIBE FOR SHARES, A SUBSCRIPTION APPLICATION IN THE FORM
ATTACHED TO THIS PROSPECTUS AND A CHECK MADE PAYABLE TO THE FIRSTRUST SAVINGS
BANK AS ESCROW AGENT AND FORWARDED ALONG WITH THE SUBSCRIPTION AGREEMENT TO THE
COMPANY AT 3123-595 BURRAND STREET, VANCOUVER, B.C. CANADA V7X 1J1.
AVAILABLE INFORMATION
The Company intends to furnish to its stockholders annual reports containing
financial statements audited and reported upon by its independent public
accounting firm and intends to make available quarterly reports for the first
three quarters of each year containing unaudited financial information.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 (the "Registration
Statement") under the Securities Act with respect to the Shares. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and this
offering, reference is made to the Registration Statement, including the
exhibits filed therewith, which may be examined at the Commission's principal
office, Room 1024, 450 Fifth Street, N.W., Washington, D. C. 20549, the
Northeast Regional Office of the Commission at 7 World Trade Center, Suite 1300,
New York, New York 10048 and the Midwest Regional Office of the Commission,
Northwest Atrium, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 where copies may be obtained upon payment of the fees prescribed by
the Commission. Descriptions contained in this Prospectus as to the contents of
any contract or other documents filed as an exhibit to the Registration
Statement are not necessarily complete and each such description is qualified by
reference to such contract or document. The Company will provide without charge
to each person who receives a Prospectus, upon written request of such person, a
copy of any of the information that is incorporated by reference in the
Prospectus.
6
<PAGE> 9
PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS
AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND FINANCIAL
STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THE PROSPECTUS
AND IN THE REGISTRATION STATEMENT.
THE COMPANY
The Company was organized under the laws of the State of Delaware on April
8, 1998, under the name Norcan Ventures, Inc. for the purpose of acquiring or
merging with an unspecified operating business. As such, the Company is a "blank
check company" as defined in Rule 419. The Company, since its incorporation, has
not been engaged in any business activities, other than those described herein.
The Company intends to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination or acquisition (a "Business
Combination") with as yet an unidentified business entity (the "Acquired
Business"). Other than general corporate activities, including but not limited
to the negotiation and consummation of a Business Combination, the Company will
not engage in any substantive commercial business immediately following this
offering until such time as it has effected a Business Combination. The Company
has no plan, proposal, agreement, understanding or arrangement to acquire or
merge with any specific business or company and the Company has not identified
any specific business or company for investigation and evaluation. It is likely
that the Company will have the ability to effect only a single Business
Combination. None of the Company's officers and directors, their affiliates or
associates have had any preliminary contact or discussions and there are no
present plans, proposals, arrangements, or understandings with any
representative of the owners of any Acquired Business regarding the possibility
of a Business Combination.
The Company's officers and directors (collectively the "Management") do
not expect to become involved as management in the aforementioned businesses and
will hire presently unknown and unidentified individuals as management for the
aforementioned ventures. Management will have complete and absolute discretion
in selecting the business activities in which the Company will engage. No
assurance can be given that Management will be able to locate or acquire an
attractive business or property or that the Company will be able to operate or
acquire such on a profitable basis. The Company has not yet engaged in any
operations.
No assurance can be given that the net proceeds of the maximum offering of
this Blank Check Offering or any lesser net amount will be sufficient to
accomplish the Company's goals or that any Acquired Business will become
profitable. In the event that substantially less than the net proceeds from the
maximum offering are raised, the Company's plans may be materially and adversely
affected in that the Company may find it even more difficult, if not impossible,
to realize its goals. If such proceeds are insufficient, the Company may be
required to seek additional capital. No assurance can be given that the Company
will be able to obtain such additional capital, or even if available, that such
additional capital will be available on terms acceptable to the Company. In the
event that Management determines that the Company is unable to conduct any
business whatsoever, Management, subject to the requirements of Rule 419, which
provides that the Deposited Funds will be returned on a pro-rata basis if an
acquisition meeting certain prescribed criteria is not consummated within 18
months of the date of this Prospectus, will, in its sole discretion, seek
stockholder approval to liquidate the Company. In the event such a liquidation
were to occur at some point in time after the Company's compliance with the
provisions of Rule 419, all stockholders of the Company including those owning
shares purchased privately at less than the public offering price, will receive
the liquidated assets on a pro-rata basis (as opposed to being based
7
<PAGE> 10
on the amounts paid for such shares). While Management has not established any
guidelines for determining at what point in time it might elect to discontinue
its efforts to effectuate an acquisition, Management is subject to the 18 month
time frame set forth in Rule 419 in which to effect an acquisition.
The Company's address is 3123-595 Burrand Street, Vancouver B.C. Canada,
V7X 1J1.
THE OFFERING
The Offering is being conducted as a blank check offering in accordance
with Rule 419. A maximum of 4,000,000 and a minimum of 1,000,000 Shares are
being offered for sale hereby at a price of $.03 per Share. The Shares are
offered on an all or none basis with respect to the first 1,000,000 Shares and
on a best efforts basis as to the balance of the 4,000,000 Shares. To subscribe
for Shares, a Subscription Application in the form attached to this prospectus
and a check made payable to Firstrust Savings Bank, as Escrow Agent should be
forwarded to the Company at 3123-595 Burrand Street, Vancouver B.C., Canada V7X
1J1. All offers and sales of Shares will be effected as follows: (a) by Mr.
Gordon Keep to the extent such offers and sales are made to the Company's
officers, directors, stockholders and their affiliates; and (b) otherwise (i) in
the United States, by registered broker/dealers or third parties not otherwise
required to register as broker/dealer under applicable federal and state
securities laws, and (ii) in jurisdictions outside the United States, by
brokers/dealers registered in such jurisdictions or other third parties
otherwise permitted to offer and sell such securities under applicable local
law. Mr. Keep will not receive any compensation or commissions with respect to
any offers and sales except for reimbursement for reasonable expenses incurred
on behalf of the Company. The Company, however, reserves the right to pay
commissions and finders fees in an amount up to 5% of the gross offering
proceeds in connection with any sales of shares effected through registered
brokers/dealers and/or finders otherwise permitted to receive such compensation
under applicable local laws. Directors and officers of the Company may purchase
Shares on the same terms and conditions as all other investors; however, any
such purchases will not be included in calculating whether the minimum number of
Shares have been sold. However, Shares purchased by the Company's existing
stockholders and their affiliates (other than the Company's officers and
directors) will be included in determining whether the minimum offering criteria
has been satisfied.
Presently there are 1,000,000 shares of Common Stock issued and
outstanding; after the completion of this offering there may be a maximum of
5,000,000 shares and a minimum of 2,000,000 shares of Common Stock issued and
outstanding.
At the completion of this offering, the present officers and directors of
the Company will own approximately 1.0% of the then outstanding shares if the
maximum number of Shares is sold and 2.5% of the then outstanding shares if the
minimum number of Shares is sold and assuming they do not acquire any Shares in
the Offering.
The Company may, in its sole discretion, terminate the Offering at any
time prior to the sale of the minimum number of shares and thereafter conclude
the Offering prior to the sale of the maximum number of shares.
The Offering may be consummated upon the sale of at least 1,000,000 shares
for an aggregate price of $30,000. If the minimum number of Shares is not sold,
the proceeds (along with interest thereon) will be returned to the subscribers
in compliance with Rule 10b-9 of the Exchange Act.
8
<PAGE> 11
However, if the minimum number of shares is sold, the rights of the subscribers
to a return of the subscription proceeds (together with interest thereon) will
be governed by Rule 419. Accordingly, if only the minimum number of shares is
sold and the Company files a post-effective amendment with respect to the
Reconfirmation Offer, it is possible that if 80% in interest of the subscribers
reconfirm their investment, to the extent that there are subscribers who do not
reconfirm their investment, the Company may effect the Business Combination with
less than the minimum number of Shares having been released from the Rule 419
Escrow (and hence with less than the $30,000 minimum gross proceeds available to
the Company). SEE "RISK FACTORS - RETURN OF TOTAL SUBSCRIPTION AMOUNT NOT
GUARANTEED".
RULE 419
The Company, a blank check company, is conducting the Offering as a blank
check offering subject to compliance with the Rule 419. Under Rule 419,
investors have certain rights and will receive certain substantive protection.
Accordingly, the Deposited Securities and the Deposited Funds will be deposited
and held in Rule 419 Escrow until an acquisition meeting specific criteria is
completed. Before the acquisition can be completed and before the Deposited
Funds and Deposited Securities can be released from escrow, the Company is
required to amend the registration statement of which this Prospectus is part,
with a post-effective amendment, and within the 5 days after the effective date
thereof, the Company is required to furnish investors with the prospectus
produced thereby containing the terms of a reconfirmation offer (the
"Reconfirmation Offer") and information regarding the proposed acquisition
candidate and its business, including audited financial statements.
Pursuant to Rule 419, an investor must have no fewer than 20 and no more
than 45 business days from the effective date of the post-effective amendment to
decide to reconfirm his investment and remain an investor or alternately,
require the return of his investment (plus any interest earned or dividends paid
thereon), less any amounts delivered to the Company as permitted under Rule 419.
Any investor not making any decision within said 45 day period will
automatically have his investment funds returned within 5 business days. Rule
419 further provides that if the Company does not complete an acquisition
meeting the specified criteria within 18 months of the Effective Date, all of
the Deposited Funds (and any interest earned or dividends paid thereon) in the
Rule 419 Escrow must be returned to investors within 5 business days. If the
offering period is extended to its limit (180 days), the Company, will have only
12 months in which to consummate a merger or acquisition. SEE "INVESTORS' RIGHTS
AND SUBSTANTIVE PROTECTION UNDER RULE 419."
DETERMINATION OF OFFERING PRICE
The offering price of $.03 per Share has been arbitrarily determined by
the Company. This price bears no relation to the Company's assets, book value,
or any other customary investment criteria, including the Company's prior
operating history. Among the factors considered by the Company in determining
the offering price were estimates of the Company's business potential, the
limited financial resources of the Company, the amount of dilution to public
investors and the general conditions of the securities market.
RISK FACTORS
The Company is presently in the development stage and consequently has not
generated any income nor incurred any expenses except those incurred in its
formation and in connection with the
9
<PAGE> 12
Offering. The Company does not expect to receive any revenues from operations
until it consummates a Business Combination.
Accordingly, an investment in the securities of the Company is highly
speculative. Notwithstanding the substantive rights afforded investors by Rule
419, a purchase of shares involves extremely high risks, and potential investors
should carefully review the entire Prospectus and, particularly, the sections
relating to "RISK FACTORS," "DILUTION" and "USE OF PROCEEDS."
USE OF PROCEEDS
Under Rule 419, 10% of the net offering proceeds (after deducting maximum
commissions) may be, and in this instance will be, delivered to the Company;
said 10% of the net offering proceeds, up to an aggregate of $11,400 if the
maximum number of Shares is sold, will be used to defray the cost incurred in
connection with the Offering. Indeed, under Rule 419 underwriting commissions,
underwriting expenses and dealer allowances, if any, are deductible from the
offering proceeds. Up to an additional 5% of the gross offering proceeds may be
paid as commissions and/or finders fees.
The Company will receive the balance of the Deposited Funds in the event a
Business Combination is consummated pursuant to the provisions of Rule 419. The
Deposited Funds will remain in the Rule 419 Escrow Account maintained by the
Escrow Agent until the consummation of a Business Combination.
The Company intends to apply the Deposited Funds, when available, to the
payment of the costs and expenses incurred in attempting to effect a Business
Combination, including selecting and evaluating an Acquired Business,
structuring and consummating a Business Combination and the preparation and
filing of a post-effective amendment detailing the Reconfirmation Offer pursuant
to Rule 419. Rule 419 requires that the fair value of any Acquired Business be
equal to at least 80% of the maximum offering proceeds. SEE "USE OF PROCEEDS."
TRANSFER AGENT
StockTrans, Inc., 7 East Lancaster Avenue, Ardmore, Pennsylvania, will act
as the Company's transfer agent.
ESCROW AGENT
The Escrow Agent is Firstrust Savings Bank, 1931 Cottman Avenue,
Philadelphia, PA 19111.
RISK FACTORS
THE SHARES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE AN
EXTREMELY HIGH DEGREE OF RISK. EACH PROSPECTIVE INVESTOR SHOULD, PRIOR TO
PURCHASE, CONSIDER VERY CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS ALL OF
THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS.
1. RULE 419 GENERALLY. Rule 419 generally requires that the securities to
be issued and the funds received in a blank check offering be deposited and held
in an escrow account until an acquisition meeting specified criteria is
completed. Before the acquisition can be completed and before the funds and
10
<PAGE> 13
securities can be released, the blank check company is required to update the
registration statement with a post-effective amendment; within 5 business days
after the effective date of any such post-effective amendment, the Company is
required to furnish investors with the prospectus produced thereby containing
information, including audited financial statements, regarding the proposed
acquisition candidate and its business. According to the rule, the investors
must have no fewer than 20 and no more than 45 days from the effective date of
the post-effective amendment to decide to remain an investor or require the
return of their investment funds. Any investor not making any decision within
said 45 day period is to automatically receive a return of his investment funds
within 5 business days. Unless investors representing 80% of the maximum
offering proceeds elect to remain investors, the consummation of an acquisition
of or merger with a target business would be prevented, all of the deposited
funds in the escrow must be returned to all investors and none of the securities
will be issued. Consequently, notwithstanding the fact that a majority of
investors may be in favor of a prospective Business Combination, such investors
may nevertheless have to accept the return of their investment in accordance
with Rule 419, if more than 20% of the Rule 419 Investors do not reconfirm their
investment. Although not considered likely, officers and directors could
acquire, on the same terms and conditions as other investors, up to 75% of the
Shares; if they were to do so, of the remaining unaffiliated stockholders, only
those holding 20% in value of the Shares offered would be required to vote in
favor of a proposed acquisition. Rule 419 further provides that if the blank
check company does not complete an acquisition meeting specified criteria within
18 months of the effectiveness of the initial registration statement of which
this Prospectus comprises a part thereof, all of the Deposited Funds in the Rule
419 Escrow, less amounts deducted therefrom pursuant to Rule 419, must be
returned to investors.
2. PROHIBITION PURSUANT TO RULE 15g-8 UNDER EXCHANGE ACT TO SELL OR OFFER
TO SELL SHARES IN RULE 419 ACCOUNT. Rule 15g-8 of the Exchange Act provides that
it is unlawful for any person to sell or offer to sell the Shares (or any
interest in or related to the Shares) held in the Rule 419 account other than
pursuant to a qualified domestic relations order as contemplated by the Act,
which term the Company believes includes an order of a court of competent
jurisdiction incorporating in an order of support or judgment of divorce
provisions for property distribution and/or support. However, each investor is
urged to consult with his own tax and legal counsel to determine the
applicability of such exemption to his particular circumstances. As a result,
contracts for sale to be satisfied by delivery of the Deposited Securities (e.g.
contracts for sale on a when, as, and if issued basis) are prohibited. Rule
15g-8 also prohibits sales of other interests based on or in the Shares, whether
or not physical delivery is required.
3. NO ASSURANCE NET PROCEEDS FROM MAXIMUM OFFERING OR LESSER AMOUNT TO BE
SUFFICIENT TO REALIZE COMPANY'S GOALS. No assurance may be given that the net
proceeds from the Offering, if the maximum number of Shares is sold or if any
lesser amount is sold, will be sufficient to allow the Company to realize its
goals and engage in a business venture chosen by the Company's management.
Further, in the event that less than the net proceeds from the maximum offering
are raised, the Company's plans may be materially and adversely affected in that
the Company may find it even more difficult, if not impossible, to realize its
goals. The Company anticipates that to the extent it sells less than 3,000,000
Shares, and if 20% in interest of the investors do not reconfirm their
investment, it will not have sufficient working capital from the Offering to pay
for the anticipated expenses of effecting a Business Combination and for general
administrative expenses for the next 18 months. In this event, it is the
Company's intention to have such costs paid for by the acquired business as part
of the Business Combination. If it can not successfully negotiate such payment,
it will look to third parties (including its stockholders) for interim
financing. No assurance can be given that such financing will be available.
There are no understandings or agreements with any persons regarding such
financing.
11
<PAGE> 14
4. RETURN OF TOTAL SUBSCRIPTION PROCEEDS NOT GUARANTEED. Rule 10b-9 of the
Exchange Act provides for a guaranteed return of proceeds in contingent
offerings when a certain minimum number of securities offered is not sold. The
Offering may be consummated upon the sale of at least 1,000,000 Shares for an
aggregate price of $30,000. If the minimum number of shares is not sold, the
proceeds (along with interest thereto) will be returned to the subscribers in
compliance with Rule 10b-9 of the Exchange Act. However, if the minimum of
Shares is sold thereby meeting the conditions of Rule 10b-9, the rights of the
subscribers to a return of the subscription proceeds (together with interest
thereto) will be governed by Rule 419. Accordingly, if only the minimum number
of Shares is sold and the Company files a post-effective amendment with respect
to the Reconfirmation Offer, it is possible that if 80% in interest of the
Subscribers reconfirm their investment, to the extent that there are subscribers
who do not reconfirm their investment, the Company may effect the Acquisition
with less than the minimum number of Shares being distributed to the
Stockholders and less than the full amount of the minimum proceeds being
released to the Company. This may adversely affect the Company's ability to
realize its goals. SEE "RISK FACTORS - NO ASSURANCE NET PROCEEDS FROM MAXIMUM
OFFERING OR LESSER AMOUNT TO BE SUFFICIENT TO REALIZE COMPANY'S GOALS."
5. RECENTLY ORGANIZED COMPANY. The Company was only recently organized and
has no operating history. The Company, therefore, must be considered promotional
and in its early formative and development stage. Potential investors should be
aware of the difficulties normally encountered by a new enterprise, especially
in view of the relatively small size of this offering. There is nothing at this
time upon which to base an assumption that the Company's business plan will
prove successful, and there is no assurance that the Company will be able to
operate profitably. The Company has limited resources and has had no revenues to
date. Upon completion of the Offering, the present stockholders, assuming the
sale of the maximum number of Shares and that no Shares are acquired, will own,
in the aggregate, 20% of the then issued and outstanding shares of Common Stock.
SEE "RISK FACTORS - CONTROL BY PRESENT STOCKHOLDERS."
6. TIME SPENT BY MANAGEMENT. Mr. Gordon Bruce Keep (sometimes herein
referred to as "Management") is the Company's sole officer and director and is
engaged in other activities; and, therefore, prior to the conclusion of the
Offering, whether or not the maximum number of shares is sold, will devote only
a minimal amount of time (not to exceed, in the aggregate, approximately 10
hours per week) to the Company's business. It is unlikely that the lack of
full-time management may have a materially adverse effect upon the Company's
business. At present, the Company has no employees. Even upon completion of the
Offering, the present intention of the Company is to limit its employees to
part-time secretarial and clerical help, except for management and employees of
any Acquired Business that it may acquire. It is contemplated that after the
Offering is consummated, Mr. Keep will spend such time in conducting the
Company's affairs as may be necessary, including but not limited to the
Company's efforts in connection with the Company seeking out potential target
companies and consummating a Business Combination. At this time, the Company
cannot speculate as to the specific amount of time that will be spent by Mr.
Keep in conducting the Company's affairs. SEE "DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS."
7. EXPERIENCE OF MANAGEMENT. Although Management has general business
experience, potential investors should be aware that Management has limited
experience in effecting business combinations and may not have any significant
experience in acquiring or operating certain business interests that the Company
might choose to acquire. Management does not have, nor does it presently intend
to enter into, any contracts or agreements with any consultants or advisors with
respect to its
12
<PAGE> 15
proposed business activities. Consequently, Management has not established the
criteria that will be used to hire independent consultants regarding their
experience, the services to be provided, the term of service, etc., and no
assurance can be made that the Company will be able to obtain such assistance on
terms acceptable to the Company. SEE "PLAN OF OPERATION."
8. NO PRESENT IDENTIFICATION OF INDUSTRY. The Company has neither
conducted nor have others made available to it results of market research
concerning the feasibility of a Business Combination with an Acquired Business.
Therefore, Management has no assurance that market demand exists for an
acquisition or merger as contemplated by the Company. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance the Company will be able to
consummate a Business Combination on terms favorable to the Company. SEE "PLAN
OF OPERATION". The Company has not yet identified a prospective Acquired
Business. There can be no assurance that an investment in the securities offered
hereby will not ultimately prove to be less favorable to investors in this
offering than a direct investment, if such opportunity were available, in an
Acquired Business. Purchasers of the Shares offered hereby, will have an
opportunity to evaluate an Acquired Business to the extent permitted by Rule
419.
To the extent the Company consummates a Business Combination with a
financially unstable company or an entity in its early stage of development or
growth (including entities without established records of sales or earnings),
the Company will become subject to numerous risks inherent in the business
operations of financially unstable and early stage or potential emerging growth
companies. In addition, to the extent that the company effects a Business
Combination with an entity in an industry characterized by a high level of risk,
the Company will become subject to the currently unascertainable risk of that
industry. It is likely that the Company will have the ability to effect only a
single Business Combination. Accordingly, the prospects for the Company's
success will be entirely dependent upon the future performance of a single
business. Unlike certain entities which have the resources to consummate several
Business Combinations of entities operating in multiple industries or multiple
areas of a single industry, it is highly likely that the Company will not have
the resources to diversify its operations or benefits from the possible
spreading of risks or offsetting of losses. In addition, by consummating a
Business Combination with only a single entity, the prospects for the Company's
success may become dependent upon the development or market acceptance of a
single or limited number of products, processes or services. Consequently, there
can be no assurance that the Acquired Business will prove to be commercially
viable.
The Company's business may involve the acquisition of or merger with a
company which does not need substantial additional capital but which desires to
establish a public trading market for its shares. A company which seeks the
Company's participation in attempting to consolidate its operations through a
merger, reorganization, asset acquisition, or some other form of combination may
desire to do so to avoid what they may deem to be adverse consequences of
themselves undertaking a public offering. Factors considered may include time
delays, significant expense and loss of voting control.
9. STOCKHOLDER APPROVAL FOR BUSINESS COMBINATION MAY RESULT IN A LOSS.
After the sale of the minimum number of Shares, Rule 419 permits 10% of the net
offering proceeds after deducting maximum commissions, to be disbursed to the
Company prior to the consummation of a Business Combination, which amount will,
in fact be dispensed to the Company. As such, pursuant to Rule 419, 90% percent
of the proceeds of this Offering, will be held in the Rule 419 Escrow pending,
among other things, the consummation of a Business Combination which transaction
must occur within 18 months of the Effective Date hereof. Accordingly, the
investors herein may lose 10% or more of their investment
13
<PAGE> 16
if a significant number of investors do not confirm their investment so as to
preclude the consummation of a Business Combination satisfying the criteria of
Rule 419.
10. INTENSE COMPETITION. There are numerous firms which are larger than
the Company, and which are also seeking to effect business acquisitions similar
to those contemplated by the Company. Such companies may be in a better position
to finance such subsidiaries and to offer incentives to management to run the
subsidiaries and to supervise them. The Company will thus encounter intense
competition in the organizing or purchasing of businesses which it hopes may
prove to be profitable.
11. POTENTIAL FUTURE 144 SALES. Of the 30,000,000 shares of the
Company's Common Stock authorized, there are presently issued and outstanding
1,000,100 none of which are being registered pursuant hereto; all are
"restricted securities" as that term is defined under the Act, and in the future
may be sold in compliance with Rule 144 of the Act, or pursuant to a
Registration Statement filed under the Act. Rule 144 provides, in essence,
that a person holding restricted securities for a period of 1 year may sell
those securities in unsolicited brokerage transactions or in transactions with
a market maker, in an amount equal to 1% of the Company's outstanding common
stock every 3 months. Additionally, Rule 144 requires that an issuer of
securities make available adequate current public information with respect to
the issuer. Such information is deemed available if the issuer satisfies the
reporting requirements of Sections 13 or 15(d) of the Exchange Act and of Rule
15c2-11 thereunder. Rule 144 also permits, under certain circumstances, the
sale of shares by a person who is not an affiliate of the Company and who
has satisfied a 3 three year holding period without any quantity
limitation and whether or not there is adequate current public information
available. Investors should be aware that sales under Rule 144, or pursuant to
a Registration Statement filed under the Act, may have a depressive
effect on the market price of the Company's securities in any market that
may develop for such shares. None of the presently outstanding shares will be
available for sale under Rule 144 until at least March, 1999.
12. POSSIBLE ISSUANCE OF ADDITIONAL SHARES. The Company's Certificate of
Incorporation, authorizes the issuance of 30,000,000 shares of Common Stock.
Upon the sale of the maximum number of Shares offered hereby, approximately 83%
of the Company's authorized shares will remain unissued. The Company's Board of
Directors has the power to issue any or all of such additional shares without
stockholder approval. Management presently anticipates that it may choose to
issue a substantial amount of such shares to acquire business interests or other
types of property in the future, or may, following a Business Combination issue
Shares for the purpose of raising additional capital. However, the Company
presently has no commitments, contracts or intentions to issue any additional
shares. Potential investors should be aware that any such stock issuances may
result in a reduction of the book value or market price, if any, of the then
outstanding shares. If the Company issues additional shares, such issuance will
reduce the proportionate ownership and voting power of the other stockholders.
Also, any new issuance of shares may result in a change of control of the
Company. SEE "PLAN OF OPERATION - FORM AND STRUCTURE OF ACQUISITION."
13. CONFLICTS OF INTEREST. Several of the Company's principal stockholders
engage in other business activities similar or dissimilar to those engaged in by
the Company, including the formation of other blind pool companies.
Specifically, four of the Company's principal stockholders are also principal
stockholders and/or officers and directors of three other companies, namely
Intertech Ventures, Inc., Northtech Ventures, Inc. and Worldwide Tech, Inc.
(collectively, the "Related Companies"), each of which has filed a registration
statement with the Commission for the purpose of effecting an Offering of their
respective securities pursuant to Rule 419. As such, the Company is under common
control with the Related Companies. If and when their respective
14
<PAGE> 17
registration statements are declared effective, the Related Companies will be
competing directly with the Company for other business opportunities. SEE "RISK
FACTORS." If these other companies are successful, the principal stockholders
may, although there is no assurance that they will do so, invest in additional
companies whose business plan would be to effect Rule 419 offerings, thereby
exacerbating the competitive environment in which the Company must operate. To
the extent that such stockholders engage in such other activities, they will
have possible conflicts of interest in diverting opportunities to other
companies, entities or persons with which they are or may be associated or have
an interest in, rather than diverting such opportunities to the Company. Such
potential conflicts of interest include, among other things, time, effort and
corporate opportunity involved in their participation in other business
transactions.
In order to resolve conflicts of interest, to the extent possible,
arising from the common control of the Company with other blind pool companies,
the Company and the Related Companies have established the following guidelines:
(a) if the business opportunity is identified by an officer or director of
the Company, notwithstanding that such person is also a principal stockholder of
a Related Company, the business opportunity will be directed to the Company;
(b) if the business opportunity is identified by a person who is a principal
stockholder of the Company but not an officer of the Company or of a Related
Company, the business opportunity will be directed to either the Company or to a
Related Company in order of the effective dates of the completion of their
respective Rule 419 offerings; to the extent that the company to whom the
business opportunity was directed declines to accept the business opportunity,
it will be offered to the Company which next completed its Rule 419 Offering;
and
(c) if the individual responsible for identifying the business opportunity is
an officer and/or director of more than one Related Company, the business
opportunity will be presented to those companies in the order in which their
offerings were completed.
While the Company and its Management intend that no shares of the Company's
Common Stock will be sold by any officers, directors or greater than 10%
stockholders or persons who may be deemed promoters of the Company without
affording all stockholders of the Company a similar opportunity, Management may,
nevertheless, actively negotiate or otherwise consent to the purchase of all or
a portion of their shares of Common Stock as a condition to or in connection
with a proposed merger or acquisition transaction. It is noted that Management
may be deemed to have paid approximately $.02 per share of Common Stock owned by
Management. In connection with any such stock purchase transaction, it is
possible that a premium may be paid for Management's share of Common Stock and
that public investors in the Company may not receive any portion thereof in the
event such premium may be paid. Any transaction structured in such manner may
present Management with conflicts of interest and as a result of such conflicts,
may possibly compromise Management's fiduciary duties to the Company's
stockholders, as the potential would therefore exist for members of Management
to consider their own personal pecuniary benefit rather than the best interest
of the Company's other stockholders. Further, the Company's other stockholders
may not be afforded an opportunity to otherwise participate in any particular
stock buy-out transaction. Additionally, in any such transaction, it is
possible, although not presently intended, that the Company may borrow funds to
be used directly or indirectly to purchase Management's shares. Proceeds from
this Blank Check Offering will not be utilized directly or indirectly to
purchase Management's shares.
15
<PAGE> 18
14. NO UNDERWRITER OR SELECTED BROKER/DEALERS. All offers and sales of
Shares will be effected as follows: (a) by Mr. Gordon keep to the extent such
offers and sales are made to the Company's officers, directors, stockholders and
their affiliates; and (b) otherwise in (i) the United States, by registered
broker/dealers or third parties not otherwise required to register as
broker/dealer under applicable federal and state securities laws, and
(ii)jurisdictions outside the United States, by brokers/dealers registered in
such jurisdictions or other third parties otherwise permitted to offer and sell
such securities under applicable local law. The Company has not retained an
underwriter or any selected registered broker/dealers to assist in this
Offering. Upon the retention of a registered broker/dealer in the United States
by the Company, the Offering will be suspended until such time as the Company's
Registration Statement, including this Prospectus, is amended to reflect such
retention. The Registration Statement will then require additional review by the
Commission, the National Association of Securities Dealers, and, if necessary,
state regulatory authorities. The Company will be expected to incur significant
additional expenses in the form of selling commissions, legal fees, and printing
and accounting costs as well as costs to effectuate the filing with the
Commission. To the extent that the Company retains a registered broker/dealer
and/or finders outside of the United States, prior to effecting any sales of the
Shares through such brokers/dealers and/or finders, it will amend this
Registration Statement, including the Prospectus, to reflect such retention. The
Company and Mr. Keep are not registered as brokers or dealers under Section 15
of the Securities Exchange Act of 1934, as amended and are relying on exemption
from such registration provided by Rule 3a4-1. The Company has reserved the
right to pay commissions and/or finders fees to broker/dealers and/or finders
equal to 5% of the proceeds derived from the sale of Shares.
15. RISKS OF LEVERAGE; DEBT OF AN ACQUIRED BUSINESS. There are currently
no limitations relating to the Company's ability to borrow funds to increase the
amount of capital available to the Company to effect a business combination or
otherwise finance the operations of any acquired business. The amount and nature
of any borrowings by the Company will depend on numerous factors, including the
Company's capital requirements, the Company's perceived ability to meet debt
services on any such borrowings, and then-prevailing conditions in the financial
markets as well as general economic conditions. There can be no assurance that
debt financing, if required or otherwise sought, will be available on terms
deemed to be commercially acceptable and in the best interest of the Company.
The inability of the Company to borrow funds required to effect or facilitate a
business combination, or to provide funds for an additional infusion of capital
into an acquired business, may have a material adverse affect on the Company's
financial condition and future prospects. Additionally, to the extent that debt
financing ultimately proves to be available, any borrowings may subject the
Company to various risks traditionally associated with incurring of
indebtedness, including (i) if the Company's operating revenues after the
Business Combination were to be insufficient to pay debt service, there would be
a risk of default and foreclosure on the Company's assets; (ii) if a loan
agreement contains covenants that require the maintenance of certain financial
ratios or reserves, and any such covenant is breached without a waiver or
renegotiation of the terms of that covenant, then the lender could have the
right to accelerate the payment of the indebtedness even if the Company has made
all principal and interest payments when due; (iii) if the interest rate on a
loan fluctuated or the loan was payable on demand, the Company would bear the
risk of variations in the interest rate or demand for payment; and (iv) if the
terms of a loan did not provide for amortization prior to maturity of the full
amount borrowed and the "balloon" payment could not be refinanced at maturity on
acceptable terms, the Company might be required to seek additional financing
and, to the extent that additional financing is not available on acceptable
terms, to liquidate its assets. Furthermore, an acquired business may already
have previously incurred debt
16
<PAGE> 19
financing and, therefore, the risks inherent thereto, as discussed above.
SEE "USE OF PROCEEDS" AND "PLAN OF OPERATION - FORM AND STRUCTURE OF
ACQUISITIONS."
16. POSSIBLE NEED FOR ADDITIONAL FINANCING OF ACQUIRED BUSINESS. In the
event of a consummation of a Business Combination, the Company cannot ascertain
with any degree of certainty the capital requirements for any particular
acquired business inasmuch as the Company has not yet identified any prospective
Acquired Business candidates. To the extent the Business Combination results in
the acquired business requiring additional financing, such additional financing
(which, among other forms, could be derived from the public or private offering
of securities or from the acquisition of debt through conventional bank
financing), may not be available, due to, among other things, the acquired
business not having sufficient (i) credit or operating history; (ii) income
stream; (iii) profit level; (iv) asset base eligible to be collateralized; or
(v) market for its securities. Although there are no agreements between the
Company and any of its officers and/or directors pursuant to which the Company
may borrow and such officers and/or directors are obligated to lend the Company
monies, there are no restrictions on the Company to borrow money, including, but
not limited to, loans from officers and directors. No stockholder approval is
required in connection with any such loans.
As no specific Business Combination or industry has been targeted, it is not
possible to predict the specific reasons why conventional private or public
financing or conventional bank financing might not become available. There can
be no assurance that, in the event of a consummation of a Business Combination,
sufficient financing to fund the operations or growth of the acquired business
will be available upon terms satisfactory to the Company, nor can there be any
assurance that financing would be available at all.
17. INVESTMENT COMPANY ACT CONSIDERATIONS. The regulatory scope of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
was enacted principally for the purpose of regulating vehicles for pooled
investments in securities, extends generally to companies engaged primarily in
the business of investing, reinvesting,owning,holding or trading in securities.
The Investment Company Act may, however, also be deemed to be applicable to a
company which does not intend to be characterized as an investment company but
which, nevertheless, engages in activities which may be deemed to be within the
definitional scope of certain provisions of the Investment Company Act. There
can be no assurance that the Company will not be deemed to be an investment
company, especially during the period prior to a Business Combination, although
the Company intends to take all measures possible to avoid such classification.
In the event the Company is deemed to be an investment company, the Company may
become subject to certain restrictions relating to the Company's activities,
including restrictions on the nature of its investments and the issuance of
securities. In addition, the Investment Company Act imposes certain requirements
on companies deemed to be within its regulatory scope, including registration as
an investment company, adoption of a specific form of corporate structure and
compliance with certain burdensome reporting, record keeping, voting, proxy,
disclosure and other rules and regulations. In the event of characterization of
the Company as an investment company, the failure by the Company to satisfy
regulatory requirements, whether on a timely basis or at all, would, under
certain circumstances, have a material adverse affect on the Company. The
Company intends to take all measures possible to avoid such characterization of
the Company. SEE "PLAN OF OPERATION."
18. TAX CONSIDERATIONS. As a general rule, federal and state tax laws and
regulations have a significant impact upon the structuring of business
combinations. The Company will evaluate the possible tax consequences of any
prospective Business Combination and will endeavor to structure the Business
Combination so as to achieve the most favorable tax treatment to the Company,
the Acquired
17
<PAGE> 20
Business and their respective stockholders. There can be no assurance,
however, that the Internal Revenue Service (the "IRS") or appropriate state tax
authorities will ultimately assent to the Company's tax treatment of a
consummated Business Combination. To the extent the IRS or state tax authorities
ultimately prevail in recharacterizing the tax treatment of a Business
Combination, there may be adverse tax consequences to the Company, the Acquired
Business and their respective stockholders. The Company files its income taxes
on a calendar year basis.
19. CHANGE OF CONTROL. In the event that the Company effects a Business
Combination by issuing additional common stock, the present stockholders of the
Company may no longer have control of the Company. Although the Company has no
present plans, understandings or arrangements with respect to any Business
Combination, the successful completion of such a transaction could result in a
change in control of the Company. This could result from the issuance of a large
percentage of the Company's authorized securities or the sale by the present
stockholders of all or a portion of their stock or a combination thereof. Any
change in control may also result in the resignation or removal of the Company's
present officers and directors. If there is a change in Management, no assurance
can be given as to the experience or qualifications of the persons who replace
present management respecting either the operation of the Company's activities
or the operation of the business, assets or property being acquired.
20. NO DIVIDENDS. The Company has not paid any dividends on its Common
Stock to date and does not presently intend to pay cash dividends prior to the
consummation of a Business Combination. The payment of dividends after any such
Business Combination, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and general financial condition
subsequent to consummation of a Business Combination. The payment of any
dividends subsequent to a Business Combination will be within the discretion of
the Company's then Board of Directors.
21. ARBITRARY DETERMINATION OF OFFERING PRICE. Prior to this offering,
there has been no public trading market for the Shares. The initial public
offering price of the Shares has been arbitrarily determined by the Company and
does not bear any relationship to such established valuation criteria such as
assets, book value or prospective earnings. Among the factors considered by the
Company were the lack of operating history of the Company, the proceeds to be
raised by the offering, the amount of capital to be contributed by the public in
proportion to the amount of stock to be retained by present stockholders, the
relative requirements of the Company, and the current market conditions in the
over-the-counter market.
22. DILUTION; DISPARITY OF CONSIDERATION. Assuming the sale of the maximum
number of Shares (based on the Company's financial statements as of July 10,
1998), new investors will incur an immediate dilution of approximately $.011 per
share after the offering of the maximum number of Shares is consummated. The
existing stockholders of the Company acquired their shares of Common Stock at a
price of $.01 (or less) per share which is $.02 per share lower than the
offering price of the Shares. Accordingly, new investors will bear virtually all
of the risks inherent in an investment in the Company. SEE "DILUTION." No resale
of the Shares can be effected until the same are released from the Rule 419
Escrow.
23. YEAR 2000 RISKS. Currently the Company does not rely on any computer
or computer programs that will materially impact the operations of the Company
in the event of a Year 2000 disruption. However, like any other company,
advances and changes in available technology can significantly impact its
business and operation. Consequently, although the Company has not
18
<PAGE> 21
identified any specific year 2000 issues, the "Year 2000" problem creates risk
for the Company from unforeseen problems in computer systems which the Company
may acquire in the future or the computer systems of third parties, including
but not limited to any acquisition candidate and/or financial institutions, with
whom it transacts business. Such failures of the Company and/or third parties'
computer systems could have a material impact on the Company's ability to
conduct its business. Prior to effecting a Business Combination, the Company
intends to assess the Year 2000 Risks associated with the Acquired Business. SEE
"PLAN OF OPERATION".
24. PENNY STOCK RULES.
Under Rule 15g-9, a broker or dealer may not sell a "penny stock" (as defined
in Rule 3a51-1) to or effect the purchase of a penny stock by any person unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with Rule
15g-9 and (b) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock to
be purchased.
The Commission adopted regulations that generally define a penny stock to be
any equity security other than a security excluded from such definition by Rule
3a51-1. Such exemptions include, but are not limited to (a) an equity security
issued by an issuer that has (i) net tangible assets of at least $2,000,000, if
such issuer has been in continuous operations for at least three years; (ii) net
tangible assets of at least $5,000,000, if such issuer has been in continuous
operation for less than three years; or (iii) average revenue of at least
$6,000,000 for the preceding three years; (b) except for purposes of Section
7(b) of the Exchange Act and Rule 419, any security that has a price of $5.00 or
more; (c) and a security that is authorized or approved for authorization upon
notice of issuance for quotation on the National Association of Securities
Dealers Automated Quotation System.
It is likely that the Company's Common Stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for the
Company's Common Stock may be adversely affected by such regulations limiting
the ability of broker/dealers to sell the Company's Common Stock and the ability
of purchasers in this offering to sell their securities in the secondary market
(following termination of the Rule 419 Escrow).
25. NO ASSURANCE OF A PUBLIC MARKET. There is no current trading market
for the Shares and there can be no assurance that a trading market will develop,
or, if such a trading market does develop, that it will be sustained. The
Shares, to the extent that a market develops for the Shares at all, will likely
appear in what is customarily known as the "pink sheets" or on the NASD Bulletin
Board, which may limit the marketability and liquidity of the Shares. Pursuant
to Rule 419, all shares issued by a blank check company, must be placed in the
Rule 419 Escrow Account. These shares will not be released from the Rule 419
Escrow until (i) the consummation of a merger or acquisition as provided for in
Rule 419 or (ii) the expiration of 18 months from the date of this Prospectus.
There is no present market for the Common Stock of the Company and there is no
likelihood of any active and liquid public trading market developing following
the release of securities from the Rule 419 Escrow. Thus, stockholders may find
it difficult to sell their shares.
19
<PAGE> 22
To date, neither the Company nor anyone acting on its behalf has taken any
affirmative steps to request or encourage any broker/dealer to act as a market
maker for the company's Common Stock. Further, there have been no discussions or
understandings, preliminary or otherwise, between the Company or anyone acting
on its behalf and any market maker regarding the participation of any such
market maker in the future trading market, if any, for the company's Common
Stock. Present management of the Company has no intention of seeking a market
maker for the Company's Common Stock at any time prior to the reconfirmation
offer to be conducted prior to the consummation of a Business Combination. The
officers of the Company after the consummation of a Business Combination may
employ consultants or advisors to obtain such market makers. Management expects
that discussions in this area will ultimately be initiated by the management of
the Company in control of the entity after a Business Combination is reconfirmed
by the stockholders. There is no likelihood of any active and liquid trading
market for the Company's Common Stock developing. SEE "MARKET FOR THE COMPANY'S
COMMON STOCK" AND "INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419."
26. RISKS ASSOCIATED WITH OPERATIONS IN FOREIGN COUNTRIES. The Company's
business plan is to seek to acquire or merge with potential businesses that may
in the opinion of Management, warrant the Company's involvement. Management's
discretion is unrestricted, and the Company may participate in any business
whatsoever that may in the opinion of Management meet the business objectives
discussed herein. Indeed, the Company may effectuate a Business Combination with
another business outside the United States. The Company has not limited the
scope of its search to a particular region or country. Accordingly, to the
extent that the Acquired Business may be located or operate in a foreign
jurisdiction, the Company's operations may be adversely affected to the extent
of the existence of unstable economic, social and/or political conditions in
such foreign regions and countries.
SELECTED FINANCIAL INFORMATION
The Company is a start-up company and has no operating history. The Company
has had no revenues or earnings from operations to date.
<TABLE>
<CAPTION>
Summary Balance As at As Adjusted Prior to Use of Proceeds
Sheet Data: July 10, 1998 Minimum Maximum
-------------- ------- --------
<S> <C> <C> <C>
Assets $ 35,600 $ 65,600 $150,000
Liabilities 30,100 13,100(1) 13,100(1)
Stockholders Equity 5,500 52,500 142,500(1)
</TABLE>
- ----------------------
(1) Reflects the conversion of a $17,000 promissory note into 100 shares of
the Company's Common Stock on September 4, 1998.
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
DEPOSITED FUNDS AND DEPOSITED SECURITIES
Pursuant to Rule 419, the Deposited Funds, after deduction for permitted
underwriting commissions, underwriting expenses, dealer allowances and certain
other amounts (equal to 5% of the proceeds) which will be delivered to the
Company, and the Deposited Securities are to be deposited into and held
20
<PAGE> 23
in the Rule 419 Escrow. The escrow is governed by an agreement which contains
certain terms and provisions specified by the Rule 419. Under Rule 419, the
Deposited Funds and Deposited Securities will be released to the Company and to
the investors, respectively, only after the Company has:
(1) Executed an agreement, for the consummation of a Business Combination,
meeting certain prescribed criteria.
(2) Filed a post-effective amendment to this Registration Statement which
includes the terms of a Reconfirmation Offer, and other prescribed information
regarding the Acquired Business including audited financial statements.
(3) Conducted the Reconfirmation Offer in accordance with the provisions of
Rule 419 and the requisite number of investors (sufficient in number to permit
an acquisition of a business or asset having a value of 80% of the maximum
offering proceeds) have elected to remain stockholders. Although not considered
likely, officers and directors could acquire on the same terms and conditions as
other investors up to 75% of the Shares being offered; if they were to do so, of
the remaining unaffiliated stockholders, only those holding 20% in value of the
Shares offered would be required to vote in favor of a proposed acquisition.
After the foregoing conditions have been satisfied the Company will submit a
signed representation to the Escrow Agent that the requirements of Rule 419 have
been satisfied and that the Business Combination has been (or is being)
consummated. The Escrow Agent can then release the Deposited Funds and Deposited
Securities.
Accordingly, the Company has entered into the Rule 419 Escrow which provides,
among other things, that:
(1) The Deposited Funds are to be deposited into the Rule 419 Escrow
maintained by the Escrow Agent promptly upon receipt of such funds. The
Deposited Funds and interest or dividends thereon, if any, are to be held for
the sole benefit of the investors and can only be invested in bank deposits, in
money market mutual funds or federal government securities or securities for
which the principal or interest is guaranteed by the federal government.
(2) All Shares and any other securities issued during the escrow period, with
respect to such Shares including securities issued with respect to stock splits,
stock dividends or similar rights are to be deposited directly into the Rule 419
Escrow promptly upon issuance. The identity of the investors are to be included
on the stock certificates or other documents evidencing the Deposited
Securities. The Deposited Securities held in the Rule 419 Escrow are to remain
as issued and deposited and are to be held for the sole benefit of the investors
who retain the voting rights, if any, with respect to the Deposited Securities
held in their names. The Deposited Securities held in the Rule 419 Escrow may
not be transferred, disposed of nor any interest created therein other than by
will or the laws of descent and distribution, or pursuant to a court order
issued in conjunction with or as part of a divorce judgment.
(3) Warrants, convertible securities or other derivative securities relating
to Deposited Securities held in the Rule 419 Escrow may be exercised or
converted in accordance with their terms; provided that, however, the securities
received upon exercise or conversion together with any cash or other
consideration paid in connection with the exercise or conversion are to be
promptly deposited into the Rule 419 Escrow.
PRESCRIBED ACQUISITION CRITERIA
Rule 419 requires that before the Deposited Funds and the Deposited
Securities can be released, the Company must execute an agreement to acquire an
acquisition candidate(s) meeting specified criteria.
21
<PAGE> 24
The agreement(s) must provide for the acquisition(s) of a business(es) or assets
for which the fair value of the business or net assets represents at least 80%
of the maximum offering proceeds, but excluding underwriting commissions,
underwriting expenses, dealer allowances payable to non-affiliates and amounts
permitted to be delivered to the Company. The agreement(s) must include, as a
condition precedent to their consummation, a requirement that a sufficient
number of investors confirm their investment so as to permit consummation of a
Business Combination satisfying the criteria of Rule 419. Consequently, for
purposes of this Offering, the fair value of the business(es) or assets to be
acquired must be at least 80% of $28,500, if the minimum number of Shares is
sold and at least 80% of $114,000 if the maximum number of Shares is sold.
POST EFFECTIVE AMENDMENT
Once the agreement governing a Business Combination meeting the above
criteria has been executed, Rule 419 requires the Company to update the
registration statement with a post-effective amendment. The post-effective
amendment must contain information required by the applicable registration form,
concerning the Acquired Business, including financial statements of the Company
and the Acquired Business as required thereby, the results of this Offering, and
the use of the funds disbursed from the Rule 419 Escrow. The post-effective
amendment must also include the terms of the Reconfirmation Offer mandated by
Rule 419. The Reconfirmation Offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited Securities can
be released from the Rule 419 Escrow.
RECONFIRMATION OFFER
The Reconfirmation Offer must commence within 5 business days after the
effective date of the post-effective amendment. Pursuant to Rule 419, the terms
of the reconfirmation offer must include the following conditions:
(1) The prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the Rule 419 Escrow within 5 business
days after the effective date of the post-effective amendment.
(2) Each investor will have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to notify the
Company in writing that the investor elects to remain an investor.
(3) If the Company does not receive written notification from an investor
within 45 business days following the effective date, the pro-rata portion of
the Deposited Funds (and any related interest or dividends) held in the Rule 419
Escrow on such investor's behalf will be returned to the investor within 5
business days by first class mail or other equally prompt means.
(4) The Business Combination may be consummated only if a minimum number of
investors representing 80% of the maximum offering proceeds elect to reconfirm
their investment.
(5) If a Business Combination is not consummated within 18 months from the
date of this prospectus, the Deposited Funds and any related interest or
dividends held in the Rule 419 Escrow shall be returned to all investors on a
pro- rata basis within 5 business days by first class mail or other equally
prompt means and the Deposited Securities will be returned to the Company.
22
<PAGE> 25
RELEASE OF DEPOSITED SECURITIES AND DEPOSITED FUNDS
The Deposited Funds and Deposited Securities may be released to the Company
and the investors, respectively, after the Escrow Agent has received a signed
representation from the Company or other evidence acceptable by the Escrow Agent
that:
(a) the Company has executed an agreement for a Business Combination for
which the fair market value of the business represents at least 80% of the
maximum offering proceeds and has filed the required post-effective amendment;
(b) the post-effective amendment has been declared effective, the mandated
Reconfirmation Offer having the conditions prescribed by Rule 419 has been
completed and the Company has satisfied all of the prescribed conditions of the
Reconfirmation Offer; and
(c) the Business Combination described in paragraph (a) above has been
consummated.
If an investor elects not to reconfirm this investment, his subscription
amount (less commissions paid and any amount permitted to be and actually
delivered to the Company) plus any interest earned thereon will be returned to
such investor; if a Business Combination is not consummated within 18 months of
the date of the prospectus, his subscription amount (less commissions paid and
any amount permitted to be and actually delivered to the Company) together with
interest earned thereon will be returned to each investor in accordance with his
subscription agreement.
THE COMPANY
The Company is a Delaware corporation incorporated on April 8, 1998 for the
purpose of acquiring or merging with an unspecified operating business. The
Company is a blank check company as defined in Rule 419. Upon completion of this
offering the Company intends to effect a Business Combination with an Acquired
Business which the Company believes has significant growth potential. The
Company will not engage in any substantive commercial business immediately
following this offering. The Company has no plan, proposal, agreement,
understanding or arrangement to acquire or merge with any specific business or
company and the Company has not identified any specific business or company for
investigation and evaluation. The Company intends to utilize either cash (to be
derived from the proceeds of this offering), equity, debt or a combination
thereof in effecting a Business Combination. It is likely that the Company will
have the ability to effect only a single Business Combination.
Since its organization, the Company's activities have been limited to the
sale of initial shares in connection with its organization, general corporate
matters, and its preparation of a registration statement and prospectus for its
initial public offering. SEE "PLAN OF OPERATION." The Company does not intend to
engage in the business of investing, reinvesting or trading in securities as its
primary business or pursue any business which would render the Company an
"investment company" pursuant to the Investment Company Act. SEE "RISK FACTORS."
The Company is in the development stage and has no operating history. No
representation is made, nor is any intended, that the Company will be able to
carry on its activities profitably. The viability of the Company is dependent
upon sufficient funds being realized by the Company from this offering, of which
there is no assurance. Proceeds of this offering may be insufficient to enable
the Company to
23
<PAGE> 26
engage in potentially profitable operations, or to otherwise engage in any
business endeavors. The likelihood of the success of the Company must be
considered in light of the expenses, difficulties, and delays frequently
encountered in connection with the formation of a new business. Further, no
assurance can be given that the Company will have the ability to acquire assets,
businesses, or properties with any value to the Company.
No assurance can be given that the net proceeds of the maximum offering of
this Blank Check Offering or any lesser net amount will be sufficient to
accomplish the Company's goals or that any business acquired or developed by the
Company will become profitable. Indeed, in compliance with Rule 10b-9 of the
Exchange Act, if the minimum number of Shares is not sold, the proceeds (along
with interest thereto) will be returned to the subscribers. In the event that
substantially less than the net proceeds from the maximum offering are raised,
the Company's plans may be materially and adversely affected in that the Company
may find it even more difficult, if not impossible, to realize its goals. If
only the minimum number of Shares is sold and the Company files a post-effective
amendment with respect to the Reconfirmation Offer, it is possible that if at
least 80% in interest of the Subscriber reconfirm their interest, to the extent
that there are subscribers who do not reconfirm their investment, the Company
may effect the Acquisition with less than the minimum number of Shares having
been released from the Rule 419 Escrow and less than the full amount of the
minimum offering proceeds having been released to the Company. If such proceeds
are insufficient to satisfy the Company's goals, the Company may be required to
seek additional capital. No assurance can be given that the Company will be able
to obtain such additional capital, or even if available, that such additional
capital will be available on terms acceptable to the Company. SEE "RISK FACTORS"
AND "PLAN OF OPERATIONS."
In the event that Management determines that the Company is unable to conduct
any business whatsoever, Management, subject to the requirements of Rule 419
which provides that the Deposited Funds will be returned on a pro-rata basis if
an acquisition meeting certain prescribed criteria is not consummated within 18
months of the date of this Prospectus, will, in its sole discretion, seek
stockholder approval to liquidate the Company. In the event such a liquidation
were to occur at some point in time after the Company's compliance with the
provisions of Rule 419, all stockholders of the Company including those owning
shares purchased privately at less than the public offering price will receive
the liquidated assets on a pro-rata basis (as opposed to being based on the
amounts paid for such shares). While Management has not established any
guidelines for determining at what point in time it might elect to discontinue
its efforts to seek a Business Combination, Management is subject to the 18
month time frame set forth in Rule 419 in which to effect an acquisition.
The Company's office is located at 3123-595 Burrand Street, Vancouver, B.C.
Canada V7X 1J1.
DILUTION
As of the date of this Prospectus, the following table sets forth the
percentage of equity to be purchased by public investors in the Offering
compared to the percentage of equity to be owned by the present stockholders,
and the comparative amounts paid for the shares by the public investors as
compared to the total consideration paid by the present stockholders of the
Company.
24
<PAGE> 27
ASSUMING THE MINIMUM NUMBER OF SHARES SOLD
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
PERCENTAGE PERCENTAGE
SHARES OF TOTAL TOTAL OF TOTAL
PURCHASED SHARES CONSIDERATION CONSIDERATION
<S> <C> <C> <C> <C>
Public Stockholders 1,000,000 50% $ 30,000 57%
Present Stockholders 1,000,100 50% 22,500 43%
Total 2,000,000 100% $ 52,500 100%
</TABLE>
ASSUMING THE MAXIMUM NUMBER OF SHARES SOLD
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
PERCENTAGE PERCENTAGE
SHARES OF TOTAL TOTAL OF TOTAL
PURCHASED SHARES CONSIDERATION CONSIDERATION
<S> <C> <C> <C> <C>
Public Stockholders 4,000,000 80% $ 120,000 84%
Present Stockholders 1,000,100 20% 32,500 16%
Total 5,000,000 100% $ 142,500 100%
</TABLE>
The difference between the public offering price per share and the pro
forma net tangible book value per share of Common Stock of the Company after
this offering constitutes the dilution to investors in this offering. Net
tangible book value per share is determined by dividing the net tangible book
value of the Company (total tangible assets less total liabilities) by the
number of outstanding shares of Common Stock. Dilution arises mainly from the
arbitrary decision by the Company as to the offering price per share. Dilution
of the value of the shares purchased by the public in this offering will also be
due, in part, to the lower book value of the shares presently outstanding, and
in part, to expenses incurred in connection with the public offering.
Net tangible book value is the net tangible assets of the Company (total
assets less total liabilities and intangible assets; see "Financial
Statements"). As of July 10, 1998 there were 1,000,000 shares of the Company's
common stock outstanding (see "CERTAIN TRANSACTIONS"). Therefore, the net
tangible book value of the Company's common stock as of July 10, 1998 was
approximately ($.02) per share. The following table illustrates this dilution
based upon the book value as at July 10, 1998 (without giving effect to the
conversion of the Note, as hereinafter defined, on September 4, 1998) and the
receipt by the Company of the estimated proceeds (after deducting maximum
underwriting commissions) from the sale of the minimum number of Shares
($28,500) and the maximum number of Shares ($114,000):
<TABLE>
<CAPTION>
Minimum Maximum
<S> <C> <C>
Public Offering Price Per Share $.03 $.03
Net Tangible Book Value Per Share,
Before Offering ($.02) ($.02)
Net Tangible Book Value Per Share
After Offering $.005 $.019
Increase Per Share Attributable to
Payment by Public Investors $.025 $.039
</TABLE>
25
<PAGE> 28
<TABLE>
<CAPTION>
Minimum Maximum
<S> <C> <C>
Dilution Per Share to Public Investors $.025 $.011
</TABLE>
USE OF PROCEEDS
The net proceeds (after deducting maximum underwriting commissions) of this
offering will be $28,500 if the minimum number of Shares is sold and $114,000 if
the maximum number of Shares is sold. The net proceeds received in this offering
will be promptly deposited into the Rule 419 Escrow Account pending consummation
of a Business Combination and satisfaction of the Rule 419 Escrow Provisions,
including but not limited to the investors reconfirmation. SEE "INVESTORS'
RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419." Pursuant to applicable rules,
the Deposited Funds must be held in escrow pending consummation of a Business
Combination satisfying the criteria of Rule 419. Pursuant to Rule 419, following
the sale of the minimum number of Shares, 10% of the Offering proceeds remaining
after payment of commissions and/or finders fees may be released to the Company
as those funds are deposited in the Escrow Account. Thus, if the minimum number
of Shares is sold, $2,850 will be released to the Company and $11,400 will be
released to the Company if the maximum number of Shares are sold. There funds
will be added to the Company's current working capital.
The proceeds as if and when made available to the Company will be used to
pay the following expenses in the order stated:
<TABLE>
<CAPTION>
Minimum(1) Maximum(1)
<S> <C> <C>
Commissions $ 1,500(2) $ 6,000(2)
SEC Edgar Compliance Fees 4,000(3) 4,000(3)
Cost of Printing and Engraving 1,000 1,000
Escrow Fee 500 500
Blue Sky 500 500
Miscellaneous Expenses 1,000 1,000
Legal fees outstanding 10,000(4) 10,000(4)
Expenses of Effectuating a
Business Combination 7,500 86,000
Working Capital 4,000 11,000
$ 30,000 $120,000
</TABLE>
- -----------------
(1) The expenses will be paid in the order listed regardless of the amount of
proceeds received in the Offering. To the extent that the Company is
required to return proceeds of up to 20% in
26
<PAGE> 29
interest of the subscribers electing not to reconfirm their investment, the
Company will have up to approximately $6,000 less if the minimum number of
shares is sold and $24,000 less if the maximum number of Shares is sold to
apply towards the expenses of effecting a Business Combination.
(2) Assumes that the Company will be required to pay a 5% commission on all
sales of Shares.
(3) The Company's largest out of pocket expense, except for legal fees owed,
will be fees associated with the Commission's Edgar filing requirements.
(4) The legal fees listed will be payable to Sierchio & Albert, P.C., a law
firm in which two of the Company's principal stockholders are principals.
Sierchio & Albert, P.C. has orally agreed to defer payment of the $10,000,
to the extent there are insufficient funds, until the consummation of a
Business Combination
Upon the consummation of a Business Combination and the reconfirmation of
the investors' purchase of Shares, which reconfirmation must precede such
consummation, pursuant to Rule 419, the balance of the Deposited Funds will be
released to the Company and may be used to offset the expenses of consummating a
Business Combination including, without limitation, the preparation and filing
of a post effective amendment to the registration statement of which this
Prospectus is part.
The net proceeds when available to the Company are intended to be utilized
for the payment of expenses incurred by the Company in investigating and, if a
suitable opportunity is found, acquiring or investing in a business, the nature
and extent of which is presently unknown and for preparation and filing of the
post effective amendment. Investigation costs with respect to any specific
business opportunity will consist primarily of costs for attorneys and
accountants. There is no limit on the amount of such costs, and they may be
substantial. If a decision is made not to proceed with any given specific
business opportunity, such costs would not be recoverable. In this connection it
is contemplated that Sierchio & Albert, P.C., will continue to represent the
Company in connection with the consummations of a Business Combination, and in
connection therewith the preparation and filing of a post effective amendment to
the registration statement as to which this prospectus is part; and (ii) be paid
a fee, comparable to that payable to an at arms length third party providing
similar services, in connection therewith.
Pursuant to an oral agreement, which may be terminated by either party on
30 days prior written notice, the Company will use the business office of its
President, rent free, until such time as it consummates a Business Combination
or the Rule 419 Escrow is otherwise terminated. However, it may be necessary to
incur some administrative costs for clerical assistance, office supplies and
related items, the amount of which is not expected to be significant. It is
expected that such costs would be covered by existing working capital.
The Company has not entered into any negotiations or discussions with any
person or entity regarding any possible establishment or acquisition of assets
or businesses, and has not at this time identified the area or areas of business
which may be suitable for acquisitions. No assurance can be given that the
Company will be able to identify and acquire a business or that if such a
business is acquired that it can be operated profitably. SEE "RISK FACTORS."
While the Company presently anticipates that it will be able to locate and
consummate a Business Combination, which adheres to the criteria discussed under
"Investors' Rights and Substantive Protection Under Rule 419," if the Company
determines that a Business Combination requires additional funds, it
27
<PAGE> 30
may seek such additional financing through loans, issuance of additional
securities or through other financing arrangements. No such financial
arrangements presently exist, and no assurance can be given that such additional
financing will be available or, if available, whether such additional financing
will be on terms acceptable to the Company. Persons purchasing Shares in this
offering will not, unless required by law, participate in the determination of
whether to obtain additional financing or as to the terms of such financing.
Because of the Company's limited resources, it is likely that the Company will
become involved in only one Business Combination.
Except as described herein and set forth above, no portion of the proceeds
of the offering will be paid to officers, directors and/or their affiliates or
associates. In connection with the Offering, expenses of approximately $30,000
consisting of (1) a legal fee of $20,000 to be paid to Sierchio & Albert, P.C.,
of which $10,000 has been paid, (2) reimbursement of out-of-pocket expenses
incurred and paid by officers and directors on behalf of the Company in
connection with the offering (not expected to exceed $2,500), and (3) other
costs associated with this Offering of approximately $7,500 will be incurred by
the Company. It is anticipated that these expenses will be paid from (i) the
Company's working capital and (ii) the 10% of the proceeds of the Offering to be
distributed to the Company pursuant to Rule 419. If such working capital is
insufficient, the Company may seek to obtain additional financing through
offerings of equity and/or debt securities or borrowings. No assurance can be
given that such financing will be available or if available that it will be on
terms acceptable to the Company. There are no agreements between any existing
stockholder and the Company as to any such financing. SEE "RISK FACTORS."
In addition, the Company anticipates incurring additional expenses of
approximately $40,000 in connection with (1) the consummation of a Business
Combination and (2) the preparation and filing of the post effective amendment.
The Company anticipates that to the extent it sells less than 3,000,000
Shares, and if 20% in interest of the investors do not reconfirm their
investment, it will not have sufficient working capital from the Offering to pay
for the anticipated expenses of effecting a Business Combination and for general
administrative expenses for the next 18 months. In this event, it is the
Company's intention to have such costs paid for by the acquired business as part
of the Business Combination. if it can not successfully negotiate such payment,
it will look to third parties (including its stockholders) for interim
financing. No assurance can be given that such financing will be available.
There are no understandings or agreements with any persons regarding such
financing.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of the
date of this Prospectus and as adjusted to reflect the sale of the Shares
offered hereby. SEE "DESCRIPTION OF SECURITIES" and "SELECTED FINANCIAL
INFORMATION."
<TABLE>
<CAPTION>
As Adjusted
Authorized Outstanding Minimum Maximum
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 30,000,000 1,000,100 2,000,100 5,000,100
</TABLE>
28
<PAGE> 31
<TABLE>
<CAPTION>
AS OF AS ADJUSTED
JULY 10,1998 MINIMUM MAXIMUM
<S> <C> <C> <C>
STOCKHOLDER'S EQUITY
COMMON STOCK $1,000 $ 2,000 $ 5,000
ADDITIONAL PAID-
IN CAPITAL 4,500 32,500 119,500
TOTAL STOCKHOLDERS'
EQUITY $5,500 $52,500(1) $142,500(1)
</TABLE>
- ------------------
(1) Reflects the conversion of $17,000 promissory note into 100 shares of the
Company's Common Stock on September 4, 1998.
MARKET FOR THE COMPANY'S COMMON STOCK
Prior to the date hereof, there has been no trading market for the
Company's Common Stock. Pursuant to the requirements of Rule 15g-8 of the
Exchange Act, a trading market will not develop prior to or after the
effectiveness of this prospectus or while the Deposited Securities remain in the
Rule 419 Escrow. The Deposited Securities under this offering will remain in the
Rule 419 Escrow until, among other things, the Company's consummation of a
Business Combination pursuant to the requirements of Rule 419. There can be no
assurance that a trading market will develop upon the consummation of a Business
Combination and the subsequent release of the Deposited Securities from the Rule
419 Escrow.
PLAN OF OPERATION
BUSINESS OBJECTIVES
The Company's business plan is to seek to acquire or merge with potential
businesses that may, in the opinion of Management, warrant the Company's
involvement. Management's discretion is unrestricted, and the Company may
participate in any business whatsoever that may in the opinion of Management
meet the business objectives discussed herein. Indeed, the Company may
effectuate a Business Combination with another business outside the United
States. The Company has not limited the scope of its search to a particular
region. SEE "RISK FACTORS." The Company does not intend to utilize any notices
or advertisements in its search for business opportunities.
The Company's officers and directors will be primarily responsible for
searching for an appropriate merger or acquisition candidate. However, to the
extent that the existing stockholders are aware of any potential business
acquisition candidates, they will also refer these to the Company. SEE
"CONFLICTS OF INTEREST." The Company recognizes that as a result of its limited
financial, managerial or other resources, the number of suitable potential
businesses that may be available to it will be extremely limited. The Company's
principal business objective will be to seek long-term growth potential in the
business in which it participates rather than immediate, short-term earnings. In
29
<PAGE> 32
seeking to attain its business objectives, the Company will not restrict its
search to any particular industry. Rather, the Company may investigate
businesses of essentially any kind or nature, including but not limited to
finance, high technology, manufacturing, service, research and development,
communications, insurance, brokerage, transportation, and others. Management may
also seek to become involved with other development stage companies or companies
that could be categorized as "financially troubled." At the present time, the
Company has not chosen the particular area of business in which it proposes to
engage and has not conducted any market studies with respect to any business,
property or industry.
EVALUATION CRITERIA
The analysis of potential business endeavors will be undertaken by or under
the supervision of Management, no member of which is a professional business
analyst. Management is comprised of individuals of varying business experiences,
and Management will rely on its own business judgment in formulating decisions
as to the types of businesses that the Company may acquire or in which the
Company may participate. It is quite possible that Management will not have any
business experience or expertise in the type of business engaged in by the
company ultimately acquired. Management will seek to examine those factors
described herein when making a business decision; however, the mention of such
factors to be examined by Management with regard to its determining the
potential of a business endeavor should not be read as implying any experience
or expertise on behalf of Management as to the business chosen. These factors
are merely illustrative of the types of factors that Management may consider in
evaluating a potential acquisition.
Management anticipates that the selection of an Acquired Business will be
complex and risky because of the competition for such business opportunities
among all segments of the financial community. The nature of the Company's
search for the acquisition of an Acquired Business requires maximum flexibility
inasmuch as the company will be required to consider various factors and
divergent circumstances which may preclude meaningful direct comparison among
the various business enterprises, products or services investigated. Investors
should recognize that the possible lack of diversification among the Company's
acquisition may not permit the Company to offset potential losses from one
venture against profits from another. This should be considered a negative
factor affecting any decision to purchase the Shares. Management of the Company
will have virtually unrestricted flexibility in identifying and selecting a
prospective Acquired Business. Management will consider, among other factors in
evaluating a prospective acquired business and determining the "fair market
value" thereof, the following:
* the Acquired Business' net worth;
* the Acquired Business' total assets;
* the Acquired Business' cash flow;
* costs associated with effecting the Business Combination;
* equity interest in and possible management participation in the
Acquired Business;
* earnings and financial condition of the Acquired Business;
* growth potential of the Acquired Business and the industry in which it
operates;
30
<PAGE> 33
* experience and skill of management and availability of additional
personnel of the Acquired Business;
* capital requirements of the Acquired Business;
* competitive position of the Acquired Business;
* stage of development of the product, process or service of the Acquired
Business;
* degree of current or potential market acceptance of the product,
process or service of the Acquired Business;
* possible proprietary features and possible other protection of the
product, process or service of Acquired Business; and
* regulatory environment of the industry in which the Acquired Business
operates.
The foregoing criteria is not intended to be exhaustive; any evaluation
relating to the merits of a particular Business Combination will be based, to
the extent relevant, on the above factors as well as other considerations deemed
relevant by Management in connection with effecting a Business Combination
consistent with the Company's business objectives. No particular consideration
may be given to any particular factor.
Although it is anticipated that locating and investigating specific
business proposals will take at least several months, the time such process will
take can by no means be assured. However, such process cannot exceed, in any
event, the 18 month time schedule set forth in Rule 419. SEE "INVESTORS' RIGHTS
AND SUBSTANTIVE PROTECTION UNDER RULE 419." The time and costs required to
select and evaluate an Acquired Business candidate (including conducting a due
diligence review) and to structure and consummate the Business Combination
(including negotiating relevant agreements and preparing requisite documents for
filing pursuant to applicable securities laws and state corporate laws) cannot
presently be ascertained with any degree of certainty.
The Company anticipates that it will make contact with business prospects
primarily through the efforts of its directors, officers and stockholders, who
will meet personally with existing management and key personnel, visit and
inspect material facilities, assets, products and services belonging to such
prospects, and undertake such further reasonable investigation as management
deems appropriate, to the extent of its limited financial resources. The Company
anticipates that certain Acquired Business candidates may be brought to its
attention from various unaffiliated sources, including securities
broker/dealers, investment bankers, venture capitalists, bankers, other members
of the financial community, and affiliated sources. While the Company does not
presently anticipate engaging the services of professional firms that specialize
in business acquisitions on any formal basis, the Company may engage such firms
in the future, in which event the Company may pay a finder's fee or other
compensation. SEE "DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- - FINDERS FEES AND OTHER COMPENSATION."
To date, the Company has not selected any particular industry or any
Acquired Business in which to concentrate its Business Combination efforts. SEE
"RISK FACTORS."
31
<PAGE> 34
TAX CONSIDERATIONS
As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. The Company
will evaluate the possible tax consequences of any prospective Business
Combination and will endeavor to structure the Business Combination so as to
achieve the most favorable tax treatment to the Company, the Acquired Business
and their respective stockholders. The IRS or other appropriate state tax
authorities may attempt to recharacterize the tax treatment of a particular
Business Combination; and, as a result there may be adverse tax consequences to
the Company, the Acquired Business and their respective stockholders.
FORM AND STRUCTURE OF ACQUISITION
Of the various methods and forms by which the Company may structure a
transaction acquiring another business, Management is likely to use, without
limitation, one of the following forms: (i) a leveraged buyout transaction in
which most of the purchase price is provided by borrowings (typically secured by
the assets of the acquired business and intended to be repaid out of the cash
flow of the business) from one or more lenders or from the sellers in the form
of a deferred purchase price; (ii) a merger or consolidation of the acquired
corporation into or with the Company; (iii) a merger or consolidation of the
acquired corporation into or with a subsidiary of the Company organized to
facilitate the acquisition (a "subsidiary merger"), or a merger or consolidation
of such a subsidiary into or with the acquired corporation (a "reverse
subsidiary merger"); (iv) an acquisition of all or a controlling amount of the
stock of the acquired corporation followed by a merger of the Acquired Business
into the Company; (v) an acquisition of the assets of a business by the Company
or a subsidiary organized for such purpose; (vi) a merger or consolidation of
the Company with or into the acquired Business or subsidiary thereof; or (vii) a
combination of any of the foregoing. The actual form and structure of a Business
Combination may be also dependent upon numerous other factors pertaining to the
Acquired Business and its stockholders as well as potential tax and accounting
treatments afforded the Business Combination.
The Company may utilize cash (derived from the proceeds of this offering),
equity, debt or a combination of these as consideration in effecting a Business
Combination. Although the Company has no commitments as of the date of this
prospectus to issue any shares of Common Stock other than as described in this
Prospectus, the Company will, in all likelihood, issue a substantial number of
additional shares in connection with a Business Combination. To the extent that
such additional shares are issued, dilution to the interest of the Company's
stockholders may occur. Additionally, if a substantial number of shares of
Common Stock are issued in connection with a Business Combination, a change in
control of the Company may occur.
If securities of the Company are issued as part of an acquisition, it
cannot be predicted whether such securities will be issued in reliance upon
exemptions from registration under applicable federal or state securities laws
or will be registered for public distribution. When registration of securities
is required, substantial cost may be incurred and time delays encountered. In
addition, the issuance of additional securities and their potential sale in any
trading market which may develop in the Company's Common Stock, of which there
is no assurance, may depress the price of the Company's Common Stock in such
market. Additionally, such issuance of additional securities by the Company
would result in a decrease in the percentage of the Company's issued and
outstanding shares of Common Stock by the purchasers of the Common Stock being
offered hereby.
32
<PAGE> 35
The Company's operations may be limited by the Investment Company Act of
1940. While the Company will attempt to conduct its operations so as not to
require registration under the Investment Company Act of 1940, there can be no
assurance that the Company will not be deemed to be subject to the Investment
Company Act of 1940.
There are currently no limitations relating to the Company's ability to
borrow funds to increase the amount of capital available to the Company to
effect a Business Combination or otherwise finance the operations of the
Acquired Business. The amount and nature of any borrowings by the Company will
depend on numerous considerations, including the Company's capital requirements,
the Company's perceived ability to meet debt service on such borrowings and then
prevailing conditions in the financial markets, as well as general economic
conditions. There can be no assurance that debt financing, if required or
otherwise sought, would be available on terms deemed to be commercially
acceptable and in the best interest of the Company. The inability of the Company
to borrow funds for an additional infusion of capital into an Acquired Business
may have material adverse effects on the Company's financial condition and
future prospects. To the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks traditionally
associated with incurring indebtedness, including the risks of interest rate
fluctuations and insufficiency of cash flow to pay principal and interest.
Furthermore, an Acquired Business may have already incurred debt financing and,
therefore, all the risks inherent thereto.
Because of the Company's small size, investors in the Company should
carefully consider the business constraints on its ability to raise additional
capital when needed. Until such time as any enterprise, product or service which
the Company acquires generates revenues sufficient to cover operating costs, it
is conceivable that the Company could find itself in a situation where it needs
additional funds in order to continue its operations. This need could arise at a
time when the Company is unable to borrow funds and/or market acceptance for the
sale of additional shares of the Company's Common Stock does not exist.
The Company's stockholders are relying upon the business judgment of
Management in connection with the proper expenditure of the funds raised in this
offering and in the future operations of the Company. It is not expected that
stockholders of the Company will be consulted with respect to the expenditure of
the proceeds of this offering or in connection with any acquisition engaged in
by the Company, unless required by law.
DAILY OPERATIONS
The Company expects to use attorneys and accountants as necessary, and does
not anticipate a need to engage any full-time employees so long as it is seeking
and evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision of whether or not
to acquire or participate in a specific business opportunity. The Company has
allocated a portion of the offering proceeds for general overhead. Although
there is no current plan to hire employees on a full-time or part-time basis,
some portion of working capital may be used to pay any part-time employees
hired.
Until an active business is commenced or acquired, the Company will have no
employees or day-to-day operations. The Company is unable to make any estimate
as to the future number of employees which may be necessary, if any, to work for
the Company. If an existing business is acquired, it is possible that its
existing staff would be hired by the Company. At the present time, it is the
intention
33
<PAGE> 36
of Management to meet or be in telephone contact at least once a week and more
frequently, if needed, to review business opportunities, evaluate potential
acquisitions and otherwise operate the affairs of the Company. Except for
reimbursement of reasonable expenses incurred on behalf of the Company,
Management will not be compensated for these services rendered on behalf of the
Company.
YEAR 2000 ISSUES
The "Year 2000 problem," as it has come to be known, refers to the fact
that many computer programs use only the last two digits to refer to a year, and
therefore do not recognize a change in the first two digits. For example, the
year 2000 would be read as being the year 1900. If not corrected, this problem
could cause many computer applications to fail or create erroneous results.
Currently the Company does not own computer equipment nor does it rely on
any computer programs that will materially impact the operations of the Company
in the event of a Year 2000 disruption. However, like any other company,
advances and changes in available technology can significantly impact its
business and operation. Consequently, although the Company has not identified
any specific year 2000 issues, the "Year 2000" problems creates risk for the
Company from unforeseen problems in any computer systems acquired in the future
by the Company or the computer systems of third parties, including but not
limited to financial institutions or vendors with whom it transacts business and
of any Company which the Company may acquire or merge with in the future. Such
failures of the Company and/or third parties' computer systems could have a
material impact on the Company's ability to conduct its business as there can be
no assurance that any of the parties with whom the Company transacts business
including a potential target candidate will be Year 2000 compliant prior to such
date. The Company is unable to predict the ultimate effect that the Year 2000
problem may have upon the Company, in that there is no way to predict the impact
that the problem will have nation-wide or world-wide and how the Company will in
turn be affected. In addition, the Company cannot predict the nature of its
potential target candidate or others with whom it will transact business who
will fail to become Year 2000 compliant prior to January 1, 2000. Significant
Year 2000 difficulties on the part of parties with whom the Company transacts
business could have a material adverse impact upon the Company. The Company has
not to date formulated a contingency plan to deal with the potential
non-compliance of vendors, customers and others with whom it transacts business,
including a potential target company, but will be considering whether such a
plan would be feasible.
Prior to effecting a Business Combination, the Company will evaluate and
assess the potential impact of the Year 2000 problem on the Acquired Business.
LEGAL PROCEEDINGS
The Company is not a party to any litigation, and has no knowledge of any
threatened litigation against the Company.
OFFICE FACILITIES
The Company will maintain its business address at Suite 3132-595 Burrand
Street, Vancouver, B.C. Canada V7X 1J1. Pursuant to an oral agreement, which may
be terminated by either party on 30 days prior written notice, the Company will
use these offices on a rent free basis until such time as it consummates a
Business Combination or the Rule 419 Escrow is otherwise terminated. The Company
34
<PAGE> 37
is a development stage company and currently has no employees other than certain
of its officers and directors.
WORKING CAPITAL
The Company anticipates that it will need to sell at least 3,000,000 Shares
in order to have sufficient working capital to pay expenses related (1) to the
Offering, (2) the effectuation of a Business Combination and (3) general
administrative expenses over the next 18 months period. In the event it does not
it will seek to have (1) the costs associated with effecting the Business
Combination and (2) accrued and unpaid expenses paid by the acquired Business.
if it can not successfully negotiate such payment, it will look to third parties
(including its stockholders) for interim financing. No assurance can be given
that such financing will be available to the Company. There are no agreements or
understanding with any person regarding such financing. SEE "RISK FACTORS."
35
<PAGE> 38
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS AND EXECUTIVE OFFICERS
The following persons are the directors and executive officers of the
Company:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Gordon Bruce Keep 41 President and Director (since June 22, 1998)
</TABLE>
All directors and officers of the Company are elected annually to serve for
one year or until their successors are duly elected and qualified.
There are no agreements or understandings for any officer or director to
resign at the request of another person. However, it is likely that upon the
effecting of a business combination, the officers and directors will resign.
None of the officers or directors are acting on behalf of or will act at the
direction of any other person.
Management's business experience during the past five years is as follows:
GORDON BRUCE KEEP
Mr. Keep received a Bachelor of Science degree from Queens University in
1979 and a MBA from the University of British Columbia in 1983. Since October of
1997, Mr. Keep has been Senior Vice President of Lions Gate Entertainment Corp.
A public film production company whose shares are traded on the Toronto Stock
Exchange. From March 1987 to October 1997 Mr. Keep was Vice President-Corporate
Finance Yorkton Securities, Inc.
Management has not been involved in any previous blank check offerings.
There are no agreements, arrangements or understandings between Management
and anyone else pursuant to which other management is to be selected for a
particular office or position. It is estimated that Management of the Company
will devote such time as they deem necessary to the activities of the Company.
Since Mr. Keep is the Company's sole officer and director, it is anticipated
that he will spend a significant amount of time in the administration of the
Company's operations including the Company's efforts in seeking acquisition
candidates and consummating a Business Combination. Mr. Keep will have the
authority to, and will, engage outside consultants and professionals on a as
needed basis. The Company has not entered into any agreement or contract with
any outside consultant or advisor; nor, does it intend to enter into any such
agreements or contracts pending consummation of a Business Combination.
Mr. Keep does not have any interest or hold a position in any other blank
check companies. However, several of the Company's principal stockholders are
also principal stockholders in three additional blank check companies, each of
which has filed a registration statement with the Securities and Exchange
Commission for the purpose of effecting an offering of their respective
securities pursuant to Rule 419. SEE "PRINCIPAL STOCKHOLDERS."
36
<PAGE> 39
Although Management does not have any current plans to promote other blank
check entities, it may do so if this Offering is successful.
FINDERS FEES AND OTHER COMPENSATION
No officer or director presently receives a salary. Except as described
herein, it is not anticipated that any director or officer will receive any fee
or salary pending consummation of a Business Combination. However, directors
and/or officers will receive expense reimbursement for expenses reasonably
incurred on behalf of the Company.
In addition, Mr. Keep as a stockholder of the Company or his affiliates may
receive personal financial gain, other than from the proceeds of this Blank
Check Offering, by (i) payment of consulting fees; (ii) sales of affiliates'
stock; and (iii) payments of salaries. SEE "CONFLICTS OF INTEREST" AND "RISK
FACTORS." However, no finder fees will be paid to an officer, director or
principal stockholder of their affiliates by virtue of their initiation of, or
the identification of an Acquired Business with which, a Business Combination is
consummated.
CONFLICTS OF INTEREST
The proposed business of the Company raises potential conflicts of interest
between the Company and several of its principal stockholders. The Company has
been formed for the purpose of locating a suitable business opportunity in which
to participate. Several of the Company's principal stockholders are engaged in
various other business activities including, but not limited to, the
organization of companies or "blank check" companies in the future.
Specifically, four of the Company's principal stockholders are also principal
stockholders and/or officers and directors of Related Companies, each of which
has filed a registration statement with the Securities and Exchange Commission
for the purpose of effecting an Offering of their respective securities pursuant
to Rule 419. As such the Company may be deemed to be under common control with
the Related Companies. If and when the registration statements filed by the
Related Companies are declared effective, those companies will be competing
directly with the Company for other business opportunities. SEE "RISK FACTORS."
If the Related Companies are successful, the principal stockholders may,
although there is no assurance that they will do so, invest in additional
companies whose business plan would be to effect Rule 419 offerings, thereby
exacerbating the competitive environment in which the Company must operate. In
addition, from time to time, in the course of their business activities, The
stockholders may become aware of investment and business opportunities and may
be faced with the issue of whether to bring such opportunities to the attention
of the Company for its participation or to other companies with which they are
associated or have an interest in.
Officers and directors of Delaware corporations are required to bring
business opportunities to their corporation if the corporation could financially
undertake the opportunity and the opportunity is within the corporation's line
of business. Because the business of the Company is to locate a suitable
business venture, Management may be required to bring such business
opportunities to the Company. Potential conflicts may arise in the
determinations by Management as to whether these potential business
opportunities are within the financial means and proposed business plans of the
Company.
Accordingly, management may have a conflict in the event that another
"blank check" or "blind pool" associated with Management is actively seeking the
acquisition of properties and businesses that are
37
<PAGE> 40
identical or similar to those that the Company may seek. A conflict will not be
present as between the Company and another affiliated "blank check" or "blind
pool" if, before the Company begins seeking acquisitions, such other "blank
check" or "blind pool": (i) enters into any understanding, arrangement or
contractual commitment to participate in, or acquire, any business or property;
or (ii) ceases its search for additional properties or businesses identical or
similar to those the Company may seek. Conflicts also may not be present to the
extent that potential business opportunities are appropriate for the Company but
not for other affiliated "blank check" or "blind pools" (or vice versa), because
of such factors as the difference in working capital available to the Company.
If, however, at any time the Company and any other firms affiliated with
Management are simultaneously seeking business opportunities, Management may
face the conflict of whether to submit a potential business acquisition to the
Company or to such other firms. SEE "RISK FACTORS."
In order to resolve conflicts of interest, to the extent possible,
arising from the common share ownership of the Company with other blind pool
companies, the Company and the Related Companies have orally established the
following guidelines:
(a) if the business opportunity is identified by an officer or director of
the Company, notwithstanding that such person is also a principal stockholder of
a Related Company, the business opportunity will be directed to the Company;
(b) if the business opportunity is identified by a person who is a
principal stockholder of the Company but not an officer of the Company or of a
Related Company, the business opportunity will be directed to either the Company
or to a Related Company in order of the effective dates of the completion of
their respective Rule 419 offerings; to the extent that the company to whom the
business opportunity was directed declines to accept the business opportunity,
it will be offered to the Company which next completed its Rule 419 Offering;
and
(c) if the individual responsible for identifying the business opportunity
is an officer and/or director of more than one Related Company, the business
opportunity will be presented to those companies in the order in which their
offerings were completed.
38
<PAGE> 41
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of June 26, 1998 and as adjusted to
reflect the sale of the Shares offered hereby, by (i) each person who is known
by the Company to own beneficially more than 5% of the Company's outstanding
common stock; (ii) each of the Company's officers and directors; and (iii) all
directors and officers of the Company as a group.
<TABLE>
<CAPTION>
===========================================================================================================================
SHARES OF
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL BENEFICIALLY APPROXIMATE APPROXIMATE PERCENTAGE
OWNER OWNED PERCENTAGE TO BE OWNED
OWNED AFTER OFFERING
- ---------------------------------------------------------------------------------------------------------------------------
MINIMUM MAXIMUM
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gordon Keep 50,000 5.0% 2.5% 1.0%
5476 Angus Dr.
Vancouver, B.C.
Canada V6M 3N4
- ---------------------------------------------------------------------------------------------------------------------------
1213788 Ontario Limited (1) 225,100 22.5% 11.25% 4.50%
c/o Robert Cross
Suite 1000 Bentall Four
1055 Dunsmuir Street
P.O. Box 49333
Vancouver, B.C.
Canada V7X 1L4
- ---------------------------------------------------------------------------------------------------------------------------
Keith Peck 225,000 22.5% 11.25% 4.50%
Suite 1000 Bentall Four
1055 Dunsmuir Street
P.O. Box 49333
Vancouver, B.C.
Canada V7X 1L4
- ---------------------------------------------------------------------------------------------------------------------------
David Patterson (2) 125,000 12.5% 6.25% 2.50%
Suite 1360
605 Robson Street
Vancouver, B.C.
Canada V6B 5J3
- ---------------------------------------------------------------------------------------------------------------------------
Michael Seifert (3) 125,000 12.5% 6.25% 2.50%
700-625 Howe Street
Vancouver, B.C.
Canada V6C 2T6
- ---------------------------------------------------------------------------------------------------------------------------
Joseph Sierchio (4) 125,000 12.5% 6.25% 2.50%
41 East 57th Street
Penthouse A,
New York, NY 10022
- ---------------------------------------------------------------------------------------------------------------------------
Stephen A. Albert (4) 125,000 12.5% 6.25% 2.50%
41 East 57th Street
Penthouse A,
New York, NY 10022
- ---------------------------------------------------------------------------------------------------------------------------
Officers and Directors as a 50,000 5.0% 2.5% 1.0%
Group (1 person)
===========================================================================================================================
</TABLE>
39
<PAGE> 42
(1) 1213788 Ontario Limited is a holding company for Mr. Robert Cross.
(2) Mr. Patterson serves as President and Director of Northtech Ventures, Inc.
("Northtech") and Intertech Ventures, Inc. ("Intertech") and is also a
principal shareholder of Northtech, Intertech and Worldwide Tech, Inc.
("Worldwide"). Northtech, Intertech and Worldwide are blank check
companies. SEE "CONFLICTS OF INTEREST" AND "RISK FACTORS".
(3) Mr. Seifert serves as President, Secretary and sole Director of Worldwide
and he is a principal shareholder of Intertech and Northtech. Northtech,
Intertech and Worldwide are blank check companies. SEE "CONFLICTS OF
INTEREST" AND "RISK FACTORS".
(4) Joseph Sierchio and Stephen A. Albert are principal stockholders of
Northtech, Intertech and Worldwide. Northtech, Intertech and Worldwide are
blank check companies. SEE "CONFLICTS OF INTEREST" AND "RISK FACTORS".
None of the Stockholders concede any affiliation with any other
stockholder for purposes of such stockholders investment in the Company.
None of these Shares will be available for resale pursuant to Rule 144 of
the Act until at least April, 1999.
Except for the securities being registered pursuant hereto, such shares
are "restricted securities", as that term is defined in the rules and
regulations promulgated under the Act, subject to certain restrictions regarding
resale. SEE "RISK FACTORS." Certificates evidencing all of the above-referenced
securities, except for the securities being registered pursuant hereto, have
been stamped with a restrictive legend and will be subject to stop transfer
orders.
CERTAIN TRANSACTIONS
The Company was incorporated in the State of Delaware on April 8, 1998.
The Company subsequently issued 500,000 shares for $.01 per share or an
aggregate price of $5,000 and 500,000 shares at a price of $.001 per share or
$500 in the aggregate. On September 4, 1998, 1213788 Ontario Limited, a
stockholder of the Company, converted a $17,000 promissory note into 100 shares
of the Company's Common Stock. SEE "PRINCIPAL STOCKHOLDERS."
The Company had issued a short term note (the "Note") in the amount of
$17,000 to 1213788 Ontario Limited, a principal shareholder. On September 4,
1998, the Note was satisfied in full in consideration of the issuance by the
Company of 100 shares of Common Stock to 1213788 Ontario Limited.
In connection with the Offering, the Company has incurred a legal fee of
$20,000 (of which $10,000 has been paid) payable to Sierchio & Albert, P.C., a
law firm in which two principal stockholders of the Company, Joseph Sierchio and
Stephen A. Albert, are principals.
40
<PAGE> 43
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 30,000,000 shares of common
stock, $.001 par value per share, of which 1,000,100 shares were issued and
outstanding as of the date of this Prospectus. Each outstanding share of common
stock entitles the holder to one vote, either in person or by proxy, on all
matters that may be voted upon by the owners thereof at meetings of the
stockholders.
The holders of common stock (i) have equal rights to dividends from
funds legally available therefor, when, as and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of common stock upon
liquidation, dissolution or winding up of the affairs of the Company; (iii) do
not have preemptive, subscription or conversion rights, and (iv) are entitled to
one non-cumulative vote per share on all matters on which stockholders may vote
at all meetings of stockholders.
All shares of common stock which are the subject of this offering,
when issued, will be fully paid for and non-assessable, with no personal
liability attaching to the ownership thereof. The holders of shares of common
stock of the Company do not have cumulative voting rights, which means that the
holders of more than 50% of such outstanding shares, voting for the election of
directors, can elect all directors of the Company if they so choose and, in such
event, the holders of the remaining shares will not be able to elect any of the
Company's directors. At the completion of the Offering, the present officers and
directors of the Company will own approximately 2.5% of the then outstanding
shares if the maximum number of Shares is sold and 1.0% of the then outstanding
shares if the minimum number of shares is sold (assuming no Shares are acquired
in the Offering).
REPORTS TO STOCKHOLDERS
The Company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable after the end of
each fiscal year. The Company's fiscal year ends on December 31. In addition,
the Company intends to issue unaudited interim reports and financial statements
on a quarterly basis.
DIVIDENDS
The Company has not declared any dividends since inception, and has
no present intention of paying any cash dividends on its common stock in the
foreseeable future. The payment by the Company of dividends, if any, in the
future, rests within the discretion of its Board of Directors and will depend,
among other things, upon the Company's earnings, its capital requirements and
its financial condition, as well as other relevant factors.
DISTRIBUTION OF SECURITIES
The Company is offering a minimum of 1,000,000 and a maximum of
4,000,000 Shares at the purchase price of $.03 per Share on a "best efforts all
or none basis" as to the first 1,000,000 Shares and on a "best efforts" basis
with regard to the remaining 4,000,000 Shares. If the minimum number of shares
is not sold during the Offering Period, the proceeds received will be promptly
41
<PAGE> 44
returned to investors with interest. The Company may allocate among or reject
any offers to purchase, in whole or in part. Moreover, the Company's directors
and officers may purchase Shares on the same terms and conditions as all other
investors provided, however, that any such Shares so purchased will not be
included in calculating the minimum number of Shares to be sold.
The Shares will be offered and sold as follows: (a) by Mr. Keep,
the Company's President and sole director, to the extent such offers and sales
are made to the Company's officers, directors, stockholders and their
affiliates; and (b) otherwise (i) in the United States, by registered
broker/dealers or third parties not otherwise required to register as
broker/dealer under applicable federal and state securities laws, and (ii) in
jurisdictions outside the United States, by brokers/dealers registered in such
jurisdictions or other third parties otherwise permitted to offer and sell such
securities under applicable local law. Mr. Keep will not receive any
compensation or commissions for his services in connection with offers and sales
of the Company's securities except for reimbursement for reasonable expenses
incurred on behalf of the Company. The Company, however, reserves the right to
pay commissions and finders fees in an amount up to 5% of the gross Offering
proceeds in connection with any sales of shares effected through registered
brokers/dealers and/or finders otherwise permitted to receive such compensation
under applicable local laws. Mr. Keep has limited experience in the sale of
securities and neither he nor the Company are registered as a broker or
dealer under Section 15 of the Securities Exchange Act of 1934.
The Shares will be offered in the States of Florida, New York as
well as in the Province of British Columbia, Canada and certain other foreign
jurisdictions. The foreign jurisdictions other than British Columbia, Canada in
which the Company intends to offer the Shares are not presently known. Prior to
effecting any sales of the Shares in any jurisdiction other than Florida, New
York, or British Columbia, Canada, the Company will amend this prospectus for
the purpose of disclosing such additional jurisdictions.
The Company is conducting the Offering as a blank check offering
subject to the provisions of Rule 419. However, until the earlier to occur of
(i) the sale of at least 1,000,000 Shares or (ii) the expiration of the Offering
Period, the Escrow Agent will maintain all proceeds in an escrow account
pursuant to the requirements of Rule 419. If at least 1,000,000 Shares
(exclusive of Shares, if any, acquired by the Company's officers and directors),
are not sold during the Offering Period, the proceeds therefrom will be returned
to the investors with interest. At such time as at least 1,000,000 Shares
(exclusive of Shares, if any, acquired by the Company's officers and directors)
are sold during the Offering Period, the proceeds from such sale, as well as the
proceeds from the sale of up to an additional 3,000,000 Shares (except as to 10%
thereof which will be released to the Company after commission expenses are paid
pursuant to Rule 419) will then continue to be deposited and held pursuant to
the provisions of Rule 419 Escrow. SEE "INVESTOR'S RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419 - DEPOSITED FUNDS AND DEPOSITED SECURITIES."
The funds received by the Company with respect to the Shares that
may be sold, less the amount permitted by Rule 419 (an amount equal to up to 10%
of the proceeds after payment of commissions) to be delivered to the
Company, will be deposited and maintained in the Rule 419 Escrow pursuant to the
terms of an escrow agreement entered into between the Company and the Escrow
Agent. Shares will be issued to purchasers only if at least 1,000,000 Shares are
sold by the Company; after the sale of at least 1,000,000 Shares, all Shares
sold pursuant hereto will be held in escrow in accordance with the provisions of
Rule 419.
42
<PAGE> 45
METHOD OF SUBSCRIBING
Prospective investors should make their checks payable to Firstrust
Saving Bank, as Escrow Agent and remit the checks and subscription agreement to
the Company at Suite 3132-595 Burrand Street, Vancouver, B.C. Canada V7X 1J1.
Subscriptions may not be withdrawn once made except in accordance with
applicable law. The Company reserves the right to reject any subscription in
whole or in part in its sole discretion for any reason whatsoever
notwithstanding tender of payment and to withdraw this Blank Check Offering at
any time prior to acceptance by the Company of the subscriptions received.
Funds will be held by the Escrow Agent, as described herein. There
can be no assurance that any or all of the Shares being offered hereby will be
sold.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to any provisions contained in its
Certificate of Incorporation, or by-laws, 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 expenses 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 indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
LEGAL OPINIONS
Sierchio & Albert, P.C., 41 East 57th Street, 39th Floor, New
York, New York 10022, have acted as Counsel to the Company, in connection
with the offering and will render an opinion as to the legality of the
securities being offered hereby. Each of Messrs. Sierchio and Albert owns
125,000 shares of the Company's common stock. SEE "PRINCIPAL STOCKHOLDERS."
EXPERTS
The Financial Statements included in this Prospectus and elsewhere
in the Registration Statement as of June 26, 1998 and for the period of
inception April 8, 1998, to June 26, 1998 have been audited by Prinzi & Company,
independent public accountants as indicated in their report with respect
thereto; the reports are included in reliance upon the authority of said firm as
an expert in accounting and auditing in giving said report.
43
<PAGE> 46
NORCAN VENTURES, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Public Accounts 2
Financial Statements:
Balance Sheet-July 10, 1998............................................................. 3
Statement of Operations for the period April 8, 1998 (date of
Inception) Through July 10, 1998.................................................... 4
Statement of Changes in Shareholders' Equity for the period April 8, 1998
(date of Inception) Through July 10, 1998........................................... 5
Statement of Cash Flows for the period April 8, 1998 (date of
Inception) Through July 10, 1998.................................................... 6
Notes to Financial Statements................................................................ 7 to 9
</TABLE>
1
<PAGE> 47
[LETTERHEAD FOR PRINZI AND COMPANY]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Norcan Ventures, Inc.:
We have audited the accompanying balance sheet of Norcan Ventures, Inc. (a
Delaware corporation in the development stage) as of July 10, 1998, and the
related statements of operations, changes in shareholders' equity and cash flows
for the period from inception (April 8,1998) to July 10,1998. 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 audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing 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 Norcan Ventures, Inc. as of
July 10,1998, and the results of its operations and its cash flows for the
period from inception (April 8,1998) to July 10,1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying financial
statements, the Company is a development stage enterprise with no significant
operating results to date. The factors discussed in Note 1 to the financial
statements raise a substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regards to those matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Prinzi & Company
[PRINZI & COMPANY]
Staten Island, New York
July 15, 1998
2
<PAGE> 48
NORCAN VENTURES, INC.
(A Development Stage Company)
BALANCE SHEET
July 10, 1998
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash................................................................ $ 12,500
----------
Total Current Assets........................................... 12,500
----------
Deferred Registration Costs.............................................. 23,100
----------
Total Assets.................................................... $ 35,600
----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accrued registration costs.......................................... $ 13,100
Note from affiliate................................................. 17,000
----------
Total Current Liabilities....................................... 30,100
----------
Shareholders' Equity:
Common stock, $.001 par value, 30,000,000 shares authorized,
1,000,000 shares issued and outstanding.......................... 1,000
Additional paid-in-capital................................................ 4,500
----------
Total Shareholders' Equity....................................... 5,500
Total Liabilities and Shareholders' Equity....................... $ 35,600
==========
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE> 49
NORCAN VENTURES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period April 8, 1998
(Date of Inception) Through July 10, 1998
<TABLE>
<S> <C>
Revenues................................................................................... $ -
------------
Expenses................................................................................... -
------------
Net Income................................................................................. $ -
------------
Net Income per Common Share................................................................ $ -
============
Weighted Average Number of Common Shares Outstanding....................................... 1,000,000
============
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE> 50
NORCAN VENTURES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the period April 8, 1998
(Date of Inception) Through July 10, 1998
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL INCOME ACCUMULATED
-------------------------- PAID IN DURING THE
SHARES PAR VALUE CAPITAL DEVELOPMENT STAGE TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of stock to
original founders for
cash............... 1,000,000 $ 1,000 $ 4,500 $ 5,500
Net Income For the period
April 8, 1998 (Date of
Inception) Through July
10, 1998........... - - - -
------------------------------------------------------------------------
Balance, July 10, 1998 1,000,000 $ 1,000 $ 4,500 $ 5,500
========================================================================
</TABLE>
See Accompanying Notes to Financial Statements
5
<PAGE> 51
NORCAN VENTURES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period April 8, 1998
(Date of Inception) Through July 10, 1998
<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net increase in Accrued Registration Costs................................... $ 13,100
Net increase in Deferred Registration Costs.................................. (23,100)
----------
Net Cash Used in Operating Activities.................................... (10,000)
----------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock....................................... 5,500
Proceeds from Note from Affiliate............................................ 17,000
----------
Net Cash Provided By Financing Activities................................ 22,500
----------
Net Increase in Cash: 12,500
Cash, beginning of period......................................................... -
----------
Cash, end of period............................................................... $ 12,500
==========
</TABLE>
See Accompanying Notes to Financial Statements
6
<PAGE> 52
NORCAN VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND OPERATIONS
Norcan Ventures, Inc. ("the Company") was incorporated in the state of Delaware
on April 8, 1998, for the purpose of raising capital, which is to be used to
effect a business combination. The Company is currently in the development
stage. All activity of the Company to date relates to its formation and proposed
fund raising. Management has elected a December 31 year end for the Company.
The Company's ability to commence operations is contingent upon obtaining
financing through a public offering of the Company's common stock.
The Company is planning to register its securities with the Securities and
Exchange Commission and offer certain securities in a "blank check" offering
subject to Rule 419 of the Securities Act of 1933, as amended ("Rule 419"). The
offering allows for the Company to sell a minimum of 1,000,000 and a maximum of
4,000,000 shares of common stock, $.001 par value, at $.03 per share.
Accordingly, the offering proceeds and the securities purchased by investors,
less 10% of the deposited funds which will be delivered to the Company as
permitted by Rule 419, will be held in escrow subject to the satisfaction of the
provisions of Rule 419.
As a result of its limited resources, the Company will, in all likelihood, have
the ability to effect only a single business combination. Accordingly, the
prospects for the Company's success will be entirely dependent upon the future
performance of a single business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH & CASH EQUIVALENTS
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments with original maturities of three months or less. For
the period April 8, 1998 (Date of Inception) through July 10, 1998 the Company
maintained its cash balances in an interest bearing account.
UTILIZATION OF ESTIMATES
The Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE> 53
NORCAN VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET INCOME PER COMMON SHARE
Net income per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
SHORT-TERM CLASSIFICATION
In accordance with the provisions of Rule 419, the Company must liquidate if no
qualified business combination can be arranged within 18 months of the effective
date of this registration, therefore, for financial reporting concerns, the
Company considers the business cycle and a short-term obligation to be 18 months
or less.
NOTE 3. CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of 30,000,000
shares of Common Stock. The Company's Board of Directors has the power to issue
any or all of the authorized but unissued Common Stock without stockholder
approval. The Company will, in all likelihood, issue a substantial number of
additional shares in connection with a business combination. To the extent that
additional shares of common stock are issued, dilution to the interest of the
Company's stockholders participating in the proposed offering will occur.
NOTE 4. RELATED PARTY TRANSACTIONS
At July 10,1998, various members of the Company's legal counsel owned 250,000
shares of the Company's Common Stock.
The Company secured a short-term note in the amount of $17,000 from a
stockholder. See Note 7 "SHORT-TERM DEBT."
<PAGE> 54
NORCAN VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5. CONFLICTS OF INTEREST
The proposed business of the Company raises potential conflicts of interests
between the Company and its officers and directors. The Company has been formed
for the purpose of locating a suitable business opportunity in which to
participate. The officers and directors of the Company (Collectively the
"Management"), who will not devote full time to the Company, are engaged in
various other business activities. From time to time, in the course of such
activities they may become aware of investment and business opportunities and
may be faced with the issue of whether to bring such opportunities to the
attention of the Company for its participation.
Accordingly, Management may have a conflict in the event that another "blank
check" or "blind pool" associated with Management is actively seeking the
acquisition of properties and business that are identical or similar to those
that the Company may seek
NOTE 6. INCOME TAXES
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this method,
deferred income taxes are determined based on differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
NOTE 7. SHORT-TERM DEBT
A short-term note payable has been secured from an affiliate (the "Note") in the
amount of $17,000. The Note bears no interest and is due the earlier of (i)
December 31, 1999 or (ii) a consummation of a business acquisition within the
parameters and guidelines of Rule 419.
<PAGE> 55
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF. IN THE EVENT ANY MATERIAL CHANGES OR TRANSACTIONS
NOT MENTIONED HEREIN ARISE, THE COMPANY HAS UNDERTAKEN THE RESPONSIBILITY TO
AMEND THIS PROSPECTUS AND THE REGISTRATION STATEMENT, OF WHICH THIS PROSPECTUS
IS A PART, THROUGH THE FILING OF POST-EFFECTIVE AMENDMENTS, INDICATING THE
EXISTENCE OF ANY SUCH MATERIAL CHANGES OR TRANSACTIONS WHICH ARE NOT REFLECTIVE
OR CONTAINED HEREIN.
TABLE OF CONTENTS
Page
Available Information 6
Prospectus Summary 7
Risk Factors 9
Selected Financial Information 20
Investors' Rights and Substantive
Protection Under Rule 419 20
The Company 23
Dilution 24
Use of Proceeds 25
Capitalization 28
Market For the Company's Common Stock 29
Plan of Operation 29
Directors, Executive Officers, Promoters
and Control Persons 36
Conflicts of Interest 37
Principal Stockholders 39
Certain Transactions 40
Description of Securities 41
Distribution of Securities 41
Legal Opinions 43
Experts 43
Financial Statements F(i)
NORCAN VENTURES, INC.
4,000,000 Shares
of Common Stock, $.001 par value per Share
Until 90 days after the registered securities are released from escrow pursuant
to Rule 419 of Regulation C, promulgated under the 1933 Securities Act, as
amended, all dealers effecting transactions in the securities whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligations of the dealers to deliver a prospectus
when acting as underwriters with respect to their unsold allotments or
subscriptions.
PROSPECTUS
Norcan Ventures, Inc.
Suite 3132-595 Burrand Street
Vancouver, B. C. Canada V7X 1J1
(604) 683-0564
<PAGE> 56
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except as hereinafter set forth, there is no charter provision, bylaw,
contract, arrangement or statute under which any officer or director of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of The Delaware General Corporation Law, as amended, provides for
the indemnification of the Company's officers, directors and corporate employees
and agents under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding, by judgment,order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such court shall deem
proper.
II-1
<PAGE> 57
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of the directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested director so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of any undertaking by or on
behalf of such director to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses including attorneys' fees incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
including (any constituent of a constituent) absorbed in a consolidation or
merger which, if separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
II-2
<PAGE> 58
(i) For purposes of this section, reference to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involve services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
THE SECURITIES AND EXCHANGE COMMISSION'S POLICY ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, 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 expenses 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
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering are as follows:
<TABLE>
<CAPTION>
Item Amount
---- ------
<S> <C>
Securities and Exchange Commission
Registration Fee $ 35.00
Cost of Electronic Filings 3,000.00
Cost of Printing and Engraving 1,000.00
Escrow Fees 500.00
Legal Fees 20,000.00
Accountants' Services and Expenses 3,000.00
"Blue Sky" Fees and Expenses 500.00
Miscellaneous Expenses 1,000.00
-----------
TOTAL $ 29,035.00
===========
</TABLE>
II-3
<PAGE> 59
Item 26. RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, the Registrant has sold securities in the manner
set forth below without registration under the Securities Act of 1933, as
amended (the "Act").
In on or about April 1998 the Company raised $5,500 in said capital through
the sale of 1,000,000 shares of common stock as follows:
<TABLE>
<CAPTION>
==============================================================================
NAME AND ADDRESS OF SHARES OF COMMON STOCK
BENEFICIAL PURCHASED
OWNER
- ------------------------------------------------------------------------------
<S> <C>
Gordon Keep 50,000
5476 Angus Dr.
Vancouver, B.C.
Canada V6M 3N4
- ------------------------------------------------------------------------------
1213788 Ontario Limited 225,000
c/o Robert Cross
Suite 1000 Bentall Four
1055 Dunsmuir Street
P.O. Box 49333
Vancouver, B.C.
Canada V7X 1L4
- ------------------------------------------------------------------------------
Keith Peck 225,000
Suite 1000 Bentall Four
1055 Dunsmuir Street
P.O. Box 49333
Vancouver, B.C.
Canada V7X 1L4
- ------------------------------------------------------------------------------
David Patterson 125,000
Suite 1360
605 Robson Street
Vancouver, B.C.
Canada V6B 5J3
- ------------------------------------------------------------------------------
Michael Seifert 125,000
700-625 Howe Street
Vancouver, B.C.
Canada V6C 2T6
- ------------------------------------------------------------------------------
Joseph Sierchio 125,000
41 East 57th Street
Penthouse A,
New York, NY 10022
- ------------------------------------------------------------------------------
Stephen A. Albert 125,000
41 East 57th Street
Penthouse A,
New York, NY 10022
==============================================================================
</TABLE>
Except for the securities being registered hereunder, such shares are
"restricted securities," as that term is defined in the rules and regulations
promulgated under the Securities Act of 1933, as amended, subject to certain
restrictions regarding resale. Certificates evidencing all of the
above-referenced securities have been stamped with a restrictive legend and will
be subject to stop transfer orders.
The Registrant believes that each of the above-referenced transactions was
exempt from registration under the Act, pursuant to Regulation S as promulgated
under the Act and by Section 4(2) of the Act and the rules and regulations
promulgated thereunder as a transaction by an issuer not involving any public
offering.
II-4
<PAGE> 60
<TABLE>
<CAPTION>
Item 27. EXHIBITS
<S> <C>
3(i)(1) Certificate of Incorporation*
3(i)(2) Amendment to Certificate of Incorporation*
3(ii) By-Laws*
4(i)(1) Form of Escrow Agreement*
4(i)(2) Form of Subscription Agreement*
5(i) Opinion of Sierchio & Albert, P.C.*
23(i)(1) Consent of Sierchio & Albert, P.C. (included in Exhibit 5(i))*
23(i)(2) Consent of Prinzi & Company
24 Power of Attorney**
</TABLE>
* PREVIOUSLY FILED
** Included on the Signature Page to the Registration Statement on Form SB-2
II-5
<PAGE> 61
Item 28. UNDERTAKINGS
(1) To file, during any period in which offers and sales of the securities
offered hereby are made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act"); and
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) that, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of the
offering.
(4) That all such post-effective amendments will comply with the applicable
form, rules and regulations of the Securities and Exchange Commission in effect
at the time of the filing thereof.
(5) In the event any material changes or transactions not mentioned herein
arise, the Company has undertaken the responsibility to amend this prospectus
and the Registration Statement, of which this prospectus is a part, through the
filing of post-effective amendments, indicating the existence of any such
material changes of transactions which are not reflected or contained herein, if
such changes occurs within 90 days of the Effective Date.
(6) To file a post-effective amendment or a supplement to the Registration
Statement to reflect (i) a probable acquisition as contemplated by Rule 419 ,
(ii) the sale of Shares in any jurisdictions other than Florida, New York and
the Province of British Columbia, Canada and (iii) the engagement of a
registered broker/dealer or finder to assist the Company in the offer and sale
of the Shares.
II-6
<PAGE> 62
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned
hereunto duly authorized in the City of Vancouver on the 30th day of October,
1998.
NORCAN VENTURES, INC.
(Registrant)
By: /s/Gordon Bruce Keep
---------------------------------------------
Gordon Bruce Keep, President and Director
<PAGE> 63
NORCAN VENTURES, INC.
AMENDMENT NO. 1 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ON FORM SB-2
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Document Page
<S> <C> <C>
3(i)(1) Certificate of Incorporation*
3(i)(2) Amendment to Certificate of Incorporation*
3(ii) By-Laws*
4(i)(1) Form of Escrow Agreement*
4(i)(2) Form of Subscription Agreement*
5(i) Opinion of Sierchio & Albert, P.C.*
23(i)(1) Consent of Sierchio & Albert, P.C. (included in Exhibit 5(i))*
23(i)(2) Consent of Prinzi & Company
24 Power of Attorney*
</TABLE>
* PREVIOUSLY FILED.
<PAGE> 1
[PRINZI AND COMPANY LOGO]
PRINZI AND COMPANY
Certified Public Accountants
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Amendment No. 1 to Form SB-2 of our report dated July
15, 1998 relating to the financial statements of Norcan Ventures, Inc. as of
July 10, 1998 and for the period from inception (April 8, 1998) to July 10,
1998, which appears in such Prospectus. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ Prinzi & Company
Staten Island, New York
July 15, 1998
