UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange Act of
1934
ROYSTON MANNOR ESTATES, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0421129
(State of organization) (I.R.S. Employer Identification No.)
Las Vegas Commerce Center, 1350 E. Flamingo Road, Suite 688, Las Vegas,
NV 89119
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 732-2253
Registrant's Attorney: Shawn Hackman, Esq., 3360 W. Sahara Ave., Suite
200, Las Vegas, NV 89102, (702) 732-2253
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
ITEM 1. DESCRIPTION OF BUSINESS
Royston Mannor Estates, Inc. is a Nevada corporation formed under the
laws of the State of Nevada on December 31, 1998. Its principal
place of business is located at Las Vegas Commerce Center, 1350 E.
Flamingo Road, Suite 688, Las Vegas, NV 89119. The Royston Mannor Estates, Inc.
was organized to engage in any lawful corporate business.
The primary activity of Royston Mannor Estates, Inc. is to locate and
consummate a merger or acquisition with a private entity. It is the preference
of Royston to merge or acquire in a manner that allows research and development
of a wholesale and retail winery. Any preference towards the wine industry
is definitively second to the primary goal of locating and consummating a
merger or acquisition. The efforts towards merging or acquiring are primary
regardless of whether the acquired or merging company is in the wine industry
or not.
Royston Mannor Estates, Inc. has been in the developmental stage
since inception and has no operating history other than organizational
matters. Royston Mannor Estates, Inc. has no operations
and in accordance with SFAS #7, is considered a development stage
company.
Mr. Makaiwi has elected to begin implementing Royston Mannor
Estates, Inc.'s principal business purpose, described below under "Item
2, Plan of Operation". As such, Royston Mannor Estates, Inc. can be
defined as a "shell" company., whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The proposed
business activities described herein classify Royston Mannor Estates,
Inc. as a "blank check" company.
Many states have enacted statutes, rules, and regulations limiting the
sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in Royston Mannor Estates, Inc.'s
securities until such time as Royston has successfully implemented its
business plan.
Royston Mannor Estates, Inc. is filing this registration
statement on a voluntary basis, pursuant to section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act"), in order to ensure that
public information is readily accessible to all shareholders and potential
investors, and to increase Royston Mannor Estates, Inc.'s access to
financial markets. Royston plans to increase its access to financial markets
by gaining reporting status on the over-the-counter bulletin board. In the
event Royston Mannor Estates, Inc.'s obligation to file periodic reports is
suspended pursuant to the Exchange Act, Royston Mannor Estates, Inc.
anticipates that it will continue to voluntarily file such reports.
Risk Factors
Royston Mannor Estates, Inc.'s business is subject to numerous risk
factors,including the following:
COMPETITION. The wine business is highly competitive. The Company will
be competing with a number of other potential suppliers of grapes and
wine, most of whom will have greater financial resources than the Company. In
this environment, there can be no assurance that there will be a suitable
property available for acquisition by the Company or that the Company can obtain
financing for, or participants to join in the development of a viable
vineyard operation without further financing. Most of the Company's
competitors have greater financial , personnel and other resources than
does the Company and therefore have a greater leverage to use in acquiring
properties, hiring personnel and marketing produce. Accordingly, a high
degree of competition in these areas is expected to continue.
GOVERNMENT REGULATION. The production and sale of grapes/wine is
subject to regulation by state, federal, local authorities, and foreign
governments. In most areas there are statutory provisions regulating the
production of food grapes and wine under which administrative agencies may
change rules and regulations without notice.
More particularly, in the event that the winery proceeds it would be
affected by FDA regulations regarding contamination and labeling and
packaging. Being alcohol, sales would be regulated as to time, area
and persons who could be sold to/ We would of course be affected by
sales and alcohol taxes.
AVAILABILITY OF SUITABLE PROPERTIES. Competition for properties is
intense. The Company will be competing with a number of other potential
purchasers of suitable property, most of whom will have greater financial
resources than the Company.
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. Royston Mannor
Estates, Inc. has had no operating history and has received no revenues or
earnings from operations. Royston Mannor Estates, Inc. has no significant
assets or financial resources. Royston Mannor Estates, Inc. will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until it completes a business combination. This may result in Royston Mannor
Estates, Inc. incurring a net operating loss which will increase continuously
until the Company completes a business combination with a profitable business
opportunity. There is no assurance that Royston Mannor Estates, Inc.
will identify a business opportunity or complete a business combination.
SPECULATIVE NATURE OF ROYSTON MANNOR ESTATES, INC.'S PROPOSED
OPERATIONS. The
success of Royston Mannor Estates, Inc.'s proposed plan of operation
will depend to a great extent on the operations, financial condition, and
management of any potential business opportunity. While management
intends to seek business combinations with entities having established
operating histories, it cannot assure that Royston Mannor Estates, Inc. will
successfully locate candidates meeting such criteria. In the event
Royston Mannor Estates, Inc. completes a business combination, the success of
the company's operations may be dependent upon management of the successor
firm or venture partner firm together with numerous other factors beyond
Royston Mannor Estates, Inc.'s control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS.
Royston Mannor Estates, Inc. is, and will continue to be, an
insignificant participant in the business of seeking mergers and joint ventures
with, and acquisitions of small private entities. A large number of established
and well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies which may also be desirable
target candidates for Royston Mannor Estates, Inc..
Nearly all such entities have significantly greater financial
resources, technical expertise, and managerial capabilities than Royston Mannor
Estates, Inc.. Royston Mannor Estates, Inc. is, consequently, at a competitive
disadvantage in identifying possible business opportunities and
successfully completing a business combination. Additionally, Royston has no
way to distinguish itself from other blank check companies.
Royston Mannor Estates, Inc. will also compete with
numerous other small public companies in seeking merger or acquisition
candidates. Royston's competition will include operating companies
that are likewise looking for acquisition and merger candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION.
Royston Mannor Estates, Inc. has no arrangement, agreement, or understanding
with respect to engaging in a business combination with any private entity.
There can be no assurance that Royston Mannor Estates, Inc. will successfully
identify and evaluate suitable business opportunities or conclude a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluations. Royston Mannor
Estates, Inc. has been in the developmental stage since inception and has no
operations to date. Other than issuing shares to its original shareholders,
Royston Mannor Estates, Inc. never commenced any operational activities.
There is no assurance that Royston Mannor Estates, Inc. will be able to
negotiate a business combination on terms favorable to the company. Royston
Mannor Estates, Inc. has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have achieved, and
without which Royston Mannor Estates, Inc. would not consider a business
combination in any form with such business opportunity. Accordingly, Royston
Mannor Estates, Inc. may enter into a business combination with a business
opportunity having no significant operating history, losses, limited or no
potential for earnings, limited assets, negative net worth, or other negative
characteristics.
ROYSTON IS DEPENDENT ON MANAGEMENT THAT HAS LIMITED OR NO BUSINESS
EXPERIENCE AND ONLY A PARTIAL TIME COMMITMENT TO ROYSTON.
While seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the company. Royston
Mannor Estates, Inc.'s sole officer has not entered into written
employment agreement with the Company and does not expect to do so in
the foreseeable future.
ROYSTON HAS NO KEY MAN INSURANCE DESPITE THE DEPENDENCE ON MANAGEMENT.
Notwithstanding the combined limited experience and time commitment of
management, loss of the services of any of these individuals would
adversely affect development of Royston Mannor Estates, Inc.'s business and its
likelihood of continuing operations. Despite this, Royston Mannor
Estates, Inc. has not obtained key man life insurance on its officer or
director. See "MANAGEMENT."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of 1934
(the "Exchange Act") must provide certain information about significant
acquisitions, including certified financial statements for Royston Mannor
Estates, Inc. acquired, covering one or two years, depending on the relative
size of the acquisition. The time and additional costs that may be incurred
by some target entities to prepare such statements may significantly delay or
even preclude Royston Mannor Estates, Inc. from completing an otherwise
desirable acquisition. Acquisition prospects that do not have or are unable
to obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act are
applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION.
Royston Mannor Estates, Inc. has conducted minimal market research
indicating that market demand exists for the transactions contemplated
by Royston Mannor Estates, Inc..
The very limited research conducted includes review of wine magazines,
some online internet research and visits to wineries in the Nevada and
California area.
Moreover, Royston Mannor Estates, Inc. has limited marketing
organization. If there is demand for a business combination as contemplated by
Royston Mannor Estates, Inc., there is no assurance Royston Mannor Estates,
Inc. will successfully complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, Royston Mannor Estates,
Inc.'s proposed operations, even if successful, will result in a business
combination with only one entity. Consequently, the resulting
activities will be limited to that entity's business. Royston Mannor Estates,
Inc.'s inability to diversify its activities into a number of areas may
subject Royston Mannor Estates, Inc. to economic fluctuations within a
particular business or industry, thereby increasing the risks associated with
Royston Mannor Estates, Inc.'s operations.
REGULATION. Although Royston Mannor Estates, Inc. will be subject to
regulation under the Securities Exchange Act of 1934, management
believes Royston Mannor Estates, Inc. will not be subject to regulation under
the Investment Company Act of 1940, insofar as Royston Mannor Estates, Inc.
will not be engaged in the business of investing or trading in securities.
In the event Royston Mannor Estates, Inc. engages in business combinations
which result in Royston Mannor Estates, Inc. holding passive investment
interests in a number of entities, Royston Mannor Estates, Inc. could be
subject to regulation under the Investment Company Act of 1940. In such event,
Royston Mannor Estates, Inc. would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. Royston Mannor Estates, Inc. has obtained no formal determination from
the Securities and Exchange Commission as to the status of the company
under the Investment Company Act of 1940 and, consequently, any violation of
such Act would subject Royston Mannor Estates, Inc. to material adverse
consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of Royston Mannor Estates, Inc.'s common stock
will, in all likelihood, result in shareholders of a private company obtaining a
controlling interest in Royston Mannor Estates, Inc.. Any such
business combination may require management of the Company to sell or transfer
all or a portion of the company's common stock held by them, or resign as
members of the Board of Director of Royston Mannor Estates, Inc.. The
resulting change in control of the company could result in removal of one or
more present officer and director of Royston Mannor Estates, Inc. and a
corresponding reduction in or elimination of their participation in the future
affairs of Royston Mannor Estates, Inc..
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION.
Royston Mannor Estates, Inc.'s primary plan of operation is based upon
a business combination with a private concern which, in all likelihood,
would result in Royston Mannor Estates, Inc. issuing securities to
shareholders of such private companies. Issuing previously authorized and
unissued common stock of Royston Mannor Estates, Inc. will reduce the
percentage of shares owned by present and prospective shareholders, and a
change in Royston Mannor Estates, Inc.'s control and/or management.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES.
Management believes that any potential target company must provide
audited financial statements for review, and for the protection of all parties
to the business combination. One or more attractive business opportunities may
forego a business combination with Royston Mannor Estates, Inc., rather
than incur the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered hereunder
have not been registered for resale under the blue sky laws of any state, and
Royston Mannor Estates, Inc. has no current plans to register or qualify its
shares in any state, holders of these shares and persons who desire to
purchase them in any trading market that might develop in the future, should
be aware that there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These restrictions could
reduce the size of any potential market.
Non-issuer trading or resale of Royston Mannor Estates, Inc.'s
securities are exempt from state registration or qualification requirements
in most states. However, some states may continue to restrict the trading or
resale of blind-pool or "blank-check" securities. Accordingly, investors should
consider any potential secondary market for Royston Mannor Estates, Inc.'s
securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-
looking statements" as that term is defined in Section 27A of the Securities
Act of 1933 as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934 as amended (the "Exchange Act"). All statements
that are included in this Registration Statement, other than statements of
historical fact, are forward-looking statements. Although Management believes
that the expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Important factors that could cause actual results to differ
materially from the expectations are disclosed in this Statement, including,
without limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation - General
Royston Mannor Estates, Inc plans to seek,investigate, and if such
investigation warrants, acquire an interest in one
or more business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation. At this time,
Royston Mannor Estates, Inc. has no plan, proposal, agreement, understanding,
or arrangement to acquire or merge with any specific business or company and
Royston Mannor Estates, Inc. has not identified any specific business
or a company for investigation and evaluation. No member of Management or
any promoter of Royston Mannor Estates, Inc., or an affiliate of either,
has had any material discussions with any other company with respect to any
acquisition of Royston Mannor Estates, Inc.
Royston Mannor Estates, Inc. will not restrict its search to any specific
business, industry, or geographical location, and may participate in business
ventures of virtually any kind or nature. However, Royston will give preference
to companies involved in the winery business. Discussion of the proposed
business under this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict Royston Mannor Estates,
Inc.'s virtually unlimited discretion to search for and enter into a
business combination. Royston Mannor Estates, Inc. may seek a combination
with a firm which only recently commenced operations, or a developing company
in need of additional funds to expand into new products or markets or seeking
to develop a new product or service, or an established business which may be
experiencing financial or operating difficulties and needs additional
capital which is perceived to be easier to raise by a public company.
In some instances, a business opportunity may involve acquiring or
merging with a corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common stock.
Royston Mannor Estates, Inc. may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries. Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid technological advances
being made in some industries, and shortages of available capital, management
believes that there are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded corporation
may include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for the principals of a
business, creating a means for providing incentive stock options or
similar benefits to key employees, providing liquidity (subject to restrictions
of applicable statues) for all shareholders, and other items.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Management believes that Royston
Mannor Estates, Inc. may be able to benefit from the use of "leverage" to
acquire a target company. Leveraging a transaction involves acquiring a
business while incurring significant indebtedness for a large percentage of the
purchase price of that business. Through leveraged transactions, Royston Mannor
Estates, Inc. would be required to use less of its available funds to
acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities.
The borrowing involved in a leveraged transaction will ordinarily
be secured by the assets of the acquired business. If that business is
not able to generate sufficient revenues to make payments on the debt
incurred by the company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that Royston Mannor
Estates, Inc. must commit to acquire a business, may correspondingly
increase the risk of loss to Royston Mannor Estates, Inc..
No assurance can be given as to the terms or availability of financing
for any acquisition by Royston Mannor Estates,Inc.. During periods
when interest rates are relatively high, the benefits of
leveraging are not as great as during periods of lower interest rates,
because the investment in the business held on a leveraged basis will
only be profitable if it generates sufficient revenues to cover the related
debt and other costs of the financing. Lenders from which Royston Mannor
Estates, Inc. may obtain funds for purposes of a leveraged buy-out may impose
restrictions on the future borrowing, distribution, and operating
policies of Royston Mannor Estates, Inc.. It is not possible at this time to
predict the restrictions, if any, which lenders may impose, or the impact
thereof on Royston Mannor Estates, Inc..
Royston Mannor Estates, Inc. has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management believes
Royston Mannor Estates, Inc. will offer owners of businesses the opportunity to
acquire a controlling ownership interest in a public company at substantially
less cost than is required to conduct an initial public offering. However, a
business that conducts a public will raise capital, but will not raise capital
as a result of merging with Royston. The owners of the businesses will,
however, incur significant post-merger or acquisition registration costs in
the event they wish to register a portion of their shares for
subsequent sale. Royston Mannor Estates, Inc. will also incur significant legal
and accounting costs in connection with the acquisition of a business
opportunity, including the costs of preparing post-effective
amendments, Forms 8-K, agreements, and related reports and documents. At a
minimum an 8K will have to be filed post effective. Additionally, 10Qs and
10Ks will need to be filed as necessary.
Nevertheless, the officer and director of Royston Mannor Estates, Inc.
have not conducted market research and are not aware of statistical
data which would support the perceived benefits of a merger or acquisition
transaction for the owners of a businesses.
Royston Mannor Estates, Inc. does not intend to make any loans to
any prospective merger or acquisition candidates or to unaffiliated
third parties. Royston Mannor Estates, Inc. will not restrict its search for
any specific kind of firms, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to predict at
this time the status of any business in which Royston Mannor Estates, Inc. 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 Royston Mannor Estates, Inc. may offer. However, Royston Mannor
Estates, Inc. does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as Royston Mannor Estates, Inc. has successfully
consummated such a merger or acquisition. Royston Mannor Estates, Inc. also
has no plans to conduct any offerings under Regulation S.
Currently, the company has minimal cash, either additional funds will have to be
raised via securities issues to pursue the winery or borrow from management.
Sources of Opportunities
Royston Mannor Estates, Inc. will seek a potential business opportunity
from all known sources, but will rely principally on personal contacts of
its officer and director as well as indirect associations between them and
other business and professional people. It is not presently anticipated
that Royston Mannor Estates, Inc. will engage professional firms
specializing in business acquisitions or reorganizations. Management, while
not especially experienced in matters relating to the new business of the
Company, will rely upon their own efforts and, to a much lesser extent, the
efforts of Royston Mannor Estates, Inc.'s shareholders, in accomplishing the
business purposes of Royston Mannor Estates, Inc.. It is not anticipated that
any outside consultants or advisors, other than Royston Mannor Estates, Inc.'s
legal counsel and accountants, will be utilized by Royston Mannor Estates,
Inc. to effectuate its business purposes described herein. However, if Royston
Mannor Estates, Inc. does retain such an outside consultant or advisor, any
cash fee earned by such party will need to be paid by the prospective
merger/acquisition candidate, as Royston Mannor Estates, Inc. has no cash
assets with which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside consultants
and none are anticipated in the future.
In the past, Royston Mannor Estates, Inc.'s management has never used
outside consultants or advisors in connection with a merger or acquisition.
As is customary in the industry, a finder's fee for locating an acquisition
prospect may be necessary. If any such fee is paid, it will have to be approved
and paid for by the target candidate because Royston has no cash.
Any such payment would be done in accordance with industry standards.
Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a
finder's fee or real estate brokerage fee could, in certain circumstances, be
paid to any employee, officer, director or 5% shareholder of Royston Mannor
Estates, Inc., if such person plays a material role in bringing a transaction to
Royston Mannor Estates, Inc..
It should be noted that Mr. Makaiwi has little or no experience in
wineries other than observations. Mr. Makaiwi does have general business
experience as disclosed in the resume.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or
under the supervision of the officer and director of Royston Mannor Estates,
Inc. (see "Management"). Management intends to concentrate on identifying
prospective business opportunities which may be brought to its
attention through present associations with management. In analyzing prospective
business opportunities, management will consider, among other factors,
such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be
available and the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of Royston Mannor
Estates, Inc.
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel of
the firm sponsoring the business opportunity as part of their investigation. To
the extent possible, Royston Mannor Estates, Inc. intends to utilize
written reports and personal investigation to evaluate the above factors.
Royston Mannor Estates, Inc. will not acquire or merge with any company for
which audited financial statements cannot be obtained. Opportunities in
which Royston Mannor Estates, Inc. participates will present certain risks,
many of which cannot be identified adequately prior to selecting a specific
opportunity. Royston Mannor Estates, Inc.'s shareholders must,
therefore, depend on Management to identify and evaluate such risks. Promoters
of some opportunities may have been unable to develop a going concern or may
present a business in its development stage (in that it has not generated
significant revenues from its principal business activities prior to Royston
Mannor Estates, Inc.'s participation.) Even after Royston Mannor Estates,
Inc.'s participation, there is a risk that the combined enterprise may not
become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by Royston Mannor
Estates, Inc. and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management time and
attention as well as substantial costs for accountants, attorneys, and others.
If a decision is made not to participate in a specific business opportunity
the costs incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a
specific business opportunity, the failure to consummate that
transaction may result in the loss by Royston Mannor Estates, Inc. of the
related costs incurred. There is the additional risk that Royston Mannor
Estates, Inc. will not find a suitable target. Management does not believe
Royston Mannor Estates, Inc. will generate revenue without finding and
completing a transaction with a suitable target company. If no such target is
found, therefore, no return on an investment in the company. will be realized,
and there will not, most likely, be a market for Royston Mannor Estates,
Inc.'s stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition,
Royston Mannor Estates, Inc. may become a party to a merger, consolidation,
reorganization, joint venture, franchise, or licensing agreement with
another corporation or entity. It may also purchase stock or assets of an
existing business. Once a transaction is complete, it is possible that the
present management and shareholders of Royston Mannor Estates, Inc. will not
be in control of the company. In addition, a majority or all of Royston
Mannor Estates, Inc.'s officer and director may, as part of the terms of the
transaction, resign and be replaced by new officer and director without a
vote of Royston Mannor Estates, Inc.'s shareholders.
It is anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
Federal and state securities laws. In some circumstances, however, as a
negotiated element of this transaction, Royston Mannor Estates, Inc. may agree
to register such securities either at the time the transaction is
consummated, under certain conditions, or at specified time thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market which may develop in Royston Mannor Estates, Inc.'s Common Stock
may have a depressive effect on such market. While the actual terms of a
transaction to which Royston Mannor Estates, Inc. may be a party cannot
be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization
under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as
amended (the "Code").
In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of
the voting stock of the surviving entity. In such event, the shareholders
of Royston Mannor Estates, Inc., including investors in this offering, would
retain less than 20% of the issued and outstanding shares of the surviving
entity, which could result in significant dilution in the equity of
such shareholders.
As part of Royston Mannor Estates, Inc.'s investigation, officer and
director of Royston Mannor Estates, Inc. will meet personally with
management and key personnel, may visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures, to the extent of Royston Mannor Estates,
Inc.'s limited financial resources and management expertise. The manner in
which Royston Mannor Estates, Inc. participates in an opportunity with a
target company will depend on the nature of the opportunity, the respective
needs and desires of the company and other parties, the management of the
opportunity, and the relative negotiating strength of the company and such
other management. With respect to any mergers or acquisitions,
negotiations with target company, management will be expected
to focus on the percentage of Royston Mannor Estates, Inc. which the target
company's shareholders would acquire in exchange for their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, Royston Mannor Estates, Inc.'s shareholders will,
in all likelihood, hold a lesser percentage ownership interest in the company
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event Royston Mannor Estates, Inc. acquires a
target company with substantial assets. Any merger or acquisition effected by
Royston Mannor Estates, Inc. can be expected to have a significant dilutive
effect on the percentage of shares held by Royston Mannor Estates, Inc.'s then
shareholders, including purchasers in this offering. Management has
advanced, and will continue to advance, funds which shall be used by
Royston Mannor Estates, Inc. in identifying and pursuing agreements with target
companies. Management anticipates that these funds will be repaid from
the proceeds of any agreement with the target company, and that any such
agreement may, in fact, be contingent upon the repayment of those funds.
It is expected that amounts to conduct investigations will be less than
$70,000 and that such amount will come from Mr. Makaiwi. Additional funds may
need to be raised if the amount exceeds this or Mr. Makaiwi is short on funds.
Mr. Makaiwi may contribute up to $10,000 for acquisition investigations.
However, Mr. Makaiwi is not obigated to advance any additional amount to
Royston. Royston may be required to issue stock to raise additional funds if
Mr. Makaiwi cannot provide said funds.
Competition
Royston Mannor Estates, Inc. is an insignificant participant among firms
which engage in business combinations with, or financing of,
development-stage enterprises. There are many established management
and financial consulting companies and venture capital firms which have
significantly greater financial and personal resources, technical
expertise and experience than Royston Mannor Estates, Inc.. In view of Royston
Mannor Estates, Inc.'s limited financial resources and management
availability, Royston Mannor Estates, Inc. will continue to be at significant
competitive disadvantage vis-a-vis the Royston Mannor Estates, Inc.'s
competitors. The Company will be at at a disadvantage with other companies
having larger technical staffs, established market shares and greater
financial backing.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company." as an
issuer which is or holds itself out as being engaged primarily in the
business of investing, reinvesting or trading securities. While Royston
Mannor Estates, Inc. does not intend to engage in such activities,
Royston Mannor Estates, Inc. may obtain and hold a minority interest in a
number of development stage enterprises. Royston Mannor Estates, Inc. could be
expected to incur significant registration and compliance costs if required to
register under the Investment Company. Act of 1940. Accordingly,
management will continue to review Royston Mannor Estates, Inc.'s activities
from time to time with a view toward reducing the likelihood Royston Mannor
Estates, Inc. could be classified as an "investment company." Royston Mannor
Estates, Inc. intends to structure a merger or acquisition in such manner as to
minimize Federal and state tax consequences to Royston., and to any
target company.
Employees
Royston Mannor Estates, Inc.'s only employees at the present time are its
officer and director, who will devote as much time as the Board of
Director determine is necessary to carry out the affairs of the Royston
Mannor Estates, Inc.. (See "Management").
Mr. Makaiwi's time devotion to Royston would be estimated at 10 hours a
month until further fundraising or a merger/acquisition.
ITEM 3. DESCRIPTION OF PROPERTY.
Royston Mannor Estates, Inc. neither owns nor leases any real property
at this time. Royston Mannor Estates, Inc. conducts its business from
Vegas Commerce Center, 1350 E. Flamingo Road, Suite 688, Las Vegas, NV 89119.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
As of December 31,1998, no one is the beneficial owner of five percent
(5%) or more of Royston Mannor Estates, Inc.'s common stock. The management
of Royston does not own any stock in the Company.
ITEM 5. DIRECTOR, EXECUTIVE OFFICER, PROMOTERS, AND CONTROL PERSONS
The members of the Board of Director of Royston Mannor Estates, Inc.
serve until the next annual meeting of the stockholders, or until their
successors have been elected. The officer serve at the pleasure of the Board of
Director. There are no agreements for any officer or director to resign
at the request of any other person, and none of the officer or director
named below are acting on behalf of, or at the direction of, any other
person. Royston Mannor Estates, Inc.'s officer and director will devote their
time to the business on an "as-needed" basis, which is expected to require
5-10 hours per month.
Information as to the director and executive officer of the Royston
Mannor
Estates, Inc. is as follows:
Name
Age
Position
Harvey Makaiwi
48
President, Sole Officer, and
Director
Harvey Makaiwi Age 48
Operated a pottery mail order business from 1990 to 1996. Developed an
interest in wine in Europe while on tour in the US military.
Formed Mount Merlot Estates in 1996. Retired from that business in 1998
to pursue current company.
Blank Check Experience
None.
There is no family relationship between any of the officer and director of
the Royston Mannor Estates, Inc.. The Royston Mannor Estates, Inc.'s Board of
Director has not established any committees.
Conflicts of Interest
Insofar as the officer and director is engaged in other business
activities, management anticipates it will devote only a minor amount of time
to Royston Mannor Estates, Inc.'s affairs. The officer and director of Royston
Mannor Estates, Inc. may in the future become shareholders, officer or
director of other companies which may be formed for the purpose of engaging in
business activities similar to those conducted by Royston Mannor Estates, Inc..
Royston Mannor Estates, Inc. does not currently have a right of first
refusal pertaining to opportunities that come to management's attention insofar
as such opportunities may relate to Royston Mannor Estates, Inc.'s
proposed business operations.
The officer and director are, so long as they are officer or director
of Royston Mannor Estates, Inc., subject to the restriction that all
opportunities contemplated by Royston Mannor Estates, Inc.'s plan of
operation which come to their attention, either in the performance of
their duties or in any other manner, will be considered opportunities of, and
be made available to Royston Mannor Estates, Inc. and the companies that
they are affiliated with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the officer or director. Subject to
the next paragraph, if a situation arises in which more than one company
desires to merge with or acquire that target company and the principals of the
proposed target company have no preference as to which company will
merge or acquire such target company., the company of which the President first
became an officer and director will be entitled to proceed with the
transaction. Except as set forth above, Royston Mannor Estates, Inc. has not
adopted any other conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Although Royston Mannor Estates, Inc. will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934, management
believes Royston Mannor Estates, Inc. will not be subject to regulation
under the Investment Company Act of 1940 insofar as Royston Mannor Estates,
Inc. will not be engaged in the business of investing or trading in
securities. In the event Royston Mannor Estates, Inc. engages in business
combinations which result in Royston Mannor Estates, Inc. holding passive
investment interests in a number of entities, Royston Mannor Estates, Inc.
could be subject to regulation under the Investment Company Act of 1940. In
such event, Royston Mannor Estates, Inc. would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. Royston Mannor Estates, Inc. has obtained no formal
determination from the Securities and Exchange Commission as to the status of
the company under the Investment Company Corp. Act of 1940 and, consequently,
any violation of such Act would subject Royston Mannor Estates, Inc. to
material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
There is no executive compensation given to any officer and director of the
company. It is possible that, after Royston Mannor Estates, Inc.
successfully consummates a merger or acquisition with an unaffiliated
entity, that entity may desire to employ or retain one or more members of
Royston Mannor Estates, Inc.'s management for the purposes of providing
services to the surviving entity, or otherwise provide other compensation to
such persons. It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to Royston Mannor Estates,
Inc.. In the event Royston Mannor Estates, Inc. consummates a transaction
with any entity referred by associates of management, it is possible that such
an associate will be compensated for their referral in the form of a finder's
fee. It is anticipated that this fee will be either in the form of restricted
common stock issued by Royston Mannor Estates, Inc. as part of the terms of
the proposed transaction, or will be in the form of cash consideration.
However, if such compensation is in the form of cash, such payment will
be tendered by the acquisition or merger candidate, because Royston Mannor
Estates, Inc. has insufficient cash available. The amount of such
finder's fee cannot be determined as of the date of this registration
statement, but is expected to be comparable to consideration normally paid in
like transactions. No member of management of Royston Mannor Estates, Inc.
will receive any finders fee, either directly or indirectly, as a result of
their respective efforts to implement Royston Mannor Estates, Inc.'s business
plan outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business dealings, but
who are not affiliated with or relatives of management. No retirement,
pension, profit sharing, stock option or insurance programs or other similar
programs have been adopted by the Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. LEGAL PROCEEDINGS
Royston Mannor Estates, Inc. is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by or against
Royston Mannor Estates, Inc. has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Royston Mannor Estates, Inc.'s common stock is not traded on any exchange or
OTC market. Management has not undertaken any discussions, preliminary
or otherwise, with any prospective market maker concerning the
participation of such market maker in the after-market for Royston Mannor
Estates, Inc.'s securities and management does not intend to initiate any such
discussions until such time as Royston Mannor Estates, Inc. has consummated a
merger or acquisition. There is no assurance that a trading market will ever
develop or, if such a market does develop, that it will continue. After a
merger or acquisition has been completed, one or both of the company's officer
and director will most likely be the persons to contact prospective market
makers. It is also possible that persons associated with the entity that
merges with or is acquired by Royston Mannor Estates, Inc. will contact
prospective market makers. Royston Mannor Estates, Inc. does not intend to
use consultants to contact market makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny stock," for
purposes relevant to Royston Mannor Estates, Inc., as any equity security that
has a market price of less than $5.00 per share or with an exercise price of
less than $5.00 per share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the rules require: (i) that
a broker or dealer approve a person's account for transactions in penny stocks;
and (ii) the broker or dealer receive from the investor a written agreement
to the transaction, setting forth the identity and quantity of the penny
stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight
form, (i) sets forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer received a signed,
written agreement from the investor prior to the transaction. Disclosure also
has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading, and about commissions payable to
both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly statements have to
be sent disclosing recent price information for the penny stock held in
the account and information on the limited market in penny stocks. The
National Association of Securities Dealers, Inc. (the "NASD"), which administers
NASDAQ, has recently made changes in the criteria for initial listing
on the NASDAQ Small Cap market and for continued listing. For initial listing,
a company must have net tangible assets of $4 million, market
capitalization of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share.
In order to continue to be included on NASDAQ, a company must maintain
$2,000,000 in net tangible assets and a $1,000,000 market value of its publicly-
traded securities. In addition, continued inclusion requires two market-makers
and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow Royston Mannor Estates,Inc.'s
securities to be traded without the aforesaid limitations. However,
there can be no assurances that, upon a successful merger or acquisition,
that Royston Mannor Estates, Inc. will qualify its securities for listing on
NASDAQ or some other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued listing. The failure
of Royston Mannor Estates, Inc. to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future
may result in the discontinuance of the inclusion of Royston Mannor
Estates, Inc.'s securities on a national exchange. In such events, trading, if
any, in Royston Mannor Estates, Inc.'s securities may then continue in the non-
NASDAQ over-the-counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the
market value of, Royston Mannor Estates, Inc.'s securities.
Holders
As of September 30,1999, there are 65 holders of Royston Corp's common
shares. 40 of these shareholders hold unrestricted stock pursuant to
Rule 504 of Regulation D, Section 4(6) exemption. Twenty Five shareholders
hold restricted stock pursuant to Rule 144.
Dividends
The Registrant has not paid any dividends to date, and has no plans to do so
in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section 4(2) of the
Securities Act of 1933, as amended and governed by Rule 144. No advertising or
general solicitation was employed in offering the shares. The securities were
offered for investment only and not for the purpose of resale or distribution,
and the transfer thereof was appropriately restricted.
50,000 shares recently issued under 4(2) to one individual.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
Royston Corp was incorporated on December 31, 1998, as Royston Mannor
Estates, Inc., with an authorized share capital of Fifty Million
(50,000,000) shares of Common Stock. Upon incorporation, the company initially
issued One Hundred Thousand (100,000) Common Shares with par value of $.001.
These shares were restricted under Rule 144 of the Securities Act of 1933, as
amended.
On February 15, 1999 the Company offered, pursuant to a 504D Offering filed
with the Securities and Exchange Commission, One Million, 1,000,000, Common
Shares at $0.10 per share. On March 25, 1999, the Company sold and issued Two
Hundred Thousand (200,000) Common Shares at $0.10 per share from that 504D
Offering. These 200,000 shares have been deemed free trading by counsel.
The Royston Mannor Estates, Inc.'s Articles of Incorporation authorizes the
issuance of 50,000,000 shares of Common stock, of which 300,000 are issued
and outstanding. The shares are non-assessable, without pre-emptive rights,
and do not carry cumulative voting rights. Holders of common shares are
entitled to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without pre-emptive
rights, and do not carry cumulative voting rights. Holders of common shares
are entitled to share ratably in dividends, if any, as may be declared by
Royston Mannor Estates, Inc. from time-to-time, from funds legally available.
In the event of a liquidation, dissolution, or winding up of Royston Mannor
Estates, Inc., the holders of shares of common stock are entitled to share on
a pro-rata basis all assets remaining after payment in full of all liabilities.
Management is not aware of any circumstances in which additional shares of
any class or series of Royston Mannor Estates, Inc.'s stock are to be issued
to management or promoters, or affiliates or associates of either.
ITEM 12. INDEMNIFICATION OF DIRECTOR AND OFFICER.
Royston Mannor Estates, Inc. and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions not amounting
to intentional misconduct, fraud, or a knowing violation of the law,since
provisions have been made in the Articles of incorporation and By-laws
limiting such liability. The Articles of Incorporation and By-laws also
provide for indemnification of the officer and director of Royston Mannor
Estates, Inc. in most cases for any liability suffered by them or arising
from their activities as officer and director of Royston Mannor Estates,
Inc. if they were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities may have a
more limited right of action than they would have except for this limitation
in the Articles of Incorporation and By-laws. The officer and director of
Royston Mannor Estates, Inc. are accountable to Royston Mannor Estates, Inc.
as fiduciaries, which means such officer and director are required to
exercise good faith and integrity in handling Royston Mannor Estates, Inc.'s
affairs. A shareholder may be able to institute legal action on behalf of
himself and all others similarly stated shareholders to recover damages where
Royston Mannor Estates, Inc. has failed or refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be able to
bring a class action or derivative suit to enforce their rights, including
rights under certain federal and state securities laws and regulations.
Shareholders who have suffered losses in connection with the purchase or sale
of their interest in Royston Mannor Estates, Inc. in connection with such
sale or purchase, including the misapplication by any such officer or
director of the proceeds from the sale of these securities, may be able to
recover such losses from Royston Mannor Estates, Inc..
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this Item 13
follow the index of financial statements appearing at Item 15 of this
Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND
FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation, and
Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
Royston Mannor Estates, Inc.
(A Development Stage Company)
Finacial Statements
March 31, 2000 and March 31, 1999
Table of Contents
Page Number
Independent Accountant's Report 1
Financial Statement
Balance Sheets 2
Statements of Operations and Deficit
Accumulated During the Development Stage 3
Statement of Changes in Stockholders' Equity 4
Statement of Cash Flows 5
Notes to the Financial Statements 6
David E. Coffey
3651 Lindell Road, Suite A
Las Vegas, NV 89103
Independent Auditor's Report
To the Board of Directors and Stockholders
of Royston Mannor Estates, Inc.
Las Vegas, NV
I have audited the accompanying balance sheets of Royston Mannor Estates, Inc.,
(a development stage company) as of March 31, 2000, and March 311, 1999, and the
related statements of operations, cash flows, and changes in stockholders'
equity for the periods then ended, as well as the cumulative period from
December 31, 1998, (date of reception) to March 31, 1999. These statements are
the responsibility of Royston Mannor Estates, Inc.'s management. My
responsiblity is to express an opinion on these financial statements based on my
audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of Royston Mannor Estates, Inc., as
of March 31, 2000, and March 31, 1999, and the results of operations, cash
flows, and changes in stockholders' equity for the periods then ended, as well
as the cumulative period from December 31, 1998, in conformity with generally
accepted accounting principles.
David Coffey, CPA
Las Vegas, Nevada
May 19, 1999
<TABLE>
Royston Mannor Estates, Inc.
(A Development Stage Company)
Balance Sheets
<CAPTION>
<S> <C> <C>
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
ASSETS
Cash $ 1058 $ 78
-------------- --------------
Total Assets $ 1058 $ 78
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 5,400 $ 400
-------------- --------------
Total Liabilities 5,400 400
Stockholders' Equity
Common stock, authorized 50,000,000
shares at $0.001 par value, issued
outstanding 350,000 shares and
100,000 shares, respectively 350 300
Additional paid in capital 26,750 19,800
Deficit accumulated during the
development stage (31,442) (20,422)
--------------- --------------
Total Liabilities and Stockholders'
Equity $ 1,058 $ 78
=============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
ROYSTON MANNOR ESTATES, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
(WITH CUMULATIVE FIGURES FROM INCEPTION)
<CAPTION>
<S> <C> <C> <C>
FROM INCEPTION
JAN. 1, 2000 TO JAN. 1, 1999 TO DEC. 31, 1998 TO
MAR. 31, 2000 MAR. 31, 1999 MAR. 31, 2000
--------------- --------------- ----------------
INCOME $ 0 $ 0 $ 0
EXPENSES
Organizational expenses 0 0 0
Consulting 5,990 20,000 25,990
Professional fees 5,000 0 5,000
Office expenses 0 22 52
--------------- ---------------- ----------------
Total expenses 10,990 20,022 31,442
Net loss (10,990) (20,022) $ (31,442)
Retained Earnings,
beginning of period (20,452) (400)
--------------- ---------------- ----------------
Deficit accumulated during
the development stage $ (31,442) $ (20,422)
=============== ================
Earnings (loss) per share
assuming dilution:
Net loss $ (0.03) $ (0.09) $ (0.11)
=============== ================ ================
Weighted average shares
outstanding 350,000 233,333 281,250
=============== ================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
ROYSTON MANNOR ESTATES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 31, 1998, (DATE OF INCEPTION) TO
MARCH 31, 2000
<S> <C> <C> <C> <C>
Common Stock Additional Total
Shares Amount Paid in Capital
-------- -------- --------------- ---------
Balance,
December 31, 1998 - - - -
Issuance of common stock
for cash December 1998 100,000 $100 0 100
Less net loss 0 0 0 (400)
-------- --------- --------------- ---------
Balance,
December 31, 1998 100,000 $100 0 (300)
Issuance of common stock
for cash March 1999 200,000 $200 19,800 20,000
Less offering costs 0 0 (3,000) (3,000)
Issuance of common stock
for cash October, 1999 50,000 $50 $ 9,950 $10,000
Less net loss 0 0 0 (20,052)
-------- --------- --------------- --------
Balance,
December 31, 1999 350,000 $350 $26,750 $6,648
Less net loss 0 0 0 (10,990)
-------- --------- --------------- --------
Balance,
March 31, 2000 350,000 $350 $26,750 $ (4,342)
======== ========= =============== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<TABLE>
ROYSTON MANNOR ESTATES, INC.
(A DEVELOPMENT STAGE COMANY)
STATEMENTS OF CASH FLOWS
(WITH CUMULATIVE FIGURES FROM INCEPTION
<S> <C> <C> <C>
FROM INCEPTION
JAN. 1, 2000 TO JAN. 31, 2000 TO DEC. 31, 1998, TO
MAR. 31, 2000 MAR. 31, 1999 MAR. 31, 2000
--------------- ---------------- --------------
CASH FLOWS PROVIDED BY
OPERATION ACTIVITES
Net loss $ (10,990) $ (20,220) $ (31,442)
Non-cash items provided in net loss 0 0 0
Adjustments to reconcile net loss
to cash used by operating activity
Account payable 5,000 0 5,400
--------------- ---------------- --------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (5,990) (20,022) (26,042)
CASH FLOWS USED BY
INVESTING ACTIVITIES 0 0 0
CASH FLOWS FROM FINNANCING
ACTIVITIES
Sale of common stock 0 200 350
Paid-in capital 0 19,800 29,750
Less offering costs 0 0 (3,000)
--------------- --------------- -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 20,000 27,100
--------------- ---------------- -------------
NET INCREASE IN CASH (DECREASE) (5,990) (22) $ 1058
==============
CASH AT BEGINNING OF PERIOD 7,048 100
--------------- -----------------
CASH AT END OF PERIOD $ 1,058 $ 78
=============== =================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
ROYSTON MANNOR ESTATES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000, AND MARCH 31, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 31, 1998, under the laws of the
STATE of NEVADA. The business purpose of the Company is primarily to
effect a merger or acquisition with a privated entity. Secondarily,
such a merger may allow research and development of a wholesale and
retail winery.
The Company will adopt accounting policies and procedures based upon the
nature of future transactions.
NOTE B OFFERING COSTS
Offering costs are reported as a reduction in the amount of paid-in
capital received for sale of the shares.
NOTE C EARNINGS (LOSS) PER SHARE
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by
dividing net income by the weighted average shares outstanding, assuming
all dilutive potential common shares were issued. Since the Company has
no common shares that are potentially issuable, such as stock options,
convertible securities or warrants, basic and diluted EPS are the same.
NOTE D STOCK OFFERINGS
In March of 1999, the Company completed sale of 200,000 shares of its
common stock at $0.10 per share for a total of $20,000. The proceeds
were to be used for the search for a merger or acquisition candidate.
In October of 1999, the Company sold, by private placement, 50,000
shares of its common stock at $0.20 per share for a total of $10,000.
The proceeds were to be used for working capital.
ARTICLES OF INCORPORATION
OF
Royston Mannor Estates, Inc.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a Corporation under and pursuant to
the laws of the State of Nevada, and we do hereby certify that:
ARTICLE I NAME: The exact name of this Corporation is:
Royston Mannor Estates, Inc.
ARTICLE II RESIDENT AGENT:
The Resident Agent of the Corporation is Bruce Thompson, 128 Fortune Drive,
Dayton, Nevada 89403.
ARTICLE III DURATION:
The Corporation shall have perpetual existence.
ARTICLE IV PURPOSES:
The purpose, object and nature of the business for which this
Corporation is organized are:
(a) To engage in any lawful activity;
(b) To carry on such business as may be necessary, convenient, or
desirable to accomplish the above purposes, and to do all other things
incidental thereto which are not forbidden by law or by these Articles
of Incorporation.
ARTICLE V POWERS:
The powers of the Corporation shall be those powers granted by 78.060 and
78.070 of the Nevada Revised Statutes under which this corporation is
formed. In addition, the Corporation shall have the following specific
powers:
(a) To elect or appoint officers and agents of I the Corporation
and to fix their compensation;
(b) To act as an agent for any individual, association,
partnership, corporation or other legal entity;
1
(c) To receive, acquire, hold, exercise rights arising out of the
ownership or possession- thereof, sell, or otherwise dispose of, shares
or other interests in, or obligations of, individuals, associations,
partnerships, corporations, or governments;
(d) To receive, acquire, hold, pledge, transfer, or otherwise
dispose of shares of the corporation, but such shares may only be purchased,
directly or indirectly, out of earned surplus;
(e) To make gifts or contributions for the public welfare or for
charitable, scientific or educational purposes, and in time of war, to
make donations in aid of war activities.
ARTICLE VI CAPITAL STOCK:
Section 1. Authorized shares. The total number of shares which this
Corporation is authorized to issue is 50,000,000 shares of Capital
Stock at $.001 par value per share.
Section 2. Voting Rights of Shareholders. Each holder of the
Common Stock shall be entitled to one vote for each share of stock standing in
his name on the books of the Corporation.
Section 3. Consideration for Shares. The Common Stock shall be
issued for such consideration, as shall be fixed from time to time by the
Board of Directors. In the absence of fraud, the judgment of the Directors
as to the value of any property for shares shall be conclusive. When shares are
issued upon payment of the consideration fixed by the Board of
Directors, such shares shall be taken to be fully paid stock and shall be
non-assessable. The Articles shall not be amended in this particular.
Section 4. Pre-emptive Rights. Except as may otherwise be provided by the
Board of Directors, no holder of any shares of the stock of the Corporation,
shall have any preemptive right to purchase, subscribe for, or otherwise
acquire any shares or stock of the Corporation of any class now or hereafter
authorized, or any securities exchangeable for or convertible into such shares,
or any warrants or other instrumentsevidencing rights or options to subscribe
for, purchase, or otherwise acquire such shares.
Section 5. Stock Rights and Options. The Corporation shall have the power to
create and issue rights, warrants, or options entitling the holders thereof
to purchase from the corporation any shares of its capital stock of any
class or classes, upon such terms and conditions and at such times and prices
as the Board of Directors may provide, which
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terms and conditions shall be incorporated in an instrument or
instruments evidencing such rights. In the absence of fraud, the judgment of
the Directors as to the adequacy of consideration for the issuance of such
rights or options and the sufficiency thereof shall be conclusive.
ARTICLE VII ASSESSMENT OF STOCK:
The capital stock of this Corporation, after the amount of the subscription
price has been fully paid in, shall not be assessable for any purpose, and
no stock issued as fully paid up shall ever be assessable or assessed. The
holders of such stock shall not be individually responsible for the debts,
contracts, or liabilities of the Corporation and shall not be liable for
assessments to restore impairments in the capital of the Corporation.
ARTICLE VIII DIRECTORS:
For the management of the business, and for the conduct of the affairs of
the Corporation, and for the future definition, limitation, and regulation
of the powers of the Corporation and its directors and shareholders, it is
further provided:
Section 1, Size of Board. The members of the governing board of the
Corporation shall be styled directors. The number of directors of the
Corporation, their qualifications, terms of office, manner of election,
time and place of meeting, and powers and duties shall be such as are
prescribed by statute and in the by-laws of the Corporation. The name and post
office address of the directors constituting the first board of directors,
which shall be One (1) in number are:
NAME ADDRESS
David Wages 500 W. College Parkway #V386 Carson City, Nevada 89706
Section 2. Powers of Board. In furtherance and not in limitation of the
powers conferred by the laws of the State of Nevada, the Board of Directors
is expressly authorized and empowered:
(a) To make, alter, amend, and repeal the by-laws subject to the
power of the shareholders to alter or repeal the by-laws made by the Board of
Directors.
(b) Subject to the applicable provisions of the by-laws then in effect, to
determine, from time to time, whether and to what extent, and at what
times and places, and under what conditions and
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regulations, the accounts and books of the corporation, or any of them,
shall be open to shareholder inspection. No shareholder shall have any
right to inspect any of the accounts, books or documents of the
Corporation, except as permitted by law, unless and until authorized to
do so by resolution of the Board of Directors or of the Shareholders of
the Corporation;
(c) To issue stock of the Corporation for money, property, services
rendered, labor performed, cash advanced, acquisitions for other
corporations or for any other assets of value in accordance with the
action of the board of directors without vote or consent of the
shareholders and the judgment of the board of directors as to value
received and in return therefore shall be conclusive and said stock,
when issued, shall be fully-paid and non-assessable.
(d) To authorize and issue, without shareholder consent,
obligations of
the Corporation, secured and unsecured, under such terms and conditions
as the Board, in its sole discretion, may determine, and to pledge or
mortgage, as security therefore, any real or personal property of the
Corporation, including after-acquired property;
(e) To determine whether any and, if so, what part, of the earned
surplus of the Corporation shall be paid in dividends to the
shareholders, and to direct and determine other use and disposition of
any such earned surplus;
(f) To fix, from time to time, the amount of the profits of the
Corporation to be reserved as working capital or for any other lawful
purpose;
(g) To establish bonus, profit-sharing, stock option, or other
types of incentive compensation plans for the employees, including officers and
directors, of the Corporation, and to fix the amount of profits to be
shared or distributed, and to determine the persons to participate in
any such plans and the amount of their: respective participation.
(h) To designate, by resolution or resolutions passed by a majority of
the whole Board, one or more committees, which, to the extent permitted
by law and authorized by the resolution or the by-laws, shall have and
may exercise the powers of the Board;
(i) To provide for the reasonable compensation of its own members
by by-law, and to fix the terms and conditions upon which such
compensation will he paid;
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(j) In addition to the powers and authority herein before, or by
statute, expressly conferred upon it, the Board of Directors may
exercise all such powers and do all such acts and things as may be
exercised or done by the corporation, subject, nevertheless, to the
provisions of the laws of the State of Nevada, of these Articles of
Incorporation, and of the by-laws of the Corporation.
Section 3. Interested Directors. No contract or transaction between
this Corporation and any of its directors, or between this Corporation and
any other corporation, firm, ..association, or other legal entity shall be
invalidated, by reason of the fact that the director of the Corporation
has a direct or indirect interest, pecuniary or otherwise, in such
corporation, firm, association, or legal entity, or because the interested
director was present at the meeting of the Board of Directors which acted
upon or in reference to such contract or transaction, or because he
participated in such action, provided that: (1) the interest of each such
director shall have been disclosed to or known by the Board and a disinterested
majority of the Board shall have nonetheless ratified and approved such
contract or transaction (such interested director or directors may be counted in
determining whether a quorum is present for the meeting at which such
ratification or approval is given); or (2) the conditions of MR. S.
78.140 are met.
ARTICLE IX LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS:
The personal liability of a director or officer of the corporation to the
corporation or the Shareholders for damages for breach of fiduciary duty as
a director or officer shall be limited to acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law.
ARTICLE X INDEMNIFICATION:
Each director and each officer of the corporation may be indemnified by
the corporation as follows:
(a) The corporation may indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) ,
judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with the action, suit or
proceeding, if he acted in good faith and in a
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manner which he reasonably believed to be in or not opposed to the best
interests of the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suite or proceeding, by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, does not of itself create a presumption
that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was
unlawful.
(b) The corporation may indemnify any person who was or is a party, or
is threatenedto be made a party, to any threatened, pending or completed
action or suit by or in the right of the corporation, to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against expenses including amounts paid in settlement and
attorneys', fees actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit, if he acted in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may
not be made for any claim, issue or matter as to which such a person
has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals there from, to be liable to the corporation
or for amounts paid in settlement to the corporation, unless and only
to the extent that the court in which the action or suit was brought or
other court of competent Jurisdiction determines upon application that
in view of all the circumstances of the case the person is fairly and
reasonably entitled to indemnity for such expenses as the court deems
proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and
(b) of this Article, or in defense of any claim, issue or matter
therein, he must be indemnified by the corporation against expenses,
including attorney's fees, actually and reasonably incurred by him in
connection with the defense,
(d) Any indemnification under subsections (a) and (b) unless ordered by
a
court or advanced pursuant to subsection (e), must be made by the
corporation only as authorized in the specific case upon a
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determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The determination
must be made:
(i) By the stockholders;
(ii) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the act, suit or proceeding;
(iii) if a majority vote of a quorum consisting of directors who were
not parties to the act, suit or proceeding so orders, by
independent legal counsel in a
written opinion; or
(iv) if a quorum consisting of directors who were not parties to the
act, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
(e) Expenses of officers and directors incurred in defending a civil
or
criminal action, suit or proceeding must be paid by the corporation as
they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is
not entitled to be indemnified by the corporation. The provisions of
this subsection do not affect any rights to advancement of expenses to
which corporate personnel other than directors or officers may be
entitled under any contract or otherwise by law.
(f) The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(i) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
the certificate or articles of incorporation or any bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
Indemnification, unless ordered by a court pursuant to subsection
(b) or for the advancement of expenses made pursuant to
subsection (e) may not be made to or on behalf of any director or
officer if a final adjudication establishes that his acts or
omissions
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involved intentional misconduct, fraud or a knowing violation of
the law and was material to the cause of action.
(ii) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs,
executors and administrators of such a person,
ARTICLE XI PLACE OF MEETING; CORPORATE BOOKS:
Subject to the laws of the State of Nevada, the shareholders and the
Directors shall have power to hold their meetings, and the Directors
shall have power to have an office or offices and to maintain the books
of the Corporation outside the State of Nevada, at such place or places
as may from time to time be designated in the by-laws or by appropriate
resolution.
ARTICLE XIII AMENDMENT OF ARTICLES:
The provisions of these Articles of Incorporation may be amended,
altered or repealed from time to time to the extent and in the manner
prescribed by the laws of the State of Nevada, and additional
provisions authorized by such laws as are then in force may be added.
All rights herein conferred on the directors, officers and shareholders
are granted subject to this reservation.
ARTICLE XIII INCORPORATOR:
The name and address of the sole incorporator signing these Articles of
Incorporation is as follows:
NAME ADDRESS
/s/ David Wages 500 W.College Parkway #V386
Carson City, NV 89706
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of
Incorporation this 18th day of December, 1998.
/s/ David Wages
