PROVENCE CAPITAL CORP INC
FILING TYPE: 10-SB12G/A
DESCRIPTION: REGISTRATION STATEMENT
FILING DATE: JAN 12 2001
PERIOD END: N/A
PRIMARY EXCHANGE: N/A
TICKER: N/A
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TABLE OF CONTENTS
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To jump to a section, double-click on the section name.
10SB12G
Table 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Table 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
EX-3.1
EX-3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
EX-3.2
EX-3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
EX-4.1
EX-4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
EX-27.1
Exhibit 27 Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB
Amendment 2
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
PROVENCE CAPITAL CORPORATION, INC.
(Name of Small Business Issuer in its charter)
Florida 65-0972648
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22154 Martella Avenue, Boca Raton, Florida 33433
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561)451-9674
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With Copy To:
Jeffrey G. Klein.
Jeffrey G. Klein, P.A.
23123 State Road 7 Suite 250B
Boca Raton, FL 33428
(561)470-9010
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Securities to be registered under Section 12(g) of the Act:
Common Stock $.001 Par Value
(Title of class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
The name of our company is PROVENCE CAPITAL CORPORATION, INC. We were
incorporated under the laws of the State of Florida on December 17, 1999. We are
a developmental stage company and have no revenues to date. Since inception, our
activities have been limited to actions related to our organization and the
preparation of this Registration Statement. We are a "shell" company conducting
virtually no business operation, other than our efforts to seek merger partners
or acquisition candidates. We have no full time employees and own no real
estate.
We were created to effect a merger, exchange of capital stock, asset acquisition
or other similar business combination (a "Business Combination") with an
operating or development stage business (the "Target Business") which desires to
utilize our status as a reporting corporation under the Securities Exchange Act
of 1934 ("Exchange Act"). We have a shareholder base of approximately 43
shareholders and 1,000,000 shares of Common Stock outstanding, all of which
shares are restricted pursuant to Rule 144 of the Securities Act of 1933, as
amended (the "Securities Act"). See "Description of Securities". Pursuant to a
resolution of our board of directors, we will not enter into any Business
Combination until the Target Business has obtained the requisite audited
financial statements required pursuant to Form 8-K (or its equivalent)
promulgated under the Exchange Act.
Upon the effectiveness of this registration statement, we intend to seek
potential business opportunities and effectuate a Business Combination with a
Target Business with significant growth potential which, in the opinion of our
management, could provide a profit to both the Company and its shareholders. We
intend to seek opportunities demonstrating the potential of long term growth as
opposed to short term earnings. Our efforts in identifying a prospective Target
Business are expected to emphasize businesses primarily located in the United
States; however, we reserves the right to acquire a Target Business located
primarily elsewhere. While we may, under certain circumstances, seek to effect
Business Combinations with more than one Target Business, as a result of our
limited resources, we will, in all likelihood, have the ability to effect only a
single Business Combination. We may effect a Business Combination with a Target
Business which may be financially unstable or in its early stages of development
or growth. We will not restrict our search to any specific business, industry or
geographical location, and we may participate in a business venture of virtually
any kind or nature. Our management may become involved in management of the
Target Business and/or may hire qualified but as yet unidentified individuals to
manage such Target Business. Presently, we have no plans, proposal, agreement,
understanding or arrangement to acquire or merge with any specific business or
company, and we have not identified any specific business or company for
investigation and evaluation.
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Our discussion of the proposed business under this caption and throughout this
registration statement is purposefully general and is not meant to restrict our
virtually unlimited discretion to search for and enter into potential business
opportunities.
"SHELL" CORPORATION
Background.
We have conducted virtually no business operations to date and expect to conduct
none in the future , other than our efforts to effectuate a Business
Combination, we can be characterized as a "shell" corporation. As a shell
corporation, we face special risks inherent in the investigation, acquisition,
or involvement in a new business opportunity. Further, as a new or "start-up"
company, we face all of the unforeseen costs, expenses, problems, and
difficulties related to such companies. We are dependent upon our sole officer
and director, Shelley Goldstein, and her efforts to effectuate a Business
Combination. Her death, incapacity or inability to hire additional staff members
capable of evaluating a Business Combination will have a materially adverse
affect on our operations. Assuming Ms. Goldstein is successful in identifying a
Business Combination, it is unlikely our shareholders will not have an
opportunity to evaluate the specific merits or risks of any one or more Business
combinations and will have no control over the decision making relating to such.
Due to our limited capital resources, the consummation of a Business Combination
will likely involve the acquisition of, or merger or consolidation with, a
company that does not need substantial additional capital but which desires to
establish a public trading market for its shares, while avoiding what it might
deem to be the adverse consequences of undertaking a public offering itself,
such as the time delays and significant expenses incurred to comply with the
various federal and state securities laws that regulate initial public
offerings. A Target Business might desire, among other reasons, to create a
public market for their shares in order to enhance liquidity for current
shareholders, facilitate raising capital through the public sale of securities
of which a prior existence of a public market for its securities exists, and/or
acquire additional assets through the issuance of securities rather than for
cash.
No trading market in our securities presently exists. In light of the
restrictions concerning shell companies contained in many state blue sky laws
and regulations, it is not likely that a trading market will be created in our
securities until such time as a Business Combination occurs with a Target
Business. No assurances are given that subsequent to such a Business Combination
that a trading market in our securities will develop. We presently have
1,000,000 shares of Common Stock outstanding, all of which are deemed to be
"restricted securities", as that term is defined under Rule 144 promulgated
under the Securities Act, in that such shares were issued in private
transactions not involving a public offering. Except for the 10,000 shares
issued to Ms. Goldstein and 896,000 issued to our principal shareholder, a total
of 94,000 shares will be
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available for sale under Rule 144 beginning in December 2000 so long as all
other conditions of Rule 144 are met (and assuming no other changes in our
capitalization). No assurances are made; however, that Rule 144 will be
available at any time for any shareholder's shares, that the Rule will not be
amended or that we will not provide to any shareholder registration rights to
register under the Securities Act any shareholder's shares for sale. See "Market
for Common Equity and Related Stockholder Matters".
We cannot estimate the time that it will take to effectuate a Business
Combination. It could be time consuming; possibly in excess of many months or
years. Additionally, no assurance can be made that we will be able to effectuate
a Business Combination on favorable terms. We might identify and effectuate a
Business Combination with a Target Business which proves to be unsuccessful for
any number of reasons, many of which are due to the fact that the Target
Business is not identified at this time. If this occurs, the Company and its
shareholders might not realize any type of profit.
Unspecified Industry and Target Business.
We will seek to acquire a Target Business without limiting ourselves to a
particular industry. Most likely, the Target Business will be primarily located
in the United States, although we reserve the right to acquire a Target Business
primarily located outside the United States. In seeking a Target Business, we
will consider, without limitation, businesses which (i) offer or provide
services or develop, manufacture or distribute goods in the United States or
abroad, including, without limitation, in the following areas: real estate,
health care and health products, educational services, environmental services,
consumer-related products and services (including amusement, entertainment
and/or recreational services), personal care services, voice and data
information processing and transmission and related technology development or
(ii) is engaged in wholesale or retail distribution. To date, we have not
selected any particular industry or any Target Business in which to concentrate
its Business Combination efforts. Accordingly, we are only able to make general
disclosures concerning the risks and hazzards of effectuating a Business
Combination with a Target Business since there is presently no current basis for
us to evaluate the possible merits or risks of the Target Business or the
particular industry in which we may ultimately operate. Any Target Business that
is selected will be required to have audited financial statements prior to the
commencement of a the Business Combination.
To the extent that we effect a Business Combination with a financially unstable
company or an entity in its early stage of development or growth (including
entities without established records of sales or earnings), we will become
subject to numerous risks inherent in the business and operations of financially
unstable and early stage or potential emerging growth companies. In addition, to
the extent that we effect a Business Combination with a Target Business in an
industry characterized by a high level of risk, we will become subject to the
currently unascertainable risks of that industry. An extremely high level of
risk frequently characterizes certain industries which experience rapid growth.
Although management will endeavor to evaluate
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the risks inherent in a particular industry or Target Business, there can be no
assurances that we will properly ascertain or assess all significant risk
factors.
Probable Lack of Business Diversification.
As a result of our limited resources, in all likelihood, we will have the
ability to effect only a single Business Combination. Accordingly, our prospects
for success will be entirely dependent upon the future performance of a single
business.
Unlike certain entities that have the resources to consummate several Business
Combinations or entities operating in multiple industries or multiple segments
of a single industry, it is highly unlikely that we will have the resources to
diversify our operations or benefit from spreading risks or offsetting losses.
Our probable lack of diversification could subject us to numerous economic,
competitive and regulatory developments, any or all of which may have a material
adverse impact upon the particular industry in which we may operate subsequent
to consummation of a Business Combination. The prospects for our success may
become dependent upon the development or market acceptance of a single or
limited number of products, processes or services. Accordingly, notwithstanding
the possibility of management assistance to the Target Business by us, there can
be no assurance that the Target Business will prove to be commercially viable.
Limited Ability to Evaluate Target Business' Management.
While our ability to successfully effect a Business Combination will be
dependent upon certain key personnel, the future role of such personnel in the
Target Business cannot presently be stated with any certainty. It is unlikely
that current management will remain associated in any operational capacity with
the Company following a Business Combination. Moreover, there can be no
assurances that current management will have any experience or knowledge
relating to the operations of the particular Target Business. Furthermore,
although we intend to closely scrutinize the management of a prospective Target
Business in connection with evaluating the desirability of effecting a Business
Combination, there can be no assurances that our assessment of such management
will prove to be correct, especially since none of our management are
professional business analysts. See "Directors, Executive Officers, Promoters
and Control Persons".
Accordingly, we will be dependant, in some significant respects, on the ability
of the management of the Target Business who are unidentifiable as of the date
hereof. In addition, there can be no assurances that such future management will
have the necessary skills, qualifications or abilities to manage a public
company. We may also seek to recruit additional managers to supplement the
incumbent management of the Target Business. There can be no assurances that we
will have the ability to recruit such additional managers, or that such
additional managers will have the requisite skill, knowledge or experience
necessary or desirable to enhance the incumbent management.
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Opportunity for Shareholder Evaluation or Approval of Business Combinations.
Our non-affiliate shareholders will, in all likelihood, not receive nor
otherwise have the opportunity to evaluate any financial or other information
which will be made available to us in connection with selecting a potential
Business Combination until after we have entered into an agreement to effectuate
a Business Combination. Such agreement to effectuate a Business Combination,
however, will be subject to shareholder approval pursuant to applicable law. As
a result, our non-affiliate shareholders will be almost entirely dependent on
the judgment and experience of management in connection with the selection and
ultimate consummation of a Business Combination. In addition, under Florida law,
the form of Business Combination could impact upon the availability of
dissenters' rights (i.e., the right to receive fair payment with respect to the
Company's Common Stock) to shareholders disapproving the proposed Business
Combination. See "Description of Business - Shell Corporation - Conflicts of
Interest" and "Certain Relationships and Related Transactions".
Selection of a Target Business and Structuring of a Business Combination.
We anticipate that the selection of a Target Business will be complex and risky
because of competition for such business opportunities among all segments of the
financial community. The nature of our search for the acquisition of a Target
Business requires maximum flexibility inasmuch as we will be required to
consider various factors and circumstances which may preclude meaningful direct
comparison among the various business enterprises, products or services
investigated. Investors should recognize that the possible lack of
diversification among our acquisitions may not us to offset potential losses
from one venture against profits from another. We have virtually unrestricted
flexibility in identifying and selecting a prospective Target Business. In
addition, in evaluating a prospective Target Business, management will consider,
among other factors, the following factors which are not listed in any
particular order:
- financial condition and results of operation of the Target Business;
- growth potential and projected financial performance of the Target
Business and the industry in which it operates;
- experience and skill of management and availability of additional
personnel of the Target Business;
- capital requirements of the Target Business;
- the availability of a transaction exemption from registration pursuant to
the Securities Act for the Business Combination;
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- the location of the Target Business;
- competitive position of the Target Business;
- stage of development of the product, process or service of the Target
Business;
- degree of current or potential market acceptance of the product, process
or service of the Target Business;
- possible proprietary features and possible other protection of the
product, process or service of the Target Business;
- regulatory environment of the industry in which the Target Business
operates;
- costs associated with effecting the Business Combination; and
- equity interest in and possible management participation in the Target
Business.
The foregoing criteria are not intended to be exhaustive; any evaluation
relating to the merits of a particular Business Combination will be based, to
the extent relevant, on the above factors as well as other considerations deemed
relevant by us in connection with effecting a Business Combination consistent
with our business objective. In many instances, it is anticipated that the
historical operations of a Target Business may not necessarily be indicative of
the potential for the future because of the possible need to shift marketing
approaches substantially, expand significantly, change product emphasis, change
or substantially augment management, or make other changes.
We will be dependent upon the owners of a Target Business to identify any such
problems which may exist and to implement, or be primarily responsible for the
implementation of, required changes. Because we may engage in a Business
Combination with a newly organized firm or with a firm which is entering a new
phase of growth, we will incur further risks, because in many instances,
management of the Target Business will not have proven its abilities or
effectiveness, the eventual market for the products or services of the Target
Business will likely not be established, and the Target Business may not be
profitable subsequent to a Business Combination.
Our limited funds and the lack of full-time management will likely make it
impracticable to conduct a complete and exhaustive investigation and analysis of
a Target Business before we commit our capital or other resources thereto.
Management decisions, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys and the like which, if
we had more funds available to it, would be desirable. We will be particularly
dependent in making decisions upon information provided by the promoter, owner,
sponsor, or others associated with the business opportunity seeking our
participation.
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In connection with its evaluation of a prospective Target Business, management
anticipates that it will conduct a due diligence review which will encompass,
among other things, meetings with incumbent management and inspection of
facilities, as well as review of financial or other information which will be
made available to us. The time and costs required to select and evaluate a
Target Business (including conducting a due diligence review) and to structure
and consummate the Business Combination (including negotiating relevant
agreements and preparing requisite documents for filing pursuant to applicable
securities laws and state "blue sky" and corporation laws) cannot presently be
ascertained with any degree of certainty. Ms. Goldstein, the Company's sole
director and officer, intends to devote only a small portion of her time,
approximately 10%, to our affairs and, accordingly, consummation of a Business
Combination may require a greater period of time than if Ms Goldstein devoted
her full time to the Company's affairs.
However, Ms. Goldstein. will devote such time as she deems reasonably necessary,
to carry out the business and affairs of the Company, including the evaluation
of potential Target Businesses and the negotiation of a Business Combination
and, as a result, the amount of time devoted to our business and affairs may
vary significantly depending upon, among other things, whether we have
identified a Target Business or are engaged in active negotiations of a Business
Combination. Any costs incurred in connection with the identification and
evaluation of a prospective Target Business with which a Business Combination is
not ultimately consummated will result in a loss to the Company and reduce the
amount of capital available to otherwise complete a Business Combination or for
the resulting entity to utilize. In the event we deplete our cash reserves, we
might be forced to cease operations and a Business Combination might not occur.
We anticipate that we will locate and make contact with Target Businesses
primarily through the reputation and efforts of Ms. Goldstein, who will meet
personally with existing management and key personnel, visit and inspect
material facilities, assets, products and services belonging to such prospects,
and undertake such further reasonable investigation as she deems appropriate.
Ms. Goldstein has a network of contacts in the State of Florida, and will most
likely concentrate her search efforts for a Target Business in this geographic
area. Ms. Goldstein does not intend to actively solicit or contact prospective
Targets directly. Rather, she believes that prospective Target Businesses will
be referred to the Company through her network of contacts.
We also expect that many prospective Target Businesses will be brought to its
attention from various other non-affiliated sources, including securities
broker-dealers, investment bankers, venture capitalists, bankers, and other
members of the financial community. We have neither the present intention, nor
does the present potential exist for us, to consummate a Business Combination
with a Target Business in which our management, promoters, or their affiliates
or associates directly or indirectly have a pecuniary interest, although no
existing corporate policies would prevent this from occurring. Although there
are no current plans to do so, we may engage the services of professional firms
that specialize in finding business acquisitions and pay a finder's fee or other
compensation. Since we have no current plans to utilize any outside consultants
or
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advisors to assist in a Business Combination, no policies have been adopted
regarding use of such consultants or advisors, the criteria to be used in
selecting such consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid. However,
because of our limited resources, it is likely that any such fee we agree to pay
would be paid in stock and not in cash. In no event will we pay a finder's fee
or commission to any officer or director or to any entity with which she is
affiliated for such service. Moreover, in no event shall we issue any of our
securities to any of our other officers, directors or promoters if any, or any
of their respective affiliates or associates, in connection with activities
designed to locate a target business.
As a general rule, Federal and state tax laws and regulations have a significant
impact upon the structuring of business combinations. We will evaluate the
possible tax consequences of any prospective Business Combination and will
endeavor to structure a Business Combination so as to achieve the most favorable
tax treatment for us, the Target Business and their respective stockholders.
There can be no assurance that the Internal Revenue Service or relevant state
tax authorities will ultimately assent to our tax treatment of a particular
consummated Business Combination.
To the extent the Internal Revenue Service or any relevant state tax authorities
ultimately prevail in recharacterizing the tax treatment of a Business
Combination, there may be adverse tax consequences to us, the Target Business
and their respective stockholders. Tax considerations as well as other relevant
factors will be valuated in determining the precise structure of a particular
Business Combination, which could be effected through various forms of a merger,
consolidation or stock or asset acquisition.
Although we have no commitments as of the date of this registration statement to
issue any shares of Common Stock, preferred stock, options or warrants, other
than as described in this registration statement, we will, in all likelihood,
issue a substantial number of additional shares in connection with the
consummation of a Business Combination. To the extent that such additional
shares are issued, dilution to the interests of our stockholders will occur.
Additionally, if a substantial number of shares of Common Stock are issued in
connection with the consummation of a Business Combination, a change in our
control is likely to occur which will likely affect, among other things, our
ability to utilize net operating loss carry forwards, if any.
Any such change in control may also result in the resignation or removal of our
present officer and director. If there is a change in management, no assurance
can be given as to the experience or qualification of such persons, either in
the operation of our activities or in the operation of the business, assets or
property being acquired. Management considers it likely that in order to
consummate a Business Combination, a change in control will occur; therefore,
management anticipates offering a controlling interest to a Target Business in
order to effectuate a Business Combination.
Ms. Goldstein may actively negotiate for or otherwise consent to the disposition
of any portion
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of her Common Stock as a condition to or in connection with a Business
Combination. Therefore, it is possible that the terms of any Business
Combination will provide for the sale of some shares of Common Stock held by Ms.
Goldstein. It is likely that none of our other shareholders will be afforded the
right to sell their shares of Common Stock in connection with a Business
Combination pursuant to the same terms that Ms. Goldstein will be provided. Our
directors intend to approve of the Business Combination pursuant to Section
607.0902(2)(d)(7) of the Florida Business Corporation Act which will have the
effect of removing the transaction from the purview of the control-share
acquisition statute promulgated under Section 607.0902 of the Florida Business
Corporation Act.
Section 607.0902 of the Florida Business Corporation Act denies corporate
control to an acquiror of control shares by extinguishing the voting rights of
shares of an "issuing public corporation", as defined therein, acquired in a
"control share acquisition", as defined therein. Voting rights may be reinstated
to the extent provided in a shareholders' resolution approved by (1) each class
or series entitled to vote separately on the proposal by a majority of all votes
entitled to be cast by such class or series and (2) each class or series
entitled to vote separately on the proposal by a majority of all votes entitled
to be cast by such class or series, excluding all "interested shares" (ie.,
generally speaking, those shares that may be voted by or at the direction of a
person who made a control-share acquisition or an officer or employee/director
of the subject "issuing public corporation").
The acquisition of shares is not directly affected, only the voting rights
attendant to control shares. Other shares of the same corporation that are owned
or acquired by the same person are not affected. The stated purpose of the
control share acquisition statute is to protect Florida shareholders by
affording them an opportunity to decide whether a change in corporate control is
desirable. Shares of an "issuing public corporation" acquired pursuant to an
acquisition approved by the corporation's board of directors are not deemed to
be "control-share acquisitions", which, effectively allows the board to approve
the acquisition and avoid a shareholder vote by taking the transaction out of
the purview of the "control-share acquisition" statute.
Thus, on-management/affiliate shareholders will not be afforded an opportunity
to approve or consent to an acquiror's purchase of Ms. William's shares pursuant
to a Business Combination. See "Description of Business -Shell Corporation -
Conflicts of Interest".
There are currently no limitations relating to our ability to borrow funds to
increase the amount of capital available to us to effect a Business Combination
or otherwise finance the operations of the Target Business. However, our limited
resources and lack of operating history could make it difficult for us to borrow
additional funds from other sources. The amount and nature of any borrowings by
us will depend on numerous considerations, including our capital requirements,
potential lenders' evaluation of our ability to meet debt service on borrowings
and the then prevailing conditions in the financial markets, as well as general
economic conditions. We do not have any arrangements with any bank or financial
institution to secure additional financing and there can be no assurance that
such arrangements if required or otherwise sought, would be
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available on terms commercially acceptable or otherwise in our best interests.
Our inability to borrow funds required to effect or facilitate a Business
Combination, or to provide funds for an additional infusion of capital into a
Target Business, may have a material adverse effect on our financial condition
and future prospects, including the ability to effect a Business Combination. To
the extent that debt financing ultimately proves to be available, any borrowings
may subject us to various risks traditionally associated with indebtedness,
including the risks of interest rate fluctuations and insufficiency of cash flow
to pay principal and interest. Furthermore, a Target Business may have already
incurred debt financing and, therefore, all the risks inherent thereto.
If our securities are issued as part of an acquisition, such securities are
required to be issued either in reliance upon exemptions from registration under
applicable federal or state securities laws or registered for public
distribution. We intend to primarily target only those companies where an
exemption from registration would be available; however, since the structure of
the Business Combination has yet to be determined, no assurances can be made
that we will be able to rely on such exemptions. Registration of securities
typically requires significant costs and time delays are typically encountered.
In addition, the issuance of additional securities and their potential sale in
any trading market which might develop in our Common Stock, of which there is
presently no trading market and no assurances can be given that one will
develop, could depress the price of our Common Stock in any market which may
develop in our Common Stock. Further, such issuance of additional securities
would result in a decrease in the percentage ownership of present shareholders.
Due to our small size and limited amount of capital, our ability to raise
additional capital if and when needed could be constrained. Until such time as
any enterprise, product or service which we acquire generates revenues
sufficient to cover operating costs, it is conceivable that we could find
ourselves in a situation where it needs additional funds in order to continue
our operations. This need could arise at a time when we are unable to borrow
funds and when market acceptance for the sale of additional shares of our Common
Stock does not exist. See "Management's Discussion and Analysis or Plan of
Operation".
Conflicts of Interest.
None of our affiliates, officers and directors are required to commit their full
time to our affairs and, accordingly, such persons may have conflicts of
interest in allocating management time among various business activities. Our
affiliates, officers and directors may engage in other business activities
similar and dissimilar to those we are engaged in. To the extent that such
persons engage in such other activities, they will have possible conflicts of
interest in diverting opportunities to other companies, entities or persons with
which they are or may be associated or have an interest, rather than diverting
such opportunities to us.
Presently, Ms. Goldstein, our sole officer and director, is involved in
overseeing and controlling her various holdings and investments which include
companies engaged in a similar business to
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ours. See "Directors, Executive Officers, Promoters and Control Persons". Also,
Ms. Goldstein may in the future become affiliated with additional other
entities, which may engage in business activities similar to those intended to
be conducted by us. Such potential conflicts of interest include, among other
things, time, effort and corporate opportunity involved in their participation
in other business transactions. As no policy has been established for the
resolution of such a conflict, we could be adversely affected should Ms.
Goldstein choose to place her other business interests before ours. No assurance
can be given that such potential conflicts of interest will not cause us to lose
potential opportunities.
In the course of her other business activities, including private investment
activities, Ms. Goldstein, the Company's sole officer and director, may become
aware of investment and business opportunities which may be appropriate for
presentation to us as well as the other entities with which they are affiliated.
Ms. Goldstein may have conflicts of interest in determining to which entity a
particular business opportunity should be presented. In general, officers and
directors of corporations are required to present certain business opportunities
to such corporations.
Accordingly, as a result of multiple business affiliations, Ms. Goldstein may
have similar legal obligations relating to presenting certain business
opportunities to multiple entities. In addition, conflicts of interest may arise
in connection with evaluations of a particular business opportunity by the board
of directors with respect to the foregoing criteria. There can be no assurances
that any of the foregoing conflicts will be resolved in our favor. We may
consider Business Combinations with entities owned or controlled by persons
other than those persons described above. There can be no assurances that any of
the foregoing conflicts will be resolved in our favor.
Ms. Goldstein may actively negotiate for or otherwise consent to the disposition
of any portion of her Common Stock as a condition to or in connection with a
Business Combination. Therefore, it is possible that the terms of any Business
Combination will provide for the sale of some shares of Common Stock held by Ms.
Goldstein. In the event that occurs, the Company's directors intend to approve
the Business Combination pursuant to Section 607.0902(2)(d)(7) of the Florida
Business Corporation Act which will have the effect of removing the transaction
from the purview of the control-share acquisition statute promulgated under
Section 607.0902 of the Florida Business Corporation Act. Thus, it is likely
that none of our other shareholders will be afforded the right to sell their
shares of Common Stock in connection with a Business Combination pursuant to the
same terms that Ms. Goldstein will be provided. Also, such shareholders will not
be afforded an opportunity to approve or consent to Ms. Goldstein's stock
purchase. See "Description of Business - Shell Corporation - Selection of a
Target Business and Structuring of a Business Combination".
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Investment Company Act and Other Regulation
We may participate in a Business Combination by purchasing, trading or selling
the securities of such Target Business. We do not, however, intend to engage
primarily in such activities.
Specifically, we intend to conduct our activities so as to avoid being
classified as an "investment company" under the Investment Company Act of 1940
(the "Investment Act"), and therefore to avoid application of the costly and
restrictive registration and other provisions of the Investment Act, and the
regulations promulgated thereunder.
Our plan of business may involve changes in our capital structure, management,
control and business, especially if we consummate a Business Combination as
discussed above. Each of these areas is regulated by the Investment Act, in
order to protect purchasers of investment company securities. Since we will not
register as an investment company, stockholders will not be afforded these
protections.
Any securities which we might acquire in exchange for our Common Stock will be
"restricted securities" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). If we elect to resell such securities, such sale
cannot proceed unless a registration statement has been declared effective by
the Securities and Exchange Commission or an exemption from registration is
available. Section 4(1) of the Securities Act, which exempts sales of securities
not involving a public distribution by persons other than the issuer, would in
all likelihood be available to permit a private sale. Although our plan of
operation does not contemplate the resale of an acquired Target Business'
securities, if such a sale were to be necessary, we would be required to comply
with the provisions of the Securities Act to effect such resale.
Any acquisition we make may be in an industry which is regulated or licensed by
federal, state or local authorities. Compliance with such regulations can be
expected to be a time consuming and expensive process.
Penny Stock Regulations - State Blue Sky restrictions -
Restrictions on Marketability.
The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities may
be covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse). For transactions covered by the rule, the
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broker-dealers must make a special suitability determination for the purchase
and receive the purchaser's written agreement of the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to sell
our securities and also may affect the ability of our shareholders to sell their
shares in the secondary market.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, and 15g-9 under the Securities Exchange Act of 1934,
as amended. Because the securities of the Company may constitute "penny stocks"
within the meaning of the rules, the rules would apply to the Company and to its
securities. The rules may further affect the ability of the Company's
shareholders to sell their shares in any public market which might develop.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differentials and markups by selling broker-dealers; and
(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. We are
aware of the abuses that have occurred historically in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to our securities.
We have 10,000,000 shares of authorized Common Stock with 1,000,000 shares of
Common Stock outstanding. See "Description of Securities". No trading market in
our securities presently exists. In light of the restrictions concerning shell
companies contained in many state blue sky laws and regulations, it is not
likely that a trading market will be created in our securities until such time
as a Business Combination occurs with a Target Business. No assurances are given
that subsequent to such a Business Combination that a trading market in ours
securities will develop. We presently have 1,000,000 shares of Common Stock
outstanding, of which all of such shares are deemed to be "restricted
securities", as that term is defined under Rule 144 promulgated under the
Securities Act, in that such shares were issued in private transactions not
involving a public offering. No assurances are made; however, that these shares
will be available for sale under Rule 144. The Company has not provided to any
shareholder registration rights to register under the Securities Act any
shareholder's shares for sale. See "Market for Common Equity and Related
Stockholder Matters".
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COMPETITION
We expect to encounter intense competition from other entities having a business
objective similar to ours. Many of these entities are well-established and have
extensive experience in connection with identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater financial, marketing, technical, personnel and other resources than us
and there can be no assurances that we will have the ability to compete
successfully. Our financial resources will be extremely limited in comparison to
those of many of its competitors. This inherent competitive limitation could
compel us to select certain less attractive Target Businesses for a Business
Combination. There can be no assurances that such Target Businesses will permit
us to meet our stated business objective. Management believes, however, that our
status as a reporting public entity could give us a competitive advantage over
privately held entities having a similar business objective to ours in acquiring
a Target Business with significant growth potential on favorable terms.
UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS
In the event that we succeed in effecting a Business Combination, we will, in
all likelihood, become subject to intense competition from competitors of the
Target Business. In particular, certain industries which experience rapid growth
frequently attract an increasingly larger number of competitors, including
competitors with increasingly greater financial, marketing, technical and other
resources than the initial competitors in the industry. The degree of
competition characterizing the industry of any prospective Target Business
cannot presently be ascertained. There can be no assurances that, subsequent to
a Business Combination, we will have the resources to compete effectively,
especially to the extent that the Target Business is in a high-growth industry.
FEDERAL SECURITIES LAWS COMPLIANCE
Under the Federal securities laws, companies reporting under the Exchange Act
must furnish stockholders certain information about significant acquisitions,
which information may require audited financial statements for a Target Business
with respect to one or more fiscal years, depending upon the relative size of
the acquisition. Consequently, the Company's policy is to only effect a Business
Combination with a Target Business that has available the requisite audited
financial statements. See "Description of Securities--Securities Exchange Act of
1934".
FACILITIES
Our principal office is located at 22154 Martella Avenue, Boca Raton, Florida
33433 This property is owned by Ms. Goldstein and is her personal residence. We
occupy this space rent free. We believe these facilities are adequate to serve
our needs until such time as a Business Combination occurs. We expect to be able
to utilize these facilities, free of charge, until such time
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as a Business Combination occurs. See "Description of Property" and "Certain
Relationships and Related Transactions".
EMPLOYEES
As of the date of this Registration Statement, we are in the development stage
and currently have no full time employees. Our management serves on a part time
basis. We expect to use consultants, attorneys and accountants as necessary, and
do not anticipate a need to engage any full-time employees so long as it is
seeking and evaluating Target Businesses. The need for employees and their
availability will be addressed in connection with the decision whether or not to
acquire or participate in a specific Business Combination.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
We are presently a development stage company conducting virtually no business
operation, other than our efforts to effect a Business Combination with a Target
Business which we considers to have significant growth potential. To date, we
have neither engaged in any operations nor generated any revenue. We receive no
cash flow. We will carry out our plan of business as discussed above. See
"Description of Business". We cannot predict to what extent our liquidity and
capital resources will be diminished prior to the consummation of a Business
Combination or whether our capital will be further depleted by the operating
losses, if any, of the Target Business which we effectuate a Business
Combination with. The continuation of our business is dependant upon our ability
to obtain adequate financing arrangements, effectuate a Business Combination and
ultimately, engage in future profitable operations.
Presently, we are not in a position to meet our cash requirements for the
remainder of our fiscal year or for the next 12 months. We do not generate any
cash revenue or receive any type of cash flow. From inception to the date of
this registration statement, Ms. Goldstein, the Company's sole officer and
director, has committed to make loans to us on a need be basis in the form of
promissory notes. Our operating costs, which includes professional fees and
costs related to a Business Combination, are likely to approximate $10,000 to
$15,000 during the next 12 months. It is likely that a Business Combination
might not occur during the next 12 months. In the event we cannot meet our
operating costs prior to the effectuation of a Business Combination, we may
cease operations and a Business Combination may not occur.
Prior to the occurrence of a Business Combination, we may be required to raise
capital through the sale or issuance of additional securities in order to ensure
that we can meet our operating the effectuation of a Business Combination. As of
the date of this registration statement, no commitments of any kind to provide
additional funds have been made by Ms. Goldstein, other
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present shareholders or any other third person. There are no agreements or
understandings of any kind with respect to any loans from such persons on our
behalf. Accordingly, there can be no assurance that any additional funds will be
available to the Company to allow it to cover its expenses. In the event the
Company can no longer borrow funds from Ms. Goldstein, and the Company elects to
raise additional capital prior to the effectuation of a Business Combination, it
expects to do so through the private placement of restricted securities rather
than through a public offering. The Company does not currently contemplate
making a Regulation S offering.
ITEM 3. DESCRIPTION OF PROPERTY.
The principal office of the Company is located at 22154 Marietta Avenue, Boca
Raton, Florida 33433, the personal residence of our president. We believe these
facilities are adequate to serve our needs until such time as a Business
Combination occurs. We expect to be able to utilize these facilities, free of
charge, until such time as a Business Combination occurs. See "Certain
Relationships and Related Transactions".
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date hereof, the names, addresses,
amount and nature of beneficial ownership and percent of such ownership of each
person known to the Company to be the beneficial owner of more than five percent
(5%) of Company's Common Stock:
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Owner
Shelley Goldstein 10,000* 1.0%
----------------------
Goldco Properties Limited Partnership 896,000 89.6%
All Officers and Directors
as a Group (1 person) 10% 1.0%
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(Excludes the 896,000 shares of common stock owned by Goldco Properties
Limited Partnership, a limited liability partnership controlled by Peter
Goldstein, the husband of Shelley Goldstein and 10,000 shares of common stock
owned individually . Any beneficial claim of ownership to these shares is
disclaimed by Ms. Goldstein.)
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The current directors and executive officers of the Company are as follows:
Name Age Position
---- --- --------
Shelley Goldstein 39 President/Secretary/Treasurer/Director
Goldco Properties Limited Shareholder
Partnership
Shelley Goldstein, has served as the Company's sole officer and director since
its inception. She also serves as the sole officer and director of Focus
Financial Group, Warresnburg Enterprises, Inc. and Gaige Financial Group, Inc.
companies which are engaged in a similar business to ours. From November 1997
through September 1999, Ms. Goldstein served as the controller for Westmark
Mortgage Corp. located in Boca Raton, Florida. From February 1996 until November
1997, she served as a consultant for The Singing Machine in Pompano Beach,
Florida. From 1985 until February 1996 she served as president and chief
financial officer of Shelley Simmons, a correspondent lender, located in Texas
and Florida. Ms. Goldstein earned a Bachelors of Arts and Bachelors of
Accounting from the University of Texas.
Goldco Properties is a limited liability partnership controlled by Peter
Goldstein, the husband of Shelley Goldstein. Mr. Goldstein is an independent
business consultant involved with several privately held companies including
GreenGold International Corporation, a management consulting firm located in
Miami, Florida, Global Business Resources, Goldco Holdings and Goldco
Properties. From 1988 to 1994 he served as chief executive officer of Fine Herbs
Corporation, a specialty food company with offices in Los Angeles and New York.
Mr. Goldstein received a Masters Degree in Business Administration from the
University of Miami
There are no agreements or understandings for our sole officer or director to
resign at the request of another person, and our sole officer and director is
not acting on behalf of or will act at the discretion of any other person.
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Presently, the only person who performs material operations on our behalf is Ms.
Goldstein, the Company's sole officer and director. She may also receive
assistance from time to time from her husband Peter Goldstein, who will assist
on a "as needed" basis without compensation. He will however be reimbursed for
any out of pocket expenses. Until such time as a Business Combination occurs,
Ms. Goldstein, does not expect any significant changes in the composition of our
officers or board of directors.
OTHER BLANK CHECK ACTIVITIES
Ms. Goldstein has recently filed on behalf of Focus Financial Group, Inc.,
Warrensburg Enterprises Inc., Gaige Financial Group, Inc. and Technology Venture
Group, Inc. a Form 10- SB with the Securities and Exchange Commission. Both of
which are are engaged in business ventures similar to ours which may pose a
conflict of interest for Ms. Goldstein.
ITEM 6. EXECUTIVE COMPENSATION.
Executive Compensation.
Our president and sole director, Ms. Goldstein, receives no salary or other
compensation in connection with her employment as such. Ms. Goldstein has no
employment agreement with us. We have no other executive officers. Pursuant to
Instruction (5) to Item 402(a)(2) of Regulation S-B, no table or column is
provided in this Item 6 to this registration statement.
Compensation of Directors
No director receives any type of compensation from us for serving as such.
Until we effectuate a Business Combination, it is not anticipated that any
officer or director will receive any compensation other than reimbursement for
out-of-pocket expenses incurred on our behalf. See "Certain Relationships and
Related Transactions". We have no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more such
programs in the future. No other arrangements are presently in place regarding
compensation to directors for their services as directors or for committee
participation or special assignments.
Each of our officers and directors hold office until their respective successors
is elected and qualified or until his/her resignation in the manner provided in
our Bylaws.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None of our officers, directors, promoters or affiliates has or proposes to have
any direct or indirect material interest in any asset proposed to be acquired
through security holdings, contracts, options, or otherwise.
It is not currently anticipated that any other salary, consulting fee, or
finder's fee shall be paid to any of our directors or executive officers, or to
any other of our affiliates except as described in this registration statement.
See "Executive Compensation".
Our officer and director may actively negotiate for or otherwise consent to the
disposition of any portion of her Common Stock as a condition to or in
connection with a Business Combination. Therefore, it is possible that the terms
of any Business Combination will provide for the sale of some shares of Common
Stock held by Ms. Goldstein. Thus, it is likely that no other shareholder of the
Company will be afforded the right to sell their shares of Common Stock in
connection with a Business Combination pursuant to the same terms that Ms.
Goldstein will be provided. Also, such shareholders will not be afforded an
opportunity to approve or consent to Ms. Goldstein's stock purchase. See
"Description of Business - Shell Corporation - Selection of a Target Business
and Structuring of a Business Combination". It is more likely than not that any
sale of securities by our current stockholders to an acquisition candidate would
be at a price substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the context of an
acquisition involving us would be determined entirely by the largely
unforeseeable terms of a future agreement with an unidentified business entity.
See "Description of Business - Shell Corporation - - Selection of a Target
Business and Structuring of a Business Combination".
To date, the Company has borrowed a total of $1,000 from a shareholder. This
money is to be repaid on demand by the Company without interest. Should we
require additional funds, Ms. Goldstein, has agreed to loan the Company funds on
an as needed basis.
ITEM 8. DESCRIPTION OF SECURITIES.
GENERAL
We are authorized to issue 10,000,000 shares of Common Stock. As of the date of
this registration statement 1,000,000 shares of Common Stock are outstanding,
held of record by approximately 50 shareholders. No other type of securities are
authorized by the Company at this time.
COMMON STOCK
Our shareholders are entitled to one vote for each share held of record on all
matters to be voted on by shareholders. There is no cumulative voting with
respect to the election of directors, with
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the result that the holders of more than 50% of the shares voted for the
election of directors can elect all of the directors. By virtue of her ownership
of more than 50% of the outstanding Common Stock, Ms. Goldstein, the Company's
principal shareholder can elect all of the directors of the Company. Florida law
permits the holders of the minimum number of shares necessary to take action at
a meeting of shareholders (normally a majority of the outstanding shares) to
take action by written consent without a meeting, provided notice is given
within ten days to all other shareholders. The holders of Common Stock are
entitled to receive dividends when, as and if declared by the board of directors
out of funds legally available therefor. In the event of liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining available for distribution to
them after payment of liabilities and after provision has been made for each
class of stock, if any, having preference over the Common Stock. Holders of
shares of Common Stock, as such, have no conversion, preemptive, redemption
provisions or other subscription rights. All of the outstanding shares of Common
Stock are fully paid and non-assessable.
DIVIDENDS
We have not paid any dividends on our Common Stock and do not presently intend
to pay cash dividends prior to the consummation of a Business Combination. The
payment of cash dividends in the future, if any, will be contingent upon our
revenues and earnings, if any, capital requirements and general financial
condition subsequent to consummation of a Business Combination. The payment of
any dividends subsequent to a Business Combination will be within the discretion
of our then board of directors. It is the present intention of the board of
directors to retain all earnings, if any, for use in our business operations
and, accordingly, the board does not anticipate paying any cash dividends in the
foreseeable future.
SECURITIES EXCHANGE ACT OF 1934
By virtue of filing this registration statement, we are making an application
with the Commission to register our Common Stock under the provisions of Section
12(g) of the Exchange Act. Such registration will require us to comply with
periodic reporting, proxy solicitations and certain other requirements of the
Exchange Act. If we seek shareholder approval of a Business Combination at such
time as our securities are registered pursuant to Section 12(g) of the Exchange
Act, our proxy solicitation materials required to be transmitted to shareholders
may be subject to prior review by the Securities and Exchange Commission. Under
the federal securities laws, public companies must furnish certain information
about significant acquisitions, which information may require audited financial
statements of an acquired company with respect to one or more fiscal years,
depending upon the relative size of the acquisition.
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Consequently, if a prospective Target Business did not have available and was
unable to reasonably obtain the requisite audited financial statements, we
could, in the event of consummation of a Business Combination with such company,
be precluded from (i) any public financing of its own securities for a period of
as long as three years, as such financial statements would be required to
undertake registration of such securities for sale to the public; and (ii)
registration of its securities under the Exchange Act. As a result these
requirements, and in order to remain in compliance with the Company's board of
director's resolution, Target Businesses will be required to possess the
requisite audited financial statements prior to the consummation of a Business
Combination. See "Description of Business- General" and "Market For Common
Equity and Related Stockholder Matters- Market Information".
In the event our obligation to file periodic reports under the Exchange Act is
suspended, we presently intend to continue to file such periodic reports on a
voluntary basis.
CERTAIN PROVISIONS OF THE COMPANY'S BYLAWS
The Company's bylaws provide, among other things, that (i) officers and
directors of the Company will be indemnified to the fullest extent permitted
under Florida law. See "Indemnification of Directors and Officers".
TRANSFER AGENT
We presently serves as our own transfer agent.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
Our common stock has not been registered with the Securities and Exchange
Commission or any state securities agency or authority. We intend to apply to
the NASDAQ Stock Market, Inc. to list our shares for quotation on the OTC
Bulletin Board. We cannot assure you when or if our application will be
accepted. If accepted, current quoted bid and asked, and last sales price for
our shares of common stock will be available on the OTC Bulletin Board.
No public trading market presently exists for our Common Stock, and there are no
present plans,
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proposals, arrangements or understandings with any person with regard to the
development of any trading market in any of ours securities. No assurances are
made, however, that a trading market for our Common Stock will ever develop. No
shares of Common Stock have been registered for resale under the blue sky laws
of any state. The holders of shares of Common Stock and persons who may desire
to purchase shares of Common Stock in any trading market that might develop in
the future, should be aware that there may be significant state blue-sky law
restrictions upon the ability of shareholders to sell their shares and of
purchasers to purchase the shares of Common Stock. Some jurisdictions may not
allow the trading or resale of blind-pool or "blank-check" securities under any
circumstances. Accordingly, shareholders should consider the secondary market
for our securities to be a limited one.
No shares of Common Stock of the Company are presently subject to outstanding
options or warrants to purchase, or securities convertible into our common
equity. Approximately 43 shareholders hold the Company's Common Stock. The
Company presently has 1,000,000 shares of Common Stock outstanding, all of which
are "restricted securities", as that term is defined under Rule 144 promulgated
under the Securities Act, in that such shares were issued in private
transactions not involving a public offering. None of these shares are currently
available for sale under Rule 144 as currently in effect. The Company has not
provided to any shareholder registration rights to register under the Securities
Act any shareholder's shares for sale.
In general, under Rule 144, as currently in effect, subject to the satisfaction
of certain other conditions, a person, including an affiliate of the Company (or
persons whose shares are aggregated), who has beneficially owned restricted
shares of Common Stock for at least one year is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1% of
the total number of outstanding shares of the same class or, if the Common Stock
is traded on a national securities exchange or the NASDAQ system, the average
weekly trading volume during the four calendar weeks preceding the sale.
A person who has not been an affiliate of the Company for at least the three
months immediately preceding the sale and who has beneficially owned restricted
shares of Common Stock for at least one year is entitled to sell such shares
under Rule 144 without regard to any of the limitations described above. No
assurances are made; however, that Rule 144 will be available at any time for
any shareholder's shares.
We have no present plans, proposals, arrangements, understandings or intention
of selling any amount of shares of Common Stock in the public market subsequent
to a Business Combination. Nevertheless, in the event that substantial amounts
of Common Stock are sold in the public market subsequent to a Business
Combination, such sales may adversely affect the price for the sale of the
Company's equity securities in any trading market which may develop. No
prediction can be made as to the effect, if any, that market sales of restricted
shares of Common Stock or the availability of such shares for sale will have on
the market prices prevailing from time to time.
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DIVIDENDS
We have not paid any dividends on our Common Stock to date and do not presently
intend to pay cash dividends prior to the consummation of a Business
Combination. The payment of cash dividends in the future, if any, will be
contingent upon our revenues and earnings, if any, capital requirements and
general financial condition subsequent to the consummation of a Business
Combination. The payment of any dividends subsequent to a Business Combination
will be within the discretion of our then board of directors. It is the present
intention of the board of directors to retain all earnings, if any, for use in
our business operations and, accordingly, the board of directors does not
anticipate paying any cash dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings, nor are we aware of any
threatened litigation of a material nature.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not Applicable.
ITEM 4. RECENT SALE OF UNREGISTERED SECURITIES
Effective as of December 17, 1999, we issued an aggregate of 1,000,000 shares of
our common stock in a private offering exempt from registration under the
Securities Act pursuant to Section 4(2) thereof for the total consideration of
$1,000 to 50 investors, including 916,000 shares issued to our principal
shareholders. We also issued 30,000 shares of our common stock to Jeffrey Klein
for legal services provided to us. We issued the balance of the shares to
individuals or entities, each of whom are relatives, friends and/or
acquaintances of Ms. Goldstein. We offered the shares ourselves and no fee or
discount was given to any underwriter, placement agent or other person in
connection with the private placement transactions. Except as described in the
preceding sentence, we have not offered, sold or issued any other securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our bylaws contain the broadest form of indemnification for our officers and
directors and former officers and directors permitted under Florida law. Our
bylaws generally provide that: The Company shall 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 Company) by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was
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serving at the request of the Company as a director, officer, employee or agent
of any other corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees), judgments, fines, amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, including any appeal thereof, if he acted in good
faith in a manner he reasonably believed to be in, or not opposed to the best
interests of the Company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe that her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contenders or its equivalent shall not create,
of itself, a presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the Company or, with respect to any criminal action or proceeding,
had reasonable cause to believe that her conduct was unlawful.
To the extent that a director, officer, employee or agent of the Company has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to above, or in any defense of any claim, issue or matter
therein, he shall be indemnified against expenses, including attorneys fees,
actually and reasonably incurred by him in connection therewith.
Any indemnification shall be made only if a determination is made that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made either (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) by the shareholders who were
not parties to such action, suit or proceeding. If neither of the above
determinations can occur because the Board of Directors consists of a sole
director or the Company is owned by a sole shareholder, then the sole director
or sole shareholder shall be allowed to make such determination.
Expenses incurred in defending any action, suit or proceeding may be paid in
advance of the final disposition of such action, suit or proceeding as
authorized in the manner provided above upon receipt of any undertaking by or on
behalf of the director, officer, employee or agent to repay such amount, unless
it shall ultimately be determined that she is entitled to be indemnified by the
Company.
The indemnification provided shall be in addition to the indemnification rights
provided pursuant to Chapter 607 of the Florida Statutes, and shall not be
deemed exclusive of any other rights to which any person seeking indemnification
may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of such a person.
-25-
<PAGE>
PART F/S
INDEX TO FINANCIAL STATEMENTS
Description Page
Independent Auditor's Report....................................... F-1
Balance Sheet...................................................... F-2
Statement of Operations and Accumulated Deficit.................... F-3
Statement of Shareholders Equity................................... F-4
Statement of Cash Flows............................................ F-5
Notes to Financial Statements...................................... F-7
-26-
<PAGE>
PART III
Item 1. Index to Exhibits
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen of Common Stock Certificate
23. Consent of Samuel F. May Jr.
27.1 Financial Data Schedule
-27-
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PROVENCE CAPITAL CORPORATION, INC.
Date: February 29, 2000 By: /s/ Shelley Goldstein
-------------------------------
Shelley Goldstein, President
-28-
<PAGE>
PROVENCE CAPITAL CORPORATION, INC.
FINANCIAL STATEMENTS
January 31, 2000
Table of Contents
Independent Auditor's Report............................................. F-1
Balance Sheet............................................................ F-2
Statement of Operations and Accumulated Deficit.......................... F-3
Statement of Shareholders' Equity........................................ F-4
Statement of Cash Flows.................................................F-5-6
Notes to Financial Statements...........................................F-7-8
<PAGE>
Independent Auditors Report
To the Board of Directors
Provence Capital Corporation, Inc.
Boca Raton, Florida
I have audited the accompanying balance sheet of Provence Capital Corporation,
Inc. (a development stage enterprise) as of January 31, 2000, and the related
statement of operations and retained earnings (accumulated deficit), statement
of shareholders' equity, and statement of cash flows for the period then ended.
These financial statements are the responsibility of the Company's management.
My responsibility 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 provide a reasonable basis for my opinion.
In my opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of Provence Capital Corporation, Inc.
(a development stage enterprise) as of January 31, 2000, the results of
operations, and its cash flows for the period then ended in conformity with
generally accepted accounting principles.
Samuel F. May Jr.
Certified Public Accountant
February 2, 2000
F-1
<PAGE>
<TABLE>
<CAPTION>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Balance Sheet
January 31, 2000
Assets
------
<S> <C>
Current assets:
Cash $ 1,000
Intangible assets:
Organizational costs 5,970
--------
Total assets $ 6,970
========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 1,000
--------
Commitments and contingencies
Shareholders' equity:
Common stock, $.001 par value, 10,000,000
shares authorized, 1,000,000 shares issued and
outstanding 1,000
Capital in excess of par value 5,970
Accumulated deficit (1,000)
--------
Total shareholders' equity 5,970
--------
Total liabilities and shareholders' equity $ 6,970
========
</TABLE>
READ ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-2
<PAGE>
<TABLE>
<CAPTION>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Statement of Operations and Accumulated Deficit
Period from
December 17,1999
(Inception) to
January 31, 2000
----------------
<S> <C>
Gross revenues $ --
Cost of sales --
----------
Gross profit on sales --
Expenses:
Legal and accounting 1,000
----------
Net loss for period 1,000
Retained earnings - beginning of period --
----------
Accumulated deficit - end of period $ 1,000
==========
Weighted average number of shares outstanding during the
period - basic undiluted 1,000,000
==========
Net loss per share - basic and diluted $ .001
==========
</TABLE>
READ ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
<PAGE>
<TABLE>
<CAPTION>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Statement of Shareholders Equity
Retained
Common Shares Capital Earnings
-------------------- in Excess of (Accumulated
Number Amount Par Value Deficit) Total
----------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance - December 6, 1999
(Inception) -- $ -- $ -- $ -- $ --
Issuance of common stock 1,000,000 1,000 5,970 -- 6,970
Net loss - inception to
January 31, 2000 -- -- -- (1,000) (1,000)
----------- ------------- --------- ---------- ----------
Balance - January 31, 2000 1,000,000 $ 1,000 $ 5,970 $ (1,000) $ 5,970
=========== ============= ========= ========== ==========
</TABLE>
READ ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
<PAGE>
<TABLE>
<CAPTION>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Statement of Cash Flows
Period from
December 17, 1999
(Inception) to
January 31, 2000
----------------
<S> <C>
Cash flows from operating activities:
Net loss $ 1,000
Adjustments to reconcile net loss to net cash provided from operating
activities:
Changes in assets and liabilities:
Increase in organizational costs --
Increase in accounts payable and accumulated expenses (1,000)
--------
Total adjustments (1,000)
--------
Net cash flows from operating activities --
Cash flows from financing activities:
Proceeds from issuance of common stock 1,000
--------
Net increase in cash 1,000
Cash balance - beginning of period --
--------
Cash balance - end of period $ 1,000
========
</TABLE>
READ ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
<PAGE>
<TABLE>
<CAPTION>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Statement of Cash Flows
Period from
December 17, 1999
(Inception) to
January 31, 2000
----------------
<S> <C>
Cash flows from operating activities:
Fees collected $ --
Cash paid to suppliers and vendors --
------
Net cash provided by operating activities --
Cash flows from financing activities:
Proceeds from issuance of common stock 1,000
Cash balance - beginning of period --
------
Cash balance - end of period $1,000
======
</TABLE>
READ ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-6
<PAGE>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Notes to Financial Statements
January 31, 2000
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization
Provence Capital Corporation, Inc. (a development stage
enterprise) (the "Company") was incorporated in Florida on
December 17, 1999 (inception of development stage). The
Company intends to serve as a vehicle to effect an asset
acquisition, merger, exchange of capital stock, or other
business combination with a domestic or foreign business. At
December 17, 1999, the Company had not yet commenced any
formal business operations, and all activity to date related
to the Company's formation, capital stock issuances,
professional fees with regard to proposed Securities and
Exchange Commission filings and identification of target
businesses. The Company's calendar year end is January 31.
The Company's ability to commence operations is contingent
upon its ability to identify a prospective target business
or raise the capital it may require through the issuance of
equity securities, debt securities, bank borrowings, or a
combination thereof.
(B) Organizational Costs
Organizational costs will be amortized by the straight line
method over a five-year period.
(C) Use of Estimates
In preparing financial statements to conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during
the reported period. Actual results could differ from those
estimates.
(D) Cash and Cash Equivalents
For purposes of the cash flow statements, the company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase
to be cash equivalents.
F-7
<PAGE>
PROVENCE CAPITAL CORPORATION, INC.
(a Development Stage Enterprise)
Notes to Financial Statements
January 31, 2000
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND
ORGANIZATION (continued)
(E) Income Taxes
The Company accounts for income taxes under the Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ("Statement
109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those
temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is
recognized in income in the period that includes the
enactment date. There was no current income tax expense in
the period ended January 31, 2000, due to the net loss. Any
deferred tax asset resulting from the net loss has been
fully offset by a valuation allowance.
(F) Earnings Per Share
Net loss per common share for the period from December 17,
1999 (inception of development stage) to January 31, 2000,
is computed based upon the weighted average common shares
outstanding as defined by Financial Accounting Standards No.
128, "Earnings Per Share." There were no common stock
equivalents outstanding at January 31, 2000.
NOTE 2 SHAREHOLDERS' EQUITY
On December 17, 1999, the Company sold 1,000,000 common shares of
its common stock as its initial capitalization. The Company's
Articles of Incorporation authorize 10,000,000 common shares at
$.001 par value.
F-8
<PAGE>
