UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB/A
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 ten 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 andat 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 inthe 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 Forms
8-K, agreements, and related reports and documents. At a minimum, It will be
necessary to file a Form 8K. 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. Additional funds will have to be
raised via securities issues or will need to be borrowed from management in
order to properly pursue its business plan.. Should Royston be unable to raise
the necessary funds in the next 12 months, Royston Mannor would be unable to
fully implement its business plan and may be unable to implement its business
plan at all. In such an event, all active operations of Roysaton would cease.
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 t
ransaction 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 $10,000
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.
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
Management anticipates it will devote only a minor amount of time to Royston
Mannor Estates, Inc.'s affairs. Currently, Mr. Makaiwi works fulltime as a
farmhand on various vineyards. Mr. Makaiwi. may in the future become a
shareholder, 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.
Mr. Makaiwi, so long as he is an officer of Royston Mannor Estates, Inc., is
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 Mr. Makaiwi. 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, the company's officer and
director will most likely be the person 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.
In March of 1999, Royston completed the sale of 200,000 shares of its common
stock at $.10 per share for a total of $20,000.
In October of 1999, Royston sold, by private placement, 50,000 shares of its
common stock at $.20 per share for a total of $10,000. In this placement, 10
people purchased 5,000 shares each.
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 Rule 504 of Regulation
D 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 Rule 504 of Regulation D Offering. These 200,000 shares have been
deemed free trading by Scott J. Uricchio of Schott & Uricchio. Mr. Uricchio's
opinion concerning these shares free trading status and counsel's consent to
the use of this opinion in this Form 10SB are included as exhibit 99.1.
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 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
[S] [S]
3.1 Articles of Incorporation Incorporated by
reference in
Company's Form
10SB filed May 15th,
2000
[S] [S]
3.2 By-Laws Incorporated by
reference in
Company's Form
10SB filed May 15,
2000
99.1 Opinion of Scott J. Uricchio concerning the tradability
of 200,000 issued on March 25, 1999.
