As filed with the SEC on January 20, 1999 SEC
Registration No. *
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
4 BRANDON - I, INC.
(Exact name of registrant as specified in charter)
Florida 6770 Applied for
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification
incorporation or Number)
organization)
As filed with the Securities and Exchange Commission on May 13,
1998 SEC Registration No. 33-98526-D
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
4 BRANDON - I, INC.
(Exact name of registrant as specified in charter)
FLORIDA 6770 APPLIED FOR (State or other (Primary
Standard Industrial (IRS Employer jurisdiction of Classification Code
Number) Identification
incorporation or Number)
organization)
4 BRANDON - I, INC.
2503 W. Gardner Ct.
Tampa, FL 33611
(Address and telephone number of registrant's principal executive
offices and principal place of business)
Michael T. Williams, Esq., PRESIDENT
4 BRANDON - I, INC.
2503 W. Gardner Ct.
Tampa, FL 33611
(Name, address, and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
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) 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. [ ]
(Continued on Next Page)
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CALCULATION OF REGISTRATION FEE
Title of Each Amount Proposed Proposed Amount of
Class of Securities to be Maximum Maximum Registration
Being Registered Registered Offering Aggregate Fee
Price Offering
Per Share Price
Common Stock, par
value $.01 per
share 500,000 $.0 $ 0 $ 100
TOTAL $ 100
MINIMUM FEE $100.00
The registrant hereby amends this registration statement on such date or dates
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.
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4 BRANDON -I, INC.
Cross Reference Sheet between Items of Form SB-2
and Prospectus Pursuant to Rule 501(b) of Regulation S-B
Item in Form SB-2 Location in Prospectus
1.Front of Registration Statement and
Outside Front Cover Page of the
Prospectus Cover Pages
2.Inside Front and Outside Back Cover Pages
of Prospectus Cover Pages
3.Summary Information and Risk Factors Prospectus Summary,
Risk Factors
4.Use of Proceeds Use of Proceeds
5.Determination of Offering Price Risk Factors,
Offering
6.Dilution Not Applicable
7.Selling Security Holders Not Applicable
8.Plan of Distribution Offering
9.Legal Proceedings Legal Proceedings
10.Directors, Executives Officers,
Promoters and Control Persons Management
11.Security Ownership of Certain Beneficial
Owners and Management Principal
Shareholders
12.Description of Securities to be
Registered Description of
Securities
13.Interest of Named Experts and Counsel Experts
14.Disclosure of Commission position
on Indemnification for
Securities Act Liabilities Indemnification
15.Organization Within Last 5 years Proposed Business,
Certain Transactions
16.Description of Business Proposed Business
17.Management's Discussion and Analysis or Plan of Operation
Management's Discussion and Analysis or
Plan of Operation
18.Description of Property Proposed Business
19.Certain Relationships and Related
Transactions Risk Factors,
Certain Transactions
20.Market for Common Equity and
Related Stockholder Matters Risk Factors,
Description of
Securities
21.Executive Compensation Management
22.Financial Statements Financial Statements
(The next two pages in the Prospectus are, respectively, Cover Page - Outside
Back and Cover Page - Outside Front.)
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Subject to Completion, dated *. Information contained herein is subject to
completion or amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such State.
4 BRANDON- 1, INC.
10,000,000 Shares of Common Stock
4 BRANDON- 1, INC. (the "Company") hereby offers up to 10,000,000 shares of
Common Stock, par value $.01 per share ("the Shares"). See "Description of
Securities." The Shares are being distributed free of charge. There is no
minimum offering. The Company is a blank check company and has not engaged in
any business and has no specific plans for any given business or industry.
THIS BLANK CHECK OFFERING IS SUBJECT TO THE PROVISIONS OF RULE 419.
ACCORDINGLY, THE SECURITIES PURCHASED BY INVESTORS ("DEPOSITED SECURITIES WILL
BE HELD IN ESCROW (THE "RULE 419 ESCROW") SUBJECT TO THE SATISFACTION OF THE
PROVISIONS OF THE RULE 419 ESCROW.
The Deposited Securities may not be released until an acquisition meeting
certain specified criteria has been made. There is no minimum number of
purchasers who must reconfirm their investment in accordance with the procedures
set forth in Rule 419 for the acquisition to be consummated. 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. If any of the investors do not elect to remain investors, the
Deposited Securities will not be distributed to them. 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
Securities will be returned to the Company. See "Investors' Rights and
Substantive Protection under Rule 419."
Prior to this offering there has been no public 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 as assets, book value or prospective earnings. There can be no
assurance that a regular trading market will develop for the Shares after this
offering or that, if developed, any such market will be sustained. The Company
anticipates that trading of the Shares will be conducted through what is
customarily known as the "pink sheets" and/or on the National Association of
Securities Dealers, Inc.'s Electronic Bulletin Board (the "Bulletin Board").
Any market for the Shares which may result will likely be less well developed
than if the Shares were traded on NASDAQ or on an exchange.
.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" at pages *.
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.
Offering Proceeds to
Price to Public (1) Discount (2) Company (3)
Per Share $ .0 $ .0 $ .0
Maximum
10,000,000 $ .0 $ .0 $ .0
(Notes on following page.)
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The date of this Prospectus is , 19
NOTES:
(1) The Shares are offered by the Company on a "best efforts" no minimum, *
Share maximum basis. The Company intends to offer the Shares through its
officer and director without the use of a professional underwriter. No
commissions will be paid for sales effected by officers and director.
(2) Mr. Williams, the President of the Company, will pay all offering costs,
including filing, printing, legal, accounting, transfer agent and escrow
agent fees (collectively, the "Offering Costs") estimated at $10,000.
Until ______________,199__ ( 90 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution are required to deliver a prospectus. This is
in addition to the obligations of dealers to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions
THE SHARES ARE BEING OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE WHEN, AS AND
IF DELIVERED TO AND ACCEPTED BY THE COMPANY, AND SUBJECT TO APPROVAL OF CERTAIN
LEGAL MATTERS BY COUNSEL AND CERTAIN OTHER CONDITIONS. THE COMPANY RESERVES THE
RIGHT TO WITHDRAW, CANCEL OR MODIFY THIS OFFERING AND TO REJECT ANY ORDER IN
WHOLE OR IN PART.
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.")
THE COMPANY HAS NO PRESENT PLANS, PROPOSALS, ARRANGEMENTS OR UNDERSTANDINGS
WITH ANY PERSON WITH REGARD TO THE DEVELOPMENT OF A TRADING MARKET FOR THE
SHARES OF COMMON STOCK OFFERED HEREBY.
THE SHARES HAVE NOT BEEN REGISTERED IN THE STATE OF FLORIDA, BUT WILL BE
OFFERED AND SOLD THEREIN PURSUANT TO AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 517.061(11) FLORIDA STATUTES. SUCH SECTION PROVIDES, IN PERTINENT
PART, FOR SALES TO NO MORE THAN 35 PURCHASERS, EXCLUDING ACCREDITED INVESTORS,
AS SUCH TERM IS DEFINED IN RULE 501 UNDER REGULATION D OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). SUCH SECTION FURTHER PROVIDES THAT IN THE EVENT
SALES ARE MADE TO FIVE OR MORE PERSONS PURSUANT TO SUCH SECTION, THAT SUCH
SALES ARE VOIDABLE BY EACH OF SUCH SUBSCRIBERS EITHER WITHIN THREE DAYS AFTER
THE FIRST TENDER OF CONSIDERATION IS MADE BY THE SUBSCRIBER OR WITHIN THREE
DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO THE
SUBSCRIBER, WHICHEVER OCCURS LATER. THIS PROSPECTUS HAS NOT BEEN REVIEWED BY
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE
SALE OF THE SHARES OFFERED HEREBY IS BEING UNDERTAKEN PURSUANT TO THE NOTICE
PROVISIONS PROVIDED BY SECTION 359-e OF THE MARTIN ACT WITH RESPECT TO
ISSUER-DEALERS, AS SUCH ACT DOES NOT REQUIRE THE REGISTRATION OF SECURITIES.
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PURCHASERS OF SECURITIES IN THIS BLANK CHECK OFFERING OR IN ANY SUBSEQUENT
TRADING MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF THE STATES OF FLORIDA OR
NEW YORK, UNLESS AN APPLICABLE TRANSACTION EXEMPTION FROM SECURITIES
REGISTRATION IS OTHERWISE AVAILABLE. THE COMPANY WILL AMEND THIS PROSPECTUS FOR
THE PURPOSES OF DISCLOSING ADDITIONAL STATES, IF ANY, IN WHICH THE COMPANY'S
SECURITIES WILL HAVE BEEN REGISTERED. THE COMPANY HAS NOT REGISTERED THE SHARES
OR OBTAINED AN EXEMPTION FROM REGISTRATION IN ANY JURISDICTION. AN EXEMPTION
FROM REGISTRATION FOR THE SHARES IS AVAILABLE ONLY IN THE STATES OF FLORIDA AND
NEW YORK AND INITIAL SALES MAY ONLY BE MADE IN SUCH JURISDICTIONS UNLESS THE
COMPANY WERE TO REGISTER THE SHARES, OBTAIN AN EXEMPTION FROM REGISTRATION OR
ASCERTAIN THE AVAILABILITY OF AN EXEMPTION IN ANY OTHER JURISDICTION SUBSEQUENT
TO THE DATE HEREOF.
TABLE OF CONTENTS
PROSPECTUS SUMMARY............................................................4
RISK FACTORS..................................................................7
CAPITALIZATION...............................................................19
PROPOSED BUSINESS............................................................20
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION....................26
DESCRIPTION OF SECURITIES....................................................26
MANAGEMENT...................................................................28
PRINCIPAL SHAREHOLDER........................................................29
CERTAIN TRANSACTIONS.........................................................30
THE OFFERING.................................................................30
INDEMNIFICATION..............................................................30
AVAILABLE INFORMATION........................................................31
LEGAL PROCEEDINGS............................................................31
LEGAL MATTERS................................................................31
EXPERTS......................................................................31
FINANCIAL STATEMENTS.......................................................F-1
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PROSPECTUS SUMMARY
The following is qualified in its entirety by reference to the more
detailed information and financial statements, including the notes thereto
appearing elsewhere in this Prospectus. Each prospective Purchaser is urged to
read this Prospectus in its entirety.
The Company
4 BRANDON- 1, Inc. (the "Company") was incorporated in the State of Florida
in September, 1999 to seek and make a Business Combination to the extent its
limited assets will allow. See RISK FACTORS" and "PROPOSED BUSINESS." The
Company is in the development stage and has no operating history. No
representation is made nor implied that the Company will be able to carry on
its activities profitably. The subsistence of the Company is dependent
initially upon funds being supplied by Management, of which there is no
assurance. Proceeds of this Blank Check Offering may be insufficient to enable
the Company to conduct potentially profitable operations or otherwise to 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 any new business. Further, no
assurance can be given that the Company will have the ability to acquire
assets, business or properties with any value to the Company. The Company's
office is located at 2503 W. Gardner Ct., Tampa, FL 33611 and its telephone
number is (813) 831-9348.
The Company
The Company intends to effect a merger, acquire the assets or the capital
stock of existing businesses or other similar business combination (a "Business
Combination) and/or to establish businesses which may become profitable, of
which no assurances are given. The Company's current management may manage any
business developed or acquired by the Company or may employ qualified, but as
yet unidentified, individuals to manage such business. No assurance can be given
that the Company can obtain sufficient funding to accomplish the Company's goals
or that any business acquired or developed by the Company will become
profitable. Because there are no offering proceeds, the Company's plans may be
materially and adversely effected in that the Company may find it even more
difficult, if not impossible, to realize its goals. Further, the Company has not
identified any business to be acquired and has no plan to create any business.
See "RISK FACTORS" and "PROPOSED BUSINESS."
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.
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The Offering
Maximum
Securities offered
Common Shares
par value $0.01 per share 10,000,000
Maximum Common Shares to
be outstanding after
the offering 10,000,100
Risk Factors
The securities offered hereby involve a high degree of risk . Such risk
factors include, among others: the Company's recent formation and limited
resources; discretionary use of proceeds; an intense competition in selecting an
Acquired Business and effecting a Business Combination. See "Risk Factors."
Investors Rights to Reconfirm Investment Under Rule 419
Deposit of Securities. Rule 419 as applicable to this Offering requires
that all securities to be issued be deposited into an escrow or trust account
governed by an agreement which contains certain terms and provisions specified
by the rule. Under Rule 419, the DEPOSITED SECURITIES will be released to
investors only after the Company has met the following three conditions. First,
the Company must execute an agreement for an acquisition(s) meeting certain
prescribed criteria. Second, the Company must successfully complete a
reconfirmation offering which includes certain prescribed terms and conditions.
Third, the acquisition(s) meeting the prescribed criteria must be consummated
(see "Prescribed Acquisition Criteria" and " Reconfirmation Offering")
Accordingly, the Company has entered into an escrow agreement with (name of
bank or broker-dealer) (the "Escrow Agent") which provides that:
(1) All securities issued in connection with the offering and any
other securities issued with respect to such securities, including securities
issued with respect to stock splits, stock dividends or similar rights are to be
deposited directly into the escrow account promptly upon issuance. The identity
of the investors are to be included on the stock certificates or other documents
evidencing the securities. The securities held in the escrow account 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 securities
held in their names. The securities held in the escrow account 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 qualified domestic
relations order as defined by The Internal Revenue Code of 1986 or Table 1 of
the Employee Retirement Income Security Act.
(2) Warrants, convertible securities or other derivative securities
relating to securities held in the escrow account may be exercised or converted
in accordance with the terms provided, however that 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 escrow account.
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Prescribed Acquisition Criteria.
Rule 419 as applicable to this Offering requires that before the DEPOSITED
SECURITIES can be released the Company must first execute an agreement(s) to
acquire an acquisition candidate(s) meeting certain specified criteria. The
agreement must provide for the acquisition of a business, businesses or assets
for which the fair value of the business represents at least 80% of the maximum
offering proceeds, including funds received or to be received from the exercise
of warrants, but excluding underwriting commissions, underwriting expenses and
dealer allowances payable to non-affiliates. Once the acquisition agreements
meeting the above criteria have been executed, the Company must successfully
complete the mandated reconfirmation offering and consummate the acquisition(s).
Post-Effective Amendment.
Once the agreement governing the acquisition of a business 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 about: the proposed acquisition candidate and
its business, including audited financial statements; the results of this
offering; and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The offer must include certain prescribed conditions which
must be satisfied before the DEPOSITED SECURITIES can be released from escrow.
Reconfirmation Offering.
The reconfirmation offer must commence within five 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 escrow account 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 any
investor within 45 business days following the effective date, the pro rata
portion of the DEPOSITED SECURITIES WILL BE RETURNED TO THE COMPANY;
(4) 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, none of the securities will be issued. (It
is likely that officers and directors will acquire, on the same terms and
conditions as other investors, 80% of the Shares. Accordingly, if they do so,
none of the remaining unaffiliated stockholders will be required to vote in
favor of a proposed acquisition.); and
(5) If a consummated acquisition(s) has not occurred by 18 months from
the date of this prospectus, the DEPOSITED SECURITIES held in the escrow account
shall be returned to the Company.
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Release of Deposited Securities
The DEPOSITED SECURITIES may be released to the Investors after:
(1) The escrow agent has received a signed representation from the
Company and any other evidence acceptable by the escrow agent that: (a) The
Company has executed an agreement for the acquisition of a business for which
the par 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, that the mandated
reconfirmation offer having the conditions prescribed by Rule 419 as applicable
to this Offering as set forth above has been completed and that the Company has
satisfied all of the prescribed conditions of the reconfirmation offer.
(2) The acquisition of the business with the fair value of at least
80% of the maximum proceeds is consummated.
RISK FACTORS
The securities offered hereby are speculative and a high degree of risk,
including, but not necessarily limited to, the several factors described below.
Each prospective Purchaser may wish carefully to consider the following risk
factors inherent in and affecting the business of the Company and this offering
before accepting the Shares.
Rule 419 Generally as Applicable to this Offering
Rule 419 generally as applicable to this Offering requires that the
securities to be issued in a blank check offering be deposited and held in
escrow until an acquisition is completed. Before the acquisition can be
completed and before the securities can be released, the blank check company is
required to update the registration statement with a post effective amendment.
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. 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, none of the securities will be
issued. It is likely that officers and directors will acquire, on the same terms
and conditions as other investors, 80% of the Shares. Accordingly, if they do
so, none of the remaining unaffiliated stockholders will be required to vote in
favor of a proposed acquisition. Thus, although the investors in this offering
will have no right to block a proposed acquisition, they will have a right to
decline to receive a distribution of their shares from escrow.
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.
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Conflicts of Interest - Possible Negotiation or Otherwise Grant of Consent by
Management to Purchase of Management's Common Stock.
While the Company and its Management intend that no shares of the Company's
Common Stock will be distributed by any officers, directors or greater than 10%
shareholders or persons who may be deemed promoters of the Company without
affording all shareholders 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 $.* per share for 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 shares of Common Stock and
that public Purchasers in the Company may not receive any portion thereof in
the event such premium may he 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 shareholders, as the potential would therefore exist for members of
Management to consider their own personal pecuniary benefit rather than the
best interests of the Company's other shareholders. Further, the Company's
other shareholders 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.
The Company's shareholders will not be afforded an opportunity specifically
to approve or disapprove any particular buy-out transaction. (See also RISK
FACTOR entitled "Actual and Potential Conflicts of Interest. ")
Actual and Potential Conflicts of Interest
The Company's officers and director may engage in other business activities
similar and dissimilar to those engaged in by the Company. To the extent that
such officers and director 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, rather than direct such opportunities to the Company. Such potential
conflicts of interest include, among other things, the time, effort and
corporate opportunity involved in their participation in other business
transactions or activities as well as the preference, notwithstanding other
possible factors, to utilize Michael T. Williams, Esq., a substantial
shareholder, for legal services. Since only limited policies have been
established for the resolution of such conflicts, the Company may be adversely
affected should these individuals choose to place their other business interests
before those of the Company. (See Risk Factor entitled "Conflict of Interest.")
All directors hold office until the next annual meeting of shareholders
and the election and qualification of their successors. Directors receive no
compensation for serving on the Board of Directors other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are appointed by
the Board of Directors and serve at the discretion of the Board.
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There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the officers or directors
are acting on behalf of or will act at the direction of any other person.
All expenses of the Company already funded and all expenses of the Company
not funded from the proceeds of this offering, to a maximum of $50,000, will be
funded as an optional capital contribution to the Company by Mr. Williams. No
such contribution or no loan from Management is required. The Company shall not
make any loans to any officers or directors following this offering. Further,
the Company shall not borrow Funds for the purpose of making payments to the
Company's officers, directors, promoters, management or their affiliates or
associates. Mr. Williams may receive legal fees in connection with the Business
Combination.
The proposed business of the Company raises potential conflicts of interest
between the Company its officers and director and its principal stockholders.
The Company has been formed for the purpose of locating a suitable business
opportunity in which to participate. The officers and director of the Company as
well as its principal stockholders, are engaged in various other business
activities including, but not limited to, the organization of other companies or
"blank check" companies in the future. Specifically, all of the Company's
principal stockholders, including Mr. Michael Williams, the Company's President,
Treasurer and sole Director, may in the future 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 (the "Related Companies"). 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 Florida 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.
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Accordingly, Management may have a conflict in the event that another
"blank check" or "blind pool" associated with Management may in the future be
actively seeking the acquisition of properties and businesses that are 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.
In addition, any officer, director, and shareholder of the Company or their
affiliates may receive personal financial gain, other than from the proceeds of
this Blank Check Offering, by means of a stock exchange transaction or other
means, including: (1) payment of consulting fees: (ii) payments of finder's
fees; (iii) sales of affiliates' stock; (iv) payments of salaries; or (v) other
methods of payment by which affiliates may receive cash, stock or other assets.
The potential exists that finder's fees or other acquisition related
compensation may be paid to the Company's officers, directors, promoters or
their affiliates or associates from revenues or other funds of an acquisition
or merger candidate, or by the issuance of debt or equity of such an entity;
the possibility, therefore, exists that such fees may become a factor in
negotiations and present conflicts of interest. No restrictions exist other
than as set forth above, as to whom loans may be made. Further, no criteria
have as yet been established for determining whether or not to make loans,
whether any such loans will be secured or limitations as to amount.
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The Company has not and does not presently intend to impose any limits or
other restrictions on the amount or circumstances under which any of such
transactions may occur. No assurance can be given that any of such potential
conflicts of interest will be resolved in favor of the Company or will
otherwise not cause the Company to lose potential opportunities. No assurance
can be given that any of such potential conflicts of interest will be resolved
in favor of the Company or will otherwise not cause the Company to lose
potential opportunities.
Recently Organized Company; Limited Resources; No Present Source of
Revenues; Report of Independent Auditors
The Company, which was incorporated in September, 1998 and is in the
development stage, has not as yet attempted to seek a Business Combination.
Management has no prior experience with respect to a transaction involving the
proposed combination of certain corporations, including a blank check company
(the "Contemplated Transaction"). None of the Company's officers have had prior
experience relating to the identification, evaluation and acquisition of an
Acquired Business. See "Management." Thus the Company has no experience in
consummating a business combination and, accordingly, there is only a limited
basis upon which to evaluate the Company's prospects for achieving its intended
business objectives. To date, the Company's efforts have been limited primarily
to organizational activities. The Company has limited resources and has had no
revenues to date. In addition, the Company will not achieve any revenues until
consummation of a Business Combination, if at all. Moreover, there can be no
assurance that any Acquired Business, at the time of the Company's consummation
of a Business Combination, or at any time thereafter, will derive any material
revenues from its operations or operate on a profitable basis. The Company's
independent auditors' report on the Company's financial statements includes an
explanatory paragraph stating that the Company's ability to commence operations
is dependent on other fund raising, which raises substantial doubt about its
ability to continue as a going concern and that the financial statements do not
de any adjustments relating to the recoverability and classification asset
carrying amounts or the amount and classification of liabilities that might
result should the Company be unable to continue as a going concern. See
"Proposed Business" and the Financial Statements of the Company included
elsewhere in this Prospectus.
Absence of Substantive Disclosure Relating to Prospective Business Combinations;
Investment in the Company Versus Investment in an Acquired Business
"Blank check" offerings are inherently characterized by an absence of
substantive disclosure. The Company has not yet identified a prospective
Acquired Business. Accordingly, Purchasers in this offering will have virtually
no substantive Information available for advance consideration of any specific
Business Combination. The absence of disclosure can be contrasted with the
disclosure which would be necessary if the Company had already identified an
Acquired Business as a Business Combination candidate or if the Acquired
Business were to effect an offering of its securities directly to the Public.
See "Proposed Business --'Blank Check' Offering."
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Seeking to Achieve Public Trading Market through Business Combination
While a prospective Acquired Business may deem a Business Combination with
the Company desirable for diverse reasons, a Business Combination may involve
the acquisition, reorganization of, merger, or some other form of business
combination with a company which does not need substantial additional capital
but which desires to establish a public trading market for its shares, while
avoiding what it may deem to be adverse consequences of undertaking a public
offering itself, such as time delays, significant expense, loss of voting
control and compliance with various federal and securities laws enacted for the
protection of Purchasers. See the risks below entitled "Unspecified Industry
and Acquired Business; Unascertainable Risks" and "No Assurance of Public
Market; Arbitrary Determination of Offering Price."
No Present Identification of Industry and/or Acquisition Prospects; High Risk of
Unavailability of Conventional Private or Public Offerings of Securities or
Conventional Bank Financing
Management has not identified any specific business or even any specific
industry, which it intends to enter through the purchase or formation of a
business. Neither the Company or any of its affiliates has any present plan/,
proposals, arrangements or understandings with respect to any possible business
combination or opportunity. None of the Company's officers, directors,
promoters, their affiliates or associates have had any preliminary contact or
discussions with any representative of the owner of any business or company
regarding the possibility of an acquisition or merger transaction contemplated
hereby. Management will have sole discretion to determine which businesses, if
any, are intended to be formed or acquired, as well as the intended terms of
any acquisition. Management has no present intention of (a) considering a
business combination with entities owned or controlled by affiliates or
associates of the Company; (b) creating subsidiary entities with a view to
distributing their securities to the shareholders of the Company; or (c)
selling any securities owned or controlled by affiliates and associates of the
Company in connection with any business combination transaction without
affording all shareholders a similar opportunity. The success of the Company is
entirely upon the ability of Management to acquire and run successful
businesses and to continue to operate them and obtain additional capital to
support the working capital requirements of these businesses after their
acquisition or formation, of which no assurances are given. (See "PROPOSED
BUSINESS")
Further, it may be expected that any target business will present such a
level of risk that conventional private or public offerings of securities or
conventional bank financing will not be available.
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Unspecified Industry and Acquired Business; Unascertainable Risks
To date, the Company has not selected any particular industry in which to
concentrate its Business Combination efforts. Accordingly, there is no current
basis for prospective Purchasers in this offering to evaluate the possible
merits or risks of the Acquired Business or the particular industry in which
the Company may ultimately operate. To the extent the Company effects 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. An extremely high level of
risk frequently characterizes certain industries which experience rapid growth.
Although management will endeavor to evaluate the risks inherent in a
particular Acquired Business or industry, there can be no assurance that the
Company will properly ascertain or assess all such significant risk factors.
See "Proposed Business--'Blank Check' Offering."
Probable Lack of Business Diversification
The Company will 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, the Company will
not have the resources to diversify its operations or benefit 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 than the Acquired Business will prove to be
commercially viable. See "Proposed Business -'Blank Check' Offering."
Dependence Upon Key Personnel
The ability of the Company to successfully effect a Business Combination will
be largely dependent upon the efforts of Messrs. Williams and Williams, the
Company's President/Treasurer and Director and Secretary, respectively. It is
anticipated that Messrs. Williams and Williams are the only persons whose
activities will be material to the operations of the Company pending the
Company's identification and/or consummation of a Business Combination. The
Company has not entered into employment agreements with any officer or
director. It is anticipated that each of Messrs. Williams and Williams will
devote no more than 2% of their time to the affairs of the Company. The Company
has no life insurance on the lives of any of the officers or directors. The
loss of the services of such key personnel, unless suitable replacements are
obtained could have a material adverse effect on the Company's capacity to
successfully achieve its business objectives. None of the Company's key
personnel are required to commit their full time to the affairs of the Company
and, accordingly, such personnel may have conflicts of interest in allocating
management time among various business activities. In addition, the success of
the Company may be dependent upon its ability to retain additional personnel
with specific knowledge or skills who may be necessary to assist the Company in
evaluating a potential Business Combination. There can be no assurance than the
Company will be able to retain such necessary additional personnel. See
"Proposed Business -- Employees" and "Management."
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<PAGE>
Lack of Experience of Management
Messrs. Williams and Williams have no prior experience with respect to the
successful completion of a Business Combination. ("the Contemplated
Transaction"). See "Management."
Possible Change in Control and Management
Although the Company has no present plans, understandings or arrangements
respecting 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 shareholders 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 director. 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.
Nature of Transaction, Benefits to Management
The Company's proposed activities may involve the merger of the Company into or
the consolidation of an interest in one company which will in turn be operated
by the Company. In a merger or acquisition present management may be able to
negotiate the sale of its control portion of Company stock at a premium price.
After the merger the Purchasers in this offering may be left with management
whose background and competence are unknown and with a greatly reduced
percentage of ownership.
Conflicts of Interest - Part-Time Management
None of the Company's key personnel are required to commit their full time to
the affairs of the Company and, accordingly, such personnel may have conflicts
of interest in allocating management time, among various business activities.
Messrs. Williams and Williams will devote no more than 2% of their time to the
affairs of the Company. Certain of these key personnel may in the future become
affiliated with entities, including other "blank check" companies, engaged in
business activities similar to those intended to be conducted by the Company.
In the course of their other business activities, including private investment
activities, Messrs. Williams and Williams may become aware of investment and
business opportunities which may be appropriate for presentation to the Company
as well as the other entities with which they are affiliated. Such persons may
have conflicts of interest in determining to which entity a particular business
opportunity should be presented. In general, officers and director of
corporations incorporated under the laws of the State of Florida are required
to present certain business opportunities to such corporations. Accordingly, as
a result of multiple business affiffiations, Messrs. Williams and Williams may
have similar legal obligations relating to presenting certain business
opportunities to multiple entities. In addition, conflicts of interest may
arise in connection with evaluations of a particular business opportunity by
the Board of Directors with respect to the foregoing criteria. There can be no
assurance that any of the foregoing conflicts will be resolved in favor of the
Company. See "Proposed Business - 'Blank Check Offering -- Selection of
Acquired Business and Structuring of a Business Combination."
17
<PAGE>
Lack of Business Opportunities
Although the Company will use efforts to attempt to locate potential
Business Combinations, there is no assurance that any Business or assets worthy
of even preliminary investigation will come to the Company's attention.
No Present Acquisition or Merger Transaction Contemplated
None of the Company's officers, directors, promoters, their affiliates or
associates have had any preliminary contact or discussions with and there are
no present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an Acquisition or merger transaction contemplated in the
prospectus.
Limited Ability to Evaluate Acquired Business' Management
While the Company's ability to successfully effect a Business Combination
will be dependent upon certain of its key personnel, the future role of such
personnel in the Acquired Business cannot presently be stated with any
certainty. While it is possible that certain of the Company's key personnel
will remain associated in some capacities with the Company following a Business
Combination, it is unlikely that such key personnel will devote their full
efforts to the affairs of the Company subsequent thereto. Moreover, there can
be no assurance that such personnel will have significant experience or
knowledge relating to the operations of the particular Acquired Business.
Furthermore, although the Company intends to closely scrutinize the management
of a prospective Acquired Business in connection with evaluating the
desirability of effecting a Business Combination, there can be no assurance
that the Company's assessment of such management will prove to be correct,
especially in light of the possible inexperience current key personnel of the
Company in evaluating certain types of businesses. In addition, there can be no
assurance that such future management will have the necessary skills,
qualifications or abilities to manage a public company. The Company may also
seek to recruit additional managers to supplement the incumbent management of
the Acquired Business. There can be no assurance that the Company will have the
ability to recruit such additional managers, or that such additional managers
will have the requisite skills, knowledge or experience necessary to enhance
the incumbent management. See "Proposed Business-'Blank Check, Offering."
Competition
The Company expects to encounter intense competition from other entities
having a business objective similar to that of the Company. Many of these
entities are well established and have extensive experience in connection with
identifying and effecting business combinations directly or through affiliates.
Many of these competitors possess greater financial, technical, personnel and
other resources than the Company and there can be no assurance that the Company
will have the ability to compete successfully. The Company's financial
resources will be relatively limited when contrasted with those of many of its
competitors. This inherent competitive limitation may compel the Company to
select certain less attractive Business Combination prospects. There can be no
assurance that such prospects will permit the Company to meet its stated
business objective. See "Proposed Business -Competition."
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<PAGE>
Uncertainty of Competitive Environment of Acquired Business
In the event that the Company succeeds in effecting a Business Combination, the
Company will, in all likelihood, become subject to intense competition from
competitors of the Acquired Business. In particular, certain industries which
experience rapid growth frequently attract an increasingly larger number of
competitors, including competitors with increasingly greater financing,
marketing, technical and other resources than their competitors in the
industry. The degree of competition characterizing the industry of any
prospective Acquired Business cannot presently be ascertained. There can be no
assurance that, subsequent to a Business Combination, the Company will have the
resources to compete effectively, especially to the extent that the Acquired
Business is in a high growth industry. See "Proposed Business -- Competition."
Need for Additional Financing
The Company has had no revenues to date and is entirely dependent upon the
efforts and funds of Management to commence operations relating to selection of
a prospective Acquired Business. The Company will not receive any revenues
until, at the earliest, the consummation of a Business Combination. Although
the Company believes that its resources will be sufficient to effect a Business
Combination, inasmuch as the Company has not yet identified any prospective
Acquired Business candidates, the Company cannot ascertain with any degree of
certainly the capital requirements for any particular transaction. In the event
that such resources prove to be insufficient for purposes of effecting a
Business Combination, the Company will be required to seek additional
financing. In the event no Business Combination is identified, negotiations are
incomplete or no Business Combination has been consummated, and Management is
unable to provide funding, the Company currently has no plans or arrangements
with respect to the possible acquisition of additional financing which may be
required to continue the operations of the Company. None of the Company's
executive officers or directors or their respective affiliates are required to
provide any loans to the Company. There can be no assurance that such financing
would be available on acceptable terms, if at all. To the extent that such
additional financing proves to be unavailable when needed to consummate a
particular Business Combination, the Company would, in all likelihood, be
compelled to restructure the transaction or abandon that particular Business
Combination and seek an alternative Acquired Business candidate. In addition,
in the event of the consummation of a Business Combination the Company may
require additional financing to fund the operations or growth of the Acquired
Business. Other than set forth above, it is presently not contemplated that any
of the Company's executive officers or directors or their respective affiliates
will provide any financing to the Company in connection with a Business
Combination nor will any such persons borrow any money from the Company. The
failure by the Company to secure such additional financing could have a
material adverse effect on the continued development or growth of the Acquired
Business. See "Proposed Business 'Blank Check' Offering -- Selection of an
Acquired Business and Structuring of a Business Combination."
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<PAGE>
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.
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 assurances 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.
Risk that Additional Financing Will be Unavailable
Although there are no specific Business Combinations or other transactions
contemplated by management, it may be expected that any such target business
will present such a level of risk that conventional private or public offerings
of securities or conventional bank financing would not be available.
Possible Depletion of Operating Funds
In the event no Business Combination is identified, negotiations are
incomplete or no Business Combination has been consummated, and no funds are
provided by Management, the Company currently has no plans or arrangements with
respect to the possible acquisition of additional financing which may be
required to continue the operations of the Company.
Possible Use of Debt Financing; 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 the
Acquired Business. The amount and nature of any borrowing by the Company will
depend on numerous considerations, including the Company's capital
requirements, the Company's perceived ability to meet debt service on any such
borrowing 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 interests 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 effect on the Company's
financial condition and future prospects. Additionally, to the extent that debt
funding ultimately proves to be available, any borrowing may subject the
Company to various risks traditionally associated with incurring of
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. See "Use of Proceeds and of Proposed Business
--'Blank Check' Offering -Selection of an Acquired Business and Structuring of
a Business Combination."
20
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Authorization of Additional Securities; No Creation of Subsidiary for the
Purpose of Distributing Securities
The Company's Articles of Incorporation authorizes the issuance of
50,000,000 shares of Common Stock, par value $.01 per share. Upon completion of
this offering, assuming all of the Shares offered hereby are distributed, there
will be 39,999,900 authorized but unissued shares of Common Stock available for
issuance. 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
additional shares of Common Stock are issued, dilution to the interests of the
Company's shareholders will 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 which may impact, among other
things, the utilization of net operating losses, if any. Furthermore, the
issuance of a substantial number of shares of Common Stock may cause dilution
and adversely affect prevailing market prices, if any, for the Common Stock,
and could impair the Company's ability to raise additional capital through the
sale of its equity securities. The Company has no plans, proposals,
arrangements or understandings with respect to the creation of a subsidiary
entity with a view to distributing to the Company's shareholders the securities
of the subsidiary entity. See "Proposed Business --'Blank Check' Offering
--Selection of an Acquired Business and Structuring of a Business Combination"
and "Description of Securities."
Acquisition Dilution and Control
The Company plans to acquire another company or companies through the
issuance of its stock. (See "Proposed Business") Any such acquisition effected
by the Company may result in the issuance of additional Common Stock which may
result in substantial dilution in the percentage of the Company's Common Stock
held by the Company's existing shareholders. Moreover, the Common Stock issued
in any such acquisition or merger transaction may be valued on an arbitrary or
non arms-length basis by management of the Company. In addition, a future
merger may involve the appointment of additional members to the Company's Board
of Directors. Any such acquisition or merger may not legally require
shareholder approval, and the Company has no plans to hold a shareholders'
meeting to vote on any acquisition or merger or provide a proxy statement to
shareholders. Such transaction will likely be structured so that the
shareholders of a private company being acquired will be issued an amount of
the Company's shares sufficient to provide them no less than a 95% equity
ownership interest in the Company.
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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. The Company believes that it is
anticipated activities, which will involve acquiring control of an operating
company, will not subject the any to regulation under the Investment Company
Act. Nevertheless, 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. In 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, recordkeeping,
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 effect on the
Company. See "Proposed Business."
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 attempt to structure the Business Combination so as to
achieve most favorable tax treatment to the Company, the Acquired Business and
their respective shareholders. 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 shareholders. See "Proposed Business - --'Blank Check' Offering
- --Selection of an Acquired Business and Structuring of a Business Combination."
Possible Payment of Finder's Fees to Management or Affiliates
In the event that a person or entity assists the Company in connection with
the introduction to a prospective Acquired Business with which a Business
Combination is ultimately consummated, such person or entity may be entitled to
receive a finder's in consideration for such introduction. Such person may be
registered as, among other things, an agent or broker/dealer under the laws of
certain jurisdiction in which the Company is not presently obligated to pay any
finder's fees. The executive officers and director of the Company may be
entitled to receive a finder's fee in the event they originate a Business
Combination. See "Proposed Business -'Blank Check' Offering -- Selection of
Acquired Business and Structure of a Business Combination" and "Management."
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<PAGE>
The Company, rather than pay normal salaries, intends to primarily
compensate officers and director through finders fees. Since the business of the
Company is to acquire business opportunities and finders fees are often paid to
intermediaries in acquisition transactions, the Company has reasoned that,
rather than potentially pay both regular salaries and/or directors fees to
officers and director, and also pay finders fees to third parties, the
opportunity for acquisition of business opportunities will be greater if
officers and director are allowed to share in any finders fee, with other types
of compensation for officers and director being limited in amount. (See "Certain
Transactions")
Control by Present Shareholders
Upon consummation of the offering, if the maximum is distributed and
assuming 80% of the shares in this offering are distributed to management, the
present shareholders (including management) of the Company, will collective own
approximately 80% of the then issued and outstanding shares of Common Stock,
all of which will be owned by the current officers and director. In the
election of directors, shareholders are not entitled to cumulate their votes
for nominees. Accordingly, it is likely that the current shareholders will be
able to substantially impact the election of all of the Company's directors and
the other affairs of the Company. See "Principal Stockholders," "Certain
Transactions" and "Description Securities."
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 capital requirements and general financial condition subsequent
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. It is the present intention of the Board of Directors to
retain all earnings, if any, for use in the Company's business operations and,
accordingly, the Board does not anticipate paying any ash dividends in the
foreseeable future. See "Description of Securities -Dividends."
No Commitment to Purchase Shares No commitment exists by anyone to purchase any
of the Shares offered. Consequently, no assurance can be given that any Shares
will be distributed.
No Assurance of Public Market; 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 have been arbitrarily
determined by the Company and does not bear any relationship to such
established valuation criteria as assets, book value or prospective earnings.
There is no assurance that a regular trading market will develop for any of the
Company's securities after this offering or that, if developed, that any such
market will be sustained. The Shares will likely appear in what is customarily
known as the "pink sheets" or on the NASD Bulletin Board, thus limiting the
marketability of the Shares. If the Company, at any time, has net tangible
assets of $1,000,000 or less, transactions in the Shares would be subject to
Rule 15c2-6 promulgated under the Securities Exchange Act of 1934. Under such
rule, broker-dealers who recommend such securities to persons other than
established customers and accredited Purchasers (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse) must make a special written suitability determination for the purchaser
and receive the purchaser's written agreement to a transaction prior to sale.
Transactions are exempt from this rule if the market price of the Shares is at
least $5.00 per share. If the Shares become subject to Rule 15c2-6,
broker-dealers may find it difficult to effectuate customer transactions and/or
trading activity in the Shares, thus, the market price, if any, may be
depressed, and an Purchaser may find it more difficult to dispose of the
Shares.
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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.
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."
In order to prevent resale transactions in violation of states' securities
laws, public stockholders may only engage in resale transactions in the United
States, in New York and Florida and such other jurisdictions (there are none
now) in which an applicable secondary trading exemption is available or a blue
sky application has been filed and accepted. As a matter of notice to the
holders thereof, the Common Stock certificates shall contain information with
respect to resale of the Shares. Further, the Company will advise its market
makers in the Shares, if any, of such restriction on resale. Such restriction on
resales may limit the ability of investors to resell the Shares purchased in the
Offering.
Determination of Offering Price.
The offering price of the Common Stock was determined by the Company, which
considered, among other things, estimates of the business potential for the
Company, the management of the Company, and the Company's plans for the
establishment of its business base. The offering price does not bear any
relation to earnings per share, book value, or the net worth of the Company.
Prospective investors should not consider the offering price of the Common
Stock as necessarily indicative of the actual value of either the Common Stock
or the Company. See "The Offering."
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Shares Eligible for Future Sale.
Upon completion of this Offering, assuming Maximum Offering, the Company will
have outstanding 10,000,100 shares of Common Stock. Of these shares of the
Company's Common Stock ("Restricted Shares"), 100 currently and assuming
acquisition of 8,000,000 shares in this Offering by Mr. Michael Williams,
8,100,000 are and will be held by Management and may not be sold unless they
are so registered thereunder or are sold pursuant to an applicable exemption
from registration including Rule 144 which governs the sales of restricted
securities. Management will be eligible to sell such shares plus any shares
acquired in this offering pursuant to Rule 144 at prescribed times and subject
to the manner of sale, volume, notice and information restrictions of Rule 144.
There has been no public market for the securities of the Company. Sales of
substantial amounts of shares of the Company's Common Stock, pursuant to Rule
144 or otherwise, could adversely affect the market price of the Common Stock,
and consequently make it more difficult for the Company to sell equity
securities in the future at a time and price which the Company deems
appropriate. See "Shares Eligible for Future Sale."
Risks Of Low-Priced Stocks
Any trading in the Common Stock be conducted in the over-the-counter market
in the so-called "pink sheets" or the "Electronic Bulletin Board" of the
National Association of Securities Dealers, Inc. ("NASD"). As a consequence, an
investor could find it more difficult to dispose of, or to obtain accurate
quotations as to the price of, the Company's securities.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure, relating to the market for penny stocks, in connection
with trades in any stock defined as a penny stock. The SEC has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
Under such rule, broker/dealers who recommend such securities to persons other
than established customers and accredited investors must make a special written
suitability determination for the purchaser and receive the purchaser's written
agreement to a transaction prior to sale.
The Company's Common Stock will fall within the definitional scope of a penny
stock, and as such, the market liquidity for the Company's securities could be
severely affected. The regulations on penny stocks could limit the ability of
broker/dealers to sell the Company's securities and thus the ability of
purchasers of the Company's securities to sell their securities in the
secondary market, if such a market ever exists.
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Regulations Concerning "Blank Check" Issuers
The ability to register or qualify for sale the Shares for both initial sale
and secondary trading is limited because a number of states have enacted
regulations pursuant to their securities or "blue sky" laws restricting or, in
some instances, prohibiting, the sale of securities of "blank check" issuers,
such as the Company, within that state. In addition, many states, while not
specifically prohibiting or restricting "blank check" companies, would not
register the Shares for sale in their states. Because of such regulations and
other restrictions, the Company's selling efforts, and any secondary market
which may develop, may only be conducted in the Primary Distribution States (as
hereinafter defined) or in those jurisdictions where an applicable exemption is
available or a blue sky application has been filed and accepted. See "State
Blue Sky Registration; Restricted Resales of the Shares," below. In addition,
the Commission enacted rules under the Securities Act which, among other
things, afford shareholders of "blank check" companies a right to rescind their
purchases of such securities for a limited period subsequent to the
consummation of a Business Combination.
State Blue Sky Registration; Restricted Resales of the Shares
THE SECURITIES HAVE NOT BEEN REGISTERED IN ANY STATE AND MAY ONLY BE OFFERED
OR TRADED IN SUCH OTHER STATES PURSUANT TO AN EXEMPTION FROM REGISTRATION.
PURCHASERS OF SUCH SECURITIES EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT
TRADING MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF STATES IN WHICH THE
SECURITIES ARE REGISTERED OR EXEMPT FROM REGISTRATION. FOR THE OFFERING
HEREUNDER, THE COMPANY INTENDS TO RELY ON, BUT HAS NOT OBTAINED EXEMPTIONS FROM
REGISTRATION IN FLORIDA AND NEW YORK. THE EXEMPTIONS ARE SELF-EXECUTING, THAT
IS TO SAY THAT THERE ARE NO NOTICE OR FILING REQUIREMENTS AND COMPLIANCE WITH
THE CONDITIONS OF THE EXEMPTION RENDER THE EXEMPTION APPLICABLE. THE COMPANY
WILL AMEND THIS PROSPECTUS FOR THE PURPOSE OF DISCLOSING ADDITIONAL STATES, IF
ANY, IN WHICH THE COMPANY'S SECURITIES WILL HAVE BEEN REGISTERED OR AN
EXEMPTION IS AVAILABLE.
Several additional states may permit secondary market sales of the Shares
(i) once or after certain financial and other information with respect to the
Company is published in a recognized securities manual such as Standard &
Poor's Corporation Records (ii) after a certain period has elapsed from the
date hereof; or (iii) pursuant to exemptions applicable to certain Purchasers.
However, since the Company is a "blank check" company, it may not be able to be
listed in a recognized securities manual until after the consummation of the
first Business Combination.
Required Expenditures
The Company presently anticipates that it will be able to locate and
acquire suitable business interests or properties without any significant
expenditures. In the event that such expenditures are required, the Company's
plans may be materially and adversely effected in that the Company may find it
even more difficult, if not impossible, to realize its goals. In any event, if
the Company eventually determines that a business opportunity requires
additional funding thee Company may seek such additional financing through
loans, additional stock issuances or through other financing arrangements. No
such financing arrangements presently exist, and no assurances can be given
that such additional financing will be available, or, if available, whether
additional financing will be on terms acceptable to the Company. The Company
believes that it will not have any significant cash needs for at least eighteen
months.
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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
2000d isruption. 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" 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".
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
director. 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.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September *, 1998, and as adjusted to give effect to the distribution of the
minimum and maximum number of Shares being offered hereby:
Maximum - 10,000,100 Shares Outstanding, As Adjusted
Shareholder's Equity Common Stock,
$.01 per value 50,000,000 shares authorized;
100 shares issued:
10,000,000 as adjusted $ 1
Capital in excess of par value $ 246
Deficit accumulated during
development stage $(247)
Total shareholders' equity $ 0
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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.
PROPOSED BUSINESS
Introduction
The Company was formed in September 1998 to seek to effect a merger,
exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating business (an "Acquired
Business"). The Business objective of the Company is to find and 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 and for an indefinite
period of time 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
equity, debt or a combination thereof in effecting a Business Combination. The
Company will effect only a single Business Combination. The Company may effect
a Business Combination with an Acquired Business which may be financially
unstable or in its early stage of development or growth.
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.
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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
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.
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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;
* 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.
The time and costs required to select and evaluate an Acquired Business
candidate 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 corporation laws) cannot
presently be ascertained with any degree of certainty. Messrs. Williams and
Williams, the current executive officers of the Company, intend to devote
approximately 2% of their respective time to the affairs of the Company and,
accordingly, consummation of a Business Combination may require a greater
period of time than if the Company's executive officers devoted their full time
to the Company's affairs. Any costs incurred in connection with the
identification and evaluation of a prospective Acquired Business with which a
Business Combination is not ultimately consummated will result in a loss to the
Company and reduce the amount of capital available to otherwise complete a
Business Combination.
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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.
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."
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.
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The Company may utilize cash, 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.
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.
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The Company's stockholders are relying upon the business judgment of
Management in connection with 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. There is no
current plan to hire employees on a full-time or part-time basis.
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 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 thefirst 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.
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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.
Working Capital
the Company anticipates that it will 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 because of the oral commitment of its director to loan sufficient funds
to the Company to pay such expenses.
"Blank Check" Offering
Background.
As a result of management's broad discretion with respect to the specific
application of the Net Proceeds of this offering, this offering can be
characterized as a "blank check" offering. Purchasers will invest in the
Company without an opportunity to evaluate the specific merits or risks of any
one or more Business Combinations. A Business Combination may involve the
acquisition of, or merger with, a company which does not need substantial
additional capital but which desires to establish a public offering itself,
while avoiding what it may deem to be adverse consequences of undertaking a
public offering itself, such as time delays, significant expense, loss of
voting control and compliance with various Federal one state securities laws.
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No Present Potential of Acquiring Any Business: Related Party Acquisitions.
Management will have sole discretion to determine which businesses, if any,
are intended to be formed or acquired, as well as the intended terms of any
acquisition, and purchasers in this Blank Check offering will not in all
likelihood have the opportunity to evaluate the merits and risks of an
acquisition or be entitled to make an election as to whether they desire to
remain Purchasers in the Company.
Management has no present intention of (a) considering a business
combination with entities owned or controlled by affiliates or associates of
the Company (herein defined as a "related party transaction") or (b) creating
subsidiary entities with a view to distributing their securities to the
shareholders of the Company. In the event management contemplates a related
party transaction it will obtain an independent appraisal of the value of the
business or assets to be acquired and no transaction will be structured unless
it is at a price which is lesser or equal to the value determined by the
independent appraisal. Such a related party transaction is not an arms-length
transaction because management would be on both sides of the transaction and
may have financial interests which are adverse to the shareholders of the
Company. Such a situation creates a potential for management's fiduciary duties
to the shareholders of the Company to be compromised and the interests of the
shareholders to be affected adversely. (See "RISK FACTORS"). If management's
fiduciary duties are compromised, any remedy available to shareholders under
state corporate law will most likely be prohibitively expensive and time
consuming.
Unspecified Industry and Acquired Business.
To date, the Company has not selected any particular industry or any
Acquired Business in which to concentrate its Business Combination efforts.
Accordingly, there is no current basis for prospective Purchasers in this
offering to evaluate the possible merits or risks of the Acquired Business or
the particular industry in which the Company may ultimately operate. To the
extent the Company effects 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 and 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 risks of that industry. An
extremely high level of risk frequently characterizes certain industries which
experience rapid growth. Although management will endeavor to evaluate the risks
inherent in a particular industry or Acquired Business, there can be no
assurance that the Company will properly ascertain or assess all significant
risk factors.
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Lack of Business Diversification.
The Company will have the resources 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
Combination 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 benefit from the possible spreading of
risks or offsetting of losses. The Company's probable lack of diversification
may subject the Company to numerous economic, competitive and regulatory
developments, any or all of which may nave a substantial adverse impact upon
the particular industry in which the Company may operate subsequent to a
Business Combination. 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. Accordingly, notwithstanding the
possibility of capital investment in and management assistance to the Acquired
Business by the Company, there can be no assurance that the Acquired Business
will prove to be commercially viable. Prior to the consummation of a the
possibility of capital investment in and management assistance to the Acquired
Business by the Company, there can be no assurance that the Acquired Business
will prove to be commercially viable. Prior to the consummation of a Business
Combination, the Company has no intention to purchase or acquire a minority
interest in any company.
Opportunity for Shareholder Evaluation or Approval of Business Combinations.
The investors in this offering will, in all likelihood, neither receive
nor otherwise have the opportunity to evaluate any financial or other
information which will be made available to the Company in connection with
selecting a potential Business Combination until after the Company has entered
into an agreement to effectuate a Business Combination. 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, none of the securities will be issued. (It is likely that officers
and directors will acquire, on the same terms and conditions as other investors,
80% of the Shares. Accordingly, if they do so, none of the remaining
unaffiliated stockholders will be required to vote in favor of a proposed
acquisition.)As a result, investors in this offering will be almost entirely
dependent on the judgment of management in connection with the selection and
ultimate consummation of a Business Combination.
36
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Management.
While the Company's ability to successfully effect a Business Combination
will be dependent upon certain key personnel, the future role of such personnel
in the Acquired Business cannot presently be stated with any certainty. While
it is possible that certain of the Company's key personnel will remain
associated in some capacities with the Company following a Business
Combination, it is unlikely that such key personnel will devote their full
efforts to the affairs of the Company subsequent thereto. Moreover, there can
be no assurance that such personnel will have any experience or knowledge
relating to the operations of particular Acquired Business. Furthermore,
although the Company intends to closely scrutinize the management of a
prospective Acquired Business in connection with evaluating the desirability of
effecting a Business Combination, there can be no assurance that the Company's
assessment of such management will prove to be correct, especially in light of
the inexperience of current key personnel of the Company in evaluating
businesses. Furthermore, there can be no assurance that such future management
will have the necessary skills, qualifications or abilities to manage a public
company intending to embark on a program of business development. The Company
may also seek to recruit additional managers to supplement the incumbent
management of the Acquired Business. There can be seek to recruit additional
managers to supplement the incumbent management of the Acquired Business. There
can be no assurance that the Company will have the ability to recruit
additional managers, or that such additional managers will have the requisite
skill, knowledge or experience necessary or desirable to enhance the incumbent
management. Investment Company Act of 1940
The Company's operations may be limited by the Investment Company Act of
1940. Unless the Company registers with the Securities and Exchange Commission
as an investment company, it will not, among other things, be permitted to own
or propose to acquire investment securities, exclusive of government securities
and cash items, which have a value exceeding 40% of the value of the Company's
total assets on an unconsolidated basis. It is not anticipated that the Company
will have a policy restricting the type of investments it may make. 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 assurances that the
Company will not be deemed to be subject to the Investment Company Act of 1940.
Payment of Salaries or Consulting Fees
In connection with the consummation of a Business Combination, the Company
may become obligated to pay to certain persons consulting fees and/or salaries.
No officers, directors or current shareholders shall be paid any consulting
fees or salaries for services delivered by such persons in connection with a
Business Combination; however legal fees may be paid to Mr. Michael Williams.
The Company shall reimburse officers and director for any accountable
reasonable expenses incurred in connection with activities on behalf of them.
There is no limit on the amount of reimbursable expenses and there will be no
review of the reasonableness of such expenses by anyone other than the Board of
Directors, all of the members of which are officers. Subsequent to the
consummation of a Business Combination, to the extent current officers,
directors and/or shareholders of the Company provide services to the Company,
such persons may receive from the Company consulting fees and/or salaries. The
Company has no present intention to pay to anyone any consulting fees or
salaries. The Company is not aware of any plans, proposals, understandings or
arrangements with respect to the sale of any shares of Common Stock of the
Company by any current shareholders. Further, there are no plans, proposals,
understandings or arrangements with respect to the transfer by the Company to
any of the Current Shareholders, any funds securities or other assets of the
Company.
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Competition
The Company expects to encounter intense competition from other entities
having a business objective similar to that of the Company. Many of these
entities are well established and have extensive experience in connection with
identifying and effecting business combinations directly or through affiliates.
Many of these competitors possess greater financial, technical, personnel and
other resources than the Company and there can be no assurance that the Company
will have the ability to compete successfully. Inasmuch as the Company may not
have the ability to compete effectively with its competitors in selecting a
prospective Acquired Business, the Company may be compelled to evaluate certain
less attractive prospects. There can be no assurance that such prospects will
permit the Company to meet its stated business objective.
Uncertainty of Competitive Environment of Acquired Business
In the event that the Company succeeds in effecting a Business Combination,
the Company will, in all likelihood, become subject to Intense competition from
competitors of the Acquired Business. In particular, certain industries which
experience rapid growth frequently attract an increasingly larger number of
competitors, including competitors with increasingly greater financial,
marketing, technical and other resources than the initial competitors in the
industry. The degree of competition characterizing the industry of any
prospective Acquired Business cannot presently be ascertained. There can be no
assurance that, subsequent to a Business Combination, the Company will have the
resources to compete effectively, especially to the extent that the Acquired
Business is in a high growth industry.
Certain Securities Laws Considerations
Under the Federal securities laws, public companies must furnish certain
information about significant acquisitions, which information may require
audited financial statements of an acquired company with respect to one or more
fiscal years, depending upon the relative size of the acquisition.
Consequently, if a prospective Acquired Business did not have available and was
unable to reasonably obtain the requisite audited financial statements, the
Company could, in the event of consummation of a Business Combination with such
company, be precluded from (i) any public financing of its own securities for a
period of as long as three years, as such financial statements would be
required to undertake registration of such securities for sale to the public;
and (ii) registration of its securities under the Securities Exchange Act of
1934. Consequently, it is unlikely that the Company would seek to consummate a
Business Combination with such an Acquired Business. See "Risk Factors."
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<PAGE>
If the Company, at any time, has net tangible assets of $5,000,000 or less,
transactions in the Shares would be subject to Rule 15g promulgated under the
Securities Exchange Act of 1934. Under such rule, broker-dealers who recommend
such securities to persons other than established customers and accredited
Purchasers (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse) must make a special written
suitability determination for the purchaser and receive the purchaser's written
agreement to a transaction prior to sale. Transactions are exempt from this
rule of the market price of the Shares is at least $5.00 per share. The U.S.
Securities and Exchange Commission Rule 3 a5 I - 1, that generally defines a
penny stock to be any equity security that has a market price of less than
$5.00 per share, subject to certain exemptions. Such exemptions include an
equity security issued by an issuer that has (i) net tangible assets of at
least $1,000,000, of such issuer has been in continuous operation for at least
three years, (ii) net tangible assets of at least $5,000,000, of 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. Unless an
exemption is available, Rule 15g require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock
market and the risks associated therewith.
Since the Shares are subject to Rule 15g, broker-dealers may find it
difficult to effectuate customer transactions and/or trading activity in the
Shares, thus, the market price, if any, may be depressed, and an Purchaser may
find it more difficult to dispose of the Shares. Also, the market liquidity for
the Company's Common Stock could be adversely affected by 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.
Facilities
Since formation the Company, pursuant to an oral agreement with the
President, at no cost to the Company, has maintained its executive offices in
approximately 100 square feet of office space located at 2503 W. Gardner Ct.,
Tampa, FL 33611, in the home of the President. The Company considers this
space, to be adequate for its needs and, other than as stated, has no
preliminary agreements or understandings with respect to the office facility in
the future.
As of the date of this Prospectus, the Company's employees consist of its
executive officers, each of whom devote approximately 2% of their working time
to the affairs of the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company, a development stage entity, has neither engaged in any
operations nor generated any revenues to date. Its entire activity since its
inception has been to prepare for its proposed fund raising through an offering
of equity securities as contemplated herein.
The Company's expenses to date, all of which are attributable to its
formation and proposed fund raising are approximately $1,000.
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<PAGE>
Substantially all of the Company's working capital needs subsequent to the
offering contemplated hereby will be attributable to the identification of a
suitable Acquired Business, and thereafter to effectuate a Business Combination
with such Acquired Business. Such working capital needs are expected to be
satisfied from funds provided by Management. Although no assurances can be
made, the Company believes it can satisfy its cash requirements until a
Business Combination is consummated with no significant expenditures. Due to
the possible indefinite period of time to consummate a Business Combination and
the nature and cost of the Company's expenses related to the Company's search
and analysis of a Business Combination, there can be no assurances that the
Company's cash requirements until a Business Combination is consummated will be
satisfied from such fund or that Management will provide such funds, which they
are under no obligation to provide. Prior to the conclusion of this offering
the Company currently anticipates its expenses to be limited to accounting
fees, legal fees, telephone, mailing, filing fees, occupational license fees,
and transfer agent fees. See "Risk Factors."
DESCRIPTION OF SECURITIES
Common Stock
The holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by stockholders. There is no cumulative
voting with respect to the election of directors, with the result that the
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors. The current officer and director of the Company
beneficially will own at least 60% of the shares of Common Stock after the
offering and, accordingly, will be able to elect all of the Company's directors
and control corporate policy. Holders of shares of Common Stock are entitled to
receive dividends when, as and if declared by the Board of Directors in its
discretion, out of funds legally available therefor. In the event of
liquidation, dissolution, or winding up of the Company, the holders of Common
Stock are entitled to share ratably in the assets of the Company, if any,
legally available for distribution to them after payment of debts and
liabilities of the Company after provision has been made for each class of
stock, if any, having liquidation preference over the Common Stock. Holders of
shares of Common Stock have no conversion, preemptive or other subscription
rights, and there are no redemption or sinking fund provisions applicable to
the Common Stock. All of the outstanding shares of Common Stock are, and the
shares of Common Stock offered may be, when issued upon payment of the
consideration set forth in this Prospectus, fully paid and non-assessable.
Preferred Stock
The Company is currently authorized to issue 20,000,000 shares of Preferred
Stock, par value $.01 per share. The preferred stock is issuable in one or more
series with such rights, preferences, maturity dates and similar matters as the
Board of Directors of the Company may from time to time determine without any
further vote or action by the Company's stockholders. No Preferred stock is
currently outstanding.
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Dividend Policy
The Company has never paid cash dividends on its Common Stock. The Board of
Directors does not anticipate paying cash dividends in the foreseeable future
as it may retain future earnings to finance the growth of the business. The
payment of future cash dividends may depend on such factors as earnings levels,
anticipated capital requirements, the operating and financial condition of the
Company and other factors deemed relevant by the Board of Directors.
Certain Provisions of Florida Law
The directors of the Company are subject to the "general standards for
directors" provisions set forth in the Florida Business Corporations Act (the
"FBCA"). These provisions provide that in discharging his or her duties and
determining what is in the best interests of the Company, a director may
consider such factors as the director deems relevant, including the long-term
prospects and interests of the Company and its shareholders and the social,
economic, legal or other effects of any proposed action on the employees,
suppliers or customers of the Company, the community in which the Company
operates and the economy in, general. Interests of other constituencies in
addition to the Company's shareholders may be considered, and directors who
take into account these other factors may make decisions which are less
beneficial to some, or a majority, of the shareholders than if the law did not
permit consideration of such other factors. The Company has elected to opt out
of the "affiliated transactions" and "control -- share acquisition" provisions
of the FBCA.
Limited Liability and Indemnification
Under the FBCA, a director is not personally liable for monetary damages
to the corporation or any other person for any statement, vote, decision, or
failure to act unless (i) the director breached or failed to perform his duties
as a director and (ii) the director's breach of, or failure to perform, those
duties constitutes: (A) a violation of the criminal law, unless the director
had reasonable cause to believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful, (B) a transaction from which the
director derived an improper personal benefit either directly or indirectly,
(C) a circumstance under which an unlawful distribution is made, (D) in a
proceeding by or in the right of the corporation to procure a judgment in its
favor or by or in the right of a shareholder, conscious disregard for the best
interest of the corporation or willful misconduct, or (E) in a proceeding by or
in the right of someone other than the corporation or shareholder, recklessness
or an act or omission which was committed in bad faith or with malicious
purpose or in a manner exhibiting wanton and willful disregard of human rights,
safety or property. A corporation may purchase and maintain insurance on behalf
of any director or officer against any liability asserted against him and
incurred by him in his 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 the FBCA.
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The Articles of Incorporation and Bylaws of the Company provide that the
Company shall, to the fullest extent permitted by applicable law, as amended
from time to time, indemnify all directors of the Company, as well as any
officers or employees of the Company to whom the Company has agreed to grant
indemnification.
Transfer Agent And Registrar
The transfer agent and registrar for the Common Stock is the Company.
Shares Eligible For Future Sale
Upon completion of this Offering, assuming Maximum Offering, the Company will
have outstanding 10,000,100 shares of Common Stock. Of these shares of the
Company's Common Stock ("Restricted Shares"), 100 currently and assuming
acquisition of 8,000,000 shares in this Offering by Mr. Michael Williams,
8,100,000 are and will be held by Management and may not be sold unless they
are so registered thereunder or are sold pursuant to an applicable exemption
from registration including Rule 144 which governs the sales of restricted
securities. Management will be eligible to sell such shares plus any shares
acquired in this offering pursuant to Rule 144 at prescribed times and subject
to the manner of sale, volume, notice and information restrictions of Rule 144.
There has been no public market for the securities of the Company. Sales of
substantial amounts of shares of the Company's Common Stock, pursuant to Rule
144 or otherwise, could adversely affect the market price of the Common Stock,
and consequently make it more difficult for the Company to sell equity
securities in the future at a time and price which the Company deems
appropriate. See "Shares Eligible for Future Sale."
Under Rule 144, a stockholder who has beneficially owned Restricted Shares
for at least one (1) year (including persons who may be deemed to be
"affiliates" of the Company under Rule 144) may sell within any three (3) month
period a number of shares that does not exceed the greater of. a) one percent
(I%) of the then outstanding shares of a particular class of the Company's
Common Stock as reported on its I OQ filing, or b) the average weekly volume on
NASDAQ during the four (4) calendar weeks preceding such sale and may only sell
such shares through unsolicited brokers' transactions. A stockholder who is not
deemed to have been an "affiliate" of the Company for at least ninety (90) days
and who has beneficially owned his shares for at least two years would be
entitled to sell such shares under Rule 144 without regard to the volume
limitations described above.
There has been no public market for the securities of the Company. Sales of
substantial amounts of shares of the Company's Common Stock, pursuant to Rule
144 or otherwise, could adversely affect the market price of the Common Stock,
and consequently make it more difficult for the Company to sell equity
securities in the future at a time and price which the Company deems
appropriate. See "Risk Factors Shares Eligible for Future Sale."
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<PAGE>
MANAGEMENT
Director And Officers
Name Age Title
Michael T. Williams 50 President, Treasurer and Director
M. Brandon Williams 18 Secretary
Michael T. Williams is President, Treasurer and Director of the Company.
His responsibilities will include management of the Company's operations as
well as the Company's administrative and financial activities. Since 1975 Mr.
Williams has been in the practice of law, initially with a government agency,
and since then, in private practice. He was also CEO of Florida Community
Cancer Centers, Dunedin, FL from 1991-1995. He received a BA from the
University of Kansas and a JD from the University of Pennsylvania.
M. Brandon Williams is the son of Michael T. Williams. He is currently a
Senior at Tampa Preparatory School, Tampa, FL.
Messrs. Williams and Williams are not required to commit his full time to
the affairs of the Company and, accordingly, they may have conflicts of interest
in allocating management time, among various business activities. Messrs.
Williams and Williams intend to devote no more than 2% of their time to the
affairs of the Company. They may in the future become affiliated with entities,
including other companies, engaged in business activities similar to those
intended to be conducted by the Company. See "Risk Factors."
All directors hold office until the next annual meeting of shareholders
and the election and qualification of their successors. Directors receive no
compensation for serving on the Board of Directors other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are appointed by
the Board of Directors and serve at the discretion of the Board.
There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the officers or directors
are acting on behalf of or will act at the direction of any other person.
Executive Compensation
No compensation has been paid to any officers or director since inception.
Pursuant to an oral understanding with management, the Company does not expect
to pay any direct or indirect compensation to its officers and director except
for reimbursement for reasonable out-of-pocket expenses until the Company's
operations are profitable.
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PRINCIPAL SHAREHOLDER
The following table sets forth information as of the date hereof and as
adjusted to reflect the sale of the Shares offered hereby, based on information
obtained from the person named below, with respect to the beneficial ownership
of shares of Common Stock by (i) each person known by the Company to be the
owner of more than 5% of the outstanding shares of Common Stock, (ii) each
director, and (iii) all officers and director as a group:
<TABLE>
<CAPTION>
Beneficial Ownership
of Common Stock
- --------------------------------------------------------------------------------------------------
Shares
Owned Percentage of Class
--------------------- ------------------------------
Before After
Offering Offering Before Offering After Offering(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael T. Williams10
100%
2503 W. Gardner Ct.
Tampa FL 33611 100 8,100,000 100% 80%
All directors and
officers as a group
(__ persons) 100 8,100,000 100% 80%
</TABLE>
(1) Assumes acquisition of 8,000,000 shares in this Offering by Mr. Williams.
See "Risk Factors."
Unless otherwise noted, all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them. No persons named in the table are acting as nominees for any persons or
are otherwise under the control of any person or group of persons. Mr. Michael
Williams may be deemed to be "promoter" and "parent" of the Company, as such
terms are defined under the Federal securities laws.
CERTAIN TRANSACTIONS
All expenses of the Company already funded and all expenses of the Company
not funded from the proceeds of this offering, to a maximum of $50,000, will be
funded as an optional capital contribution to the Company by Mr. Williams. No
such contribution or no loan from Management is required. The Company shall not
make any loans to any officers or directors following this offering. Further,
the Company shall not borrow Funds for the purpose of making payments to the
Company's officers, directors, promoters, management or their affiliates or
associates. Mr. Williams may receive legal fees in connection with the Business
Combination.
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CONFLICTS OF INTEREST
The proposed business of the Company raises potential conflicts of interest
between the Company its officers and director and its principal stockholders.
The Company has been formed for the purpose of locating a suitable business
opportunity in which to participate. The officers and director of the Company as
well as its principal stockholders, are engaged in various other business
activities including, but not limited to, the organization of other companies or
"blank check" companies in the future. Specifically, all of the Company's
principal stockholders, including Mr. Michael Williams, the Company's President,
Treasurer and sole Director, may in the future 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 (the "Related Companies"). 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 Florida 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 may in the future be
actively seeking the acquisition of properties and businesses that are 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."
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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.
THE OFFERING
The Company is offering 10,000,000 shares of Common Stock for no cash
consideration. The Shares are offered by the Company on a "best efforts" no
minimum, 10,000,000 Share maximum basis. The Company intends to offer the
Shares through its officers and director Michael and Brandon Williams without
the use of a profession underwriter. No commissions will be paid for sales
effected by officers and director. Mr. Michael T. Williams may acquire
8,000,000 shares in this offering on the same terms as all other investors.
Prior to this offering, there has been no public market for the Shares.
Consequently, the initial public offering price for the Shares has been
determined solely by the Company. Among the factors considered in determining
the public offering price were the history of, and the prospects for, the
Company's business, an assessment of the Company's management, its past and
present operations, the prospects for earnings of the Company, the present
state of the Company's development, the general condition of the securities
market at the time of the offering and the market prices of similar securities
of comparable companies at the time of the offering. Such price is subject to
change as a result of market conditions and other factors, and no assurance can
be given that a public market for the Shares will develop after the close of
the offering, or if a public market in fact develops, that such public market
will be sustained, or that the Shares can be resold at any time at the offering
or any other price. See "Risk Factors."
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INDEMNIFICATION
The Company's Articles of Incorporation and Florida law contain provisions
relating to the indemnification of officers and director.
Generally, the foregoing provide that the corporation may indemnify any
person who was or is a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except for an action by or in right of the Corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation.
Insofar as indemnification for liabilities arising under the securities act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed 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 his counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act with respect to the Common Stock offered hereby. This
Prospectus omits certain of the information contained in the Registration
Statement, and reference is hereby made to the Registration Statement and
related exhibits and schedules for further information with respect to the
Company and the Common Stock offered hereby. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and in
each such instance reference is made to the copy of such document filed as an
exhibit to the Registration Statement. Each such statement is qualified in its
entirety by such reference. The Registration Statement and the exhibits and
schedules forming a part thereof can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and should also be
available for inspection and copying at the following regional offices of the
Commission: 7 World Trade Center, 14th Floor, New York, New York 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, DC
20549, at prescribed rates. The Commission maintains a Web Site (http://www.
sec. gov.) that contains reports, proxy statements and other information filed
by the Company.
47
<PAGE>
LEGAL PROCEEDINGS
The Company is not a party to, nor is it aware of, any threatened
litigation of a material nature.
LEGAL MATTERS
Williams Law Group, P.A., Tampa FL, of which Mr. Williams is the principal,
has rendered an opinion (which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part) to the effect that the Shares,
when issued and paid for as described herein, will constitute legally issued
securities of the Company, fully paid and non-assessable. Mr. Williams is the
sole shareholder of the Company.
See "Principal Shareholder."
EXPERTS
The financial statements included in this Prospectus have been audited by
Beard Nertney Kingery Crouse & Hohl, P.A., independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
48
<PAGE>
FINANCIAL STATMENTS
TABLE OF CONTENTS
- ------------------------------------
Independent Auditors' Report F-2
Financial Statements as of and for the period September 24, 1998 (date of
incorporation) to December 31, 1998:
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholder's Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
<PAGE>
{Letterhead of BEARD NERTNEY KINGERY CROUSE & HOHL P.A.}
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of 4 BRANDON - I, Inc.:
We have audited the balance sheet of 4 BRANDON - I, Inc. (the "Company"), a
development stage enterprise, as of December 31, 1998, and the related
statements of operations, stockholder's equity and cash flows for the period
September 24, 1998 (date of incorporation) to December 31, 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 the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe 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 the Company as of December 31,
1998, and the results of its operations and its cash flows for the period
September 24, 1998, (date of incorporation) to December 31, 1998 in conformity
with generally accepted accounting principles.
The Company, with the consent of its stockholder, has elected under the Internal
Revenue Code to be an S Corporation. In lieu of corporate income taxes, the
stockholders of an S Corporation are taxed on their proportionate share of the
Company's taxable income. Therefore, no provision or liability for income taxes
has been included in these financial statements.
BEARD NERTNEY KINGERY CROUSE & HOHL P.A.
January 20, 1999
F-2
<PAGE>
4 BRANDON - I, Inc.
(A Development Stage Enterprise)
BALANCE SHEET AS OF DECEMBER 31, 1998
ASSETS $ 0
===
LIABILITIES AND STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY:
Common stock - $.01par value: 50,000,000 shares
authorized1 100 shares issued and outstanding $ 1
Preferred Stock - $.01 par value; 20,000,000
shares authorized 0 shares issued and outstanding 0
Additional paid-in capital 246
Deficit accumulated during the development stage (247)
---
TOTAL $ 0
===
SEE NOTES TO FINANCIAL STATEMENTS.
F-3
<PAGE>
4 BRANDON - I, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
for the period September 24, 1998 (date of incorporation)
to December 31, 1998
EXPENSES
Organization costs $ 247
---
NET LOSS $ 247
===
NET LOSS PER SHARE $2.47
====
SEE NOTES TO FINANCIAL STATEMENTS.
F-4
<PAGE>
4 BRANDON - I, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDER'S EQUITY
for the period September 24, 1998 (date of incorporation)
to December 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Deficit
Accumulated
Additional During the
Common Preferred Paid- Development
Shares Value Shares Value in Capital Stage Total
------ ----- --------- ------ --------- ----------- -----
Balances, September 24, 199 0 $ 0 0 $ 0 $ 0 $ 0 $ 0
Proceeds from the issuance
of common stock 100 1 246 247
Net loss for the period,
September 24, 1998
(date of incorporation)
to December 31, 1998 (247) (247)
--- --- --- --- --- --- ---
Balances December 31, 1998 100 $ 1 0 $ 0 $ 246 $ (247) $ 0
=== === === === === === ===
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
F-5
<PAGE>
4 BRANDON - I, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
for the period September 24, 1998 (date of incorporation)
to December 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(247)
---
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock 247
---
NET INCREASE IN 0ASH AND CASH EQUIVALENTS 0
---
CASH AND CASH EQ0IVALENTS, BEGINNING OF PERIOD 0
CASH AND CASH EQ0IVALENTS, END OF PERIOD $ 0
===
SUPPLEMENTAL DISCLOSURES
Interest paid $ 0
===
SEE NOTES TO FINANCIAL STATEMENTS.
F-6
<PAGE>
4 BRANDON - I, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
4-BRANDON - I, Inc. (the "Company") was incorporated under the laws of the state
of Florida on September 24, 1998. The Company is considered to be in the
development stage, as defined in Financial Accounting Standards Board Statement
No. 7. The Company intends to effect a merger or other similar business
combinations or to establish new businesses. The planned principal operations of
the Company have not commenced, therefore accounting policies and procedures
have not yet been established.
- -------------------------------------------------------------------------------
F-7
<PAGE>
Part 11 - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 22. Indemnification of Directors and Officers.
The information required by this Item is incorporated by reference to
"Indemnification" in the Prospectus herein.
Item 23. Other Expenses of Issuance and Distribution.
SEC Registration Fee $100
Blue Sky Fees and Expenses 1000
Legal Fees and Expenses 0
Printing and Engraving Expenses 6,500
Accountants' Fees and Expenses 1,000
Miscellaneous 1,400
-----
Total $10,000
The foregoing expenses, except for the SEC fees, are estimated.
Item 24. Recent Sales of Unregistered Securities.
The following sets forth information relating to all previous sales of Common
Stock by the Registrant which sales were not registered under the Securities
Act of 1933.
None
Item 25. Exhibits.
The following exhibits are filed with this Registration Statement:
Number Exhibit Name
1 Escrow Agreement in Accordance with Rule 419 under the Securities Act of
1933, as amended
3.1 Articles of Incorporation
3.2 By-Laws
4.1 *Common Stock.
5 Opinion Regarding Legality
23.1* Consent of Counsel
23.2 Consent of Expert
* Filed by ammendment
All other Exhibits called for by Rule 601 of Regulation S-B are not applicable
to this filing. Information pertaining to the Common Stock of the Company is
contained in the Articles of Incorporation and By-Laws of the Company.
49
<PAGE>
Item 26. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offer or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section I 0(a)(3) of the Securities
Act of 193 3; (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) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; (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 Securities Act
of 1933, each such post-effective amendment that contains a form of prospectus
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 which remain unsold at the termination of the Offering.
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred to that section.
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 its Certificate of Incorporation or provisions of
Florida law, 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 such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
50
<PAGE>
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 to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized by power of attorney, in the City of Tampa, State of Florida, on
January 10, 1999.
4 Brandon - I, Inc.
/s/ Michael T. Williams
Michael T. Williams, President, Treasurer, and Director
/s/ M. Brandon Williams, Secretary
M. Brandon Williams, Secretary
51
EXHIBIT NO.
1
Escrow Agreement
<PAGE>
EXHIBIT 1
ESCROW AGREEMENT IN ACCORDANCE WITH RULE 419
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
ESCROW AGREEMENT dated as of __________, 1998 (the "Agreement") by and between 4
Brandon - I, Inc., a Florida corporation (the "Company")
and________________________________________________
__________________________________, (the "Escrow Agent").
The Company, through its officers and director and selected broker-dealers, will
sell up to 10,000,000 shares of Common Stock, par value $.001 (the "Shares"), as
more fully described in the Company's definitive Prospectus dated
________________ , 1998 comprising part of the company's Registration Statement
on Form SB-2, as amended (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Act") (File NO. *) declared effective on
__________________ (the "Prospectus").
The Company desires that the Escrow Agent accept all offering proceeds, after
deduction of cash paid for underwriting commissions, underwriting expenses and
dealer allowances and amounts permitted to be released to the Company pursuant
to Rule 419(b)(2)(vi), a copy of which rule is attached hereto and made a part
hereof, to be derived by the company from the sale of the Shares (the "Offering
Proceeds"), as well as the share certificates representing the Shares issued in
connection with the company's offering, in escrow, to be held and disbursed as
hereinafter provided.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Escrow Agent. The company hereby appoints the Escrow Agent
to act in accordance with and subject to the terms of this Agreement, and
the Escrow Agent hereby accepts such appointment and agrees to act in
accordance with and subject to such terms.
2. Share Certificates.
Subject to Rule 419, upon the Company's distribution of its
securities, the Company shall promptly deliver to the Escrow Agent all
share certificates representing the Shares issued in connection with the
Company's offering, which shall be held in trust for the purchasers as set
forth in Rule 419. The identity of the purchasers of the securities shall
be included on the stock certificates or other documents evidencing such
securities. Securities held in trust are to remain as issued and shall be
held for the sole benefit of the purchasers, who shall have voting rights
with respect to securities held in their names, as provide be applicable
state law. No transfer or other disposition of securities so held or any
interest related such securities shall be permitted other than by will or
the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Internal Revenue code of 1986 as amended
[26 U.S.C. 1 et seq.], or Title 1 of the Employee Retirement Income
Security Act [29 U.S.C. 1001 et seq.], or the rules thereunder. Warrants,
convertible securities or other derivative securities, if any, relating to
securities held in the Escrow Account may be exercised or converted in
accordance with their terms; provided however, that securities received
upon exercise or conversion, are also so held.
1
<PAGE>
3. Release of the Shares.
Upon the earlier of (i) receipt by the Escrow Agent of a signed
representation from the Company to the Escrow Agent, that the requirements
of Rule 419(e)(1) and (e)(2) have been met, and consummation of an
acquisition(s) meeting the requirements of Rule 419(e)(2) or (ii) written
notification from the Company to the Escrow Agent to deliver the Offering
Proceeds to another escrow agent in accordance with Paragraph 5.8 then, in
such event, the Escrow Agent shall release the securities to the purchasers
or registered holders identified on the trust securities or deliver such
other escrow agent, as the case may be, whereupon the Escrow Agent shall be
released from further liability hereunder. Notwithstanding the foregoing,
if an acquisition meeting the requirements of Rule 419(e)(1) has not
occurred by a date within 18 months after the effective date of the
Registration Statement, funds held in the Escrow Account shall be returned
by first class mail or equally prompt means to the purchasers within five
business days following that date.
4. Concerning the Escrow Agent.
The Escrow Agent shall not be liable for any actions
taken or omitted by it, or any action suffered by it to be taken or omitted
by it, in good faith and in the exercise of its own best judgment, and may
rely conclusively and shall be protected in acting upon any order, notice
demand, certificate, opinion or advice of counsel (including counsel chosen
by the Escrow Agent), statement , instrument , report or other paper or
document (not only as to its due execution and the validity and
effectiveness of its provision, but also as to the truth and acceptability
of any information therein contained) which is believed by the Escrow Agent
to be genuine and to be signed or presented by the proper person or person.
The Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced
by a writing delivered to the Escrow Agent signed by the proper party or
parties and, if the duties or rights of the Escrow Agent are affected,
unless it shall have given its prior written consent thereto.
The Escrow Agent shall not be responsible for the
sufficiency or accuracy, the form of, or the execution validity, value or
genuineness of any document or property received, held or delivered by it
hereunder, or of any signature or endorsement thereon, or for any lack of
endorsement thereon, or for any description therein, nor shall the Escrow
Agent be responsible or liable in any respect on account of the identity,
authority or rights of the person executing or delivering or purporting to
execute or deliver any document or property paid or delivered by the Escrow
Agent pursuant to the provisions hereof. The Escrow Agent shall not be
liable for any loss which may be incurred by reason of any investment of
any monies or properties which it holds hereunder.
The Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or
persons, that a fact or an event by reason of which an action would or
might be taken by the Escrow Agent does not exist or has not occurred,
without incurring liability for any action taken or omitted, in good faith
and in the exercise of its own best judgment, in reliance upon such
assumption.
2
<PAGE>
The Escrow Agent shall be indemnified and held harmless by
the Company form and
against any expenses, including counsel fees and disbursements, or loss
suffered by the Escrow Agent in connection with any action, suit or other
proceeding involving any claim, or in connection with any claim or demand,
which in any way directly or indirectly arises out of or relates to this
Agreement, the services of the Escrow Agent hereunder, the monies or other
property held by it hereunder or any such expense or loss. Promptly after
the receipt by the Escrow Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall, if
a claim in respect thereof shall be made against the other parties hereto,
notify such parties thereof in writing; but the failure by the Escrow Agent
to give such notice shall not relieve any party form any liability which
such party may have to the Escrow Agent hereunder. In the event of the
receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the Escrow Account or it may deposit
the Escrow Account with the clerk of any appropriate court or it may retain
the Escrow Account pending receipt of a final, non-appealable order of a
court having jurisdiction over all of the parties hereto directing to whom
and under what circumstances the Escrow Account is to be disbursed and
delivered.
The Escrow Agent shall be entitled to reasonable
compensation from the Company for all services rendered by it hereunder
From time to time on and after the date hereof, the
Company shall deliver or cause to be delivered to the Escrow Agent such
further documents and instruments and shall do or cause to be done such
further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.
The Escrow Agent may resign at any time and be
discharged from its duties as Escrow Agent hereunder by its giving the
Company at least thirty (30) days' prior written notice thereof. As soon as
practicable after its resignation, the Escrow Agent shall turn over to a
successor escrow agent appointed by the Company, all monies and property
held hereunder upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new escrow agent is so appointed
within the sixty (60) day period following the giving of such notice of
resignation, the Escrow Agent may deposit the Escrow Account with any court
it deems appropriate.
The Escrow Agent shall resign and be discharged form its
duties as Escrow Agent hereunder if so requested in writing at anytime by
the Company, provided, however, that such resignation shall become
effective only upon acceptance of appointment by a successor escrow agent
as provided above.
Notwithstanding anything herein to the contrary, the
Escrow Agent shall not be relieved from liability thereunder for its own
gross negligence or its own willful misconduct.
3
<PAGE>
5. Miscellaneous.
This Agreement shall for all purposes be deemed to be
made under and shall be construed in accordance with the laws of the State
of Florida.
This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to be charged.
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation thereof.
This Agreement shall be binding upon and inure to the
benefit of the respective parties hereto and their legal representatives,
successors and assigns. Any notice or other communication required or which
may be given hereunder shall be in writing and either be delivered
personally or be mailed, certified or registered mail, return receipt
requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, two (2) days after the date of mailing. The
parties may change the persons and addresses to which the notices or other
communications are to be sent by giving written notice to any such change
in the manner provided herein for giving notice.
WITNESS the execution of this Agreement as of the date first above written.
4 Brandon - I, INC.
By: ______________________________________
President
This Escrow Agreement is accepted as of the ______ day of _____________,
1998.
By: _______________________________________
Authorized Representative
4
EXHIBIT NO.
3.1
Articles of Incorporation
<PAGE>
AMENDED ARTICLES OF INCORPORATION
OF 4 Brandon - I, Inc.
ARTICLE I - NAME AND MAILING ADDRESS
The name of this corporation is 4 Brandon - I, Inc. and the mailing
address of this corporation is 2503 W. Gardner Ct. Tampa Fl 33611.
ARTICLE II - DURATION
This corporation shall have perpetual existence.
ARTICLE III - PURPOSE
This corporation is organized to include the transaction of any or all
lawful business for which corporations may be incorporated under Chapter 607,
Florida Statutes (1975) as presently enacted and as it may be amended from time
to time.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 50,000,000 shares of One Cent
common stock, which shall be designated as "Common Shares" and Twenty Million
shares of One Cent preferred stock, which shall be designated as "Preferred
Shares."
The Preferred Shares may be issued in such series and with with such
rights, privileges, and preferences as determined solely by the Board of
Directors.
ARTICLE V - INITIAL REGISTERED OFFICE AND AGENT The street
address of the initial registered office of this corporation
is 2503 W. Gardner Ct. Tampa Fl 33611, and the name of the initial
registered agent of this corporation at that address is Michael T. Williams.
1
<PAGE>
ARTICLE VI - INITIAL BOARD OF DIRECTORS This corporation
shall have One director(s) initially. The number of
directors may be either increased or decreased from time to time by the Bylaws,
but shall never be less than one (1). The name(s) and address(es) of the initial
director(s) of this corporation are:
NAME ADDRESS
Michael T. Williams 2503 W. Gardner Ct.
Tampa Fl 33611
ARTICLE VII - INCORPORATOR(S)
The name and address of the person(s) signing these Articles of
Incorporation is (are):
NAME ADDRESS
Michael T. Williams 2503 W. Gardner Ct.
Tampa Fl 33611
ARTICLE VIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE IX - AMENDMENT
This corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendment thereto, and any
right conferred upon the shareholders is subject to this reservation.
ARTICLE X - AFFILIATED TRANSACTIONS AND CONTROL SHARE ACQUISITIONS The
Corporation expressly elects not to be governed by Sections
607.0901 and 607.0902 of the Florida Business Corporations Act, relating to
affiliated transactions and control share acquisitions, respectively.
IN WITNESS WHEREOF, the undersigned incorporator(s) has (have) executed
these Articles of Incorporation this September 23, 1998.
- -------------------------------
Michael T. Williams
2
<PAGE>
CERTIFICATE DESIGNATING REGISTERED AGENT
AND STREET ADDRESS FOR SERVICE OF PROCESS
WITHIN FLORIDA
Pursuant to Florida Statutes Section 48.091, 4 Brandon - I, desiring to
organize under the laws of the State of Florida, hereby designates Michael T.
Williams, located at 2503 W. Gardner Ct. Tampa Fl 33611 as its registered agent
to accept service of process within the State of Florida.
ACCEPTANCE OF DESIGNATION
The undersigned hereby accepts the above designation as registered agent
to accept service of process for the above-named corporation, at the place
designated above, and agrees to comply with the provisions of Florida Statutes
Section 48.091(2) relative to maintaining an office for the service of process.
- -------------------------------
Michael T. Williams
3
EXHIBIT NO.
3.2
BYLAWS
<PAGE>
BYLAWS
OF
4 Brandon - I, Inc.
ARTICLE I - MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen (13) months after the last preceding annual
meeting of shareholders. Business transacted at the annual meeting shall include
the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held when directed by the Board of Directors, or when requested in writing by
the holders of not less than ten percent (10%) of all the shares entitled to
vote at the meeting. A meeting requested by shareholders shall be called for a
date not less than ten (10) or more than sixty (60) days after the request is
made, unless the shareholders requesting the meeting designate a later date. The
call for the meeting shall be issued by the Secretary, unless the President,
Board of Directors, or shareholders requesting the meeting designate another
person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) nor more than
sixty (60) days before the meeting, either personally or by first class mail, by
or at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned to
another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. If, however, after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in this section to each shareholder
of record on the new record date entitled to vote at such meeting.
1
<PAGE>
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholder of any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
(60) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty (60) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on which
the particular action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten (10) days prior to such meeting, shall be kept on file at
the registered office of the corporation, at the principal place of business of
the corporation or at the office of the transfer agent or register of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially complied
with, the meeting on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
2
<PAGE>
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series a majority of the shares of such class or
series shall constitute a quorum for the transaction of such item of business by
that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at
a meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or his duly authorized attorney-in-fact.
At each election for directors, every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the bylaws of the
corporate shareholder; or, in the absence of any applicable bylaw, by such
person as the Board of Directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a certified coy of the
bylaws or other instrument of the corporate shareholder. In the absence of any
such designation, or in case of conflicting designation by the corporate
shareholder, the chairman of the board, president, any vice president, secretary
and treasurer of the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing gin the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
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Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable
shares has been mailed to the holders thereof and a sum sufficient to redeem
such shares has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders thereof
upon surrender of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided by
law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one (1) is present then that one, may exercise all the
powers conferred by the proxy; but if the proxy holders present at the meeting
are equally divided as to the right and manner of voting in any particular case,
the voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing a
substitute to act in his place.
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Section 11. Voting Trusts. Any number of shareholders of this corporation
may create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares, as provided by
law. Where the counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been deposited with the
corporation as provided by law, such documents shall be subject to the same
right of examination by a shareholder of the corporation, in person or by agent
or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder or record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholders' Agreements. Two (2) or more shareholders, of
this corporation may enter an agreement providing for the exercise of voting
rights in the manner provided in the agreement or relating to any phase of the
affairs of the corporation as provided by law. Nothing therein shall impair the
right of this corporation to treat the shareholders of record as entitled to
vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any action required
by law, these bylaws, or the articles of incorporation of this corporation to be
taken at any annual or special meeting of shareholders of the corporation, or
any action which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted. If
any class of shares is entitled to vote thereon as a class, such written consent
shall be required of the holders of a majority of the shares of each class of
shares entitled to vote as a class thereon and of the total shares entitled to
vote thereon.
Within ten (10) days after obtaining such authorization by written
consent, notice shall be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidated or sale or
exchange of assets for which dissenters rights are provided under this act, the
notice shall contain a clear statement of the right of shareholders dissenting
therefrom to be paid the fair value of their shares upon compliance with further
provisions of this act regarding the rights of dissenting shareholders.
ARTICLE II - DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and business and affairs of the corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this
state or shareholders of this corporation.
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Section 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one (1) or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence, or
(c) a committee of the board upon which he does not serve, duly designated
in accordance with a provision of the articles of incorporation or the bylaws,
as to matters within its designated authority, which committee the director
reasonable believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. The corporation shall have at least one (1) director.
The minimum number of directors may be increased or decreased from time to time
by amendment to these bylaws, but no decrease shall have the effect of
shortening the terms of any incumbent director and no amendment shall decrease
the number of directors below one (1), unless the stockholders have voted to
operate the corporation.
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Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter, the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors fixed
by these bylaws shall constitute a quorum for the transaction of business. The
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one (1) or more of its directors or any
other corporation, firm, association or entity in which one (1) or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
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(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or
shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one (1) or more other
committees each of which, to the extent provided in such resolution shall have
and may exercise all the authority of the Board of Directors, except that no
committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of proxy
solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to a
general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares, except
that the Board of Directors, having acted regarding general authorization for
the issuance or sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general formula or method
specified by the Board of Directors, by resolution or by adoption of a stock
option or other plan, authorize a committee to fix the terms of any contract for
the sale of the shares and to fix the terms upon which such shares may be issued
or sold, including, without limitation, the price, the rate or manner of payment
of dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of State.
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The Board of Directors, by resolution adopted in accordance with this
section, may designate one (1) or more directors as alternate members of any
such committee, who may act in the place and stead of any member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings by the
Board of Directors shall be held without notice. Written notice of the time and
place of special meetings of the Board of Directors shall be given to each
director by either personal delivery, telegram or cablegram at least two (2)
days before the meeting or by notice mailed to the director at least five (5)
days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two (2) directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
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Section 15. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of a corporation, or any action which may be taken at a
meeting of the directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action so to be taken, signed by all
of the directors, or all the members of the committee, as the case may be, is
filed in the minutes of the proceedings of the board or of the committee. Such
consent shall have the same effect as a unanimous vote.
ARTICLE III - OFFICERS
Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two (2) or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notice of meetings out, and
perform such other duties as may be prescribed by the Board of Directors or the
President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or appointed
by the Board of Directors may be removed by the board whenever in its judgment
the best interest of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the Board
of Directors, unless the bylaws shall have expressly reserved such power to the
shareholders.
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Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an officer
or agent shall not of itself create contract rights.
ARTICLE IV - STOCK CERTIFICATES
Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice-President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice-President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the fact thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder or record of by his duly authorized attorney, and the signature of
such person has been guaranteed by a commercial bank or trust company or by a
member of the New York or American Stock Exchange.
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Section 4. Lost, Stolen, or Destroyed Certificates. The corporation shall
issue a new stock certificate in the place of any certificate previously issued
if the holder of record of the certificate (a) makes proof in affidavit form
that it has been lost, destroyed or wrongfully taken; (b) requests the issue of
a new certificate before the corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
ARTICLE V - BOOKS AND RECORDS
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a records of its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have been
a holder of record of shares or of voting trust certificates therefor at least
six (6) months immediately preceding his demand or shall be the holder of record
of, or the holder of record of voting trust certificates for, at least five
percent (5%) of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four (4) months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five (5) years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
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ARTICLE VI - DIVIDENDS
The Board of Directors of this corporation may, from time to time, declare
and the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the articles of
incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own treasury
shares.
(c) Dividends may be declared and paid in the corporation's own authorized
but unissued shares out of any unreserved and unrestricted surplus of the
corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such
shares shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without a par value, such
shares shall be issued at such stated value as shall be fixed by the Board of
Directors by resolution adopted at the time such dividend is declared, and there
shall be transferred to stated capital at the time such dividend is paid an
amount of surplus equal to the aggregate stated value so fixed in respect of
such shares; and the amount per share so transferred to stated capital shall be
disclosed to the shareholders receiving such dividend concurrently with the
payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
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ARTICLE VII - CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation as
it appears on page 1 of these bylaws.
ARTICLE VIII - AMENDMENTS
These bylaws may be repealed or amended, and new bylaws may be adopted, by
the Board of Directors.
End of bylaws adopted by the Board of Directors.
14
EXHIBIT NO.
5.1
Opinion of WILLIAMS LAW GROUP, P.A.
<PAGE>
WILLIAMS LAW GROUP, P.A.
2503 West Gardner Court
Tampa, FL 33611
January 10, 1999
4 Brandon - I, INC.
RE: Registration Statement on Form SB-2
Gentlemen:
I have acted as your counsel in the preparation on a Registration Statement
on Form SB-2 (the "Registration Statement") filed by you with the Securities and
Exchange Commission covering shares of Common Stock of 4 Brandon - I, Inc. (the
"Stock").
In so acting, I have examined and relied upon such records, documents and
other instruments as in our judgment are necessary or appropriate in order to
express the opinion hereinafter set forth and have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us
certified or photostatic copies.
Based on the foregoing, I am of the opinion that:
The Stock, when issued and delivered in the manner and/or the terms
described in the Registration Statement (after it is declared effective), will
duly and validly issued, fully paid and nonassessable;
I hereby consent to the reference to my name in the Registration Statement
under the caption "Legal Matters" and to the use of this opinion as an exhibit
to the Registration Statement. In giving this consent, I do not hereby admit
that I come within the category of a person whose consent is required under
Section7 of the Act, or the general rules and regulations thereunder.
Very truly yours,
/S/Michael T. Williams
- - -----------------------------------
Michael T. Williams
EXHIBIT NO.
23.1
Consent of BEARD NERTNEY KINGERY CROUSE & HOHL P.A.
<PAGE>
{Letterhead of BEARD NERTNEY KINGERY CROUSE & HOHL P.A.}
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
SB-2 No._________) with respect to our report dated January 20, 1999, with
respect to the financial statements of 4 Brandon - I, Inc. for the period ended
December 31, 1998 filed with the Securities and Exchange Commission.
/s/ BEARD NERTNEY KINGERY CROUSE & HOHL P.A.
