GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE 1934 ACT
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A
(Amendment No. 1)
FILE NO.: 000-30345
CIK: 0001111749
CHARM CAPITAL, CORP.
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(Name of Small Business Issuer)
Delaware 13-4079042
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(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
39 Broadway, Suite 2250, New York, NY 10006
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(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number (212) 425-8200
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Securities to be registered under Section 12(b) of the Act:
NONE
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Securities to be Registered Under Section 12(g) of the Act:
Common Stock, $.0001 Par Value
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(Title of Class)
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TABLE OF CONTENTS
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 2. PLAN OF OPERATION
ITEM 3. DESCRIPTION OF PROPERTY
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
ITEM 6. EXECUTIVE COMPENSATION
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 8. DESCRIPTION OF SECURITIES
PART II.
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 2. LEGAL PROCEEDINGS
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
PART F/S.
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
BALANCE SHEET AS OF MARCH 31, 2000
NOTES TO BALANCE SHEET AS OF MARCH 31, 2000
PART III.
ITEM 1. INDEX TO EXHIBITS
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Charm Capital, Corp. (the "Company"), was incorporated on September 8,
1999, under the laws of the State of Delaware. The Company was formed in order
to seek business opportunities and is currently a "shell" with no commercial
operations. To date its activities have been organizational in nature and as a
result it must be considered to be in its developmental stage. The Company has
no full time employees, owns no real estate and since inception has been
primarily concerned with developing its business plan and raising its initial
capital.
The Company is one of ten shell companies created by Mark Elenowitz and
Louis Taubman, who are shareholders in all ten shell companies. Each shell has
the same business plan. The Company and the other shells seek to find private
companies that wish to become reporting companies, with which to merge. Mr.
Elenowitz and Mr. Taubman engage in the business of creating public shells and
finding merger partners for these blank check companies.
The Company's current business plan is to seek out business opportunities
and to pursue other related activities intended to enhance shareholder value.
Because the Company has no capital, it is unlikely that the Company will be able
to take advantage of more than one such business opportunity. The Company
intends to seek opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings.
The Company currently intends to generate revenue for its shareholders
through the acquisition of stock of potential merger partners with whom the
shells may be merged. In addition to the revenue generated from anticipated
capital gains from the sale of such stock, Mr. Elenowitz and Mr. Taubman also
derive revenue indirectly from TM Capital Partners, LLC, the majority
shareholder in the shell companies, which acts as a consultant to companies
seeking to merge with a public vehicle.
The acquisition of a business opportunity will probably be in the form of a
merger with a foreign or domestic private issuer that wishes to become a
reporting issuer. However, the Company is not limiting its search to such an
opportunity and as a result the business opportunity may also take the form of a
purchase, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership.
Neither does the Company intend to restrict its search for business
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the
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selection of business opportunities is unrestricted, subject to the availability
of such opportunities, economic conditions, and other factors.
To date, the Company has not identified any business opportunity that it
plans to pursue, nor has the Company reached any agreement or definitive
understanding with any person concerning an acquisition. The Company is filing
this Form 10-SB on a voluntary basis in order to become a 12(g) registered
company under the Securities Exchange Act of 1934. As a "reporting company," the
Company may be more attractive to a private acquisition target because it may be
listed to trade its shares on the OTCBB.
As a consequence of this registration of its securities, any entity which
has an interest in being acquired by, or merging into, the Company is expected
to be an entity that desires to become a public company and establish a public
trading market for its securities. There are various reasons why an entity would
wish to become a public company including (i) the ability to use registered
securities as currency in acquisitions of assets or businesses; (ii) increased
visibility in the financial community; (iii) the facilitation of borrowing from
financial institutions; (iv) increased liquidity to investors; (v) greater ease
in subsequently raising capital (vi) compensation of key employees through stock
options; (vii) enhanced corporate image; and (viii) a presence in the United
States capital markets.
Management believes that the business opportunity will likely be a business
entity with the goal of becoming a public company in order to use its securities
for the acquisition of assets or businesses; a company which is unable to find
an underwriter of its securities or is unable to find an underwriter of its
securities on terms acceptable to it; a company that wishes to become public
with less dilution of its common stock than would occur upon an underwriting; a
company that believes that it will be able to obtain investment capital on more
favorable terms after it has become public; or a foreign company that wishes to
make an initial entry into the United States securities market.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of its
own management and board of directors.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more. No
assurances can be given that the Company will be able to enter into a business
combination, as to the terms of a business combination, or as to the nature of
the target company.
In all probability, however, upon completion of an acquisition or merger,
there will be a change in control through issuance of substantially more shares
of common stock. Further, in conjunction with an acquisition or merger, it is
likely that management may offer to sell a controlling interest at a price not
relative to or reflective of any value of the
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shares sold by management, and at a price which could not be achieved by
individual shareholders at the time.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under the
Securities Exchange Act of 1934.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had no
operating history nor any revenues or earnings from operations. The Company has
no significant assets or financial resources. The Company will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in the Company
incurring a net operating loss which will increase continuously until the
Company can consummate a business combination with a target company. There is no
assurance that the Company can identify such a target company and consummate
such a business combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target company.
While management will prefer business combinations with entities having
established operating histories, there can be no assurance that the Company will
be successful in locating candidates meeting such criteria. In the event the
Company completes a business combination, of which there can be no assurance,
the success of the Company's operations will be dependent upon management of the
target company and numerous other factors beyond the Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A large
number of established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which may be merger
or acquisition target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO STANDARDS
FOR BUSINESS COMBINATION. The Company has no current arrangement, agreement or
understanding with respect to engaging in a merger with or acquisition of a
specific business entity. There can be no assurance that the Company will be
successful in identifying and evaluating suitable
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business opportunities or in concluding a business combination. Management has
not identified any particular industry or specific business within an industry
for evaluation by the Company. There is no assurance that the Company will be
able to negotiate a business combination on terms favorable to the Company. The
Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it will
require a target company to have achieved, or without which the Company would
not consider a business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for immediate
earnings, limited assets, negative net worth or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking a
business combination, management anticipates devoting only a limited amount of
time per month to the business of the Company. The Company's officers have not
entered into a written employment agreement with the Company and they are not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on its officers and directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
these individuals would adversely affect development of the Company's business
and its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. Certain conflicts of interest may exist
between the Company and its officers and directors. They have other business
interests to which they devote their attention, and may be expected to continue
to do so although management time should be devoted to the business of the
Company. As a result, conflicts of interest may arise that can be resolved only
through exercise of such judgment as is consistent with fiduciary duties to the
Company. See "Management," and "Conflicts of Interest."
Mark Elenowitz and Louis Taubman have created and are beneficial owners of
ten shells. It is presumed that these shells will be sold in chronological order
by date of incorporation. However, a target company may be more suited or prefer
a certain shell formed subsequent to the Company. Thus Mark Elenowitz and Louis
Taubman may attempt to merge a target company with one of their shells
incorporated subsequent to the Company, regardless of chronological order. Mark
Elenowitz and Louis Taubman will profit if any of the shells are merged,
regardless of chronological order of incorporation. Thus, finding a target
company to merge with this Company may not necessarily be a priority for Mark
Elenowitz and Louis Taubman who will gain financially if any of the shells are
sold.
Mark Elenowitz and Louis Taubman will each receive stock, indirectly and
directly, as a result of any merger that occurs. In addition, Mr. Elenowitz and
Mr. Taubman and their other partners may also receive cash as a result of any
consulting agreement between TM Capital Partners, LLC and potential merger
candidates.
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REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act") requires companies subject
thereto to provide certain information about significant acquisitions including
certified financial statements for the company acquired covering one or two
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target companies to prepare such
financial statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company. Acquisition
prospects that do not have or are unable to obtain the required audited
statements may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has neither
conducted, nor have others made available to it, market research indicating that
demand exists for the transactions contemplated by the Company. Even in the
event demand exists for a merger or acquisition of the type contemplated by the
Company, there is no assurance the Company will be successful in completing any
such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with only one business entity. Consequently, the Company's
activities will be limited to those engaged in by the business entity that the
Company merges with or acquires. The Company's inability to diversify its
activities into a number of areas may subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will be
subject to regulation under the Exchange Act, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
could subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving
the issuance of the Company's common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in the
Company. Any such business combination may require shareholders of the Company
to sell or transfer all or a portion of the Company's common stock held by them.
The resulting change in control of the Company will likely result in removal of
the present
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officers and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.
REGULATION OF PENNY STOCKS. The Company's securities, when available for
trading, will be subject to a Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established customers or accredited investors.
For purposes of the rule, the phrase "accredited investors" means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell the Company's securities and also
may affect the ability of purchasers in this offering to sell their securities
in any market that might develop therefore.
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, 15g-7, 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 owners of
Shares to sell the securities of the Company in any market that might develop
for them.
Shareholders should be aware that the market for penny stocks has suffered
in recent years from patterns of fraud and abuse (see www.sec.gov; Press
Releases: "SEC Proposes Several Measures to Combat Securities Fraud, and Issues
Status Report on Commission-wide Microcap Fraud Efforts"). 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. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.
TAXATION. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both
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companies, pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the federal and
state tax consequences to both the Company and the target company; however,
there can be no assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state taxes
that may have an adverse effect on both parties to the transaction.
NO PUBLIC MARKET EXISTS. There is no public market for the Company's Common
stock, and no assurance can be given that a market will develop or that a
shareholder ever will be able to liquidate his investment without considerable
delay, if at all. If a market should develop, the price may be highly volatile.
Factors such as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered hereby. Owing
to the low price of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.
RULE 144 SALES. All of the outstanding shares of Common Stock held by
present officers, directors, and stockholders are "restricted securities" within
the meaning of Rule 144 under the Securities Act of 1933, as amended. As
restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as required under applicable
state securities laws. Rule 144 provides in essence that a person who has held
restricted securities for one year may, under certain conditions, sell every
three months, in brokerage transactions, a number of shares that does not exceed
the greater of 1.0% of a company's outstanding common stock or the average
weekly trading volume during the four calendar weeks prior to the sale. There is
no limit on the amount of restricted securities that may be sold by a
nonaffiliate after the restricted securities have been held by the owner for a
period of two years. A sale under Rule 144 or under any other exemption from the
Act, if available, or pursuant to subsequent registration of shares of Common
Stock of present stockholders, may have a depressive effect upon the price of
the Common Stock in any market that may develop.
BLUE SKY RESTRICTIONS. Many states have enacted statutes or rules that
restrict or prohibit the sale of securities of "shell" companies to residents so
long as they remain without specific business plans. To the extent any current
shareholders or subsequent purchaser from a shareholder may reside in a state
that restricts or prohibits resale of shares in a "shell" company, warning is
hereby given that the shares may be "restricted" from resale as long as the
company is a shell company.
At the date of this registration statement, the Company has no intention of
offering further shares in a private offering to anyone. Further, the policy of
the Board of
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Directors is that any future offering of shares will only be made after an
acquisition has been made and can be disclosed in appropriate 8-K filings.
In the event of a violation of state laws regarding resale of "shell"
shares the Company could be liable for civil and criminal penalties which would
be a substantial impairment to the Company. At date of this registration
statement, all shareholders' shares bear a "restrictive legend," and the Company
will examine each shareholders' resident state laws at the time of any proposed
resale of shares now outstanding to attempt to avoid any inadvertent breach of
state laws.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in exchange
for the Company's securities. The Company has no particular acquisition in mind
and has not entered into any negotiations regarding such an acquisition. Neither
the Company's officers and directors nor any affiliate have engaged in any
negotiations with any representative of any company regarding the possibility of
an acquisition or merger between the Company and such other company.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates pay referral fees to consultants and
others who refer target businesses for mergers into public companies in which
management and its affiliates have an interest. Payments are made if a business
combination occurs, and may consist of cash or a portion of the stock in the
Company retained by management and its affiliates, or both. In the past a cash
referral fee was paid to a finder in relation to the Solomon Alliance Group,
Inc. and Madison Holdings, Inc. business combination and the Reagan Holdings,
Inc. and FindEx.com, Inc. business combination. The referral fee paid to the
finder, which was not affiliated with Madison Holdings, was $50,000 in cash plus
100,000 shares of Solomon Alliance Group, Inc. A referral fee of $50,000 in cash
plus 100,000 shares of FindEx.com, Inc. was paid to TM Capital Partners, an
entity affiliated with MHE Projix, LLC, the majority shareholder of Reagan
Holdings, Inc. in relation to its business combination with FindEx.com, Inc.
The Company has no full time employees. The Company's officers have agreed
to allocate a portion of their time to the activities of the Company, without
compensation. The officers anticipate that the business plan of the Company can
be implemented by their devoting no more than 10 hours each per month to the
business affairs of the Company and, consequently, conflicts of interest may
arise with respect to the limited time commitment by such officer.
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Management is currently involved with other shell companies, and is
involved in creating additional shell companies similar to this one. A conflict
may arise in the event that another shell company with which management is
affiliated is formed and actively seeks a target company. Management anticipates
that target companies will be located for the Company and other shell companies
in chronological order of the date of incorporation of such shell companies or
by lot. However, other shell companies that may be formed may differ from the
Company in certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or other items.
It may be that a target company may be more suitable for or may prefer a certain
shell company formed after the Company. In such case, a business combination
might be negotiated on behalf of the more suitable or preferred shell company
regardless of date of formation or choice by lot. To date, Management has
successfully completed business combinations, in the form of Share Exchanges,
between three target companies and three of their shells in chronological order
by date of incorporation of the shells.
The Certificate of Incorporation of the Company provides that the Company
may indemnify officers and/or directors of the Company for liabilities, which
can include liabilities arising under the securities laws. Therefore, assets of
the Company could be used or attached to satisfy any liabilities subject to such
indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities registered
under the Exchange Act. The Company will not restrict its search to any specific
business, industry, or geographical location and the Company may participate in
a business venture of virtually any kind or nature. Management anticipates that
it will be able to participate in only one potential business venture because
the Company has nominal assets and limited financial resources. See item F/S,
"Financial Statements." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries .
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived
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benefits of a publicly registered corporation. Such perceived benefits may
include facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company, who are not
professional business analysts. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange Act.
The Company will not acquire or merge with any company for which audited
financial statements cannot be obtained at or within a reasonable period of time
after closing of the proposed transaction.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be
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incurred in such an offering, loss of voting control to public shareholders or
the inability to obtain an underwriter or to obtain an underwriter on
satisfactory terms.
The Company will not restrict its search for any specific kind of business
entity, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person will need to be
assumed by the target company, as the Company has limited cash assets with which
to pay such obligation.
Following a business combination the Company may benefit from the services
of others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target company, management may recommend one
or more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that the services of the consultant or advisor be continued
after any business combination. Additionally, a target company may be presented
to the Company only on the condition that the services of a consultant or
advisor be continued after a merger or acquisition. Such preexisting agreements
of target companies for the continuation of the services of attorneys,
accountants, advisors or consultants could be a factor in the selection of a
target company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is likely that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, it is likely
that the Company's officers and directors will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a shell company.
Until such time as this occurs, the Company will not register any additional
securities. The issuance of additional securities and their potential sale into
any trading market which may develop in the Company's securities may depress the
market value of the Company's securities in the future if such a market
develops, of which there is no assurance.
While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of ownership may be subject to significant
reduction in the event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held by the
Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.
The Company will not acquire or merge with any entity that cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition, as well as
the Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
13
<PAGE>
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations made
by the target company, the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company.
TM Capital Partners, L.L.C., the principal shareholder of the Company, has
informally agreed that it will advance to the Company any additional funds which
the Company needs for operating capital and for costs in connection with
searching for or completing an acquisition or merger. Such advances will be made
without expectation of repayment unless the owners of the business which the
Company acquires or merges with agree to repay all or a portion of such
advances. There is no minimum or maximum amount TM Capital Partners, L.L.C. will
advance to the Company. The Company will not borrow any funds to make any
payments to the Company's promoters, management or their affiliates or
associates.
COMPETITION
The Company expects to encounter substantial competition in its efforts to
locate attractive business opportunities, primarily from business development
companies, venture capital partnerships and corporations, venture capital
affiliates of large industrial and financial companies, small investment
companies, and wealthy individuals. Many of these entities have significantly
greater financial and personnel resources and technical expertise than the
Company. The Company may also experience competition from other public "shell"
companies, some of which may have more funds available than the Company. As a
result of the Company's combined extremely limited financial resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no property. The Company does not currently maintain an
office or any other facilities. It does currently maintain a mailing address at
39 Broadway, Suite 2250, which is the office address of its Secretary, Louis
Taubman. The Company pays no rent for the use of this mailing address. The
Company does not believe that it will need to maintain an office at any time in
the foreseeable future in order to carry out its plan of operations described
herein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date of this registration
statement, each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, all directors individually and
all directors and officers of the
14
<PAGE>
Company as a group. Except as noted, each person has sole voting and investment
power with respect to the shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
------------------- ------------------- ----------
TM Capital partners, L.L.C. (1) 4,750,000 95%
15425 Shady Grove Road
Suite 400
Rockville, MD 20850
Mark Elenowitz 125,000 2.5%
(President, Treasurer
and Director)
15425 Shady Grove Road
Suite 400
Rockville, MD 20850
Louis Taubman 125,000 2.5%
(Secretary and Director)
39 Broadway, Suite 2250
New York, NY 10006
All Executive Officers and
Directors as a Group 5,000,000 100%
(1) Two of the Company's officers and directors- Louis Taubman and Mark
Elenowitz are indirect beneficial owners of TM Capital Partners, L.L.C. TM
Capital provides services for such persons, particularly in regard to locating
private companies that may wish to go public, and acts as an initial shareholder
in certain companies formed by such parties. Since TM Capital has fewer than 100
shareholders and is not making and does not intend to make a public offering of
its securities, management believes that it is not deemed to be an investment
company by virtue of an exemption provided under the Investment Company Act of
1940, as amended.
15
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has two Directors and two Officers as follows:
Name Age Positions and Offices Held
---- --- --------------------------
Mark Elenowitz 30 President, Treasurer and Director
Louis Taubman 31 Secretary and Director
There are no agreements or understandings for the officers or directors to
resign at the request of another person and the above-named officers and
directors are not acting on behalf of nor will act at the direction of any other
person.
Set forth below is the name of the directors and officers of the Company,
all positions and offices with the Company held, the period during which he has
served as such, and the business experience during at least the last five years:
Mark Elenowitz, 30, has served as President, Treasurer and as a Director of the
Company since its inception, and has extensive financial experience within the
marketplace, including experience in corporate finance, mergers and
acquisitions, and marketing. Mr. Elenowitz earned his Series 7 and 63 broker
licenses and held a Series 24 license while employed as branch manager at
Tamaron Investments. Mr. Elenowitz is also Co-Chairman Managing Director of
VentureNow, Inc., a private venture capital company, a Managing Director of
Invoke Distribution, an international direct marketing company, and President of
Investor Communications Company, LLC, an investor relations firm. Mr. Elenowitz
has also served as Vice President of Investor Relations for Quest International
Resources Corporation, a public natural resource exploration company.
Previously, Mr. Elenowitz was Vice President of Sales at Josephthal, Lyon &
Ross, Inc., a NYSE member firm. Mr. Elenowitz is a graduate of the University of
Maryland College of Business and Management, with a Bachelor of Science in
Finance.
Louis E. Taubman, 31, has served as Secretary and as a Director of the Company
since its inception. Mr. Taubman is a partner in the New York law firm of Kogan
Taubman & Neville, LLC, a boutique securities firm. Before joining Kogan Taubman
& Neville, Mr. Taubman maintained a private practice wherein he provided general
corporate and securities counsel to various developmental stage businesses.
Prior to that, Mr. Taubman served as an attorney in the legal department of
Prudential Securities, Inc. Mr. Taubman provides counsel to both issuers and
underwriters with regard to public and private finance, mergers and
acquisitions. Additionally, Mr. Taubman has litigated matters in various federal
and state courts, as well as before such self-regulatory bodies as the NASD, NFA
and NYSE. Mr. Taubman graduated cum laude from New York Law School in 1993 and
holds a Bachelor of Science degree in Political Science from Syracuse
University.
16
<PAGE>
TOTAL CURRENT SHELL COMPANIES
Mr. Elenowitz, as president and a director of the Company, and Mr. Taubman,
as secretary and a director of the Company, are currently involved with other
shell companies, and are involved in creating additional companies similar to
this one. The initial business purpose of each of these companies was or is to
engage in a business combination with an unidentified company or companies and
each were or will be classified as a shell company until completion of a
business combination.
Generally target companies will be located for the Company and other
identical shell companies in chronological order of the date of formation of
such shell companies or, in the case of shell companies formed on the same date,
alphabetically. However, certain shell companies may differ from the Company in
certain items such as place of incorporation, number of shares and shareholders,
working capital, types of authorized securities, preference of a certain shell
company name by management of the target company, or other items. It may be that
a target company may be more suitable for or may prefer a certain shell company
formed after the Company. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred shell company regardless
of date of formation.
The following chart summarizes certain information concerning recent shell
companies with which Mr. Elenowitz and Mr. Taubman are or have been involved,
which have filed or will be filing a registration statement on Form 10-SB. In
most instances that a business combination is transacted with one of these
companies, it is required to file a Current Report on Form 8-K describing the
transaction. Reference is made to the Form 8-K filed for any company listed
below for detailed information concerning the business combination entered into
by that company.
<TABLE>
<CAPTION>
Registration Form/
Date of Effectiveness Date of
Corporation File Number Incorporation Status
----------- --------------------- ------------- ------
<S> <C> <C> <C>
Hancock Holdings, Inc. Form 10-SB 5/18/99 Merged with Orion
1/15/00 Technologies, Inc., a
000-29673 Nevada corporation on
February 17, 2000.
Orion filed its Form 8-K
on February 24, 2000.
Madison Holdings, Inc. Form 10-SB 5/18/99 Merged with Solomon
1/15/00 Alliance Group, an
000-29973 Arizona corporation on
March 16, 2000. Solomon
filed its Form 8-K on
March 10, 2000.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Registration Form/
Date of Effectiveness Date of
Corporation File Number Incorporation Status
----------- --------------------- ------------- ------
<S> <C> <C> <C>
Reagan Holdings, Inc. Form 10-SB 7/27/99 Merged with FindEx.com,
1/15/00 Inc., a Nevada
000-29963 Corporation on
March 7, 2000. FindEx
filed its Form 8-K on
March 15, 2000.
Aries Holdings, Inc. Form 10-SB 9/7/99 Seeking merger with
4/10/00 unidentified company.
000-29411 Form 8-K will be filed if
business combination
occurs.
Parade Holdings, Inc. Form 10-SB 9/7/99 Seeking merger with
4/10/00 unidentified company.
000-30337 Form 8-K will be filed if
business combination
occurs.
Pepper Capital, Corp. Form 10-SB 9/8/99 Seeking merger with
4/10/00 unidentified company.
000-29408 Form 8-K will be filed if
business combination
occurs.
Irving Capital, Corp. Form 10-SB 9/8/99 Seeking merger with
6/12/00 unidentified company.
000-30343 Form 8-K will be filed if
business combination
occurs.
Parc Capital, Corp. Form 10-SB 9/8/99 Seeking merger with
6/12/00 unidentified company.
000-30339 Form 8-K will be filed if
business combination
occurs.
Model Capital, Corp. Form 10-SB 9/8/99 Seeking merger with
6/12/00 unidentified company.
000-30341 Form 8-K will be filed if
business combination
occurs.
Charm Capital, Corp. Form 10-SB 9/8/99 Seeking merger with
6/12/00 unidentified company.
000-30345 Form 8-K will be filed if
business combination
occurs.
</TABLE>
18
<PAGE>
RECENT TRANSACTIONS BY SHELL COMPANIES
Share Exchange between Hancock Holdings, Inc. and Orion Technologies, Inc.
--------------------------------------------------------------------------
On February 22, 2000, Orion Technologies, Inc., a Nevada corporation,
purchased all of the issued and outstanding shares of Hancock Holdings, Inc.
pursuant to a share exchange agreement. Hancock Holdings, Inc. was formed on May
18, 1999 to engage in a merger or acquisition with an unidentified company or
companies and was structured substantially similar to the Company, including
similar management and beneficial shareholders.
Pursuant to a Share Exchange Agreement (the "Agreement") dated February 22,
2000, Orion Technologies, Inc., a Nevada corporation ("Orion" or the "Company"),
acquired all of the issued and outstanding capital stock of Hancock Holdings,
Inc. ("Hancock") from the shareholders of Hancock in a pro rata exchange for an
aggregate of 150,000 shares of Orion's common stock, par value $0.001 per share
(the "Share Exchange"). There were seven shareholders of Hancock immediately
prior to the Share Exchange. They were MHE Projix LLC, a Florida limited
liability company, Mark Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic
Smith, William Quigley, Jr., and Barry Labell, who held 5,000,000 shares of
Hancock common stock in the aggregate. As a result of the Share Exchange, 100%
of the outstanding capital stock of Hancock is owned by Orion and Hancock become
a wholly-owned subsidiary of Orion. MHE Projix LLC, Mark Elenowitz, Louis
Taubman, David Simonetti, Thomas Bostic Smith, Wiliam Quigley, Jr., and Barry
Labell owned 4,750,000, 87,500, 87,500, 25,000, 25,000, 12,500, and 12,500
shares of Hancock, respectively. They exchanged their shares of Hancock for
142,500, 2,625, 2,625, 750, 750, 375 and 375 shares of Orion, respectively. Mark
Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic Smith, William Quigley,
Jr., and Barry Labell were all either officers or directors of Hancock Holdings
at the time of the Share Exchange. Additionally, Louis Taubman, Mark Elenowitz,
Tom Bostic Smith, and David Simonetti are owners (either directly or indirectly)
of MHE Projix, LLC.
At the time of the transaction, Orion Technologies' shares traded at an
average bid price of $3.63 per share during the month of the Share Exchange.
However, because the securities issued in the share exchange are restricted and
because Orion Technologies is a relatively new company, it is impossible to
accurately gauge the value of the shares at this time.
At the time of the merger, Orion Technologies, Inc. was an international
holding company concentrating on Internet and telecommunications-based
technologies and services for e-commerce and business-to-business markets. Orion
Technologies, Inc. has three wholly-owned subsidiaries: Globalinx Corp., a
Delaware Company; EZ Elektronische Zahlungssysteme GmbH, a German Limited
Liability Company; and EPS Elektronische Processing Systeme GmbH, a German
Limited Liability Company. Following the share exchange, Hancock Holdings, Inc.
became a wholly owned subsidiary of Orion Technologies, Inc., and Orion
Technologies, Inc. filed a Form 8-K on February 24, 2000 with the Securities and
Exchange Commission describing the transaction.
19
<PAGE>
The common stock of Orion Technologies, Inc. trades on the NASD OTC
Bulletin Board under the symbol ORTG. Detailed information concerning this
business combination may be obtained from its filings under the Exchange Act
which are found in the EDGAR archives page of the Securities and Exchange
Commission's Website at www.sec.gov.
Share Exchange Between Madison Holdings, Inc. and Solomon Alliance Group,
Inc.
--------------------------------------------------------------------------
On March 8, 2000, Solomon Alliance Group, Inc., an Arizona corporation,
purchased all of the issued and outstanding shares of Madison Holdings, Inc.
pursuant to a share exchange agreement (the "Agreement"). Madison Holdings, Inc.
was formed on May 18, 1999 to engage in a merger or acquisition with an
unidentified company or companies and was structured substantially similar to
the Company, including similar management and beneficial shareholders.
Pursuant to the Agreement, Solomon Alliance Group, Inc.., a Nevada
corporation ("Solomon" or the "Company"), acquired all of the issued and
outstanding capital stock of Madison Holdings, Inc. ("Madison") from the
shareholders of Madison in a pro rata exchange for an aggregate of 300,000
shares of Solomon's common stock, par value $0.001 per share (the "Share
Exchange"). There were seven shareholders of Madison immediately prior to the
Share Exchange. They were MHE Projix LLC, a Florida limited liability company,
Mark Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic Smith, William
Quigley, Jr., and Barry Labell, who held 5,000,000 shares of Madison common
stock in the aggregate. As a result of the Share Exchange, 100% of the
outstanding capital stock of Madison is owned by Solomon and Madison become a
wholly-owned subsidiary of Solomon. MHE Projix LLC, Mark Elenowitz, Louis
Taubman, David Simonetti, Thomas Bostic Smith, Wiliam Quigley, Jr., and Barry
Labell owned 4,750,000, 87,500, 87,500, 25,000, 25,000, 12,500, and 12,500
shares of Madison, respectively. They exchanged their shares of Hancock for
285,000, 5,250, 5,250, 1,500, 1,500, 750 and 750 shares of Solomon,
respectively. Mark Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic
Smith, William Quigley, Jr., and Barry Labell were all either officers or
directors of Madison Holdings at the time of the Share Exchange. Additionally,
Louis Taubman, Mark Elenowitz, Tom Bostic Smith, and David Simonetti are owners
(either directly or indirectly) of MHE Projix, LLC.
At the time of the transaction, Solomon Alliance shares traded at an
average bid price of $4.50 per share during the month of the Share Exchange.
However, because the securities issued in the Share Exchange are restricted and
because Solomon Alliance is a relatively new company, it is impossible to
accurately gauge the value of the shares at this time.
Additionally, Solomon retained Investor Communications Company, LLC through
IC Capital, LLC (collectively "ICC") to provide investor relations services. ICC
received compensation in the form of 100,000 restricted common shares. Of the
100,000 shares, 30% (36,000 shares) vested immediately, with the balance vesting
over a twelve month
20
<PAGE>
period. ICC also receives $7,500 per month in cash, plus expenses. The term of
this contract is for twelve months.
At the time of the merger, Solomon Alliance Group, Inc. was a development
stage company with plans to become a leading provider of customized wireless
data communications solutions for individual and business needs. Solomon
Alliance Group, Inc. has one wholly-owned subsidiary, Visual Link Wireless, Inc.
Following the share exchange, Madison Holdings, Inc. became a wholly owned
subsidiary of Solomon Alliance Group, Inc., and Solomon Alliance Group, Inc.
filed a Form 8-K on March 16, 2000 with the Securities and Exchange Commission
describing the transaction.
The common stock of Solomon Alliance Group, Inc. trades on the NASD OTC
Bulletin Board under the symbol SAGE. Detailed information concerning this
business combination may be obtained from its filings under the Exchange Act
which are found in the EDGAR archives page of the Securities and Exchange
Commission's Website at www.sec.gov.
Share Exchange between Reagan Holdings, Inc. and FindEx.com, Inc.
-----------------------------------------------------------------
March 7, 2000, Findex.com, Inc., a Nevada corporation, purchased all of the
issued and outstanding shares of Reagan Holdings, Inc. pursuant to a Share
Exchange Agreement (the "Agreement"). Reagan Holdings, Inc. was formed on July
27, 1999 to engage in a merger or acquisition with an unidentified company or
and was structured substantially similar to the Company, including similar
management and beneficial shareholders.
Pursuant to the Agreement, FindEx.com, Inc., a Nevada corporation ("FindEx"
or the "Company"), acquired all of the issued and outstanding capital stock of
Reagan Holdings, Inc. ("Hancock") from the shareholders of Reagan in a pro rata
exchange for an aggregate of 150,000 shares of Orion's common stock, par value
$0.001 per share (the "Share Exchange"). There were seven shareholders of
Hancock immediately prior to the Share Exchange. They were MHE Projix LLC, a
Florida limited liability company, Mark Elenowitz, Louis Taubman, David
Simonetti, Thomas Bostic Smith, William Quigley, Jr., and Barry Labell, who held
5,000,000 shares of Reagan common stock in the aggregate. As a result of the
Share Exchange, 100% of the outstanding capital stock of Reagan is owned by
FindEx and Reagan become a wholly-owned subsidiary of FindEx. MHE Projix LLC,
Mark Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic Smith, Wiliam
Quigley, Jr., and Barry Labell owned 4,750,000, 87,500, 87,500, 25,000, 25,000,
12,500, and 12,500 shares of Reagan, respectively. They exchanged their shares
of Hancock for 142,500, 2,625, 2,625, 750, 750, 375 and 375 shares of FindEx,
respectively. Mark Elenowitz, Louis Taubman, David Simonetti, Thomas Bostic
Smith, William Quigley, Jr., and Barry Labell were all either officers or
directors of Reagan Holdings at the time of the Share Exchange. Additionally,
Louis Taubman, Mark Elenowitz, Tom Bostic Smith, and David Simonetti are owners
(either directly or indirectly) of MHE Projix, LLC.
21
<PAGE>
At the time of the transaction, FindEx.com shares traded at an average bid
price of $8.75 per share during the month of the Share Exchange. However,
because the securities issued in the Share Exchange are restricted and because
FindEx.com is a relatively new company, it is impossible to accurately gauge the
value of the shares at this time.
Additionally, FindEx.com retained Investor Communications Company, LLC,
through IC Capital, LLC (collectively "ICC") for investor relations services.
ICC, which is wholly-owned by Mr. Elenowitz, received 120,000 restricted shares
of FindEx.com in exchange for ICC's services. Of the 120,000 shares received,
30% (36,000 shares) vested immediately, with the balance vesting over a twelve
month period. Furthermore, ICC receives $7,500 per month in cash, plus expenses,
for these services. The contract term is twelve months.
FindEx.com also retained MHE, Inc., which is wholly -owned by Mr.
Elenowitz, to provide consulting services related to business development and
finance. MHE, Inc. received 250,000 restricted shares of FindEx.com in exchange
for its services. At the time of the merger, FindEx.com, Inc. was a retail,
wholesale, and Internet supplier of software products to business and religious
organizations and individuals.
At the time of the merger, Findex.com, Inc. was a retail, wholesale, and
Internet supplier of software products to business and religious organizations
and individuals. Following the transaction, Reagan Holdings, Inc. became a
wholly owned subsidiary of Findex.com, Inc., and Findex.com, Inc. filed a Form
8-K on March 15, 2000 with the Securities and Exchange Commission describing the
transaction. The common stock of Findex.com, Inc. trades on the NASD OTC
Bulletin Board under the symbol FIND. Detailed information concerning this
business combination may be obtained from its filings under the Exchange Act
which are found in the EDGAR archives page of the Securities and Exchange
Commission's Website at www.sec.gov.
CONFLICTS OF INTEREST
The Company's officers and directors have organized nine other shells and
expect to organize other companies of a similar nature and with a similar
purpose as the Company. Consequently, there are potential inherent conflicts of
interest in acting as an officer and director of the Company. Insofar as the
officers and directors are engaged in other business activities, management
anticipates that it will devote only a minor amount of time to the Company's
affairs. The Company does not have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such opportunities
may relate to the Company's proposed business operations.
A conflict may arise in the event that another shell company with which
management is affiliated is formed and actively seeks a target company. It is
anticipated that target companies will be located for the Company and other
shell companies in chronological order of the date of incorporation of such
shell companies or by lot. However, any shell
22
<PAGE>
companies that may be formed may differ from the Company in certain items such
as place of incorporation, number of shares and shareholders, working capital,
types of authorized securities, or other items. It may be that a target company
may be more suitable for or may prefer a certain shell company formed after the
Company. In such case, a business combination might be negotiated on behalf of
the more suitable or preferred shell company regardless of date of incorporation
or choice by lot. As such, Mr. Elenowitz and Mr. Taubman may, at the time of a
merger negotiation with a target company, be more inclined to enter into a
business combination involving another shell regardless of chronological order
of the date of incorporation.
Management are principals of other businesses with operations which require
greater time commitments than the Company. As such, demands may be placed on the
time of Management that will detract from the amount of time they are able to
devote to the Company. Management intends to devote as much time to the
activities of the Company as required. However, should such a conflict arise,
there is no assurance that Management would not attend to other matters prior to
those of the Company. Management projects that initially up to ten hours each
per month of their time may be spent locating a target company which amount of
time would increase when the analysis of, and negotiations and consummation
with, a target company are conducted.
In addition to the foregoing, Louis Taubman, the Company's secretary and
director, is a partner in the law firm of Kogan Taubman & Neville, LLC, the
Company's current attorneys. In addition, other partners of Kogan Taubman &
Neville, LLC hold an indirect interest in TM Capital Partners, L.L.C, the
Company's majority shareholder.
No other securities, or rights to securities, of the Company will be issued
to management or promoters, or their affiliates or associates, prior to the
completion of a business combination. At the time of a business combination,
management expects that some or all of the shares of Common Stock owned by TM
Capital Partners, L.L.C, Mark Elenowitz and Louis Taubman will be purchased by
the target company. The amount of Common Stock sold or continued to be owned by
such parties cannot be determined at this time.
The terms of a business combination may include such terms as some or all
of the current officers or directors remaining as directors or officers of the
Company and/or the continuing services or other legal work of the Company being
handled by the law firm of which Mr. Taubman is a principal. Additionally, the
terms of a business combination may provide for a payment by cash or otherwise
(i.e. stock of the target company) to TM Capital Partners, L.L.C. or the
officers or directors of the Company for the purchase of all or part of their
common stock of the Company by a target company. Certain of the Company's
principals would directly benefit from such employment or payments. Such
benefits may influence Management's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. The amount of any finder's fee will
be
23
<PAGE>
subject to negotiation, and cannot be estimated at this time. No finder's fee of
any kind will be paid to management or promoters of the Company or to their
associates or affiliates. No loans of any type have, or will be, made to
management or promoters of the Company or to any of their associates or
affiliates.
The Company's officers and directors, and their affiliates or associates
have not had any negotiations with and there are no present arrangements or
understandings with any representatives of the owners of any business or company
regarding the possibility of a business combination with the Company.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management or promoters of the
Company or any affiliates or associates have any interest, direct or indirect.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management, promoters, shareholders or their affiliates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such persons prior to a
business combination;
(iii) The entering into any business combination or acquisition of assets
in which such persons have any interest, direct or indirect; or
(iv) The payment of any finder's fees to such persons.
These policies have been adopted by the Board of Directors of the Company,
and any changes in these provisions require the approval of the Board of
Directors. Management does not intend to propose any such action and does not
anticipate that any such action will occur.
Other than the policies listed above, there are no binding guidelines or
procedures for resolving potential conflicts of interest. Failure by management
to resolve conflicts of interest in favor of the Company could result in
liability of management to the Company. However, any attempt by shareholders to
enforce a liability of management to the Company would most likely be
prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company may participate in a business opportunity by
purchasing, trading or selling the securities of such business, the Company does
not intend to engage primarily in such activities. Specifically, the Company
intends to conduct its activities so
24
<PAGE>
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. In the event,
however, that the Company engages in business combinations which result in the
Company holding passive investment interests in a number of entities the Company
could be subject to regulation under the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment company and
could be expected to incur significant registration and compliance costs. The
Company has obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment Company Act of
1940. Any violation of such Act would subject the Company to material adverse
consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officers and directors do not receive any compensation for
their services rendered to the Company, have not received such compensation in
the past, and are not accruing any compensation pursuant to any agreement with
the Company.
The officers and directors of the Company will not receive any finder's
fee, either directly or indirectly, as a result of their efforts to implement
the Company's business plan outlined herein. However, the officers and directors
of the Company anticipate receiving benefits as beneficial shareholders of the
Company. See "Item 4. Security Ownership of Certain Beneficial Owners and
Management."
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 5,000,000 shares of Common Stock to the
following persons for a total of $725 in cash:
Name Number of Total Shares Consideration
-------------------------------------------------------------------------------
TM Capital Partners, L.L.C. (1) 4,750,000 $475.00
Mark Elenowitz 125,000 $125.00
Louis Taubman 125,000 $125.00
(1) TM Capital Partners, LLC is owned by MHE, Inc., which is wholly-owned by
Mark Elenowitz; and by KT Ventures, LLC, which is owned by Louis Taubman,
Simon Kogan, and Brian Neville. Mr. Taubman owns 36% of KT Ventures, LLC.
The remaining percentage is owned by Simon Kogan and Brian Neville.
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The proposed business activities described herein classify the Company as a
shell company. The Securities and Exchange Commission and many states have
enacted statutes, rules and regulations limiting the sale of securities of shell
companies. Management does not intend to undertake any efforts to cause a market
to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Accordingly, the
shareholders of the Company have executed and delivered a "lock-up" letter
agreement, affirming that such shareholders shall not sell their shares of the
Company's common stock except in connection with or following completion of a
merger or acquisition resulting in the Company no longer being classified as a
shell company. The shareholders have deposited their stock certificates with the
Company's management, and will not release the certificates except in connection
with or following the completion of a merger or acquisition.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, par value $.0001 per share. The following statements relating
to the capital stock are summaries and do not purport to be complete. Reference
is made to the more detailed provisions of, and such statements are qualified in
their entirety by reference to, the Certificate of Incorporation and the
By-laws, copies of which are filed as exhibits to this registration statement.
COMMON STOCK
Holders of shares of Common Stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of Common Stock do
not have cumulative voting rights. Holders of Common Stock are entitled to share
ratably in dividends, if any, as may be declared from time to time by the Board
of Directors in its discretion from funds legally available therefor. In the
event of a liquidation, dissolution or winding up of the Company, the holders of
Common Stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. All of the outstanding shares of Common Stock are
fully paid and non-assessable.
Holders of Common Stock have no preemptive rights to purchase the Company's
Common Stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the Common Stock. At this time the Company has no
intention to issue preferred stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for use
in its business operations and
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accordingly, the Board of Directors does not anticipate declaring any dividends
prior to a business combination.
GLOSSARY
The Company: Charm Capital, Corp., the company whose Common Stock is the
subject of this registration statement.
Exchange Act: The Securities Exchange Act of 1934, as amended.
"Penny Stock" Security: As defined in Rule 3a51-1 of the Exchange Act, a
"penny stock" security is any equity security other than a security (i) that is
a reported security (ii) that is issued by an investment company (iii) that is a
put or call issued by the Option Clearing Corporation (iv) that has a price of
$5.00 or more (except for purposes of Rule 419 of the Securities Act) (v) that
is registered on a national securities exchange (vi) that is authorized for
quotation on the Nasdaq Stock Market, unless other provisions of Rule 3a51-1 are
not satisfied, or (vii) that is issued by an issuer with (a) net tangible assets
in excess of $2,000,000, if in continuous operation for more than three years or
$5,000,000 if in operation for less than three years or (b) average revenue of
at least $6,000,000 for the last three years.
Securities Act: The Securities Act of 1933, as amended.
Small Business Issuer: As defined in Rule 12b-2 of the Exchange Act, a
"Small Business Issuer" is an entity (i) which has revenues of less than
$25,000,000 (ii) whose public float (the outstanding securities not held by
affiliates) has a value of less than $25,000,000 (iii) which is a United States
or Canadian issuer (iv) which is not an Investment Company and (v) if a
majority-owned subsidiary, whose parent corporation is also a small business
issuer.
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PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET PRICE. There is no trading market for the Company's Common Stock
at present and there has been no trading market to date. There is no assurance
that a trading market will ever develop or, if such a market does develop, that
it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (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.
In order to qualify for listing on the Nasdaq SmallCap Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the Nasdaq
SmallCap Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 shareholders.
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If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the Company's
securities may be traded in the over-the-counter ("OTC") market. The OTC market
differs from national and regional stock exchanges in that it (1) is not sited
in a single location but operates through communication of bids, offers and
confirmations between broker-dealers and (2) securities admitted to quotation
are offered by one or more broker-dealers rather than the "specialist" common to
stock exchanges. The Company may apply for listing on the NASD OTC Bulletin
Board or may offer its securities in what are commonly referred to as the "pink
sheets" of the National Quotation Bureau, Inc. To qualify for listing on the
NASD OTC Bulletin Board, an equity security must have one registered
broker-dealer, known as the market maker, willing to list bid or sale quotations
and to sponsor the company for listing on the Bulletin Board.
If the Company is unable initially to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is conducted
in the OTC market, a shareholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Company's securities.
(B) HOLDERS. There are three holders of the Company's Common Stock. On
March 29, 2000, the Company issued 5,000,000 of its Common Shares to these
shareholders for cash at $.0001 per share for a total price of $725. The issued
and outstanding shares of the Company's Common Stock were issued in accordance
with the exemptions from registration afforded by Sections 3(b) and 4(2) of the
Securities Act of 1933 and Rules 506 and 701 promulgated thereunder.
(C) DIVIDENDS. The Company has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of its accountants.
29
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities that were not
registered as follows:
Date Name Number of Shares Consideration
-------------- --------------------- ---------------- -------------
Mar. 29, 2000 TM Capital 4,750,000 $475.00
Partners, L.L.C. (1)
Mar. 29, 2000 Mark Elenowitz (1) 125,000 $125.00
Mar. 29, 2000 Louis Taubman (1) 125,000 $125.00
--------
(1) Mark Elenowitz and Louis Taubman are the indirect owners of TM Capital
Partners, L.L.C. and therefore may be considered to be indirect beneficial
owners of the common stock of the Company issued to TM Capital. With respect to
the sales made to TM Capital, the Company relied on the exemption from the
registration requirements set forth in Section 4(2) of the Securities Act of
1933, as amended. Shares issued to Louis Taubman and Mark Elenowitz were issued
pursuant Rule 701.
The shareholders of the Company have executed and delivered a "lock-up"
letter agreement which provides that such shareholders shall not sell the
securities except in connection with or following the consummation of a merger
or acquisition. Further, each shareholder has placed its stock certificates with
the Company until such time. Any liquidation by the current shareholders after
the release from the "lock-up" selling limitation period may have a depressive
effect upon the trading price of the Company's securities in any future market
that may develop.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents,
against expenses incurred in any action, suit or proceeding. The Certificate of
Incorporation and the By-laws of the Company provide for indemnification of
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
30
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knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. The
Company's Certificate of Incorporation contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING
THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
31
<PAGE>
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the period
ending March 31, 2000. The following financial statements are attached to this
report and filed as a part thereof.
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheet as of March 31, 2000
4) Notes to Balance Sheet as of March 31, 2000
INDEX TO FINANCIAL STATEMENTS
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
Independent Auditors' Report
Balance Sheet as of March 31, 2000
Notes to Balance Sheet as of March 31, 2000
32
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2000
33
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
CONTENTS
PAGE(S)
-------
Independent Auditors' Report 1.
Financial Statements:
Balance Sheet 2.
Statement of Income and Retained Earnings 3.
Statement of Changes in Stockholders' Equity 4.
Statement of Cash Flows 5.
Notes to Financial Statements 6.
COHEN & KAMENY CPA'S PLLC
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<PAGE>
TO THE BOARD OF DIRECTORS
CHARM CAPITAL, CORP.
We have audited the accompanying balance sheet of Charm Capital, Corp. (a
Delaware corporation) as of March 31, 2000, and the related statements of
income, stockholders' equity, and cash flows for the period from inception
(September 8, 1999) to March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charm Capital, Corp. as of
March 31, 2000, and the results of its operations and its cash flows for the
initial period then ended in conformity with generally accepted accounting
principles.
-------------------------
COHEN & KAMENY CPA'S PLLC
RIVERDALE, NEW YORK
APRIL 7, 2000
F-1
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF MARCH 31, 2000
ASSETS
CURRENT ASSETS:
Cash $725.
TOTAL CURRENT ASSETS: 725.
-----
TOTAL ASSETS $725.
=====
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
$ --
-----
TOTAL LIABILITIES: $ --
=====
STOCKHOLDERS' EQUITY:
Commonstock, $.0001 par value, 10,000,000 shares authorized,
5,000,000 issued and outstanding $500.
Additional paid in capital 225.
Retained Earnings --
-----
TOTAL STOCKHOLDERS' EQUITY: 725.
-----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $725.
=====
The accompanying notes are an integral part of these financial statements.
F-2
COHEN & KAMENY CPA'S PLLC
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
NET SALES --
COST OF SALES --
GROSS PROFIT --
------
OPERATING EXPENSES --
INCOME FROM OPERATIONS --
------
NET INCOME --
RETAINED EARNINGS--BEGINNING OF PERIOD --
RETAINED EARNINGS--END OF PERIOD --
======
The accompanying notes are an integral part of these financial statements.
F-3
COHEN & KAMENY CPA'S PLLC
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
Additional
Common Paid-in Retained
Stock Capital Earnings
----------------------------------
Balances at inception - September 8, 1999 -- -- --
Common stock issued 500. 225. --
Net income -- -- --
----------------------------------
Balances at March 31, 2000 500. 225. --
==================================
The accompanying notes are an integral part of these financial statements.
F-4
COHEN & KAMENY CPA'S PLLC
<PAGE>
CHARM CAPITAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
$ --
------
NET CASH PROVIDED BY OPERATING ACTIVITIES --
------
CASH FLOWS FROM INVESTING ACTIVITIES:
--
------
NET CASH PROVIDED BY INVESTING ACTIVITIES --
------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions 725.
------
NET CASH PROVIDED BY FINANCING ACTIVITIES 725.
------
NET INCREASE IN CASH & CASH EQUIVELANTS $ 725.
Cash - at beginning of period --
------
CASH & CASH EQUIVALENTS - AT END OF PERIOD $ 725.
======
The accompanying notes are an integral part of these financial statements.
F-5
COHEN & KAMENY CPA'S PLLC
<PAGE>
CHARM CAPITAL, CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
NOTE 1 - DESCRIPTION OF THE COMPANY'S BUSINESS:
Charm Capital, Corp. (the Company) was incorporated on September 8,
1999 in the state of Delaware. The Company was formed in order to
seek business opportunities and is currently a "shell" with no
business operations. As of the date of these financial statements
all of the Company's operations have been organizational in nature
and as a result it must be considered in its developmental stage.
The Company's current business plan is to seek out business
opportunities and to pursue other related activities intended to
enhance shareholder value. The Company will be seeking
opportunities, which will probably be in the form of a merger with a
foreign or domestic private issuer that wishes to become a reporting
issuer. However, the Company will explore opportunities, which may
take the form of a purchase, exchange of stock, or encompass
entities such as a corporation, joint venture or partnership. This
includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical,
communications and others.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's accounting policies are in accordance with generally
accepted accounting principles. Outlined below are those policies
considered significant.
(a) STATEMENT OF CASH FLOWS:
For purposes of the statement of cash flows, the company considers
all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
NOTE 3 - CAPITAL STOCK:
As part of the Company's initial organization the Company was
authorized to issue 10,000,000 shares of it's $ .0001 par value
common stock. Subsequent to its formation the Company entered into
subscription agreements authorizing the issuance of 5,000,000 shares
of it's $ .0001 par value common stock. The subscription agreements
were completed on March 7, 2000 when the Company received payments
for the shares.
F-6
COHEN & KAMENY CPA'S PLLC
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-laws:
2.1** Certificate of Incorporation
2.2** By-Laws
(3) Instruments Defining the Rights of Holders
3.1** Lock-Up Agreement with TM Capital Partners, L.L.C.
3.2** Lock-Up Agreement with Mark Elenowitz
3.3** Lock-Up Agreement with Louis Taubman
(4) Consents
4.1** Consent of Independent Certified Public Accountant
------------
** Filed herewith
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.
CHARM CAPITAL, CORP.
By: ________________________________________
Mark Elenowitz, President and Director
By: _________________________________________
Louis Taubman, Secretary and Director
35
