U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
RC Holding Corp.
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(Name of Small Business Issuer in its Charter)
Delaware 13-4025362
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
515 Madison Ave, 21st Flr, New York, NY 10022
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(Address of principal executive offices) (zip code)
Issuer's telephone number (212) 688-4668
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None N/A
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
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RC Holding Corp.
Form 10-SB
Table of Contents Page
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Part I
Item 1. Description of Business ........................................ 3
Item 2. Management's Discussion and Analysis or Plan of Operations .... 15
Item 3. Description of Property ....................................... 16
Item 4. Security Ownership of Certain Beneficial Owners and Management .. 16
Item 5. Directors, Executive Officers, Promoters, and Control Persons ... 17
Item 6. Executive Compensation .......................................... 18
Item 7 Description for Officers, Directors, Promoters, or Affiliates.... 18
Item 8. Description of Securities ....................................... 19
Part II
Item 1. Market Price of Dividends on the Registrant's Common Equity and
other Shareholder Matters ...................................... 20
Item 2. Legal Proceedings ............................................... 20
Item 3. Changes in and Disagreements with Accountants ................... 20
Item 4. Recent Sales of Unregistered Securities ......................... 20
Item 5. Indemnification of Directors and Officers ....................... 20
Part F/S
Exhibit 1 Financial Statements............................................ F-1
Part III
Index to exhibits and description of exhibits............................. 20
Signature Page............................................................ 21
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Forward-Looking Statement
This registration Statement contains certain forward-looking statements
and information relating to RC Holding Corp. that are based on the beliefs of
its management as well as assumptions made by and information currently
available to its management. When used in this report, the words "anticipate",
"believe', "expect", "intend", "plan" and similar expression, as they relate to
RC Holding Corp. to its management, are intended to identify forward looking
statements. These statements reflect management's current view of RC Holding
Corp. concerning future events and are subject to certain risks, uncertainties
and assumptions, including among many others: a general economic downturn; a
downturn in the securities market; a general lack of interest for any reason in
going public by means of transactions involving public blank check companies;
federal or state laws or regulations having an adverse effect on blank check
companies, Securities and exchange Commission regulations which affect trading
in the securities of "penny tocks," and other risks and uncertainties.
Should any of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this report as anticipated, estimated or expected. Readers
should realize that RC Holding is in the development stage, with only very
limited assets, and that for RC Holding to succeed requires that it either
originate a successful business (for which it lacks the funds) or acquire a
successful business. RC Holdings realization of its business aims as stated
herein will depend in the near future principally on the successful completion
of its acquisition of a business, as discussed below.
Item 1. Description of Business.
RC Holding Corp. (the "Company") was incorporated under the laws of the
state of Delaware on November 22, 1996. The Company was formed as a blind pool
or blank check company for the purpose of seeking to complete a merger or
business acquisition transaction.
The Company has generally been inactive since inception. Its only
activities have been organizational ones, directed at developing its business
plan and conducting a limited search for business opportunities. The Company has
not commenced commercial operations. The Company has no full-time employees and
owns no real estate or personal property.
The Company has elected to initiate the process of voluntarily becoming
a reporting company under the Securities Exchange Act of 1934 by filing this
Form 10-SB registration statement. Following the effective date of this
registration statement, the Company intends to comply with the periodical
reporting requirements of the Securities Exchange Act of 1934 and to seek to
complete a business acquisition transaction.
The Company is a "blind pool" or "blank check" company, whose business
plan is to seek, investigate and if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be made by
purchaser, merger, exchange of stock, or otherwise, and may encompass assets or
a business entity, such as a corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely that the Company will be
able to take advantage of more than one such business opportunity. The Company
intends to seek opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings. However, at the present time, the Company has
not identified any business opportunity that it plans to pursue, nor has the
Company reached any agreement or definitive understanding with any person
concerning an acquisition.
Alternatively, the Company may be referred to as a "shell corporation"
and once trading on the Nasd Bulletin Board, a "trading and reporting shell
corporation." Shell corporations have zero or nominal assets and typically no
stated or contingent liabilities. Private companies wishing to become publicly
trading may wish to merge with a shell (a "reverse merger") whereby the
shareholders of the private company become the majority of the shareholders of
the combined company. The private company may purchase for cash all or a portion
of the common share of the shell corporation from its major stockholders.
Typically, the Board and officers of the private company become the new Board
and officers of the combined company and often the name of the private company
becomes the name of the combined company.
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Prior to the effective date of this registration statement, it is
anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses that they represent have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No direct discussions regarding the possibility of merger are
expected to occur until after the effective date of this registration statement.
No assurance can be given that the Company will be successful in finding or
acquiring a desirable business opportunity, given the limited funds that are
expected to be available for acquisitions. Furthermore, no assurance can be
given that any acquisition, which does occur, will be on terms that are
favorable to the Company or its current stockholders.
The Company's search will be directed toward small and medium-sized
enterprises, which have a desire to become public corporations. In addition
these enterprises may wish to satisfy, either currently or in the reasonably
near future, the minimum tangible asset requirement in order to qualify shares
for trading on NASDAQ or on an exchange such as the American Stock Exchange.
(See "Investigation and Selection of Business Opportunities"). The Company
anticipates that the business opportunities presented to it will (i) either be
in the process of formation, or be recently organized with limited operating
history or a history of losses attributable to under-capitalization or other
factors; (ii) be experiencing financial or operating difficulties; (iii) be in
need of funds to develop new products or services or to expand into a new
market, or have plans for rapid expansion through acquisition of competing
businesses; (iv) or other similar characteristics. The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued or that it believes may realize a substantial benefit from
being publicly owned. Given the above factors, investors should expect that any
acquisition candidate may have little or no operating history, or a history of
losses or low profitability.
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.
As a consequence of this registration of its securities, any entity,
which has an interest in being acquired by, or merging into the Company, is
expected to be an entity that desires to become a public company and establish a
public trading market for its securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock constituting control of
the Company would either be issued by the Company or be purchased from the
current principal stockholders of the Company by the acquiring entity or its
affiliates. If stock is purchased from the current principal stockholders, the
transaction is very likely to be a private transaction rather than a public
distribution of securities, but is also likely to result in substantial gains to
the current principal stockholders relative to their purchase price for such
stock. In the Company's judgment, none of the officers and directors would
thereby become an "underwriter" within the meaning of the Section 2(11) of the
Securities Act of 1933, as amended as long as the transaction is a private
transaction rather than a public distribution of securities. The sale of a
controlling interest by certain principal shareholders of the Company would
occur at a time when minority stockholders are unable to sell their shares
because of the lack of a public market for such shares.
Depending upon the nature of the transaction, the current officers and
directors of the Company may resign their management and board positions with
the Company in connection with a change of control or acquisition of a business
opportunity (See"Form of Acquisition," below, and "Risk Factors - The Company's
- - Lack of Continuity of Management"). In the event of such a resignation, the
Company's current management would thereafter have no control over the conduct
of the Company's business.
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It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and directors,
its other stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plan, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.
The Company does not foresee that it will enter into a merger or
acquisition transaction with any business with which its officers or directors
are currently affiliated. Should the Company determine in the future, contrary
to the forgoing expectations, that a transaction with an affiliate would be in
the best interests of the Company and its stockholders, the Company is in
general permitted by Delaware law to enter into a transaction if:
(1) The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed
or are known to the Board of Directors, and the Board in good
faith authorizes, approves or ratifies the contract or
transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested
directors constitute less than a quorum; or
(2) The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically authorized,
approved or ratified in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the Company as of
the time it is authorized, approved or ratified, by the Board
of Directors or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
company's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, the
perceived benefit the business opportunity will derive from becoming a publicly
held entity, and numerous other factors which are difficult, if not impossible,
to analyze through the application of any objective criteria. In many instances,
it is anticipated that the historical operations of a specific business
opportunity may not necessarily be indicative of the potential for the future
because of a variety of factors, including, but not limited to, the possible
need to expand substantially, shift marketing approaches, change product
emphasis, change or substantially augment management, raise capital and the
like.
It is anticipated that the Company will not be able to diversify, but
will essentially be limited to the acquisition of one business opportunity
because of the Company's limited financing. This lack of diversification will
not permit the Company to offset potential losses from one business opportunity
against profits from another, and should be considered an adverse factor
affecting any decision to purchase the Company's securities.
Certain types of business acquisition transactions may be completed
without any requirement that the Company first submit the transaction to the
stockholders for their approval. In the event the proposed transaction is
structured in such a fashion that stockholder approval is not required, holders
of the Company's securities (other than principal stockholders holding a
controlling interest) should not anticipate that they will be provided with
financial statements or any other documentation prior to the completion of the
transaction. Other types of transactions require prior approval of the
stockholders.
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In the event a proposed business combination or business acquisition
transaction is structured in such a fashion that prior stockholder approval is
necessary, the Company will be required to prepare a Proxy or Information
Statement describing the proposed transaction, file it with the Securities and
Exchange Commission for review and approval, and mail a copy of it to all
Company stockholders prior to holding a stockholders meeting for purposes of
voting on the proposal. Minority shareholders that do not vote in favor of a
proposed transaction will then have the right, in the event the transaction is
approved by the required number of stockholders, to exercise statutory
dissenters rights and elect to be paid the fair value of their shares.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's officers and directors, none of whom are
professional business analysts (See "Management"). Although there are no current
plans to do so, Company management might hire an outside consultant to assist in
the investigation and selection of business opportunities, and might pay a
finder's fee. Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities, no policies have been adopted regarding use of such consultants
or advisors, the criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or the total amount of fees
that may be paid. However, because of the limited resources of the Company, it
is likely that any such fee the Company agrees to pay would be paid in stock and
not in cash.
Otherwise, in analyzing potential business opportunities, Company
management anticipates that it will consider, among other things, the following
factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) The Company's perception of how any particular business
opportunity will be received by the investment community and
by the Company's stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have
a significant prospect in the foreseeable future of becoming,
sufficient to enable the securities of the Company to qualify
for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit
the trading of such securities to be exempt from the
requirements of Rule 15c2-6 adopted by the Securities and
Exchange Commission (See "Risk Factors - The Company -
Regulations of Penny Stocks").
(4) Capital requirements and anticipated availability of required
funds, to be provided by the company or from operations,
through the sale of additional securities, through joint
ventures or similar arrangements, or from other sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar
size and experience within the industry segment as well as
within the industry as a whole;
(7) Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
(8) The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
(9) The accessibility of required management expertise, personnel,
raw materials, services, professional assistance, and other
required items.
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In regard to the possibility that the shares of the
Company would qualify for listing on NASDAQ, the current
standards for initial listing include, among other
requirements, that the Company (1) have net tangible assets of
at least $4.0 million, or a market capitalization of $50.0
million, or net income of not less that $0.75 million in its
latest fiscal year or in two of the last three fiscal years;
(2) have a public float (i.e., shares that are not held by any
officer, director or 10% stockholder) of at least 1.0 million
shares; (3) have a minimum bid price of at least $4.00; (4)
have at least 300 round lot stockholders (i.e., stockholders
who own not less than 100 shares); and (5) have an operating
history of at least one year or have a market capitalization
of at least $50.0 million. Many, and perhaps most, of the
business opportunities that might be potential candidates for
a combination with the Company would not satisfy the NASDAQ
listing criteria.
No one of the factors described above will be
controlling in the selection of a business opportunity, and
management will attempt to analyze all factors appropriate to
each opportunity and make a determination based upon
reasonable investigative measures and available data.
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. Potential investors must recognize that, because
of the Company's limited capital available for investigation
and management's limited experience in business analysis, the
Company may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.
The Company is unable to predict when it may
participate in a business opportunity. It expects, however,
that the analysis of specific proposals and the selection of a
business opportunity may take several months or more.
Prior to making a decision to participate in a
business opportunity, the Company will generally request that
it be provided with written materials regarding the business
opportunity containing as much relevant information as
possible. Including, but not limited to, such items as a
description of products, services and company history;
management resumes; financial information; available
projections, with related assumptions upon which they are
based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, or service marks, or
rights thereto; present and proposed forms of compensation to
management; a description of transactions between such company
and its affiliates during the relevant periods; a description
of present and required facilities;, an analysis of risks and
competitive conditions; a financial plan of operation and
estimated capital requirements; audited financial statements,
or if they are not available, unaudited financial statements,
together with reasonable assurance that audited financial
statements would be able to be produced within a reasonable
period of time not to exceed 60 days following completion of a
merger or acquisition transaction; and the like.
As part of the Company's investigation, the Company's
executive officers and directors may 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.
It is possible that the range of business
opportunities that might be available for consideration by the
Company could be limited by the impact of Securities and
Exchange Commission regulations regarding purchase and sale of
"penny stocks." The regulations would affect, and possibly
impair, any market that might develop in the Company's
securities until such time as they qualify for listing on
NASDAQ or on an exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk
Factors - Regulation of Penny Stocks."
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Company management believes that various types of
potential merger or acquisition candidates might find a
business combination with the Company to be attractive. These
include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for
current stockholders, acquisition candidates which have
long-term plans for raising capital through public sale of
securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and
acquisition candidates which plan to acquire additional assets
through issuance of securities rather than for cash, and
believe that the possibility of development of a public market
for their securities will be of assistance in that process.
Acquisition candidates, which have a need for an immediate
cash infusion are not likely to find a potential business
combination with the Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the
Company may participate in a business opportunity. Specific
business opportunities will be reviewed as well as the
respective needs and desires of the Company and the promoters
of the opportunity and, upon the basis of the review and the
relative negotiating strength of the Company and such
promoters, the legal structure or method deemed by management
to be suitable will be selected. Such structure may include,
but is not limited to leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements.
The Company may act directly or indirectly through an interest
in a partnership, corporation or other form of organization.
Implementing such structure may require the merger,
consolidation or reorganization of the Company with other
corporations or forms of business organization. In addition,
the present management and stockholders of the Company most
likely will not have control of a majority of the voting stock
of the Company following a merger or reorganization
transaction. As part of such a transaction, the Company's
existing directors may resign and new directors may be
appointed without any vote by stockholders.
It is likely that the Company will acquire its
participation in a business opportunity through the issuance
of Common Stock or other securities of the Company. Although
the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax
free" reorganization under the Internal Revenue Code of 1986
as amended, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e., 80% or
more) of the common stock of the combined entities immediately
following the reorganization. If a transaction were structured
to take advantage of these provisions rather than other "tax
free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate
20% or less of the total issued and outstanding shares. This
could result in substantial additional dilution in the equity
of those who were stockholders of the Company prior to such
reorganization. Any such issuance of additional shares might
also be done simultaneously with a sale or transfer of shares
representing a controlling interest in the Company by the
current officers, directors and principal stockholders. See
"Description of Business - General."
It is anticipated that any new securities issued in
any reorganization would be issued in reliance upon one or
more exemptions from registration under applicable federal and
state securities laws to the extent that such exemptions are
available. In some circumstances, however, as a negotiated
element of the transaction, the Company may agree to register
such securities either at the time the transaction is
consummated, or under certain conditions at specified times
thereafter. The issuance of substantial additional securities
and their potential sale into any trading market that might
develop in the Company's securities may have a depressive
effect upon such market.
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The Company will participate in a business
opportunity only after the negotiation and execution of a
written agreement. Although the terms of such agreement cannot
be predicted, generally such an agreement would require
specific representations and warranties by all of the parties
thereto, specify certain events of default, detail the terms
of closing and the conditions which must be satisfied by each
of the parties thereto prior to such closing, outline the
manner of bearing costs if the transaction is not closed, set
forth remedies upon default, and include miscellaneous other
terms.
As a general matter, the Company anticipates that it,
and/or its principal stockholders will enter into a letter of
intent with the management, principals or owners of a
prospective business opportunity prior to signing a binding
agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties
to consummate the transaction. Execution of a letter of intent
will by no means indicate that consummation of an acquisition
is probable. Neither the Company nor any of the other parties
to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement is
executed. Even after a definitive agreement is executed, it is
possible that the acquisition would not be consummated should
any party elect to exercise any right provided in the
agreement to terminate it on specific grounds.
It is anticipated that 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 and 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. Moreover, because many
providers of goods and services require compensation at the
time or soon after the goods and services are provided, the
inability of the Company to pay until an indeterminate future
time may make it impossible to produce goods and services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity
by purchasing, trading or selling the securities of such
business. The Company does not, however, intend to engage
primarily in such activities. Specifically, the Company
intends to conduct its activities so as to avoid being
classified as an "investment company" under the Investment
Company Act of 1940 (the "Investment Act"), and therefore to
avoid application of the costly and restrictive registration
and other provisions of the Investment Act, and the
regulations promulgated thereunder.
The Company's plan of business may involve changes in
its capital structure, management, control and business,
especially if it consummates the reorganization as discussed
above. Each of these areas is regulated by the Investment Act,
in order to protect purchasers of investment company
securities. Since the Company will not register as an
investment company, stockholders will not be afforded these
protections.
Competition
The Company expects to encounter substantial
competition in its efforts to locate attractive business
combination opportunities. The competition may in part come
from business development companies, venture capital
partnerships and corporations, small investment companies,
brokerage firms, and the like. Some of these types of
organizations are likely to be in a better position than the
Company to obtain access to attractive business acquisition
candidates either because they have greater experience,
resources and managerial capabilities than the Company,
because they are able to offer immediate access to limited
amounts of cash, or for a variety of other reasons. The
Company also will experience competition from other public
"blind pool" companies, some of which may also have funds
available for use by an acquisition candidate.
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Administrative Offices
The Company currently maintains a mailing address at
515 Madison Avenue, 21st Floor, New York, NY 10022, which is
the office address of its President. The Company's telephone
number there is (212) 688-4668. Other than this mailing
address, the Company does not currently maintain any other
office facilities, and does not anticipate the need for
maintaining office facilities at any time in the foreseeable
future. The Company pays no rent or other fees for the use of
the mailing address.
Employees
The Company is in the development stage and currently
has no employees. Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does
not anticipate a need to engage any full-time employees so
long as it is seeking and evaluating business opportunities.
The need for employees and their availability will be
addressed in connection with the decision whether or not to
acquire or participate in specific business opportunities.
Risk Factors
A. Conflicts of Interest. Certain conflicts of interest exist
between the Company and its officers and directors. They have
other business interests to which they currently devote
attention, and are expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only
through their exercise of judgement in a manner which is
consistent with their fiduciary duties to the Company. See
"Management," and "Conflicts of Interest."
It is anticipated that the Company's principal shareholders
may actively negotiate or otherwise consent to the purchase of
a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction.
In this process, the Company's principal shareholders may
consider their own personal pecuniary benefit rather than the
best interest of other Company shareholders. Depending upon
the nature of a proposed transaction, Company shareholders
other than the principal shareholders may not be afforded the
opportunity to approve or consent to a particular transaction.
See "Conflicts of Interest."
B. Possible Need for Additional Financing. The Company has very
limited funds, and such funds, may not be adequate to take
advantage of any available business opportunities. Even if the
Company's currently available funds prove to be sufficient to
pay for its operations until it is able to acquire an interest
in, or complete a transaction with, a business opportunity,
such funds will clearly not be sufficient to enable it to
exploit the opportunity. Thus, the ultimate success of the
Company will depend, in part, upon it availability to raise
additional capital. In the event that the company requires
modest amounts of additional capital to funds its operations
until it is able to complete a business acquisition or
transaction, such funds, are expected to be provided by the
principal shareholders. However, the Company has not
investigated the availability, source, or terms that might
govern the acquisition of the additional capital which is
expected to be required in order to exploit a business
opportunity, and will not do so until it has determined the
level of need for such additional financing. There is no
assurance that additional capital will be available from any
source or, if available, that it can be obtained on terms
acceptable to the company. If not available, the Company's
operations will be limited to those that can be financed with
its modest capital.
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C. Regulations of Penny Stocks. The Company's securities, when
available for trading, will be subject to a Securities and
Exchange Commission rule that impose special sales practice
requirements upon broker-dealers who sell such securities to
persons other than established customers or accredited
investors. For purpose of the rule, the phrase "accredited
investor" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in
excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the
broker dealer must make special suitability determination for
the purchaser and receive the purchasers written agreement to
the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell the Company's
securities and also may affect the ability of purchasers of
the Company's securities and also may affect the ability of
purchasers of the Company's securities to sell such securities
in any market that might develop therefor.
In addition, the Securities and Exchange Commission has
adopted a number of rules to regulate "penny stocks." Such
rules include Rule 3a51-1 under the Securities Act of 1933, an
Rules 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7
under the Securities Exchange Act of 1934, as amended. Because
the securities of the Company may constitute "penny stocks"
within the meaning of the rules, the rules would apply to the
Company and to its securities. The rules may further affect
the ability of the Company's shareholders to sell their shares
in any public market, which might develop.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years form patterns of fraud and
abuse. Such patterns include (I) control of the market for the
security by one or a few broker-dealers that are often related
to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and
misleading press releases; (iii) "boiler room" practices
involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling
broker-dealers; and (v) the wholesale dumping of the same
securities by promoters and broker dealers after prices have
been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent
investor losses. The Company's management is aware of the
abuses that have occurred historically in the penny stock
market. Although the Company does not expect to be in a
position to dictate the behavior of the market or of broker
dealers who participate in the market, management will strive
within the confines of practical limitations to prevent the
described patterns form being established with respect to the
Company's securities.
D. No Operating History. The Company was formed in November,
1996, as a blind pool or blank check entity, for the purpose
of registering its common stock under the 1934 Act and
acquiring a business opportunity. The Company has no operating
history, revenues from operations, or assets other than a
modest amount of cash. The Company faces all of the risks of a
new business and the special risks inherent in the
investigation, acquisition, or involvement in a new business
opportunity. The Company must be regarded as a new or
"start-up" venture with all of the unforeseen costs, expenses,
problems, and difficulties to which such ventures are subject.
11
<PAGE>
E. No Assurance of Success or Profitability. There is no
assurance that the Company will acquire a favorable business
opportunity. Even if the Company should become involved in a
business opportunity, there is no assurance that it will
generate revenues or profits, or that the market price of the
Company's outstanding shares will be increased thereby.
F. Possible Business - Not Identified and Highly Risky. The
Company has not identified and has no commitments to enter
into or acquire a specific business opportunity. As a result,
it is only able to make general disclosures concerning the
risks and hazards of acquiring a business opportunity, rather
than providing disclosure with respect to specific risks and
hazards relating to a particular business opportunity. As a
general matter, prospective investors can expect any potential
business opportunity to be quite risky. See Item 1 "
Description of Business."
G. Type of Business Acquired. The type of business to be acquired
may be one that desires to avoid effecting its own public
offering an the accompanying expense, delays, uncertainties,
and federal and state requirements which purport to protect
investors. Because of the Company's limited capital, it is
more likely than not, that any acquisition by the company will
involve other parties whose primary interest is the
acquisition of control of a publicly traded company. Moreover,
any business opportunity acquired may be currently
unprofitable or present other negative factors.
H. Impracticability of Exhaustive Investigation. The Company's
limited funds and lack of full-time management will make it
impracticable to conduct a complete and exhaustive
investigation and analysis of a business opportunity before
the Company commits its capital or other resources thereto.
Management decisions, therefore, will likely be made without
detailed feasibility studies, independent analysis, market
surveys and the like which, if the Company had more funds
available to it, would be desirable. The Company will be
particular dependent in making decisions upon information
provided by the promoter, owner, sponsor, or other associated
with the business opportunity seeking the Company's
participation. A significant portion of the Company's
available funds may be expended for investigative expenses and
other expenses related to preliminary aspects of completing an
acquisition transaction, whether or not any business
opportunity investigated is eventually acquired.
I. Lack of Diversification. Because of the limited financial
resources that the Company has, it is unlikely that the
Company will be able to diversify its acquisitions or
operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to
economic fluctuations within a particular business or industry
and therefore increase the risks associated with the Company's
operations.
J. Need for Audited Financial Statements. The Company will
require audited financial statements from any business that it
proposes to acquire. Since the Company will be subject to the
reporting provisions of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), it will be required to
include audited financial statements in its periodical reports
for any existing business it may acquire. In addition, the
lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing
on NASDAQ, the automated quotation system sponsored by the
Association of Securities Dealers, Inc., or on any existing
stock exchange. Moreover, the lack of such financial
statements is likely to discourage broker-dealers from
becoming or continuing to serve as market makers in the
securities of the Company. Finally, without audited financial
statements, the Company would almost certainly be unable to
offer securities under a registration statement pursuant to
the Securities Act of 1933, and the ability of the Company to
raise capital would be significantly limited. Consequently,
acquisitions prospects that do not have, or are unable to
provide reasonable assurances that they will be able to
obtain, the required audited statements would not be
considered by the Company to be appropriate for acquisition.
12
<PAGE>
K. Other Regulation. An acquisition made by the Company may be of
a business that is subject to regulation or licensing by
federal, state, or local authorities. Compliance with such
regulations and licensing can be expected to be a
time-consuming, expensive process and may limit other
investment opportunities of the Company.
L. Dependence upon Management; Limited Participation of
Management. The Company will be entirely dependant upon the
experience of its officers and directors in seeking,
investigating, and acquiring a business and in making
decisions regarding the Company's operations. It is possible
that, from time to time, the inability of such persons to
devote their full time attention to the business of the
Company could result in a delay in progress toward
implementing its business plan. See "Management." Because
investors will not be able to evaluate the merits of possible
future business acquisitions by the Company, they should
critically assess the information concerning the Company's
officers and directors.
M. Lack of Continuity in Management. The Company does not have an
employment agreement with any of its officers or directors,
and as a result, there is no assurance that they will continue
to manage the Company in the future. In connection with
acquisition of a business opportunity, it is likely the
current officers and directors of the Company may resign. A
decision to resign will be based upon the identity of the
business opportunity and the nature of the transaction, and is
likely to occur without the vote or consent of the
stockholders of the Company.
N. Indemnification of Officers and Directors. The Company's
articles of Incorporation provide for the indemnification of
its, directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses
incurred by them in any litigation to which they become a
party arising from their association with or activities on
behalf of the Company. The Company will also bear the expenses
of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the
Company therefor if it is ultimately determined that any such
person shall not have been entitled to indemnification. This
indemnification policy could result in substantial
expenditures by the Company, which it will be unable to
recoup.
O. Dependence upon Outside Advisors. To supplement the business
experience of its officers and directors, the Company may be
required to employ accountants, technical experts, appraisers,
Attorneys, or other consultants or advisors. The selection of
any such advisors will, be made by the Company's officers,
without any input by shareholders. Furthermore, it is
anticipated that such persons may be engaged on an "as needed"
basis without a continuing fiduciary or other obligation to
the Company. In the event the officers of the Company consider
it necessary to hire outside advisors, they any elect to hire
persons who are affiliates, if those affiliates are able to
provide the required services.
P. Leveraged Transactions. There is a possibility that any
acquisition of a business opportunity by the Company may be
leveraged. I.e., the Company may finance the acquisition of
the business opportunity by borrowing against the assets of
the business opportunity to be acquired, or against the
projected future revenues or profits of the business
opportunity. This could increase the Company's exposure to
larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates
enough revenues to cover the related debt and expenses.
Failure to make payments on the debt incurred to purchase the
business opportunity could result in the loss of a portion or
all of the assets acquired. There is no assurance that any
business opportunity acquired through a leveraged transaction
will generate sufficient revenues to cover the related debt
and expenses.
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<PAGE>
Q. Competition. The search for potentially profitable business
opportunities is intensely competitive. The Company expects to
be at a disadvantage when competing with many firms that have
substantially greater financial and management resources and
capabilities than the Company. These competitive conditions
will exist in any industry in which the Company may become
interested.
R. No Foreseeable Dividends. The Company has not paid dividends
on its Common Stock and does not anticipate paying such
dividends in the foreseeable future.
S. Loss of Control by Present Management and Stockholders. In
conjunction with completion of a business acquisition, it is
anticipated that the Company will issue an amount of the
Company's authorized but unissued Common Stock that represents
a majority of the voting power and equity of the Company. In
conjunction with such a transaction, the Company's current
Officers, Directors, and principal shareholders could also
sell all, or a portion, of their controlling block of stock to
the acquired company's stockholders. Such a transaction would
result in a greatly reduced percentage of ownership of the
Company by its current shareholders. As a result, the acquired
company's stockholders would control the Company, and it is
likely that they would replace the Company's management with
persons who are unknown at this time.
T. No Public Market Exists. There is currently no public market
for the Company's common stock, and no assurance can be given
that a market will develop or that a shareholder ever will be
able to liquidate his investment without considerable delay,
if at all. If a market should develop, the price may be highly
volatile. Factors such as those discussed in this "Risk
Factors" section may have a significant impact upon the market
price of the securities offered hereby. Owing to the low price
of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchasers
finds a broker willing to effect a transaction in theses
securities, the combination of brokerage commissions, state
transfer taxes, if any, and any other selling costs may exceed
the selling price. Further, many leading institutions will not
permit the use of such securities as collateral for any loans.
U. Rule 144 Sales. All of the presently outstanding shares of
Common Stock are "restricted securities" within the meaning of
Rule 144 under the Securities Act of 1933, as amended. As
restricted shares, these shares may be resold only pursuant to
an effective registration statement or under the requirements
of Rule 144 or other applicable state securities laws. Rule
144 provides in essence that a person who has held restricted
securities for a prescribed period, may under certain
conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the
greater of 1.0% of a company's outstanding common stock or the
average weekly trading volume during the four calendar weeks
prior to sale. There is no limit on the amount of restricted
securities that may be sold by a non-affiliate after, the
restricted securities have been held by the owner, for a
period of at least two years. A sale under Rule 144 or under
any other exemption from the Act, if available, or pursuant to
subsequent registrations of common stock of present
shareholders, may have a depressive effect upon the price of
the Common Stock in any market that may develop. As of the
date hereof, 478,720 of the currently outstanding shares
of common stock of the Company have been held by the current
owners, thereof for a period of more than two years. And
accordingly, such shares are currently available for resale in
accordance with the provisions of Rule 144.
V. Blue Sky Consideration. Because the securities registered
hereunder have not been registered for resale under the
Blue-Sky laws of any state. The holders of such 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 law restrictions upon the
ability of investors to sell the securities and of purchasers
to purchase the securities. Some jurisdictions may not allow
the trading or resale of blind pool or "blank check"
securities under any circumstances. Accordingly, investors
should consider the secondary market for the Company's
securities to be a limited one.
14
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
Liquidity and Capital Resource
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or
capital resources or stockholders equity other than the receipt of
proceeds for its inside capitalization funds. Substantially all of such
funds have been used to pay expenses incurred by the Company. As of
September 30, 1999, the Company's balance sheet reflects current and
total assets of $359.
The Company intends to seek to carry out its plan of business
as discussed herein. In order to do so, it will require additional
capital to pay ongoing expenses, including particularly legal and
accounting fees incurred in conjunction with preparation and filing of
this registration statement on form 10-SB, and in conjunction with
future compliance with its on-going reporting obligations.
Results of Operations
During the period from November 22, 1996 (inception) through
September 30, 1999, the Company has engaged in no significant
operations other than organizational activities, acquisition of capital
and preparation for registration of its securities under the Securities
Exchange Act of 1934, as amended. During this period, the Company
received no revenues.
For the current fiscal year, the Company anticipates incurring
a loss as a result of expenses associated with registration and
compliance with reporting obligations under the Securities Exchange Act
of 1934, and expenses associated with locating and evaluating
acquisition candidates. The company anticipates that until a business
combination is completed with an acquisition candidate, it will not
generate revenues. The Company may also continue to operate at a loss
after completing a business combination, depending upon the performance
of the acquired business.
Need for Additional Financing
The Company's existing capital will not be sufficient to meet
the Company's cash needs, including the costs of completing its
registration and complying with its continuing reporting obligation
under the Securities Exchange Act of 1934. Accordingly, additional
capital will be required.
No commitments to provide additional funds have been made by
management or other stockholders, and the Company has no plans,
proposals, arrangements or understandings with respect to the sale or
issuance of additional securities prior to the location of a merger or
acquisition candidate. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover
its expenses. Notwithstanding the forgoing, to the extent that
additional funds are required, the Company anticipates receiving such
funds in the form of advancements from current shareholders without
issuance of additional shares or other securities, or through the
private placement of restricted securities rather than through a public
offering. The Company does not currently contemplate making a
Regulation S offering.
15
<PAGE>
Regardless of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might
seek to compensate providers of services by issuances of stock in lieu
of cash. For information as to the Company's policy in regard to
payment for consulting services, see "Certain Relationships and
Transactions."
Year 2000 issues are not currently material to the Company's
business, operations or financial condition, and the Company does not
currently anticipate that it will incur any material expenses to
remediate Year 2000 issues it may encounter. However, Year 2000 issues
may become material to the Company following its completion of a
business combination transaction. In that event, the Company will be
required to adopt a plan and a budget for addressing such issues.
Item 3. Description of Property.
The Company currently maintains a mailing address at 515
Madison Avenue, 21st Flr, New York, NY 10022, which is the address of
its President. The Company pays no rent for the use of this mailing
address. The Company does not believe that it will need to maintain an
office at any time in the foreseeable future in order to carry out its
plan of operations described herein. The Company's telephone number is
212-688-4668.
Item 4. Security ownership of Certain Beneficial Owners and Management.
Beneficial Ownership
The following table sets forth, as of the date of this
Registration Statement, the stock ownership of each executive officer
and director of the Company, of all executive officers and directors of
RC Holding as a group, and of each person known by the Company to be a
beneficial owner of 5% or more of its Common Stock. Except as otherwise
noted, each person listed below is the sole beneficial owner of the
shares and has sole investment and voting power as such shares. No
person listed below has any options, warrant or other right to acquire
additional securities of the Company, except as may be otherwise noted.
Name and address Number of Shares % of Class
Owned Beneficially Owned
John R. Rice III 230,400 38.4%
1 Seawall Lane
Bayville, NY 11709
Joseph F. Ingrassia 230,400 38.4%
3 Van Gogh Lane
Suffern, NY 10901
Charlotte Iapicca 30,320 5.1%
94 Goodee St.
West Peabody, MA 01960
Cosmo Palmieri 30,320 5.1%
5122 Marshall Ford Rd.
Austin, TX 78732
Frank Piopii 30,320 5.1%
4 Cliff Ave.
Winthrop, MA 02152
Dominick Pope 30,320 5.1%
195 10th Ave.
New York, NY 10011
All Directors and 460,800 76.8%
Executive Officers (2 persons)
16
<PAGE>
Item 5. Directors, Executive Officers, Promoters, and Control Persons.
The directors and executive officers serving the Company are as
follows:
Name Age Position Held
------------------- --- -------------------
John R. Rice III 55 President, Director
Joseph F. Ingrassia 40 Secretary, Director
The directors named above will serve until the next annual meeting of
the Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding between any
of the directors or officers of the Company and any other person pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders may directly or indirectly
participate in or influence the management of the Company's affairs.
The directors and officers will devote their time to the Company's
affairs on an "as needed" basis, which, depending on the circumstances, could
amount to as little as two hours per month, or more than forty hours per month,
but more than likely will fall within the range of five to ten hours per month.
There are no agreements or understandings for any officer or director to resign
at the request of another person, and none of the officers or directors are
acting on behalf of, or will act at the direction of, any other person.
Biographical Information
John R. Rice III received a bachelors degree from the University of Miami, 1965.
Mr. Rice is a founding partner of Capstone & Company, LLC, 515 Madison Avenue,
21st Floor, New York, NY 10022 (formally Blackstone & Company, Ltd.) a financial
services company providing purchase order financing, debt placement to rapidly
growing and financially distressed companies. The central focus of Capstone's
activities is structuring, pricing and negotiating purchase order finance
transactions.
Joseph F. Ingrassia received a bachelors degree in Psychology from Siena
College, NY in 1980 and a MBA in management (Finance Concentration) in 1984 from
Golden Gate University, San Francisco. Mr. Ingrassia cofounded Capstone &
Company, a financial services company providing purchase order financing, debt
placement to rapidly growing and financially distressed companies, in 1991.
Indemnification of Officers and Directors
As permitted by Delaware law, the Company's Articles of Incorporation
provide that the Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being, or having been,
Company directors or officers unless, in any such action, they are adjudged to
have acted with gross negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, or persons controlling the Company. Pursuant
to the foregoing provisions, the Company has been informed that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore, unenforceable.
17
<PAGE>
Conflicts of Interest
None of the officers of the Company will devote more than a portion of
his time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of the officers
other business and investment activities. Such conflicts may require that the
Company attempt to employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be obtained upon
terms favorable to the Company.
The officers, directors and principal shareholders of the Company may
actively negotiate for the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial premium may be paid by the
purchaser in conjunction with any sale of shares by the Company's officers,
directors and principal shareholders made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a substantial
premium may be paid to members of Company management to acquire their shares
creates a conflict of interest for them and may compromise their state law
fiduciary duties to the Company's other shareholders. In making any such sale,
members of Company management may consider their own personal pecuniary benefit
rather than the best interests of the Company and the Company's other
shareholders, and the other shareholders are not expected to be afforded the
opportunity to approve or consent to any particular buy-out transaction
involving shares held by members of Company management.
Item 6. Executive Compensation.
No officer or director has received any compensation from the Company.
Until the Company acquires additional capital, it is not anticipated that any
officer or director will receive compensation from the Company other than
reimbursement for out-of-pocket expenses incurred on behalf of the Company. See
"Certain Relationships and Related Transactions." The Company has no stock
option, retirement, pension, or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.
Item 7. Certain Relationships and Related Transactions.
The Company has adopted a policy under which any consulting or finder's
fee that may be paid to a third party for consulting services to assist
management in evaluating a prospective business opportunity would be paid in
stock rather than in cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict whether, or in what amount,
such stock issuance might be made.
It is not currently anticipated that any salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or executive
officers, or to any other affiliate of the Company except as described under
"Executive Compensation" above.
18
<PAGE>
Although management has no current plans to cause the Company to do so,
it is possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current stockholders to the acquisition candidate or principals
thereof, or to other individual or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
Item 8. Description of Securities
Common Stock
The Company's Articles of incorporation authorize the issuance of
20,000,000 shares of Common Stock, par $.01. Each record holder of Common Stock
is entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. The Articles of Incorporation do not permit
cumulative voting for the election of directors.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out of
legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common Stock
have no preemptive, conversion or redemptive rights. All of the issued and
outstanding shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and non-assessable.
To the extent that additional shares of the Company's Common Stock are issued,
the relative interests of then existing stockholders may be diluted.
Transfer Agent
The Company's Transfer Agent is Manhattan Transfer Registrar Co, 58
Dorchester Rd, Lake Ronkonkoma, NY 11779.
Reports to Stockholders
The Company plans to furnish it stockholders with an annual report for
each fiscal year ending December 31 containing financial statements audited by
its independent certified public accountants. In the event the Company enters
into a business combination with another company, it is the present intention of
management to continue furnishing annual reports to stockholders. Additionally,
the Company may, in its sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems appropriate. The Company
intends to comply with the periodic reporting requirements of the Securities
Exchange Act of 1934.
19
<PAGE>
Part II
Item 1. Market Price and Dividends on the Registrant's Common equity and
other Shareholder Matters
There has been no established public trading market for the Company's
securities since its inception on November 22, 1996. As of November 31, 1999,
the Company had 31 shareholders of record. No dividends have been paid to date
and the Company's Board of directors does not anticipate paying dividends in the
foreseeable future.
Item 2. Legal Proceedings.
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
Item 3. Changes in and Disagreements with Accountants.
The Company has had no changes in or disagreements with accountants on
accounting or financial disclosures matters
Item 4. Recent sales of Unregistered Securities.
The following Unregistered Securities of the Company have been issued
in the past 3 years. On April 4, 1998, the Company issued 30,320 restricted
shares of its common stock to each of four affiliates for an aggregate of
121,280 Shares. The shares were exempt from registration pursuant to Section
4(2) of the Securities Act of 1933 as amended.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company provide
that the Company will indemnify its officers and directors for costs and
expenses incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a manner he
reasonably believed to be in the Company's best interest and is a party by
reason of his status as an officer or director, absent a finding of negligence
or misconduct in the performance of duty.
Part F/S
The Financial Statements of RC Holding Corp. required by regulation S-B
commence on page F-1 hereof and are incorporated herein by reference.
Part III
Items 1 & 2 Index to exhibits and description of Exhibits
2.1 Articles of Incorporation*
2.1a Amendment to Articles of Incorporation*
2.2 By-Laws*
*Previously filed
20
<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.
Date: March 6, 2000 By: /s/ John Rice
-----------------------------
John Rice, President
Date: March 6, 2000 By: /s/ Joseph F. Ingrassia
------------------------------
Joseph F. Ingrassia, Secretary
21
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RC Holding Corp.
(A Development Stage Company)
Table Of Contents
December 31, 1999
INDEPENDENT AUDITOR'S REPORT
EXHIBIT
FINANCIAL STATEMENTS
Balance Sheet ............................................. F-1
Statement of Income and Retained Earnings ................. F-2
Statement of Cash Flows ................................... F-3
Statement of Shareholders Equity .......................... F-4
Notes to Financial Statements ............................. F-5
<PAGE>
[LOGO]
Nelson, Mayoka & Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
551 5TH Avenue
New York, New York
10176-0001
Tel. (212) 697-7979
Fax (212) 697-8997
DIRECT LINE
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders of
RC Holding Corp. (A development Stage Company)
We have audited the accompanying balance sheet of RC Holding Corp. (A
development Stage Company), as of December 31, 1999 and the related statements
of operations, stockholders' equity and cash flows for the year ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RC Holding Corp. (A development
Stage Company), as of December 31, 1999, and the results of its operations for
the year ended December 31, 1999 in conformity with generally accepted
accounting principles.
February 18, 2000
New York, New York
Nelson, Mayoka and Company
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
RC HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
CURRENT ASSETS:
Subscriptions Receivable ................................ $ 359
TOTAL CURRENT ASSETS ............................... 359
--------
Total Assets ........................................ $ 359
========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued expenses ................... $ 11,261
STOCKHOLDER'S EQUITY
Common stock - $0.001 par value 600,000 shares authorized
600,000 shares issued and outstanding ................... $ 600
Paid - in capital ....................................... --
Accumulated Deficit ..................................... (11,502)
--------
TOTAL STOCKHOLDER'S EQUITY ......................... (10,902)
--------
$ 359
========
The Accompanying Notes are an Integral Part of These Financial Statements.
F-1
<PAGE>
RC HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1999
Sales $ -
Cost of sales -
---------
Gross profit -
Selling general and administration 11,196
Other income (expense) net -
Net income (loss) before taxes (11,196)
Provision for income taxes 65
---------
Net income (loss) $ (11,261)
=========
Net income (loss) per share $ (0.0428)
---------
Average number of shares outstanding 263,246
---------
The Accompanying Notes are an Integral Part of These Financial Statements.
F-2
<PAGE>
RC HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) $ (11,261)
Changes in assets and liabilities
Increase (Decrease) in accounts payable 11,261
-----------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES -
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock -
Additional Paid in Capital -
-----------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES -
-----------
NET INCREASE (DECREASE) IN CASH -
CASH AT BEGINNING OF YEAR -
-----------
CASH AT END OF YEAR $ -
===========
The Accompanying Notes are an Integral Part of These Financial Statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
RC HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES TO STOCKHOLDERS EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
Common stock Additional
Number of paid in Accumulated
shares Amount capital (deficit) Total
--------- -------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance - JANUARY 1, 1999 1,500 $ - $ 241 $ (241)$ (241)
Net Loss - - - (11,261) (11,261)
Shares Issued - - - - -
--------- -------- --------- ----------- ---------
Balance - DECEMBER 31, 1999 1,500 $ - 241 $ (11,502)$ (11,261)
========= ======== ========= =========== =========
</TABLE>
<PAGE>
The Accompanying Notes are an Integral Part of These Financial Statements.
F-4
<PAGE>
RC Holding Corp.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
Note 1 - Organization and Summary of Significant Accounting Policies
Organization:
On November 22, 1996 RC Holding Corp. (A Development Stage Company) (" the
Company") was incorporated under the laws of Delaware, to engage in any
business, which is permitted by the General Corporation Law of Delaware.
Development Stage:
The Company is currently in the development stage and has no significant
operations to date.
Income Taxes:
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes.
Based upon the company generating a loss no provision has been made for Federal
Income taxes. A provision has been made for Delaware minimum tax of $65.
Statement of Cash Flows:
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest and taxes in the period ended December 31, 1999 was $ - 0
- -.
Net (Loss) Per Common Share:
The net (loss) per common share is computed by dividing the net (Loss) for the
period by number of shares outstanding at December 31, 1999.
F-5
<PAGE>
RC Holding Corp.
( A Development Stage Company)
Notes to Financial Statements
December 31, 1999
Note 2 - Capital Stock
Common Stock:
The Company initially authorized 1,500 shares no par value.
On August 20, 1999 a majority of the RC Holding Corp.'s shareholders authorized
the amendment to the Company's Certificate of Incorporation to increase the
number of shares the company authorized to issue from 1,500 shares of common
stock, no par value, to 20,000,000 shares of common stock, par value $.001.
The shareholders also authorized a forward split on a 400 share for 1 share
basis effective following the amendment of the Certificate of Amendment of the
Certificate of Incorporation.
The Company is constantly seeking business opportunities and other means of
financing to enable it to complete its business plan.
The company has declared no dividends through December 31, 1999.
Note 3 - Related Party Events
The Company presently maintains its principal office 515 Madison Avenue, 21st
Floor, New York, NY 10022.
F-6
