ASTIR, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0306861
(State of organization) (I.R.S. Employer Identification No.)
4016 N. Tenaya Way, Suite #184, Las Vegas, NV 89129
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 768-0555
Registrant's Attorney: Shawn Hackman, Esq.
3360 W. Sahara Ave.
Suite 200, Las Vegas, NV 89102
(702) 732-2253
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common
ITEM 1. DESCRIPTION OF BUSINESS
Background
Astir, Inc. (the "Company") is a Nevada corporation formed on
September 21, 1993.
Its principal place of business is located at 4016 N. Tenaya Way,
Suite #184, Las Vegas, NV 89129. The Company was organized to engage
in any lawful corporate business, including but not limited to,
participating in mergers with and acquisitions of other companies.
The Company has been in the developmental stage since inception and
has no operating history other than organizational matters. The
Company was organized September 21, 1993, under the laws of the
State of Nevada, as Astir, Inc. The company has no operations and in
accordance with SFAS #7, is considered a development stage company.
The Company was incorporated by Jose F. Garcia. He no longer holds
any position with the Company and holds none of the Company's stock.
Initially Mr. Garcia was issued 2,500,000 shares of common stock.
Mr. Garcia sold or gifted his shares to 33 friends and business
acquaintances in transactions exempt from registration pursuant to
section 4 of the Securities Act of 1933, as amended. All such
transactions took place on or prior to October 23, 1993. All
shareholders have held their stock since that time. The primary
activity of the Company currently involves seeking a company or
companies that it can acquire or with whom it can merge. The Company
has not selected any company as an acquisition target or merger
partner and does not intend to limit potential candidates to any
particular field or industry, but does retain the right to limit
candidates, if it so chooses, to a particular field or industry. The
Company's plans are in the conceptual stage only. The Board of
Directors has elected to begin implementing the Company's principal
business purpose, described below under "Item 2, Plan of Operation".
As such, the Company can be defined as a "shell" company, whose sole
purpose at this time is to locate and consummate a merger or
acquisition with a private entity. The proposed business activities
described herein classify the Company as a "blank check" company.
Many states have enacted statutes, rules, and regulations limiting
the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to undertake
any efforts to cause a market to develop in the Company's securities
until such time as the Company has successfully implemented its
business plan. The Company is filing this registration statement on
a voluntary basis, pursuant to section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act"), in order to ensure that
public information is readily accessible to all shareholders ad
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to file
periodic reports is suspended pursuant to the Exchange Act, the
Company anticipates that it will continue to voluntarily file such
reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE ANDD MINIMAL ASSETS. The Company has
had no operating history and has received no revenues or earnings
from operations.
The Company has no significant assets or financial resources. The
Company will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until it completes a business
combination. This may result in the Company incurring a net
operating loss which will increase continuously until the Company
completes a business combination with a profitable business
opportunity. There is no assurance that the Company will identify a
business opportunity or complete a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of
the Company's proposed plan of operation will depend to a great
extent on the operations, financial condition, and management of the
identified business opportunity. While management intends to seek
business combinations with entities having established operating
histories, it cannot assure that the Company will successfully
locate candidates meeting such criteria. In the event the Company
completes a business combination, the success of the Company's
operations may be dependent upon management of the successor firm or
venture partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities. A
large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of
companies which may also be desirable target candidates for the
Company. Nearly all such entities have significantly greater
financial resources, technical expertise, and managerial
capabilities than the Company. The Company is, consequently, at a
competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will also compete with numerous other small
public companies in seeking merger or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no arrangement,
agreement, or understanding with respect to engaging in a business
combination with any private entity. There can be no assurance the
Company will successfully identify and evaluate suitable business
opportunities or conclude a business combination. Management has not
identified any particular industry or specific business within an
industry for evaluations. The Company has been in the developmental
stage since inception and has no operations to date. Other than
issuing shares to its original shareholders, the Company never
commenced any operational activities. The combination on terms
favorable to the Company. The Company has not established a specific
length of operating history or a specified level of earnings,
assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which the Company
would not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business e is no assurance the Company
will be able to negotiate a business opportunity having no
significant operating history, losses, limited or no potential for
earnings, limited assets, negative net worth, or other negative
characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting up
to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect
development of the Company's business and its likelihood of
continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and non
"arms-length" transactions may also arise in the event the Company's
officers or directors are involved in the management of any firm
with which the Company transacts business. The Company's Board of
Directors has adopted a resolution which prohibits the Company from
completing a combination with any entity in which management serve
as officers, directors or partners, or in which they or their family
members own or hold any ownership interest. Management is not aware
of any circumstances under which this policy could be changed while
current management is in control of the Company. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS -
CONFLICTS OF INTEREST." REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION. Companies subject to Section 13 of the Securities
Exchange Act of 1934 (the "Exchange Act") must provide certain
information about significant acquisitions, including certified
financial statements for the company acquired, covering one or two
years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude the
Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition
so long as the reporting requirements of the 1934 Act are
applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
not conducted or received results of market research indicating that
market demand exists for the transactions contemplated by the
Company. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. If there is demand for a
business combination as contemplated by the Company, there is no
assurance the Company will successfully complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's proposed
operations, even if successful, will result in a business
combination with only one entity. Consequently, the resulting
activities will be limited to that entity's business. The Company's
inability to diversify its activities into a number of areas may
subject the Company to economic fluctuations within a particular
business or industry, thereby increasing the risks associated with
the Company's operations.
REGULATION. Although the Company will be subject to regulation under
the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act
of 1940, insofar as the Company will not be engaged in the business
of investing or trading in securities. In the event the Company
engages in business combinations which result in the Company holding
passive investment interests in a number of entities, the Company
could be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as an
investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as
to the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject the
Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining a
controlling interest in the Company. Any such business combination
may require management of the Company to sell or transfer all or a
portion of the Company's common stock held by them, or resign as
members of the Board of Directors of the Company. The resulting
change in control of the Company could result in removal of one or
more present officers and directors of the Company and a
corresponding reduction in or elimination of their participation in
the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based upon a
business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously authorized
and unissued common stock of the Company will reduce the percentage
of shares owned by present and prospective shareholders, and a
change in the Company's control and/or management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into a
business combination with an entity that desires to establish a
public trading market for its shares. A target company may attempt
to avoid what it deems to be adverse consequences of undertaking its
own public offering by seeking a business combination with the
Company. The perceived adverse consequences may include, but are not
limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control
to public shareholders, and the inability or unwillingness to comply
with various federal and state securities laws enacted for the
protection of investors. These securities laws primarily relate to
registering securities and full disclosure of the Company's
business, management, and financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target entity. Management cannot assure that a business combination
will meet the statutory requirements for a tax-free reorganization,
or that the parties will obtain the intended tax-free treatment upon
a transfer of stock or assets. A non-qualifying reorganization could
result in the imposition of both federal and state taxes, which may
have an adverse effect on both parties to the
transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management believes that any potential target company
must provide audited financial statements for review, and for the
protection of all parties to the business combination. One or more
attractive business opportunities may forego a business combination
with the Company, rather than incur the expenses associated with
preparing audited financial statements.
BLUE SKY CONSIDERATIONS. Because the securities registered hereunder
have not been registered for resale under the blue sky laws of any
state, and the Company has no current plans to register or qualify
its shares in any state, holders of these shares and persons who
desire to purchase them in any trading market that might develop in
the future, should be aware that there may be significant state blue
sky restrictions upon the ability of new investors to purchase the
securities. These restrictions could reduce the size of any
potential market. As a result of recent changes in federal law, non-
issuer trading or resale of the Company's securities is exempt from
state registration or qualification requirements in most states.
However, some states may continue to restrict the trading or resale
of blind-pool or "blank-check" securities. Accordingly, investors
should consider any potential secondary market for the Company's
securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-
looking statements" as that term is defined in Section 27A of the
Securities Act of 1933 as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934 as amended (the
"Exchange Act"). All statements that are included in this
Registration Statement, other than statements of historical fact,
are forward-looking statements. Although Management believes that
the expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause
actual results to differ materially from the expectations are
disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in this
Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more business
opportunities presented to it by persons or firms desiring the
perceived advantages of a publicly held corporation. At this time,
the Company has no plan, proposal, agreement, understanding, or
arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or
company for investigation and evaluation. No member of Management or
any promoter of the Company, or an affiliate of either, has had any
material discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical location,
and may participate in business ventures of virtually any kind or
nature. Discussion of the proposed business under this caption and
throughout this Registration Statement is purposefully general and
is not meant to restrict the Company's virtually unlimited
discretion to search for and enter into a business combination. The
Company may seek a combination with a firm which only recently
commenced operations, or a developing company in need of additional
funds to expand into new products or markets or seeking to develop a
new product or service, or an established business which may be
experiencing financial or operating difficulties and needs
additional capital which is perceived to be easier to raise by a
public company. In some instances, a business opportunity may
involve acquiring or merging with a corporation which does not need
substantial additional cash but which desires to establish a public
trading market for its common stock. The Company may purchase assets
and establish wholly-owned subsidiaries in various businesses or
purchase existing businesses as subsidiaries. Selecting a business
opportunity will be complex and extremely risky. Because of general
economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes
that there are numerous firms seeking the benefits of a publicly-
traded corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for
the principals of a business, creating a means for providing
incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statues)
for all shareholders, and other items. Potentially available
business opportunities may occur in many different industries and at
various stages of development, all of which will make the task of
comparative investigation and analysis of such business
opportunities extremely difficult and complex.
Management believes that the Company may be able to benefit from the
use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the Company
would be required to use less of its available funds to acquire a
target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target
companies, or to other activities. The borrowing involved in a
leveraged transaction will ordinarily be secured by the assets of
the acquired business. If that business is not able to generate
sufficient revenues to make payments on the debt incurred by the
Company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These
leveraging techniques, while reducing the amount of funds that the
Company must commit to acquire a business, may correspondingly
increase the risk of loss to the Company. No assurance can be given
as to the terms or availability of financing for any acquisition by
the Company. During periods when interest rates are relatively high,
the benefits of leveraging are not as great as during periods of
lower interest rates, because the investment in the business held on
a leveraged basis will only be profitable if it generates sufficient
revenues to cover the related debt and other costs of the financing.
Lenders from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future borrowing,
distribution, and operating policies of the Company. It is not
possible at this time to predict the restrictions, if any, which
lenders may impose, or the impact thereof on the Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the opportunity
to acquire a controlling ownership interest in a public company at
substantially less cost than is required to conduct an initial
public offering. The owners of the businesses will, however, incur
significant post-merger or acquisition registration costs in the
event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting
costs in connection with the acquisition of a business opportunity,
including the costs of preparing post-effective amendments, Forms 8-
K, agreements, and related reports and documents. Nevertheless, the
officers and directors of the Company have not conducted market
research and are not aware of statistical data which would support
the perceived benefits of a merger or acquisition transaction for
the owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially
any stage of its corporate life. It is impossible to predict at this
time the status of any business in which the Company may become
engaged, in that such business may need to seek additional capital,
may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the
Company does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as the Company has successfully
consummated such a merger or acquisition. The Company also has no
plans to conduct any offerings under Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them
and other business and professional people. It is not presently
anticipated that the Company will engage professional firms
specializing in business acquisitions or reorganizations.
Management, while not especially experienced in matters relating to
the new business of the Company, will rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's
shareholders, in accomplishing the business purposes of the Company.
It is not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes
described herein. However, if the Company does retain such an
outside consultant or advisor, any cash fee earned by such party
will need to be paid by the prospective merger/acquisition
candidate, as the Company has no cash assets with which to pay such
obligation. There have been no discussions, understandings,
contracts or agreements with any outside consultants and none are
anticipated in the future. In the past, the Company's management has
never used outside consultants or advisors in connection with a
merger or acquisition. As is customary in the industry, the Company
may pay a finder's fee for locating an acquisition prospect. If any
such fee is paid, it will be approved by the Company's Board of
Directors and will be in accordance with the industry standards.
Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such
fees are typically in the range of 5% on a $1,000,000 transaction
ratably down to 1% in a $4,000,000 transaction. Management has
adopted a policy that such a finder's fee or real estate brokerage
fee could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such person
plays a material role in bringing a transaction to the Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product. There
is no assurance that the Company will be able either to obtain
additional financing or to interest third parties in providing
funding for the further development, marketing and manufacturing of
any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors of the Company
(see "Management"). Management intends to concentrate on
identifying prospective business opportunities which may be brought
to its attention through present associations with management. In
analyzing prospective business opportunities, management will
consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be
available and
the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be
anticipated to
impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel of
the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained.
Opportunities in which the Company participates will present certain
risks, many of which cannot be identified adequately prior to
selecting a specific opportunity. The Company's shareholders must,
therefore, depend on Management to identify and evaluate such risks.
Promoters of some opportunities may have been unable to develop a
going concern or may present a business in its development stage (in
that it has not generated significant revenues from its principal
business activities prior to the Company's participation.) Even
after the Company's participation, there is a risk that the combined
enterprise may not become a going concern or advance beyond the
development stage.
Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require substantial
management time and attention as well as substantial costs for
accountants, attorneys, and others. If a decision is made not to
participate in a specific business opportunity the costs incurred in
the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may
result in the loss by the Company of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction with a
suitable target company. If no such target is found, therefore, no
return on an investment in the Company will be realized, and there
will not, most likely, be a market for the Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation,
reorganization, joint venture, franchise, or licensing agreement
with another corporation or entity. It may also purchase stock or
assets of an existing business. Once a transaction is complete, it
is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of the Company's officers and directors may, as part
of the terms of the transaction, resign and be replaced by new
officers and directors without a vote of the Company's shareholders.
It is anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration under
applicable Federal and state securities laws. In some circumstances,
however, as a negotiated element of this transaction, the Company
may agree to register such securities either at the time the
transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional
securities and their potential sale into any trading market which
may develop in the Company's Common Stock may have a depressive
effect on such market.
While the actual terms of a transaction to which the Company may be
a party cannot be predicted, it may be expected that the parties to
the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in
a so called "tax free" reorganization under Sections 368(a)(1) or
351 of the Internal Revenue Code of 1986, as amended (the "Code").
In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more
of the voting stock of the surviving entity. In such event, the
shareholders of the Company, including investors in this offering,
would retain less than 20% of the issued and outstanding shares of
the surviving entity, which could result in significant dilution in
the equity of such shareholders. part of the Company's
investigation, officers and directors of the Company will meet
personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and take other reasonable investigative measures, to the
extent of the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity with
a target company will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the
management of the opportunity, and the relative negotiating strength
of the Company and such other management. With respect to any
mergers or acquisitions, negotiations with target company management
will be expected to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their
shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, the Company's
shareholders will, in all likelihood, hold a lesser percentage
ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant
reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's then shareholders,
including purchasers in this offering.
Management has advanced, and will continue to advance, funds which
shall be used by the Company in identifying and pursuing agreements
with target companies.
Management anticipates that these funds will be repaid from the
proceeds of any agreement with the target company, and that any such
agreement may, in fact, be contingent upon the repayment of those
funds.
Competition
The Company is an insignificant participant among firms which engage
in business combinations with, or financing of, development-stage
enterprises. There are many established management and financial
consulting companies and venture capital firms which have
significantly greater financial and personal resources, technical
expertise and experience than the Company. In view of the Company's
limited financial resources and management availability, the Company
will continue to be at significant competitive disadvantage vis-a-
vis the Company's competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the programming
code in existing computer systems as the year 2000 approaches. The
Company has assessed these issues as they relate to the Company, and
since the Company currently has no operating business and does not
use any computers, and since it has no customers, suppliers or other
constituents, it does not believe that there are any material year
2000 issues to disclose in this Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company"
as an issuer which is or holds itself out as being engaged primarily
in the business of investing, reinvesting or trading securities.
While the Company does not intend to engage in such activities, the
Company may obtain and hold a minority interest in a number of
development stage enterprises. The Company could be expected to
incur significant registration and compliance costs if required to
register under the Investment Company Act of 1940. Accordingly,
management will continue to review the Company's activities from
time to time with a view toward reducing the likelihood the Company
could be classified as an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Management").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this time.
The Company does have the use of a limited amount of office space
from one of the directors, Jeff Bradley, at no cost to the Company,
and Management expects this arrangement to continue.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The following table sets forth each person known to the Company, as
of October 23, 1998, to be a beneficial owner of five percent (5%)
or more of the Company's common stock, by the Company's directors
individually, and by all of the Company's directors and executive
officers as a group. Except as noted, each person has sole voting
and investment power with respect to the shares shown.
Title of Class
Name/Address
of Owner
Shares
Beneficially
Owned
Percentage
Ownership
Common
Jorge Melgar
13719 W. Bambridge Ave.
Goodyear, AZ 85375
100,000
4%
Common
Silvia Orellana
21041 N. 61st Dr.
Glendale, AZ 85308
100,000
4%
Common
Jeff Bradley
1522 Marita Dr.
Boulder City, NV 89005
100,000
4%
Common
All officers and directors
(3 individuals)
300,000
12%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS
The members of the Board of Directors of the Company serve until the
next annual meeting of the stockholders, or until their successors
have been elected. The officers serve at the pleasure of the Board
of Directors. There are no agreements for any officer or director to
resign at the request of any other person, and none of the officers
or directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to the
business on an "as-needed" basis, which is expected to require 5-10
hours per month. Information as to the directors and executive
officers of the Company is as follows:
Name/Address
Age
Position
Jorge E. Melgar
13719 W. Cambridge Ave.
Goodyear, AZ 85375
27
President/Director
Silvia B Orellana
21041 N. 61st Dr.
Glendale, AZ 85308
31
Secretary/Director
Jeff W Bradley
1522 Marita Dr.
Boulder City, NV 89005
Treasurer/Director
Jorge E. Melgar; President
He has been the Company President and a Director since October 1,
1997. He attended Rio Hondo Community College and AMS College for
basic electronics and in 1990 received his computer technician
certification. He also attended the ABC Trade College and served
with the Arizona Electrical Contractor Association, where he
graduated as a Journeyman in 1997. He has worked as an electrical
contractor for the past nine years. Since December, 1998, he has
worked with WMS as an electrical contractor, where he is in charge
of supervising all commercial installations. From March of 1995,
through December, 1998, he worked for Current Construction
Electrical, where he was in charge of the electrical installation in
the residential field, and customer satisfaction. From 1990 through
1995, he worked in the purchase and sales department of MJM
Electrical Contractors. Part of his work there included electrical
installation on the Los Angeles Rapid Transit System.
Silvia B. Orellana; Secretary
Ms. Orellana attended nursing school at the Montebello (CA)
Community College and Long Beach Community College from 1983 to
1987. She has worked on the development and care of children since
that time. She currently is working in Scottsdale, AZ as a
professional child development assistant with Drs. David and Deborah
Kauffman. From 1990 to 1995, she worked with Mr. and Mrs. Steve
Chang, in Los Angeles, as an operations manager in a Chinese import
business. From 1987 to 1990, she worked in Guatemala, teaching
English as a second language to children under 10 year old.
Jeff W. Bradley; Treasurer
Jeff Bradley has extensive experience in the setup and structuring
of new corporations in the state of Nevada. He also have over
fifteen years of experience with shell corporations and reverse
merges, mergers, acquisitions, and tax free stock exchanges. He has
been a consultant with Shogun Investment Group, Ltd, for the past
ten years. The following is a list of Companies Mr. Bradley has been
involved with for the past five years: January 1993 to March 1994:
Consulting work for Triple "D" Court, Inc. of Wyoming now Video
Stream International OTC BB (VSTM) February 1995 to June 1996:
Consulting work for Perfect Future, Ltd. Of Nevada now Eduverse
Accelerated Learning Systems, Inc. OTC BB (EDUV). April 1996 to
July 1997: Consulting work for Rhodes Wolters & Associates, Inc. of
Nevada now The Majestic Companies, Inc. OTC BB (MJXC). January 1996
to December 1998: Consulting work for Capital Placement
Specialists, Inc. of Utah now Converge Global, Inc. OTC BB (CVRG).
May 1997 to January 1999: Consulting work for Metro Match, Inc. of
Nevada OTC BB (MTMH). From 1976 to 1981, he was employed by W.W.
Grainger as a warehouse representative and sales representative. In
1982 he became the VP Regional Sales Manager for National Energy
Management. Since 1990 he has been a corporate consultant for Shogun
Investment Group.Blank Check Experience From 1990 to 1996, Mr.
Melgar served as secretary and treasurer of a Nevada corporation
named Woodie I, Inc., a development stage company. The Company
merged into a real estate venture in Florida in 1996, and Mr. Melgar
left to continue in his electrician career. In addition to the
experience described above, Mr. Jeff Bradley is or has been an
officer and/or director the following blank check companies: Noble
Onie, Inc. - Officer and Director since December 12, 1995 Roller
Coaster, Inc. - Officer and Director since December 12, 1995 Mr.
Bradley is also an Officer and or Director in the following inactive
corporations, Accord Investment and Development Group a Nevada
corporation, Grand Sports International, Ltd., a Nevada corporation,
High Desert Land Development, Inc., a Nevada Corporation and Stealth
Holding, Inc. a Nevada corporation.
There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has not
established any committees.
Conflicts of Interest
Insofar as the officers and directors aare engaged in other business
activities, management anticipates it will devote only a minor
amount of time to the Company's affairs. The officers and directors
of the Company may in the future become shareholders, officers or
directors of other companies which may be formed for the purpose of
engaging in business activities similar to those conducted by the
Company. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation which
come to their attention, either in the performance of their duties
or in any other manner, will be considered opportunities of, and be
made available to the Company and the companies that they are
affiliated with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the officer or director.
Subject to the next paragraph, if a situation arises in which more
than one company desires to merge with or acquire that target
company and the principals of the proposed target company have no
preference as to which company will merge or acquire such target
company, the company of which the President first became an officer
and director will be entitled to proceed with the transaction.
Except as set forth above, the Company has not adopted any other
conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
SSecurities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company will
not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and, consequently,
any violation of such Act would subject the Company to material
adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the Company,
nor have they received such compensation in the past. They both have
agreed to act without compensation until authorized by the Board of
Directors, which is not expected to occur until the Registrant has
generated revenues from operations after consummation of a merger or
acquisition. As of the date of this registration statement, the
Company has no funds available to pay directors. Further, none of
the directors are accruing any compensation pursuant to any
agreement with the Company. It is possible that, after the Company
successfully consummates a merger or acquisition with an
unaffiliated entity, that entity may desire to employ or retain one
or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide
other compensation to such persons. However, the Company has adopted
a policy whereby the offer of any post-transaction remuneration to
members of management will not be a consideration in the Company's
decision to undertake any proposed transaction. Each member of
management has agreed to disclose to the Company's Board of
Directors any discussions concerning possible compensation to be
paid to them by any entity which proposes to undertake a transaction
with the Company and further, to abstain from voting on such
transaction. Therefore, as a practical matter, if each member of
the Company's Board of Directors is offered compensation in any form
from any prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of Directors
as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the
event the Company consummates a transaction with any entity referred
by associates of management, it is possible that such an associate
will be compensated for their referral in the form of a finder's
fee. It is anticipated that this fee will be either in the form of
restricted common stock issued by the Company as part of the terms
of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash,
such payment will be tendered by the acquisition or merger
candidate, because the Company has insufficient cash available. The
amount of such finder's fee cannot be determined as of the date of
this registration statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein. Persons
"associated" with management is meant to refer to persons with whom
management may have had other business dealings, but who are not
affiliated with or relatives of management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger with
any entity in which any of the Company's Officers, Directors,
principal shareholders or their affiliates or associates serve as
officer or director or hold any ownership interest. Management is
not aware of any circumstances under which this policy may be
changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the
Company has successfully implemented its business plan described
herein. Accordingly, each shareholder of the Company has executed
and delivered a "lock-up" letter agreement, affirming that he/she
shall not sell his/her respective shares of the Company's common
stock until such time as the Company has successfully consummated a
merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that
no trading will occur in the Company's securities until a merger or
acquisition has been consummated, each shareholder has agreed to
place his/her respective stock certificate with the Company's legal
counsel, who will not release these respective certificates until
such time as legal counsel has confirmed that a merger or
acquisition has been successfully consummated. The Company's legal
counsel is Shawn F. Hackman, PC, 3360 W. Sahara Ave., Suite 200, Las
Vegas, NV 89102. However, while management believes that the
procedures established to preclude any sale of the Company's
securities prior to closing of a merger or acquisition will be
sufficient, there can be no assurances that the procedures
established herein will unequivocally limit any shareholder's
ability to sell their respective securities before such closing.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings
and, to the best of its knowledge, no such action by or against the
Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's common stock is not traded on any exchange or OTC
market. Management has not undertaken any discussions, preliminary
or otherwise, with any prospective market maker concerning the
participation of such market maker in the after-market for the
Company's securities and management does not intend to initiate any
such discussions until such time as the Company has consummated a
merger or acquisition. There is no assurance that a trading market
will ever develop or, if such a market does develop, that it will
continue.
After a merger or acquisition has been completed, one or both of the
Company's officers and directors will most likely be the persons to
contact prospective market makers. It is also possible that persons
associated with the entity that merges with or is acquired by the
Company will contact prospective market makers. The Company does not
intend to use consultants to contact market makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity security
that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer approve a
person's account for transactions in penny stocks; and (ii) the
broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account
for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and
objectives of the person; and (ii) make a reasonable determination
that the transactions in penny stocks are suitable for that person
and that person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight
form, (i) sets forth the basis on which the broker or dealer made
the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of
investing in penny stocks in both public offerings and in secondary
trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities
and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have
to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers NASDAQ, has recently made changes in the criteria
for initial listing on the NASDAQ Small Cap market and for continued
listing. For initial listing, a company must have net tangible
assets of $4 million, market capitalization of $50 million or net
income of $750,000 in the most recently completed fiscal year or in
two of the last three fiscal years. For initial listing, the common
stock must also have a minimum bid price of $4 per share. In order
to continue to be included on NASDAQ, a company must maintain
$2,000,000 in net tangible assets and a $1,000,000 market value of
its publicly-traded securities. In addition, continued inclusion
requires two market-makers and a minimum bid price of $1.00 per
share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid limitations.
However, there can be no assurances that, upon a successful merger
or acquisition, the Company will qualify its securities for listing
on NASDAQ or some other national exchange, or be able to maintain
the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future
may result in the discontinuance of the inclusion of the Company's
securities on a national exchange. In such events, trading, if any,
in the Company's securities may then continue in the non-NASDAQ
over-the-counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.
Holders
There are 33 holders of the Company's Common Stock. Initially,
founders shares were issued to Jose F. Garcia. Mr. Garcia was issued
2,500,000 shares of common stock. Mr. Garcia sold or gifted his
shares to 33 friends and business acquaintances in transactions
exempt from registration pursuant to section 4 of the Securities Act
of 1933, as amended.
All such transactions took place prior to or during October 23,
1993. All shareholders have held their stock since that time. All of
the issued and outstanding shares of the Company's Common Stock were
issued in accordance with the exemption from registration afforded
by Section 4(2) of the Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no plans
to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the shares. The
securities were offered for investment only and not for the purpose
of resale or distribution, and the transfer thereof was
appropriately retricted.
All of the shareholders of the Company have executed and delivered a
"lock-up" letter agreement which provides that each such shareholder
shall not sell his/her respective securities until such time as the
Company has successfully consummated a merger or acquisition.
Further, each shareholder has placed his/her respective stock
certificate with the Company's legal counsel, who has been
instructed not to release any of the certificates until the Company
has closed a merger or acquisition. Any liquidation by the current
shareholders after the release from the "lock-up" selling limitation
period may have a depressive effect upon the trading price of the
Company's securities in any future market which may develop.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent of
the then outstanding Common Stock or the average weekly trading
volume during the four calendar weeks prior to such sale. Rule 144
also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who has satisfied a two-
year holding period and who is not, and has not been for the
preceding three months, an affiliate of the Company.\
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance of
50,000,000 shares of Common, of which 2,500,000 are issued and
outstanding. The shares are non-assessable, without pre-emptive
rights, and do not carry cumulative voting rights. Holders of common
shares are entitled to one vote for each share on all matters to be
voted on by the stockholders. The shares are fully paid, non-
assessable, without pre-emptive rights, and do not carry cumulative
voting rights. Holders of common shares are entitled to share
ratably in dividends, if any, as may be declared by the Company from
time-to-time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the holders
of shares of common stock are entitled to share on a pro-rata basis
all assets remaining after payment in full of all liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be issued
to management or promoters, or affiliates or associates of either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its shareholders
for errors in judgment or other acts or omissions not amounting to
intentional misconduct, fraud, or a knowing violation of the law,
since provisions have been made in the Articles of incorporation and
By-laws limiting such liability. The Articles of Incorporation and
By-laws also provide for indemnification of the officers and
directors of the Company in most cases for any liability suffered by
them or arising from their activities as officers and directors of
the Company if they were not engaged in intentional misconduct,
fraud, or a knowing violation of the law. Therefore, purchasers of
these securities may have a more limited right of action than they
would have except for this limitation in the Articles of
Incorporation and By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors are
required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be
able to bring a class action or derivative suit to enforce their
rights, including rights under certain federal and state securities
laws and regulations. Shareholders who have suffered losses in
connection with the purchase or sale of their interest in the
Company in connection with such sale or purchase, including the
misapplication by any such officer or director of the proceeds from
the sale of these securities, may be able to recover such losses
from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this Item
13 follow the index of financial statements appearing at Item 15 of
this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation, and
Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Barry L. Friedman, dated October 16,
1998.
Balance Sheet as of October 15, 1998, December 31, 1997, and
December 31, 1996
Statement of Operation for the years ended December 31, 1996, and
December 31, 1997, and the period ended October 15, 1998.
Statement of Stockholders' Equity
Statement of Cash Flows for the years ended December 31, 1996, and
December 31, 1997, and the period ended October 15, 1998.
Notes to Financial Statements
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Astir, Inc.
By: n /ss/ Jorge Melgar
Jorge Melgar, President
