U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
Platinum and Gold, Inc.
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(Name of Small Business Issuer in its charter)
Nevada 65-0729332
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12724 N.W. 11th Court
Sunrise, Florida 33323
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (800) 525-8495
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
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Item 1: Description of Business:
(a) Business Development
Platinum and Gold, Inc. (the "Company" or "P&G") is incorporated in the
State of Nevada. The Company was originally incorporated as Integra Ventures,
Inc. on February 19, 1997 ("Integra"). The Company is not presently trading on
an exchange, but intends to apply to trade on the Over the Counter Bulletin
Board once its Form 10SB has been accepted. Its executive offices are presently
located at 12724 N.W. 11th Court, Sunrise, FL 33323. Its telephone number is
(800) 525-8495 and its facsimile number is (954) 845-0656.
The Company is filing this Form 10-SB on a voluntary basis so that the
public will have access to the required periodic reports on P&G's current status
and financial condition. The Company will file periodic reports in the event its
obligation to file such reports is suspended under the Securities and Exchange
Act of 1934 (the "Exchange Act".)
Initially the Company was engaged in the medical supply business. In
November 1998, at the time it acquired Platinum and Gold Recording & Publishing
Company, a Florida corporation formed in June 1997 ("PGRP") as a wholly-owned
subsidiary, its purpose changed to P&G's initial purpose of discovering,
developing, recording and marketing new talent in the entertainment industry.
PGRP's founding philosophy arose from the diversified experience of its
management in the music, video, film and related industries. See Part I, Item 1.
"Description of the Business - (b) Business of Issuer."
In February 1997, prior to its acquisition of PGRP, the Company sold
1,720,000 shares of its unrestricted common stock to 70 individuals for $17,200.
For such offering, the Company relied upon Section 3(b) of the Act and Rule 504
and Section 517.061(11) of the Florida code, Section 90.530(11) of the Nevada
code, Section 48-2-103(b)(4) of the Tennessee code and Section 5[581- 5]I(c) of
the Texas code. No state exemption was necessary for the sales made to Canadian
or French investors. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In July 1997, prior to its acquisition of PGRP, the Company conducted a 1
for 4 reverse split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law. See Part II,
Item 1, a). "Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters, Market Information."; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In July 1997, prior to its acquisition of PGRP, the Company entered into a
share exchange agreement with First Aid Direct, Inc., a Florida corporation
("FAD"), and its shareholders which had been formed in February 1997. The
exchange was made whereby the Company issued 2,970,000 shares of its restricted
common stock to the shareholders of FAD for all of the issued and outstanding
stock of FAD. This offering was conducted pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Act") and Rule 506 of Regulations D
promulgated thereunder ("Rule 506") and Section 517.061(11) of the Florida Code.
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See Part I, Item 7. "Certain Relationships and Related Transactions"; and Part
II, Item 4. "Recent Sales of Unregistered Securities."
In August 1998, prior to its acquisition of PGRP, the Company entered into
a Recission and Cancellation Agreement with FAD and its shareholders, thereby
returning the parties to their original positions prior to the share exchange
conducted in July 1997 ab initio. Thus, FAD exchanged 2,970,000 shares of common
stock of the Company for 100% of the issued and outstanding stock of FAD and FAD
was no longer a wholly-owned subsidiary of the Company. See Part I, Item 7.
"Certain Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In October 1998, prior to its acquisition of PGRP, the Company conducted a
4 for 1 forward split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law. See Part II,
Item 1, a). "Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters, Market Information."; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was until the
next annual meeting of the shareholders and directors. As compensation, Randy
Bernsen was promised 10,000 shares of the restricted common stock of the Company
upon the share exchange to be conducted in November 1998. The shares were issued
in January 1999 pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part I, Item 1. "Employees and
Consultants"; Part I, Item 4. "Security Ownership of Certain Beneficial Owners
and Management"; Part I, Item 5. "Directors, Executive Officer, Promoters and
Control Persons"; Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in November
1998. The shares were issued in January 1999 pursuant to Section 4(2) of the
Act, Rule 506 and Section 517.061(11) of the Florida code. See Part I, Item 1.
"Employees and Consultants"; Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management"; Part I, Item 5. "Directors, Executive
Officer, Promoters and Control Persons"; Part I, Item 7. "Certain Relationships
and Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In November 1998, the Company entered into a share exchange agreement with
PGRP, and its shareholders which had been formed in June 1997. The exchange was
made whereby the Company issued 10,000,000 shares of its restricted common stock
to the shareholders of PGRP for all of the issued and outstanding stock of PGRP.
This offering was conducted pursuant to Section 4(2) of the Act and Rule 506 and
Section 517.061(11)of the Florida Code.See Part I, Item 7."Certain Relationships
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and Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on the
Company's Board of Directors and a Representation Agreement entered into in
December 1998. The shares were issued pursuant to Section 4(2) of the Act, Rule
506 and Section 517.061(11) of the Florida code. See Part I, Item 1. "Employees
and Consultants"; Part I, Item 4. "Security Ownership of Certain Beneficial
Owners and Management"; Part I, Item 5. "Directors, Executive Officer, Promoters
and Control Persons"; Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
In January 1999, the Company conducted an offering of its unrestricted
common stock pursuant to section 3(b) of the Act and Rule 504. No shares were
sold thereunder. See Part II, Item 4. "Recent Sales of Unregistered Securities."
In April 1999, the Company sold 1,000 shares of its unrestricted common
stock to one (1) investor for $850. For such offering, the Company relied upon
Section 3(b) of the Act, Rule 504 and Section 90.530(11) of the Nevada code. See
Part II, Item 4. "Recent Sales of Unregistered Securities."
In July 1999, the Company initiated an offering of its Convertible Notes.
The Notes have a term of one (1) year, bear interest at a rate of nine percent
(9%) and are automatically convertible to shares of the Company's restricted
common stock in one (1) year (if they are not converted earlier) at a price of
$1.00 per share plus interest. To date, no Notes have been sold. The offering is
ongoing. The Company relied upon Section 3(b) of the Act and Rule 504. See Part
II, Item 4. "Recent Sales of Unregistered Securities."
In September 1999, the Company executed a Promissory Note in favor of Carol
Neal, the Company's Chairman, President and Treasurer in the amount of $24,600.
The Note was in exchange for monies lent by Ms. Neal to the Company for working
capital. The Note is payable on demand and bears no interest. See Part I, Item
2. "Management's Discussion and Analysis or Plan of Operation - Operating
Expenses - Interest and Other Income (Expense), Net" and Part II, Item 4,
"Recent Sales of Unregistered Securities"
See (b) "Business of Issuer" immediately below for a description of the
Company's business.
(b) Business of Issuer.
General
The Company was formed in February 1997 and had little or no operations
until November, 1998, when it acquired PGRP. P&G is an entertainment company
involved in the music and film business. Its principal activity is to discover
gifted new artists and to pair those persons with experienced teams of
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entertainers in the same or similar fields. The teams will serve as mentors to
the new artists and will help to further develop their skills. Ultimately, the
Company (with the artist) will produce a finished work based on original
material created by the artist, the Company or both or will re-record a previous
hit. Artists contract directly with the Company. This eliminates the expense of
agents and middle men and translates to a substantial savings for both the
Company and the artist.
Music Recording and Publishing
In the music industry, P&G plans to record its artists both with original
material and with previously released hit songs. Most works will most likely be
aimed at a pop audience, as the Company feels that this segment of the industry
is the most appropriate for the artists P&G currently scouts, is possibly the
most profitable and may be the easiest to enter with a new artist.
P&G will manufacture the recorded material into compact disc ("CD") singles
and albums and cassette singles and albums and then will distribute to the
public via satellite, cable and national TV networks through 1-800 buy-direct
response telephone numbers, as well as over the Internet.
If Only and Touch Me
The Company has already recorded the music for its first two (2) singles,
"If Only" and "Touch Me". The Company is searching for a talented lead vocalist
to record a "voiceover". The singles were recorded in Nashville, TN, with the
help of John Mattick who has worked with such groups as Alabama, Sawyer Brown,
and the Righteous Brothers. He has arranged and produced for Dirty Dancing,
Michael Jackson, Johnny Lee, Andy Reiss, and Reba McIntire. Andy Reiss plays
electric guitar and has also played for Reba McIntire. Dave Fowler plays bass
and has played for Lori Morgan and Dottie West. Rick Lonow plays drums and has
played with Bellami Brothers. Etta Britt is a back-up singer on the single and
has performed with Englebert Humperdink. Larry Hanson plays acoustic guitar and
has played for both Alabama and Righteous Brothers. Chris Hinson who works with
percussion and engineering has worked closely with Clarence Clemmons and DJ
Jazzy Jeff, arranging, writing and performing original music. The singles were
test-marketed in Nashville in 1998 and tested extremely well. The "I wanna buy"
margin was approximately 95%.
Betty Dickson
The Company signed a contract with jazz, blues and swing artist Betty
Dickson to promote and sell her two full-length albums titled "Stolen Goods" and
"A Woman For All Seasons" through direct marketing efforts (the "Dickson
Contract"). The albums were recorded in 1996 and 1998 respectively and are
available in both CD and cassette formats. Neither album has been released to
the public to date, although there have been limited sales to individuals at
concert events at which Ms. Dickson has performed. P&G is obligated to pay Ms.
Dickson $1.00 for each album sold. The contract expires September 3, 2000.
Ms. Dickson is also seeking to become affiliated with a record label. A
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record company contract would provide Ms. Dickson with the means to distribute
her albums nationally and internationally, to tour in concert and to possibly
record with other jazz greats and legends, with the whom the record label has
some affiliation. As a term of the Dickson contract, P&G is entitled to receive
20% of the proceeds of any future contract between Ms. Dickson and such record
label.
Ms. Dickson has recorded four (4) full-length albums to date titled "Can't
Get Out of This Mood" in 1993, "Many, Many Kisses" in 1995, "Stolen Goods" in
1996 and "A Woman For All Seasons" in 1998. She is currently preparing material
for her next album which is currently untitled and for which no release date is
available.
Ms. Dickson resides in Florida, where she often performs in local hotels
and nightclubs, as well as in jazz music festivals and concerts. Additionally,
she tours nationally and has appeared in a "Legends of Jazz" show aboard the SS
Norway. She works regularly with the Eddie Higgins Trio performing for the Ft.
Lauderdale Jazz Society and at other local events.
Steve Jordan
The Company has signed a letter of intent with artist Steve Jordan to enter
into a contract for the purpose of recording a single CD and cassette to be sold
through direct response television advertising and through Internet sales. Mr.
Jordan is currently completing work on his first album and plays in the 1940's
and 1950's contemporary big band genre. He appeals to a wide range of ages and
musical tastes, from gospel to big band.
Mr. Jordan began singing to audiences at the age of three (3) and has been
singing publicly ever since. He studied at the Rhode Island Conservatory of
Music and sang with the famous Al Kay Orchestra until Al Kay passed away. Mr.
Jordan sang gospel with a group called Jubilee Band in the mid 1980's and has
looked forward to sharing his work with others through production of an album
ever since.
Barbara Chadwick
The Company signed a producers contract with artist Barbara Chadwick in
September 1999 to record a single CD and cassette at New River Recording Studios
in Ft. Lauderdale, Florida which is to be Ms. Chadwick's first album. P&G is to
bear all costs in the production of the album, while Ms. Chadwick will retain
all rights to the work produced. P&G shall market the album through direct
response television advertisement as well as over the Internet. P&G shall pay
Ms. Chadwick a $0.12 royalty on all sales of the album through direct response
television.
The Company will also serve as Ms. Chadwick's agent and will endeavor to
introduce Ms. Chadwick to a major record company. In the event such a contract
is signed, the Company is entitled to 35% of the value of such contract.
Ms. Chadwick sings both blues and contemporary jazz and performs in clubs
and hotels along the east coast of the United States concentrating primarily in
New Jersey and Florida.
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Beverly Fortin
The Company signed a producers contract with artist Beverly Fortin in
September 1999 to record a single CD and cassette at New River Recording Studios
in Ft. Lauderdale, Florida which is to be Ms. Fortin's first album. P&G is to
bear all costs in the production of the album, while Ms. Fortin will retain all
rights to the work produced. P&G shall market the album through direct response
television advertisement as well as over the Internet. P&G shall pay Ms. Fortin
a $0.12 royalty on all sales of the album through direct response television.
The Company will also serve as Ms. Fortin's agent and will endeavor to
introduce Ms. Fortin to a major record company. In the event such a contract is
signed, the Company is entitled to 35% of the value of such contract.
Ms. Fortin sings pop music occasionally at local events and has served as a
backup singer to nationally known artists such as Brenda K. Star, Mariah Carey,
Debbie Jacobs, Pamela Stanley, Jessica Williams, Vickie Sue Robinson and Gloria
Estefan and the Miami Sound Machine. She owns a restaurant in Pompano Beach,
Florida and several other local nightclubs.
Television
P&G also plans to explore the possibility of a talk show based in Florida.
In 1980, the three commercial networks' combined broadcast was less than 100
hours of programming a week. Today there are 6 commercial broadcast networks and
over 150 cable channels plus satellite needing to fill up 24 hours of every day
with programs. This translates to over 20,000 hours of time which programmers
must fill.
A half-hour prime time series can cost over $1 million per episode to
produce. These shows are too expensive for many small stations, and in any
event, can only run at peak hours. News magazines and talk shows are therefore
high on the networks' wish lists. These shows are less expensive to produce and
appeal to a large segment of the viewership. Variety shows containing new talent
are rarely produced and aired although they have remained comparatively
inexpensive to produce. Television stations often shy away from the task of
recruiting new talent for fear of over-diversifying from a television to a
television and music company.
The Company feels that it could either contract with a television station
to provide talent for a television station sponsored variety show, or could fill
an entire time slot by producing a variety show of its own. By introducing its
talent in this medium, the Company hopes to boost record sales.
Films and Videos
The Company may also expand into the area of the production of movies made
strictly for the home video, pay-per-view and cable television and satellite
audiences.
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Motion Picture Licensing and Distribution
The Company may also expand its business to include licensing, sales and
distribution of certain rights to independently produced feature films in a wide
variety of genres. The Company's goal would be to become increasingly active in
acquiring both domestic and foreign distribution rights, booking motion pictures
with theatrical exhibitors, arranging for the manufacture of release prints from
the film negative and promoting the motion pictures with advertising and
publicity campaigns.
The Company has already begun to act as a foreign sales agent, licensing
distribution rights in markets outside the United States to independently
produced films which are fully financed and owned by others, in exchange for a
sales agency fee. In addition to the production of motion pictures and
distribution in the United States, substantial revenues are possible from
international exploitation of the Company's motion pictures. International
revenues of motion picture distributors from filmed entertainment grew from $4.7
billion in 1989 to $8.7 billion in 1996. This growth has been attributed to
worldwide acceptance of and the demand for motion pictures produced in the US,
the privatization of foreign television industries, growth in the number of
foreign households with video cassette players and growth in the number of
foreign television screens.
The Company actively participates at all three major film markets (the
American Film Market, the Cannes Film Festival and MIFED), as well as the major
television (NATPE, MIP, MIPCOM) and video (VSDA) markets. The Company may also,
from time to time, engage independent representatives to assist the Company in
acquiring and/or licensing motion picture rights.
With respect to international territories, the Company licenses
distribution rights in various mediums (such as theatrical, video, pay
television, free television, satellite and other rights) to foreign
sub-distributors on either an individual rights basis or grouped in various
combinations of rights (which sometimes includes rights in all media). These
rights are licensed by the Company to numerous sub-distributors in international
territories or regions either on a picture-by-picture basis or, in certain
circumstances, with respect to a number of motion pictures pursuant to output
arrangements. Currently, the most appealing international territories for the
Company are Australia, the Benelux countries, Brazil, Canada, France, Germany,
Italy, Japan, Scandinavia, Spain and the United Kingdom.
The terms of the Company's license agreements with foreign sub-distributors
vary depending upon the territory and media involved and whether the agreement
relates to a single motion picture or multiple motion pictures. Most of the
Company's license agreements will provide that the Company will receive a
minimum guarantee from the foreign sub-distributor with all or a majority of
such minimum guarantee paid prior to, or upon delivery of the film to the
distributor for release in the particular territory. The remainder of any unpaid
minimum guarantee is generally payable at specified intervals after delivery of
the film to the sub-distributor. The minimum guarantee is recouped by the
sub-distributor out of the revenues generated from exploitation of the picture
in such territory. The foreign sub-distributor retains a negotiated distribution
fee (generally measured as a percentage of the gross revenues generated from its
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distribution of the motion picture), recoups its distribution expenses and the
minimum guarantee and ultimately (after recoupment by the distribution expenses)
remits to the Company the remainder of any receipts in excess of the
distributor's ongoing distribution fee.
The Company must rely on the foreign sub-distributor's ability to
successfully exploit the film in order to receive any proceeds in excess of the
minimum guarantee. In certain situations, the Company does not receive a minimum
guarantee from the foreign sub-distributor and instead negotiates terms which
usually result, in effect, in an allocation of gross revenues between the sub-
distributor and the Company. Typically the terms of such an arrangement provide
for the sub- distributor to retain an ongoing distribution fee (calculated as a
percentage of gross receipts of the sub-distributor in the territory), recoup
its expenses and pay remaining receipts in excess of the ongoing distribution
fee to the Company. Alternatively, such as often with respect to video rights,
the terms may provide for a royalty to be paid to the Company calculated as a
percentage of the gross receipts of the sub-distributor from exploitation of the
video rights (without deduction for the sub-distributor's distribution
expenses).
Groups of motion pictures are often packaged and licensed as a group for
exhibition on video and television over a period that extends beyond five years
from the initial domestic theatrical release of a particular film. Motion
pictures are also licensed and "packaged" by producers and distributors for
television broadcast in international markets by government owned or privately
owned television studios and networks. Pay television is less developed outside
the U.S., but is experiencing significant international growth. The prominent
foreign pay television services include channel Premiere, STAR TV, British Sky
Broadcasting and the international operations of several U.S. cable services
including HBO, the Disney Channel and Turner Broadcasting.
Business Strategy
The Company's business strategy, which is dependent upon its continuing to
have sufficient cash flow from operations and/or obtaining sufficient additional
financing with which to enhance the commercialization of existing and future
products, is to develop the talents of new artists and to either reproduce an
existing work or to record original material for global distribution. The
Company's revenues to date are minimal and are based upon the licensing
arrangements it has entered into as a foreign sales agent. The Company's
revenues are dependent on the volume of sales from its products and services it
provides.
Revenues from sales and services are recognized in the period in which
sales are made or services are provided. The Company's gross profit margin will
be determined in part by its ability to estimate and control direct costs of
manufacturing and production costs and its ability to incorporate such costs in
the price charged to customers and clients.
The Company's objective is to become a dominant provider of entertainment
products, initially in the music industry and eventually including music, video,
television products as well as to become an agent for others. To achieve this
objective, and assuming that sufficient funds are available, the Company
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intends to: (i) develop international distribution channels and co-marketing
alliances for the Company's products and services; (ii) continue to sign new
artists and to develop their skills and ready them for production; (iii) to
explore new possibilities in television and the internet; and (iv) to begin
retail sales of its products through Direct Sales efforts.
Management believes that the Company is poised to lead in the ever
developing entertainment industry. Management expects, in the event the Company
continues to achieve product acceptance, to increase its market penetration
through acquisition of additional artists, joint venture opportunities with
established market leaders and expansion of its personnel. However, such
expansion presents certain challenges and risks and there can be no assurance
that the Company, even if it were successful in acquiring other bases of
business development, would be successful in profitably penetrating these
potential markets.
Marketing and Distribution
Marketing
The following discussion of the entertainment industry, as it relates to
the Company's objectives, is of course pertinent only if the Company is
successful in maintaining sufficient cash flow from operations and/or obtaining
sufficient debt and/or equity financing to commercialize its existing products,
to add additional key personnel where needed, and to supplement new product
development. In addition, the Company must be able to generate significant
profits from operations and/or additional financing to continue expanding the
business and/or to fund the anticipated growth, assuming the Company's proposed
expanded business is successful. There can be no assurance such financing can be
obtained or that the Company's proposed expanded business will be successful.
According to the National Association of Recording Merchandisers ("NARM"),
the music industry is a $8.79 Billion a year enterprise, with 32.6% of sales
being made through the use of credit cards. The Company was recently approved to
accept major credit cards and will implement their use on direct sales efforts
immediately.
Although according to the Recording Industry Association of America
("RIAA") the Internet accounted for only 0.3% of the total music sales in the
U.S. in 1997, the RIAA sees the Internet as, "an opportunity to expose music to
a wider audience than ever before." The Internet is an inexpensive medium which
also allows a company with less resources such as independents and start-ups to
compete for sales with larger more established companies.
In the wake of a dramatic increase in Internet sales, the record club
industry has reported steady declines between the years of 1994 and 1997. While
record club purchases accounted for a total of 15.1% of total music sales, in
1997 record club sales accounted for only 11.6% of total music sales. Mail order
sales, which seem to have paralleled record club sales, have reached a seven (7)
year market share low of 2.7% (RIAA).
A significant factor in the above distribution forum changes has been the
introduction of new mediums for audio listening. In 1997, full-length CD's
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dominated the market with a 70.2% market share. A far second was full-length
cassettes with only an 18.2% share. Vinyl sales however, rose from 0.3% in 1993
(the date of CD introduction) to 0.7% in 1997. This rise was mostly attributed
to collectors, disk jockeys and rap music (RIAA).
According to the RIAA, unit shipments of all formats to direct and special
markets grew 11% from 124.7 million in mid-'98 to 138.4 million in mid-'99. This
is especially of interest to the Company, who plans to focus in these areas. The
dollar value of shipments to direct and special markets also grew 4.7% from
$732.5 million in mid-'98 to $767.2 million in mid-'99.
Consumer profiles compiled by NARM are also of interest to P&G, as much of
the Company's music will appeal to an older audience. 1997 statistics show that
persons 45 years of age and older are the second largest purchasers of music
products, second only to ages 15-19.
Distribution
The Company's initial plan of distribution is to market and sell the
product through direct sales efforts. Primarily the Company will focus on
infomercials to sell its products. Print media, direct mail and short form 120
and 60-second commercials may follow the infomercial.
In addition to the infomercial, the Company may eventually institute a
direct mail and sales campaign for the Company's products which the Company
believes will generate sales from consumers throughout the United States. In
addition, the Company has an ongoing program to participate in trade shows and
festivals, promotional events and retail mall shows. These events have
historically generated sales and significant exposure in the industry.
The growth and improvement of direct response marketing and sales via
infomercials, home shopping networks and commercials has had a positive impact
on the retail sales industry and specifically on the music industry. Companies
such as BMG and Columbia House have been especially successful. Additionally,
retailers are increasingly utilizing alternative forms of retailing; such as,
television shopping and infomercials and merchandising albums with other
entertainment items.
The Company intends to save considerable expense by acting as its own
fulfillment center. Thus, all telephone sales, packaging and shipping will be
handled exclusively by the Company. The Company expects that it will have
sufficient resources and capital necessary to expand to meet these obligations.
A shortage of capital could have a material adverse effect on the Company's
ability to handle its fulfillment obligations in-house.
The Company expects to sell its products in retail stores when profit
margins show signs of weakening through direct sales efforts. The retail market
is expected to support the product for several years thereafter.
The Company's intends to eventually joint venture with major recording
labels which have the support structure necessary to record and publish an
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album on a much larger scale. By joint-venturing for manufacturing, distribution
and finance of albums, P&G hopes to be able to launch new artists quickly and
efficiently, dedicating adequate funds to promote the artist and the work to
achieve maximum exposure.
Distribution on the Internet
The Company is also already selling its products over the Internet. It
advertises albums for sale directly through the Company website. Customers are
able to browse the site, listen to sample wav. files and soon will be able to
purchase albums directly from the Company over the Internet in a secure
environment. The Company intends to pay for advertising space on frequently
visited sites such as browsers upon receipt of sufficient capital from either
revenues or debt or equity financing.
Also, the on-line delivery of music and video is inevitable and the death
of the modern music and video stores is imminent. P&G plans to establish
websites to promote and distribute its materials, as well as the materials of
others. Online sales are considerably less expensive to promote.
Status of Publicly Announced Products and Services
The singles "If Only" and "Touch Me" were originally to be recorded with
Michela as the lead vocalist. The Company released information to the public in
various mediums publicizing the expected release. The singles were test-marketed
in Nashville in 1998 and tested extremely well. The "I wanna buy" margin was
approximately 95%. The Company has since elected not to use Michela as the lead
vocalist for these two (2) singles and is currently searching for a suitable
singer to replace Michela.
Additionally, the Betty Dickson albums A Woman For All Seasons and Stolen
Goods are currently available through the Company's website located at
http://www.platinum-gold.com.
No other P&G products or services have been publicly announced and are
either in the production or planning phase.
Competition
The Company faces competition from large, well-established companies with
considerably greater financial, marketing, sales and technical resources than
those available to the Company. Additionally, many of the Company's present and
potential competitors have research and development capabilities that may allow
such competitors to develop new and improved products which may compete with the
Company's products. The Company's products could be rendered obsolete or made
uneconomical by the development of new products, technological advances
affecting the cost of production, or marketing or pricing actions by one or more
of the Company's competitors. The Company's business, financial condition or
results of operations could be materially adversely affected by one or more of
such developments. There can be no assurance that the Company will be able to
compete successfully against current or future competitors or that competition
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will not have an material adverse effect on the Company's business, financial
condition or results of operations.
Competition - Music Recording and Publishing
Competition is intense within the music industry, in general, and also in
the agency or booking aspect of the industry in which the Company may conduct
its operations in the future. The Company's opportunity to obtain clients with
the potential for achieving popular and commercial success may be limited by its
financial resources and other assets. It is anticipated that the music industry
may be subject to changes in the general state of the economy, shifts in the
demographic structure, changes in the buying habits of the public, the
availability of alternative forms of entertainment and the increased cost of
doing business. Further, there may be significant technological advances in the
future and the Company may not have adequate creative management and resources
to enable it to take advantage of such advances. Many of the companies and other
organizations with which the Company will be in competition have far greater
financial resources, greater experience and larger staffs than the Company.
Additionally, many of such organizations have proven operating histories, which
the Company lacks. The Company expects to face strong competition from both such
well-established companies and independent companies like itself.
Competition - Films
In the event the Company enters the motion picture industry, the Company's
movies will compete with traditional feature films and television programming
produced by major movie studios, including Disney, Warner Bros. Inc., Twentieth
Century Fox Film Corporation, Paramount Pictures, Sony Pictures, Inc.,
Lucasfilm, Universal City Studios, Inc. and MGM/UA, as well as numerous other
independent motion picture and television production companies. The Company's
broadcast and home video products will compete with the films of these movie
studios for audience acceptance and exhibition over broadcast/cable and home
video channels. In addition, the Company will compete with movie studios for the
acquisition of literary properties, production financing, the services of
performing artists, and the services of other creative and technical personnel.
Most of the movie studios with which the Company will compete have significantly
greater name recognition and significantly greater financial, technical,
creative, marketing, and other resources than does the Company. Due to their
substantially greater resources, these movie studios likely will be able to
enter into more favorable distribution arrangements and to promote their films
and television programming more successfully than the Company.
Competition - Videos
In the event the Company enters into the video production industry, the
Company's videos will compete with the feature films produced by the major movie
studios listed above as well as numerous independent production companies, some
of whom produce movies exclusively for release on videocassette. Most of the
movie studios with which the Company will compete have significantly greater
name recognition and significantly greater financial, technical, creative,
marketing, and other resources than does the Company. Due to their substantially
greater resources, these movie studios likely will be able to enter into more
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favorable distribution arrangements and to promote their films and television
programming more successfully than the Company.
Competition - Distribution on the Internet
The market for online commerce is extremely competitive, and the Company
believes competition, particularly in connection with online music sales, will
continue to grow and intensify. The Company's most visible competitors may
include CustomDisc.com, CDuctive, and amplified.com. Although the Company's
primary focus will be on sales of Company artists, rather than the music of
other artists, P&G may ultimately compete with existing online websites that
provide sales of pre-recorded music on the Internet. Online competitors include
CDnow, Inc., Amazon.com, Inc., barnesandnoble.com inc., Columbia House and BMG
Music Service. CDnow purchased SuperSonic Boom, a custom compilation provider,
in June 1998.
Sources and Availability of Raw Materials
The materials needed to produce movies or television and to record music is
widely available from numerous third parties for rent or for sale. The final
product is then manufactured and mass produced by a third party independent
contractor. The raw materials to produce CD's, audio cassettes, digital video
disks, videocassettes, laser disks and other medium are widely available from
numerous sources. No shortage of materials is expected in the foreseeable
future.
Dependence on one or few customers
The Company will rely heavily on its customers' preferences to best
determine the products which will be produced. The commercial success of the
Company's products will depend on its ability to predict the type of content
that will appeal to a broad audience. Although the Company plans to test market
their products prior to their release, there can be no assurance that the
Company will be able to predict the appeal of its products before their
production. Considerable expense is expended on production costs before a
product can be test marketed. Therefore, although a product which tests poor can
be scrapped before additional expense is incurred associated with release
including marketing and distribution, the Company may have to bear the expense
of production of some products, which may never be released. This may have a
material adverse effect on the Company.
Research and Development
The Company believes that research and development is an important factor
in its future growth. The entertainment industry is closely linked to
technological advances, which produce new ways of producing product and a new
medium for its use by the public. Recent developments include: on-line sales,
digital downloading of music and video, digital video disks and others.
Therefore, the Company must continually invest in the latest technology to
appeal to the public and to effectively compete with other companies in the
industry. No assurance can be made that the Company will have sufficient funds
to purchase technological advances as they become available. Additionally, due
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to the rapid advance rate at which technology advances, the Company's equipment
and inventory may be outdated quickly, preventing or impeding the Company from
realizing its full potential profits.
Patents, Copyrights and Trademarks
The Company intends to protect its original intellectual property with
patents, copyrights and/or trademarks as appropriate.
To date, the Company has registered two (2) copyrights. On November 7,
1997, the Company filed on Form SR (for sound recordings) copyright applications
for the works titled "If Only" and "Touch Me". The effective date of such
registrations is November 7, 1997.
Governmental Regulation
Currently there is no government regulation of the Company's business nor
of the Company's products.
State and Local Licensing Requirements
Currently there are no state or local licensing requirements which apply to
the Company's business or to its products
Effect of Probable Governmental Regulation on the Business
Currently there is no government regulation of the Company's business nor
of the Company's products. However, new laws are emerging which regulate
commerce over the internet and the way data and information may be transmitted
over the Internet. Should the Company engage in activities involving the
Internet in the future, it may be subject to these laws and/or regulations.
As the Company's products and services are available over the Internet in
multiple states and foreign countries, these jurisdictions may claim that the
Company is required to qualify to do business as a foreign corporation in each
such state and foreign country. New legislation or the application of laws and
regulations from jurisdictions in this area could have a detrimental effect upon
the Company's business.
A governmental body could impose sales and other taxes on the provision of
the Company's products and services, which could increase the costs of doing
business. A number of state and local government officials have asserted the
right or indicated a willingness to impose taxes on Internet-related services
and commerce, including sales, use and access taxes; however, no such laws have
become effective to date. The Company cannot accurately predict whether the
imposition of any such taxes would materially increase its costs of doing
business or limit the services which it provides, since it may be possible to
pass on some of these costs to the consumer and continue to remain competitive.
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If, as the law in this area develops, the Company becomes liable for
information carried on, stored on, or disseminated through its website, it may
be necessary for the Company to take steps to reduce its exposure to this type
of liability through alterations in its equipment, insurance or other methods.
This may require the Company to spend significant amounts of money for new
equipment or premiums and may also require it to discontinue offering certain of
its products or services.
Due to the increasing popularity and use of the Internet, it is possible
that additional laws and regulations may be adopted with respect to the
Internet, covering issues such as content, privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards, consumer protection,
electronic commerce, taxation, copyright infringement and other intellectual
property issues. P&G cannot predict the impact, if any, that future regulatory
changes or developments may have on the Company's business, financial condition,
or results of operation.
Cost of Research and Development
For fiscal year 1997 and 1998, the Company expended no measurable amount of
money on research and development efforts. At the current time, none of the
costs associates with research and development are bourne directly by the
customer; however there is no guarantee that such costs will not be bourne by
customers in the future and, at the current time, the Company does not know the
extent to which such costs will be bourne by the customer, if at all.
Cost and Effects of Compliance with Environmental Laws
The Company's business is not subject to regulation under the state and
Federal laws regarding environmental protection and hazardous substances
control. The Company is unaware of any bills currently pending in Congress which
could change the application of such laws so that they would affect the Company.
Employees and Consultants
At August 31, 1999, the Company employed three (3) persons. None of these
employees are represented by a labor union for purposes of collective
bargaining. The Company considers its relations with its employees to be
excellent. The Company plans to employ additional personnel as needed upon
product rollout to accommodate fulfillment needs.
In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was until the
next annual meeting of the shareholders and directors. As compensation, Randy
Bernsen was promised 10,000 shares of the restricted common stock of the Company
upon the share exchange to be conducted in November 1998. The shares were issued
in January 1999 pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part I, Item 4. "Security Ownership of
Certain Beneficial Owners and Management"; Part I, Item 5. "Directors, Executive
Officer, Promoters and Control Persons"; Part I, Item 7. "Certain Relationships
and Related Transactions"; and Part II, Item
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4. "Recent Sales of Unregistered Securities."
In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in November
1998. The shares were issued in January 1999 pursuant to Section 4(2) of the
Act, Rule 506 and Section 517.061(11) of the Florida code. See Part I, Item 4.
"Security Ownership of Certain Beneficial Owners and Management"; Part I, Item
5. "Directors, Executive Officer, Promoters and Control Persons"; Part I, Item
7. "Certain Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of Unregistered Securities."
In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on the
Company's Board and a Representation Agreement entered into in December 1998.
The shares were issued pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part I, Item 4. "Security Ownership of
Certain Beneficial Owners and Management"; Part I, Item 5. "Directors, Executive
Officer, Promoters and Control Persons"; Part I, Item 7. "Certain Relationships
and Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
Currently, the Company has no employment agreements with its employees. P&G
intends to enter into such agreements upon the effectiveness of its Form10SB.
Facilities
The Company maintains its executive offices at 12724 N.W. 11th Court,
Sunrise, Florida 33323, which is the residence of both Valerie Peters and Louise
Cavell. Approximately 500 square feet of space is devoted entirely to P&G as an
office. Its telephone number is (800) 525-8495 and its facsimile number is (954)
845-0656. The Company plans to lease office space in either Broward or Palm
Beach County, Florida upon receipt of sufficient capital resulting from revenues
or debt or equity financing. It is planned that such office space shall serve as
the Company headquarters and also as a fulfillment center for the Company's
products. See Part I, Item 3. "Description of Property."
Risk Factors
Before making an investment decision, prospective investors in the
Company's Common Stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. History of Losses. Although the Company has been in business since
February 19, 1997 it is still in the development stage. As of December 31, 1997,
the Company had total assets of $15,594, a net loss of $106 with no revenues and
stockholders equity of $13,849. As of December 31, 1998, the Company had total
assets of $38,375, a cumulative net loss of $18,050 on no revenues and
stockholders deficit of $1,295. Due to the Company's operating history and
limited resources, among other factors, there can be no assurance that
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profitability or significant revenue will occur in the future. Moreover, the
Company expects to continue to incur operating losses through at least the
second fiscal quarter of the year 2000, and there can be no assurance that
losses will not continue thereafter. The ability of the Company to establish
itself as a going concern is dependent upon the receipt of additional funds from
operations or other sources to continue those activities. The Company is subject
to all of the risks inherent in the operation of a development stage business
and there can be no assurance that the Company will be able to successfully
address these risks. See Part I, Item 1. "Description of Business."
2. Minimal Assets. Working Capital and Net Worth. As of December 31, 1998,
the Company's total assets in the amount of $38,375, consisted, principally, of
the sum of $1,533 in cash, $1,959 in office equipment and $34,883 in other
assets. As a result of its minimal assets and a net loss from operations, in the
amount of $18,050, as of December 31, 1998, the Company had a net worth of
$38,375. Further, there can be no assurance that the Company's financial
condition will improve. Even though management believes, without assurance, that
it will obtain sufficient capital with which to implement its expansion plan,
the Company is not expected to proceed with its expansion without an infusion of
capital. In order to obtain additional equity financing, management may be
required to dilute the interest of existing shareholders or forego a substantial
interest of its revenues, if any. See Part I, Item 1. "Description of Business"
3. Need for Additional Capital. Without an infusion of capital or profits
from operations, the Company is not expected to proceed with its expansion as
planned. Accordingly, the Company is not expected to overcome its history of
losses unless additional equity and/or debt financing is obtained. While the
Company anticipates the receipt of increased operating revenues, such increased
revenues cannot be assured. Further, the Company may incur significant
unanticipated expenditures which deplete its capital at a more rapid rate
because of among other things, the stage of its business, its limited personnel
and other resources and its lack of a widespread client base and market
recognition. Because of these and other factors, management is presently unable
to predict what additional costs might be incurred by the Company beyond those
currently contemplated. The Company has not identified sources of additional
capital funds, and there can be no assurance that resources will be available to
the Company when needed. See Part I, Item 1. "Description of Business - (b)
Business of Issuer."
4. Dependence on Management. The possible success of the Company is
expected to be largely dependent on the continued services of its Founder,
Chairman, President and Treasurer, Carol Neal, its Vice-President and Director,
Valerie Peters and its Secretary and Director, Louise Cavell. Virtually all
decisions concerning the production, marketing, distribution and sales of the
Company's products and services will be made or significantly influenced by the
Company's officers. These officers are expected to devote only such time and
effort to the business and affairs of the Company as may be necessary to perform
their responsibilities as executive officers. The loss of the services of any of
these officers, but particularly Carol Neal, would adversely affect the conduct
of the Company's business and its prospects for the future. The Company
presently has no employment agreements with any of its officers and holds no
key-man life insurance on the lives of, and has no other agreement with any of
these officers. See Part I, Item 1. "Description of Business -(b) Business of
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Issuer and Part I, Item 5. "Directors, Executive Officers, Promoters and Control
Persons."
5. Limited Distribution Capability. The Company's success depends in large
part upon its ability to distribute its products and services. As compared to
the Company, which lacks the financial, personnel and other resources required
to compete with its larger, better-financed competitors, virtually all of the
Company's competitors have much larger budgets for securing customers. Depending
upon the level of operating capital or funding obtained by the Company,
management believes, without assurance, that it will be possible for the Company
to attract distributors for its products and services. However, in the event
that only limited funds are available from operations or obtained, the Company
anticipates that its limited finances and other resources may be a determinative
factor in the decision to go forward with planned expansion. Until such time, if
ever, as the Company is successful in generating sufficient cash flow from
operations or securing additional capital, of which there is no assurance, it
intends to continue to operate at its current stage. See Part I, Item 1.
"Description of Business," (b) "Business of Issuer - Sales and Marketing-
Distribution of Products."
6. High Risks and Unforeseen Costs Associated with the Company's Expanded
Entry into the Music and Related Entertainment Industries. There can be no
assurance that the costs for the establishment of a distributor network, and the
marketing and sales costs associated with the rollout of its products and
services will not be significantly greater than those estimated by Company
management or that significant expenditures will not be needed to record and
produce the Company's products. Therefore, the Company may expend significant
unanticipated funds or significant funds may be expended by the Company without
development of a commercial market for its products. There can be no assurance
that cost overruns will not occur or that such cost overruns will not adversely
affect the Company. Further, unfavorable general economic conditions and/or a
downturn in customer acceptance and appeal could have an adverse affect on the
Company's business. Additionally, competitive pressures and changes in customer
mix, among other things, which management expects the Company to experience in
the uncertain event that it achieves commercial viability, could reduce the
Company's gross profit margin from time to time. Accordingly, there can be no
assurance that the Company will be capable of establishing itself in a
commercially viable position in local, state, nationwide and international music
and motion picture markets. See Part I, Item 1. "Description of Business," (b)
"Business of Issuer."
7. Few Artists Under Contract or Customer Base. While the Company has
signed several contracts with aspiring artists, the Company presently has no
established musical artists, musical groups, comedy acts or other artists or
entertainers under contract. The Company will be dependent upon its President,
Ms. Carol Neal, to select the musicians, musical groups, comics and other
artists and performers whose talents the Company will seek to develop and
record. Ms. Neal will utilize the contacts with musicians, musical groups,
agents, directors, producers and others which she has developed in the music
business to select and target performing artists and groups and comedy acts to
be signed by the Company, there can be no assurance that any such artists or
performers will have a chance of achieving popular and commercial success.
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8. Dependency on Securing a Suitable Strategic Partner. The Company's
ability to establish an adequate customer base at a level sufficient to meet the
larger competition depends in part upon the ability of the Company to capitalize
on distribution agreements not yet in place and to establish a joint venture
agreement with a suitable partner for its production of new music and motion
picture works. There can be no assurance that a qualified strategic arrangement
will be found at the levels which management believes are possible. Further,
even if the Company receives sufficient cash flow from operations or proceeds
from equity and/or debt financing or otherwise, thus enabling it to go forward
with its planned expansion, it will nevertheless be dependent upon the
availability of a qualified strategic partner to progress at the levels which
the Company believes are necessary. See Part I, Item 1. "Description of
Business," (b) Business of Issuer - Sales and Marketing."
9. Significant Customer and Product Concentration. There is no assurance
that the Company will be able to obtain adequate distribution of its products.
Most motion pictures and audio works are produced by large companies which have
distribution agreements already in place. Most distributors carry an extensive
line of products which they make available to customers in the form of box
office movies, video rentals and audio sales. The Company's ability to achieve
revenues in the future will depend in significant part upon its ability to
obtain and provide support to distributors, as well as the condition of its
distributors. Even if the Company secures distribution agreements, there can be
no assurance that the distributors with which the Company contracts, will be
able to compete with larger distributors who appeal to a wider customer base as
a result of their ability to carry a more extensive line of products. Any
cancellation of a distributorship agreement or delay in payment may materially
adversely affect the Company's business, financial condition and results of
operations. There can be no assurance that the Company's revenues will increase
in the future or that the Company will be able to support or attract
distributors for its products. See "Part I, Item. 1. "Description of Business -
(b) Business of Issuer - Sales and Marketing - Distribution of Products; and -
Dependence on Major Customers" and Part I, Item 2. Management's Discussion and
Analysis of Financial Condition or Plan of Operation - Revenues."
10. Fluctuations in Results of Operations. The Company has experienced and
may in the future experience significant fluctuations in revenues, gross margins
and operating results. In addition, a single order for the Company's products
can represent a significant portion of the Company's potential sales for such
quarter. As with many developing businesses, the Company expects that some
orders may not materialize or delivery schedules may have to be deferred as a
result of changes in distribution schedules, among other factors. As a result,
the Company's operating results for a particular period to date have been and
may in the future be materially adversely affected by a delay, rescheduling or
cancellation of even one purchase order. Moreover, purchase orders are often
received and accepted substantially in advance of shipment, and the failure to
reduce actual production costs to the extent anticipated or an increase in
anticipated costs before shipment could materially, adversely affect the gross
margins for such order, and as a result, the Company's results of operations.
Moreover, a majority of the Company's anticipated orders could be canceled since
orders are expected to be made substantially in advance of shipment, and even
though the Company's contracts will not typically provide that orders may be
canceled, if an important distributor wishes to cancel an order, the Company may
be compelled, due to competitive conditions, to accede to such request. As a
result, backlog, if any, will not necessarily be indicative of future sales for
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any particular period. Furthermore, a substantial portion of net sales may be
realized near the end of each quarter. A delay in a shipment near the end of a
particular quarter, due, for example, to an unanticipated shipment rescheduling,
to cancellations or deferrals by customers or to unexpected production
difficulties experienced by the Company, may cause net revenues in a particular
quarter to fall significantly below the company's expectations and may
materially adversely affect the Company's operating results for such quarter.
A large portion of the Company's expenses are variable but difficult to
reduce should revenues not meet the Company's expectations, thus magnifying the
material adverse effect of any revenue shortfall. Furthermore, announcements by
the Company or its competitors of new artists and new releases could cause
distributors to defer purchases of the Company's products or a reevaluation of
products under development, which would materially adversely affect the
Company's business, financial condition and results of operations. Additional
factors that may cause the Company's revenues, gross margins and results of
operations to vary significantly from period to period include: product
production costs, patent processing, possible government regulation of the
Company's business and/or products and their method of distribution, mix of
products sold, manufacturing efficiencies, costs and capacity, price discounts,
market acceptance and the timing of availability of new products by the Company
or its distributors, usage of different distribution and sales channels and
methods and general economic and political conditions. In addition, the
Company's results of operations are influenced by competitive factors, including
the pricing and availability of and demand for works in the same genre. All of
the above factors are difficult for the company to forecast, and these or other
factors could materially adversely affect the Company's business, financial
condition and results of operations. As a result, the Company believes that
period-to-period comparisons are not necessarily meaningful and should not be
relied upon as indications of future performance. See Part I, Item. 2.
"Management's Discussion and Analysis of Financial Condition or Plan of
Operation."
11. Potential for Unfavorable Interpretation of Future Government
Regulation. The Company is not subject to regulations governing its products at
the present time. The Company may be subject to regulation if it elects to
distribute its products through means such as the Internet, in which case the
Company will be required to comply with new and emerging laws, the
interpretation of which will be uncertain and unclear. In such event the Company
shall have all of the uncertainties such laws present including the risk of loss
of substantial capital in the event the Company is unable to comply with the law
or is unable to utilize the method of distribution it thinks will best serve the
Company's products.
12. No Assurance of Product Quality. Performance and Reliability. The
Company expects that its distributor and their customers will continue to
establish demanding specifications for quality, performance and reliability.
Although the Company will attempt to purchase equipment and raw materials from
manufacturers who adhere to good manufacturing practice standards, there can be
no assurance that problems will not occur in the future with respect to quality,
performance, reliability and price. If such problems occur, the Company could
experience increased costs, delays in or cancellations or rescheduling of orders
or shipments and product returns and discounts, any of which would have a
material adverse effect on the Company's business, financial condition or
results
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of operations.
13. Future Capital Requirements. The Company's future capital requirements
will depend upon many factors, including the cost of production of the Company's
products, requirements to either rent or construct adequate production
facilities such as a recording studio and the status of competitive products and
services. The Company believes that it will require additional funding in order
to fully exploit its plan for operations. There can be no assurance, however,
that the Company will secure such additional financing. There can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. If additional funds are raised by issuing equity
securities, further dilution to the existing stockholders will result. If
adequate funds are not available, the Company may be required to delay, scale
back or even eliminate its production schedules or obtain funds through
arrangements with partners or others that may require the Company to relinquish
rights to certain of its existing or potential products or other assets.
Accordingly, the inability to obtain such financing could have a material
adverse effect on the Company's business, financial condition and results of
operations. See Part I, Item 2. "Management's Discussion and Analysis of
Financial Condition or Plan of Operation."
14. Uncertainty Regarding Protection of Proprietary Rights. The Company
will attempt to protect its intellectual property rights through patents,
trademarks, secrecy agreements, trade secrets and a variety of other measures.
However, there can be no assurance that such measures will provide adequate
protection for the Company's original works, that additional disputes with
respect to the ownership of its intellectual property rights will not arise
between the Company and the artists it contracts with, that the Company's
products will not otherwise be copied by competitors or that the Company can
otherwise meaningfully protect its intellectual property rights. There can be no
assurance that any copyright owned by the Company will not be invalidated,
circumvented or challenged, that the rights granted thereunder will provide
competitive advantages to the Company or that any of the Company's pending or
future applications will be issued with the scope of the claims sought by the
Company, if at all. Furthermore, there can be no assurance that others will not
develop similar products which appeal to the same genre or duplicate the
Company's products or that third parties will not assert intellectual property
infringement claims against the Company. In addition, there can be no assurance
that foreign intellectual property laws will adequately protect the Company's
intellectual property rights abroad. The failure of the Company to protect its
proprietary rights could have a material adverse effect on its business,
financial condition and results of operations.
Litigation may be necessary to protect the Company's intellectual property
rights, to determine the validity of and scope of the proprietary rights of
others or to defend against claims of infringement or invalidity. Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance that
infringement, invalidity, right to use or ownership claims by third parties or
claims for indemnification resulting from infringement claims will not be
asserted in the future. If any claims or actions are asserted against the
Company, the Company may seek to obtain a license under a third party's
intellectual property rights. There can be no assurance, however, that a license
will be available under reasonable terms or at all. In addition, should the
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Company decide to litigate such claims, such litigation could be extremely
expensive and time consuming and could materially adversely affect the Company's
business, financial condition and results of operations, regardless of the
outcome of the litigation. See Part I, Item 1. Description of Business - (b)
Business of Issuer - Patents, Copyrights and Trademarks."
15. Ability to Grow. The Company expects to grow through one or more
strategic alliances, acquisitions, internal growth and by establishing
distributorship relationships. There can be no assurance that the Company will
be able to create a greater market presence, or if such market is created, to
expand its market presence or successfully enter other markets. The ability of
the Company to grow will depend on a number of factors, including the
availability of working capital to support such growth, existing and emerging
competition, one or more qualified strategic alliances and the Company's ability
to achieve and maintain sufficient profit margins in the face of pricing
pressures. The Company must also manage costs in an environment which is
notorious for unforeseen and underestimated costs and adapt its infrastructure
and systems to accommodate growth within the niche market which it hopes to
create.
The Company also plans to expand its business, in part, through
acquisitions. Although the Company will continuously review potential
acquisition candidates, it has not entered into any agreement, understanding or
commitment with respect to any additional acquisitions at this time. There can
be no assurance that the Company will be able to successfully identify suitable
acquisition candidates, complete acquisitions on favorable terms, or at all, or
integrate acquired businesses into its operations. Moreover, there can be no
assurance that acquisitions will not have a material adverse effect on the
Company's operating results, particularly in the fiscal quarters immediately
following the consummation of such transactions, while the operations of the
acquired business are being integrated into the Company's operations. Once
integrated, acquisitions may not achieve comparable levels of revenues,
profitability or productivity as the then existing Company products or otherwise
perform as expected. The Company is unable to predict whether or when any
prospective acquisition candidate will become available or the likelihood that
any acquisitions will be completed. The Company will be competing for
acquisition and expansion opportunities with entities that have substantially
greater resources than the Company. In addition, acquisitions involve a number
of special risks, such as diversion of management's attention, difficulties in
the integration of acquired operations and retention of personnel, unanticipated
problems or legal liabilities, and tax and accounting issues, some or all of
which could have a material adverse effect on the Company's results of
operations and financial condition. (See Part I, Item 1. "Description of
Business (b) "Business Issuer.")
16. Competition. The music and motion picture industries and the
entertainment industry in general are all highly competitive, with several major
companies involved. The Company will be competing with larger competitors in
international, national, regional and local markets. In addition, the Company
may encounter substantial competition from new market entrants. Many of the
Company's competitors have significantly greater name recognition and have
greater marketing, financial and other resources than the Company. Further,
competition for ticket sales and product purchases has meant the expenditure of
additional monies in the production and promotion of new products and services.
There can be no assurance that the Company will be able to complete
23
<PAGE>
effectively against such competitors in the future.
The market for online commerce is extremely competitive, and the Company
believes that competition, particularly in connection with online music sales,
will continue to grow and intensify. Although the Company's primary focus is on
sales of the Company's works, rather than pre-recorded music of various artists,
the Company may ultimately compete with existing online websites that provide
sales of pre-recorded music on the Internet. Online competitors include CDnow,
Inc., Amazon.com, Inc., barnesandnoble.com inc., Columbia House and BMG Music
Service.
The Company also faces significant competition in the growing market to
provide digitally downloaded music, specifically for music files in MP3 format.
Digitally downloaded music can currently be found on the websites of existing
online music retailers, artists and record labels as well as catalogs of songs
provided by Internet portals such as Lycos. The Company's most visible
competitors for digitally downloaded music include GoodNoise Corporation
(recently renamed EMusic.com) and MP3.com. The Company expects the competition
to provide MP3 files to intensify with further entry by additional record
labels, artists and portals, including those with greater resources and music
content than the Company. In February 1999, the five major record labels
announced that they have joined with IBM to conduct a market trial of a digital
distribution system, providing over 1,000 albums to cable subscribers in the San
Diego area. In May 1999, Matsushita Electric Industrial Co. Ltd., AT&T Corp.,
BMG Entertainment and Universal Music Group announced an alliance to develop and
test technology for secure digital distribution of music to personal computers
and new digital music playback devices. In June 1999, media company Cox
Enterprises Inc. announced an investment in and joint venture with MP3.com. The
Company expects additional market trials and alliances by technology and music
industry participants to continue as the music industry attempts to integrate
emerging technology into its existing distribution methods.
In addition to competition encountered on the Internet, the Company faces
competition from traditional music retail chains and megastores, mass
merchandisers, consumer electronics stores, music clubs, and a number of small
custom compilation start-up companies. The Company could also face competition
from record companies, multimedia companies and entertainment companies that
seek to offer recorded music either directly to the public or through strategic
ventures and partnerships. In April 1999, Universal and BMG, which collectively
control approximately 45% of the U.S. music market, announced a joint venture to
promote and sell their pre-recorded CD's through a series of Internet websites
organized by music categories. In May 1999, Microsoft Corporation and Sony
Corporation announced an agreement to pursue a number of cooperative activities
and Sony decided to make its music content available for downloading from the
Internet using Microsoft's multimedia software MS-Audio. In June 1999, Sony
announced a partnership with Digital On-Demand in which Sony will make its music
catalog available for digital delivery to retailers through in-store kiosks.
(See Part I. Item 1. "Description of Business," (b) "Business of
Issuer-Competition.")
17. Dependence on the Growth of Online Commerce. Purchasing products and
services over the Internet is a new and emerging market. The Company's future
revenues and profits are ubstantially dependent upon widespread consumers
24
<PAGE>
acceptance and use of the internet and other online services as a medium for
commerce. Rapid growth of the use of the internet and other online services is a
recent phenomenon. This growth may not continue. A sufficiently broad base of
consumers may not adopt, or continue to use, the internet as a medium of
commerce. Demand for and market acceptance of recently introduced products and
services over the internet are subject to a high level of uncertainty, and there
are few proven products and services. For the Company to grow, consumers who
have historically used traditional means of commerce will instead need to
purchase products and services online, and as a result the online music markets
may not be viable without the growth of internet commerce.
18. Dependence on improvement of the Internet. The Internet has
experienced, and is expected to continue to experience, significant growth in
the number of users and amount of traffic. The Company's success will partially
depend upon the development and maintenance of the Internet's infrastructure to
cope with this increased traffic. This will require a reliable network backbone
with the necessary speed, bandwidth, data capacity and security. Improvement of
the Internet's infrastructure will also require the timely development of
complementary products, such as high-speed modems, to provide reliable Internet
access and services.
19. Requirement for Response to Rapid Technological Change and Requirement
for Frequent New Product Introductions. The entertainment market for audio and
video products and services is subject to rapid technological change, frequent
new equipment and product introductions and enhancements, product obsolescence
and changes in end-user requirements. The Company's ability to be competitive in
this market will depend in significant part upon its ability to successfully
obtain, utilize and produce for sale and distribution new products and services
on a timely and cost-effective basis that are based upon this new technology.
Any success of the Company in developing new and enhanced products and services
will depend upon a variety of factors, including new product selection, timely
and efficient completion of production schedules, its cost reduction program and
the development, completion, performance, quality and reliability of competitive
products and services by competitors. The Company may experience delays from
time to time in completing development and introduction of new products and
services. Moreover, there can be no assurance that the Company will be
successful in selecting and developing new artists, or in producing and
marketing new products and services. There can be no assurance that defects will
not be found in the Company's products and services after commencement of
commercial shipments, which could result in the loss of or delay in market
acceptance. The inability of the Company to introduce in a timely manner new
products that contribute to revenues could have a material adverse effect on the
Company's business, financial condition and results of operations. See "Part I,
Item. 1. "Description of Business (b) Business of Issuer - Competition."
20. Possible Adverse Affect of Fluctuations in the General Economy and
Business of Customers. Historically, the general level of economic activity has
significantly affected the demand for new music sales and also attendance at box
office movie showings. There can be no assurance that an economic downturn would
not adversely affect the demand for the Company's products and services. There
can be no assurance that such economic factors will not adversely affect the
Company's planned products and services.
25
<PAGE>
21. Lack of Working Capital Funding Source. Other than revenues from the
anticipated sale of its products, the Company has no current source of working
capital funds, and should the Company be unable to secure additional financing
on acceptable terms, its business, financial condition, results of operations
and liquidity would be materially adversely affected.
22. Dependence on Contract Manufacturers and Lease of Equipment; Reliance
on Sole or Limited Sources of Supply. As of the date hereof, the Company has no
internal manufacturing/production capacity, nor does it own the equipment
necessary to produce audio recordings or television or motion picture movies.
The Company also intends to utilize contract manufacturers to produce its
products once produced. No formal agreements are currently in place. The Company
will also indirectly rely on raw material suppliers to provide CD's, cassette
tapes, videotapes, digital video disks and other medium to record its product
onto for distribution to its distributors. Certain necessary components and
services anticipated to be necessary for the manufacture and production of the
Company's products could be required to be obtained from a sole supplier or a
limited group of suppliers. There can be no assurance that the Company's
contract manufacturers, will be sufficient to fulfill the Company's orders.
Should the Company be required to rely solely on contract manufacturers and
a limited group of suppliers, such increasing reliance involves several risks,
including a potential inability to obtain an adequate supply of finished
products and required components, and reduced control over the price, timely
delivery, reliability and quality of finished products and components. The
Company does not believe that it is currently necessary to have any long-term
supply agreements with its manufacturers or suppliers but this may change in the
future. The Company may experience delays in the delivery of and quality
problems with its products and certain components from vendors. Certain of the
Company's suppliers may have relatively limited financial and other resources.
Any inability to obtain timely deliveries of acceptable quality or any other
circumstances that would require the Company to seek alternative sources of
supply, or to manufacture its finished products internally, could delay the
Company's ability to ship its products which could damage relationships with
current or prospective customers and have a material adverse effect on the
Company's business, financial condition and operating results. See "Part I, Item
1. "Description of Business - (b) Business of Issuer."
23. Uncertainty of Market Acceptance. The future operating results of the
Company depend to a significant extent upon the development of products and
services deemed appealing, attractive and affordable by consumers of audio and
video related entertainment products. There can be no assurance that the Company
has the ability to continuously introduce original products and services into
the marketplace which will achieve the market penetration and acceptance
necessary for the Company to grow and become profitable on a sustained basis,
especially given the fierce competition that exists from companies more
established and well financed than the Company. See "Part I, Item 1.
"Description of Business -(b) Business of Issuer - Competition.
24. International Operations; Risks of Doing Business in Developing
Countries. Substantially all of the Company's products will be initially made to
distribute to customers located inside of the United States. The Company
anticipates, however that international sales will, as a result of various
26
<PAGE>
distribution agreements be entered into, and will account for revenues from
product sales for the foreseeable future. The Company's international sales may
be denominated in foreign or United States currencies. The Company does not
currently engage in foreign currency hedging transactions. As a result, a
decrease in the value of foreign currencies relative to the United States dollar
could result in losses from transactions denominated in foreign currencies. With
respect to the Company's international sales that are United States
dollar-denominated, such a decrease could make the Company's products less
price-competitive. Additional risks inherent in the Company's international
business activities include changes in regulatory requirements, costs and risks
of local customers in foreign countries, availability of suitable export
financing, timing and availability of export licenses, tariffs and other trade
barriers, political and economic instability, difficulties in staffing and
managing foreign operations, difficulties in managing distributors, potentially
adverse tax consequences, foreign currency exchange fluctuations, the burden of
complying with a wide variety of complex foreign laws and treaties and the
possibility of difficulty in accounts receivable collections. Some of the
Company's customer purchase agreements may be governed by foreign laws, which
may differ significantly from U.S. laws. Therefore, the Company may be limited
in its ability to enforce its rights under such agreements and to collect
damages, if awarded. There can be no assurance that any of these factors will
not have a material adverse effect on the Company's business, financial
condition and results of operations. See "Part I, Item 1. "Description of
Business - (b) Business of Issuer - Sales and Marketing - Distribution of
Products."
25. No Dividends. While payments of dividends on the Common Stock rests
with the discretion of the Board of Directors, there can be no assurance that
dividends can or will ever be paid. Payment of dividends is contingent upon,
among other things, future earnings, if any, and the financial condition of the
Company, capital requirements, general business conditions and other factors
which cannot now be predicted. It is highly unlikely that cash dividends on the
Common Stock will be paid by the Company in the foreseeable future. See Part I,
Item 8. "Description of Securities - Description of Common Stock - Dividend
Policy."
26. No Cumulative Voting. The election of directors and other questions
will be decided by a majority vote. Since cumulative voting is not permitted and
a majority of the Company's outstanding Common Stock constitute a quorum,
investors who purchase shares of the Company's Common Stock may not have the
power to elect even a single director and, as a practical matter, the current
management will continue to effectively control the Company. See Part I, Item 8.
"Description of Securities - Description of Common Stock."
27. Control by Present Shareholders. The present shareholders of the
Company's Common Stock will, by virtue of their percentage share ownership and
the lack of cumulative voting, be able to elect the entire Board of Directors,
establish the Company's policies and generally direct its affairs. Accordingly,
persons investing in the Company's Common Stock will have no significant voice
in Company management, and cannot be assured of ever having representation on
the Board of Directors. See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management."
28. Potential Anti-Takeover and Other Effects of Issuance of Preferred
Stock May Be Detrimental to Common Shareholders. Potential Anti-Takeover and
Other Effects of Issuance of Preferred Stock May Be Detrimental to Common
27
<PAGE>
Shareholders. The Company is authorized to issue shares of preferred stock.
("Preferred Stock") although none has been issued to date. The issuance of
Preferred Stock may not require approval by the shareholders of the Company's
Common Stock. The Board of Directors, in its sole discretion, may have the power
to issue shares of Preferred Stock in one or more series and to establish the
dividend rates and preferences, liquidation preferences, voting rights,
redemption and conversion terms and conditions and any other relative rights and
preferences with respect to any series of Preferred Stock. Holders of Preferred
Stock may have the right to receive dividends, certain preferences in
liquidation and conversion and other rights; any of which rights and preferences
may operate to the detriment of the shareholders of the Company's Common Stock.
Further, the issuance of any shares of Preferred Stock having rights superior to
those of the Company's Common Stock may result in a decrease in the value of
market price of the Common Stock provided a market exists, and additionally,
could be used by the Board of Directors as an anti-takeover measure or device to
prevent a change in control of the Company. See Part I, Item 1. "Description of
Securities - Description of Preferred Stock."
29. No Secondary Trading Exemption. Secondary trading in the Common Stock
will not be possible in each state until the shares of Common Stock are
qualified for sale under the applicable securities laws of the state or the
Company verifies that an exemption, such as listing in certain recognized
securities manuals, is available for secondary trading in the state. There can
be no assurance that the Company will be successful in registering or qualifying
the Common Stock for secondary trading, or availing itself of an exemption for
secondary trading in the Common Stock, in any state. If the Company fails to
register or qualify, or to obtain or verify an exemption for the secondary
trading of, the Common Stock in any particular state, the shares of Common Stock
could not be offered or sold to, or purchased by, a resident of that state. In
the event that a significant number of states refuse to permit secondary trading
in the Company's Common Stock, a public market for the Common Stock will fail to
develop and the shares could be deprived of any value.
30. Possible Adverse Effect of Penny Stock Regulations on Liquidity of
Common Stock in any Secondary Market. Although the Company does not currently
trade on any medium, the Common Stock when listed is expected to come within the
meaning of the term "penny stock" under 17 CAR 240.3a51-1 because such shares
are issued by a small company; are expected to be low-priced (under five
dollars); and will not traded on NASDAQ or on a national stock exchange. The SEC
has established risk disclosure requirements for broker-dealers participating in
penny stock transactions as part of a system of disclosure and regulatory
oversight for the operation of the penny stock market. Rule 15g-9 under the
Securities Exchange Act of 1934, as amended, obligates a broker-dealer to
satisfy special sales practice requirements, including a requirement that it
make an individualized written suitability determination of the purchaser and
receive the purchaser's written consent prior to the transaction. Further, the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990 require a
broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure instrument that provides information about penny
stocks and the risks in the penny stock market. Additionally, the customer must
be provided by the broker-dealer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and the salesperson in the
transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. For so long as the Company's Common
28
<PAGE>
Stock is considered penny stock, the penny stock regulations can be expected to
have an adverse effect on the liquidity of the Common Stock in the secondary
market, if any, which develops.
Item 2. Management's Discussion and Analysis or Plan of Operation
Discussion and Analysis
Initially the Company was engaged in the medical supply business. In
November 1998, at the time it acquired PGRP as a wholly-owned subsidiary, its
purpose changed to P&G's initial purpose of discovering, developing, recording
and marketing new talent in the entertainment industry. PGRP's founding
philosophy arose from the diversified experience of its management in the music,
video, film and related industries.
The Company was in the development stage until November 1998 when the Share
Exchange took place between PGRP and the Company and is still emerging from that
stage. The Company has only recently begun selling the Betty Dickson albums and
has not yet completed the "If Only" and "Touch Me" singles. From the date of the
Share Exchange in November 1998 through August 31, 1999, the Company generated
no revenues. Since the date of the Share Exchange through August 31, 1999, the
Company has generated cumulative losses of approximately $25,000. Due to the
Company's limited operating history and limited resources, among other factors,
there can be no assurance that profitability or significant revenues on a
quarterly or annual basis will occur in the future.
The Company is currently preparing to launch its first two (2) singles and
expects to introduce other products by Ms. Dickson and others by the end of 2000
and expects to continue to invest significant resources in several new products
and enhancements through 2000.
Since recording of the first two (2) singles and upon entering into
contracts with several artists, the Company has begun to make preparations for a
period of growth, which may require it to significantly increase the scale of
its operations. This increase will include the hiring of additional personnel in
all functional areas and will result in significantly higher operating expenses.
The increase in operating expenses is expected to be matched by a concurrent
increase in revenues. However, the Company's net loss may continue even if
revenues increase and operating expenses may still continue to increase.
Expansion of the Company's operations may cause a significant strain on the
Company's management, financial and other resources. The Company's ability to
manage recent and any possible future growth, should it occur, will depend upon
a significant expansion of its accounting and other internal management systems
and the implementation and subsequent improvement of a variety of systems,
procedures and controls. There can be no assurance that significant problems in
these areas will not occur. Any failure to expand these areas and implement and
improve such systems, procedures and controls in an efficient manner at a pace
consistent with the Company's business could have a material adverse effect on
the Company's business, financial condition and results of operations. As a
result of such expected expansion and the anticipated increase in its operating
expenses, as well as the difficulty in forecasting revenue levels, the Company
expects to continue to experience significant fluctuations in its revenues,
costs and gross margins, and therefore its results of operations. See Part I,
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<PAGE>
Item 1. "Description of the Business - (b) Business of the Issuers - Risk
Factors - Fluctuations in Results of Operations".
Results of Operations - Full Fiscal Years
Revenues
To date the Company has had only minimal revenues. The Company will focus
its efforts with regard to its music business on the "If Only" and "Touch Me"
projects, with the production and recording of the artists currently under
contract and then on contracting with and recording new artists. The Company
intends to sell its music over the Internet, through the use of a direct sales
campaign and through other methods.
Although the Company has entered into several letters of intent with new
artists, few contracts are currently in place. Furthermore, the Company has not
yet finished the "If Only" and "Touch Me" singles, which cost the Company a
significant amount of money to produce. Therefore, there is no assurance that
the Company will be able to successfully contract with and record new artists,
nor that it will be able obtain adequate distribution of its products to the
intended end user once they are produced.
The Company's ability to achieve revenues in the future, especially with
regard to its motion picture business, may depend in significant part upon its
ability to obtain orders from, maintain relationships with and provide support
to, distributors, as well as the condition of its distributors. As a result, any
cancellation, reduction or delay in orders by or shipments to any distributor or
the inability of any distributor to finance its purchases of the Company's
products may materially adversely affect the Company's business, financial
condition and results of operations. There can be no assurance that the
Company's revenues will increase in the future. See Part I, Item 1. "Description
of the Business - (b), Business of the Issuers - Risk Factors - Significant
Customer and Product Concentration; Fluctuations in Results of Operations;
Declining Average Selling Prices and International Operations; Risks of Doing
business in Developing Countries."
Operating Expenses
Sales and Marketing These expenses consist of advertising, meetings and
conventions and entertainment related to product exhibitions and related travel
expenses. Since inception, the Company has spent approximately $1,170 on sales
and marketing expenses. For the years ended December 31, 1997 and December 31,
1998, sales and marketing expenses were $0 and $1,170, respectively. In 1998,
the Company increased its expenses particularly with regard to recording. The
Company intends to invest significant resources to expand its sales and
marketing effort, including the hiring of additional personnel and to establish
the infrastructure necessary to support future operations. The Company expects
that such expenses in 1999 will increase in absolute dollars as compared to
1998.
General and Administrative These expenses consist primarily of the general
and administrative expenses for salaries, contract labor and other expenses
30
<PAGE>
for management and finance and accounting, legal and other professional services
including ongoing expenses as a publicly owned Company related to legal,
accounting and other administrative services and expenses. Since inception, the
Company has spent approximately $24,043 on general and administrative expenses.
For the years ended December 31, 1997 and December 31, 1998, general and
administrative expenses were $106 and $16,774, respectively. The Company expects
general and administrative expenses to increase in absolute dollars in 1999 as
compared to 1998, as the Company continues to expand its operations.
Interest and Other Income (Expense), Net In September 1999, the Company
executed a Promissory Note in favor of Carol Neal, the Company's Chairman,
President and Treasurer in the amount of $24,600. The Note was in exchange for
monies lent by Ms. Neal to the Company for working capital. The Note is payable
on demand and bears no interest. See Part II, Item 4, "Recent Sales of
Unregistered Securities"
The Company did not report foreign currency gains or losses for the year
ended December 31, 1998 since the Company has had no foreign transactions to
date. In the event that the Company contracts with a foreign entity for the
purchase of its products, the Company may in the future be exposed to the risk
of foreign currency gains or losses depending upon the magnitude of a change in
the value of a local currency in an international market. The Company does not
currently engage in foreign currency hedging transactions, although it may
implement such transactions in the future.
Financial Condition, Liquidity and Capital Resources
At December 31, 1998, the Company had assets totaling $38,375 and
liabilities totaling $39,670. Since the Share Exchange in November 1998, the
Company has financed its operations and met its capital requirements through
borrowing from current shareholders.
Operating activities used net cash of $13,306 and $14,760 in1997 and 1998,
respectively.
At December 31, 1998, the Company had a working capital deficiency of
approximately $23,166.
The Company's principal commitments for capital expenditures are those
associated with advertising and marketing the singles for sale to the public,
recording those artists with which the Company currently has signed contracts
and the marketing and sale of those albums once they are produced. See Part I,
Item 1. "Description of the Business - (b) Business of Issuer."
The Company's future capital requirements will depend upon many factors,
including the success of the singles, the ability of the Company to successfully
produce albums with those artists with which it currently has signed contracts,
the extent and timing of acceptance of the Company's products and services in
the market, expansion of the Company's marketing and sales efforts, the
Company's results of operations and the status of competitive products and
services. The Company believes that cash on hand, cash flow from operations, if
any, and funds available from the current private placement offering will be
adequate to fund its operations for at least the next six months. There can be
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<PAGE>
no assurance, however, that the Company will not require additional financing
prior to such date to fund its operations. In addition, the Company may require
additional financing after such date to fund its operations. There can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all, when required by the Company. If additional funds
are raised by issuing equity securities, further dilution to the existing
stockholders will result. If additional funds are raised by issuing debt
securities future interest expense will be incurred. If adequate funds are not
available, the Company may be required to delay, scale back the development of
new or improved products or to scale back or eliminate one or more of its
research and development programs or obtain funds through arrangements with
partners or others that may require the Company to relinquish rights to certain
of its products or potential products or other assets that the Company would not
otherwise relinquish. Accordingly, the inability to obtain such financing could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
The Company determined that the Year 2000 impact is not material to P&G and
that it will not impact its business, operations or financial condition since
all of the internal software utilized by the Company has the capability of being
upgraded to support Year 2000 versions.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
Forward-Looking Statements
This Form 10-SB includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-SB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), demand
for the Company's products and services, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
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<PAGE>
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-SB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
Item 3. Description of Property
The Company maintains its executive offices at 12724 N.W. 11th Court,
Sunrise, Florida 33323, which is the residence of both Valerie Peters and Louise
Cavell. Approximately 500 square feet of space is devoted entirely to P&G as an
office. Its telephone number is (800) 525-8495 and its facsimile number is (954)
845-0656. The Company plans to lease office space in either Broward or Palm
Beach County, Florida upon receipt of sufficient capital resulting from revenues
or debt or equity financing. It is planned that such office space shall serve as
the Company headquarters and also as a fulfillment center for the Company's
products.
The Company owns no real property and its personal property consists of
furniture, fixtures and equipment, with an original cost of $2,177 on July 31,
1999.
Item 4. Security Ownership of Certain Beneficial Owners and Management:
The following table sets forth information as of September 30, 1999,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Title of Amount and Nature of Percent of
Beneficial Owner Class Beneficial Owner Class
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Carol Neal Common 6,000,000 51.6%
Valerie Peters Common 2,000,000 17.2%
Louise Cavell Common 2,000,000 17.2%
Glenda Grainger-Miller(2) Common 10,000 0.1%
</TABLE>
33
<PAGE>
<TABLE>
<S> <C> <C> <C>
Randy Bernsen(3) Common 10,000 0.1%
Margaret Ann Ronayne(4) Common 10,000 0.1%
All Executive Officers and Common 10,030,000 86.2%
Directors as a Group
(six (6) persons)
- ----------
</TABLE>
(1) The address for each of the above is c/o Platinum and Gold, Inc., 12724
N.W. 11th Court, Sunrise, FL 33323.
(2) In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in
November 1998. The shares were issued in January 1999 pursuant to Section
4(2) of the Act, Rule 506 and Section 517.061(11) of the Florida code. See
Part I, Item 5. "Directors, Executive Officer, Promoters and Control
Persons"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
(3) In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was
until the next annual meeting of the shareholders and directors. As
compensation, Randy Bernsen was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in
November 1998. The shares were issued in January 1999 pursuant to Section
4(2) of the Act, Rule 506 and Section 517.061(11) of the Florida code. See
Part I, Item 5. "Directors, Executive Officer, Promoters and Control
Persons"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
(4) In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on
the Company's Board and a Representation Agreement entered into in December
1998. The shares were issued pursuant to Section 4(2) of the Act, Rule 506
and Section 517.061(11) of the Florida code. See Part I, Item 5.
"Directors, Executive Officer, Promoters and Control Persons"; Part I, Item
7. "Certain Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of Unregistered Securities."
There are no arrangements which may result in the change of control of the
Company.
34
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons:
Executive Officers and Directors
Set forth below are the names, ages, positions, with the Company and
business experiences of the executive officers and directors of the Company.
<TABLE>
<S> <C> <C>
Name Age Position(s) with Company
Carol Neal 54 Chairman, President, Treasurer
Valerie Peters 60 Director, Vice-President
Louise Cavell 55 Director, Secretary
Glenda Grainger-Miller 54 Director
Randy Bernsen 45 Director
Margaret Ann Ronayne 48 Director
</TABLE>
All directors hold office until the next annual meeting of the Company's
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the Board of Directors. The officers and directors will
devote such time and effort to the business and affairs of the Company as may be
necessary to perform their responsibilities as executive officers and/or
directors of the Company.
In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was until the
next annual meeting of the shareholders and directors. As compensation, Randy
Bernsen was promised 10,000 shares of the restricted common stock of the Company
upon the share exchange to be conducted in November 1998. The shares were issued
in January 1999 pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part I, Item 7. "Certain Relationships and
Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in November
1998. The shares were issued in January 1999 pursuant to Section 4(2) of the
Act, Rule 506 and Section 517.061(11) of the Florida code. See Part I, Item 7.
"Certain Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on the
Company's Board, although the agreement was never memorialized in writing. The
shares were issued pursuant to Section 4(2) of the Act, Rule 506 and Section
35
<PAGE>
517.061(11) of the Florida code. See Part I, Item 7. "Certain Relationships and
Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
Family Relationships
There are no family relationships between or among the executive officers
and directors of the Company.
Business Experience
Carol Neal, age 54, currently serves as Chairman, President and Treasurer.
She has served as Chairman, President and Treasurer since the Share Exchange in
November 1998. Between 1990 and 1995, Ms. Neal was the activities director at
the Preserve of Palm. During that time she served as a music therapist to 32
nursing facilities. From 1995 until present she has served as the Chief
Financial Officer for IBP Corp. in Boca Raton, Florida. Ms. Neal has sang
professionally for the last 30 years in various nightclubs and restaurants
around the country and overseas and has recorded an album, which sold thousands
of copies. Ms. Neal graduated from Winchester High School in 1963.
Valerie Peters, age 60, currently serves as a Director and as a
Vice-President. She has served as a Director and as Vice-President since the
Share Exchange in November 1998. Since 1981, Ms. Peters has co-owned and
co-managed Sunglass Haven, a high-end wholesale/retail outfitter for annual
local and national trade shows. Sunglass Haven provides specialty eyewear for
the marine/water sport industry. Ms. Peters graduated from Wm. Culen Bryant High
School in 1956.
Louise Cavell, age 55, currently serves as a Director and as the Secretary.
She has served as Director and as Secretary since the Share Exchange in November
1998. She obtained a Real Estate Broker's License in 1977, which is still
active. Ms. Cavell graduated from Newfield High School in 1962. Since 1981, Ms.
Cavell has co-owned and co-managed Sunglass Haven with Ms. Peters. Also between
the years of 1992 and 1995, she owned a cocktail lounge located in Davie,
Florida.
Glenda Grainger-Miller, age 54, currently serves as a Director. She has
served in this capacity since the Share Exchange in November 1998. Ms.
Grainger-Miller worked for Miller-Reich Productions, Inc. as a Production
Associate and Executive Administrator in North Miami Beach, Florida from 1972 to
1994. Between January and May 1995, she produced Cruise Ship Revue Shows for
Holland America Cruise Lines in Miami Florida for Glen-Scott Productions, Inc.
She currently works for FJM Productions, Inc. in Coral Springs, Florida, where
she is an Associate Producer, Executive Administrator and Executive Assistant to
the President. Ms. Grainger-Miller graduated from Great Britain High School in
1962. She is fluent (written and conversational) in French and Spanish and also
speaks conversational Italian.
Randy Bernsen, age 45, currently serves as a Director. He has served the
Company in this capacity since the Share Exchange in November 1998. Mr. Bernsen
currently owns a digital recording studio, where he has produced his own work as
well as the work of other artists. Mr. Bernsen travels annually to Southeast
36
<PAGE>
Asia and Europe to perform in concert with other jazz musicians. He also teaches
music and performs locally. Mr. Bernsen graduated from Plantation High School in
1972.
Margaret Ann Ronayne, age 48, currently serves as a Director. She has
served the Company in this capacity since December 1999. Ms. Ronayne has worked
as National Top 40's Promotional Director of Arista Records since 1993. There
she is responsible for radio exposure for Whitney Houston, Aretha Franklin,
Kenny G., Barry Manilow, Tony Braxton, Puff Daddy and others. Ms. Ronayne
graduated from St. Thomas Aquinas High School in 1969.
Item 6. Executive Compensation
<TABLE>
<CAPTION>
Name Year Annual Annual Annual LT Comp LT LTIP All
and Post Comp Comp Comp Rest Comp Payouts Other
Salary Bonus Other Stock Options (1)
(1) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carol Neal, 1998 $0
Chairman,
President 1999 $0
and
Treasurer
- --------------------------------------------------------------------------------
Valerie 1998 $0
Peters,
Director and 1999 $0
Vice-
President
- --------------------------------------------------------------------------------
Louise 1998 $0
Cavell,
Director and 1999 $0
Secretary
- --------------------------------------------------------------------------------
Glenda 1998 $0
Grainger-
Miller, 1999 $0 (2)
Director
- --------------------------------------------------------------------------------
Randy 1998 $0
Bernsen,
Director 1999 $0 (3)
- --------------------------------------------------------------------------------
Margaret 1998 $0
Ann
Ronayne, 1999 $0 (4)
Director
- --------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
(1) All other compensation includes certain health and life insurance benefits
paid by the Company on behalf of its employee.
(2) In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in
November 1998. The shares were issued in January 1999 pursuant to Section
4(2) of the Act, Rule 506 and Section 517.061(11) of the Florida code. See
Part I, Item 7. "Certain Relationships and Related Transactions"; and Part
II, Item 4. "Recent Sales of Unregistered Securities."
(3) In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was
until the next annual meeting of the shareholders and directors. As
compensation, Randy Bernsen was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in
November 1998. The shares were issued in January 1999 pursuant to Section
4(2) of the Act, Rule 506 and Section 517.061(11) of the Florida code. See
Part I, Item 7. "Certain Relationships and Related Transactions"; and Part
II, Item 4. "Recent Sales of Unregistered Securities."
(4) In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on
the Company's Board and a Representation Agreement entered into in December
1998. The shares were issued pursuant to Section 4(2) of the Act, Rule 506
and Section 517.061(11) of the Florida code. See Part I, Item 7. "Certain
Relationships and Related Transactions"; and Part II, Item 4. "Recent Sales
of Unregistered Securities."
Employee Contracts and Agreements
The Company has entered into Employee Agreements with only a limited number
of its officers and directors, but intends to enter into formal contracts with
each of them in the near future.
Key Man Life Insurance
The Company intends to apply for Key Man Life Insurance and
Officer/Director Insurance upon becoming a reporting company under the 1934 Act.
Employee and Consultants Stock Option Plans
38
<PAGE>
There is currently no employee nor consultant stock option plan in place,
although the Company plans to submit such a plan or plans to the shareholders at
the next annual meeting.
Compensation of Directors
The Company has no standard arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.
Item 7. Certain Relationships and Related Transactions
In July 1997, prior to its acquisition of PGRP, the Company entered into a
share exchange agreement with FAD, and its shareholders which had been formed in
February 1997. The exchange was made whereby the Company issued 2,970,000 shares
of its restricted common stock to the shareholders of FAD for all of the issued
and outstanding stock of FAD. This offering was conducted pursuant to Section
4(2) of the Act and Rule 506 and Section 517.061(11) of the Florida Code. See
Part II, Item 4. "Recent Sales of Unregistered Securities."
In August 1998, prior to its acquisition of PGRP, the Company entered into
a Recission and Cancellation Agreement with FAD and its shareholders, thereby
returning the parties to their original positions prior to the share exchange
conducted in July 1997 ab initio. Thus, FAD exchanged 2,970,000 shares of common
stock of the Company for 100% of the issued and outstanding stock of FAD and FAD
was no longer a wholly-owned subsidiary of the Company. See Part II, Item 4.
"Recent Sales of Unregistered Securities."
In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was until the
next annual meeting of the shareholders and directors. As compensation, Randy
Bernsen was promised 10,000 shares of the restricted common stock of the Company
upon the share exchange to be conducted in November 1998. The shares were issued
in January 1999 pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in November
1998. The shares were issued in January 1999 pursuant to Section 4(2) of the
Act, Rule 506 and Section 517.061(11) of the Florida code. See Part II, Item 4.
"Recent Sales of Unregistered Securities."
In November 1998, the Company entered into a share exchange agreement with
PGRP, and its shareholders which had been formed in June 1997. The exchange was
made whereby the Company issued 10,000,000 shares of its restricted common stock
to the shareholders of PGRP for all of the issued and outstanding stock of PGRP.
This offering was conducted pursuant to Section 4(2) of the Act and Rule 506 and
39
<PAGE>
Section 517.061(11) of the Florida Code. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on the
Company's Board and a Representation Agreement entered into in December 1998.
The shares were issued pursuant to Section 4(2) of the Act, Rule 506 and Section
517.061(11) of the Florida code. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
Item 8. Description of Securities
Description of Capital Stock
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, $0.001 par value per share and 1,000,000 shares of Preferred
Stock, $0.001 par value per share. As of September 30, 1999, the Company had
11,631,000 shares of its Common Stock outstanding and none of its Preferred
Stock outstanding.
Description of Common Stock
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted; which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any, to be distributed to holders of the Preferred Stock. All shares of the
Company's Common Stock issued and outstanding are fully-paid and nonassessable.
Dividend Policy
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distribution with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefore,
after requirements with respect to preferential dividends on, and other matters
relating to, the Preferred Stock, if any, have been met. The Company has not
paid any dividends on its Common Stock and intends to retain earnings, if any,
to finance the development and expansion of its business. Future dividend policy
is subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, capital requirements and the
financial condition of the Company.
40
<PAGE>
Description of Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more
series as may be determined by the Board of Directors. The voting powers and
preferences, the relative rights of each such series and the qualifications,
limitations and restrictions thereof shall be established by the Board of
Directors, except that no holder of Preferred Stock shall have preemptive
rights.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Company's Common Stock is
Interwest Transfer Co., Inc. which is located at 1981 East Murray Holliday Road,
Suite 100, Salt Lake City, Utah 84117, telephone (801) 272-9294 and facsimile
(801) 277-3147. There is no transfer agent for shares of the Company's preferred
stock.
PART II.
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
a) Market Information.
The Company is not presently trading on an exchange, but intends to apply
to trade on the Over the Counter Bulletin Board once its Form 10SB has been
accepted.
In July 1997, prior to its acquisition of PGRP, the Company conducted a 1
for 4 reverse split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law. See Part II,
Item 4. "Recent Sales of Unregistered Securities."
In October 1998, prior to its acquisition of PGRP, the Company conducted a
4 for 1 forward split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law. See Part II,
Item 4. "Recent Sales of Unregistered Securities."
(b) Holders.
As of September 30 the Company had 62 shareholders of record of its
11,631,000 outstanding shares of Common Stock, 10,030,000 of which are
restricted Rule 144 shares and 1,601,000 of which are free-trading. Of the Rule
144 shares, no shares have been held by affiliates of the Company for more than
one (1) year.
(c) Dividends.
The Company has never paid or declared any dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future.
41
<PAGE>
Item 2. Legal Proceedings
No legal proceedings have been initiated either by or against the Company
to date.
Item 3. Changes in and Disagreements with Accountants
None.
Item 4. Recent Sales of Unregistered Securities
The Company relied upon Section 4(2) of the Act and Rule 506 for several
transactions regarding the issuance of its unregistered securities. In each
instance, such reliance was based upon the fact that (i) the issuance of the
shares did not involve a public offering, (ii) there were no more than 35
investors (excluding "accredited investors"), (iii) each investor who was not an
accredited investor either alone or with his purchaser representative(s) has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective investment, or the
issuer reasonably believes immediately prior to making any sale that such
purchaser comes within this description, (iv) the offers and sales were made in
compliance with Rules 501 and 502, (v) the securities were subject to Rule 144
limitation on resale and (vi) each of the parties is a sophisticated purchaser
and had full access to the information on the Company necessary to make an
informed investment decision by virtue of the due diligence conducted by the
purchaser or available to the purchaser prior to the transaction.
The Company relied upon Section 3(b) of the Act and Rule 504 for several
transactions regarding the issuance of its unregistered securities. In each
instance, such reliance was based on the following: (i) the aggregate offering
price of the offering of the shares of Common Stock and warrants did not exceed
$1,000,000, less the aggregate offering price for all securities sold with the
twelve months before the start of and during the offering of shares in reliance
on any exemption under Section 3(b) of, or in violation of Section 5(a) of the
Act; (ii) no general solicitation or advertising was conducted by the Company in
connection with the offering of any of the shares; (iii) the fact the Company
has not been since its inception (a) subject to the reporting requirements of
Section 13 or 15(d) of the Securities Act of 1934, as amended, (b) and
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (c) a development stage company that either has no specific
business plan or purpose or has indicated that its business plan is to engage in
a merger or acquisition with an unidentified company or companies or other
entity or person.
The Company relied upon Florida Code Section 517.061(11) for several
transactions. In each instance, such reliance is based on the following: (i)
sales of the shares of Common Stock were not made to more than 35 persons; (ii)
neither the offer nor the sale of any of the shares was accomplished by the
publication of any advertisement; (iii) all purchasers either had a preexisting
personal or business relationship with one or more of the executive officers of
the Company or, by reason of their business or financial experience, could be
reasonably assumed to have the capacity to protect their own interests in
42
<PAGE>
connection with the transaction; (iv) each purchaser represented that he was
purchasing for his own account and not with a view to or for sale in connection
with any distribution of the shares; and (v) prior to sale, each purchaser had
reasonable access to or was furnished all material books and records of the
Company, all material contracts and documents relating to the proposed
transaction, and had an opportunity to question the executive officers of the
Company. Pursuant to Rule 3E-500.005, in offerings made under Section
517.061(11) of the Florida Statutes, an offering memorandum is not required;
however each purchaser (or his representative) must be provided with or given
reasonable access to full and fair disclosure of material information. An issuer
is deemed to be satisfied if such purchaser or his representative has been given
access to all material books and records of the issuer; all material contracts
and documents relating to the proposed transaction; and an opportunity to
question the appropriate executive officer. In the regard, the Company supplied
such information and was available for such questioning (the "Florida
Exemption").
In February 1997, prior to its acquisition of PGRP, the Company sold
1,720,000 shares of its unrestricted common stock to 70 individuals for $17,200.
The Company relied upon Section 3(b) of the Act and Rule 504 and the Florida
Exemption, Section 90.530(11) of the Nevada code, Section 48- 2-103(b)(4) of the
Tennessee code and Section 5[581-5]I(c) of the Texas code. No state exemption
was necessary for the sales made to Canada or France investors. A Form D was
filed with the SEC.
The facts upon which the Company relied in Nevada are as follows: the
transaction was part of an issue in which (a) there were no more than 25
purchasers in Nevada, other than those designated in subsection 10, during any
12 consecutive months; (b) no general solicitation or general advertising is
used in connection with the offer to sell or sale of the securities; (c) no
commission or other similar compensation is paid or given, directly or
indirectly, to a person, other than a broker-dealer licensed or not required to
be licensed under this chapter, for soliciting a prospective purchaser in
Nevada; and (d) one of the following conditions was satisfied: (1) the seller
reasonably believed that all the purchasers in Nevada, other than those
designated in subsection 10, were purchasing for investment; or (2) immediately
before and immediately after the transaction, the Company reasonably believed
that its securities were held by 50 or fewer beneficial owners, other than those
designated in subsection 10, and the transaction was part of an aggregate
offering that does not exceed $500,000 during any 12 consecutive months.
The facts upon which the Company relied in Tennessee are as follows: (A)
The aggregate number of persons in Tennessee purchasing the securities from the
Company and all affiliates of the Company pursuant to this exemption during the
twelve month period ending on the date of such sale did not exceed fifteen (15)
persons, exclusive of persons who acquired the securities in transactions which
were not subject to this exemption or which were otherwise exempt from
registration under the provisions of this exemption or which have been
registered pursuant to Sec. 48-2-105 or Sec. 48- 2-106. (B) The securities were
not offered for sale by means of publicly disseminated advertisements or sales
literature; and (C) All purchasers in Tennessee purchased such securities with
the intent of holding such securities for investment for their own accounts and
without the intent of participating directly or indirectly in a distribution of
such securities.
43
<PAGE>
The facts upon which the Company relied in Texas are as follows: The sale
during the period of twelve (12) months ending with the date of the sale in
question was to not more than fifteen (15) persons and such persons purchased
such securities for their own account and not for distribution.
In July 1997, prior to its acquisition of PGRP, the Company conducted a 1
for 4 reverse split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law.
In July 1997, prior to its acquisition of PGRP, the Company entered into a
share exchange agreement with FAD, and its shareholders which had been formed in
February 1997. The exchange was made whereby the Company issued 2,970,000 shares
of its restricted common stock to the shareholders of FAD for all of the issued
and outstanding stock of FAD. This offering was conducted pursuant to Section
4(2) of the Act and Rule 506 and the Florida Exemption. No Form D was filed with
the SEC.
In August 1998, prior to its acquisition of PGRP, the Company entered into
a Recission and Cancellation Agreement with FAD and its shareholders, thereby
returning the parties to their original positions prior to the share exchange
conducted in July 1997 ab initio. Thus, FAD exchanged 2,970,000 shares of common
stock of the Company for 100% of the issued and outstanding stock of FAD and FAD
was no longer a wholly-owned subsidiary of the Company.
In October 1998, prior to its acquisition of PGRP, the Company conducted a
4 for 1 forward split of its common stock. This transaction was effected by the
Company's Board of Directors in accordance with the Company's Articles of
Incorporation and Bylaws and also in accordance with Nevada law.
In October 1998, prior to its acquisition by the Company, PGRP entered into
an agreement with Randy Bernsen to be a Director of PGRP. The term was until the
next annual meeting of the shareholders and directors. As compensation, Randy
Bernsen was promised 10,000 shares of the restricted common stock of the Company
upon the share exchange to be conducted in November 1998. The shares were issued
in January 1999 pursuant to Section 4(2) of the Act, Rule 506 and the Florida
Exemption.
In November 1998, prior to its acquisition by the Company, PGRP entered
into an agreement with Glenda Grainger to be a Director of PGRP. As
compensation, Glenda Grainger was promised 10,000 shares of the restricted
common stock of the Company upon the share exchange to be conducted in November
1998. The shares were issued in January 1999 pursuant to Section 4(2) of the
Act, Rule 506 and the Florida Exemption.
In November 1998, the Company entered into a share exchange agreement with
PGRP, and its shareholders which had been formed in June 1997. The exchange was
made whereby the Company issued 10,000,000 shares of its restricted common stock
to the shareholders of PGRP for all of the issued and outstanding stock of PGRP.
44
<PAGE>
This offering was conducted pursuant to Section 4(2) of the Act and Rule 506 and
the Florida Exemption. No Form D was filed with the SEC.
In January 1999, the Company issued 10,000 shares of its restricted common
stock to Margaret Ann Ronayne in connection with her agreement to serve on the
Company's Board and a Representation Agreement entered into in December 1998.
The shares were issued pursuant to Section 4(2) of the Act, Rule 506 and the
Florida Exemption.
In January 1999, the Company conducted an offering of its unrestricted
common stock pursuant to section 3(b) of the Act and Rule 504. No shares were
sold thereunder. A Form D was filed with the SEC.
In April 1999, the Company sold 1,000 shares of its unrestricted common
stock to one (1) investor for $850. The Company relied upon Section 3(b) of the
Act, Rule 504 and Section 90.530(11) of the Nevada code. No Form D was filed
with the SEC.
The facts upon which the Company relied in Nevada are as follows: the
transaction was part of an issue in which (a) there were no more than 25
purchasers in Nevada, other than those designated in subsection 10, during any
12 consecutive months; (b) no general solicitation or general advertising is
used in connection with the offer to sell or sale of the securities; (c) no
commission or other similar compensation is paid or given, directly or
indirectly, to a person, other than a broker-dealer licensed or not required to
be licensed under this chapter, for soliciting a prospective purchaser in
Nevada; and (d) one of the following conditions was satisfied: (1) the seller
reasonably believed that all the purchasers in Nevada, other than those
designated in subsection 10, were purchasing for investment; or (2) immediately
before and immediately after the transaction, the Company reasonably believed
that its securities were held by 50 or fewer beneficial owners, other than those
designated in subsection 10, and the transaction was part of an aggregate
offering that does not exceed $500,000 during any 12 consecutive months.
In July 1999, the Company initiated an offering of Convertible Notes. The
Notes have a term of one (1) year, bear interest at a rate of nine percent (9%)
and are automatically convertible to shares of the Company's restricted common
stock in one (1) year (if they are not converted earlier) at a price of $1.00
per share plus interest. To date, no Notes have been sold. The offering is
ongoing. The Company relied upon Section 3(b) of the Act and Rule 504.
In September 1999, the Company executed a Promissory Note in favor of Carol
Neal, the Company's Chairman, President and Treasurer in the amount of $24,600.
The Note was in exchange for monies lent by Ms. Neal to the Company for working
capital. The Note is payable on demand and bears no interest.
Item 5. Indemnification of Directors and Officers
The Company's Articles of Incorporation provide that: To the fullest extent
permitted by law, no director or officer of the Corporation shall be personally
liable to the Corporation or its shareholders for damages for breach of any
45
<PAGE>
duty owed to the Corporation or its shareholders. In addition, the Corporation
shall have the power, in its Bylaws or in any Resolution of its stockholders or
directors, to undertake to indemnify the officers and directors of this
Corporation against any contingency or peril as may be determined to be in the
best interests of this Corporation, and to procure policies of insurance at this
Corporation's expense.
The Company's Bylaws provide that: The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director or officer of the Corporation to the fullest
extent permitted or authorized by current or future legislation or judicial or
administrative decision against all fines, liabilities, costs and expenses,
including attorneys' fees, arising out of his or her status as a director,
officer, agent, employee or representative. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking an
indemnification may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, wither or not the Corporation would have the
legal power to indemnify them directly against such liability.
The Nevada Revised Statutes provide that: (1) A corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action, suit or
proceeding if he acted in good faith and in a manner which he reasonably
believes to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order settlement, conviction or upon plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably believes to
be in or not opposed to the best interests of the corporation, and that, with
respect to any criminal action or proceeding, he had reasonable cause to believe
that his conduct was unlawful and (2) A corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he reasonably
believes to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
46
<PAGE>
circumstances of the case, the person is fairly and reasonably entitles to
indemnify for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections 1 and 2, or in defense of any claim, issue
or matter therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
The statutes also provide that any discretionary indemnification under NRS
78.7502 unless ordered by a court or advanced pursuant to subsection 2, may be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. The determination must be made: (1) by the
stockholders; (2) by the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding;
(3) if a majority vote of a quorum consisting of directors who were not parties
to the action, suit or proceeding so orders, by independent legal counsel in a
written opinion; or (4) if a quorum consisting of directors who were not parties
to the action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
The articles of incorporation, the bylaws or an arrangement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsequent do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered by
a court pursuant to this section: (1) does not exclude any other rights to which
a person seeking indemnification or advancement of expenses may be entitled
under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his office,
except that indemnification, unless ordered by a court pursuant to NRS 78.7502
or for the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director if a final adjudication establishes that
his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action and (2) continues
for a person who has ceased to be a director, officer, employee or agent and
inures to the benefit of the heirs, executors and administrators of such a
person.
PART F/S
The Financial Statements of Surgical required by Regulation S-X commence on
page F-1 hereof in response to Part F/S of this Registration Statement on Form
10-SB and are incorporated herein by this reference.
47
<PAGE>
PLATINUM AND GOLD, INC.
(a Development Stage Company)
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants F-2
Financial Statements:
Consolidated Balance Sheets Assets F-3
Consolidated Balance Sheets
Liabilities & Stockholders Equity F-4
Consolidated Statements of Cash Flows F-5
<PAGE>
STEINER & GELBER, P.A.
CERTIFIED PUBLIC ACCOUNTS
2201 NW 30TH PLACE, SUITE A
POMPANO BEACH, FL 33069
TELEPHONE: 954-969-8786
FAX: 954-969-8782
To the Board of Directors
Platinum and Gold, Inc.
Fort Lauderdale, Florida
We have compiled the accompanying consolidated balance sheet of Paltinum and
Gold, Inc. and Subsidiary at June 30, 1999, and the related statement of income
and retained earnings for the six months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants
a compilation is limited to presenting in the form of financial statements and
supplementary schedules information that is the representation of management. We
have not audited or reviewed the accompanying financial statements and,
accordingly, do not express an opinion or any other form of assurance on them.
However, we did become aware of the departures from generally accepted
accounting priniciples that are described in the following paragraph.
Management has elected to omit substantially all of the disclosures and the
statement of cash flows required by generally accepted accounting principles. If
the ommited disclosures were included in the financial statements, they might
influence the user's conclusions about the company's financial position, results
of operations and cash flows. Accordingly, these financial statements are not
designed for those who are not informed about such matters.
The Company is in the development stage as of June 30, 1999 and to date had no
significant oeprations. Recovery of the Company's assets is dependent on future
events, the outcome of which is indetrminable. In addition, successful
completion of the Company's development program and its transition, ultimately,
to attaining profitable operations is dependant upon obtaingin adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company's cost structure.
/s/ Steiner & Gelber, P.A.
Pompano Beach, Florida
August 14, 1999
F-2
Member of Florida Institue of Certified Public Accoutants
Member of American Institue of Certified Public Accoutants
<PAGE>
<TABLE>
<CAPTION>
PLATINIUM AND GOLD INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
June 30, 1999
ASSETS
<S> <C> <C>
CURRENT ASSETS:
CASH $ 489.79
$ 489.79
PROPERTY AND EQUIPMENT:
OFFICE FURNITURE AND EQUIPMENT 2,176.88
2,176.88
ACCUMULATED DEPRECIATION (436.00)
1,740.88
OTHER ASSETS:
DEFERRED COSTS $ 4,682.58
-------------
34,682.58
$ 36,913.25
</TABLE>
SEE ACCOUNTANTS' COMPILATION REPORT
F-3
<PAGE>
<TABLE>
<CAPTION>
PLATINIUM AND GOLD INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
June 30, 1999
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
CURRENT LIABILITES:
ACCOUNTS PAYABLE $ 25,649.19
--------------
$ 25,649.19
LONG TERM LIABILITIES:
LOANS PAYABLE - STOCKHOLDERS 18,821.15
--------------
18,821.15
STOCKHOLDER'S EQUITY:
CAPITAL STOCK $ 12,363.50
--------------
ADDITIONAL PAID IN CAPITAL 5,246.50
RETAINED EARNINGS (25,167.09)
7,557.09
$ 36,913.25
</TABLE>
SEE ACCOUNTANTS' COMPILATION REPORT
F-4
<PAGE>
<TABLE>
<CAPTION>
PLATINIUM AND GOLD INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
June 30, 1999
STATEMENTS OF CASH FLOWS
<S> <C> <C>
INCOME AMOUNT PERCENT
TOTAL INCOME .00 .00
OPERATING EXPENSES:
ADVERTISING 1,233.15 .00
BANK CHARGES 93.40 .00
DUES AND SUBSCRIPTIONS 55.00 .00
LEGAL AND ACCOUNTING 3,808.00 .00
OFFICE EXPENSES 77.20 .00
TRANSFER AGENT COSTS 15. .00
TELEPHONE 758.98 .00
TRAVEL 857.88 .00
----------- -------
TOTAL OPERATING EXPENSE 6,898.61 .00
----------- -------
INCOME BEFORE OTHER ITEMS: (6,898.61) .00
----------- -------
OTHER ITEMS (INCOME)/EXPENSE
DEPRECIATION 218.00 .00
----------- -------
TOTAL OTHER ITEMS 218.00 .00
----------- -------
NET INCOME OR (LOSS) (7,116.61) .00%
========
RETAINED EARNINGS - BEG. (18,050.48)
RETAINED EARNINGS - END $ (25,167.09)
============
</TABLE>
SEE ACCOUNTANTS' COMPILATION REPORT
F-5
<PAGE>
PLATINUM AND GOLD, INC.
(a Development Stage Company)
Consolidated Financial Statements
and
Report of Independent Certified Public Accountants
<PAGE>
<TABLE>
<CAPTION>
PLATINUM AND GOLD, INC.
(a Development Stage Company)
TABLE OF CONTENTS
Page
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-2
FINANCIAL STATEMENTS:
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statements of
Stockholders' Equity (Deficit) F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
</TABLE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
Platinum and Gold, Inc.
We have audited the accompanying consolidated balance sheets of Platinum and
Gold, Inc. and Subsidiary (a Development Stage Company) as of December 31, 1998
and 1997, and the related consolidated statements of operations, stockholders'
equity (deficit) and cash flows for the year ended December 31, 1998, for the
period February 19, 1997 (date of inception) to December 31, 1997 and for the
period February 19, 1997 (date of inception) 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 audits.
We conducted our audits 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 from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide 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 Platinum and Gold, Inc. and
Subsidiary (a Development Stage Company), as of December 31, 1998 and 1997 and
the results of its operations and its cash flows for the year ended December 31,
1998, for the period February 19, 1997 (date of inception) to December 31, 1997
and for the Period February 19, 1997 (date of inception) to December 31, 1998 in
conformity with generally accepted accounting principles.
The Company is in the development stage as of December 31, 1998 and to date has
had no significant operations. Recovery of the Company's assets is dependent on
future events, the outcome of which is indeterminable. In addition, successful
completion of the Company's development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company's cost structure.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has suffered losses and has yet to
generate an internal cash flow that raises substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Margolies Fink and Wichrowski
Certified Public Accountants
Pompano Beach, Florida
January 18, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Consolidated Balance Sheets
ASSETS
December 31,
1998 1997
<S> <C> <C>
Current assets:
Cash $ 1,533 $ 2,394
------------- ----------
Total current assets 1,533 2,394
------------- ----------
Office equipment, net of accumulated
depreciation of $218 1,959 -
Other assets 34,883 13,200
------------- ----------
$ 38,375 $ 15,594
============= ==========
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 24,649 $ -
------------ ----------
Total current liabilities 24,649 -
------------ ----------
Stockholder loans 15,021 1,745
------------ ----------
Total liabilities 39,670 1,745
------------ ----------
Stockholders' equity (deficit):
Common stock, $.001 par value;
authorized 20,000,000 shares,
11,600,000 shares issued and outstanding 12,355 12,355
Additional paid-in capital 4,400 4,400
Deficit accumulated during development stage (18,050) (106)
------------- ----------
(1,295) 16,649
Less: subscriptions receivable - (2,800)
------------- ----------
Total stockholders' equity (deficit) (1,295) 13,849
------------- ----------
$ 38,375 $ 15,594
============= ==========
</TABLE>
See accompanying notes to the
consolidated financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Consolidated Statements of Operations
From From
Inception Inception
Year Ended (February 19, 1997) to (February 19, 1997) to
December 31, 1998 December 31, 1997 December 31, 1998
------------------ ------------------ ----------------------
<S> <C> <C> <C>
Office expenses $ 3,262 $ 106 $ 3,368
Professional fees 8,233 8,233
Stockholder expenses 1,935 1,935
Sales expenses 1,170 1,170
Travel and entertainment 2,826 2,826
Taxes and licenses 300 300
Depreciation expense 218 218
------------------ ----------------- ----------------
17,944 106 18,050
----------------- ----------------- ----------------
Net loss $ (17,944) $ (106) $ (18,050)
================== ================= ================
Net loss per common share:
Basic
Net loss per share $ (.001) $ - $ (.001)
================= ================= ================
Weighted average shares 11,600,000 11,600,000 11,600,000
================= ================= ================
Diluted
Net loss per share $ (.001) $ - $ (.001)
================= ================= ================
Weighted average shares 11,600,000 11,600,000 11,600,000
================= ================= ================
</TABLE>
See accompanying notes to the consolidated financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
For the Periods Indicated
Deficit
Common Stock accumulated
---------------- Additional during the
Number of Paid-in development Subscriptions
Shares Amount capital stage Receivable Total
--------- ------- ---------- ------------ -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, February 19, 1997
(date of inception) - $ - $ - $ - $ - $ -
Issuance of common stock 11,600,000 12,355 4,400 - (2,800) 13,955
Net loss - - - (106) - (106)
------------ --------- ---------- ------------ -------------- ----------
Balance, December 31, 1997 11,600,000 12,355 4,400 (106) (2,800) 13,849
Collection of subscription receivable - - - - 2,800 2,800
Net loss - - - (17,944) - (17,944)
------------ --------- ---------- ------------ -------------- ----------
Balance, December 31, 1998 11,600,000 $ 12,355 $ 4,400 $(18,050) $ - $ (1,295)
=========== ========= ========== ============ ============== ==========
</TABLE>
See accompanying notes to the
consolidated financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash
From From
Inception Inception
Year Ended (February 19, 1997) to (February 19, 1997) to
December 31, 1998 December 31, 1997 December 31, 1998
------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Net loss $ (17,944) $ (106) $ (18,050)
------------ ------------- ----------
Adjustments to reconcile net loss
to net cash used for operating activities:
Depreciation expense 218 - 218
Increase in other assets (21,683) (13,200) (34,883)
Increase in accounts payable 24,649 - 24,649
------------ ------------- -----------
Total adjustments 3,184 (13,200) (10,016)
------------ ------------- -----------
Net cash used for operating activities (14,760) (13,306) (28,066)
------------ ------------- -----------
Cash flows for investing activities:
Acquisition of office equipment (2,177) - (2,177)
------------ ------------- -----------
Net cash used for investing activities (2,177) - (2,177)
------------ -------------- -----------
Cash flows from financing activities:
Proceeds from stockholder loans, net 13,276 1,745 15,021
Proceeds from issuance of common stock 2,800 13,955 16,755
------------ ------------- -----------
Net cash provided by financing activities 16,076 15,700 31,776
------------ ------------- -----------
Net increase (decrease) in cash (861) 2,394 1,533
Cash at beginning of period 2,394 -0- -0-
------------ ------------- ------------
Cash at end of period $ 1,533 $ 2,394 $ 1,533
============ ============= ============
</TABLE>
See accompanying notes to the
consolidated financial statements.
F-6
<PAGE>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Notes to Consolidated Financial Statements
(1) BACKGROUND
The Company, ("Platinum and Gold, Inc.") was organized in the state of Nevada on
February 19, 1997, under the name Integra Ventures, Inc. The Company changed its
name to Platinum and Gold, Inc. on November 5, 1998 and on November 11, 1998
completed a merger with its wholly-owned subsidiary, Platinum and Gold Recording
and Publishing Company. The subsidiary, a Florida corporation incorporated on
June 18, 1997, was formed to develop and commercialize unique compact disc
single and casettes.
The Company, through its wholly-owned subsidiary, is in the entertainment
industry involved in the music and film business. The principal activity of the
Company is the acquisition, development, production, marketing, manufacturing
and distribution of recorded music by new recording artists, principally from
other countries.
The Company is currently in a development stage and is in the process of raising
additional capital. There is no assurance that the development of these artists
and their music will be successful and that the Company will achieve a
profitable level of operations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of consolidation
The consolidated financial statements include all of the accounts of
Platinum and Gold, Inc. and its wholly-owned subsidiary, Platinum and
Gold Recording and Publishing Company. All significant intercompany
transactions and balances have been eliminated in preparing the
consolidated financial statements.
(b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(c) Cash and cash equivalents
Holdings of highly liquid investments with original maturities of
three months or less and investment in money market funds are
considered to be cash equivalents by the Company.
F-7
<PAGE>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Notes to Financial Statements (Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Property and equipment
Property and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed using straight-line methods
over the depreciable lives of the related assets, which is five years
for office equipment.
(e) Net loss per share
In 1998, the Company adopted SFAS No. 128, ("Earnings Per Share"),
which requires the reporting of both basic and diluted earnings per
share. Basic net loss per share is determined by dividing loss
available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted loss per share
reflects the potential dilution that could occur if options or other
contracts to issue common stock were exercised or converted into
common stock, as long as the effect of their inclusion is not
anti-dilutive.
(f) Income taxes
The Company adopted the method of accounting for income taxes
pursuant to the Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" (SFAS 109). SFAS 109 requires an asset
and liability approach for financial accounting and reporting for
income taxes. Under SFAS 109, the effect on deferred taxes of a
change in tax rates is recognized in income in the year that includes
the enactment date.
(3) GOING CONCERN
The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. The
Company has yet to generate an internal cash flow, and until the sales of their
products begin, the Company is totally dependent upon the debt and equity
funding.
As a result of these factors, there exists substantial doubt about the Company's
ability to continue as a going concern. However, management of the Company is
continually negotiating with various outside entities for additional funding. To
date, management has been able to raise the necessary capital to reach this
stage of product development and has been able to fund any capital requirements.
However, there is no assurance that the development of these artists and their
music will be successful and that the Company will achieve a profitable level of
operations.
F-8
<PAGE>
PLATINUM AND GOLD, INC. AND SUBSIDIARY
(a Development Stage Company)
Notes to Financial Statements (Continued)
(4) ACQUISITIONS
On November 11, 1998, the Company acquired Platinum and Gold Recording and
Publishing Company in a business combination accounted for as a pooling of
interests. Platinum and Gold Recording and Publishing Company, which engages in
the development and commercialization of unique compact disc single and casettes
became a wholly owned subsidiary of the Company through the exchange of
10,000,000 shares of the Company's common stock for all of the issued and
outstanding stock of Platinum and Gold Recording and Publishing Company. The
accompanying financial statements for 1998 are based on the assumption that the
companies were combined for the full year, and financial statements of the prior
year has been restated to five effect to the combination.
Results of operations of the separate companies have not been presented as the
Company did not have any operations since inception other that its organization.
(5) OTHER ASSETS
Other assets consist of the following:
<TABLE>
<S> <C> <C>
December 31,
1998 1997
--------------- --------------
Deferred production costs $ 18,683 $ -
Organization costs 16,000 13,200
Security deposits 200 -
--------------- ---------------
Totals $ 34,883 $ 13,200
=============== ===============
</TABLE>
The costs associated with the production of the initial twenty-four track
recording have been deferred until the recording is totally completed and
determined to be available for sales and distribution.
(6) STOCKHOLDER LOANS
Since the inception of the Company, the principal stockholder has loaned the
Company the necessary funds to operate the business. These loans are noninterest
bearing.
(7) STOCKHOLDERS' EQUITY
The Company sold 1,600,000 shares of its common stock in a Regulation D exempt
offering in February 1997 at a subscription price of $.01 per share. A total of
$16,000 was received from the sale of stock and was used to pay all of the costs
associated with the offering and the organization of the Company. On November
11, 1998, the Company completed a merger with Platinum and Gold Recording and
Publishing Company. (See Note 4)
The Company also has 1,000,000 shares of $.001 par value preferred stock, none
of which has been issued as of December 31, 1998.
F-9
<PAGE>
PART III
Item 1. Index to Exhibits
3.(i).1 * Articles of Incorporation of Integra Ventures, Inc. filed
February 19, 1997.
3.(i).2 * Certificate of Amendment of Articles of Incorporation
changing name to First Aid Direct, Inc. filed July 25, 1997.
3.(i).3 * Certificate of Amendment of Articles of Incorporation
changing name to Platinum and Gold, Inc.
3.(ii).1 * Bylaws of Integra Ventures, Inc.
4.1 * Form of Private Placement Offering of 1,600,000 common
shares at $0.01 per share.
4.2 * Form of Private Placement Offering of 984,000 common shares
at $1.00 per share.
4.3 * Form of Private Placement Offering of 9% convertible notes
at $10,000 per Unit.
4.4 * Form of Convertible Note pursuant to 9% convertible note
offering.
10.1 * Share Exchange Agreement between Integra Ventures, Inc. and
First Aid Direct, Inc. dated July 23, 1997.
10.2 * Recission and Cancellation Agreement between First Aid
Select, Inc. d/b/a First Aid Direct and Integra Ventures,
Inc. dated August 28, 1998.
10.3 * Share Exchange Agreement between Platinum and Gold, Inc. and
shareholders of Platinum and Gold Recording & Publishing
Company dated November 11, 1998.
10.4 * Agreement with Randy Bernsen dated October 28, 1998.
10.5 * Agreement with Glenda Grainger-Miller dated November 1,1998.
10.6 * Agreement with B&D Productions dated September 3, 1999.
10.7 * Letter of Intent with Steve Jordan dated July 1, 1998.
10.8 * Agreement with Barbara Chadwick dated September 3, 1999.
10.9 * Agreement with Beverly Fortin dated September 3, 1999.
10.10 * Promissory Note with Carol Neal dated September 7, 1999.
10.11 * Agreement with Margaret Ann Ronayne dated December 2, 1998.
27.1 * Financial Data Schedule.
- ----------------
(* Filed herewith)
<PAGE>
Item 2. Description of Exhibits
The documents required to be filed as Exhibits Number 2 and 6 and in
Part III of Form 1-A filed as part of this Registration Statement on Form 10-SB
are listed in Item 1 of this Part III above. No documents are required to be
filed as Exhibit Numbers 3 , 5 or 7 in Part III of Form 1-A and the reference to
such Exhibit Numbers is therefore omitted. The following additional exhibits are
filed hereto:
23.1 * Accountants' Consent from Margolies, Fink and Wichrowski
- -----------
(* Filed herewith)
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Platinum and Gold, Inc.
(Registrant)
Date: October 6, 1999 By:/s/ Carol Neal
---------------------------
Carol Neal, Chairman, President and Treasurer
By:/s/ Valerie Peters
---------------------------
Valerie Peters, Director and Vice-President
By:/s/ Louise Cavell
---------------------------
Louise Cavell, Director and Secretary
EXHIBIT 3.(i).1
FILED Articles of Incorporation Filing fee:
IN THE OFFICE OF THE (PURSUANT TO NRS 78) Receipt #:
SECRETARY OF STATE STATE OF NEVADA
OF THE
STATE OF NEVADA
FEB 19 1997 [State Seal]
No. C3303-97 STATE OF NEVADA
(For filing office use) Secretary of State (For filing office use)
1. NAME OF CORPORATION: INTEGRA VENTURES, INC.
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in Nevada
(where process may be served)
Name of Resident Agent: Corporate Creations
Street Address:
1504 #8-RS265 Main Street (PHYSICAL LOCATION ONLY NO MAILED ALLOWED)Gordnerville
- -------------------------------------------------------------------------------
Street No. Street Name City Zip
Mailing Address (if different):
4521 PGA Boulevard Suite 211, Palm Beach Gardens, FL 33410
- ---------------------------------------------------- -----
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 20,000,000 Par value: $.001
------------ ------
Number of shared without par value:
------
4. GOVERNING BOARD: shall be styled as (check one): X Directors Trustees The
FIRST BOARD OF DIRECTORS shall consist of one member and the names and
addresses are as follows (attach additional pages if necessary):
Dale B. Finfrock, Jr. P.O. Box 669, Palm Beach, FL 33480
--------------------------------------------------------------------
Name Address City/State/Zip
5. PURPOSE (optional - see reverse side): The purpose of the corporation shall
be:
6. NRS 78.037: States that the articles of Incorporation may also contain a
provision eliminating or limiting the personal liability of a director or
officer of the corporation or its stockholders for damages for breach or
fiduciary duty as a director or officer except acts or omissions which
include misconduct or fraud. Do you want this provision to be part of your
articles? Please check one of the following: __YES X NO
7. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information noted on
separate pages. But, if any additional information is contradictory to this
form it cannot be filed and will be returned to you for correction.. Number
of pages attached 1 .
<PAGE>
8. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles: (signatures must be obtained)
Brian R. Fons . Subscribed and sworn to before me
Name (print) this 19th day of February, 1997.
401 Ocean Drive #312 (Door Code 125)
Miami Beach FL 33139-6629 /s/ (illegible)
Address City/State/Zip -----------------
/s/ Brian R. Fons Notary Public
------------------
Signature
[Notary Seal]
9. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I Corporate Creations hereby accept appointment as Resident Agent for the above
named corporation.
/s/ (illegible), Asst. Secretary 2-19-97
------------------------------------ -------------
Signature of Resident Agent Date
<PAGE>
Articles of Incorporation Filing fee:
(PURSUANT TO NRS 78) Receipt #
STATE OF NEVADA
[State Seal]
STATE OF NEVADA
(For filing office use) Secretary of State (For filing office use)
Attachment #1
3. The Corporation shall also have the authority to issue 1,000,000 shares of
preferred stock, par value $.001 per share, which may be divided into series and
with preferences, limitations and relative rights determined by the Board of
Directors.
The Corporation elects not to be governed by the provisions of NRS
78.378 to 78.3793 governing the acquisition of a controlling interest in the
Corporation.
The Corporation also adopts the following additional provisions:
Denial of Preemptive Rights
No Shareholder shall have any right to acquire shares or other securitiezs of
the corporation except to the extent such right may be granted by an amendment
to these Articles of Incorporation or by a resolution of the board of Directors.
Liability and Indemnification of Directors and Officers
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation or its shareholders.
In addition, the Corporation shall have the power, in its bylaws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this Corporation agaibnst any contingency or peril as
may be determined to be in the best interests of this Corporation, and to
procure policies of insurance at this Corporation's expense.
Amendment of Bylaws
Notwithstanding anything in these Articles of Incorporation, the Bylaws, or
applicable state corporation law, the shareholders shall not adopt, modify,
amend or repeal bylaws of the corporation except upon the affirmative vote of a
simple majority vote of the holders of all the issued and outstanding shares of
the Corporation entitled to vote thereon.
Shareholders
Inspection of Books. The Board of Directors shall make reasonable rules to
determine at what times and places and under what conditions the books of the
Corporation shall be open to inspection by shareholders or a duly appointed
representative of a shareholder.
Quorum. The holders of shares entitled to one-third of the votes at a meeting of
shareholders shall constitute a quorum.
<PAGE>
Required Vote. Acts of the shareholders shall require the approval of holders of
50.01% of the outstanding votes of shareholders.
Contracts
A contract or other transaction between this Corporation and any person, firm or
other company shall be affected (illegible) the fact that any other officer or
director of this Corporation is, or at some time in the future becomes, an
officer, director or partner of such other contracting party, or has now or in
the future obtains a direct or indirect interest in such contract.
EXHIBIT 3.(i).2
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE STATE
STATE OF NEVADA
[stamp]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed By:
JUL 25 1997 INTEGRA VENTURES, INC.
No. C 3 3 0 3 - 9 7 Name of Corporation
---------------
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
[stamp]
We the undersigned Dale B. Finfrock, Jr., President and Assistant Secretary
of INTEGRA VENTURES, INC.
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on July 24, 1997, adopted a resolution to amend the original articles as
follows:
Article 1 is hereby amended to read as follows:
Name of Corporation: FIRST AID DIRECT, INC.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 3,300,000: that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Dale B. Finfrock
---------------------------
President or Vice President
/s/ Dale B. Finfrock
--------------------------------
Secretary or Assistant Secretary
State of FLORIDA )
) ss.
County of DADE )
On July 25, 1997, personally appeared before me, a Notary Public, Dale B.
Finfrock, Jr., who acknowledged that they executed the above instrument.
<PAGE>
MIRTHA S. RODRIGUEZ /s/ Martha S. Rodriguez
COMMISSION # CC 626325 Signature of Notary
EXPIRES MAR 3, 2001
BONDED THRU ATLANTIC BONDING CO., INC.
[Notary Stamp]
(Notary Stamp or Seal)
EXHIBIT 3.(i).3
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed By:
FIRST AID DIRECT, INC.
Name of Corporation
I the undersigned Dale B. Finfrock, Jr., President and Greg
K. Kuroda, Assistant Secretary of FIRST AID DIRECT, INC.
do hereby certify:
That the Board of Directors of said corporation at a
meeting duly convened, held on November 5, 1998, adopted a resolution
to amend the original articles as follows:
Article 1 is hereby amended to read as follows:
------------------
The name of the corporation is: PLATINUM AND GOLD, INC.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation is
11,000,000: that the said change(s) and amendment have been consented
to and approved by a majority vote of the stockholders holding at
least a majority of each class of stock outstanding and entitled to
vote thereon.
/s/ Dale B. Finfrock
-----------------------------
President or Vice President
/s/ Dale B. Finfrock
-----------------------------
Secretary or Assistant Secretary
State of FLORIDA )
) ss.
County of DADE )
On November 5, personally appeared before me, a Notary Public, Dale
Finfrock, who acknowledged that they executed the above instrument.
LUIS A. URIARTE /s/ Luis A. Uriarte
COMMISSION # CC(illegible) Signature of Notary
EXPIRES SEP 02, 2000
BONDED THROUGH ATLANTIC BONDING CO., INC.
[Notary Stamp]
EXHIBIT 3.(ii).1
Bylaws
of
INTEGRA VENTURES, INC.
ARTICLE I. DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or under the
authority of the Board of Directors. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. Directors must
be natural persons who are at least 18 years of age but need not be shareholders
of the Corporation. Residents of any state may be directors.
Section 2. Compensation. The shareholders shall have authority to fix the
compensation of directors. Unless specifically authorized by a resolution of the
shareholders, the directors shall serve in such capacity without compensation.
Section 3. Presumption of Assent. A director who is present at a meeting of the
Board of Directors or a committee of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the action
taken unless he objects at the beginning of the meeting (or promptly upon
arriving) to the holding of the meeting or transacting the specified business at
the meeting, or if the director votes against the action taken or abstains from
voting because of an asserted conflict of interest.
Section 4. Number. The Corporation shall have at least the minimum number of
directors required by law. The number of directors may be increased or decreased
from time to time by the Board of Directors.
Section 5. Election and Term. At each annual meeting of the shareholders, the
shareholders shall elect directors to hold office until the next annual meeting
or until their earlier resignation, removal from office or death. Directors
shall be elected by a plurality of the votes cast by the shares entitled to vote
in the election at a meeting at which a quorum is present.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled by
the shareholders or 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. If there are no remaining directors, the vacancy
shall be filled by the shareholders.
Section 7. Removal of Directors. At a meeting of shareholders, any director or
the entire Board of Directors may be removed, with or without cause, provided
the notice of the meeting states that one of the purposes of the meeting is the
removal of the director. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast against removal.
Section 8. 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 a majority of directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 9. 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 one or more committees each of which must have at least two members.
<PAGE>
Each committee shall have the authority set forth in the resolution designating
the committee.
Section 10. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the Corporation or
at another place designated by the person or persons giving notice or otherwise
calling the meeting.
Section 11. Time, Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held without notice at the time and on the date designated by
resolution of the Board of Directors. Written notice of the time, date and place
of special meetings of the Board of Directors shall be given to each director by
mail delivery at least two days before the meeting.
Notice of a meeting of the Board of Directors need not be given to a
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting constitutes a waiver of notice of that
meeting and waiver of all objections to the place of the meeting, the time of
the meeting, and the manner in which it has been called or convened, unless a
director objects to the transaction of business (promptly upon arrival at the
meeting) 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 must be specified in the notice or waiver of notice of
the 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 an 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 President or
the Chairman of the Board of Directors. Members of the Board of Directors and
any committee of the board may participate in the meeting by telephone
conference or similar communications equipment if all persons participating in
the meeting can hear each other at the same time. Participation by these means
constitutes presence in person at a meeting.
Section 12. Action by Written Consent. Any action required or permitted to be
taken at a meeting of directors may be taken without a meeting if a consent in
writing setting forth the action to be taken and signed by all of the directors
is filed in the minutes of the proceedings of the Board. The action taken shall
be deemed effective when the last director signs the consent, unless the consent
specifies otherwise.
ARTICLE II. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of the
corporation for the election of officers and for such other business as may
properly come before the meeting shall be held at such time and place as
designated by the Board of Directors.
Section 2. Special Meeting. Special meetings of the shareholders shall be held
when directed by the President or when requested in writing by shareholders
holding at least 10% of the Corporation's stock having the right and entitled to
vote at such meeting. A meeting requested by shareholders shall be called by the
President for a date not less than 10 nor more than 60 days after the request is
made. Only business within the purposes described in the meeting notice may be
conducted at a special shareholders' meeting.
<PAGE>
Section 3. Place. Meetings of the shareholders will be held at the principal
place of business of the Corporation or at such other place as is designated by
the Board of Directors.
Section 4. Notice. A written notice of each meeting of shareholders shall be
mailed to each shareholder having the right and entitled to vote at the meeting
at the address as it appears on the records of the Corporation. The meeting
notice shall be mailed not less than 10 nor more than 60 days before the date
set for the meeting. The record date for determining shareholders entitled to
vote at the meeting will be the close of business on the day before the notice
is sent. The notice shall state the time and place the meeting is to be held. A
notice of a special meeting shall also state the purposes of the meeting. A
notice of meeting shall be sufficient for that meeting and any adjournment of
it. If a shareholder transfers any shares after the notice is sent, it shall not
be necessary to notify the transferee. All shareholders may waive notice of a
meeting at any time.
Section 5. Shareholder Quorum. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Any number of shareholders, even if less than a quorum, may
adjourn the meeting without further notice until a quorum is obtained.
Section 6. Shareholder Voting. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. An alphabetical list of all shareholders who are entitled to
notice of a shareholders' meeting along with their addresses and the number of
shares held by each shall be produced at a shareholders' meeting upon the
request of any shareholder.
Section 7. Proxies. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof may vote in person or by proxy executed
in writing and signed by the shareholder or his attorney-in-fact. The
appointment of proxy will be effective when received by the Corporation's
officer or agent authorized to tabulate votes. No proxy shall be valid more than
11 months after the date of its execution unless a longer term is expressly
stated in the proxy.
Section 8. Validation. If shareholders who hold a majority of the voting stock
entitled to vote at a meeting are present at the meeting, and sign a written
consent to the meeting on the record, the acts of the meeting shall be valid,
even if the meeting was not legally called and noticed.
Section 9. Conduct of Business By Written Consent. Any action of the
shareholders may be taken without a meeting if written consents, setting forth
the action taken, are signed by at least a majority of shares entitled to vote
and are delivered to the officer or agent of the Corporation having custody of
the Corporation's records within 60 days after the date that the earliest
written consent was delivered. Within 10 days after obtaining an authorization
of an action by written consent, notice shall be given to those shareholders who
have not consented in writing or who are not entitled to vote on the action. The
notice shall fairly summarize the material features of the authorized action. If
the action creates dissenters' rights, the notice shall contain a clear
statement of the right of dissenting shareholders to be paid the fair value of
their shares upon compliance with and as provided for by the state law governing
corporations.
ARTICLE III. OFFICERS
Section 1. Officers; Election; Resignation; Vacancies. The Corporation shall
have the officers and assistant officers that the Board of Directors appoint
<PAGE>
from time to time. Except as otherwise provided in an employment agreement which
the Corporation has with an officer, each officer shall serve until a successor
is chosen by the directors at a regular or special meeting of the directors or
until removed. Officers and agents shall be chosen, serve for the terms, and
have the duties determined by the directors. A person may hold two or more
offices.
Any officer may resign at any time upon written notice to the Corporation. The
resignation shall be effective upon receipt, unless the notice specifies a later
date. If the resignation is effective at a later date and the Corporation
accepts the future effective date, the Board of Directors may fill the pending
vacancy before the effective date provided the successor officer does not take
office until the future effective date. Any vacancy occurring in any office of
the Corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 2. Powers and Duties of Officers. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as may be
prescribed by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
Section 3. Removal of Officers. An officer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by the Board with
or without cause whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer, agent or member of a committee shall not of itself create contract
rights. Any officer, if appointed by another officer, may be removed by that
officer.
Section 4. Salaries. The Board of Directors may cause the Corporation to enter
into employment agreements with any officer of the Corporation. Unless provided
for in an employment agreement between the Corporation and an officer, all
officers of the Corporation serve in their capacities without compensation.
Section 5. Bank Accounts. The Corporation shall have accounts with financial
institutions as determined by the Board of Directors.
ARTICLE IV. DISTRIBUTIONS
The Board of Directors may, from time to time, declare distributions to its
shareholders in cash, property, or its own shares, unless the distribution would
cause (i) the Corporation to be unable to pay its debts as they become due in
the usual course of business, or (ii) the Corporation's assets to be less than
its liabilities plus the amount necessary, if the Corporation were dissolved at
the time of the distribution, to satisfy the preferential rights of shareholders
whose rights are superior to those receiving the distribution. The shareholders
and the Corporation may enter into an agreement requiring the distribution of
corporate profits, subject to the provisions of law.
ARTICLE V. CORPORATE RECORDS
Section 1. Corporate Records. The corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time. The Corporation shall keep as permanent records minutes of all
<PAGE>
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors on behalf of the
Corporation. The Corporation shall maintain accurate accounting records and a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by class of shares
showing the number and series of shares held by each.
The Corporation shall keep a copy of its articles or restated
articles of incorporation and all amendments to them currently in effect; these
Bylaws or restated Bylaws and all amendments currently in effect; resolutions
adopted by the Board of Directors creating one or more classes or series of
shares and fixing their relative rights, preferences, and limitations, if shares
issued pursuant to those resolutions are outstanding; the minutes of all
shareholders' meetings and records of all actions taken by shareholders without
a meeting for the past three years; written communications to all shareholders
generally or all shareholders of a class of series within the past three years,
including the financial statements furnished for the last three years; a list of
names and business street addresses of its current directors and officers; and
its most recent annual report delivered to the Department of State.
Section 2. Shareholders' Inspection Rights. A shareholder is entitled to inspect
and copy, during regular business hours at a reasonable location specified by
the Corporation, any books and records of the Corporation. The shareholder must
give the Corporation written notice of this demand at least five business days
before the date on which he wishes to inspect and copy the record(s). The demand
must be made in good faith and for a proper purpose. The shareholder must
describe with reasonable particularity the purpose and the records he desires to
inspect, and the records must be directly connected with this purpose. This
Section does not affect the right of a shareholder to inspect and copy the
shareholders' list described in this Article if the shareholder is in litigation
with the Corporation. In such a case, the shareholder shall have the same rights
as any other litigant to compel the production of corporate records for
examination.
The Corporation may deny any demand for inspection if the demand was
made for an improper purpose, or if the demanding shareholder has within the two
years preceding his demand, sold or offered for sale any list of shareholders of
the Corporation or of any other corporation, has aided or abetted any person in
procuring any list of shareholders for that purpose, or has improperly used any
information secured through any prior examination of the records of this
Corporation or any other corporation.
Section 3. Financial Statements for Shareholders. Unless modified by resolution
of the shareholders within 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders with annual financial statement which
may be consolidated or combined statements of the Corporation and one or more of
its subsidiaries, as appropriate, that include a balance sheet as of the end of
the fiscal year, an income statement for that year, and a statement of cash
flows for that year. If financial statements are prepared for the Corporation on
the basis of generally accepted accounting principles, the annual financial
statements must also be prepared on that basis.
If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the President or the person responsible for the
Corporation's accounting records stating his reasonable belief whether the
statements were prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of preparation and describing any
respects in which the statements were not prepared on a basis of accounting
<PAGE>
consistent with the statements prepared for the preceding year. The Corporation
shall mail the annual financial statements to each shareholder within 120 days
after the close of each fiscal year or within such additional time thereafter as
is reasonably necessary to enable the Corporation to prepare its financial
statements. Thereafter, on written request from a shareholder who was not mailed
the statements, the Corporation shall mail him the latest annual financial
statements.
Section 4. Other Reports to Shareholders. If the Corporation indemnifies or
advances expenses to any director, officer, employee or agent otherwise than by
court order or action by the shareholders or by an insurance carrier pursuant to
insurance maintained by the Corporation, the Corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next annual shareholders' meeting, or prior to the meeting if the
indemnification or advance occurs after the giving of the notice but prior to
the time the annual meeting is held. This report shall include a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
If the Corporation issues or authorizes the issuance of shares for
promises to render services in the future, the Corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.
ARTICLE VI. STOCK CERTIFICATES
Section 1. Issuance. The Board of Directors may authorize the issuance of some
or all of the shares of any or all of its classes or series without
certificates. Each certificate issued shall be signed by the President and the
Secretary (or the Treasurer). The rights and obligations of shareholders are
identical wither or not their shares are represented by certificates.
Section 2. Registered Shareholders. No certificate shall be issued for any share
until the share is fully paid. The Corporation shall be entitled to treat the
holder of record of shares as the holder in fact and, except as otherwise
provided by law, shall not be bound to recognize any equitable or other claim to
or interest in the shares.
Section 3. Transfer of Shares. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation of the share certificates
duly endorsed by the holder of record or attorney-in-fact. If the surrendered
certificates are canceled, new certificates shall be issued to the person
entitled to them, and the transaction recorded on the books of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. If a shareholder claims to
have lost or destroyed a certificate of shares issued by the Corporation, a new
certificate shall be issued upon the delivery to the Corporation of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed, and, at the discretion of the Board of Directors, upon the deposit
of a bond or other indemnity as the Board reasonably requires.
ARTICLE VII. INDEMNIFICATION
Section 1. Right to Indemnification. The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director or officer of the
<PAGE>
Corporation to the fullest extent permitted or authorized by current or future
legislation or judicial or administrative decision against all fines,
liabilities, costs and expenses, including attorneys' fees, arising out of his
or her status as a director, officer, agent, employee or representative. The
foregoing right of indemnification shall not be exclusive of other rights to
which those seeking an indemnification may be entitled. The Corporation may
maintain insurance, at its expense, to protect itself and all officers and
directors against fines, liabilities, costs and expenses, wither or not the
Corporation would have the legal power to indemnify them directly against such
liability.
Section 2. Advances. Costs, charges and expenses (including attorneys' fees)
incurred by person referred to in Section 1 of this Article in defending a civil
or criminal proceeding shall be paid by the Corporation in advance of the final
disposition thereof upon receipt of an undertaking to repay all amounts advanced
if it is ultimately determined that the person is not entitled to be indemnified
by the Corporation as authorized by this Article, and upon satisfaction of other
conditions required by current or future legislation.
Section 3. Savings Clause. If this Article or any portion of it is invalidated
on any ground by a court of competent jurisdiction, the Corporation nevertheless
indemnifies each person described in Section 1 of this Article to the fullest
extent permitted by all portions of this Article that have not been invalidated
and to the fullest extent permitted by law.
ARTICLE VIII. AMENDMENT
These Bylaws may be altered, amended or repealed, and new Bylaws
adopted, by a majority vote of the directors or by a vote of the shareholder
holding a majority of the shares.
I certify that these are the Bylaws adopted by the Board of Directors
of the Corporation.
/s/ Dale B. Finfrock
---------------------------
Secretary
Date: 2-21-97
EXHIBIT 4.1
Offering Memorandum Confidential
Dated February 27, 1997
Integra Ventures, Inc.
(A Nevada Corporation)
1,600, 000 Shares
At a Price of $.01 Per Share
Integra Ventures, Inc., a Nevada corporation (the "Company"), is a
company which is in the medical supply business.
The Company's principal office is located at 222 Lakeview Avenue,
Suite 160-124, West Palm Beach, FL 33401.
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF RISK. INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SUITABLE ONLY FOR
PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD A TOTAL LOSS OF THEIR
INVESTMENT AND WILL BE SOLD ONLY TO ACCREDITED OR OTHERWISE QUALIFIED INVESTORS.
FOR A DISCUSSION OF THE MATERIAL RISKS IN CONNECTION WITH THE PURCHASE OF THE
SHARES, SEE "INVESTMENT RISK CONSIDERATIONS".
The SECURITIES ARE BEING OFFERED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (The "ACT"), IN RELIANCE UPON The EXEMPTION
FROM REGISTRATION AFFORDED BY SECTIONS 4(2) AND 3(b) OF The SECURITIES ACT AND
REGULATION D PROMULGATED THEREUNDER.
THIS MEMORANDUM HAS NOT BEEN REVIEWED OR APPROVED OR DISAPPROVED, NOR
HAS The ACCURACY OR ADEQUACY OF THE INFORMATION SET FORTH HEREIN BEEN PASSED
UPON BY The SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
ADMINISTRATOR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS
OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY SECTIONS 4(2) OR
3(b) OF THE SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D PROMULGATED
THEREUNDER AND STATE SMALL CORPORATE OFFERING REGISTRATION PROVISIONS. PURSUANT
TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO ANY LIMITATIONS ON
RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE SUBJECT TO
LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES IMPOSED BY The
BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, The COMPANY INTENDS TO FILE THE
REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY MANAGEMENT AS HAVING
POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO QUALIFY The SHARES FOR
SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN BE GIVEN THAT IT WILL
BE ABLE TO QUALIFY The SHARES FOR SECONDARY TRADING IN ANY SUCH STATES IN WHICH
IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO QUALIFY The SHARES
FOR SECONDARY TRADING WILL CREATE
<PAGE>
SUBSTANTIAL RESTRICTION ON The TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE
The BENEFIT OF The EXEMPTION PROVIDED BY RULE 504 OF REGULATION D. SEE "RISK
FACTORS." THE COMPANY WILL USE ITS BEST EFFORTS TO CAUSE The SHARES TO BE LISTED
ON THE ELECTRONIC BULLETIN BOARD OPERATED BY The NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY BE TRADED. THERE IS NO
ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A LISTING IS OBTAINED
THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF DEVELOPED, THAT IT WILL BE
SUSTAINED.
----------------------------------------------------------------
Subscription Proceeds to the
Price Commissions(1) Company
Per Share $0.01 $ -0- $ 16,000
(1) The Shares are being sold by the Company's sole Officer and no commissions
will be paid in connection with the Offering.
Integra Ventures, Inc.
222 Lakeview Avenue
Suite 160-124
West Palm Beach, FL 33401
(561) 833-5092
<PAGE>
CONFIDENTIAL INFORMATION
THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM IS CONFIDENTIAL
AND PROPRIETARY TO THE COMPANY AND IS BEING SUBMITTED TO PROSPECTIVE INVESTORS
IN THE COMPANY SOLELY FOR SUCH INVESTORS' CONFIDENTIAL USE WITH THE EXPRESS
UNDERSTANDING THAT, WITHOUT THE PRIOR WRITTEN PERMISSION OF THE COMPANY, SUCH
PERSONS WILL NOT RELEASE THIS DOCUMENT OR DISCUSS THE INFORMATION CONTAINED
HEREIN OR MAKE REPRODUCTIONS OF OR USE THIS OFFERING MEMORANDUM FOR ANY PURPOSE
OTHER THAN EVALUATING A POTENTIAL INVESTMENT IN THE SHARES.
A PROSPECTIVE INVESTOR, BY ACCEPTING DELIVERY OF THIS OFFERING
MEMORANDUM, AGREES PROMPTLY TO RETURN TO THE COMPANY THIS OFFERING MEMORANDUM
AND ANY OTHER DOCUMENTS OR INFORMATION FURNISHED IF THE PROSPECTIVE INVESTOR
ELECTS NOT TO PURCHASE ANY OF THE SHARES OFFERED HEREBY.
THE INFORMATION PRESENTED HEREIN WAS PREPARED BY THE COMPANY IS BEING
FURNISHED BY THE COMPANY SOLELY FOR USE BY PROSPECTIVE INVESTORS IN CONNECTION
WITH THE OFFERING NOTHING CONTAINED HEREIN IS, OR SHOULD BE RELIED ON AS A
PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY.
THIS OFFERING MEMORANDUM DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO
CONTAIN ALL THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN
INVESTIGATING THE COMPANY. EACH INVESTOR MUST CONDUCT AND RELY ON ITS OWN
EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SHARES
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
IN CONNECTION WITH THE PURCHASE OF SHARES.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SHARES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. EXCEPT AS OTHERWISE INDICATED, THIS OFFERING MEMORANDUM SPEAKS AS
OF THE DATE HEREOF. NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OTHER THAN THAT
CONTAINED IN THIS OFFERING MEMORANDUM, OR TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND, FI GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THE COMPANY DISCLAIMS IN, OR OMISSION FROM, THIS OFFERING
MEMORANDUM OR ANY OTHER
<PAGE>
WRITTEN OR ORAL COMMUNICATION TRANSMITTED OR MADE AVAILABLE TO THE
RECIPIENT.
FOR RESIDENT OF ALL STATES:
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND
SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH LAWS. THE SHARES ARE SUBJECT TO RESTRICTIONS ON THE
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION. ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
NOTICES TO PROSPECTIVE INVESTORS
THIS OFFERING MEMORANDUM IS SUBMITTED IN CONNECTION WITH THE OFFERING
OF THE SHARES AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE. BY
ACCEPTING DELIVERY OF THIS OFFERING MEMORANDUM, EACH RECIPIENT AGREES TO RETURN
THIS OFFERING MEMORANDUM AND ALL OTHER DOCUMENTS IF THE RECIPIENT DOES NOT AGREE
TO PURCHASE ANY OF THE SHARES TO THE COMPANY AT ITS ADDRESS LISTED ON THE COVER
OF THE OFFERING MEMORANDUM.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON THE TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO PURCHASE SHARES TO ANY PERSON IN ANY STATE OR IN ANY
<PAGE>
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS UNLAWFUL, SUBJECT TO THE
PRECEDING SENTENCE. THIS OFFERING MEMORANDUM IS INTENDED FOR THE EXCLUSIVE USE
OF THE PERSON TO WHOM IT IS DELIVERED BY AN AUTHORIZED AGENT OF THE COMPANY ON
BEHALF OF THE COMPANY.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
CONFIDENTIAL OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS AS
LEGAL, TAX OR INVESTMENT ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL,
ACCOUNTANT OR BUSINESS ADVISOR AS TO LEGAL, TAX AND RELATED MATTERS COVERING HIS
INVESTMENT.
THE SHARES ARE OFFERED SUBJECT TO THE ACCEPTANCE BY THE COMPANY OF
OFFERS BY PROSPECTIVE INVESTORS, ALLOCATION OF SHARES BY THE COMPANY AND OTHER
CONDITIONS SET FORTH HEREIN. THE COMPANY MAY REJECT ANY OFFER IN WHOLE OR IN
PART AND NEED NOT ACCEPT OFFERS IN THE ORDER RECEIVED.
THIS CONFIDENTIAL OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE
STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE
THE STATEMENTS MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENT
PURPORTED TO BE SUMMARIZED HEREIN.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SHARES UNDERLYING THE SHARES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MEMORANDUM.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SUBSCRIPTION PRICE FOR THE SHARES IS PAYABLE IN FULL UPON
SUBSCRIPTION. THE OFFERING PRICE WAS DETERMINED ARBITRARILY BY THE COMPANY AND
BEARS NO RELATIONSHIP TO ASSETS, EARNINGS, BOOK VALUE OR ANY OTHER CRITERIA OF
VALUE. NO REPRESENTATION IS MADE THAT THE SHARES HAVE MARKET VALUE OF, OR COULD
BE RESOLD AT, THAT PRICE (SEE "RISK FACTORS," "DILUTION," AND "USE OF PROCEEDS).
THE SHARES WILL BE OFFERED BY THE COMPANY ON A BEST EFFORTS BASIS TO
A SELECT GROUP OF INVESTORS WHO MEET CERTAIN SUITABILITY STANDARDS. NO
COMMISSIONS AND NO NON-ACCOUNTABLE OR ACCOUNTABLE EXPENSE ALLOWANCE OF ANY KIND
<PAGE>
ALLOWANCE OF ANY KIND WILL BE PAID FROM OR DEDUCTED FROM THE PROCEEDS RAISED
HEREBY. THE COMPANY WILL ABSORB ALL MARKETING EXPENSES ASSOCIATED WITH THIS
OFFERING 9SEE "USE OF PROCEEDS").
THE COMPANY HAS AGREED TO PROVIDE, PRIOR TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREIN, TO EACH POTENTIAL PURCHASER OF SECURITIES (OR
HIS REPRESENTATIVES) OR BOTH) THE OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE
ANSWERS FROM, THE COMPANY OR ANY PERSON ACTING ON ITS BEHALF CONCERNING THE
TERMS AND CONDITIONS OF THIS OFFERING AND TO OBTAIN ANY ADDITIONAL INFORMATION,
TO THE EXTENT THEY POSSESS SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT
UNREASONABLE EFFORT OR EXPENSE NECESSARY TO VERIFY THE ACCURACY OF THE
INFORMATION SET FORTH HEREIN.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO ANY PERSON
WHO DOES NOT MEET THE SUITABILITY STANDARDS DESCRIBED HEREIN. REPRODUCTION OF
THIS OFFERING MEMORANDUM IS STRICTLY PROHIBITED.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS OFFERING MEMORANDUM EXCEPT AS NOTED ABOVE
WITH REGARD TO QUESTIONS ASKED OF THE COMPANY AND OF THOSE AUTHORIZED TO ACT ON
ITS BEHALF. NO OFFERING LITERATURE OR ADVERTISING HAS BEEN AUTHORIZED BY THE
COMPANY EXCEPT THE INFORMATION CONTAINED HEREIN. ANY INFORMATION OR
REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ITS OFFICERS AND DIRECTORS. EXCEPT AS OTHERWISE
INDICATED, THIS OFFERING MEMORANDUM SPEAKS AS OF THE DATE ON THE COVER PAGE
NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE RESPECTIVE DATES AT WHICH THE
INFORMATION IS GIVEN HEREIN OR THE DATE HEREOF.
ANY UNSOLD SHARES MAY BE PURCHASED BY THE COMPANY OR ITS AFFILIATES
ON THE SAME TERMS AS SHARES PURCHASED BY OTHER INVESTORS.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE
COMMISSION DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR
DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT
ACT OR EXEMPTION THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA
SECURITIES ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN
SECTION 44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT
REGISTRATION UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS
AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT
IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE
HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES
ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA.
IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE
PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE
BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR
WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED
TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA
SECURITIES ACT OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION SET FORTH IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A
TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OR EXEMPTION THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE
INVESTOR'S NET WORTH.
NOTICE TO INDIANA RESIDENTS
<PAGE>
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT
BY A NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S
NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND
SECURITIES ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN
SECTION 11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY
NOT BE REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A
SECURITY, OR IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH
OF AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS
AND AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER
THAT ACT OR EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY
NOT BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING
OFFERED HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF
TWELVE (12) MONTHS AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE
INVESTOR'S NET WORTH.
NOTICE TO NEBRASKA RESIDENTS
<PAGE>
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE
HAS EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES)
OF TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE
OF HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY
GENERAL 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.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR
<PAGE>
ADEQUACY OF THE INFORMATION PROVIDED HEREIN. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE
SECURITIES ACT OF 1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF
COUNSEL TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-
ACCREDITS INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE
COMPANY CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE
MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
<PAGE>
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND
MAY NOT BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH
INVESTOR AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO UTAH RESIDENTS
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES
ACT AND MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON
SECURITIES ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON
HAS NOT REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT
BE SOLD WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
<PAGE>
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OFFERING MEMORANDUM
- ----------------------------------------------------------------------------
Integra Ventures, Inc.
(A Florida Corporation)
Offering Memorandum Dated February 27, 1997
1,600,000 Shares
Integra Ventures, Inc., (the "Company"), a Nevada corporation, is
offering on a "best efforts, no minimum basis" up to a maximum of 1,600,000
shares of common stock ("Common Stock"), $.001 par value, at $0.01 per Share.
Since there is no minimum, no proceeds will be held in escrow account and all
funds will be immediately available to the Company.
The Company intends to apply for inclusion of the Common Stock on the
Over the Counter Electronic Bulletin Board. There can be no assurances that an
active trading market will develop, even if the securities are accepted for
quotation. Additionally, even if the Company's securities are accepted for
quotation and active trading develops, the Company is still required to maintain
certain minimum criteria established by NASDAQ, of which there can be no
assurance that the Company will be able to continue to fulfill such criteria.
Prior to this offering, there has been no public market for the
common stock of the Company. The price of the Shares offered hereby was
arbitrarily determined by the Company and does not bear any relationship to the
Company's assets, book value, net worth, results of operations or any other
recognized criteria of value. For additional information regarding the factors
considered in determining the offering price of the Shares, see "Risk Factors -
Arbitrary Offering Price," "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports, in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see
"Risk Factors"). Investors should carefully review the entire Memorandum and
should not invest any funds in this Offering unless they can afford to lose
their entire investment. In making an investment decision, investors must rely
on their own examination of the issuer and the terms of the Offering, including
the merit and risks involved.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements and notes thereto appearing
elsewhere in this Memorandum.
<PAGE>
The Company is in the business of providing supplies and other
products to the medical industry. The company was incorporated in the State of
Nevada and its principal executive office is located at 222 Lakeview Avenue,
Suite 160- -124, West Palm Beach, FL 33401 and its telephone number is (561)
833-5092
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD
PURCHASE THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT
DECISION, SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER
MATTERS REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS:
Risk Factors Relating to the Business of the Company
Start-up or Development Stage Company. The Company has had no
operations since its organization and is a "start-up" or "development stage"
company. No assurances can be given that the Company will be able to compete
with other companies in its industry. The purchase of the securities offered
hereby must be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds to Issuer"
and "Description of Business."
No Assurance of Profitability. To date, the Company has not generated
any revenues from operations. The Company does not anticipate any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid in
the foreseeable future. See "Dividend Policy."
Possible Need for Additional Financing . The Company intends to fund
its operations and other capital needs for the next 12 months substantially from
the proceeds of this Offering, but there can be no assurance that such funds
will be sufficient for these purposes. The Company may require additional
amounts of capital for its future expansion, operating costs and working
capital. The Company has made no arrangements to obtain future additional
financing, and if required, there can be no assurance that such financing will
be available, or that such financing will be available on acceptable terms. See
"Use of Proceeds."
Dependence on Management. The Company's success is principally
dependent on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds . The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof. Pending use of such proceeds, the net proceeds of this offering will be
invested by the Company in temporary, short-term interest-bearing obligations.
See "Use of Proceeds."
Arbitrary Offering Price. There has been no prior public market for
the Company's securities. The price to the public of the Shares offered hereby
has been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
<PAGE>
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Lack of Prior Market for Securities of the Company. No prior market
has existed for the securities being offered hereby and no assurance can be
given that a market will develop subsequent to this offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
USE OF PROCEEDS
The Company will receive the proceeds from the Offering for working
capital.
DIVIDEND POLICY
Holders of the Company's Common Stock are entitled to dividends when,
as and if declared by the Board of Directors out of funds legally available
therefor. The Company does not anticipate the declaration or payment of any
dividends in the foreseeable future. The Company intends to retain earnings, if
any, to finance the development and expansion of its business. Future dividend
policy will be subject to the discretion of the Board of Directors and will be
contingent upon future earnings, if any, the Company's financial condition,
capital requirements, general business conditions and other factors. Therefore,
there can be no assurance that any dividends of any kind will ever be paid.
THE COMPANY
The Company is in the business of providing supplies and other
products to the medical industry. In addition, the company is negotiating with
other companies in the medical field with the intent of acquiring all of the
shares or assets of one or more of these companies. However, if the company is
unable to complete the acquisition/acquisitions it will continue to operate its
existing business and expand its activities through internal growth.
Management
Dale B. Finfrock, Jr. , is the Company's sole Director, and its President and
Secretary.
EXECUTIVE COMPENSATION
Since the Company was recently incorporated, it has no historical
information with respect to executive compensation. At the conclusion of the
Offering, the Company does not intend to compensate its officers for services to
the Company from the proceeds of this Offering and will only do so when and if
the Company generates profits.
Compensation of Directors
Directors are not paid fees for their services nor reimbursed for
expenses of attending board meetings.
DESCRIPTION OF SECURITIES
Shares
The Company is offering hereby a "best efforts, no minimum basis" up
to 1,600,000 shares of Common Stock at $.01 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
<PAGE>
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Florida for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been no market for the Common Stock
of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Common Stock of the Company in the public market may adversely
affect prevailing market prices, and may impair the Company's ability to raise
capital at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self-underwriting. The Shares will be offered by the Company at the
offering price of $.01 per Share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there
is no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the
actual value of the Shares. Such price is subject to change as a result of
market conditions and other factors, and no assurance can be given that the
Shares can be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to
making an investment in the Company, that he has had the opportunity to inspect
the books and records of the Company and that he has had the opportunity to make
inquiries to the officers and directors of the Company and further that he has
been provided full access to such information.
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS
PERMITTED TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE
SUCH AN INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS
INVESTMENTS BE DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal Revenue Code
with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of such person's purchase of the Shares
exceeds $1,100,000;
(6) A natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current year;
<PAGE>
(7) A trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited investors (as
defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
nonaccredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to investments
in limited partnerships either alone or with its Purchaser Representative,
if any; and
(2) The Investor has been provided access to all relevant documents it desires
or needs; and
(3) The Investor is aware of its limited ability to sell and/or transfer its
Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the entire
investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE
IF A POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally
applicable to all Investors, the Employee Retirement Income Security Act of
1934, as amended ("ERISA"), and the regulations promulgated thereunder by the
Department of Labor impose certain additional suitability standards for
Investors that are qualified pension, profit-sharing or stock bonus plans
("Benefit Plan Investor"). In considering the purchase of Shares, a fiduciary
with respect to a prospective Benefit Plan Investor must consider whether an
investment in the Shares will satisfy the prudence requirement of Section
404(a)(1)(B) of ERISA, since there is not expected to be any market created in
which to sell or otherwise dispose of the Shares. In addition, the fiduciary
must consider whether the investment in Shares will satisfy the diversification
requirement of Section 404(a)(1)(C) of ERISA.
<PAGE>
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
sale of the Shares and that it will not sell, pledge,
assign or transfer or offer to sell, pledge, assign or transfer any of its
Shares without an effective registration statement under the Securities Act, or
an exemption there from and an opinion of counsel acceptable to the Company that
registration under the Securities Act is not required and that the transaction
complies with all other applicable Federal and state securities or Blue Sky
laws.
<PAGE>
Integra Ventures, Inc.
(A Nevada Corporation)
Subscription Documents
February 27, 1997
INSTRUCTION FOR COMPLETION:
In connection with your subscription for Integra Ventures, Inc. (the
"Company"), enclosed herewith are the following documents which must be properly
and fully completed and signed:
1. INVESTMENT AGREEMENT. Fully completed and signed. Please make your
check payable to the Company. (Note to partnerships who wish to subscribe: each
general partner of the partnership must fully complete and sign the Investment
Agreement).
- ----------------------------------------------------------------
NOTES TO SUBSCRIBERS:
(a) Please indicate on the Subscription Agreement and the
Confidential Purchaser Questionnaire how the Units are to be held (e.g. joint
tenants with rights of survivorship, tenants by the entireties, etc.)
(b) Please return Subscription Documents and checks to the Company at
P.O. Box 669, Palm Beach, FL 33480. Checks should be made payable to the Integra
Ventures, Inc.
(c) Additional copies of the required forms are available from the
Company at P.O. Box 669, Palm Beach, FL 33480, or by calling the Company at
(407) 833-5092.
<PAGE>
INVESTMENT SUBSCRIPTION AGREEMENT
To: Integra Ventures, Inc.
P.O. Box 669
Palm Beach, FL 33480
Gentlemen:
You have informed me that the Company is offering shares of the
Company's common stock at a price of $0.01 per share.
1. Subscription. Subject to the terms and conditions of this
Subscription Agreement (the "Agreement"), the undersigned hereby tenders this
subscription, together with the payment (in cash or by bank check in lawful
funds of the United States) of an amount equal to $0.01 per Share, and the other
subscription documents, all in the forms submitted to the undersigned.
2. Acceptance of Subscription: Adoption and Appointment. It is
understood and agreed that this Agreement is made subject to the following terms
and conditions:
(a) The Company shall have the right to accept or reject
subscriptions in any order it shall determine, in whole or in part, for any
reason (or for no reason).
(b) Investments are not binding on the Company until accepted by
the Company. The Company will refuse any subscription by giving written notice
to the purchaser by personal delivery or first-class mail. In its sole
discretion, the Company may establish a limit on the purchase of Units by a
particular purchaser.
(c) The undersigned hereby intends that his signature hereon
shall constitute an irrevocable subscription to the Company of this Agreement,
subject to a three day right of rescission for Florida residents pursuant to
Section 517.061 of the Florida Securities and Investor Protection Act. Each
Florida resident has a right to withdraw his or her subscription for Units,
without any liability whatsoever, and receive a full refund of all monies paid,
within three days after the execution of this Agreement or payment for the Units
has been made, whichever is later. To accomplish this withdrawal, a subscriber
need only send a letter or telegram to the Company at the address set forth in
this Agreement, indicating his or her intention to withdraw. Such letter or
telegram should be sent and postmarked prior to the end of the aforementioned
third day. It is prudent to send such letter by certified mail, return receipt
requested, to ensure that is received and also to evidence the time when it was
mailed. If the request is made orally (in person or by telephone) to the Company
a written confirmation that the request has been received should be requested.
Upon satisfaction of the all the conditions referred to herein,
copies of this Agreement, duly executed by the Company, will be delivered to the
undersigned.
3. Representations and Warranties of the Undersigned. The undersigned
hereby represents and warrants to the Company as follows:
<PAGE>
(a) The undersigned (I) has adequate means of providing for his
current needs and possible personal contingencies, and he has no need for
liquidity of his investment in the Company; (ii) is an Accredited Investor, as
defined below, or has the net worth sufficient to bear the risk of losing his
entire investment; and (iii) has, alone or together with his Purchaser
Representative (as hereinafter defined), such knowledge and experience in
financial matters that the undersigned is capable of evaluating the relative
risks and merits of this investment.
"Accredited Investors" include: (I) accredited investors as defined in
Regulation D under the Securities Act of 1933, as amended ("Reg. D") i.e., (a)
$1,000,000 in net worth (including spouse) or (b) $200,000 in annual income for
the last two years and projected for the current year; and (ii) the Company or
affiliates of the Company.
"Non-Accredited Investors" are all subscribers who are not "Accredited
Investors."
All investors must have either a preexisting personal or business
relationship with the Company or any of its affiliates, or by reason of their
business or financial experience (or the business or financial experience of
their unaffiliated professional advisors) would reasonably be assumed to have
the capacity to protect their own interests in connection with this investment.
Each subscriber must represent that he is purchasing for his own account not
with a view to or for resale in connection with any distribution of the Units.
(b) The address set forth in his Purchaser Questionnaire is his true
and correct residence, and he has no present intention of becoming a resident of
any other state or jurisdiction.
(c) The undersigned acknowledges that if a "Purchaser Representative",
as defined in Regulation D, has been utilized by the undersigned, (I) the
undersigned has completed and executed the Acknowledgment of Use of Purchaser
Representative; (ii) in evaluating his investment as contemplated hereby, the
undersigned has been advised by his Purchaser Representative as to the merits
and risks of the investment in general and the suitability of the investment for
the undersigned in particular; and (ii) the undersigned's Purchaser
Representative has completed and executed the Purchaser Representative
Questionnaire.
(d) The undersigned has received and read or reviewed with his
Purchaser Representative, if any, and represents he is familiar with this
Agreement, the other Subscription Documents and the Memorandum accompanying
these documents. The undersigned confirms that all documents, records and books
pertaining to the investment in the Company and requested by the undersigned or
his Purchaser Representative have been made available or have been delivered to
the undersigned and/or the undersigned's Purchaser Representative.
(e) The undersigned and/or his Purchaser Representative have had an
opportunity to ask questions of and receive answers from the Company or a person
or persons acting on its behalf, concerning the terms and conditions of this
investment and the financial condition, operations and prospects of the Company.
(f) The undersigned understands that the Units have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
or any state securities laws and are instead being offered and sold in reliance
on exemptions from registration; and the undersigned further understands that he
<PAGE>
is purchasing an interest in a Company without being furnished any offering
literature or prospectus other than the material furnished hereby.
(g) The Units for which the undersigned hereby subscribed are being
acquired solely for his own account, and are not being purchased with a view to
or for the resale, distribution, subdivision, or fractionalization hereof. He
has no present plans to enter into any such contract, undertaking, agreement or
arrangement. In order to induce the Company to sell and issue the Units
subscribed for hereby to the undersigned, it is agreed that the Company will
have no obligation to recognize the ownership, beneficial or otherwise, of such
Units by anyone but the undersigned.
(h) The undersigned has received, completed and returned to the
Company the Purchaser Questionnaire relating to his general ability to bear the
risks of an investment in the Company and his suitability as an investor in a
private offering; and the undersigned hereby affirms the correctness of his
answers to such Confidential Purchaser Questionnaire and all other written or
oral information concerning the undersigned's suitability provided to the
Company by, or on behalf of, the undersigned.
(I) The person, if any, executing the Purchaser Representative
Questionnaire, a copy of which has been received by the undersigned, is acting
and is hereby designated to act as the undersigned's Purchaser Representative in
connection with the offer and sale of the Units to the undersigned. This
designation of a Purchaser Representative was made with the knowledge of the
representations and disclosures made in such Purchaser Representative
Questionnaire and other Subscription Documents.
(j) The undersigned acknowledges and is aware of the following:
(i) That there are substantial restrictions on the
transferability of the Units and the Units will not be, and investors
in the Company have no rights to require that, the Units be registered
under the Securities act; the undersigned may not be able to avail
himself of certain of the provisions of Rule 144 adopted by the
Securities and Exchange Commission under the Securities Act with
respect to the resale of the Units and, accordingly, the undersigned
may be required to hold the Units for a substantial period of time and
it may not be possible for the undersigned to liquidate his investment
in the Company.
(ii) That no federal or state agency has made any finding or
determination as to the fairness of the offering of Units for
investment or any recommendation or endorsement of the Units.
(1) The approximate or exact length of time that he will be
required to remain as owner of the Units.
(2) The prior performance on the part of the Company or any
Affiliate (as defined in Rule 405 under the Securities Act), or
its associates, agents, or employees or of any other person, will
in any way indicate the predictable results of the ownership of
the Units or of the overall Company.
(3) Subscriptions will be accepted in the order in which
they are received.
<PAGE>
(iv) That the Company shall incur certain costs and expenses
and undertake other actions in reliance upon the irrevocability
of the subscription (following the three day rescission period
described in Paragraph 2(C) of this Agreement) for the Units made
hereunder.
The foregoing representations and warranties are true and accurate as of
the date of delivery of the Funds to the Company and shall survive such
delivery. If, in any respect, such representations and warranties shall not be
true and accurate prior to the delivery of the Funds pursuant to Paragraph 1
hereof, the undersigned shall give written notice of such fact to his Purchaser
Representative, if any, specifying which representations and warranties are not
true and accurate and the reasons therefor, with a copy to the Company and
otherwise to give the same information to the Company directly.
4. Indemnification. The undersigned acknowledges that he understands
the meaning and legal consequences of the representations and warranties
contained in Paragraph 3 hereof, and he hereby indemnifies and holds harmless
the Company, agents, employees and affiliates, from and against any and all
losses, claims, damages or liabilities due to or arising out of a breach of any
representations(s) or warranty(s) of the undersigned contained in this
Agreement.
5. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgment or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to him under
federal or sate securities laws.
6. Transferability. The undersigned agrees not to transfer or assign
this Agreement, or any of his interest herein. Further, an investor in the Units
pursuant to this Agreement and applicable law, will not be permitted to transfer
or dispose of the Units unless they are registered or unless such transaction is
exempt from registration under the Securities Act or other securities laws and
in the case of the purportedly exempt sale, such investor provided (at his own
expense) an opin ion of counsel reasonably satisfactory to the Company that such
exemption is, in fact available.
7. Revocation. The undersigned acknowledges and agrees that his
subscription for the Units made by the execution and delivery of this Agreement
by the undersigned is irrevocable and subject to the three day right of
rescission in Florida described in Section 2(C) herein, and that such
subscription shall survive the death or disability of the undersigned, except as
provided pursuant to the blue sky laws of the states in which the Units may be
offered, or any other applicable state statutes or regulations.
8. Miscellaneous.
(a) All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the undersigned at his address set forth
below and to
(b) Notwithstanding the place where this Agreement may be executed by any
of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed in accordance with and shall be govern by
the laws of the State of Florida.
(c) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof any may be amended only by
writing executed by all parties.
<PAGE>
(d) This Agreement shall be binding upon the heirs, estates, legal
representatives, successors and assigns of all parties hereto.
(e) All terms used herein shall be deemed to include the masculine and the
feminine and the singular and the plural as the context requires.
<PAGE>
INTEGRA VENTURES, INC. .
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Accredited |_|
Non Accredited |_|
Number of Shares Subscribed for:
Amount tendered at $0.01 per Share:
Date: __________________________
---------------------------- -----------------------------
(Signature of Subscriber) (Signature of Spouse, or joint
tenant, if any)
- ----------------------------- -----------------------------
(Printed Name of Subscriber) (Printed Name of Spouse, or
other joint tenant, if any)
- ----------------------------- -----------------------------
(Address) (Address)
- ----------------------------- ----------------------------
- ----------------------------- ----------------------------
(Social Security Number) (Social Security Number)
EXHIBIT 4.2
- --------------------------------------------------------------------------------
OFFERING MEMORANDUM
- --------------------------------------------------------------------------------
Platinum and Gold, Inc.
(A Nevada Corporation)
Offering Memorandum Dated January 1, 1999
984,000 Shares
Platinum and Gold, Inc., a Nevada corporation (the "Company"), is
offering on a "best efforts, no minimum basis" up to a maximum of 984,000 shares
of common stock ("Shares"), $.001 par value, at $1.00 per share. Since there is
no minimum, no proceeds will be held in an escrow account and all funds will be
immediately available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company intends to apply for inclusion of the Common Stock on the
Over the Counter Electronic Bulletin Board. There can be no assurances that an
active trading market will develop, even if the securities are accepted for
quotation.
Prior to this offering, there has been no public market for the
common stock of the Company. The price of the Shares offered hereby was
arbitrarily determined by the Company and does not bear any relationship to the
Company's assets, book value, net worth, results of operations or any other
recognized criteria of value. For additional information regarding the factors
considered in determining the offering price of the Shares, see "Risk Factors -
Arbitrary Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR
SALE, ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL,
CANCELLATION OR MODIFICATION OF THE OFFER, WITHOUT NOTICE. THE
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<PAGE>
COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE
PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see
"Risk Factors"). Investors should carefully review the entire Memorandum and
should not invest any funds in this Offering unless they can afford to lose
their entire investment. In making an investment decision, investors must rely
on their own examination of the issuer and the terms of the Offering, including
the merit and risks involved.
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY
SECTIONS 4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION
PROVISION. PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO
ANY LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE
COMMISSION DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR
DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT
OF AN ALABAMA PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MAY NOT
2
<PAGE>
EXCEED TWENTY (20%) PERCENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF
PRINCIPAL RESIDENCE, FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT
ACT OR EXEMPTION THEREFROM.
NOTICE TO ARIZONA RESIDENTS
SUBJECT TO THE PROVISIONS OF ARIZONA ADMINISTRATIVE CODE R14-4-140,
THESE SECURITIES MAY BE OFFERED AND SOLD BY THE ISSUER ONLY TO ACCREDITED
INVESTORS AS DEFINED IN ARIZONA ADMINISTRATIVE CODE R14-4-126 AND MAY BE
RE-OFFERED AND SOLD WITHIN ARIZONA FOR A THREE YEAR PERIOD ONLY TO ACCREDITED
INVESTORS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR THE ARIZONA CORPORATION COMMISSION, NOR
HAVE THEY PASSED UPON THE MERITS OF OR OTHERWISE APPROVED THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT
IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
3
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THE OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE
HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES
ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA.
IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE
PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE
BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR
WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED
TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA
SECURITIES ACT OF 1973, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION SET FORTH IN SECTION 9(m) OF SUCH ACT AND THE SECURITIES CANNOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A
TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY AN NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES) EQUAL TO AT
LEAST THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN NO EVENT LESS THAN
SEVENTY-FIVE THOUSAND ($75,000) DOLLARS OR (ii) A NET
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<PAGE>
WORTH (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES OF TWO (2) TIMES HIS
INVESTMENT BUT IN NO EVENT LESS THAN THIRTY THOUSAND ($30,000) DOLLARS AND A
GROSS INCOME OF THIRTY THOUSAND ($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTY
THOUSAND ($40,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND AUTOMOBILES]
AND A MINIMUM ANNUAL GROSS INCOME OF FORTY THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY AN NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PERCENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT),
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
10520(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUTES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND
SECURITIES ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN
SECTION 11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY
NOT BE REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A
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<PAGE>
SECURITY, OR IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH
OF AT LEAST FIFTY THOUSAND ($50,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS
AND AUTOMOBILES] AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAX YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS [AS COMPUTED ABOVE].
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER
THAT ACT OR EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENTS
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION, NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NOR HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
THERE IS NO ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
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<PAGE>
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(B), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI. UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($30,000) DOLLARS AND A NET WORTH OF AT
LEAST THIRTY THOUSAND ($30,000) DOLLARS (EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES) OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTORS NET
WORTH.
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
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<PAGE>
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE
HAS EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF
HOME, FURNISHING AND AUTOMOBILES) OF ONE HUNDRED TWENTY FIVE THOUSAND ($125,000)
DOLLARS AND FIFTY THOUSAND ($50,000) DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES NOT CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT YET BEEN REVIEWED BY THE ATTORNEY
GENERAL PRIOR TO ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
HAS NOT PASSED OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THAT WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATION
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES CT. THE SECURITIES
8
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A HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-
ACCREDITED INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTORS NET
WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE DIRECTOR OF
THE STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS
ADVISED THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION
STATEMENT AND HAS NOT REVIEWED THIS DOCUMENT SINCE THIS DOCUMENT IS NOT REQUIRED
TO BE FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE
COMPANY CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE
MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (2) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE OF
THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY PERSON
WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVE NOTICE BY
LETTER OR TELEGRAM SENT AND POSTMARKED BEFORE THE END OF THE SECOND BUSINESS DAY
AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED ORALLY, WRITTEN
CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS WHO IS A
PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF TWELVE (12)
MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST HAVE EITHER
(i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS [EXCLUDING HOME,
HOME FURNISHINGS AND AUTOMOBILES] AND A MINIMUM ANNUAL GROSS INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST SEVENTY-FIVE
THOUSAND ($75,000) DOLLARS [AS COMPUTED ABOVE], AND MAY NOT INVEST MORE THAN TEN
(10%) PERCENT OF THEIR NET WORTH [EXCLUSIVE OF THE SUBSCRIBER'S HOME, HOME
FURNISHINGS AND AUTOMOBILES].
NOTICE TO SOUTH CAROLINA RESIDENTS
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THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
ONE OR MORE SECURITIES ACTS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSIONER OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47-31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DEPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY-FIVE THOUSAND ($225,000) DOLLARS
[AS COMPUTED ABOVE].
NOTICE TO TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE
AND MAY NOT BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS
MAY PLACE SUCH INVESTOR AND THE ISSUER IN VIOLATION OF THE TEXAS
SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO UTAH RESIDENTS
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON
SECURITIES ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON
HAS NOT REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT
BE SOLD WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
The Company, a Nevada corporation, is a business that centers around
the discovery development, recording and marketing of new talent in the
entertainment industry. Its principal executive offices are located at 12724
N.W. 11th Court, Sunrise, FL 33323.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD
PURCHASE THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT
DECISION, SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER
MATTERS REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
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No Assurance of Profitability To date, the Company has not generated
substantial revenues from operations. The Company's ability to successfully
implement its business plan is dependent upon the completion of this Offering.
There can be no assurance that the Company will be able to develop into a
successful or profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund
its operations and other capital needs for the next 12 months substantially from
the proceeds of this Offering and from the anticipated income from its new and
existing products, but there can be no assurance that such funds will be
sufficient for these purposes. The Company may require additional amounts of
capital for its future expansion, operating costs and working capital. The
Company has made no formal arrangements to obtain future additional financing,
and if required, there can be no assurance that such financing will be
available, or that such financing will be available on acceptable terms.
Dependence on Management The Company's success is principally
dependent on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof.
Arbitrary Offering Price. There has been no prior public market for
the Company's securities. The price to the public of the Shares offered hereby
has been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Lack of Prior Market for Securities of the Company. No prior market
has existed for the securities being offered hereby and no assurance can be
given that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
Forward-Looking Statements. This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including
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such things as capital expenditures (including the amount and nature thereof),
expected sales revenues, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate under the circumstances. However, whether actual results and
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, including the risk factors
discussed in this Memorandum, general economic, market or business conditions,
the business opportunities (or lack thereof) that may be presented to and
pursued by the Company, changes in laws or regulations, and other factors, some
of which are beyond the control of the Company. Consequently, all of the
forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forward-looking statements.
USE OF PROCEEDS
The initial proceeds of this Offering will be used by the Company to
fund its efforts to become a publicly traded company. Expenses in connection
with this effort will include legal fees, transfer agent fees, accounting fees,
state Blue Sky filing fees, Standard & Poor's application fees and other
miscellaneous fees. The remainder of the proceeds will be utilized by the
Company as working capital.
THE COMPANY
Platinum and Gold, Inc., a Nevada corporation, of which Platinum and
Gold Recording & Publishing Company is a wholly owned subsidiary (hereinafter
collectively referred to as the "Company" and/or "Platinum and Gold") is a
business that centers around the discovery development, recording and marketing
of new talent in the entertainment industry.
Description of Business - Overview
Platinum and Gold Recording and Publishing Company is an
entertainment company involved in the music and film business. The principal
activity of Platinum and Gold is to discover gifted new artists, to work with
them to develop their abilities and ultimately to record them using exceptional
original material. Single compact discs and cassettes will be used to market
them on national and international TV networks through 800 numbers, home
shopping networks, QVC and direct response TV modes. This will generate profits
for Platinum and Gold and should create a pre-sold market for major labels.
Artists contract directly with Platinum and Gold. The Company then records them
with original top 100 pop material, manufactures the recorded material into
compact disc singles and cassette singles and then distributes to the public via
satellite, cable and national TV networks through 1-800 buy-direct response
telephone numbers.
The Company's strategy for marketing growth revolves around multiple
autonomous major labels with central financial controls and support functions.
By joint-venturing these activities for manufacturing, distribution and finance
of albums, Platinum and Gold will be able to launch new artists quickly and thus
capture a greater market share with limited delay. Artists will record original
material for launch by the Company through worldwide TV direct response 800
numbers.
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Platinum and Gold knows that the development of new talent with
international mass-market appeal is the key to obtaining market share and
profitability. The Company considers the main sources of international popular
repertoire to be the United Kingdom, Italy, Germany, Switzerland, Brazil,
Israel, Russia, Poland, Spain, Australia and the United States. The Thai music
market bought pop music to the tune of billions of dollars in 1997. The Company
has done extensive research and has established numerous contacts worldwide. The
Company plans to further develop these relationships by forwarding literature
about the Company to these individuals and organizations. The Company expects
that several will become international talent scouts for Platinum and Gold.
The Company's first single is slated to be launched in January 1999.
The single, containing songs titled "If Only" and "Touch Me", will be released
for sale on national and international TV 800 numbers, and is expected to
strengthen ties between the Company and an undisclosed major record label upon
recording of the full album. The Company also plans to eventually profit from
re-releases, greatest hits and compilation albums.
Executive Summary
In the next full year the Company intends to develop two new
full-length compact discs containing all original music.
The Company's keys to success and critical factors for the next year are:
o Product development.
o Retail sales through Direct Response Toll Free Shopping
o Sales to dealers in volume.
o Financial control and cash flow planning.
Through its independent research, Platinum and Gold estimates that by
presenting the public with entertainment suited for all age groups through
infomercials, the Home Shopping Network (QVC), toll-free numbers and
mass-marketing, it has the ability to sell hundreds of thousands of records in a
short period of time.
Objectives
3. To give Platinum and Gold the market presence needed to support
marketing and sales and to attract potential suppliers who can
provide new sources of products and services for the Company to offer
its customers.
To produce 10 new compact discs and to initiate contracts with 10 new
artists by the end of calendar year 1999.
5. To control expenditures to maximize net income.
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Mission
Platinum and Gold intends to provide a new innovative musical,
theatrical and publishing concept to the public. Platinum and Gold will provide
a new approach to the music theater and publishing community by utilizing
contemporary sounds and by introducing up and coming international stars. The
Company will target not only mature listeners, but also hopes to spark interest
in a younger and hipper crowd.
Keys to Success
The keys to success in the entertainment industry are:
o Marketing; dealing with promotional channels on cable TV, finding the right
networks to sell product to the public --- creating a pre-sold market for major
label joint ventures.
o Product quality; creating product with state-of-the-art technology, dynamic
new talent and backing them with top name musicians.
o Management; key personnel experienced in product research and development and
marketing in the music industry.
o Create a pre-sold, pre-tested market for major labels.
Company Summary
Singles:
The "If Only" and "Touch Me" single was recorded in Nashville, TN,
with the help of John Mattick who has worked with such groups as Alabama, Sawyer
Brown, and the Righteous Brothers. He has arranged and produced for Dirty
Dancing, Michael Jackson, Johnny Lee, Andy Reiss, and Reba McIntire. Andy Reiss
plays electric guitar and has also played for Reba McIntire. Dave Fowler plays
bass and has played for Lori Morgan and Dottie West. Rick Lonow plays drums and
has played with Bellami Brothers. Etta Britt is a back-up singer on the single
and has performed with Englebert Humperdink. Larry Hanson plays acoustic guitar
and has played for both Alabama and Righteous Brothers. Chris Hinson who works
with percussion and engineering has worked closely with Clarence Clemmons and DJ
Jazzy Jeff, arranging, writing and performing original music.
Television Station
Platinum and Gold also plans to explore the possibility of a talk
show based in Florida. In 1980 the 3 commercial networks' combined broadcast was
less than 100 hours of programming a week. Today there are 6 commercial
broadcast networks and over 150 cable channels plus satellite needing to fill up
24 hours of every day with programs. This adds up to over 20,000 hours of
content per week. A half-hour prime time series can cost over $1 mm per episode
and news magazines and talk shows with talent are high on the networks' wish
lists. However, variety shows containing new talent no longer exist although
they have remained comparatively inexpensive to produce. The Company feels that
by introducing its talent in this medium, it can boost both record and concert
ticket sales.
Broadcast Quality Films and Videos
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The Company plans to explore the feasibility of producing high value,
production broadcast quality, full-length feature films for global distribution.
The Company plans to test the market with its first film currently in production
phase. "Betrayal Times Two" is a drama which embraces the same murder spanning
two lifetimes. The Company seeks distribution agreements with Blockbuster as
well as entertainment companies such as: Time Warner (HBO), Triborough
entertainment, MTV networks, Selkirk Communications and Playboy International,
as well as over fifty distributors throughout the world.
The Company prides itself on the fact that it maintains a friendly
and fair work environment, which respects diversity, new ideas, and hard work.
Management believes that this environment will be conducive to creativity and
success.
The Company's strategy consists of:
o A commitment to producing top-quality entertainment for the family --- plus
individuals in growing markets
o A focus on creating original material and programming, for which Platinum
and Gold plans to retain all copyrights and distribution rights
o An emphasis on exploiting new video movie and music outlets and overseas
talent
o A commitment to minimizing financial risk by pre-financing a minimum of 80%
of production costs through pre-sales and co-productions
The Company will carefully select projects with universal appeal
which meet the standards of worldwide markets, which will enhance international
sales. The Company's distribution and marketing division plans to sell original
movies to the television and home video market in approximately 102 countries.
Platinum and Gold plans to exhibit at trade shows including MIP-TV (France),
NATPE (United States), Monte Carlo, and MIP ASIA (Hong Kong)
Film Production and Distribution
An integral part of Platinum and Gold's business will be
specialization in the production of movies strictly for the home video,
pay-per-view and cable television and satellite audiences. The Company will also
specialize in the acquisition and worldwide license, sale or distribution of
distribution rights to independently produced feature films in a wide variety of
genres including top-notch action, comedy, drama, foreign language, science
fiction and thrillers. The Company's goal is to become increasingly active in
acquiring distribution rights (both domestic and foreign), booking motion
pictures with theatrical exhibitors, arranging for the manufacturer of release
prints from the film negative, and promoting such motion pictures with
advertising and publicity campaigns through the efforts of the entire Company.
Platinum and Gold has already begun to act as a foreign sales agent,
licensing distribution rights in markets outside the United States to
independently produced films which are fully financed and owned by others, in
exchange for a sales agency fee. In addition to the production of motion
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pictures and distribution in the United States, substantial revenues are
possible from international exploitation of the Company's motion pictures.
International revenues of motion picture distributors from filmed entertainment
grew from $4.7 billion in 1989 to $8.7 billion in 1996. The growth has been
attributed to worldwide acceptance of and the demand for motion pictures
produced in the US, the privatization of foreign television industries, growth
in the number of foreign households with video cassette players and growth in
the number of foreign television screens.
In a number of foreign countries, as in the United States, the film
(and in some cases the entertainment) industry is dominated by a small number of
companies, often large, diversified companies with production and distribution
operations. However, like in the United States, in most of such countries there
are also smaller, independent, motion picture production and distribution
companies. Foreign distribution companies not only distribute motion pictures
produced in their countries or regions but also films licensed or sub-licensed
from United States production companies and distributors. Additionally, film
companies in many foreign countries produce films not only for local
distribution, but also for export to other countries, including the United
States.
While some foreign language films, such as Like Water For Chocolate,
Il Postino (The Postman) and Antonia's Line, and foreign English-language films,
such as Wings of the Dove, The English Patient, Shine, Four Weddings and a
Funderal, The Crying Game and Crocodile Dundee appeal to a wide U.S. audience,
most foreign language films distributed in the United States are released on a
limited basis as such films draw a specialized audience for which the appeal of
such films has decreased recently.
Home Video
Home Video distribution consists of the promotion and sale of
videocassettes to local, regional and national video retailers which rent or
sell videocassettes to consumers for home viewing. Most films are initially made
available in videocassette format at a wholesale price of approximately $50 to
$75 per videocassette and are sold at that price primarily to wholesalers who
then sell to video rental stores at a price of approximately $75 to $105 per
videocassette for rental of the cassettes to consumers. Following the initial
marketing period, selected films may be remarketed at a wholesale price of $ 10
to $15 or less for sale to consumers. These "sell-through" arrangements are used
most often with films that will appeal to a broad marketplace or to children. A
few major releases with broad appeal may be initially offered by a film company
at a price designed for sell-through rather than rental when it is believed that
the ownership demand by consumers will result in a sufficient level of sales to
justify the reduced margin on each cassette sold. Typically, owners of films do
not share in rental income, however, video distributors are beginning to enter
into revenue sharing arrangements with certain retail stores in some
circumstances. Under such arrangements, videocassettes are sold at a reduced
price to video rental stores (usually $8 to $10 per videocassette) and a
percentage of the rental revenue is then shared with the owners (or licensors)
of the films.
Home video arrangements in international territories are similar to
those in domestic territories except that the wholesale prices may differ
significantly. Television rights for films initially released theatrically are,
if such films have broad appeal, generally licensed first to
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pay-per-view for an exhibition period within six to nine months following
initial domestic theatrical release, then to pay television approximately 12 to
15 months after initial domestic theatrical release, thereafter in certain cases
to network television for an exhibition period, and then to pay television
again. These films are then syndicated to either independent stations or basic
cable outlets.
Pay-per-view allows subscribers to pay for individual programs.
Pay television allows cable television subscribers to view such
services as HBO/Cinemax, Showtime/The Movie Channel, Encore Media Services or
others offered by their cable system operators for a monthly subscription fee.
Pay-per-view and pay television is now delivered not only by cable,
but also by satellite transmission and films are generally licensed in both such
media. Certain films which are not initially released in the domestic theatrical
market may "premiere" instead on pay television followed in some limited
circumstances by theatrical release.
Groups of motion pictures are often packaged and licensed as a group
for exhibition on television over a period that extends beyond five years from
the initial domestic theatrical release of a particular film. Motion pictures
are also licensed and "packaged" by producers and distributors for television
broadcast in international markets by government owned or privately owned
television studios and networks. Pay television is less developed outside the
U.S., but is experiencing significant international growth. The prominent
foreign pay television services include channel Premiere, STAR TV, British Sky
Broadcasting and the international operations of several U.S. cable services
including HBO, the Disney Channel and Turner Broadcasting.
Motion Picture Distribution By The Company - International Distribution
The Company generally participates annually with a sales office at
all three major film markets (the American Film Market, the Cannes Film Festival
and MIFED), as well as the major television (NATPE, MIP, MIPCOM) and video
(VSDA) markets. The Company may also, from time to time, engage independent
representatives to assist the Company in acquiring and/or licensing motion
picture rights.
With respect to international territories, the Company licenses
distribution rights in various mediums (such as theatrical, video, pay
television, free television, satellite and other rights) to foreign
sub-distributors on either an individual rights basis or grouped in various
combinations of rights (which sometimes includes rights in all media). These
rights are licensed by the Company to numerous sub-distributors in international
territories or regions either on a picture-by-picture basis or, in certain
circumstances, with respect to a number of motion pictures pursuant to output
arrangements. Currently, the most appealing international territories for the
Company are Australia, the Benelux countries, Brazil, Canada, France, Germany,
Italy, Japan, Scandinavia, Spain and the United Kingdom.
The terms of the Company's license agreements with foreign
sub-distributors vary depending upon the territory and media involved and
whether the agreement relates to a single motion picture or multiple motion
pictures. Most of the Company's license agreements will provide that the Company
will receive a minimum guarantee from the foreign sub-distributor with all or a
majority of such minimum guarantee paid prior to, or upon delivery of the film
to the distributor for release in the particular territory. The remainder of any
unpaid minimum guarantee is generally payable at specified intervals after
delivery of the film to the sub-distributor. The minimum guarantee is
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recouped by the sub-distributor out of the revenues generated from exploitation
of the picture in such territory. The foreign sub-distributor retains a
negotiated distribution fee (generally measured as a percentage of the gross
revenues generated from its distribution of the motion picture), recoups its
distribution expenses and the minimum guarantee and ultimately (after recoupment
by the distribution expenses) remits to the Company the remainder of any
receipts in excess of the distributor's ongoing distribution fee.
The Company must rely on the foreign sub-distributor's ability to
successfully exploit the film in order to receive any proceeds in excess of the
minimum guarantee. In certain situations, the Company does not receive a minimum
guarantee from the foreign sub-distributor and instead negotiates terms which
usually result, in effect, in an allocation of gross revenues between the sub-
distributor and the Company. Typically the terms of such an arrangement provide
for the sub- distributor to retain an ongoing distribution fee (calculated as a
percentage of gross receipts of the sub-distributor in the territory), recoup
its expenses and pay remaining receipts in excess of the ongoing distribution
fee to the Company. Alternatively, such as often with respect to video rights,
the terms may provide for a royalty to be paid to the Company calculated as a
percentage of the gross receipts of the sub-distributor from exploitation of the
video rights (without deduction for the sub-distributor's distribution
expenses).
Music Publishing
Michela's debut single in the USA "If Only" and "Touch Me" was
test-marketed in Nashville in 1998, and did extremely well. The "I wanna buy"
margin was a high 95%. These first two singles are expected to draw other
international artists to the Company. Platinum and Gold strives to achieve a
balance between short-term achievements and long-term objectives.
Unlike many industries where assets decline in value and products
have a definable shelf life, the Company's assets, through careful management of
artistic talent, have the ability to grow indefinitely. The potential earning
power of a music catalogue of artists and top 20 compact disks and tapes far
exceeds even initial box office receipts. The Company plans to utilize a portion
of the proceeds of these assets as a base from which the Company will fund and
develop new ventures to ensure that Platinum and Gold's repertoire is constantly
rejuvenated.
The Company expects international success for the Italian diva
"Michela". She has already achieved star status reaching out to audiences across
Europe. Platinum And Gold's rich repertoire of local, regional, international,
and breakthrough artists will strive to deliver several international hits
during 1999. The combination of a diverse talent base will create an expanding
catalogue enabling the Company's music division to gain recognition within the
industry.
Recorded Music
The operating results of a record company, especially in the pop
market, are affected by changing audience tastes and particularly by the record
company's ability to identify, attract and retain new talent that will gain
acceptance in the marketplace quickly. Platinum and Gold believes that its
management has the creative ability to sign and retain artists who will appeal
to popular taste over an extended period of time. Each Platinum and Gold
division has its own artist and repertoire (ALR) staff whose task it is to
identify and sign new artists with potential international appeal and who are
not necessarily known in the US.
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<PAGE>
Contract Terms
Platinum and Gold seeks to contract with its' artists on an exclusive
basis for the marketing of their recordings (both audio and audio-visual) in
return for a percentage royalty on the wholesale or retail selling price of the
recording. The Company will seek to obtain rights on a worldwide basis. The
Company seeks to obtain rights to exploit products delivered by the artists for
the life of the product's copyright.
Distribution on the Internet
The Company has established a board level task force to develop a
global strategy for distribution services on the Internet and is monitoring all
developments in internet distribution very closely, in particular the on-line
delivery of music. The Company will have a number of websites which may be used
for marketing purposes.
New Technology
Platinum and Gold has Digital Versatile Disc (DVD) capability. DVD
provides for digital encoding and reproduction of video and audio signals on
disc.
Trademarks
Platinum and Gold registers its major trademarks and trade names in
all instances where the Company believes it is necessary for the protection of
its rights.
Competition
The success of Platinum and Gold's music business depends on, among
other things, the skill and creativity of the Company's staff and on its
relationship with its artists. While Platinum and Gold promotes an environment
of creative freedom, it also structures goals and time schedules with its
artists to ensure efficiency. It is anticipated that test marketing will be done
pre-recording in most cases. This will ensure an efficient use of the Company's
resources. The ability of Platinum and Gold to attract talent depends upon the
Company's success on its first few endeavors. For this reason, the Company is
making every effort to put its best foot forward.
Industry Sales
Pop music grew 18% over 1996 in 1997. Sales in North America improved
25% in 1997. Sales in the rest of the world increased 19% in 1997 due to the
success of several international artists, most notably in Brazil, Mexico and
Australia.
Letters of Intent Activities
The Company has already entered into letters of Intent with the
following new recording artists:
Michela Dalla Pozza Italian recording artist
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<PAGE>
Steve Jordan USA recording artist
Heather Craig USA recording artist
Kari Kimmel USA recording artist
Carol Neal (piano) USA recording artist
These artists have already made an indelible impression on small
audiences around the globe. Platinum and Gold has contacts with songwriters and
arrangers that have been an inspiration to Alabama, Gloria Estefan, Sawyer
Brown, Reba McEntire and others. The Company's first joint venture with a major
label is expected in February 1999. The joint-venture will most likely be based
on a single - 2 song advance CD that sells up to 1 million units on national and
international TV for each artist the Company represents. This will provide a
heavy retail test market focus for record labels. Record labels can then begin
to build an album through performances at various conventions and "first act"
concerts.
MANAGEMENT
The following sets forth the names of the company's officers and directors:
Carol Neal President/Treasurer
Carol Neal is a leading musician who knows the value of working her
audience - and they love it! Carol gives new meaning to the "club entertainment"
industry. She brings warmth and a personal touch to her audiences. The results
are unsurpassable. She fills a room because of the way she brings her following
everywhere she performs; audience involvement, sincere concern for talent and an
innate knowledge of what people need to hear and feel. Carol is gracious. She is
versatile from country to top 30's, 40's, 50's, 60's, 70's, and 80's to
classical. Carol has studied music therapy and has recorded an album which sold
in the thousands through media. Ms Neal has worked on a Nashville single in
producing and publishing.
1962 - 1964 Overseas
1962 - 1975 New York State and the New England states
1975 - 1980 Florida during the winters, Provincetown & Cape Cod during
the summers
1975 to 1976 Bridge Restaurant & Lounge Ft. Lauderdale FL
1978 to 1979 Helm Restaurant & Lounge Ft. Lauderdale FL
1978 to 1980 Americos Restaurant Ft. Lauderdale FL
1980 to 1981 Polynesian Village Ft. Lauderdale FL
1981 to 1982 Jimmy Januarys Restaurant Ft. Lauderdale FL
1982 to 1983 Marandolas Restaurant Ft. Lauderdale FL
Tivoli Gardens (entertainment dir.) Ft. Lauderdale FL
1984 Ocean Ranch Ft. Lauderdale FL
Bridge Hotel Boca Raton FL
1985 to 1986 The Toast of the Town North Miami FL
1986 to 1988 N.Y. Steak House North Miami FL
Inn on the Bay North Miami FL
Upstairs Lounge at Val Harbour Shops Bal Harbour FL
Breakers Hotel, W. Palm Beach FL
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<PAGE>
J J's Otherside Wilton Manors FL
Fireside Restaurant Ft. Lauderdale FL
Shang-ri-la Ft. Lauderdale FL
Channel 4 TV Montage Miami FL
1989 Toast Restaurant North Miami FL
Upper Deck Cafe Boca Raton FL
Studley's W. Palm Beach FL
With the reputation and relationships Carol has established within
the industry, she will attract talent to the Company as well as add legitimacy
to the Company in its development stage. She is mature, responsible and
knowledgeable concerning royalties, licensing and foreign sales. She is
wellacquainted with several writers of original material. She will work closely
with music lawyers concerning agreements, policy documents, copyright statues
and related contracts.
Valerie Peters Vice President
Val has extensive experience in the sales and research and
development fields with years of retail experience with mass merchandisers all
over the U. S. She will oversee day to day operations, network new talent to all
levels of the entertainment industry and help manage Platinum & Gold's artists.
She will also establish relationships with radio and television networks
nationally and internationally. She has had experience as an executive officer
for a non-profit entertainment organization. A substantial portion of the
Company's revenues were derived from talent shows she, as part of a team,
negotiated and developed. She also coordinated all fund-raising to develop
successful productions.
1981- 1998 Val was owner and manager of Sunglass Haven. There she developed and
implemented marketing and communication strategies for trade shows, wholesaled
and managed internet traffic. She managed employees, administered local
joint-ventures, partnerships and trade show events. She personally invented
internet campaigns to create awareness of products and conducted situational
demographics analysis for larger distribution of products and services.
1975 -1981 Ms. Peters was a restaurant entrepreneur achieving a growth rate of
five percent per year. Her field of expertise also includes banking and
accounting and management of the office.
Louise A. Cavell Secretary
Louise has an extensive background in new business development. She
has supervised international transactions from the letter of intent stage to
contract signing and has helped establish joint-ventures with other companies
and distributors. She is has negotiated contracts relating to advertising
campaigns and plays an active role in overall office and staff management as
well as research and development.
1987-1988 Louise was Vice President of Sunglass Haven where she owned and
operated a chain of retail concessions at boat shows and trade shows throughout
the country. She developed programs and entertainment to help stimulate sales
for top name sunglasses, such as Rayban, Serengeti, Oceanware, Hobie and others.
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<PAGE>
The level of consumer buying activity was quite susceptible to area
activity including the intensity and quality of local retail competition. A
great deal of research and development was done by Ms Cavell for successful
consumer behavior patterns in each geographical area.
1981- 1987 Louise became President and Owner of LoLo's Pub and Restaurant. She
designed entertaining, imaginative concepts with theme franchising in mind. The
first pub located in South Florida had three distinctive proprietary concepts
that encompassed made to order specialty drinks, country music entertainers and
sports bar. The model facility began to develop an excellent track record for
combining artistic innovation with practical knowledge to produce restaurant
food, beverage and entertainment that were functional, timeless, and exciting.
Glenda Grainger-Miller Director
Glenda Grainger-Miller was co-producer and administrator for
Miller-Reich Enterprises from 1972 until 1994, with over 22 years of production
experience. Her creative ideas and administrative expertise helped her company
to produce numerous award winning Spectaculars, which toured cities throughout
Europe, North and South America and the Carribean.
Ms. Grainger-Miller is a talented singer/actress, who has appeared on
major television network shows such as "The Tonight Show" with Johnny Carson and
the "Mike Douglas Show."
She is currently helping to produce musical shows for attraction such as
Walt Disney World (Orlando), Sun City (South Africa), Fountainebleau Hilton
Resort & Towers (Miami Beach) and artists such as Vikki Carr and Frank Sinatra,
Jr. She provides financial, booking, sales and service consulting for many
artists and venues.
Randy Bernsen Director
Mr. Bernsen was voted one of the top ten unsigned guitarists by JAZZIZ
magazine. He has been in the music industry for 30 years. At age 23, he toured
with Blood, Sweat and Tears. He has since played an active role in the
international music scene and has continued to produce, compose and tour,
offering audiences around the world a unique musical experience.
Mr. Bernsen has traveled extensively and has performed in many European
cities. He toured with world famous pianist Joe Zawinul for 2 years. He has
recently settled in Japan and has established himself there as a
producer/performer/talent scout.
Mr. Bernsen owns and operates a digital studio, where he has composed
and edited music for clients such as Raddison and Motorola.
Margaret Ann Ronayne Director
Ms. Ronayne was the Southeast Regional Promotion Director for Motown
Records for 13 years. Her creative genius has shined through the voices and
talent of recording artists from the 1970's to the 1990's. She has worked as
National Top 40's Promotion Director for Arista Records for the last 7 years.
She has helped to promote artists such as Whitney Houston, Aretha Franklin,
Kenny G, Barry Manilow, Tony Braxton, Puff Daddy and more.
23
<PAGE>
PRINCIPAL SHAREHOLDERS
As of January 1, 1999, the Company had 11,630,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of January 1,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
<TABLE>
<CAPTION>
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Before Offering After Offering
Offering
<S> <C> <C> <C>
Carol Neal 6,000,000 51.6% 47.6%
Valerie Peters 2,000,000 17.2% 15.9%
Loiuse Cavell 2,000,000 17.2% 15.9%
Glenda Grainger-Miller 10,000 00.1% 00.1%
Randy Bernsen 10,000 00.1% 00.1%
Margaret Ann Ronayne 10,000 00.1% 00.1%
- -------------------------------------------------------------------------------
All Officers and 10,030,000 86.2% 79.5%
Directors as a Group
</TABLE>
DESCRIPTION OF SECURITIES
Shares
The Company is hereby offering a "best efforts, no minimum basis" up to
984,000 shares of Common Stock at $1.00 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid
24
<PAGE>
and nonassessable, and all shares to be sold and issued as contemplated hereby,
will be validly authorized and issued, fully paid and nonassessable. The Board
of Directors is authorized to issue additional shares of Common Stock, not to
exceed the amount authorized by the Company's Certificate of Incorporation, on
such terms and conditions and for such consideration as the Board may deem
appropriate without further stockholder action. The above description concerning
the Common Stock of the Company does not purport to be complete. Reference is
made to the Company's Certificate of Incorporation and Bylaws which are
available for inspection upon proper notice at the Company's offices, as well as
to the applicable statutes of the State of Florida for a more complete
description concerning the rights and liabilities of stockholders.
Prior to this offering, there has been no market for the Common Stock of
the Company, and no predictions can be made of the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Stock of the Company in the public market may adversely affect
prevailing market prices, and may impair the Company's ability to raise capital
at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self- underwriting. The Shares will be offered by the Company at the
offering price of $1.00 per share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is
no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
25
<PAGE>
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS
AND PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS
COULD MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR
SHOULD RELY ON SUCH INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
26
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
27
<PAGE>
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited investors
(as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in securities either alone or with its Purchaser Representative, if
any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3) The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE
IF A POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
28
<PAGE>
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of the
offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution or
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
29
<PAGE>
Platinum and Gold, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):___________________________________________________________________
Address of Residence
(if natural
person):_____________________________________________________________________
Address of
Business:___________________________________________________________________
Subscriber's
Telephone
No.:________________________________________________________________________
Subscriber's Social
Security No. or
Tax I.D.
No.:_______________________________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any:
- ----------------------------------------------------------------------------
Date of
Subscription:_______________________________________________________________
Amount of
Subscription:
$--------------------------------------------------------------------------
30
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
Platinum and Gold, Inc.
12724 N.W. 11th Ct.
Sunrise, FL 33323
Phone: (800) 525-8495 Fax: (954) 845-0656
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Regulation D, Section 504 common
stock of Platinum and Gold, Inc., a Nevada corporation (the Company), for a
total consideration of $_________, the receipt and sufficiency of which is
hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of these criteria:
(i) the undersigned is a natural person whose individual net worth or
joint net worth with his spouse, at the time of his purchase,
exceeds $1,000,000 (ONE MILLION DOLLARS); or
(ii) the undersigned is a natural person and had an individual income
in excess of $200,000 (TWO-HUNDRED THOUSAND DOLLARS) in each of
the two most recent years, or jointly with his spouse in excess
of $300,000 (THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least the same
income level in the current year; or
(iii)qualifies as an accredited investor under Regulation D of the
Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
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<PAGE>
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is not anticipated that there
will be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares may bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
32
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
33
EXHIBIT 4.3
PLATINUM AND GOLD, INC.
OFFERING OF NO MORE THAN 50 UNITS OF PLATINUM AND GOLD, INC., AT AN
OFFERING PRICE OF TEN THOUSAND DOLLARS ($10,000) PER UNIT
Platinum and Gold, Inc., a Nevada corporation, of which Platinum and Gold
Recording & Publishing Company is a wholly owned subsidiary (hereinafter
collectively referred to as the "Company" and/or "P&G"), is offering a maximum
of 50 Units for sale at a price of $10,000 per Unit. There is no limitation on
the number of Units a subscriber may purchase. The Company may under certain
circumstances accept subscriptions for partial Units.
Prior to this Offering there has been no public market for the securities
of the Company and there can be no assurance that any such public market for the
securities of the Company will develop subsequent to this Offering. The Offering
price has been determined arbitrarily by the Company and does not necessarily
bear any relationship to the Company's assets, book value, net worth or any
other recognized criteria of value.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL DILUTION TO
PUBLIC INVESTORS. THEY SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD THE
RISK OF LOSS OF THEIR INVESTMENT. SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Discounts and Proceeds to
Price to Public (1) Commissions (2) the Issuer (3)
Per Unit $10,000 $ -0- $10,000
Total Maximum
Offering $500,000 $ -0- $500,000
(1) This offering is made by the Company on a "best efforts" basis, for
a period of 180 days from the date of this Memorandum and may be extended, at
the option of the Company for an additional period or periods not exceeding an
additional 180 days in the aggregate.
(2) No commissions will be paid in connection with sales which are made
directly by the Company. All sales will be made directly by the Company's
principals (officers, directors or employees).
(3) Before deducting certain other cost(s) related to this Offering
payable by the Company including legal, accounting and printing expenses.
The date of this Private Offering Memorandum is July 19, 1999.
<PAGE>
EXPLANATION OF UNIT INTEREST
A Unit shall consist of the following:
A one (1) year Note in the principal amount of $10,000 which shall be
converted into 10,000 shares of Rule 144 Restricted Common Stock of the Company
at the Maturity Date not including interest payable at the Maturity Date in Rule
144 Restricted Common Stock calculated at 9% per annum based on the average
closing price of the stock for 7 days prior to the Maturity Date.
This offering is being conducted pursuant to Section 3(b) of the
Securities Act of 1933, as amended (the "Act"), and Rule 504 of Regulation D
promulgated thereunder ("Rule 504") or other applicable provisions, although the
shares issuable upon conversion of this Note shall be Rule 144 restricted
shares. The Company expects to file for an exemption for shares with the SEC
under Regulation A in the near future. In the event the Company acquires such an
exemption under Regulation A, the Company shall issue Regulation A exempt shares
in lieu of such restricted shares. In addition, upon conversion of this Note,
and after issuance of the Shares, at any time that the Company proposes to file
a Company registration statement on Form S-1 under the Act, each Unit investor
will have certain registration rights more fully defined in this Private
Placement Memorandum.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
TABLE OF CONTENTS
Page No.
Summary of Offering.....................................................15
Risk Factors............................................................16
Use of Proceeds.........................................................17
Business................................................................17
Management..............................................................26
Principal Shareholders..................................................29
Description of the Securities...........................................30
Plan of Distribution....................................................31
EXHIBITS
Financial Data..........................................................A
Subscription Agreement and Investment Representation of Investors.......B
Convertible Note . . . . . . . . . . . . . . . . . . . . . . . . . . . .C
<PAGE>
THE UNITS ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND WILL NOT BE REGISTERED
UNDER THE 1933 ACT, OR QUALIFIED UNDER THE SECURITIES LAW OF ANY STATE AND
THEREFORE CANNOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION AND QUALIFICATION, OR THE AVAILABILITY OF AN EXEMPTION THEREFROM.
THERE IS NO PUBLIC OR OTHER MARKET FOR SUCH UNITS.
THE UNITS OFFERED HEREBY INVOLVE RISK AND SHOULD NOT BE PURCHASED BY ANYONE WHO
CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. (SEE "RISK FACTORS.")
EACH RECIPIENT MUST RELY UPON HIS OR HER OWN REPRESENTATIVE AS TO LEGAL, TAX AND
RELATED MATTERS. THE COMPANY HAS NOT APPLIED AND WILL NOT APPLY FOR A RULING AS
TO ITS TAX STATUS AS A PARTNERSHIP FROM THE INTERNAL REVENUE SERVICE. (SEE "TAX
CONSIDERATIONS.")
THE COMPANY INTENDS TO CONDUCT THE OFFERING THROUGH THE COMPANY IN SUCH A MANNER
THAT A SIGNIFICANT NUMBER OF THE UNITS WILL BE SOLD TO "ACCREDITED INVESTORS" AS
THAT TERM IS DEFINED IN REGULATION D UNDER THE SECURITIES ACT OF 1933. THE
REPRESENTATIONS OF EACH INVESTOR WILL BE REVIEWED TO DETERMINE THE SUITABILITY
OF PROSPECTIVE INVESTORS (PARTICULARLY NONACCREDITED INVESTORS), AND THE COMPANY
WILL HAVE THE RIGHT TO REFUSE A SUBSCRIPTION FOR UNITS IF IN ITS SOLE DISCRETION
THE COMPANY BELIEVES THAT THE PROSPECTIVE INVESTOR DOES NOT MEET THE APPLICABLE
SUITABILITY REQUIREMENT OR THAT THE UNITS ARE OTHERWISE AN UNSUITABLE INVESTMENT
FOR THE PROSPECTIVE INVESTOR.
THE COMPANY SHALL PRIOR TO THE SALE OF ANY SECURITIES ALLOW EACH INVESTOR OR HIS
AGENT THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM ANY PERSON
AUTHORIZED TO ACT ON BEHALF OF THE COMPANY CONCERNING ANY ASPECT OF THE
INVESTMENT AND TO OBTAIN ANY ADDITIONAL INFORMATION (TO THE EXTENT THE COMPANY
POSSESSES SUCH INFORMATION) NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION
CONTAINED IN THIS OFFERING MEMORANDUM. INVESTORS OR THEIR REPRESENTATIVES HAVING
QUESTIONS OR DESIRING ADDITIONAL INFORMATION SHOULD CONTACT CAROL NEAL AT (800)
525-8495.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE ALABAMA
SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS NOT
BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES NOT
<PAGE>
RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON THE
ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN ALABAMA
PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT
OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE, FURNISHINGS AND
AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES ACT AND
MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO ARIZONA RESIDENTS
SUBJECT TO THE PROVISIONS OF ARIZONA ADMINISTRATIVE CODE R14-4- 140, THESE
SECURITIES MAY BE OFFERED AND SOLD BY THE ISSUER ONLY TO ACCREDITED INVESTORS AS
DEFINED IN ARIZONA ADMINISTRATIVE CODE R14-4- 126 AND MAY BE RE-OFFERED AND SOLD
WITHIN ARIZONA FOR A THREE YEAR PERIOD ONLY TO ACCREDITED INVESTORS. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR THE ARIZONA CORPORATION COMMISSION, NOR HAVE THEY PASSED UPON THE
MERITS OF OR OTHERWISE APPROVED THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION
14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE SECURITIES ACT
OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS NOT BEEN
FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE SECURITIES AND
EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION HAS PASSED UPON
THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO THEIR PURCHASE,
APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
<PAGE>
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS UNLAWFUL
TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST THEREIN, OR TO
RECEIVE ANY CONSIDERATION THEREFORE WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN
THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A
TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT OF
1973, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH IN
SECTION 9(m) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED EXCEPT
IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS OTHERWISE IN
COMPLIANCE WITH SAID ACT.
<PAGE>
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES ACT AND MAY
NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY AN NON-ACCREDITED
INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A NET WORTH
(EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES) EQUAL TO AT LEAST THREE
(3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN NO EVENT LESS THAN SEVENTY-FIVE
THOUSAND ($75,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHINGS AND AUTOMOBILES OF TWO (2) TIMES HIS INVESTMENT BUT IN NO EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTY THOUSAND
($40,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND AUTOMOBILES] AND A
MINIMUM ANNUAL GROSS INCOME OF FORTY THOUSAND ($40,000) DOLLARS, OR (ii) A NET
WORTH OF AT LEAST ONE HUNDRED TWENTYFIVE THOUSAND ($125,000) DOLLARS AS COMPUTED
ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY AN NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY (20%)
PERCENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE, FURNISHINGS
THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT), HAVE BEEN
ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREIN.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH
THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION 10520(2)(R) OF TITLE
32 OF THE MAINE REVISED STATUTES. THESE SECURITIES MAY BE DEEMED RESTRICTED
SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE SECURITIES
UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES LAWS OR UNLESS
AN EXEMPTION UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES ACT IN
RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION 11-602(9) OF
SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE REOFFERED FOR
SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR IN A
TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF AT LEAST
FIFTY THOUSAND ($50,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAX YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS [AS COMPUTED ABOVE].
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES ACT AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED WRITTEN
STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX (6)
MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER OCCURS
FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENTS THEREAFTER.
<PAGE>
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE MINNESOTA
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED FOR VALUE
EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION, NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NOR HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
THERE IS NO ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT BE ANY
MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF THESE
SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY STANDARDS AND
MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT. ADDITIONALLY, ALL
PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET WORTH OF AT LEAST
THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY THOUSAND ($30,000)
DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS. THESE
SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR IN A
TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN A TRANSACTION
EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(B), MISSOURI UNIFORM SECURITIES
ACT (RMSO 1969).
THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF MISSOURI.
UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD IN THE
STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER SAID
ACT.
<PAGE>
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A MINIMUM ANNUAL
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS AND A NET WORTH OF AT LEAST THIRTY
THOUSAND ($30,000) DOLLARS (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OR A
NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE OF HOME,
FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY (20%) PERCENT
OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED HEREBY
AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS AFTER
DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A NON-ACCREDITED
INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTORS NET WORTH.
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA SECURITIES ACT AND MAY
NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER
(i) A NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OF TWO HUNDRED
FIFTY THOUSAND ($250,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME,
FURNISHING AND AUTOMOBILES) OF ONE HUNDRED TWENTY FIVE THOUSAND ($125,000)
DOLLARS AND FIFTY THOUSAND ($50,000) DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED OR ENDORSED THE MERITS
OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES NOT CONSTITUTE APPROVAL
OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE DEPARTMENT
OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
<PAGE>
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT YET BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR
TO ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT
OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE IN LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THAT WERE MADE, NOT MISLEADING. IT CONTAINS A
FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE SUMMARIZED
HEREIN.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE NORTH
CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATION NEITHER
RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE ADMINISTRATOR
PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933
AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITED
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTORS NET WORTH.
<PAGE>
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE DIRECTOR OF THE STATE
OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED THAT
THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT AND
HAS NOT REVIEWED THIS DOCUMENT SINCE THIS DOCUMENT IS NOT REQUIRED TO BE FILED
WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY CREATING
THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS
INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN COMMONWEALTH OF
PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE PENNSYLVANIA
SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE, AND RECEIVE
A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY LIABILITY, WITHIN
TWO (2) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE OF THIS WITHDRAWAL
RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY PERSON WHO WISHES TO
EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVE NOTICE BY LETTER OR
TELEGRAM SENT AND POSTMARKED BEFORE THE END OF THE SECOND BUSINESS DAY AFTER
EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED ORALLY, WRITTEN
CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS WHO IS A
PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF TWELVE (12)
MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST HAVE EITHER
(i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS [EXCLUDING HOME,
HOME FURNISHINGS AND AUTOMOBILES] AND A MINIMUM ANNUAL GROSS INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST SEVENTY-FIVE
THOUSAND ($75,000) DOLLARS [AS COMPUTED ABOVE], AND MAY NOT INVEST MORE THAN TEN
(10%) PERCENT OF THEIR NET WORTH [EXCLUSIVE OF THE SUBSCRIBER'S HOME, HOME
FURNISHINGS AND AUTOMOBILES].
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER ONE OR MORE
SECURITIES ACTS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED.
<PAGE>
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSIONER OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES
HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47-31 OF THE SOUTH DAKOTA
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DEPOSED OF FOR
VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SIXTY THOUSAND ($60,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY-FIVE THOUSAND ($225,000) DOLLARS
[AS COMPUTED ABOVE].
NOTICE TO TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR SHALL
NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT BE
REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR SHALL
NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
<PAGE>
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES ACT
AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT REVIEWED
THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD WITHOUT
REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY ITSELF AS
TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNITED
STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED
GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OF
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE OR
AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER,
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR
IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
SUMMARY OF OFFERING
The Company, a Nevada corporation, is a business that centers around the
discovery development, recording and marketing of new talent in the
entertainment industry.
The executive offices of P&G are as follows:
12724 N.W. 11th Court
Sunrise, FL 33323
Telephone: (800) 525-8495
Facsimile: (954) 845-0656
(Original subscription documents and full payment must be received by Company
before stock can be ordered)
<PAGE>
The Offering
Type of security offered............................................ Notes
Offering price per Units............................................ $10,000
Maximum Number of Units Offered.......................................50
Shares Outstanding
Prior to the Offering .......................................11,640,000
After the Maximum Offering (after Note conversion) . .12,140,000
Selected Financial Information
The financial data included in this Memorandum as Exhibit A sets forth
information regarding the Company as of its stated date. A summary of pertinent
financial data relating to the Company is set forth therein.
RISK FACTORS
The purchase of Units offered hereby involves a high degree of risk.
These securities should only be purchased by persons who can afford the risk of
loss of their entire investment. Prior to the purchasing of shares, prospective
investors should carefully consider the following risk factors:
1. P&G is a development stage company with a limited operating history. To
date the Company has minimal revenues from operations and only nominal assets.
See "Financial Statements." The Company faces all the risks inherent in a new
business and there can be no assurance that any of the Company's planned future
activities will be successful. Since the Company was recently organized, it
cannot provide historical information and financial data upon which a
prospective investor can make an informed judgment as to the future prospects of
the Company. The purchase of the securities offered hereby must therefore be
regarded as the placing of funds at a high risk in a new or "start-up" venture
with all the unforeseen costs, expenses, problems and difficulties to which such
ventures are subject. See "Use of Proceeds" and "Business."
2. Without the proceeds of this Offering the Company will have only minimal
capital and will be limited in its operations. If the Offering does not raise a
substantial amount of funds, the Company's capital may prove to be insufficient
to permit substantial operations to commence, other than to a very limited
extent. The Company may receive from this offering maximum net proceeds of
$500,000. Less than the maximum amount may be obtained. If substantially less
than the maximum financing offering is available to the Company, its planned
activities may be materially and adversely affected.
<PAGE>
3. None of the outstanding stock of the Company currently outstanding has
been registered under the Securities Act of 1933, as amended (the "Act"). Common
stock underlying the Units offered herein will be issued pursuant to Regulation
D, and will be "restricted" under the Securities Act of 1933. State securities
laws may also require the placement of transfer restrictions on the securities
purchased herein.
4. The Company is not registered as, and is not required to register as, an
investment company or "mutual fund" and thus is not subject to the extensive
regulation imposed by the Securities and Exchange Commission under the
Investment Company Act of 1940 (the "40 Act"). Accordingly, stockholders will
not be accorded the protections provided by the '40 Act or by the SEC which
enforces those acts and may not be accorded the protection provided by the
Advisers Act.
5. The Articles of Incorporation and/or the Bylaws provide that the
Management may be indemnified against costs and expenses incurred in connection
with, and will not be liable to the stockholders for, any action taken, or
failure to act, on behalf of the Company in connection with the business of the
Company as determined by the Management if not engaged in willful misconduct.
Therefore, a stockholder may have a more limited right of action against the
Management than would be available absent these provisions in the Articles of
Incorporation and/or Bylaws.
6. Management will have broad discretion to utilize the funds of the
company.
USE OF PROCEEDS
The net proceeds to be realized from this Offering will approximate
$500,000 if the Maximum Offering is sold; however, it is likely that less than
the full amount of this offering will be obtained. Management anticipates the
net proceeds less initial expenses payable will be applied to the business of
the Company, providing working capital.
Initial expenses payable consist of: (a) legal, accounting, Blue Sky
compliance, printing costs and transfer agent fees. No other charges or expenses
are expected or anticipated. The balance of the funds will be utilized by the
Management for working capital.
BUSINESS
P&G is a business that centers around the discovery development, recording
and marketing of new talent in the entertainment industry.
Description of Business - Overview
Platinum and Gold Recording and Publishing Company is an entertainment
company involved in the music and film business. The principal activity of
Platinum and Gold is to discover gifted new artists, to work with them to
develop their abilities and ultimately to record them using exceptional original
material. Single and album compact discs and cassettes will be used to market
them on national and international TV networks through 800 numbers, home
<PAGE>
shopping networks, QVC and direct response TV modes. This will generate profits
for Platinum and Gold and should create a pre-sold market for major labels.
Artists contract directly with Platinum and Gold. The Company then records them
with original top 100 pop material, manufactures the recorded material into
compact disc singles and albums and cassette singles and then distributes to the
public via satellite, cable and national TV networks through 1-800 buy-direct
response telephone numbers.
The Company's strategy for marketing growth revolves around multiple
autonomous major labels with central financial controls and support functions.
By joint-venturing these activities for manufacturing, distribution and finance
of albums, Platinum and Gold will be able to launch new artists quickly and thus
capture a greater market share with limited delay. Artists will record original
material for launch by the Company through worldwide TV direct response 800
numbers and websites on the internet which offers convenience, speed, price and
service.
Platinum and Gold knows that the development of new talent with national
and international mass-market appeal is the key to obtaining market share and
profitability. The Company considers the main sources of international popular
repertoire to be the United Kingdom, Italy, Germany, Switzerland, Brazil,
Israel, Russia, Poland, Spain, Australia and the United States. The Thai music
market bought pop music to the tune of billions of dollars in 1997. The Company
has done extensive research and has established numerous contacts worldwide. The
Company plans to further develop these relationships by forwarding literature
about the Company to these individuals and organizations. The Company expects
that several will become international talent scouts for Platinum and Gold. The
Company's first two albums are completed through licensing.
The Company's first single is slated to be launched in January 2000. The
single, containing songs titled "If Only" and "Touch Me", will be released for
sale on national and international TV 800 numbers, and is expected to strengthen
ties between the Company and an undisclosed major record label upon recording of
the full album. The Company also plans to eventually profit from re-releases,
greatest hits and compilation albums.
Executive Summary
In the next full year the Company intends to develop two new full-length
compact discs containing all original music.
The Company's keys to success and critical factors for the next year are:
o Product development.
o Retail sales through Direct Response Toll Free Shopping
o Sales to dealers in volume.
o Financial control and cash flow planning.
<PAGE>
Through its independent research, Platinum and Gold estimates that by
presenting the public with entertainment suited for all age groups through
infomercials, the Home Shopping Network (QVC), toll-free numbers and
mass-marketing, it has the ability to sell hundreds of thousands of records in a
short period of time.
Objectives
6. To give Platinum and Gold the market presence needed to support
marketing and sales and to attract potential suppliers who can provide
new sources of products and services for the Company to offer its
customers.
7. To produce 5-10 new compact discs and to initiate contracts with 5-10
new artists by the end of calendar year 2000.
8. To control expenditures to maximize net income.
Mission
P&G intends to provide a new innovative musical, theatrical and
publishing concept to the public. The Company will provide a new approach to the
music theater and publishing community by utilizing contemporary sounds and by
introducing up and coming national and international stars. The Company will
target not only mature listeners, but also hopes to spark interest in a younger
and hipper crowd. P&G plans to perform a musical "Tribute to Liberace" with
celebrated European entertainer and protege to Liberace, Danny LaRue in May 2000
at the Broward Center for the Performing Arts.
Keys to Success
The keys to success in the entertainment industry are:
o Marketing; dealing with promotional channels on cable TV, finding the right
networks to sell product to the public --- creating a pre-sold market for major
label joint ventures.
o Product quality; creating product with state-of-the-art technology, dynamic
new talent and backing them with top name musicians.
o Management; key personnel experienced in product research and development and
marketing in the music industry.
o Create a pre-sold, pre-tested market for major labels.
o Internet sales -the hottest and most sought after businesses today are
utilizing the internet and by 2000 it will be the best, quickest way to shop.
Company Summary
<PAGE>
Singles:
The "If Only" and "Touch Me" single was recorded in Nashville, TN, with
the help of John Mattick who has worked with such groups as Alabama, Sawyer
Brown, and the Righteous Brothers. He has arranged and produced for Dirty
Dancing, Michael Jackson, Johnny Lee, Andy Reiss, and Reba McIntire. Andy Reiss
plays electric guitar and has also played for Reba McIntire. Dave Fowler plays
bass and has played for Lori Morgan and Dottie West. Rick Lonow plays drums and
has played with Bellami Brothers. Etta Britt is a back-up singer on the single
and has performed with Englebert Humperdink. Larry Hanson plays acoustic guitar
and has played for both Alabama and Righteous Brothers. Chris Hinson who works
with percussion and engineering has worked closely with Clarence Clemmons and DJ
Jazzy Jeff, arranging, writing and performing original music.
Television Station
Platinum and Gold also plans to explore the possibility of a talk show
based in Florida. In 1980 the 3 commercial networks' combined broadcast was less
than 100 hours of programming a week. Today there are 6 commercial broadcast
networks and over 150 cable channels plus satellite needing to fill up 24 hours
of every day with programs. This adds up to over 20,000 hours of content per
week. A half-hour prime time series can cost over $1 mm per episode and news
magazines and talk shows with talent are high on the networks' wish lists.
However, variety shows containing new talent no longer exist although they have
remained comparatively inexpensive to produce. The Company feels that by
introducing its talent in this medium, it can boost both record and concert
ticket sales.
Broadcast Quality Films and Videos
The Company plans to explore the feasibility of producing high value,
production broadcast quality, full-length feature films for global distribution.
The Company plans to test the market with its first film which will be in the
production phase by January to March 2000. "Betrayal Times Two" is a drama which
embraces the same murder spanning two lifetimes. The Company seeks distribution
agreements with Blockbuster as well as entertainment companies such as: Time
Warner (HBO), Triborough entertainment, MTV networks, Selkirk Communications and
Playboy International, as well as over fifty distributors throughout the world.
The Company prides itself on the fact that it maintains a friendly and
fair work environment, which respects diversity, new ideas, and hard work.
Management believes that this environment will be conducive to creativity and
success.
The Company's strategy consists of:
o A commitment to producing top-quality entertainment for the family --- plus
individuals in growing markets, and non-violent action movies
o A focus on creating original material and programming, for which Platinum and
Gold plans to retain all copyrights and distribution rights
<PAGE>
o An emphasis on exploiting new video movie, music outlets and overseas talent
o A commitment to minimizing financial risk by pre-financing a minimum of 80% of
production costs through pre-sales and co-productions
The Company will carefully select projects with universal appeal which
meet the standards of worldwide markets, which will enhance international sales.
The Company's distribution and marketing division plans to sell original movies
to the television and home video market in approximately 102 countries. Platinum
and Gold plans to exhibit at trade shows including MIP-TV (France), NATPE
(United States), Monte Carlo, and MIP ASIA (Hong Kong).
Film Production and Distribution
An integral part of Platinum and Gold's business will be specialization
in the production of movies strictly for the home video, pay-per-view and cable
television and satellite audiences. The Company will also specialize in the
acquisition and worldwide license, sale or distribution of distribution rights
to independently produced feature films in a wide variety of genres including
top-notch action, comedy, drama, foreign language, science fiction and
thrillers. The Company's goal is to become increasingly active in acquiring
distribution rights (both domestic and foreign), booking motion pictures with
theatrical exhibitors, arranging for the manufacturer of release prints from the
film negative, and promoting such motion pictures with advertising and publicity
campaigns through the efforts of the entire Company.
Platinum and Gold has already begun to act as a foreign sales agent,
licensing distribution rights in markets outside the United States to
independently produced films which are fully financed and owned by others, in
exchange for a sales agency fee. In addition to the production of motion
pictures and distribution in the United States, substantial revenues are
possible from international exploitation of the Company's motion pictures.
International revenues of motion picture distributors from filmed entertainment
grew from $4.7 billion in 1989 to $8.7 billion in 1996. The growth has been
attributed to worldwide acceptance of and the demand for motion pictures
produced in the US, the privatization of foreign television industries, growth
in the number of foreign households with video cassette players and growth in
the number of foreign television screens.
In a number of foreign countries, as in the United States, the film (and
in some cases the entertainment) industry is dominated by a small number of
companies, often large, diversified companies with production and distribution
operations. However, like in the United States, in most of such countries there
are also smaller, independent, motion picture production and distribution
companies. Foreign distribution companies not only distribute motion pictures
produced in their countries or regions but also films licensed or sub-licensed
from United States production companies and distributors. Additionally, film
companies in many foreign countries produce films not only for local
distribution, but also for export to other countries, including the United
States.
While some foreign language films, such as Like Water For Chocolate, Il
Postino (The Postman) and Antonia's Line, and foreign English-language films,
such as Wings of the Dove, The English Patient, Shine, Four Weddings and a
<PAGE>
Funeral, The Crying Game and Crocodile Dundee appeal to a wide U.S. audience,
most foreign language films distributed in the United States are released on a
limited basis as such films draw a specialized audience for which the appeal of
such films has decreased recently.
Home Video
Home Video distribution consists of the promotion and sale of
videocassettes to local, regional and national video retailers which rent or
sell videocassettes to consumers for home viewing. Most films are initially made
available in videocassette format at a wholesale price of approximately $50 to
$75 per videocassette and are sold at that price primarily to wholesalers who
then sell to video rental stores at a price of approximately $75 to $105 per
videocassette for rental of the cassettes to consumers. Following the initial
marketing period, selected films may be remarketed at a wholesale price of $ 10
to $15 or less for sale to consumers. These "sell-through" arrangements are used
most often with films that will appeal to a broad marketplace or to children. A
few major releases with broad appeal may be initially offered by a film company
at a price designed for sell-through rather than rental when it is believed that
the ownership demand by consumers will result in a sufficient level of sales to
justify the reduced margin on each cassette sold. Typically, owners of films do
not share in rental income, however, video distributors are beginning to enter
into revenue sharing arrangements with certain retail stores in some
circumstances. Under such arrangements, videocassettes are sold at a reduced
price to video rental stores (usually $8 to $10 per videocassette) and a
percentage of the rental revenue is then shared with the owners (or licensors)
of the films.
Home video arrangements in international territories are similar to
those in domestic territories except that the wholesale prices may differ
significantly. Television rights for films initially released theatrically are,
if such films have broad appeal, generally licensed first to pay-per-view for an
exhibition period within six to nine months following initial domestic
theatrical release, then to pay television approximately 12 to 15 months after
initial domestic theatrical release, thereafter in certain cases to network
television for an exhibition period, and then to pay television again. These
films are then syndicated to either independent stations or basic cable outlets.
Pay-per-view allows subscribers to pay for individual programs.
Pay television allows cable television subscribers to view such services
as HBO/Cinemax, Showtime/The Movie Channel, Encore Media Services or others
offered by their cable system operators for a monthly subscription fee.
Pay-per-view and pay television is now delivered not only by cable, but
also by satellite transmission and films are generally licensed in both such
media. Certain films which are not initially released in the domestic theatrical
market may "premiere" instead on pay television followed in some limited
circumstances by theatrical release.
Groups of motion pictures are often packaged and licensed as a group for
exhibition on television over a period that extends beyond five years from the
initial domestic theatrical release of a particular film. Motion pictures are
also licensed and "packaged" by producers and distributors for television
broadcast in international markets by government owned or privately owned
<PAGE>
television studios and networks. Pay television is less developed outside the
U.S., but is experiencing significant international growth. The prominent
foreign pay television services include channel Premiere, STAR TV, British Sky
Broadcasting and the international operations of several U.S. cable services
including HBO, the Disney Channel and Turner Broadcasting.
Motion Picture Distribution By The Company - International Distribution
The Company generally participates annually with a sales office at all
three major film markets (the American Film Market, the Cannes Film Festival and
MIFED), as well as the major television (NATPE, MIP, MIPCOM) and video (VSDA)
markets. The Company may also, from time to time, engage independent
representatives to assist the Company in acquiring and/or licensing motion
picture rights.
With respect to international territories, the Company licenses
distribution rights in various mediums (such as theatrical, video, pay
television, free television, satellite and other rights) to foreign
sub-distributors on either an individual rights basis or grouped in various
combinations of rights (which sometimes includes rights in all media). These
rights are licensed by the Company to numerous sub-distributors in international
territories or regions either on a picture-by-picture basis or, in certain
circumstances, with respect to a number of motion pictures pursuant to output
arrangements. Currently, the most appealing international territories for the
Company are Australia, the Benelux countries, Brazil, Canada, France, Germany,
Italy, Japan, Scandinavia, Spain and the United Kingdom.
The terms of the Company's license agreements with foreign
sub-distributors vary depending upon the territory and media involved and
whether the agreement relates to a single motion picture or multiple motion
pictures. Most of the Company's license agreements will provide that the Company
will receive a minimum guarantee from the foreign sub-distributor with all or a
majority of such minimum guarantee paid prior to, or upon delivery of the film
to the distributor for release in the particular territory. The remainder of any
unpaid minimum guarantee is generally payable at specified intervals after
delivery of the film to the sub-distributor. The minimum guarantee is recouped
by the sub-distributor out of the revenues generated from exploitation of the
picture in such territory. The foreign sub-distributor retains a negotiated
distribution fee (generally measured as a percentage of the gross revenues
generated from its distribution of the motion picture), recoups its distribution
expenses and the minimum guarantee and ultimately (after recoupment by the
distribution expenses) remits to the Company the remainder of any receipts in
excess of the distributor's ongoing distribution fee.
The Company must rely on the foreign sub-distributor's ability to
successfully exploit the film in order to receive any proceeds in excess of the
minimum guarantee. In certain situations, the Company does not receive a minimum
guarantee from the foreign sub-distributor and instead negotiates terms which
usually result, in effect, in an allocation of gross revenues between the
sub-distributor and the Company. Typically the terms of such an arrangement
provide for the sub-distributor to retain an ongoing distribution fee
(calculated as a percentage of gross receipts of the sub-distributor in the
territory), recoup its expenses and pay remaining receipts in excess of the
ongoing distribution fee to the Company. Alternatively, such as often with
respect to video rights, the terms may provide for a royalty to be paid to the
<PAGE>
Company calculated as a percentage of the gross receipts of the sub-distributor
from exploitation of the video rights (without deduction for the
sub-distributor's distribution expenses).
Music Publishing
Michela's singles "If Only" and "Touch Me" were test-marketed in
Nashville in 1998, and did extremely well. The "I wanna buy" margin was a high
95%. These first two singles are expected to draw international artists to the
Company. Platinum and Gold strives to achieve a balance between short-term
achievements and long-term objectives.
Unlike many industries where assets decline in value and products have a
definable shelf life, the Company's assets, through careful management of
artistic talent, have the ability to grow indefinitely. The potential earning
power of a music catalogue of artists and top 20 compact disks and tapes far
exceeds even initial box office receipts. The Company plans to utilize a portion
of the proceeds of these assets as a base from which the Company will fund and
develop new ventures to ensure that Platinum and Gold's repertoire is constantly
rejuvenated.
Recorded Music
The operating results of a record company, especially in the pop market,
are affected by changing audience tastes and particularly by the record
company's ability to identify, attract and retain new talent that will gain
acceptance in the marketplace quickly. Platinum and Gold believes that its
management has the creative ability to sign and retain artists who will appeal
to popular taste over an extended period of time. Each Platinum and Gold
division has its own artist and repertoire (ALR) staff whose task it is to
identify and sign new artists with potential international appeal and who are
not necessarily known in the US.
Contract Terms
Platinum and Gold seeks to contract with its' artists on an exclusive
basis for the marketing of their recordings (both audio and audio-visual) in
return for a percentage royalty on the wholesale or retail selling price of the
recording. The Company will seek to obtain rights on a worldwide basis. The
Company seeks to obtain rights to exploit products delivered by the artists for
the life of the product's copyright.
Distribution on the Internet
The Company has established a board level task force to develop a global
strategy for distribution services on the Internet and is monitoring all
developments in internet distribution very closely, in particular the on-line
delivery of music. The Company will have a number of websites which may be used
for marketing purposes.
New Technology
Platinum and Gold has Digital Versatile Disc (DVD) capability. DVD
provides for digital encoding and reproduction of video and audio signals on
disc.
<PAGE>
Trademarks
Platinum and Gold registers its major trademarks and trade names in all
instances where the Company believes it is necessary for the protection of its
rights.
Competition
The success of Platinum and Gold's music business depends on, among
other things, the skill and creativity of the Company's staff and on its
relationship with its artists. While Platinum and Gold promotes an environment
of creative freedom, it also structures goals and time schedules with its
artists to ensure efficiency. It is anticipated that test marketing will be done
pre-recording in most cases. This will ensure an efficient use of the Company's
resources. The ability of Platinum and Gold to attract talent depends upon the
Company's success on its first few endeavors. For this reason, the Company is
making every effort to put its best foot forward.
Industry Sales
Pop music grew 18% over 1996 in 1997. Sales in North America improved
25% in 1997. Sales in the rest of the world increased 19% in 1997 due to the
success of several international artists, most notably in Brazil, Mexico and
Australia.
Letters of Intent Activities
The Company has already entered into letters of Intent with the
following new recording artists:
Carol Neal (piano)
Steve Jordan (USA)
Betty Ann Dickson (USA)
Beverly Fortin (USA)
Barbara Chadwick (USA)
Betty Ann Dickson, contemporary jazz artist worldwide, has completed two
albums and is currently on the P&G website (internet). These two albums will be
sold on 1-800 numbers by the end of 1999.
These artists have already made an indelible impression on small
audiences around the globe. Platinum and Gold has contacts with songwriters and
arrangers that have been an inspiration to Alabama, Gloria Estefan, Sawyer
Brown, Reba McEntire and others. The Company's first joint venture with a major
label is expected in March 2000. The joint-venture will most likely be based on
a single - 2 song advance CD that sells up to 1 million units on national and
international TV for each artist the Company represents. This will provide a
heavy retail test market focus for record labels. Record labels can then begin
to build an album through performances at various conventions and "first act"
concerts.
<PAGE>
MANAGEMENT
The following sets forth the names of the company's officers and
directors:
Carol Neal President/Treasurer
Carol Neal is a leading musician who knows the value of working her
audience - and they love it! Carol gives new meaning to the "club entertainment"
industry. She brings warmth and a personal touch to her audiences. The results
are unsurpassable. She fills a room because of the way she brings her following
everywhere she performs; audience involvement, sincere concern for talent and an
innate knowledge of what people need to hear and feel. Carol is gracious. She is
versatile from country to top 30's, 40's, 50's, 60's, 70's, and 80's to
classical. Carol has studied music therapy and has recorded an album which sold
in the thousands through media. Ms Neal has worked on a Nashville single in
producing and publishing.
1962 - 1964 Overseas
1962 - 1975 New York State and the New England states
1975 - 1980 Florida during the winters, Provincetown & Cape Cod during
the summers
1975 to 1976 Bridge Restaurant & Lounge Ft. Lauderdale FL
1978 to 1979 Helm Restaurant & Lounge Ft. Lauderdale FL
1978 to 1980 Americos Restaurant Ft. Lauderdale FL
1980 to 1981 Polynesian Village Ft. Lauderdale FL
1981 to 1982 Jimmy Januarys Restaurant Ft. Lauderdale FL
1982 to 1983 Marandolas Restaurant Ft. Lauderdale FL
Tivoli Gardens (entertainment dir.) Ft. Lauderdale FL
1984 Ocean Ranch Ft. Lauderdale FL
Bridge Hotel Boca Raton FL
1985 to 1986 The Toast of the Town North Miami FL
1986 to 1988 N.Y. Steak House North Miami FL
Inn on the Bay North Miami FL
Upstairs Lounge at Val Harbour Shops Bal Harbour FL
Breakers Hotel, W. Palm Beach FL
J J's Otherside Wilton Manors FL
Fireside Restaurant Ft. Lauderdale FL
Shang-ri-la Ft. Lauderdale FL
Channel 4 TV Montage Miami FL
1989 Toast Restaurant North Miami FL
Upper Deck Cafe Boca Raton FL
Studley's W. Palm Beach FL
With the reputation and relationships Carol has established within the
industry, she will attract talent to the Company as well as add legitimacy to
the Company in its development stage. She is mature, responsible and
knowledgeable concerning royalties, licensing and foreign sales. She is
well-acquainted with several writers of original material. She will work closely
with music lawyers concerning agreements, policy documents, copyright statues
and related contracts.
<PAGE>
Valerie Peters Vice President
Val has extensive experience in the sales and research and development
fields with years of retail experience with mass merchandisers all over the U.
S. She will oversee day to day operations, network new talent to all levels of
the entertainment industry and help manage Platinum & Gold's artists. She will
also establish relationships with radio and television networks nationally and
internationally. She has had experience as an executive officer for a non-profit
entertainment organization. A substantial portion of the Company's revenues were
derived from talent shows she, as part of a team, negotiated and developed. She
also coordinated all fund-raising to develop successful productions.
1981- 1998 Val was owner and manager of Sunglass Haven. There she developed and
implemented marketing and communication strategies for trade shows, wholesaled
and managed internet traffic. She managed employees, administered local
joint-ventures, partnerships and trade show events. She personally invented
internet campaigns to create awareness of products and conducted situational
demographics analysis for larger distribution of products and services.
1975 -1981 Ms. Peters was a restaurant entrepreneur achieving a growth rate of
five percent per year. Her field of expertise also includes banking and
accounting and management of the office.
Louise A. Cavell Secretary
Louise has an extensive background in new business development. She has
supervised international transactions from the letter of intent stage to
contract signing and has helped establish joint-ventures with other companies
and distributors. She is has negotiated contracts relating to advertising
campaigns and plays an active role in overall office and staff management as
well as research and development.
1987-1988 Louise was Vice President of Sunglass Haven where she owned and
operated a chain of retail concessions at boat shows and trade shows throughout
the country. She developed programs and entertainment to help stimulate sales
for top name sunglasses, such as Rayban, Serengeti, Oceanware, Hobie and others.
The level of consumer buying activity was quite susceptible to area
activity including the intensity and quality of local retail competition. A
great deal of research and development was done by Ms Cavell for successful
consumer behavior patterns in each geographical area.
1981- 1987 Louise became President and Owner of LoLo's Pub and Restaurant. She
designed entertaining, imaginative concepts with theme franchising in mind. The
first pub located in South Florida had three distinctive proprietary concepts
that encompassed made to order specialty drinks, country music entertainers and
sports bar. The model facility began to develop an excellent track record for
combining artistic innovation with practical knowledge to produce restaurant
food, beverage and entertainment that were functional, timeless, and exciting.
<PAGE>
Glenda Grainger-Miller Director
Glenda Grainger-Miller was co-producer and administrator for Miller-Reich
Enterprises from 1972 until 1994, with over 22 years of production experience.
Her creative ideas and administrative expertise helped her company to produce
numerous award winning Spectaculars, which toured cities throughout Europe,
North and South America and the Carribean.
Ms. Grainger-Miller is a talented singer/actress, who has appeared on major
television network shows such as "The Tonight Show" with Johnny Carson and the
"Mike Douglas Show."
She is currently helping to produce musical shows for attraction such as
Walt Disney World (Orlando), Sun City (South Africa), Fountainebleau Hilton
Resort & Towers (Miami Beach) and artists such as Vikki Carr and Frank Sinatra,
Jr. She provides financial, booking, sales and service consulting for many
artists and venues.
Randy Bernsen Director
Mr. Bernsen was voted one of the top ten unsigned guitarists by JAZZIZ
magazine. He has been in the music industry for 30 years. At age 23, he toured
with Blood, Sweat and Tears. He has since played an active role in the
international music scene and has continued to produce, compose and tour,
offering audiences around the world a unique musical experience.
Mr. Bernsen has traveled extensively and has performed in many European
cities. He toured with world famous pianist Joe Zawinul for 2 years. He has
recently settled in Japan and has established himself there as a
producer/performer/talent scout.
Mr. Bernsen owns and operates a digital studio, where he has composed and
edited music for clients such as Raddison and Motorola.
Margaret Ann Ronayne Director
Ms. Ronayne was the Southeast Regional Promotion Director for Motown
Records for 13 years. Her creative genius has shined through the voices and
talent of recording artists from the 1970's to the 1990's. She has worked as
National Top 40's Promotion Director for Arista Records for the last 7 years.
She has helped to promote artists such as Whitney Houston, Aretha Franklin,
Kenny G, Barry Manilow, Tony Braxton, Puff Daddy and more.
FACILITIES
The Company headquarters are located in Sunrise, Florida.
REMUNERATION
The Company has an agreement with respect to compensation for its key
personnel and management as well as with the legal and accounting firms it has
retained.
<PAGE>
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 11,631,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of July 19,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each officer and/or director of the Company; and
(iii) by all directors and officers as a group.
Name Number of Shares Percentage Owned Percentage
Owned Prior to Offering Before Offering After Maximum
Offering
- ------------------------------------------------------------------------------
Carol Neal 6,000,000 51.6% 49.5%
Valerie Peters 2,000,000 17.2% 16.5%
Louise A. Cavell 2,000,000 17.2% 16.5%
Glenda Grainger- 10,000 0.1% 0.1%
Miller
Randy Bernsen 10,000 0.1% 0.1%
Margaret Ann 10,000 0.1% 0.1%
Ronayne
- ------------------------------------------------------------------------------
Officers and 10,030,000 86.2% 82.7%
Directors as a group
(Assumes that all convertible notes distributed herein have been converted into
common shares of the Company)
DESCRIPTION OF THE SECURITIES
Units The Company is hereby offering on a "best efforts basis"
- ----- up to 50 Units at $10,000 per Unit.
A Unit shall consist of the following:
A one (1) year Note in the principal amount of $10,000 which shall be
converted into 10,000 shares of Rule 144 Restricted Common Stock of the Company
at the Maturity Date not including interest payable at the Maturity Date in Rule
144 Restricted Common Stock calculated at 9% per annum based on the average
closing price of the stock for 7 days prior to the Maturity Date.
This offering is being conducted pursuant to Section 3(b) of the
Securities Act of 1933, as amended (the "Act"), and Rule 504 of Regulation D
promulgated thereunder ("Rule 504") or
<PAGE>
other applicable provisions, although the shares issuable upon conversion of
this Note shall be Rule 144 restricted shares. The Company expects to file for
an exemption for shares with the SEC under Regulation A in the near future. In
the event the Company acquires such an exemption under Regulation A, the Company
shall issue Regulation A exempt shares in lieu of such restricted shares. In
addition, upon conversion of this Note, and after issuance of the Shares, at any
time that the Company proposes to file a Company registration statement on Form
S-1 under the Act, each Unit investor will have certain registration rights more
fully defined in this Private Placement Memorandum.
Prior to this Offering there has been no public market for the
securities of the Company and it is unlikely that any such public market for the
securities of the Company will develop subsequent to this offering. The Offering
price has been determined arbitrarily by the Company and does not necessarily
bear any relationship to the Company's assets, book value, net worth or any
other recognized criteria of value.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefore when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Nevada for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this Offering, there has been no market for the Common Stock of
the Company, and no predictions can be made of the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Stock of the Company in the public market may adversely affect
prevailing market prices, and may impair the Company's ability to raise capital
at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors
<PAGE>
can elect all the directors if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any person to the
Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company will offer up to 50 Units. The Units will be offered
directly by the Principals of the Company at the offering price of $10,000 per
Unit. There is no limitation on the number of Units a subscriber may purchase.
Price of the Offering
There is currently no market for shares of the Company's common stock or
preferred stock, and there is no guaranty that a market will ever develop for
these securities. Accordingly, the offering price has been determined by the
Company. Among other factors considered in such determination were estimates of
business potential for the Company, the Company's financial condition, an
assessment of the Company's management and the general condition of the
securities market at the time of this Offering. Such price does not necessarily
bear any relationship to the assets, income or net worth of the Company.
The Offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Units can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will be
sustained. Consequently, purchasers of the Units offered hereby may not find a
ready market for their Units.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENTS AND ACTUAL RESULTS COULD MATERIALLY
DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON SUCH
INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to
making an investment in the Company, that he has had the opportunity to inspect
the books and records of the Company and that he has had the opportunity to make
inquiries to the officers and directors of the Company and further that he has
been provided full access to such information.
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
-----------------------------------
Suitability
Units will be offered and sold pursuant to an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Units only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Units to that
Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
<PAGE>
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Units exceeds
$1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited investors
(as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2)The Investor has been provided access to all relevant documents it
desires or needs; and
(3) The Investor is aware of its limited ability to sell and/or transfer
its Units in the Company; and
<PAGE>
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE
IF A POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Units, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Units will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Units. In addition, the fiduciary must consider whether
the investment in Units will satisfy the diversification requirement of Section
404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Units
The Availability of Federal and state exemptions and the legality of the
offers and sales of the Units are conditioned upon, among other things, the fact
that the purchase of Units by all Investors are for investment purposes only and
not with a view to resale or distribution. Accordingly, each prospective
Investor will be required to represent in the Subscription Agreement that it is
purchasing the Units for its own account and for the purpose of investment only,
not with a view to, or in accordance with, the distribution of sale of the Units
and that it will not sell, pledge, assign or transfer or offer to sell, pledge,
assign or transfer any of its Units without an effective registration statement
under the Securities Act, or an exemption therefrom (including an exemption
under Regulation D, Rule 505 or Regulation D, Rule 506) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
<PAGE>
CONFIDENTIAL
Platinum and Gold, Inc., a Nevada corporation
INVESTOR SUITABILITY EVALUATION QUESTIONNAIRE
1. NAME ___________________________________________________
2. ADDRESS ___________________________________________________
==================================================
3. PHONE Residence ( )______________________________
Business ( )______________________________
4. SOCIAL SECURITY NUMBER ______________________________
TAX IDENTIFICATION NUMBER ______________________________
5. DATE OF BIRTH _________________________________________
6. REPRESENTATIONS (Investor should initial the appropriate blanks to which
an affirmative representation can be made)
_______________ The total purchase price does not exceed
twenty percent (20%) of my net worth at
the time of the sale and my subscription
is at least One Hundred Fifty Thousand
Dollars ($150,000).
_______________ I have a net worth of One Million Dollars
($1,000,000) or more.
_______________ I have an income of Two Hundred Thousand
Dollars ($200,000) or more in each of the
past two (2) years and during the current
year.
_______________ The total purchase price does not exceed twenty
percent (20%) of my net worth.
I further represent that I can bear the economic risk of this investment
and that I have substantial experience in making investment decisions of this
type.
------------------------------
Signature of Investor
Date:___________________________ ______________________________
Name of Investor
Platinum and Gold, Inc.
(A Nevada corporation)
<PAGE>
==================
SUBSCRIPTION DATA SHEET
===================
Name of Subscriber
(Offeree):____________________________________________________________________
Address of Residence
(if natural
person):_____________________________________________________________________
- ----------------------------------------------------------------------------
Address of
Business:____________________________________________________________________
Subscriber's
Telephone
No.:________________________________________________________________________
Subscriber's Social
Security No. or
Tax I.D.
No.:________________________________________________________________________
Preferred Address for receiving mail:
( ) Residence ( ) Business ( ) Other, if any:
Date of
Subscription:_________________________________________________________________
Amount of
Subscription: $__________________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
Platinum and Gold, Inc.
12724 N.W. 11th Court
Sunrise, FL 33323
Telephone: (800) 525-8495
Facsimile: (954) 845-0656
(Original subscription documents and full payment must be received by Company
before stock can be ordered)
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ Units of Platinum and Gold, Inc., a Nevada
corporation (the Company), for a total consideration of $_________, the receipt
and sufficiency of which is hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Units, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Units has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of these criteria:
(i) the undersigned is a natural person whose individual
net worth or joint net worth with his spouse, at the
time of his purchase, exceeds $1,000,000 (ONE MILLION
DOLLARS); or
(ii) the undersigned is a natural person and had an
individual income in excess of $200,000 (TWO-HUNDRED
THOUSAND DOLLARS) in each of the two most recent years,
or jointly with his spouse in excess of $300,000
(THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least
the same income level in the current year; or
<PAGE>
(iii)qualifies as an accredited investor under Regulation D
of the Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Units. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Units herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Units as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Units have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Units may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Units (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Units to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Units to be sold by the
undersigned. The undersigned understands that it is anticipated that there may
not be any market for resale of the Units, and that it may not be possible for
the undersigned to liquidate an investment in the Units. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Units. He understands that any
instruments representing the Units will bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Units,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Units.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
<PAGE>
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The Units referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
Units have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
EXHIBIT 4.4
This Note, and the securities issuable upon the conversion of this Note, have
not been registered under the Securities Act of 1933, as amended (the "Act") or
applicable state law and may not be sold, transferred or otherwise disposed of
unless registered under the Act and any applicable state act or unless the
Company receives an opinion from counsel for the holder and is satisfied that
this Note and the underlying securities may be transferred without registration
under the Act.
CONVERTIBLE NOTE
$________________ As of _________________
Palm Beach, Florida
FOR VALUE RECEIVED, PLATINUM AND GOLD, INC., a Nevada corporation (the
"Company"), hereby promises to pay to the order of ________________________, or
any subsequent holder of this Note (the "Payee"), at
____________________________________________, or at such other place as may be
designated by the Payee from time to time by notice to the Company, the
principal sum of ______________________________ ($________), together with
simple interest from the date hereof (the "Issuance Date") on the unpaid
principal amount at an annual rate equal to nine percent (9%) per annum. Such
principal and interest shall be paid in accordance with the terms of Section 1
below, to such account as the Payee shall direct.
1. PAYMENTS.
(a) The unpaid principal amount of this Note shall be converted into Rule 144
Restricted Common Stock of the Company as provided herein on or before
______________ (the "Maturity Date").
(b) Interest on the unpaid principal balance of this Note at the rate of nine
percent (9%) per annum shall accrue from the date hereof and shall be payable to
the Payee in shares of Common Stock of the Company at the Maturity Date, the
number of which shall be equal to the product of such interest payment divided
by the Conversion Price, as defined herein, with the overage, if any, payable in
cash. Interest shall be calculated on the basis of a 365 day year.
(c) In the event that any payment of principal and/or interest hereunder becomes
due and payable on a Saturday, Sunday or other day on which commercial banks in
the State of Florida are authorized or required by law to close, then the
maturity thereof shall be extended to the next succeeding "Business Day"
(defined as any days on which national banks in the United States are open for
business); and during any such extension, interest on principal amounts payable
shall accrue and be payable at the applicable rate.
2. RANKING OF NOTE.
Subject at all times to the subordination provisions set forth in
Section 9 hereof, this Note shall constitute senior securities of the Company
and, except as provided below, shall rank pari passu with all other indebtedness
for money borrowed by the Company and senior to any other indebtedness for money
borrowed by the Company which, by its terms shall be made expressly subject and
subordinated to this Note.
3. PREPAYMENT OF NOTE.
1
<PAGE>
(a) Prior to the Maturity Date, the Company shall provide the holder with a
notice that a prepayment event has occurred (the "Prepayment Notice"). The
holder shall have thirty (30) days from the date of the Prepayment Notice to
elect (i) to take prepayment of the principal amount of the Note and any accrued
but unpaid interest in whole without premium or penalty or (ii) to convert in
accordance with Section 4 hereof.
(b) Notwithstanding anything to the contrary set forth in Section 3(a) hereof,
subject at all times to the holder's right to convert all or any portion of this
Note into Common Stock pursuant to Section 4 hereof, the principal amount of
this Note and any accrued and unpaid interest may be prepaid, at the option of
the Company, in whole or in part, without premium or penalty, at any time or
from time to time from and after that date which shall be the earlier to occur
of (i) the Maturity Date or (ii) the date on which the Company shall register
for resale pursuant to the Securities Act of 1933, as amended (the "Act") all
"Conversion Shares" (as herein defined) issuable upon conversion of the entire
principal amount of this Note, pursuant to a Registration Statement on the
appropriate registration form declared effective by the Securities and Exchange
Commission (the "SEC"). If either event set forth in this Section 3(b) shall
occur, the Company shall provide the holder with a Prepayment Notice.
(c) Each Prepayment Notice shall specify the principal amount of this Note to be
redeemed. Each prepayment of principal of this Note shall be accompanied by the
payment of all interest accrued and unpaid to the prepayment date on the amount
so prepaid. Each such prepayment shall be made by wire transfer of immediately
available funds or by bank cashier's check payable to the Payee. Any partial
prepayment of this Note, whether optional or mandatory, shall be applied first
to accrued and unpaid interest hereon, and then to the outstanding principal
amount of this Note in the inverse order of maturity.
4. CONVERSION.
Subject at all times to the Company's right to prepay the Notes as provided in
Section 3 hereof, the holders of the Notes shall have the following conversion
rights (the "Conversion Rights"):
(a) Voluntary Conversion. At any time or from time to time following the
Issuance Date, the holder of this Note may elect to convert up to one hundred
(100%) percent of the original principal amount of this Note and any accrued but
unpaid interest, into shares of Common Stock of the Company at the Conversion
Price, by written notice given to the Company in accordance with the provisions
of Section 4(g) hereof (the "Conversion Notice"). In no event may the holder of
this Note effect a conversion of less than $10,000 principal amount of this
Note. Such right of Voluntary Conversion shall be effected by the surrender of
this Note to the Company for conversion at any time during normal business hours
at the office of the Company, accompanied (i) by the Conversion Notice, (ii) if
so required by the Company, by instruments of transfer, in a form satisfactory
to the Company, duly executed by the registered holder or by his duly authorized
attorney and (iii) transfer tax stamps or funds therefore, if required pursuant
to Section 4(f) herein.
(b) Automatic Conversion. Effective as of the Maturity Date, to the extent not
previously converted by the holder, all remaining principal amount of this Note,
together with all accrued interest hereon, shall automatically and without
further action on the part of such holder be converted into Common Stock of the
Company at the Conversion Price.
(c) Conversion Price. Subject to adjustment from time to time as provided in
Section 4(d) below, the term "Conversion Price" shall mean $1.00 per share of
common stock.
(d) Adjustments of Conversion Price. The Conversion Price in effect from time to
time shall be, subject to adjustment in accordance with the provisions of this
Section 4(d).
(i) Adjustments for Stock Splits and Combinations. If the Company shall at
any time or from time to time after the Issuance Date, effect a stock split of
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the outstanding Common Stock, the Conversion Price in effect immediately prior
to the stock split shall be proportionately decreased. If the Company shall at
any time or from time to time after the Issuance Date, combine the outstanding
shares of Common Stock, the Conversion Price in effect immediately prior to the
combination shall be proportionately increased. Any adjustments under this
Section 4(d)(i) shall be effective at the close of business on the date the
stock split or combination occurs.
(ii) Adjustments for Certain Dividends and Distributions. If the
Company shall at any time or from time after the Issuance Date, make or issue or
set a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in shares of Common Stock,
then, and in each event, the Conversion Price in effect immediately prior to
such event shall be decreased as of the time of such issuance or, in the event
such a record date shall have been fixed, as of the close of business on such
record date, by multiplying the Conversion Price then in effect by a fraction;
(A) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date; and
(B) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution.
(iii) Adjustments for Other Dividends and Distributions. If the
Company shall at any time or from time to time after the Issuance Date, make or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in other than
shares of Common Stock, then, and in each event, an appropriate revision to the
Conversion Price shall be made and provision shall be made (by adjustments of
the Conversion Price or otherwise) so that the holder of this Note shall receive
upon conversions thereof, in addition to the number of shares of Common Stock
receivable thereon, the number of securities of the Company which they would
have received had this Note been converted into Common Stock on the date of such
event and had thereafter, during the period from the date of such event to and
including the Conversion Date, retained such securities (together with any
distributions payable thereon during such period), giving application to all
adjustments called for during such period under this Section 4(c)(iii) with
respect to the rights of the holders of the Note.
(iv) Adjustments for Reclassification, Exchange or Substitution. If
the Common Stock issuable upon conversion of this Note at any time or from time
to time after the Issuance Date shall be changed into the same or a different
number of shares of any class or classes of stock, whether by reclassification,
exchange, substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends provided for in Sections 4(d)(i), (ii)
and (iii), or a reorganization, merger, consolidation, or sale of assets
provided for in Section 4(d)(v)), then, and in each event, an appropriate
revision to the Conversion Price shall by made and provisions shall be made (by
adjustments of the Conversion Price of otherwise) so that the holder of this
Note shall have the right thereafter to convert such Note into the kind and
amount of shares of stock and other securities receivable upon such
reclassification, exchange, substitution or other change, by holders of the
number of shares of Common Stock into which such Note might have been converted
immediately prior to such reclassification, exchange, substitution or other
change, all subject to further adjustment as provided herein.
(v) Adjustments for Reorganization, Merger, Consolidation or Sales of
Assets. If at any time or from time to time after the Issuance Date there shall
be a capital reorganization of the Company (other than by way of a stock split
or combination of shares or stock dividends or distributions provided for in
Section 4(d)(i), (ii) and (iii), or a reclassification, exchange or substitution
of shares provided for in Section 4(d)(iv)), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's properties or assets to any other person, then as a part of
such reorganization, merger, consolidation, or sale, an appropriate revision to
the Conversion Price shall be made and provision shall be made (by adjustments
of the Conversion Price or otherwise) so that the holder of this Note shall have
the right thereafter to convert this Note into the kind and amount
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<PAGE>
of shares of stock and other securities or property of the Company or any
successor corporation resulting from such reorganization, merger, consolidation,
or sale, to which a holder of Common Stock deliverable upon conversion of such
shares would have been entitled upon such reorganization, merger, consolidation,
or sale. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4(d)(v) with respect to the rights
of the holders of this Note after the reorganization, merger, consolidation, or
sale to the end that the provisions of this Section 4(c)(v) (including any
adjustment in the Conversion Price then in effect and the number of shares of
stock or other securities deliverable upon conversion of this Note) shall be
applied after that event in as nearly an equivalent manner as may be
practicable.
(d) No Impediment. The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith, assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Note set forth in this
Section 4 against impairment.
(e) Certificate as to Adjustments. Upon occurrence of each adjustment or
readjustment of the Conversion Price or number of shares of Common Stock
issuable upon conversion of the Note pursuant to this Section 4, the Company at
its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish notice to the holder of this Note,
a certificate setting forth such adjustment and readjustment, showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon written request of the holder of this Note, at any time, furnish or
cause to be furnished to such holder a like certificate setting forth such
adjustments and readjustments, the applicable Conversion Price in effect at the
time and the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon the conversion
of such Note. Notwithstanding the foregoing, the Company shall not be obligated
to deliver a certificate unless such certificate would reflect an increase or
decrease of at least one percent (1%) of such adjusted amount.
(f) Issue Taxes. The Company shall pay any and all issue and other taxes,
excluding federal, state or local income taxes, that may be payable in respect
of any issue or delivery of shares of Common Stock on conversion of this Note
pursuant hereto; provided, however, that the Company shall not be obligated to
pay any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.
(g) Notices and Delivery of Shares. All notices and other communications
hereunder shall be in writing and shall be deemed given (i) on the same date, if
delivered personally or by facsimile by not later than 5:00 p.m. Florida time
(provided, that a copy of such facsimile shall be simultaneously sent to Donald
F. Mintmire, Esq. at (561)659-5371, or (ii) three business days following being
mailed by certified or registered mail, postage prepaid, return-receipt
requested, addressed to the party in accordance with Section 7 hereof. Not later
than seven (7) Business Days following receipt of notice of conversion as
provided herein (the "Delivery Date"), the Company shall deliver to the holders
of this Note, against delivery of this Note surrendered for conversion,
certificates evidencing all shares of Common Stock into which this Note shall be
converted.
(h) Fractional Shares. No fractional shares of Common Stock shall be issued upon
conversion of the Note. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Company shall pay cash equal to the product of
such fraction multiplied by the Conversion Price of one share of the Company's
Common Stock on the applicable Conversion Date.
(i) Reservation of Common Stock. The Company shall at all times reserve and keep
available, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the Note, the full number of shares
deliverable upon conversion of all the Note from time to time outstanding. The
Company shall, from time to time in accordance with the Nevada General
Corporations Law, as amended, increase the authorized number of shares of Common
Stock if at any time the unissued number of authorized shares shall not be
sufficient to permit the conversion
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<PAGE>
of all of the Note at the time outstanding. In such connection, the Company
shall hold a special meeting of stockholders not later than 180 days after any
date in which the Company shall have insufficient shares of Common Stock so
reserved for the purpose of authorizing additional shares of Common Stock.
(j) Retirement of Note. Conversion of this Note shall be deemed to have been
effected on the applicable Conversion Date. The converting holder shall be
deemed to have become a stockholder of record of the Common Stock on the
applicable Conversion Date. Upon conversion of only a portion of this Note, the
Company shall issue and deliver to such holder, at the expense of the Company,
against receipt of the original Note delivered for partial cancellation, a new
Note representing the unconverted portion of this Note so surrendered and Common
Stock equal to the portion converted.
(k) Regulatory Compliance.
(i) If any shares of Common Stock to be reserved for the purpose of
conversion of this Note require registration or listing with or approval of any
government authority, stock exchange or other regulatory body under any federal
or state law or regulation or otherwise before such shares may be validly issued
or delivered upon conversion, the Company shall, at its sole cost and expense,
in good faith and as expeditiously as possible, endeavor to secure such
registration, listing or approval, as the case may be.
(ii) The shares of Common Stock issuable upon the election to convert
shall be Rule 144 restricted shares (the "Restricted Securities").
(iii) The holder of such shares shall have the following registration
rights:
(A) Neither this Note nor the Shares underlying it have been
registered under the Securities Act of 1933, as amended (the "Act"). Unless and
until registered under the Act, this Note and all replacement Notes shall bear
the following legend:
This Note, and the securities issuable upon the conversion of this Note,
have not been registered under the Securities Act of 1933, as amended
(the "Act") or applicable state law and may not be sold, transferred or
otherwise disposed of unless registered under the Act and any applicable
state act or unless the Company is satisfied that this Note and the
underling securities may be transferred without registration under the
Act.
(a) This offering is being conducted pursuant to Section 3(b) of the
Securities Act of 1933, as amended (the "Act"), and Rule 504 of Regulation D
promulgated thereunder ("Rule 504") or other applicable provisions, although the
shares issuable upon conversion of this Note shall be Rule 144 restricted
shares. The Company expects to file for an exemption for shares under Regulation
A in the near future. In the event the Company acquires such an exemption under
Regulation A, the Company shall issue Regulation A exempt shares in lieu of such
restricted shares. In addition, upon conversion of this Note, and after issuance
of the Shares, at any time that the Company proposes to file a Company
registration statement on Form S-1 under the Act (the "Registration Statement"),
either for its own account or for the account of a stockholder or stockholders,
the Company shall give the Holder written notice of its intention to do so and
of the intended method of sale (the "Registration Notice") within a reasonable
time prior to the anticipated filing date of the Company's Registration
Statement effecting such Company registration. Holder may request inclusion of
any Restricted Securities in such Registration Statement by delivering to the
Company, within ten (10) Business Days after receipt of the Registration Notice,
a written notice (the "Piggyback Notice") stating the number of Restricted
Securities proposed to be included and that such shares are to be included in
any underwriting only on the same terms and conditions as the shares of Common
Stock otherwise being sold through underwriters under such Company Registration
Statement. The Company shall use its best efforts to cause all Restricted
Securities specified in the Piggyback Notice to be included in the Company
Registration Statement and any related offering, all to the extent requisite to
permit the sale by the Holder of its Restricted Securities in accordance with
the method of sale applicable to the other shares of Common Stock included in
such Company Registration Statement; provided, however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the Company Registration Statement filed
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<PAGE>
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of Holder's Restricted Securities, the
Company may, at its election, give written notice of such determination to
Holder and, thereupon:
(i) in the ease of a determination not to register, shall be
relieved of its obligation to register Holder's Restricted Securities in
connection with such registration (but not from its obligation to pay the
registration expenses in connection therewith), and
(ii) in the case of a delay in registering, shall be permitted
to delay registering Holder's Restricted Securities for the same period as the
delay in registering such other securities.
(b) The Company's obligation to include Restricted Securities in a
Company's Registration Statement shall be subject to the following limitations:
(i) The Company may elect, at its sole option and for any
reason, not to register Holder's Restricted Shares, provided however, that this
right is limited to one (1) time and relative to one (1) particular Company
Registration Statement.
(ii) The Company shall not be obligated to include any
Restricted Securities in a registration statement
filed on Form S-4, Form S-8 or such other similar successor forms then in effect
under the Securities Act.
(iii) If a Company Registration Statement involves an
underwritten offering and the managing underwriter advises the Company in
writing that in its opinion, the number of securities requested to be included
in such Company Registration Statement exceeds the number which can be sold in
such offering without adversely affecting the offering, the Company shall
include in such Company Registration Statement the number of such securities
which the Company is so advised can be sold in such offering without adversely
affecting the offering, determined as follows:
(A) first, the securities proposed by the Company
to be sold for it own account, and
(B) second, any Restricted Securities requested
to be included in such registration and any
other securities of the Company in accordance with the priorities, if and then
existing among the holders of such securities pro rata among the holders thereof
requesting such registration on the basis of the number of shares of such
securities requested to be included by such holders.
(iv) The Company shall not be obligated to include
Restricted Securities in more than one (1) Company
Registration Statement.
(c) To the extent Holder's Restricted Securities are intended to be
included in a Company Registration Statement, Holder may include any of its
Restricted Securities in such Company Registration Statement pursuant to this
Agreement only if Holder furnishes to the Company in writing, within ten (10)
business days after receipt of a written request therefore, such information
specified in Item 507 of Regulation S-K under the Act or such other information
as the Company may reasonably request for use in connection with the Company
Registration Statement or Prospectus or preliminary Prospectus included therein
and in any application to the NASD. Holder as to which the Company Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make all information previously
furnished to the Company by Holder not materially misleading.
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<PAGE>
5. EVENTS OF DEFAULT.
The occurrence and continuance of any one or more of the following events is
herein referred to as an Event of Default:
(a) If the Company shall default in converting the applicable principal amount
of this Note into Common Stock and delivering stock certificates in respect of
such conversion within thirty (30) Business Days from the Company's receipt of
the applicable notice of conversion pursuant to the provisions hereof, whether
on the Maturity Date or otherwise; or
(b) If the Company shall default in the payment of any installment of interest
on this Note when payable in accordance with the terms thereof for more than
sixty (60) calendar days after the same shall become due if the Payee has not
elected to take such interest in Common Stock; and if the Payee has elected to
take such interest in Common Stock, if the Company shall default in delivering
stock certificates in respect of such election within sixty (60) Business Days
from the Company's receipt of the notice of such election; or
(c) If the Company shall not, at the time of receipt of a Conversion Notice
hereunder, have a sufficient number of authorized and unissued shares of its
Common Stock available for issuance to the holder of this Note upon conversion
of all or any portion of this Note in accordance with the terms hereof, and such
default shall not have been remedied within one hundred eighty (180) calendar
days from the date of such Conversion Notice; or
(d) If the Company shall default in the performance of or compliance with any of
its material covenants or agreements contained herein and such default shall not
have been remedied within thirty (30) calendar days after written notice thereof
shall have been delivered to the Company by the holder of this Note in
accordance with the notice provisions herein; or
(e) If any representation or warranty made in writing by or on behalf of the
Company in connection with the transactions contemplated hereby shall prove to
have been false or incorrect in any material respect on the date as of which
made; or
(f) If the Company or any of its "Significant Subsidiaries" (as defined herein)
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts as they become due, or shall file a voluntary
petition in bankruptcy or shall have an order for relief under the Bankruptcy
Act granted against it or them, or shall be adjudicated a bankrupt or insolvent,
or shall file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or shall file any
answer admitting or not contesting the material allegations of a petition filed
against the Company or any of its Significant Subsidiaries in any such
proceeding, or shall seek or consent to or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company or any of its Significant
Subsidiaries, or the Company or its directors shall take any action looking to
the dissolution or liquidation of the Company or any of its Significant
Subsidiaries. For purposes of this Section 5(f), the term Significant Subsidiary
shall mean and include any other person, firm or corporation (i) more than 50%
of the common stock or equity interests of which are owned of record by the
Company or any Subsidiary of the Company, and (ii) the net income before taxes
or total assets of which represent more than 15% of the consolidated net income
before taxes or consolidated assets of the Company and all of its Subsidiaries;
or
(g) If, within sixty (60) days after the commencement of any proceeding against
the Company or any Significant Subsidiary seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief
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<PAGE>
under any present or future statute, law or regulation, such proceeding shall
not have been dismissed, or if, within sixty (60) days after the appointment,
without the consent or acquiescence of the Company or any Significant
Subsidiary, of any trustee, receiver or liquidator of the Company or any
Significant Subsidiary or of all or any substantial part of the properties of
the Company or any Significant Subsidiary, such appointment shall not have been
vacated.
6. REMEDIES ON DEFAULT; ACCELERATION.
Upon the occurrence and during the continuance of an Event of Default, the
entire unpaid balance of principal and accrued interest on this Note may be
accelerated and declared to be immediately due and payable by the holder in Rule
144 Restricted Shares of the Company's Common Stock. Unless waived by the
written consent of the holder, such holder may proceed to protect and enforce
its rights by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein, or for
an injunction against a violation of any of the terms hereof, or in aid of the
exercise of any power granted hereby or by law. Upon the occurrence of an Event
of Default, the Company agrees to pay to the holder of this Note such further
amount as shall be sufficient to cover the cost and expense of collection,
including, without limitation, reasonable attorneys' fees and expenses. No
course of dealing and no delay on the part of the holder of this Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers and remedies. No right, power
or remedy conferred hereby upon the holder hereof shall be exclusive of any
other right, power or remedy referred to herein nor now or hereafter available
at law, in equity, by statute or otherwise.
7. NOTICES.
All notices, requests, demands or other communications hereunder shall be in
writing and personally addressed or sent by telecopier or by registered or
certified mail, return receipt requested, postage pre-paid, addressed or
telecopied as follows or to such other address or telecopier number of which
notice has been given pursuant hereto:
If to the Company: Platinum and Gold, Inc.
12724 N.W. 11th Court
Sunrise, FL 33323
Attn: Carol Neal
Telephone: (800) 525-8495
Fax: (954) 845-0656
with copy to: Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Attn: Donald F. Mintmire, Esq.
Telephone: (561) 832-5696
Fax: (561) 659-5371
If to the Holder: to such Holder at the address set forth on the records of the
Company. In addition, copies of all such notices or other communications shall
be concurrently delivered by the person giving the same to each person who has
been identified to the Company by such Holder as a person who is to receive
copies of such notices.
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8. GOVERNING LAW.
This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Nevada, without giving effect to conflict of law
principles.
9. SUBORDINATION TO SENIOR DEBT.
(a) Payment of the principal of and interest on this Note is subordinated, to
the extent and in the manner provided herein, to the prior payment of all
indebtedness of the Company and/or all Subsidiaries of the Company, for money
borrowed or other obligations which is now or may hereafter be owed
(collectively, "Senior Debt") to any bank, commercial finance company, factor,
insurance company or other institution the lending activities of which are
regulated by law (individually, a "Senior Lender" and collectively, "Senior
Lenders"), which may, hereafter on any one or more occasions provide financing
to the Company or any of its Subsidiaries, secured by liens on any of the assets
and properties of the Company and/or any of its Subsidiaries (individually and
collectively, an "Institutional Borrower").
(b) Upon any payment or distribution of assets or securities of the
Institutional Borrower, as the case may be, of any kind or character, whether in
cash, property or securities, upon any dissolution or winding up or total or
partial liquidation or reorganization of the Institutional Borrower, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts payable under Senior Debt shall first be paid in full
in cash, or payment provided for in cash or cash equivalents, before the holder
hereof shall be entitled to receive any payment on account of principal of or
interest on this Note. Before any payment may be made by the Institutional
Borrower of the principal of or interest on this Note upon any such dissolution
or winding up or liquidation or reorganization, any payment or distribution of
assets or securities of the Institutional Borrower of any kind of character,
whether in cash, property or securities, to which the holder hereof would be
entitled, except for the provisions of this Section 9, shall be made by the
Institutional Borrower or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, directly to
the holders of Senior Debt or their representatives to the extent necessary to
pay all such Senior Debt in full after giving effect to any concurrent payment
or distribution to the holders of such Senior Debt.
(c) Upon the happening of any default in payment of the principal of or interest
on any Senior Debt, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no direct or indirect payment in cash,
property or securities, by set-off or otherwise, shall be made or agreed to be
made by the Institutional Borrower on account of the principal of or interest on
this Note.
(d) Upon the happening of an event of default (other than under circumstances
when the terms of Section 9(c) above are applicable) with respect to any Senior
Debt pursuant to which the holder thereof is entitled under the terms of such
Senior Debt to accelerate the maturity thereof, and upon written notice thereof
given to each of the Institutional Borrower and the holder of this Note by such
holder of Senior Debt ("Payment Notice"), then, unless and until such event of
default shall have been cured or waived or shall have ceased to exist, no action
shall or may be taken for collection of any amounts under this Note, and no
direct or indirect payment in cash, property or securities, by set-off or
otherwise, shall be made or agreed to be made by the Institutional Borrower an
account of the principal of or interest on this Note until such Senior Debt has
been paid in full accordance with its terms.
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<PAGE>
(e) In the event that, notwithstanding the provisions of this Section 9, any
payment shall be made on account of the principal of or interest on this Note in
contravention of such provisions, then such payment shall be held for the
benefit of, and shall be paid over and delivered to, the holders of such Senior
Debt remaining unpaid to the extent necessary to pay in full in cash or cash
equivalents the principal of and interest on such Senior Debt in accordance with
its terms after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.
(f) Nothing contained in this Section 9 shall
(i) impair the conversion rights of the holder hereof referred to in
Section 4 above,
(ii) impair, as between the Company and the holder of this Note, the
obligation of the Company, which is absolute and unconditional, to pay to the
holder hereof principal and interest as the same shall become due and payable,
or
(iii) prevent the holder hereof from exercising all rights, powers
and remedies otherwise provided herein or by applicable law, all subject to the
express limitations provided herein.
(g) Upon the occurrence of an Event of Default, if any Senior Debt shall then be
outstanding, no acceleration of the maturity of this Note shall be effective
until the earlier of (i) ten (10) days shall have passed following the date of
delivery to the Institutional Borrower by a Senior Lender(s) of written notice
of acceleration of any Senior Debt, or (ii) the maturity of any then outstanding
Senior Debt shall have been accelerated by reason of a default hereon. The
Company may pay the holder hereof any defaulted payment and all other amounts
due following any such acceleration of the maturity of this Note if this Section
9 would not prohibit such payment to be made at that time.
(h) Upon payment in full of all Senior Debt, the Payee of this Note shall be
subrogated to the rights of the holder or holders of Senior Debt to receive all
payments or distributions applicable on such Senior Debt to the extent of the
prior application thereto of moneys or other assets which would have been
received in respect of this Note, but for these subordination provisions, until
the principal of, and interest on, this Note shall have been paid in full.
(i) The Payee, by accepting this Note
(i) shall be bound by all of the foregoing subordination provisions;
(ii) agrees expressly for the benefit of the present and future
holders of Senior Debt that this Note is subject to the foregoing subordination
provisions;
(iii) authorizes such persons as shall be designated by all holders
of Senior Debt at any given time, on his or its benefit to execute and deliver
such agreements, assignments, proofs of claim and other documents appropriate to
effectuate the foregoing subordination provisions; and
(iv) hereby appoints the person so designated his or its
attorney-in-fact for such purpose.
(j) The foregoing subordination provisions shall be for the benefit of all
holders of Senior Debt from time to time
10
<PAGE>
outstanding, and each of such holders may proceed to enforce such provisions
either directly against the holder hereof or in any other manner provided by
law.
10. PERMITTED PAYMENTS.
Notwithstanding the provisions of Section 9 of this Note, and provided that no
default or event of default (or event which, with the passage of time or giving
of notice or both) has occurred, will occur as a result of the "Permitted
Payment" (herein defined), or will occur with the passage of time or giving of
notice or both, under any document or instrument evidencing such Senior Debt,
the Company may pay to the Payee, and the Payee may accept from the Company, the
principal payments of, and/or interest payments on, the outstanding principal
amount of this Note when due on an unaccelerated basis (herein, "Permitted
Payments"); it being understood and agreed by the Payee by accepting this Note
that neither:
(a) the payment terms set forth in Section l of this Note;
(b) the subordination provisions contained in Section 9 of this Note, nor
(c) the provisions of this Section 10 of this Note, may be modified or
amended without the prior written consent of each and every holder of
Senior Debt.
11. SUCCESSORS AND ASSIGNS.
This Note shall be binding upon and inure to the benefit of the Company and the
holder hereof and their respective successors and permitted assigns; provided,
however, that the Company may not transfer or assign any of its rights or
obligations hereunder without the prior written consent of the holder hereof;
and provided, further, that transfer or assignment by the holder is in
accordance with the rules governing Restricted Securities.
IN WITNESS WHEREOF, the Company has caused this Note to be executed by its duly
authorized officers as of the date first set forth above.
PLATINUM AND GOLD, INC.
By: ___________________________________
Carol Neal, President
Attest: ___________________________________
11
EXHIBIT 10.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER TH SECURITIES ACT OF 1933 9THE "1933 ACT"), NOR REGISTERED UNDER ANY STATE
SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF STOCK
AGREEMENT made this 23rd day of July, 1997, by and between INTEGRA
VENTURES, INC., a Nevada corporation, (the "ISSUER") and the individuals listed
in Exhibit A attached hereto, (the "SHAREHOLDERS"), which SHAREHOLDERS own all
of the issued and outstanding shares of FIRST AID DIRECT, INC., a Florida
corporation ("FAD").
In consideration of the mutual promises, covenants, and
representations contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of
this Agreement, the ISSUER agrees to issued to SHAREHOLDERS, 2,970,000 shares of
common stock of ISSUER, $.001 par value, (the "Shares") in exchange for 100% of
the issued and outstanding shares of FAD, such that FAD shall become a wholly
owned subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and FAD the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Nevada. All actions
taken by the ISSUER have been valid and in accordance with the laws of the State
of Nevada.
ii. Capital The authorized capital stock of ISSUER consists
of 20,000,000 shares of common stock, $.001 part value, of which 3,300,000 are
issued and outstanding, and 1,000,000 shares of preferred stock, par value
$.001, none of which are issued. All outstanding shares are fully paid and non
assessable, free of liens, encumbrance, options, restrictions and legal or
equitable rights of others not a part to this Agreement. At closing, there will
be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating ISSUER to issue or to
transfer from treasury any additional shares of its capital stock. None of the
outstanding shares of ISSUER are subject to any stock restriction agreements.
All of the shareholders of ISSUER have valid title to such shares and acquired
their shares in a lawful transaction and in accordance with the laws of Nevada.
iii. Financial Statements. Exhibit B to this Agreement
includes the balance sheet of ISSUER as of July 31, 1997, and the related
statements of income and retained earnings for the period then ended. The
1
<PAGE>
financial statements have been prepared in accordance with generally accepted
accounting principles consistently followed by ISSUER throughout the periods
indicated, and fairly present the financial position of ISSUER as of the date of
the balance sheet in the financial statements, and the results of its operations
for the periods indicated.
iv. Absence of Changes. Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
v. Liabilities. ISSUER does not have any debt, liability,
or obligation of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected on the
ISSUERS' financial statement. ISSUER is not aware of any pending, threatened or
asserted claims, lawsuits or contingencies involving ISSUER or its common stock.
There is no dispute of any kind between ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. At closing, ISSUER will be
free from any and all liabilities, liesn, claims and/or commitments.
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by ISSUER and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by SHAREHOLDERS.
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying
on any business and is not a party to any contract, agreement or lease. No
person holds a power of attorney from ISSUER.
ix. Compliance with Laws. ISSUER has complied with, and
is not in violation of any federal, state, or local statute, law, and/or
regulation pertaining to ISSUER. ISSUER has complied with all federal and state
securities laws in connection with the issuance, sale and distribution of its
securities.
x. Litigation. ISSUER is not (and has not been) a part to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, shall not (1) sell, pledge, or assign
any assets (2) amend its Articles of incorporation or By-Laws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
2
<PAGE>
xii. Corporate Documents. Copies of each of the following
documents, which are true, complete and correct in all material respects, will
be attached to and made a part of this Agreement:
1. Articles of Incorporation;
2. Bylaws;
3. Minutes of Shareholders Meetings;
4. Minutes of Directors Meetings;
5. List of Officers and Directors;
6. Balance Sheet as of July 31, 1997 together with other financial
statements described in Section 2(iii);
7. Stock register and stock records of
ISSUER and a current, accurate list of
ISSUER's shareholders.
xiii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with both the laws of Nevada and of Florida.
xiv. Title. The Shares to be issued to SHAREHOLDERS wil
be, at closing, free and clear of all liens, security interests, pledges,
charges, claims and encumbrances and restrictions of any kind. None of such
shares are or will be subject to any voting trust or agreement. No person holds
or has the right to receive any proxy or similar instrument with respect to such
shares, except as provided in this Agreement, the ISSUER is not a party to any
agreement which offers or grants to any person the right to purchase or acquire
any of the securities to be issued to SHAREHOLDERS. There is no applicable
local, state or federal law, rule, regulation, or decree which would, as a
result of the issuance of the Shares to SHAREHOLDERS, impair, restrict or delay
SHAREHOLDERS' voting rights with respect to the Shares.
3. SHAREHOLDERS and FAD represent and warrant to ISSUER the
following:
i. Organization. FAD is a corporation duly organized,
validly existing, and in good standing under the laws of Florida, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Florida. All actions
taken by the incorporators, directors and shareholders of FAD have been valid
and in accordance with the laws of the State of Florida.
ii. Shareholders and Issued Stock. Exhibit A annexed hereto
sets forthe the names and share holdings of 100% of FAD's shareholders.
iii. Listing Stock for Trading. Upon closing, SHAREHOLDERS
and FAD shall take all steps reasonably necessary to get the ISSUER's common
stock listed for trading in NASD Automated Bulletin Board and to, as soon as
practicably possible, have the company listed with Standard & Poors or Moodys in
their Accelerated Corporate Report.
iv. Counsel. SHAREHOLDERS and FAD represent and warrant
that prior to Closing, that they are represented by independent counsel or have
had the opportunity to retain independent counsel to represent them in this
transaction and that prior to Closing, the law offices of Donald F. Mintmire &
Associates has acted as exclusive counsel tot he ISSUER and has not represented
either the SHAREHOLDERS or FAD in any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agrees that the Shares being
issued pursuant to this Agreement may be sold, pledged, assigned hypothecate or
otherwise transferred, with or without consideration (a "Transfer"), only
3
<PAGE>
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agrees, prior to any
Transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place at the
law offices of Donald F. Mintmire, 265 Sunrise Avenue, Suite 204, Palm Beach,
Florida. Unless the closing of this transaction takes place on or before July
31, 1997, then either party may terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
o By the ISSUER
(1) Board of Directors Minutes authorizing the
issuance of a certificate or certificates for 2,970,000 Shares, registered in
the names of the SHAREHOLDERS equal to their pro-rata holdings in FAD.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing
such person as SHAREHOLDERS designate as a director(s) of ISSUER.
(4) The resignation of all the directors of
ISSUER, except that of SHAREHOLDERS designee, dated subsequent to he resolution
described in 3, above.
(5) Unaudited financial statements of ISSUER,
which shall include a balance sheet dated as of July 31, 1997 and statements of
operations, stockholders equity and cash flows for the twelve month period then
ended.
(6) All of the business and corporate records of
ISSUER, including but not limited to correspondence files, bank statements,
checkbooks, savings account books, minutes of shareholder and directors meeting,
financial statements, checkbooks, savings account books, minutes of shareholder
and directors meetings, financial statements, shareholder listings, stock
transfer records, agreements and contracts.
(7) Such other minutes of ISSUER's shareholders
or directors as may reasonably be required by SHAREHOLDERS.
(8) Within 30 days of closing, a private place-
ment memorandum pursuant to Rule 504 of Regulation D as promulgated under the
Securities Act of 1933 for up to 995,000 shares of ISSUER's stock, on a post
closing basis, at a price of $________ per share.
(9) An Opinion Letter from ISSUER's Attorney
attesting to the validity and condition of the ISSUER.
ii. By SHAREHOLDER AND FAD:
(1) Delivery to the ISSUER, or to its Transfer
Agent, the certificates representing 100% of the issued and outstanding stock of
FAD.
4
<PAGE>
(2) Consents signed by all the shareholders of
FAD consenting to the terms of this Agreement.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of,
or relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Palm Beach County, Florida in
accordance with the Commercial Rules of the American Arbitration Association
then existing and judgment on the arbitration award may be entered in any court
having jurisdiction over the subject matter of the controversy.
8. MISCELLANEOUS.
i. Captions and Headings. Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
now way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No Oral change. This Agreement and any provision
herein, may not be waived, changed, modified, or discharged orally, but only by
a written agreement signed by party against whom enforcement of any waiver,
change modification or discharge is sought.
iii. No Waiver. Except as otherwise provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (I) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
iv. Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
5
<PAGE>
ISSUER: Dale B. Finfrock
P.O. Box 669
Palm Beach, FL 33480
Copy to: Donald F. Mintmire, Esquire
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
FAD: Scott Siegel
10211 N.W. 53rd St.
Sunrise, FL 33351
Copy to: Stacey A. Giulianti ESQ
8751 W. Broward Blvd., Suite 408
Plantation, FL 33324
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
23 day of July, 1997.
INTEGRA VENTURES, INC. FIRST AID DIRECT, INC.
By: /s/ Dale B. Frinfrock By: /s/ Scott Siegel
- ------------------------- --------------------------
Dale B. Finfrock, President Scott Siegel, President
This Agreement is terminated and voided by mutual agreement effective July 23,
1997.
INTEGRA VENTURES, INC. FIRST AID DIRECT, INC.
/s/ Dale B. Finfrock /s/ Scott Siegel
- ------------------------ ------------------------
Dale B. Finfrock, President Scott Siegel, President
<PAGE>
EXHIBIT A
SHAREHOLDERS OF FIRST AID DIRECT, INC.
NAME SHARES
Scott Siegel 100%
7
EXHIBIT 10.2
RECISSION AND CANCELLATION AGREEMENT
THIS RECISSION AND CANCELLATION AGREEMENT made and entered into this
28TH day of August, 1998, by and between First Aid Select, Inc. d/b/a First Aid
Direct, a Florida corporation ("FAD"), and Integra Ventures, Inc., a Nevada
corporation (n/k/a First Aid Direct) ("Integra").
In consideration of the mutual promises, covenants and conditions
contained herein, and other good and valuable consideration, the receipt and
sufficiency of all of which is hereby acknowledged, it is agreed by and between
the parties as follows:
1. Integra and FAD have agreed that it is in the best interest
of both parties to release the claims Integra has against
FAD as well as the claims that FAD has against Integra in
consideration of such release; and
2. Integra does hereby release and discharge FAD from any and
all obligations under said Agreement for the Exchange of
Common Stock dated July 23, 1997, in consideration of FAD
voiding, canceling and terminating said Agreement effective
as of July 23, 1997, thereby restoring the parties to their
original positions; and
3. FAD does hereby release and discharge Integra from any and
all obligations under said Agreement for the Exchange of
Common Stock dated July 23, 1997, in consideration of
Integra voiding, canceling and terminating said Agreement
effective as of July 23, 1997, thereby restoring the
parties to their original positions; and
4. FAD and its shareholders represent that it has not issued
any shares of stock of Integra by private placement or
other exemption under the federal or state securities laws;
and
5. FAD represents that each of the officers and directors of
Integra has tendered and hereby do tender their
resignations effective as of July 23, 1997; and
6. FAD represents that all shares of Integra issued on or
after July 23, 1997 will be returned to Dale B. Finfrock
immediately upon the execution of this Agreement; and
7. FAD understands that Integra has incurred expenses in
conjunction with the Agreement for the Exchange of Common
Stock and agrees to remit payment to Integra in the amount
of $5,000.00, which shall be considered full payment and
satisfaction of those expenses, as well as any and all
expenses incurred by Integra on behalf of FAD; and
<PAGE>
8. Integra will file an Amendment to its Articles of Incorporation with
the State of Nevada changing its name from First Aid Direct, Inc.
within 30 business days of the receipt of all corporate documents in
conjunction with this Recission Agreement.
The signature of each of the parties hereto constitutes their consent to all of
the foregoing.
FIRST AID DIRECT, INC. INTEGRA VENTURES, INC.
By:/s/ Scott Siegel By:/s/ Dale B. Finfrock
- ----------------------- ----------------------------
Scott Siegel, President Dale B. Finfrock, President
FIRST AID SELECT, INC.
/s/ Scott Siegel
- ----------------------
Scott Siegel, Secretary
EXHIBIT 10.3
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER TH SECURITIES ACT OF 1933 9THE "1933 ACT"), NOR REGISTERED UNDER ANY STATE
SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF STOCK
AGREEMENT made this 11th day of November, 1998, by and between
Platinum and Gold, Inc., a Nevada corporation, (hereinafter referred to as the
"ISSUER") and the individuals listed in Exhibit A attached hereto, (the
"SHAREHOLDERS"), which SHAREHOLDERS own all of the issued and outstanding shares
of PLATINUM AND GOLD RECORDING & PUBLISHING COMPANY, a Florida corporation,
("PAG").
In consideration of the mutual promises, covenants, and
representations contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of
this Agreement, the ISSUER agrees to issued to SHAREHOLDERS, 10,000,000 shares
of the common stock of ISSUER, $.001 par value, in exchange for 100% of the
issued and outstanding shares of PAG, such that PAG shall become a wholly owned
subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and PAG the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Nevada. All actions
taken by the ISSUER have been valid and in accordance with the laws of the State
of Nevada.
ii. Capital The authorized capital stock of ISSUER consists
of 20,000,000 shares of common stock, $.001 part value, of which 11,600,000 are
issued and outstanding, and 1,000,000 shares of preferred stock, par value
$.001, none of which are issued. All outstanding shares are fully paid and non
assessable, free of liens, encumbrance, options, restrictions and legal or
equitable rights of others not a part to this Agreement. At closing, there will
be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating ISSUER to issue or to
transfer from treasury any additional shares of its capital stock. None of the
outstanding shares of ISSUER are subject to any stock restriction agreements.
All of the shareholders of ISSUER have valid title to such shares and acquired
their shares in a lawful transaction and in accordance with the laws of Nevada.
iii. Financial Statements. Exhibit B to this Agreement
includes the balance sheet of ISSUER as of November 30, 1998, and the related
statements of income and retained earnings for the period then ended. The
<PAGE>
financial statements have been prepared in accordance with generally accepted
accounting principles consistently followed by ISSUER throughout the periods
indicated, and fairly present the financial position of ISSUER as of the date of
the balance sheet in the financial statements, and the results of its operations
for the periods indicated.
iv. Absence of Changes. Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
v. Liabilities. ISSUER does not have any debt, liability,
or obligation of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected on the
ISSUERS' financial statement. ISSUER is not aware of any pending, threatened or
asserted claims, lawsuits or contingencies involving ISSUER or its common stock.
There is no dispute of any kind between ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. At closing, ISSUER will be
free from any and all liabilities, liesn, claims and/or commitments.
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by ISSUER and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by SHAREHOLDERS.
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying
on any business and is not a party to any contract, agreement or lease. No
person holds a power of attorney from ISSUER.
ix. Compliance with Laws. ISSUER has complied with, and is
not in violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
x. Litigation. ISSUER is not (and has not been) a part to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course.
xii. Corporate Documents. Copies of each of the following
documents, which are true, complete and correct in all material respects, will
<PAGE>
be attached to and made a part of this Agreement:
1. Articles of Incorporation;
2. Bylaws;
3. List of Officers and Directors;
xiii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with both the laws of Nevada and of Florida.
xiv. Title. The Shares to be issued to SHAREHOLDERS will
be, at closing, free and clear of all liens, security interests, pledges,
charges, claims and encumbrances of any kind. They will, however, be RESTRICTED
SECURITIES, as that term is defined by the Securities Act of 1933. The Shares to
be issued to SHAREHOLDERS will not be Registered, but will be issued pursuant to
an exemption from Registration. They will be subject to certain resale
restrictions imposed by Rule 144, or other applicable provisions of state and/or
Fed3eral law. However, none of such Shares are or will be subject to any voting
trust or agreement. No person holds or has the right to receive any proxy or
similar instrument with respect to such shares, except as provided in this
Agreement. The ISSUER is not a party to any agreement which offers or grants to
any person the right to purchase or acquire any of the securities to be issued
to SHAREHOLDERS. There is no applicable local, state or federal law, rule,
regulation, or decree which would, as a result of the issuance of the Shares to
SHAREHOLDERS, impair, restrict or delay SHAREHOLDERS' voting rights with respect
to the Shares.
3. SHAREHOLDERS and PAG represent and warrant to ISSUER the
following:
i. Organization. PAG is a corporation duly organized,
validly existing, and in good standing under the laws of Florida, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Florida. All actions
taken by the incorporators, directors and shareholders of PAG have been valid
and in accordance with the laws of the State of Florida.
ii. Shareholders and Issued Stock. Exhibit A annexed hereto
sets forthe the names and share holdings of 100% of PAG's shareholders.
iii. Listing Stock for Trading. Upon closing, SHAREHOLDERS
and PAG shall take all steps reasonably necessary to get the ISSUER's common
stock listed for trading in NASD Automated Bulletin Board and to, as soon as
practicably possible, have the company listed with Standard & Poors or Moodys in
their Accelerated Corporate Report.
iv. Counsel. SHAREHOLDERS and PAG represent and warrant
that prior to Closing, that they are represented by independent counsel or have
had the opportunity to retain independent counsel to represent them in this
transaction and that prior to Closing, the law offices of Donald F. Mintmire &
Associates has acted as exclusive counsel tot he ISSUER and has not represented
either the SHAREHOLDERS or PAG in any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agrees that the Shares being
issued pursuant to this Agreement may be sold, pledged, assigned hypothecate or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agrees, prior to any
Transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
<PAGE>
5. CLOSING. The closing of this transaction shall take place at the
law offices of Donald F. Mintmire, 265 Sunrise Avenue, Suite 204, Palm Beach,
Florida. Unless the closing of this transaction takes place on or before
November 30, 1998, then either party may terminate this Agreement.
5. EXPENSE PROVISION. ISSUER and PAG agree to and shall reimburse the
other for any and all expenses, debts, claims or similar charges not disclosed
to the other herein and further agree that such items, if any, may be offset by
either party against any amounts owed or due the other.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
o By the ISSUER
(1) Board of Directors Minutes authorizing the
issuance of a certificate or certificates for 10,000,00 Shares, registered in
the names of the SHAREHOLDERS equal to their pro-rata holdings in PAG.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing
such person as SHAREHOLDERS designate as a director(s) of ISSUER.
(4) The resignation of all the directors of
ISSUER, except that of SHAREHOLDERS designee, dated subsequent to he resolution
described in 3, above.
(5) Unaudited financial statements of ISSUER,
which shall include a balance sheet dated as of November 30, 1998 and statements
of operations, stockholders equity and cash flows for the twelve month period
then ended.
(6) All of the business and corporate records
of ISSUER, including but not limited to correspondence files, bank statements,
checkbooks, savings account books, minutes of shareholder and directors meeting,
financial statements, checkbooks, savings account books, minutes of shareholder
and directors meetings, financial statements, shareholder listings, stock
transfer records, agreements and contracts.
(7) Such other minutes of ISSUER's shareholders
or directors as may reasonably be required by SHAREHOLDERS.
(8) Within 30 days of closing, a private place-
ment memorandum pursuant to Rule 504 of Regulation D as promulgated under the
Securities Act of 1933.
(9) An Opinion Letter from ISSUER's Attorney
attesting to the validity and condition of the ISSUER.
ii. By SHAREHOLDER AND PAG:
(1) Delivery to the ISSUER, or to its Transfer
Agent, the certificates representing 100% of the issued and outstanding stock of
PAG.
(2) Consents signed by all the shareholders of
PAG consenting to the terms of this Agreement.
<PAGE>
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of,
or relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Palm Beach County, Florida in
accordance with the Commercial Rules of the American Arbitration Association
then existing. The arbitrator assigned shall have authority and power to decide
all arbitratible issues. Judgment on the arbitration award may be entered in any
court having jurisdiction over the subject matter of the controversy. The
prevailing party in such claim or controversy shall be entitled to recover all
costs and expenses of such claim or controversy, including attorneys fees from
the non-prevailing party.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph
headings throughout this Agreement are for convenience and reference only, and
shall in now way be deemed to define, limit, or add to the meaning of any
provision of this Agreement.
ii. No Oral change. This Agreement and any provision herein
may not be waived, changed, modified, or discharged orally, but only by a
written agreement signed by both parties to this Agreement.
iii. No Waiver. Except as otherwise provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (a) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (b) the acceptance of performance
of anything required by this Agreement to be performed with knowledge of the
breach or failure of a covenant, condition, or provision hereof shall not be
deemed a waiver of such breach or failure, and (c) no waiver by any party of one
breach by another party shall be construed as a waiver with respect to any other
or subsequent breach.
iv. Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
<PAGE>
ISSUER: Dale B. Finfrock
P.O. Box 669
Palm Beach, FL 33480
With a copy to: Donald F. Mintmire, Esquire
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
PAG: Carol Neal
12724 N.W. 11th Ct.
Sunrise Fl 33323
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
11th day of November, 1998.
PLATINUM AND GOLD, INC. PLATINUM AND GOLD RECODING &
PUBLISHING COMPANY
By: /s/ Dale B. Frinfrock By: /s/ Carol Neal
- -------------------------- --------------------------
Dale B. Frinfrock, President Carol Neal, President
EXHIBIT 10.4
AGREEMENT
AGREEMENT made this 28 day of October, 1998, between PLATINUM AND
GOLD RECORDING AND PUBLISHING COMPANY, a Florida corporation, of 12724 N.W.
11sth Court, Sunrise, FL 33323, hereinafter referred to as "COMPANY", and RANDY
BERNSEN of 1138 N.E. 17th Way, Fort Lauderdale, FL 33304, hereinafter referred
to as "BERNSEN".
WHEREAS, the COMPANY was incorporated on _______________________, and
pursuant to the Articles of Amendment dated July 16, 1998, is authorized to
issue 100 million shares of $.01 par value stock; and
WHEREAS, the COMPANY anticipates that it will execute a public
offering for the sale of stock to the general public within sixty days from
date; and
WHEREAS, the COMPANY is desirous of electing BERNSEN as a Director of
the COMPANY to utilize his skills and knowledge in the entertainment, recording,
and publishing industries, and desires to compensate BERNSEN for such Director's
services by delivering _______ shares of stock to BERNSEN.
THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:
9. ELECTION AS DIRECTOR.
Upon execution hereof, the COMPANY shall cause BERNSEN to be elected
as a Director of the COMPANY, to serve until the next annual meeting of
shareholders and directors. The COMPANY will record and execute such documents
as may be necessary to implement such election.
10. DUTIES.
BERNSEN shall consult and advise the COMPANY concerning information
which he may possess regarding business practices in the entertainment,
recording, and publishing industries. BERNSEN shall attend the annual meeting of
Directors, and perform such other duties as may customarily be required of
Directors. Notwithstanding the foregoing, the day to day operation of the
COMPANY shall rest with the remainder of the Directors and/or officers of the
COMPANY. BERNSEN shall not be required to travel in furtherance of COMPANY's
business unless the specific terms have been mutually agreed upon.
3. EXPENSES.
The COMPANY shall pay for any and all expenses incurred by BERNSEN in
furtherance of his duties hereunder, including but not limited to travel and
accommodations, car rentals, per diems, long distance, and the like. In the
event BERNSEN pay for such expenses, the COMPANY shall immediately reimburse
BERNSEN upon receipt of documentation for such expenses.
4. COMPENSATION.
As compensation for his director's duties hereunder, the COMPANY
shall issue to BERNSEN 10,000 shares of unrestricted common stock in the
COMPANY. Additionally, BERNSEN shall be entitled to such additional compensation
as is afforded to other directors, such as bonuses, "perks", insurance,
vacations, and the like. As the COMPANY anticipates entering into a public
<PAGE>
offering within 60 days from date, the COMPANY shall issue such shares upon the
public offering, or 60 days from date; whichever first occurs. In the event the
COMPANY does not enter into the public offering, BERNSEN shall nevertheless be
entitled to his shares of stock in the COMPANY.
5. EMPLOYMENT.
The COMPANY may employ BERNSEN as producer, writer, director,
engineer, or in any other capacity. Such additional duties are not within the
scope of BERNSEN's duties as a Director. BERNSEN shall be entitled to additional
compensation for such services upon terms as are generally prevailing in the
entertainment industry for a similarly situated individual.
6. NOTICES.
All notices under this Agreement shall be in writing and shall be
deemed to have been given when mailed in any United States Post Office, enclosed
in a certified postpaid envelope addressed to the address of the respective
parties stated above, or to any other address that the party may have fixed
notice; any notice of change of address, however, shall be effective only when
received.
9. WAIVER.
Failure to insist upon strict compliance with any term, covenant, or
condition of this Agreement shall not be deemed a waiver of it. No waiver or
relinquishment of a right or power under this Agreement shall be deemed a waiver
of it at any other time.
10. SEVERABILITY.
The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
o MODIFICATION.
This Agreement cannot be changed, modified, or discharged orally, but
only if consented to in writing by both parties.
(12) BINDING EFFECT.
Except as otherwise herein expressly provided, this Agreement shall
inure to the benefit of and be binding upon the COMPANY, its successors and
assigns, including but not limited to any corporation which may acquire all or
substantially all of the COMPANY'S assets and business or with or into which the
COMPANY may be consolidated or merged. In the event the shares of stock
authorized by COMPANY shall be increased, BERNSEN shall be entitled to his
pro-rata increase thereof.
(13) GOVERNING LAW/ATTORNEY'S FEES.
This Agreement shall be governed by the laws of the state of Florida,
County of Broward. The prevailing party shall be entitled to recover cost and
attorney's fees incurred in enforcement and interpretation of this Agreement.
(14) ENTIRE AGREEMENT.
This Agreement supersedes all agreements previously made between the
parties relating to its subject matter. There are no other understandings or
agreements.
<PAGE>
15. ADDITIONAL DOCUMENTS.
The parties agree to execute such additional documents as may be
reasonably necessary to effectuate the intent of this Agreement.
IN AGREEMENT, the parties have signed their names below.
/s/ Carol A. Neal, President
- ----------------------------------
PLATINUM AND GOLD RECORDING AND PUBLISHING COMPANY
By: Carol A. Neal
Its: President
/s/ Randy Bernsen 10/28/98
- -----------------------
RANDY BERNSEN
EXHIBIT 10.5
REPRESENTATION AGREEMENT
THIS REPRESENTATION AGREEMENT, made this 1st day of Nov, 1998 by and between
PLATINUM & GOLD RECORDING and PUBLISHING COMPANY a Florida Corporation,
presently located at 12724 N.W. 11th Court, Sunrise, FL 33323 (hereinafter
referred to as COMPANY) and Glenda Grainger, located at 1460 Sheridan Street,
Hollywood, FL 33020, (hereinafter referred to as Glenda Grainger).
WITNESSETH THAT:
WHEREAS, the COMPANY and Glenda Grainger have, cocurrent herewith
entered into an agreement dated above to have Glenda Grainger serve on the Board
of Directors of Company as Director for a term of one (1) year, due to her vast
skills and expertise in producing, composing, foreign ventures, selling, booking
and contacts in the entertainment industry.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and lawful consideration, the receipt and adequacy of
which is acknowledged by all parties hereto, the parties hereto agree as
follows:
IT IS UNDERSTOOD, that concurrent with Company going public that
Glenda Grainger will serve as a director on the Board of Directors of Company.
This will give the company the ability too use her name and her consultation
from time to time. One meeting per year will be required for an annual report.
Upon Company going public, Company will deliver 10,000 shares of common stock to
Glenda Grainger for these services and permissions.
Entire Agreement: This agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supercedes all
prior agreements and understandings (written or oral) of the parties in
connection herewith.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day
and year first above written.
PLATINUM & GOLD RECORDING and PUBLISHING
by: /s/ Carol Neal Date 11/1/98
Carol Neal, President
by:/s/ Glenda Grainger Date 11/1/98
STATE OF FLORIDA )
COUNTY OF PALM BEACH )SS:
)
The foregoing instrument before me this ___ day of _____________, 1998 by Glenda
Grainger, who is personally known to me or who has produced __________________
<PAGE>
as identification and did/did not take an oath.
Notary Public:
Sign______________________________
Print______________________________
State of Florida at Large (Seal)
My commission Expires:
<PAGE>
EXHIBIT A
SHAREHOLDERS OF PLATINUM AND GOL RECORDING & PUBLISHING COMPANY
NAME SHARES
Carol Neal 6,000,000
Valerie Peters 2,000,000
Louise Cavell 2,000,000
Randy Bernsen 20,000
Glenda Grainger 20,000
EXHIBIT 10.6
Platinum & Gold Recording & Publishing Corp.
12724 NW 11th Ct.
Sunrise, FL 33323
USA
Phone 800-525-8495
Fax 954-845-0656
CONTRACT TO LICENSE, PROMOTE AND SELL SOUNDTRACKS OF BETTY DICKSON
This is a contract between B & D Productions and Platinum and Gold Recording and
Publishing Corporation. This contract will begin on September 3, 1999 and expire
on September 3, 2000.
Platinum and Gold Recording and Publishing Corporation has agreed to publicize
two (2) albums produced by B & D productions, "Stolen Goods" and "A Woman for
All Seasons" vocalist Betty Dickson.
Platinum and Gold Recording and Publishing Corporation will create a commercial
to market "Stolen Goods" and "A Woman for All Seasons" on television through
1-800 numbers. Major and small recording labels will receive a roster of states,
times and networks the commercial will air. Platinum and Gold's best efforts
will hopefully achieve a record label contract for Betty Dickson Platinum and
Gold will be responsible for all expenses incurred for cost of commercials,
printing of CD's and cassettes.
B & D Productions through licensing masters of "Stolen Goods" and "A Woman for
All Seasons" authorizes Platinum and Gold Recording and Publishing Corporation
to print CD's and cassettes for marketing on TV 1-800 numbers and Platinum and
Gold Recording and Publishing Company's website Platinum-Gold.com.
B & D productions will receive $1.00 for each album sold through any advertising
vehicle Platinum and Gold produces and uses. If and when a recording contract is
accepted, B & D productions will pay Platinum and Gold a finders fee of 20% of
contract. In witness whereof, the parties hereto, intending to be legally bound,
have executed this agreement.
PLATINUM & GOLD RECORDING & PUBLISHING CORPORATION.
By: Carol Neal, President
/s/ Carol Neal Date 9/3/99
- ---------------------
B & D PRODUCTIONS
by: Betty Dickson
/s/ Betty Dickson Date 9-3-99
- --------------------
by: Dolores Davies
/s/ Dolores Davies Date 9-3-99
- --------------------
EXHIBIT 10.7
PLATINUM AND GOLD RECORDING AND PUBLISHING CORP.
7860 Glades Road, Suite 220 o Boca Raton, FL 33434
Phone: (561) 482-0004 o Fax: (561) 488-2602
July 1, 1998
Steve Jordan
216 NE 1st Street
Ft. Lauderdale, FL 33304
This letter is to express the intent of Platinum and Gold Recording and
Publishing Corp. to enter into a contract with you for the purposes of recording
a single compact disc and cassette to be sold through a TV 800 number by either
QVC, Home Shopping Network, Cable TV or all of them. This will furnish the
capability to complete an album with you through a joint-venture formed by
Platinum and Gold Recording and Publishing and a renown company.
This Letter of Intent will formerly go into contract within 10 to 15 weeks.
Recording at New River Recording Studio will begin at that time. Capital will be
raised through a private placement for the completion of these two projects. We
will proceed to contract if agreeable by both parties.
In addition, it is the intent of Platinum and Gold Recording and Publishing
Corp., to act as an agent/manager to secure musicians and appearances for the
purpose of performing track dates for radio and TV.
The structure of the agreement is complete and shall be governed in all respects
by the laws of the State of Florida.
An executed copy of this Letter of Intent shall be deemed to be an original,
enforceable and admissible document for all purposes as may be necessary to
enforce the terms hereof.
Sincerely,
Platinum and Gold Recording and Publishing Corp.
by: by:
/s/ Valerie M. Peters /s/ Louise A. Cavell
- ---------------------- ----------------------
Valerie M. Peters Louise A. Cavell
President/CEO VP/Secretary
/s/ Carol Neal
- ------------------
Carol Neal
CFO/Treasurer
Agreed to and accepted this 1st day of July, 1998.
/s/ Steve Jordan
- -----------------------
Steve Jordan
EXHIBIT 10.8
PRODUCERS CONTRACT
This contract dated the 3rd day of September, 1999 is between Barbara Chadwick
(Hereinafter referred to as ARTIST) and producer PLATINUM AND GOLD RECORDING &
PUBLISHING CORP. (hereinafter referred to as PRODUCER). The term of this
agreement shall commence as of the date hereof and shall continue until the
completion of PRODUCERS services.
PRODUCER agrees to record a single compact disc and cassette with ARTIST (music
to be determined) to be sold through a TV 800 number on Cable and Satellite TV.
All recording will be done at New River Recording Studio located in Ft.
Lauderdale, FL.
All musicians for the purpose of performing soundtracks will be the
responsibility of the PRODUCER.
All masters produced hereunder, from the inception of the recording hereof, all
reproductions made therefrom, together with the performances embodied therein
and all copyrights therein and thereto and all renewals and extensions thereof,
shall be entirely the property of producer, free of any claims whatsoever by
ARTIST.
All expenses for production of infomcial for 1-800 numbers on TV will be sole
responsibility pf PRODUCER.
In addition it is the intent of PRODUCER to act as an agent/manager to secure a
major record company contract for ARTIST (determined by sales produced with TV
infomercials).
ARTIST shall receive a total of $.012 royalty fee for every CD or cassette sold
through 1-800 numbers.
If PRODUCER is successful in completing a contract with a major record company
for ARTIST, PRODUCER shall receive 35% of entire recording contract upon
execution of said contract.
PRODUCER hereby warrants, represents, and agrees that she is under no
disability, restriction or other incumbency to her right to execute and perform
the services described in this Contract.
PRODUCER shall have the right at our election to assign any of our rights
hereunder in whole or part to any subsidiary, affiliated or related company, or
to any person, firm or corporation acquiring rights in the Masters produced
hereunder.
This contract sets forth the entire understanding of the parties hereto relating
to the subject matter hereof. No amendment or modification of this contract
shall be binding unless confirmed in writing by both parties. Nothing herein
contained shall constitute a partnership or joint venture between you and us.
This contract has been entered into in the state of Florida, and its validity,
construction, interpretation, and legal effect shall be governed by the laws of
the state of Florida. If the foregoing correctly reflects your understanding and
agreement with us, please indicate by signing below.
/s/ Carol Neal
- --------------------
PRODUCER
Agreed and Accepted
/s/ Barbara Chadwick
- -------------------------
ARTIST
EXHIBIT 10.9
PRODUCERS CONTRACT
This contract dated the 3rd day of September, 1999 is between Beverly Fortin
(hereinafter referred to as ARTIST) and producer PLATINUM AND GOLD RECORDING &
PUBLISHING CORP. (hereinafter referred to as PRODUCER). The term of this
agreement shall commence as of the date hereof and shall continue until the
completion of PRODUCERS services.
PRODUCER agrees to record a single compact disc and cassette with ARTIST (music
to be determined) to be sold through a TV 800 number on Cable and Satellite TV.
All recording will be done at New River Recording Studio located in Ft.
Lauderdale, FL.
All musicians for the purpose of performing soundtracks will be the
responsibility of the PRODUCER.
All masters produced hereunder, from the inception of the recording hereof, all
reproductions made therefrom, together with the performances embodied therein
and all copyrights therein and thereto and all renewals and extensions thereof,
shall be entirely the property of producer, free of any claims whatsoever by
ARTIST.
All expenses for production of infomcial for 1-800 numbers on TV will be sole
responsibility pf PRODUCER.
In addition it is the intent of PRODUCER to act as an agent/manager to secure a
major record company contract for ARTIST (determined by sales produced with TV
infomercials).
ARTIST shall receive a total of $.012 royalty fee for every CD or cassette sold
through 1-800 numbers.
If PRODUCER is successful in completing a contract with a major record company
for ARTIST, PRODUCER shall receive 35% of entire recording contract upon
execution of said contract.
PRODUCER hereby warrants, represents, and agrees that she is under no
disability, restriction or other incumbency to her right to execute and perform
the services described in this Contract.
PRODUCER shall have the right at our election to assign any of our rights
hereunder in whole or part to any subsidiary, affiliated or related company, or
to any person, firm or corporation acquiring rights in the Masters produced
hereunder.
This contract sets forth the entire understanding of the parties hereto relating
to the subject matter hereof. No amendment or modification of this contract
shall be binding unless confirmed in writing by both parties. Nothing herein
contained shall constitute a partnership or joint venture between you and us.
This contract has been entered into in the state of Florida, and its validity,
construction, interpretation, and legal effect shall be governed by the laws of
the state of Florida. If the foregoing correctly reflects your understanding and
agreement with us, please indicate by signing below.
/s/ Louise A. Cavell for Platinum & Gold Recording & Publishing Corp.
- ---------------------
PRODUCER
Agreed and Accepted:
/s/ Beverly Fortin
- ----------------------
ARTIST
EXHIBIT 10.10
PROMISSORY NOTE
$24,600.00
Fort Lauderdale, Florida
September 7 , 1999
For value received the undersigned promises to pay the order of CAROL
NEAL, the principal sum of Twenty-Four Thousand Six Hundred and No/100 Dollars
($24,600.00), with no interest thereon. Said sum being payable in lawful money
of the United States or its equivalent, at 7699 N.E.
8th Court, Boca Raton, Florida 33487, payable as follows:
The entire outstanding principal balance due shall be due and payable
upon demand, however, if no demand is made, then the entire principal
balance shall be due and payable in full, two (2) years from the date
of this Note.
Each maker and endorser severally waives demand, protest and notice
of maturity, nonpayment or protest and all requirements necessary to hold each
of them liable as makers and endorsers.
Each maker and endorser further agrees, jointly and severally, to pay
all costs of collection including a reasonable attorney's fee in case the
principal of this note or any payment on the principal or any interest thereon
is not paid at the respective maturity thereof, or in case it becomes necessary
to protect the security hereof, whether suit be brought or not.
This note and deferred interest payments shall bear interest at the
rate if Eighteen (18%) percent, per annum from maturity until paid.
Maker shall pay holder a late charge of five percent (5.0%) of any
payment not received by holder within ten (10) days after its due date, provided
that holder has not exercised his right of acceleration.
Upon default in the payment of principal and/or interest due under
this Promissory Note, or upon default under the mortgage securing this
Promissory Note, the entire outstanding principal balance together with interest
thereon shall, at the option of the holder, be immediately due and payable.
This note is to be construed and enforced according to the laws of
the State of Florida.
Anything to the contrary notwithstanding the entire principal balance
together with interest thereon, shall be immediately due and payable upon the
transfer or conveyance of any interest in the property encumbered by the
mortgage securing this promissory note.
This note may be pre-paid, in whole or in part, without premium or
penalty.
PLATINUM AND GOLD RECORDING AND
PUBLISHING COMPANY
By: /s/ Valerie Peters
----------------------------
VALERIE PETERS, Vice President
EXHIBIT 23.1
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in the Registration
Statement of PLATINUM AND GOLD, INC. on Form 10SB to be filed on or about
October 11 , 1999, with the Securities and Exchange Commission the consolidated
financial statements of PLATINUM AND GOLD, INC. and subsidiaries which expresses
an unqualified opinion and includes an explanatory paragraph relating to a going
concern uncertainty appearing in the Form l0SB of PLATINUM AND GOLD, INC. for
Registration.
/s/ Margolies Fink and Wichrowski
- ---------------------------------------------
Margolies Fink and Wichrowski
Certified Public Accountants
Pompano Beach, Florida
October 8, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001081084
<NAME> Platinum and Gold, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Currency
<S> <C>
<PERIOD-TYPE> 7-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1999
<PERIOD-END> Jul-31-1999
<EXCHANGE-RATE> 1
<CASH> 225
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 34,682
<PP&E> 2,176
<DEPRECIATION> (472)
<TOTAL-ASSETS> 36,612
<CURRENT-LIABILITIES> 25,649
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,963
<TOTAL-LIABILITY-AND-EQUITY> 36,612
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,163
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,417)
<INCOME-TAX> 0
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<CHANGES> 0
<NET-INCOME> (7,417)
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</TABLE>
