U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
General Form for Registration of Securities
Of Small Business Issuers
Under Section 12(b) or (g) of
The Securities Exchange Act of 1934
APOLLO VENTURE GROUP, INC.
(Name of Small Business Issuer)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
52-2146784
I.R.S. Employer Identification Number
2049 Century Park E., #3760, Los Angeles, CA 90067
(Address of Principal Executive Offices including zip code)
310/7882634
(Issuer's Telephone Number)
Securities to be registered Under Section 12(b) of the Act: None
Securities to be registered Under Section 12(g) of the Act:
Common Stock, $.0001 Par Value
(Title of Class)
<PAGE>
PART I
ITEM 1. BUSINESS
APOLLO VENTURE GROUP, INC. (the "Company "), was incorporated on
January 29 1998 under the laws of the State of Delaware to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions. 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 will attempt to locate and negotiate with a business entity
for the merger of that target company into the Company. In certain instances, a
target company may wish to become a subsidiary of the Company or may wish to
contribute assets to the company rather than merge. No assurances can be given
that the Company will be successful in locating or negotiating with any target
company.
The Company has been formed to provide a method for a foreign or
domestic private company to become a reporting ("public") company whose
securities are qualified for trading in the United States secondary market.
PERCEIVED BENEFITS:
There are certain perceived benefits to being a reporting company with
a class of publicly traded securities. These are commonly thought to include the
following:
the ability to use registered securities to make acquisitions of assets
or businesses;
increased visibility in the financial community;
the facilitation of borrowing from financial institutions;
improved trading efficiency;
shareholder liquidity;
greater ease in subsequently raising capital;
compensation of key employees through stock options;
enhanced corporate image;
a presence in the United States capital market.
POTENTIAL TARGET COMPANIES:
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
a company for which a primary purpose of becoming public is the use of
is securities for the acquisition of assets or businesses;
a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to it;
a company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
a foreign company which may wish an initial entry into the United
States securities market;
a special situation company, such as, a company seeking a public market
to satisfy redemption requirements under a qualified Employee Stock Option Plan;
a company seeking one or more of the other perceived benefits of
becoming a public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of its
own management and Board of Directors.
No assurances can be given that the Company will be able to enter into
a business combination, as to the terms of a business combination, or as top the
nature of the target company.
The proposed business activities described herein classify the Company
as a blank check company. See "GLOSSARY". The Securities and Exchange Commission
and many States have enacted statutes, rules and regulations limiting the sale
of securities of blank check companies. Management does not intend to undertake
any efforts to cause a market develop in the Company's securities until such
time as the Company has successfully implemented its business plan described
herein. Accordingly, the shareholders of the Company have executed and delivered
a "lock-up" letter agreement affirming that such shareholders will not sell or
otherwise transfer their shares of the Company's common stock except in
connection with or following completion of a merger or acquisition resulting in
the Company no longer being classified as a blank check company. The
shareholders have deposited their stock certificates with the Company's
management, who will not release the certificates except in connection with or
following the completion of a merger or acquisition.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under the
Securities Exchange Act of 1934.
RISK FACTORS:
The Company's business is subject to numerous risk factors, including
the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS; The Company has had
no operating history nor any revenue 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 the consummation of a business combination. This may result in the Company
incurring a net operating loss which will increase continuously until the
Company can consummate a business combination with a target company. There is no
assurance that the Company can identify such a target company and consummate
such a business combination.
SPECULATIVE NATURE OF THE 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 target company.
While management will prefer business combinations with entities having
established operating histories, there can be no assurance that the Company will
be successful in locating candidates meeting such criteria. In the event the
Company completes a business combination, of which there can be no assurance,
the success of the Company's operations will be dependent upon management of the
target company and 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 with and acquisitions of business
entities. A large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of companies which
may be merger or acquisition target candidates for the Company. Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the Company will be
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 current arrangement,
agreement or understanding with respect to engaging in a merger with or
acquisition of a specific business entity. There can be no assurance that the
Company will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company will be able
to negotiate a business 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 company to have achieved, or without which the Company would
not consider a business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for immediate
earnings, limited assets, negative net worth or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY; While seeking
a business combination, management anticipates devoting only a limited amount of
time per month to the business of the Company. The Company's sole officer has
not entered into a written employment agreement with the Company and he is not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on its officer and director. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
this individual would adversely affect development of the company's business and
its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL; The Company's officers and Directors
participates in other business ventures which may compete directly with the
Company. Additional conflicts or interest and non-arms-length transactions may
also arise in the future. Management has adopted a policy that the Company will
not seek a merger with, or acquisition of, any entity in which any member of
management serves as an officer, director or partner, or in which they or their
family members own or hold any ownership interest. See "ITEM 5. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--CONFLICTS OF INTEREST".
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION; Section 13 of
the Securities Exchange Act of 1934 (the "Exchange Act") requires companies
subject thereto to 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 significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company. 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 Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION; The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the Company.
Even in the event demand exists for a merger or acquisition of the type
contemplated by the Company, there is no assurance the company will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION; The Company's proposed operations, even if
successful, will in all likelihood result in the company engaging in a business
combination with only one business entity. Consequently, the company's
activities will be limited to those engaged in by the business entity which the
Company merges with or acquires. 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 and therefore increase the
risks associated with Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT; Although the Company will be
subject to regulation under the Exchange Act, 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
could 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 target company obtaining a controlling interest in
the Company. Any such business combination may require shareholders of the
Company to sell or transfer all or portion of the Company's common stock held by
them. The resulting change in control of the Company will likely result in
removal of the present Officer and Director of the Company and a corresponding
reduction in or elimination of his 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 business entity which, in all likelihood, will result in the Company
issuing securities to shareholders of such business entity. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by the present shareholders of the
Company and would most likely result in a change in control or management of the
Company.
TAXATION; Federal and State tax consequences will, in all likelihood,
be major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as 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 company, however, there can be no assurance that such business
combination will meet the statutory requirements of 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 of the Company will request that any potential
business opportunity provide audited financial statements. One or more
attractive business opportunities may choose to forego the possibility of a
business combination with the Company rather than incur the expenses associated
with preparing audited financial statements. In such case, the Company may
choose to obtain certain assurances as to the target company's assets,
liabilities, revenues and expenses prior to consummating a business combination,
with further assurances that an audited financial statement would be provided
after closing of such a transaction. Closing documents relative thereto may
include representations that the audited financial statements will not
materially differ from the representations included in such closing documents.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in
exchange for the Company's securities. The Company has no particular acquisition
in mind and has not entered into any negotiations regarding such an acquisition.
Neither the Company's Officers and Directors nor any affiliate has engaged in
any negotiations with any representative of any company regarding the
possibility of an acquisition or merger between the Company and such other
company.
Management anticipates seeking out a target company through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting firms,
investment bankers, financial advisors and similar person, the use of one or
more World Wide Web sites and similar methods. No estimate can be made as to the
number of persons who will be contacted or solicited. Management may engage in
such solicitation directly or may employ one or more other entities to conduct
or assist in such solicitation. Management and its affiliates pay referral fees
to consultants and others who refer target businesses for mergers into public
companies in which management and its affiliates have an interest. Payments are
made if a business combination occurs, and may consist of cash or a portion of
the stock in the Company retained by management and its affiliates, or both.
The Company has no full-time employees. The Company's President and
Treasurer have agreed to allocate a portion of his time to the activities of the
Company, without compensation. The President and Treasurer anticipates that the
business plan of the Company can be implemented by his devoting no more than ten
(10) hours per month to the business affairs of the Company and, consequently,
conflicts of interest may arise with respect to the limited time commitment by
such officer.
Management is not currently involved with formation of other blank
check companies, but anticipates future involvement in creating additional blank
check companies similar to this one. A conflict may arise in the event that
another blank check company with which management is affiliated is formed and
actively seeks a target company. Management anticipates that target companies
will be located for the Company and other blank check companies in chronological
order of the date of formation of such blank check companies or by lot. However,
other blank check companies that may be formed may differ from the Company in
certain items such as place of incorporation, number of shares and shareholders,
working capital, types of authorized securities, or other items. It may be that
a target company may be more suitable for or may prefer a certain blank check
company formed after the Company. In such case a business combination might be
negotiated on behalf of the more suitable or preferred blank check company
regardless of date of formation or choice by lot. See "ITEM 5, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--CURRENT BLANK CHECK
COMPANIES".
The Certificate of Incorporation of the Company provides that the
company may indemnify Officers and/or Directors of the Company for liabilities,
which can include liabilities arising under the securities laws. Therefore,
assets of the Company could be used or attached to satisfy any liabilities
subject to such indemnification.
GENERAL BUSINESS PLAN:
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business entity which desires
to seek the perceived advantages of a corporation which has a class of
securities registered under the Exchange Act. The Company will not restrict its
search to any specific business, industry, or geographical location and the
Company may participate in a business venture of virtually any kind or nature.
Management anticipates that it will be able to participate in only one (1)
potential business venture because the Company has nominal assets and limited
financial resources. See ITEM F/S, "FINANCIAL STATEMENTS." This lack of
diversification should be considered a substantial risk to the shareholders of
the Company because it will not permit the Company to offset potential losses
from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various business or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at comparative investigation and analysis of such business
opportunities difficult and complex.
The Company has, and will continue to have no capital with which to
provide the owners of business entities with any cash or other assets. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the Officer and Directors of the Company, who are not
professional business analysts. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Exchange Act requires that any merger or acquisition candidate
comply with certain reporting requirements, which include providing audited
financial statements to be included in the reporting filings made under the
Exchange Act. The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained at or within a reasonable period
of time after closing of the proposed transaction.
The Company may enter into a business combination with a business
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. Such 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 or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
The Company will not restrict its search for any specific kind of
business entity, 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 business 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.
Management of the company, which in all likelihood will not be
experienced in matters relating to the business of a target company, will rely
upon its own efforts in accomplishing the business purposes of the Company.
Outside consultants or advisors may be utilized by the Company to assist in the
search for qualified target companies. If the Company does retain such an
outside consultant or advisor, any cash fee earned by such person will need to
be assumed by the target company, as the Company has limited cash assets with
which to pay such obligation.
Following a business combination the Company may benefit from the
services of others in regard to accounting, legal services, underwritings and
corporate public relations. If requested by a target company, management may
recommend one or more underwriters, financial advisors, accountants, public
relations firms or other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to the
Company only on the condition that the services of a consultant or advisor be
continued after a merger or acquisition. Such preexisting agreements of target
companies for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target company.
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, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is likely that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, it is likely
that the Company's Officers and Directors will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
Federal and State securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. Until such time as this occurs, the Company will not register any
additional securities. The issuance of additional securities and their potential
sale into any trading market which may develop in the Company's securities may
depress the market value of the Company's securities in the future if such a
market develops, of which there is no assurance.
While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code if 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company 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
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of 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 shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.
The Company will not acquire or merge with any entity which cannot
provide audited financial statements at or within a reasonable period of time
after closing of the reporting requirements included in the Exchange Act.
Included in these requirements is the duty of the Company to file audited
financial statements as part of or within sixty (60) days following its Form 8-K
to be filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements of
the Exchange Act, or if the audited financial statements provided do not conform
to the representations made by the target company, the closing documents may
provide that the proposed transaction will be voidable at the discretion of the
present management of the Company.
Frederic Cohn and Dr. Alan V. Phan, principal shareholders of the
Company, has agreed that they will advance to the Company any additional funds
which the Company needs for operating capital and for costs in connection with
searching for or completing an acquisition or merger. Such advances will be made
without expectation of repayment unless the owners of the business which the
Company acquired or merged with agree to repay all or a portion of such
advances. There is no minimum or maximum amount they will advance the Company.
The Company will not borrow any funds to make any payments to the Company's
promoters, management or their affiliates or associates.
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
the Company's Officer, Director and Shareholders or any affiliate or associate
serves as an officer or director or holds any ownership interest.
COMPETITION:
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial resources
and limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and, at this time, has no agreements to
acquire any properties. The Company currently uses the offices of Frederic Cohn
at no cost to the Company. Frederic Cohn has agreed to continue this arrangement
until the Company completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 16, 1999, each person
known by the Company to be the beneficial owner of five percent (5%) or more of
the Company's common stock, all Directors individually, and all Directors and
Officers of the Company as a group. Except as noted, each person has sole voting
and investment power with respect to the shares shown;
Name & Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
Frederic Cohn.(1) 2,000,000 40%
1424 Fourth St., #225
Santa Monica, CA 90401
Alan V. Phan (2) 3,000,000 60%
100 Atlantic Ave. #511
Long Beach, CA 90802
All Executive Officers and
Directors as a group (2 persons) 5,000,000 100%
(1). Mr. Cohn is considered the beneficial owner of the shares of
common stock of the Company issued to Frederic Cohn
(2) Mr Phan is Chairman and Chief Executive Officer of The Hartcourt
Companies, Inc., a fully reporting company listed on NASDAQ-OTC trading as HRCT
and is the Beneficial owner of the shares of common stock of the company issued
to him.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Company has two (2) Directors and Officers as follows:
Name Age Positions and Offices Held
Frederic Cohn 63 President, Secretary and Director
Alan V. Phan 54 Chairman, Treasurer and Director
There are no agreements or understandings for the Officer or Director
to resign at the request of another person and the above named officer and
director is not acting on behalf of nor will act at the direction of any other
person.
Set forth below is the name of the Director and Officer of the Company,
all positions and offices with the Company held, the period during which he has
served as such, and the business experience during at least the last five (5)
years;
Alan V. Phan received his academic training and degrees at Pennsylvania
StateUniversity (PhD-Management), his Master of Science degree from Sussex
College of Technology, and his Bachelor of Science in Environmental Engineering
at Pennsylvania State University and has had over 30 years of experience in
business management. Dr. Phan is currently Chairman of the Board and Chief
Executive Officer of The Hartcourt Companies, Inc. (NASDAQ-OTB-BB) and its
predecessor private company functioning in this capacity since 1994
Frederic Cohn, received a Bachelor of Science in Commerce and Finance
in 1956 from Wilkes University, a Bachelor of laws from New York Law School in
1963. Since 1994, he has served as Chairman & Chief Executive Officer of Diatec
Recycling Technologies (USA) Inc., a development company involved in the
recycling of used disposable diapers with no commercial activities to date and
at the same time has functioned as Secretary and Board member of The Hartcourt
Companies since 1994. With over thirty years of business experience and
management, Mr. Cohn was a successful entrepreneur, owning and operating
medium-sized companies in the fields of transportation, entertainment and
manufacturing.
PREVIOUS BLANK CHECK COMPANIES:
There have been two three other filings made; for AVIAN CORP., for AMG
VENTURE CAPITAL GROUP, INC. and AMERICAN VENTURE GROUP, INC. none of which have
as yet been approved.
CURRENT BLANK CHECK COMPANIES:
There are none at present as yet approved (see above paragraph)
although Mr. Cohn anticipates being involved with additional blank check
companies filed under the Securities Act or under the Exchange Act.
RECENT TRANSACTION BY BLANK CHECK COMPANIES:
There are no recent transactions by blank check companies.
CONFLICTS OF INTEREST:
The Company's Officers and Directors have not organized but do expect
to organize other companies of a similar nature and with a similar purpose as
the Company. Consequently, there are potential inherent conflicts of interest in
acting as an officer and director of the Company. Insofaras, the officer and
director is engaged in other business activities, management anticipates that it
will devote only a minor amount of time to the Company's affairs. The Company
does not have a right of first refusal pertaining to opportunities that come to
management's attention insofar, such opportunities may relate to the Company's
proposed business operations.
A conflict may arise in the event that another blank check company with
which management is affiliated is formed and actively seeks a target company. it
is anticipated that target companies will be located for the Company and other
blank check companies in chronological order of the date of formation of such
blank check companies, or by lot. However, any blank check companies that may be
formed may differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working capital, types of
authorized securities or other items. It may be that a target company may be
more suitable for or may prefer a certain blank check company formed after the
Company. In such case, a business combination might be negotiated on behalf of
the more suitable or preferred blank check company regardless of date of
formation or choice by lot. Mr. Cohn and Dr. Phan will be responsible for
seeking, evaluating, negotiating and consummating a business combination with a
target company which may result in terms providing benefits to both officers..
Mr. Cohn is the principal of Frederic Cohn as well as being an officer
/director of The Hartcourt Companies, Inc.(NASDAQ-OTC-BB)and Diatec Recycling
Technologies(USA) Inc, a private company. Dr. Phan is Chairman of the Board and
Chief Executive Officer of the Hartcourt Companies, Inc. (NASDAQ-OTC-BB). As
such, demands may be placed on the time of both which will detract from the
amount of time he is able to devote to the Company. Each intends to devote as
much time to the activities of the Company as required. However, should such a
conflict arise, there is no assurance that either would not attend to other
matters prior to those of the Company. Mr. Cohn projects that initially up to
ten (10) hours per month of his time may be spent locating a target company
which amount of time would increase when the analysis of and negotiation and
consummation with a target company are conducted.
Dr. Phan is Chairman of the Board and Chief Executive Officer of The
Hartcourt Companies, Inc. (NASDAQ-OTC) and as such, demands may be placed on his
time which will detract from the amount of time he is able to devote to the
Company as Director. Dr. Phan projects that initially up to 10 hours per month
of his time may be spent located a target company which amount of time would
increase when the analysis of and negotiation and consummation with a target
company are conducted.
Mr. Cohn owns 2,000,000 shares of common stock of the Company. No other
securities or rights to securities of the Company will be issued to management,
promoters, their affiliates or associates prior to the completion of a business
combination. At the time of a business combination management expects that some
or all of the shares of common stock owned by Frederic Cohn, and the shares of
common stock owned by Dr. Alan V. Phan will be purchased by the target company.
Mr. Cohn and Dr. Phan would directly benefit form such employment or payment.
Such benefits may influence their choice of a target company. The amount of
common stock sold or continued to be owned by Frederic Cohn or Dr. Alan V. Phan
cannot be determined at this time.
The terms of business combination may include such terms as one or both
of the shareholders remaining a Director or Officer of the Company . The terms
of a business combination may provide for a payment by cash or otherwise to
Aladdin Associates or Phan for the purchase of all or part of their common stock
of the Company by a target company. Either one or both shareholders would
directly benefit from such employment or payment. Such benefits may influence
their choice of a target company.
The Company may agree to pay finder's fees as appropriate and allowed
to unaffiliated person who may bring a target company to the Company where that
reference results in a business combination. The amount of any finder's fee will
be subject to negotiation, and cannot be estimated at this time. No finder's fee
of any kind will be paid to management, promoters of the Company, any of their
associates or affiliates. No loans of any type have or will be made to
management, promoters of the Company, any of their associates or affiliates.
The Company's Officers and Directors its promoter and their affiliates
or associates have not had any negotiations with and there are no present
arrangements to understandings with any representatives of the owners of any
business or company regarding the possibility of a business combination with the
Company.
The Company will not enter into a business combination or acquire any
assets of any kind for its securities, in which management or promoters of the
Company or any affiliates or associates have any interest, direct or indirect.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management, promoters, shareholders or their affiliates;
Any lending by the Company to such persons;
The issuance of any additional securities to such persons prior to a
business combination;
The entering into any business combination or acquisition of assets
in which such person have any interest, direct or indirect; or
The payment of any finder's fees to such person.
These policies have been adopted by the Board of Directors of the
company, and any changes in these provisions require the approval of the Board
of Directors. Management does not intend to propose any such action and does not
anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of the Company could result in liability of management to Company.
However, any attempt by shareholders to enforce a liability of management to the
Company would most likely be prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940:
Although the Company will be subject to regulation under the Securities
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 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. Any violation of such Act would subject the
Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
The Company's Officers and Directors dos not receive any compensation
for his services rendered to the Company, has not received such compensation in
the past, and is not accruing any compensation pursuant to any agreement with
the Company.
The Officers and Directors of the Company will not receive any finder's
fee either directly or indirectly as a result of his efforts to implement the
Company's business plan outlined herein. However, the Officers and Directors of
the Company anticipates receiving benefits as a beneficial shareholders of the
Company. See ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT".
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has issued a total of 5,000,000 shares of common stock to
the following persons for a total of $500 in cash;
Name Number of Total Shares Consideration
Frederic Cohn 2,000,000 $200
Alan V. Phan 3,000,000 $300
The proposed business activities described herein classify the Company
as a blank check company. See "GLOSSARY". The Securities and Exchange commission
and many States have enacted statutes, rules and regulations limiting the sale
of securities of blank check companies. 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, the shareholders of the Company have executed and delivered
a "lock-up" letter agreement, affirming that such shareholders shall not sell
their shares of the Company's common stock except in connection with or
following completion of a merger or acquisition resulting in the Company no
longer being classified as a blank check company. The shareholders have
deposited their stock certificates with the Company's management who will not
release the certificates except in connection with or following the completion
of a merger or acquisition.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 100,000,000
shares of common stock, par value $.0001 per share. Further authorized are
20,000,000 preferred shares, par value $.0001 per share. The following
statements relating to the capital stock set forth the material terms of the
Company's securities. However, reference is made to the more detailed provisions
of, and such statements are qualified in their entirety by reference to the
Certificate of Incorporation and the By-Laws, copies of which are filed as
Exhibits to this registration statement.
COMMON STOCK:
Holders of shares of common stock are entitled to one vote for each
share on all maters to be voted on by the stockholders. Holders of common stock
do not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time-to-time by the
Board of Directors in its discretion from funds legally available therefor. In
the event of a liquidation, dissolution or winding-up of the Company, the
holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. All of the outstanding shares of
common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or sinking
fund provisions with respect to the common stock.
PREFERRED STOCK:
The Company's Certificate of Incorporation as amended authorizes the
issuance of 20,000,000 shares of preferred stock, $.0001 par value per share, of
which no shares have been issued. The Board of Directors is authorized to
provide for the issuance of shares of preferred stock in series and by filing a
certificate pursuant to the applicable law of Delaware to establish from
time-to-time the number of shares to be included in each such series and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions thereof without any
further vote or action by the shareholders. Any shares of preferred stock so
issued would have priority over the common stock with respect to dividend or
liquidation right. Any future issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the voting and other
rights of the holders of common stock. At present, the Company has no plans to
issue any preferred stock not adopt any series, preferences or other
classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might impede
a business combination by including class voting rights that would enable the
holder to block such a transaction or facilitate a business combination by
including voting rights that would provide a required percentage vote of the
stockholders. In addition, under certain circumstances the issuance of preferred
stock could adversely affect the voting power of the holders of the common
stock. Although the Board of Directors is required to make any determination to
issue such stock based on its judgment as to the best interests of the
stockholders of the Company, the Board of Directors could act in a manner that
would discourage an acquisition attempt or other transaction that some or a
majority of the stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their stock over the then market
price of such stock. The Board of Directors does not at present, intend to seek
stockholder approval prior to any issuance of currently authorized stock unless
otherwise required by law or stock exchange rules. The Company has no present
plans to issue any preferred stock.
DIVIDENDS:
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial condition. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for use
in its business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
GLOSSARY:
"Blank Check"
Company As defined in Section 7(b)(3) of the Securities Act, a "blank
check company is a development stage company that 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 and is issuing "penny stock"
securities as defined in Rule 3a51- 1 of the Exchange Act.
The "Company" APOLLO VENTURE GROUP, INC. , the company whose common stock is
the subject of this registration statement.
"Exchange Act" The Securities Exchange Act of 1934, as amended.
"Penny Stock" Security As defined in Rule 3a51-1 of the Exchange Act, a
"penny stock " security is any equity security other than a
security (i) that is a reported security (ii) that is issued
by an investment company (iii) that is a put or call issued by
the Option Clearing Corporation (iv) that has a price of $5.00
or more (except for purposes of Rule 419 of the Securities
Act) (v) that is registered on a National Securities Exchange
(vi) that is authorized for quotation on the Nasdaq Stock
Market, unless other provisions of Rule 3a51-1 are not
satisfied or (vii) that is issued by an issuer with (a) net
tangible assets in excess of $2,000,000 if in continuous
operation for more than three (3) years or $5,000,000 if in
operation for less than three (3) years, or (b) average
revenue of at least $6,000,000 for the last three years.
"Securities Act" The Securities Act of 1933, as amended.
"Small Business
Issuer" As defined in Rule 12b-2 of the Exchange Act, a "Small
Business Issuer" is an entity (I) which has revenues of less
than $25,000,000 (ii) whose public float (the outstanding
securities not held by affiliates) has a value of less than
$25,000,000 (iii) which is a United States or Canadian issuer
(iv) which is not an Investment Company and (v) if a
majority-owned subsidiary, whose parent corporation is also a
small business issuer.
<PAGE>
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(A) MARKET PRICE; There is no trading market for the Company's common
stock at present and there has been no trading market to-date. There is no
assurance that a trading market will ever develop or, if such a market does
develop that it will continue.
The Securities and Exchange Commission has adopted rule 15g-9 which
establishes 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: (1) that a broker or a 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 stock.
In order to qualify for listing on the Nasdaq SmallCap Market, a
company must have at least (i) net tangible assets for $4,000,000 or market
capitalization of $50,000,000 or net income for two (2) of the last three years
of $750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one (1) year or, if less than one
year $50,000,000 in market capitalization. For continued listing on the Nasdaq
SmallCap market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 shareholders.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the Company's
securities may be traded in the over-the-counter ("OTC") market. The OTC market
differs from national and regional stock exchanges in that it (1) is not sited
in a single location but operates through communication of bids, offers and
confirmations between broker-dealers and (2) securities admitted to quotation
are offered by one or more broker-dealers rather than the "specialist" common to
stock exchange. The Company may apply for listing on the NASD OTC Bulletin
Board, or may offer its securities in what are commonly referred to as the "pin
sheets" of the National Quotation Bureau, Inc.. to qualify for listing on the
NASD OTC Bulletin Board, an equity security must have one registered
broker-dealer known as the market maker, willing to list bid or sale quotation
and to sponsor the company for listing on the Bulletin Board.
If the Company is unable initially to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is conducted
in the OTC market, 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.
(B) HOLDERS; There are two (2) holders of the Company's common stock.
On February 19, 1999, the Company issued 5,000,000 of its common shares to these
shareholders for cash at $.0001 per share for a total price of $500. The issued
and outstanding shares of the Company's common stock were issued in accordance
with the exemptions from registration afforded by Sections 3(b) and 4(2) of the
Securities Act of 1933, and Rules 506 and 701 promulgated thereunder.
(C) DIVIDENDS; The company has not paid any dividends to-date, and has
no plans to do so in the immediate future.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has not changed accountants since its formation and there
are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
During the past three (3) years the Company has sold securities which
were not registered as follows:
Date Name Number of Shares Consideration
Feb. 19, 1999 Frederic Cohn(1) 2,000,000 $200
Feb. 19, 1999 Alan V. Phan(2) 3,000,000 $300
(1) Mr. Cohn.,an individual is therefore considered to be the
beneficial owner of the common stock of the Company issued to Aladdin
Associates, Inc.. With respect to the sales made to Frederic Cohn the company
relied on Section 4(2) of the Securities Act of 1933, as amended and Rule 506
promulgated thereunder.
(2) Dr. Phan is an individual and is therefore considered to be the
beneficial owner of the common stock of the Company issued to Alan V. Phan. With
respect to the sales made to Alan V. Phan, the Company relied upon Section 3(b)
of the Securities Act of 1933, as amended and Rule 701 promulgated thereunder.
The shareholders of the Company have executed and delivered a "lock-up"
letter agreement which provides that such shareholders shall not sell the
securities except in connection with or following the consummation of a merger
or acquisition. Further, each shareholder has placed its stock certificates with
the company until such time. 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.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation of the Law of the State of
Delaware provides that a Delaware Corporation has the power under specified
circumstances, to indemnify its directors, officers, employees and agents
against expenses incurred in any action, suit or proceeding. The Certificate of
Incorporation and the By-Laws of the company provide for indemnification of
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such provision
shall not eliminate or limit the liability of a director (1) for any breach of
the director's duty or loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 9relating to liability for
unauthorized acquisitions or redemption's of, or dividend on capital stock) of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the Director derived an improper personal benefit. The
Company's Certificate of Incorporation contains such a provision.
INSOFAR INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE
OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
<PAGE>
PART F/S
FINANCIAL STATEMENTS:
Attached are audited financial statements for the Company for the
period ended February 22, 1999. The following financial statements are attached
to this report and filed as a part thereof;
Table of Contents - Financial Statements;
Independent Auditors' Report;
Balance Sheet as of February 22, 1999
Notes to Balance Sheet as of February 22, 1999
INDEX TO FINANCIAL STATEMENTS
APOLLO VENTURE GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
Independent Auditors' Report .............................F-1
Balance Sheet as of February 22, 1999 ....................F-2
Notes to Balance Sheet as of February 22, 1999 ......F-3, F-4
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of APOLLO VENTURE GROUP, INC.
(A Development Stage Company)
We have audited the accompanying balance sheet of APOLLO VENTURE GROUP,
INC. (a development stage company) as of February 22, 1999. This
financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheet is free
of material misstatement. An audit includes examining, or a test basis,
evidence supporting the amounts and disclosures in the balance sheet.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall balance sheet presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly in
all material respects, the financial position of APOLLO VENTURE GROUP,
INC. (a development stage company) as of February 22, 1999, in
conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
February 22, 1999
<PAGE>
APOLLO VENTURE GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF FEBRUARY 22, 1999
ASSETS
Cash $ 500
TOTAL ASSETS $ 500
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par value, 20 million shares
authorized, zero issued and outstanding
Common stock, $.0001 par value, 100 million
shares authorized 5,000,000 issued and
outstanding $ 500
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 500
See accompanying notes to balance sheet
F-2
<PAGE>
APOLLO VENTURE GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF FEBRUARY 22, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Operations
AVIAN, CORP. (a development stage company) (the "Company") was
incorporated in Delaware on January 29, 1998 to serve as a vehicle to effect a
merger, exchange of capital stock, asset acquisition or other business
combination with a domestic or foreign private business. At Feb. 22, 1999, the
Company had not yet commenced any formal business operations, and all activity
to-date relates to the Company's formation and proposed fund raising. The
Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the capital it will
require through the issuance of equity securities, debt securities, bank
borrowings or a combination thereof.
Use of Estimates
The preparation of the 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.
NOTE 2 - STOCKHOLDERS' EQUITY
Preferred Stock
The company is authorized to issue 20,000,000 shares of preferred stock
at $.0001 par value, with such designations, voting and other rights and
preferences as may be determined from time-to-time by the Board of Directors.
Common Stock
The Company is authorized to issue 100,000,000 shares of common stock
at $.0001 par value. The Company issued 2,000,000 and 3,000,000 shares to
Frederic Cohn and Dr. Alan Phan , respectively.
NOTE 3 - RELATED PARTIES
Frederic Cohn is a firm owned by a director of the Company who owns
100% of the outstanding stock of Aladdin Associates, Inc.. Dr. Alan Phan is a
significant shareholder, Chairman of the Board and Chief Operating Officer of
The Hartcourt Companies, Inc., (NASDAQ-OTC-BB)
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-Laws
2.1** Certificates of Incorporation
2.2** By-Laws
(3) Instruments Defining the Rights of Holders
3.1 Lock-up Agreement with Frederic Cohn
3.2 Lock-up Agreement with Alan V. Phan
(10)(a) Consents - Experts
10.1** Consent of Accountants
**Filed herewith
<PAGE>
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.
APOLLO VENTURE GROUP, INC. INC.
By: /s/ Frederic Cohn
----------------------------------
Frederic Cohn, Director,
President and Secretary
By: /s/ Alan V. Phan
----------------------------------
Alan Phan, Director
and Treasurer
<PAGE>
CERTIFICATE OF INCORPORATION
OF
APOLLO VENTURE GROUP, INC.
FIRST: The name of the corporation is APOLLO VENTURE GROUP, INC.
SECOND: Its registered office in the State of Delaware is located at 25
Greystone Manor, Lewes, Delaware 19958-9776, County of Sussex. The registered
agent in charge thereof is Harvard Business Services, Inc.
THIRD: The purpose of the corporation is to engage in any lawful
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the corporation is
authorized to issue is 50,000,000 shares having a par value of $0.001 per share.
FIFTH: The business and affairs of the corporation shall be managed by
or under the direction of the board of directors, and the directors need not be
elected by ballot unless required by the bylaws of the corporation.
SIXTH: This corporation shall be perpetual unless otherwise decided by
a majority of the Board of Directors.
SEVENTH: In furtherance and not in limitation of the powers conferred
by the laws of Delaware, the board of directors is authorized to amend or repeal
the bylaws.
EIGHTH: The corporation reserves the right to amend or repeal any
provision in this Certificate of Incorporation in the manner prescribed by the
Laws of Delaware.
NINTH: The incorporator is Harvard Business Services, Inc., whose
mailing address is 25 Greystone Manor, Lewes, DE 19958. The powers of the
incorporator are to file this certificate of incorporation, approve the bylaws
of the corporation and elect the initial directors.
TENTH: To the fullest extent permitted by the Delaware General
Corporation Law, a director of this corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director.
I, Richard H. Bell, for the purpose of forming a corporation under the
laws of the State of Delaware do make and file this certificate, and do certify
that the facts herein stated are true and have accordingly sighed below, this
5th day of February, 1999.
Signed and Attested to by:
/s/ Richard H. Bell
- ----------------------------------
Richard H. Bell,
President & Secretary
HARVARD BUSINESS SERVICES, INC.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
APOLLO VENTURE GROUP. INC. a corporation organized and existing under and by
virtue of the General Corporation laws of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of APOLLO VENTURE GROUP INC
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thcrcof numbered 'THE FOURTH:" so that, as amended said
Article shall be and read as follows:
FOURTH: The total number of authorized shares which the corporation
is authorized to issue 100,000.000 shares of common stock having a par value of
$0 0001 per share and 20.000,000 shares of preferred stock having a par value of
$O.OO01 per share.
The number of authorized shares of preferred stock or of common stock
may be raised by the affirmative vote of the holders of a majority of the
outstanding shares of the corporation entitled to vote thereon.
All shares of common stock shall be identical and each share of
common stock shall be entitled to one vote on all matters.
The board of directors is authorized, subject to limitations
prescribed by law and the provisions of this Article Fourth, to provide by
resolution or rcsolutions for the issuance of the shares of preferred stock in
one or more series, and by filing a certificate pursuant to the applicable law
of the State of Delaware, to establish from time to time the number of shares
included in any such series, and to fix the designation, powers, preferences and
rights of the shares of any such series and the qualifications. limitations or
restrictions thereof.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
hcld, upon notice in accordance with Section 222 of the General Corporation law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said APOLLO VENTURE GROUP, INC. has caused this certificate
to be signed by an authorized officer, this 19th day of February, 1999.
BY: /s/ Frederic Cohn
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Name: Frederic Cohn
Title: President
<PAGE>
BY-LAWS
OF A DELAWARE GENERAL CORPORATION
ARTICLE I - REGISTERED AGENT AND REGISTERED OFFICE
Section 1. The registered office of the corporation in the State of
Delaware shall be at 25 Greystone Manor, in the City of Lewes, County of Sussex.
The registered agent in charge thereof shall be Harvard Business Services, Inc.
Section 2. The corporation may also have offices at such other places
as the Board of Directors may from time to time designate, in any State or
County around the world.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders may be held at any place, either
within or without the State of Delaware and the USA, as may be selected from
time to time by the Board of Directors.
Section 2. Annual Meetings: The annual meeting of the stockholders
shall be held on the second day of January of each year if not on a legal
holiday, and if a legal holiday, then on the next secular day following at 9
o'clock a.m., when they shall elect Directors and transact such other business
as may property be brought before the meeting. If the annual meeting for the
election of directors is not held on the date designated, the directors shall
cause the meeting to be held on another date, at their convenience.
Section 3. Election of Directors: Elections of the Directors of the
corporation need not be by written ballot, in accordance with the Delaware
General Corporation Law (DGCL).
Section 4. Special Meetings: Special meetings of the stockholders may
be called at any time by the president, or the Board of Directors, or
stockholders entitled to cast at least one-fifth of the votes which all
stockholders are entitled to cast at the particular meeting. Upon written
request of any person on persons who have duly called a special meeting, it
shall be the duty of the secretary to fix the date, place and time of the
meeting, to be held not more than thirty days after the receipt of the request,
and to give due notice thereof to all the persons entitled to vote at the
meeting.
Business at all special meetings shall be confined to the objects stated in the
call and the matters germane thereto, unless all stockholders entitled to vote
are present and consent.
Written notice of a special meeting of stockholders stating the time and place
of the meeting, and the object thereof, shall be given to each stockholder
entitled to vote at least 15 days prior, unless a greater period of notice is
required by statute in a particular case.
Section 5. Quorum: A majority of the outstanding shares of the
corporation entitled to vote, represented in a person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than a majority of the
outstanding shares entitled to vote is represented at a meeting, a majority of
the shares so represented, may adjourn the meeting at anytime without further
notice. The stockholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
Section 6. Proxies: Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after one year from its
date, unless the proxy provides for a longer period, as allowable by law.
<PAGE>
A duly executed proxy shall be irrevocable if it states that it is
irrevocable power. A proxy may be irrevocable regardless of whether the interest
with which it is coupled is an interest in the stock itself or an interest in
the corporation generally. All proxies shall be filed with the Secretary of the
meeting before being voted upon.
Section 7. Notice of Meetings: Whenever stockholders are required or
permitted to take any action at a meeting a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called.
Unless otherwise provided by law, written notice of any meeting shall be given
not less than ten nor more than sixty days before the date of the meeting to
each stockholder entitled to vote at such meeting.
Section 8. Consent In Lieu of Meetings: Any action required to be taken
at any annual or special meeting of stockholders of a corporation, or any action
which maybe taken at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
Section 9. List of Stockholders: The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
No share of stock of which any installment is due and unpaid shall be voted at
any meeting. The list shall not be open to the examination of any stockholder,
for any purpose, except as required by Delaware law. The list shall be kept
either at a place within the City where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be
managed by its Board of Directors. The Board of Directors shall consist of 2
members, unless and until this number is changed by an amendment to this
article. Each director shall be elected for a term of one year, and until his
successor shall qualify or until his earlier resignation or removal.
Section 2. Regular Meetings: Regular meetings of the Board of Directors
shall be held without notice according to the schedule of the regular meetings
of the Board of Directors which shall be distributed to each Board member at the
first meeting each year. The regular meetings shall be held either at the
registered office of the corporation, or at such other place as shall be
determined by the Board. Regular meetings, in excess of the one Annual meeting
(Art. III Sec. 2) shall not be required if deemed unnecessary by the Board.
Section 3. Special Meetings: Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors on 5 days notice to all
directors, either personally or by mail, courier service, E-Mail or telecopy;
special meetings may be called by the President or Secretary in like manner and
on like notice by written request to the Chairman of the Board of Directors.
Section 4. Quorum: A majority of the total number of directors shall
constitute a quorum of any regular or special meetings of the Directors for the
transaction of business.
Section 5. Consent of Lieu of Meeting: Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
The Board of Directors may hold its meetings, and have an office or offices
anywhere in the world, within or outside of the State of Delaware.
Section 6. Conference Telephone: Directors may participate in a meeting
of the Board, of a committee of the Board or of the stockholders, by means of
voice conference telephone or video conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in this manner shall constitute
presence in person at such meeting.
Section 7. Compensation: Directors as such shall not receive any stated
salary for their services, but by resolution of the Board, a fixed sum per
meeting and any expenses of Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity and
receiving compensation therefore.
Section 8. Removal: A director may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote at an election
of directors, in accordance with the laws of Delaware.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be chosen by
the Board of Directors. They shall be President, Secretary, Treasurer, one or
more Vice Presidents and such other officers as the Board of Directors shall
deem necessary. The Board of Directors may also choose a Chairman from among
it's own members. Any number of offices may be held by the same person.
Section 2. Salaries: Salaries of all officers and agents of the
corporation shall be determined and fixed by the Board of Directors.
Section 3. Term of Office: The officers of the corporation shall serve
at the pleasure of the Board of Directors and shall hold office until their
successors are chosen and have qualified. Any officer or agent elected or
appointed by the Board may be removed by the Board of Directors whenever, in its
judgment, the best interest of the corporation will be served thereby.
Section 4. President: The president shall be chief executive officer of
the corporation; he shall preside at all meetings of the stockholders and
directors; he shall have general and active management of the business of the
corporation. He shall be EXOFFICIO a member of all committees, and shall have
the general power and duties of supervision and management, as defined by the
Board of Directors.
Section 5. Secretary: The Secretary shall attend all sessions of the
board and all meetings of the stockholders and act as clerk thereof, and record
all votes of the corporation and the minutes of all its transactions in a book
to be kept for that purpose, and shall perform like duties.
For all the committees of the Board of Directors when required. He
shall give, or cause to be given, notice of all meetings of the stockholders and
of the Board of Directors, and such other duties as may be prescribed by the
Board of Directors or President, under whose supervision shall be. He shall keep
in safe custody the corporate seal of the corporation, and when authorized by
the Board, affix the same to any instrument requiring it.
Section 6. Treasurer: The treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall keep the moneys of
the corporation in a separate account to the credit of the corporations. He
shall disburse the funds of the corporation as may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render to the President
and directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the financial
condition of the corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise, shall be filed by the Board of
Directors. Vacancies and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of the
directors then in office, although less than a quorum, or cause, the corporation
should have no directors in office, then any officer or other fiduciary
entrusted with like responsibility for the person or estate of a stockholder,
may call a special meeting of stockholders in accordance with the provisions of
these by-laws.
Section 2. Resignations Effected at Future Date: When one or more
directors shall resign from the Board, effective at a future date, a majority of
the directors then in office, including those who have resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose thereof, have
the right during the usual hours of business to inspect for nay proper purpose
the corporation's stock ledger, a list of its stockholders, and its minute of
Stockholder meetings for the past two years. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent shall be the person who seeks the
right to inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing which authorizes the attorney or other agent to
so act on behalf of the stockholder. The demand under oath shall be directed to
the corporation at its registered office or at its principal place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be numbered
and registered in the Stock Transfer Ledger and transfer books of the
corporation as they are issued. They shall bear the corporate seal and shall be
signed by the President and the Secretary.
Section 2. Transfers: Transfers of the shares shall be made on the
books of the corporation upon surrender of the certificates therefore, endorsed
by the person named in the certificate or by attorney, lawfully constituted in
writing. No transfer shall be made which is inconsistent with applicable law.
Section 3. Lost Certificate: The corporation may issue a new stock
certificate in place of any certificate theretofore signed by it, alleged to
have been lost, stolen, or destroyed.
Section 4. Record Date: In order that the corporation may determine
stockholders entitled to notice of or to vote at any meeting of stockholders on
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty days prior to any other action.
If no record date is fixed:
The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if the notice is
waived, at the close of the business on the day next preceding the day on which
the meeting is held.
The record date for which determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed.
The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or vote
a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 5. Dividends: The Board of Directors may declare and pay
dividends upon the outstanding shares of the corporation from time to time and
to such extent as they deem advisable, in the manner and upon the terms and
conditions provided by statute and the Certificate of Incorporation.
Section 6. Reserves: Before payment of any dividend there may be set
aside out of the net profits of the corporation such sum or sums as the
directors, from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining the property of the corporation, or for such other
purpose as the directors shall thing conducive to the interests of the
corporation, and the directors may abolish any such reserve in the manner in
which it was created.
ARTICLE - MISCELLANEOUS PROVISIONS
Section 1. Checks: All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 2. Fiscal Year: The fiscal year shall begin on the first day of
January of every year, unless this section is amended according to Delaware Law.
Section 3. Notice: Whenever written notice is required to be given to
any person, it may be given to such a person, either personally or by sending a
copy thereof through the mail, or by telecopy (FAX) or by telegram, charges
prepaid, to his address appearing on the books of the person entitled thereto
when deposited in the United States mail or with a telegraph office for
transmission to such person. Such notice shall specify the place, day and hour
of meeting and, in the case of a special meeting of stockholders, the general
nature of business to be transacted.
Section 4. Waiver of Notice: Whenever any written notice is required by
statue, or by Certificate or the by-laws of this corporation a waiver thereof in
writing, signed by he person or persons entitled to such a notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Except in the case of a special meeting of stockholders,
neither the business to be transacted nor the purpose of the meeting need be
specified in the waiver of notice of such meeting. Attendance of a person either
in person or by proxy at any meeting shall constitute a waiver of notice of such
meeting, except where a person attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting was lawfully
convened.
Section 5. Disallowed Compensation: Any payments made to an officer or
employee of the corporation such as a salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be disallowed in
whole or in part as a deductible expense by the Internal Revenue Service, shall
be reimbursed by such officer or employee to the corporation to the full extent
of such disallowance. It shall be the duty of the directors, as a Board, to
enforce payment of each amount disallowed. In lieu of payment by the officer or
employee, subject to the determination of the directors, proportionate amounts
may be withheld from his future compensation payments until the amount owned to
the corporation has been recovered.
Section 6. Resignations: Any director or other officer may resign at
any time, such resignation to be in writing, and to take effect from the time of
its receipt by the corporation, unless some time to be fixed in the resignation
and then from that date. The acceptance of a resignation shall not be required
to make it effective.
ARTICLE X - LIABILITY
Section 1. The personal liability of the founders is limited to the
amount of money put into the corporation. Stockholder liability is limited to
the stock held in the corporation.
Section 2. The directors' liability is limited according to Article X
of the certificate of incorporation, which state that it shall be limited to the
fullest extent of current Delaware Law.
ARTICLE XI - AMENDMENTS
Section 1. these bylaws may be amended or repealed by the vote of
stockholders entitled to cast at least a majority of the votes which all
stockholders are entitled to cast thereon, at any regular or special meeting of
the stockholders, duly convened after notice to the stockholders of that
purpose.
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A signed copy of these by-laws shall be placed on file in the
corporation's main office as proof of the date of commencement of commercial
activity of the corporation.
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This is the initial form of the company by-laws as of the incorporation
formation date as listed in the company's Certificate of Incorporation.
