U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
RCA Trading Co.
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(Name of Small Business Issuer in its Charter)
Florida 13-4025362
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
551 5th Ave, Suite 1120, New York, NY 10176
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(Address of principal executive offices) (zip code)
Issuer's telephone number (212) 972-8570
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
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RCA Trading Co.
Form 10-SB
Table of Contents Page
Part I
Item 1. Description of Business ..............................................3
Item 2. Management's Discussion and Analysis or Plan of Operations ..........14
Item 3. Description of Property .............................................16
Item 4. Security Ownership of Certain Beneficial Owners and Management ......16
Item 5. Directors, Executive Officers, Promoters, and Control Persons .......16
Item 6.Executive Compensation ................................................18
Item 7.Certain relationships and Certain Transactions ........................18
Item 8.Description of Securities .............................................19
Part II
Item 1. Market Price and Dividends on the Registrant's Common ...............20
Equity and other Shareholder Matters
Item 2. Legal Proceedings ...................................................20
Item 3. Changes in and Disagreements with Accountants .......................20
Item 4. Recent Sales of Unregistered Securities .............................20
Item 5. Indemnification of Directors and Officers ...........................20
Part F/S
Exhibit 1 Financial Statements
Part III
Index to exhibits and description of exhibits ................................20
Signature Page ...............................................................21
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Forward Looking Statement
This registration statement contains certain forward-looking statements
and information relating to RCA Trading Co. that are based on the beliefs of its
management as well as assumptions made by and information currently available to
its management. When used in this report, the words "anticipate", "believe",
"expect", "intend", "plan" and similar expressions, as they relate to RCA
Trading Co. to its management, are intend to identify forward looking
statements. These statements reflect managements current view of RCA Trading,
Co. concerning future events and are subject to certain risks, uncertainties and
assumptions, including among many others: a general economic dowturn; a dowturn
in the securities market; a general lack og interest for any reason in going
public by means of transactions involvong public blank check companies,
Securities and Exchange Commission regulations which affect trading in the
securities of "penny stocks", and other risks and uncertanties.
Should any of these risks or uncertainties materialize, or should
underlying assumptions prove correct, actual results may vary form those
described in this record as anticipated, estimated or expected. Readers should
realize that RCA Trading Co. is in the development stage, with only very limited
assets, and that for RCA Trading to succeed requires that it either originate
successful business (for which ti lacks the funds) or acquire a successful
business. RCA Tradings realization of its business aims as stated herein will
depend in the near future principally on the successful completion of an
acquisition of a business, as discussed below.
Item 1. Description of Business.
RCA Trading Co. (the "Company") was incorporated under the laws of the
state of Florida on May 6, 1996. The Company was formed as a blind pool or blank
check Company for the purpose of seeking to complete a merger or business
acquisition transaction.
The Company has generally been inactive since inception. Its only
activities have been organizational ones, directed at developing its business
plan, conducting a limited search for business opportunities, and previous
efforts directed at completing a voluntary registration pursuant to Section 12
(g) of the Securities Exchange Act of 1934. The Company has not commenced
commercial operations. The Company has no full-time employees and owns no real
estate or personal property.
The Company has elected to initiate the process of voluntarily becoming
a reporting Company under the Securities Exchange Act of 1934 by filing this
Form 10-SB registration statement. Following the effective date of this
registration statement, the Company intends to comply with the periodical
reporting requirements of the Securities Exchange Act of 1934 and to seek to
complete a business acquisition transaction.
The Company is a "blind pool" or "blank check" Company, whose business
plan is to seek, investigate and if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be made by
purchaser, merger, exchange of stock, or otherwise, and may encompass assets or
a business entity, such as a corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely that the Company will be
able to take advantage of more than one such business opportunity. The Company
intends to seek opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings. However, at the present time, the Company has
not identified any business opportunity that it plans to pursue, nor has the
Company reached any agreement or definitive understanding with any person
concerning an acquisition.
Alternatively, the Company may be referred to as a "shell corporation"
and once trading on the Nasd Bulletin Board, a "trading and reporting shell
corporation." Shell corporations have zero or nominal assets and typically no
stated or contingent liabilities. Private companies wishing to become publicly
trading may wish to merge with a shell (a "reverse merger") whereby the
shareholders of the private Company become the majority of the shareholders of
the combined Company. The private Company may purchase for cash all or a portion
of the common share of the shell corporation from its major stockholders.
Typically, the Board and officers of the private Company become the new Board
and officers of the combined Company and often the name of the private Company
becomes the name of the combined Company.
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Prior to the effective date of this registration statement, it is
anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses that they represent have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No direct discussions regarding the possibility of merger are
expected to occur until after the effective date of this registration statement.
No assurance can be given that the Company will be successful in finding or
acquiring a desirable business opportunity, given the limited funds that are
expected to be available for acquisitions. Furthermore, no assurance can be
given that any acquisition, which does occur, will be on terms that are
favorable to the Company or its current stockholders.
The Company's search will be directed toward small and medium-sized
enterprises, which have a desire to become public corporations and which are
able to satisfy, or anticipate and which are able to satisfy or anticipate in
the reasonable near future, the minimum tangible asset requirement in order to
qualify shares for trading on NASDAQ or on an exchange such as the American
Stock Exchange. (See "Investigation and Selection of Business Opportunities").
The Company anticipates that the business opportunities presented to it will (i)
either be in the process of formation, or be recently organized with limited
operating history or a history of losses attributable to under-capitalization or
other factors; (ii) be experiencing financial or operating difficulties; (iii)
be in need of funds to develop new products or services or to expand into a new
market, or have plans for rapid expansion through acquisition of competing
businesses; (iv) or other similar characteristics. The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued or that it believes may realize a substantial benefit from
being publicly owned. Given the above factors, investors should expect that any
acquisition candidate may have little or no operating history, or a history of
losses or low profitability.
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.
As a consequence of this registration of its securities, any entity,
which has an interest in being acquired by, or merging into the Company, is
expected to be an entity that desires to become a public Company and establish a
public trading market for its securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock constituting control of
the Company would either be issued by the Company or be purchased from the
current principal stockholders of the Company by the acquiring entity or its
affiliates. If stock is purchased from the current principal stockholders, the
transaction is very likely to be a private transaction rather than a public
distribution of securities, but is also likely to result in substantial gains to
the current principal stockholders relative to their purchase price for such
stock. In the Company's judgment, none of the officers and directors would
thereby become an "underwriter" within the meaning of the Section 2(11) of the
Securities Act of 1933, as amended as long as the transaction is a private
transaction rather than a public distribution of securities. The sale of a
controlling interest by certain principal shareholders of the Company could
occur at a time when minority stockholders are unable to sell their shares
because of the lack of a public market for such shares.
Depending upon the nature of the transaction, the current officers and
directors of the Company may resign their management and board positions with
the Company in connection with a change of control or acquisition of a business
opportunity (See"Form of Acquisition," below, and "Risk Factors - The Company's
- - - - - - - Lack of Continuity and Management"). In the event of such a resignation, the
Company's current management would thereafter have no control over the conduct
of the Company's business.
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It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and directors,
its other stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plan, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.
The Company does not foresee that it will enter into a merger or
acquisition transaction with any business with which its officers or directors
are currently affiliated. Should the Company determine in the future, contrary
to the forgoing expectations, that a transaction with an affiliate would be in
the best interests of the Company and its stockholders, the Company is in
general permitted by Florida law to enter into such a transaction if:
(1) The material facts as to the relationship or interest of the affiliate and
as to the contract or transaction are disclosed or are known to the Board
of Directors, and the Board in good faith authorizes, approves or ratifies
the contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors constitute
less than a quorum; or
(2) The material facts as to the relationship or interest of the affiliate and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically authorized, approved or ratified in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the Company as of the time it is
authorized, approved or ratified, by the Board of Directors or the
stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
Company's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, the
perceived benefit the business opportunity will derive from becoming a publicly
held entity, and numerous other factors which are difficult, if not impossible,
to analyze through the application of any objective criteria. In many instances,
it is anticipated that the historical operations of a specific business
opportunity may not necessarily be indicative of the potential for the future
because of a variety of factors, including, but not limited to, the possible
need to expand substantially, shift marketing approaches, change product
emphasis, change or substantially augment management, raise capital and the
like.
It is anticipated that the Company will not be able to diversify, but
will essentially be limited to the acquisition of one business opportunity
because of the Company's limited financing. This lack of diversification will
not permit the Company to offset potential losses from one business opportunity
against profits from another, and should be considered an adverse factor
affecting any decision to purchase the Company's securities.
Certain types of business combination or business acquisition
transactions may be completed without any requirement that the Company first
submit the transaction to the stockholders for their approval. In the event the
proposed transaction is structured in such a fashion that stockholder approval
is not required, holders of the Company's securities (other than principal
stockholders holding a controlling interest) should not anticipate that they
will be consulted or that they will be provided with financial statements or any
other documentation prior to the completion of the transaction. Other types of
transactions require prior approval of the stockholders.
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In the event a proposed business combination or business acquisition
transaction is structured in such a fashion that prior stockholder approval is
necessary, the Company will be required to prepare a Proxy or Information
Statement describing the proposed transaction, file it with the Securities and
Exchange Commission for review and approval, and mail a copy of it to all
Company stockholders prior to holding a stockholders meeting for purposes of
voting on the proposal. Minority shareholders who do not vote in favor of a
proposed transaction will then have the right, in the event the transaction is
approved by the required number of stockholders, to exercise statutory
dissenters rights and elect to be paid the fair value of their shares.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's officers and directors, none of whom are
professional business analysts (See "Management"). Although there are no current
plans to do so, Company management might hire an outside consultant to assist in
the investigation and selection of business opportunities, and might pay a
finder's fee. Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities, no policies have been adopted regarding use of such consultants
or advisors, the criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or the total amount of fees
that may be paid. However, because of the limited resources of the Company, it
is likely that any such fee the Company agrees to pay would be paid in stock and
not in cash.
Otherwise, in analyzing potential business opportunities, Company
management anticipates that it will consider, among other things, the following
factors:
(1) Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
(2) The Company's perception of how any particular business opportunity will be
received by the investment community and by the Company's stockholders;
(3) Whether, following the business combination, the financial condition of the
business opportunity would be, or would have a significant prospect in the
foreseeable future of becoming, sufficient to enable the securities of the
Company to qualify for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit the trading of
such securities to be exempt from the requirements of Rule 15c2-6 adopted
by the Securities and Exchange Commission (See "Risk Factors - The Company
- Regulations of Penny Stocks").
(4) Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;
(7) Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;
(8) The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and
(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
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In regard to the possibility that the shares of the Company would qualify
for listing on NASDAQ, the current standards for initial listing include, among
other requirements, that the Company (1) have net tangible assets of at least
$4.0 million, or a market capitalization of $50.0 million, or net income of not
less that $0.75 million in its latest fiscal year or in two of the last three
fiscal years; (2) have a public float (i.e., shares that are not held by any
officer, director or 10% stockholder) of at least 1.0 million shares; (3) have a
minimum bid price of at least $4.00; (4) have at least 300 round lot
stockholders (i.e., stockholders who own not less than 100 shares); and (5) have
an operating history of at least one year or have a market capitalization of at
least $50.0 million. Many, and perhaps most, of the business opportunities that
might be potential candidates for a combination with the Company would not
satisfy the NASDAQ listing criteria.
No one of the factors described above will be controlling in the selection
of a business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's limited
capital available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.
Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity containing as much relevant information as
possible. Including, but not limited to, such items as a description of
products, services and Company history; management resumes; financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents, trademarks, or service marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions between such
Company and its affiliates during the relevant periods; a description of present
and required facilities;, an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurance that audited financial statements
would be able to be produced within a reasonable period of time not to exceed 60
days following completion of a merger or acquisition transaction; and the like.
As part of the Company's investigation, the Company's executive officers
and directors may meet personally with management and key personnel, may visit
and inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
It is possible that the range of business opportunities that might be
available for consideration by the Company could be limited by the impact of
Securities and Exchange Commission regulations regarding purchase and sale of
"penny stocks." The regulations would affect, and possibly impair, any market
that might develop in the Company's securities until such time as they qualify
for listing on NASDAQ or on an exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - Regulation
of Penny Stocks."
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Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current stockholders,
acquisition candidates which have long-term plans for raising capital through
public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates, which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company may participate
in a business opportunity. Specific business opportunities will be reviewed as
well as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of the review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization. In addition, the present management and stockholders of the
Company most likely will not have control of a majority of the voting stock of
the Company following a merger or reorganization transaction. As part of such a
transaction, the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986 as amended, depends upon the issuance to the
stockholders of the acquired Company of a controlling interest (i.e., 80% or
more) of the common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, the Company's current stockholders would retain in the aggregate
20% or less of the total issued and outstanding shares. This could result in
substantial additional dilution in the equity of those who were stockholders of
the Company prior to such reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or transfer of shares representing
a controlling interest in the Company by the current officers, directors and
principal stockholders. See "Description of Business - General."
It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon one or more exemptions from registration under
applicable federal and state securities laws to the extent that such exemptions
are available. In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities either at the
time the transaction is consummated, or under certain conditions at specified
times thereafter. The issuance of substantial additional securities and their
potential sale into any trading market that might develop in the Company's
securities may have a depressive effect upon such market.
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The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its principal
stockholders will enter into a letter of intent with the management, principals
or owners of a prospective business opportunity prior to signing a binding
agreement. Such a letter of intent will set forth the terms of the proposed
acquisition but will not bind any of the parties to consummate the transaction.
Execution of a letter of intent will by no means indicate that consummation of
an acquisition is probable. Neither the Company nor any of the other parties to
the letter of intent will be bound to consummate the acquisition unless and
until a definitive agreement is executed. Even after a definitive agreement is
executed, it is possible that the acquisition would not be consummated should
any party elect to exercise any right provided in the agreement to terminate it
on specific grounds.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs incurred in the related investigation would not be recoverable. Moreover,
because many providers of goods and services require compensation at the time or
soon after the goods and services are provided, the inability of the Company to
pay until an indeterminate future time may make it impossible to procure goods
and services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as an
"investment Company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore to avoid application of the costly and restrictive
registration and other provisions of the Investment Act, and the regulations
promulgated thereunder.
The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates the
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment Company securities.
Since the Company will not register as an investment Company, stockholders will
not be afforded these protections.
Competition
The Company expects to encounter substantial competition in its efforts to
locate attractive business combination opportunities. The competition may in
part come from business development companies, venture capital partnerships and
corporations, small investment companies, brokerage firms, and the like. Some of
these types of organizations are likely to be in a better position than the
Company to obtain access to attractive business acquisition candidates either
because they have greater experience, resources and managerial capabilities than
the Company, because they are able to offer immediate access to limited amounts
of cash, or for a variety of other reasons. The Company also will experience
competition from other public "blind pool" companies, some of which may also
have funds available for use by an acquisition candidate.
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Administrative Offices
The Company currently maintains a mailing address at 551 5th Ave, Suite
1120, New York, NY 10176. The Company's telephone number there is (212)
688-4668. Other than this mailing address, the Company does not currently
maintain any other office facilities, and does not anticipate the need for
maintaining office facilities at any time in the foreseeable future. The Company
pays no rent or other fees for the use of the mailing address.
Employees
The Company is in the development stage and currently has no employees.
Management of the Company expects to use consultants, attorneys and accountants
as necessary, and does not anticipate a need to engage any full-time employees
so long as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities.
Risk Factors
A. Conflicts of Interest. Certain conflicts of interest exist between the
Company and its officers and directors. They have other business interests
to which they currently devote attention, and are expected to continue to
do so. As a result, conflicts of interest may arise that can be resolved
only through their exercise of judgement in a manner which is consistent
with their fiduciary duties to the Company. See "Management," and
"Conflicts of Interest."
It is anticipated that the Company's principal shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or
acquisition transaction. In this process, the Company's principal
shareholders may consider their own personal pecuniary benefit rather than
the best interest of other Company shareholders. Depending upon the nature
of a proposed transaction, Company shareholders other than the principal
shareholders may not be afforded the opportunity to approve or consent to a
particular transaction. See "Conflicts of Interest."
B. Possible Need for Additional Financing. The Company has very limited funds,
and such funds, may not be adequate to take advantage of any available
business opportunities. Even if the Company's currently available funds
prove to be sufficient to pay for its operations until it is able to
acquire an interest in, or complete a transaction with, a business
opportunity, such funds will clearly not be sufficient to enable it to
exploit the opportunity. Thus, the ultimate success of the Company will
depend, in part, upon it availability to raise additional capital. In the
event that the Company requires modest amounts of additional capital to
funds its operations until it is able to complete a business acquisition or
transaction, such funds, are expected to be provided by the principal
shareholders. However, the Company has not investigated the availability,
source, or terms that might govern the acquisition of the additional
capital which is expected to be required in order to exploit a business
opportunity, and will not do so until it has determined the level of need
for such additional financing. There is no assurance that additional
capital will be available from any source or, if available, that it can be
obtained on terms acceptable to the Company. If not available, the
Company's operations will be limited to those that can be financed with its
modest capital.
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C. Regulations of Penny Stocks. The Company's securities, when available for
trading, will be subject to a Securities and Exchange Commission rule that
impose special sales practice requirements upon broker-dealers who sell
such securities to persons other than established customers or accredited
investors. For purpose of the rule, the phrase "accredited investor" means,
in general terms, institutions with assets in excess of $5,000,000, or
individuals having a net worth in excess of $1,000,000 or having an annual
income that exceeds $200,000 (or that, when combined with a spouse's
income, exceeds $300,000). For transactions covered by the rule, the broker
dealer must make special suitability determination for the purchaser and
receive the purchasers written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to
sell the Company's securities and also may affect the ability of purchasers
of the Company's securities and also may affect the ability of purchasers
of the Company's securities to sell such securities in any market that
might develop therefor.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rule 3a51-1 under the
Securities Act of 1933, an Rules 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6,
and 15g-7 under the Securities Exchange Act of 1934, as amended. Because
the securities of the Company may constitute "penny stocks" within the
meaning of the rules, the rules would apply to the Company and to its
securities. The rules may further affect the ability of the Company's
shareholders to sell their shares in any public market, which might
develop.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered
in recent years form patterns of fraud and abuse. Such patterns include (I)
control of the market for the security by one or a few broker-dealers that
are often related to the promoter or issuer; (ii) manipulation of prices
through prearranged matching of purchases and sales and false and
misleading press releases; (iii) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (iv) excessive and undisclosed bid-ask
differential and markups by selling broker-dealers; and (v) the wholesale
dumping of the same securities by promoters and broker dealers after prices
have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses.
The Company's management is aware of the abuses that have occurred
historically in the penny stock market. Although the Company does not
expect to be in a position to dictate the behavior of the market or of
broker dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns
form being established with respect to the Company's securities.
D. No Operating History. The Company was formed in May 1996, as a blind pool
or blank check entity, for the purpose of registering its common stock
under the 1934 Act and acquiring a business opportunity. The Company has no
operating history, revenues from operations, or assets other than a modest
amount of cash from private sales of stock. The Company faces all of the
risks of a new business and the special risks inherent in the
investigation, acquisition, or involvement in a new business opportunity.
The Company must be regarded as a new or "start-up" venture with all of the
unforeseen costs, expenses, problems, and difficulties to which such
ventures are subject.
E. No Assurance of Success or Profitability. There is no assurance that the
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance
that it will generate revenues or profits, or that the market price of the
Company's outstanding shares will be increased thereby.
- 11 -
<PAGE>
F. Possible Business - Not Identified and Highly Risky. The Company has not
identified and has no commitments to enter into or acquire a specific
business opportunity. As a result, it is only able to make general
disclosures concerning the risks and hazards of acquiring a business
opportunity, rather than providing disclosure with respect to specific
risks and hazards relating to a particular business opportunity. As a
general matter, prospective investors can expect any potential business
opportunity to be quite risky. See Item 1 " Description of Business."
G. Type of Business Acquired. The type of business to be acquired may be one
that desires to avoid effecting its own public offering and the
acCompanying expense, delays, uncertainties, and federal and state
requirements which purport to protect investors. Because of the Company's
limited capital, it is more likely than not, that any acquisition by the
Company will involve other parties whose primary interest is the
acquisition of control of a publicly traded Company. Moreover, any business
opportunity acquired may be currently unprofitable or present other
negative factors.
H. Impracticability of Exhaustive Investigation. The Company's limited funds
and lack of full-time management will make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or other resources
thereto. Management decisions, therefore, will likely be made without
detailed feasibility studies, independent analysis, market surveys and the
like which, if the Company had more funds available to it, would be
desirable. The Company will be particular dependent in making decisions
upon information provided by the promoter, owner, sponsor, or other
associated with the business opportunity seeking the Company's
participation. A significant portion of the Company's available funds may
be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or
not any business opportunity investigated is eventually acquired.
I. Lack of Diversification. Because of the limited financial resources that
the Company has, it is unlikely that the Company will be able to diversify
its acquisitions or operations. The Company's probable inability to
diversify its activities into more than one area will subject the Company
to economic fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's operations.
J. Need for Audited Financial Statements. The Company will require audited
financial statements from any business that it proposes to acquire. Since
the Company will be subject to the reporting provisions of the Securities
Exchange Act of 1934 (the "Exchange Act"), it will be required to include
audited financial statements in its periodical reports for any existing
business it may acquire. In addition, the lack of audited financial
statements would prevent the securities of the Company from becoming
eligible for listing on NASDAQ, the automated quotation system sponsored by
the Association of Securities Dealers, Inc., or on any existing stock
exchange. Moreover, the lack of such financial statements is likely to
discourage broker-dealers from becoming or continuing to serve as market
makers in the securities of the Company. Finally, without audited financial
statements, the Company would almost certainly be unable to offer
securities under a registration statement pursuant to the Securities Act of
1933, and the ability of the Company to raise capital would be
significantly limited. Consequently, acquisitions prospects that do not
have, or are unable to provide reasonable assurances that they will be able
to obtain, the required audited statements would not be considered by the
Company to be appropriate for acquisition.
- 12 -
<PAGE>
K. Other Regulation. An acquisition made by the Company may be of a business
that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected
to be a time-consuming, expensive process and may limit other investment
opportunities of the Company.
L. Dependence upon Management; Limited Participation of Management. The
Company will be entirely dependant upon the experience of its officers and
directors in seeking, investigating, and acquiring a business and in making
decisions regarding the Company's operations. It is possible that, from
time to time, the inability of such persons to devote their full time
attention to the business of the Company could result in a delay in
progress toward implementing its business plan. See "Management." Because
investors will not be able to evaluate the merits of possible future
business acquisitions by the Company, they should critically assess the
information concerning the Company's officers and directors.
M. Lack of Continuity in Management. The Company does not have an employment
agreement with any of its officers or directors, and as a result, there is
no assurance that they will continue to manage the Company in the future.
In connection with any acquisition of a business opportunity, it is likely
the current officers and directors of the Company may resign. A decision to
resign will be based upon the identity of the business opportunity and the
nature of the transaction, and is likely to occur without the vote or
consent of the stockholders of the Company.
N. Indemnification of Officers and Directors. The Company's Articles of
Incorporation provide for the indemnification of its, directors, officers,
employees, and agents, under certain circumstances, against attorney's fees
and other expenses incurred by them in any litigation to which they become
a party arising from their association with or activities on behalf of the
Company. The Company will also bear the expenses of such litigation for any
of its directors, officers, employees, or agents, upon such person's
promise to repay the Company therefor if it is ultimately determined that
any such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by the
Company, which it will be unable to recoup.
O. Dependence upon Outside Advisors. To supplement the business experience of
its officers and directors, the Company may be required to employ
accountants, technical experts, appraisers, Attorneys, or other consultants
or advisors. The selection of any such advisors will, be made by the
Company's officers, without any input from shareholders. Furthermore, it is
anticipated that such persons may be engaged on an "as needed" basis
without a continuing fiduciary or other obligation to the Company. In the
event the officers of the Company consider it necessary to hire outside
advisors, they any elect to hire persons who are affiliates, if those
affiliates are able to provide the required services.
P. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against
the assets of the business opportunity to be acquired, or against the
projected future revenues or profits of the business opportunity. This
could increase the Company's exposure to larger losses. A business
opportunity acquired through a leveraged transaction is profitable only if
it generates enough revenues to cover the related debt and expenses.
Failure to make payments on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all of the assets
acquired. There is no assurance that any business opportunity acquired
through a leveraged transaction will generate sufficient revenues to cover
the related debt and expenses.
Q. Competition. The search for potentially profitable business opportunities
is intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.
- 13 -
<PAGE>
R. No Foreseeable Dividends. The Company has not paid dividends on its Common
Stock and does not anticipate paying such dividends in the foreseeable
future.
S. Loss of Control by Present Management and Stockholders. In conjunction with
completion of a business acquisition, it is anticipated that the Company
will issue an amount of the Company's authorized but unissued Common Stock
that represents the greater majority of the voting power and equity of the
Company. In conjunction with such a transaction, the Company's current
Officers, Directors, and principal shareholders could also sell all, or a
portion, of their controlling block of stock to the acquired Company's
stockholders. Such a transaction would result in a greatly reduced
percentage of ownership of the Company by its current shareholders. As a
result, the acquired Company's stockholders would control the Company, and
it is likely that they would replace the Company's management with persons
who are unknown at this time.
T. No Public Market Exists. There is currently no public market for the
Company's common stock, and no assurance can be given that a market will
develop or that a shareholder ever will be able to liquidate his investment
without considerable delay, if at all. If a market should develop, the
price may be highly volatile. Factors such as those discussed in this "Risk
Factors" section may have a significant impact upon the market price of the
securities offered hereby. Owing to the low price of the securities, many
brokerage firms may not be willing to effect transactions in the
securities. Even if a purchasers finds a broker willing to effect a
transaction in theses securities, the combination of brokerage commissions,
state transfer taxes, if any, and any other selling costs may exceed the
selling price. Further, many leading institutions will not permit the use
of such securities as collateral for any loans.
U. Rule 144 Sales. All of the presently outstanding shares of Common Stock are
"restricted securities" within the meaning of Rule 144 under the Securities
Act of 1933, as amended. As restricted shares, these shares may be resold
only pursuant to an effective registration statement or under the
requirements of Rule 144 or other applicable state securities laws. Rule
144 provides in essence that a person who has held restricted securities
for a prescribed period, may under certain conditions, sell every three
months, in brokerage transactions, a number of shares that does not exceed
the greater of 1.0% of a Company's outstanding common stock or the average
weekly trading volume during the four calendar weeks prior to sale. There
is no limit on the amount of restricted securities that may be sold by a
non-affiliate after, the restricted securities have been held by the owner,
for a period of at least two years. A sale under Rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registrations of common stock of present shareholders, may have a
depressive effect upon the price of the Common Stock in any market that may
develop. As of the date hereof, all 6,163,500 of the currently outstanding
shares of common stock of the Company have been held by the current owners,
thereof for a period of more than two years. And accordingly, such shares
are currently available for resale in accordance with the provisions of
Rule 144.
V. Blue Sky Consideration. Because the securities registered hereunder have
not been registered for resale under the Blue-Sky laws of any state. The
holders of such shares and persons who desire to purchase them in any
trading market that might develop in the future. Should be aware, that
there may be significant state Blue-Sky law restrictions upon the ability
of investors to sell the securities and of purchasers to purchase the
securities. Some jurisdictions may not allow the trading or resale of blind
pool or "blank check" securities under any circumstances. Accordingly,
investors should consider the secondary market for the Company's securities
to be a limited one.
- 14 -
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resource
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholders equity other than the receipt of proceeds in the amount of $______
for its inside capitalization funds. Substantially all of such funds have been
used to pay expenses incurred by the Company. Consequently, as of December
31,1999, the Company's balance sheet reflects current and total assets of
$_____.
The Company intends to seek to carry out its plan of business as discussed
herein. In order to do so, it will require additional capital to pay ongoing
expenses, including particularly legal and accounting fees incurred in
conjunction with preparation and filing of this registration statement on form
10-SB, and in conjunction with future compliance with its on-going reporting
obligations.
Results of Operations
During the period from May 6, 1996 (inception) through December 31, 1999,
the Company has engaged in no significant operations other than organizational
activities, acquisition of capital and preparation for registration of its
securities under the Securities Exchange Act of 1934. During this period, the
Company received no revenues.
For the current fiscal year, the Company anticipates incurring a loss as a
result of expenses associated with registration and compliance with reporting
obligations under the Securities Exchange Act of 1934, and expenses associated
with locating and evaluating acquisition candidates. The Company anticipates
that until a business combination is completed with an acquisition candidate, it
will not generate revenues. The Company may also continue to operate at a loss
after completing a business combination, depending upon the performance of the
acquired business.
Need for Additional Financing
The Company's existing capital will not be sufficient to meet the Company's
cash needs, including the costs of completing its registration and complying
with its continuing reporting obligation under the Securities Exchange Act of
1934. Accordingly, additional capital will be required.
No commitments to provide additional funds have been made by management or
other stockholders, and the Company has no plans, proposals, arrangements or
understandings with respect to the sale or issuance of additional securities
prior to the location of a merger or acquisition candidate. Accordingly, there
can be no assurance that any additional funds will be available to the Company
to allow it to cover its expenses. Notwithstanding the forgoing, to the extent
that additional funds are required, the Company anticipates receiving such funds
in the form of advancements from current shareholders without issuance of
additional shares or other securities, or through the private placement of
restricted securities rather than through a public offering.
Regardless of whether the Company's cash assets prove to be inadequate to
meet the Company's operational needs, the Company might seek to compensate
providers of services by issuance's of stock in lieu of cash. For information as
to the Company's policy in regard to payment for consulting services, see
"Certain Relationships and Transactions."
- 15 -
<PAGE>
Year 2000 issues are not currently material to the Company's business,
operations or financial condition, and the Company does not currently anticipate
that it will incur any material expenses to remediate Year 2000 issues it may
encounter. However, Year 2000 issues may become material to the Company
following its completion of a business combination transaction. In that event,
the Company will be required to adopt a plan and a budget for addressing such
issues.
Item 3. Description of Property.
The Company currently maintains a mailing address at 551 5th Ave, Suite
2100, New York, NY 10176. The Company pays no rent for the use of this mailing
address. The Company does not believe that it will need to maintain an office at
any time in the foreseeable future in order to carry out its plan of operations
described herein. The Company's telephone number is 212-972-8570.
Item 4. Security ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of the date of this Registration
Statement, stock ownership of each executive officer and director of RCA
Trading, Co. of all executive officers and directors of RCA Trading, Co. as a
group, and of each person known by RCA Trading, Co. to be a beneficial owner of
5% or more of its Common Stock. Except as otherwise noted, each person listed
below is the sole beneficial owner of the shares and has sole investment and
voting power as such shares. No person listed below has any options, warrant or
other right to acquire additional securities of RC Holding, except as may be
otherwise noted.
Number of Shares % of Class Owned
Name and address Owned Beneficially
- - - - - - ----------------------- ---------------- ----------------
Thomas Phillips III 1,800,000 29.2%
259 Westchester Ave.
Tuckhoe, NY 10011
Christian Rama 1,800,000 29.2%
17 Fruitwood Ln.
Commack, NY 11725
Jason Rama 1,800,000 29.2%
1330 Harrison Ave.
Mamaroneck, NY 10543
Dominick Pope 10,000 ***
195 Tenth Ave.
New York, NY 10011
All Directors and 10,000 ***
Executive Officers (1 person)
(1) Dominick Pope is the President and Director in RCA Trading, Co.
- 16 -
<PAGE>
Item 5. Directors, Executive Officers, Promoters, and Control Persons.
The directors and executive officers serving the Company are as follows:
Name Age Position Held
-------------- --- -------------------
Dominick Pope 67 President, Director
James Seaon 56 Secretary, Director
The directors named above will serve until the next annual meeting of
the Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding between any
of the directors or officers of the Company and any other person pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders and management under which
non-management shareholders may directly or indirectly participate in or
influence the management of the Company's affairs.
The directors and officers will devote their time to the Company's
affairs on an "as needed" basis, which, depending on the circumstances, could
amount to as little as two hours per month, or more than forty hours per month,
but more than likely will fall within the range of five to ten hours per month.
There are no agreements or understandings for any officer or director to resign
at the request of another person, and none of the officers or directors are
acting on behalf of, or will act at the direction of, any other person.
Biographical Information
Dominick Pope, 67 years of age. Since 1977, Mr. Pope has served as President of
L.J. Loeffler In-House Communications Business, located in New York City. Mr.
Pope attended Baruch College. He is the brother of Mark Anthony a registered
representative of the Underwriter, Suppes Securities, Inc., who shall resign
from Suppes Securities, Inc. as of January 1, 1997.
James H. Season, 56, been treasurer and a director of Insurance Capital Corp.
since 1996. He has been a consultant and President of Ambassador Capital Group,
Inc, since 1999. From 1996 to 1999, he was Chief Financial Officer and a
director of Hungarian broadcasting Corp. From 1995 to 1996, he was a senior
financial officer and director (until 1999) of Hungarian Telephone and Cable
Corp. From 1993 to 1995, he was Chief Financial Officer and Vice Chairman of
Standard Brands Paint Company. Prior to 1993, he held a number of senior
financial and investment banking positions including being Managing Director of
Chase Manhattan Bank from 1982 to 1986.
Indemnification of Officers and Directors
As permitted by Florida law, the Company's Articles of Incorporation
provide that the Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being, or having been,
Company directors or officers unless, in any such action, they are adjudged to
have acted with gross negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, or persons controlling the Company. Pursuant
to the foregoing provisions, the Company has been informed that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore, unenforceable.
- 17 -
<PAGE>
Conflicts of Interest
None of the officers of the Company will devote more than a portion of
his time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of the officers
other business and investment activities. Such conflicts may require that the
Company attempt to employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be obtained upon
terms favorable to the Company.
The officers, directors and principal shareholders of the Company may
actively negotiate for the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial premium may be paid by the
purchaser in conjunction with any sale of shares by the Company's officers,
directors and principal shareholders made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a substantial
premium may be paid to members of Company management to acquire their shares
creates a conflict of interest for them and may compromise their state law
fiduciary duties to the Company's other shareholders. In making any such sale,
members of Company management may consider their own personal pecuniary benefit
rather than the best interests of the Company and the Company's other
shareholders, and the other shareholders are not expected to be afforded the
opportunity to approve or consent to any particular buy-out transaction
involving shares held by members of Company management.
Item 6. Executive Compensation.
No officer or director has received any compensation from the Company.
Until the Company acquires additional capital, it is not anticipated that any
officer or director will receive compensation from the Company other than
reimbursement for out-of-pocket expenses incurred on behalf of the Company. See
"Certain Relationships and Related Transactions." The Company has no stock
option, retirement, pension, or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.
Item 7. Certain Relationship and Related Transactions
No officer, director, promoter, or affiliate of the Company has or
proposes to have any direct or indirect material interest in any asset proposed
to be acquired by the Company through security holdings, contracts, options, or
otherwise.
The Company has adopted a policy under which any consulting or finder's
fee that may be paid to a third party for consulting services to assist
management in evaluating a prospective business opportunity would be paid in
stock rather than in cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict whether, or in what amount,
such stock issuance might be made.
It is not currently anticipated that any salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or executive
officers, or to any other affiliate of the Company except as described under
"Executive Compensation" above.
The Company does not maintain an office, but it does maintain a mailing
address at 551 5th Ave, Suite 1120, New York, NY 10176, for which it pays no
rent, and for which it does not anticipate paying rent in the future. It is
likely that the Company will not establish an office until it has completed a
business acquisition transaction, but it is not possible to predict what
arrangements will actually be made with respect to future office facilities.
Although management has no current plans to cause the Company to do so,
it is possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current stockholders to the acquisition candidate or principals
thereof, or to other individual or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
- 18 -
<PAGE>
Item 8. Description of Securities
Common Stock
The Company's Articles of incorporation authorize the issuance of
10,000,000 shares of Common Stock. Each record holder of Common Stock is
entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. The Articles of Incorporation do not permit
cumulative voting for the election of directors.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out of
legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common Stock
have no preemptive, conversion or redemptive rights. All of the issued and
outstanding shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and non-assessable.
To the extent that additional shares of the Company's Common Stock are issued,
the relative interests of then existing stockholders may be diluted.
Transfer Agent
The Company's Transfer Agent is Manhattan Transfer Registrar Co, 58
Dorchester Rd, Lake Ronkonkoma, NY 11779.
Reports to Stockholders
The Company plans to furnish it stockholders with an annual report for
each fiscal year ending December 31 containing financial statements audited by
its independent certified public accountants. In the event the Company enters
into a business combination with another Company, it is the present intention of
management to continue furnishing annual reports to stockholders. Additionally,
the Company may, in its sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems appropriate. The Company
intends to comply with the periodic reporting requirements of the Securities
Exchange Act of 1934.
Part II
Item 1. Market Price and Dividends on the Registrant's Common equity and other
Shareholder Matters
There has been no established public trading market for the Company's
securities since its inception on May 6, 1996. As of February 2, 2000, the
Company had 38 shareholders of record. No dividends have been paid to date and
the Company's Board of directors does not anticipate paying dividends in the
foreseeable future.
Item 2. Legal Proceedings.
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
- 19 -
<PAGE>
No director, officer or affiliate of the Company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or security holder is a party
adverse to the Company or has a material interest adverse to the Company in
reference to pending litigation.
Item 3. Changes in and Disagreements with Accountants.
In July 1998, the Company engaged Stewart Benjamin CPA, PC., 27 Shelter
Hill Rd. Plainview, NY, 11803 as its independent auditor to complete audits of
its financial statements as of its fiscal years ending December 31, up until
December 31, 1999 since inception (May 6, 1996).
Item 4. Recent sales of Unregistered Securities.
No shares have been issued in the last two years.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company provide
that the Company will indemnify its officers and directors for costs and
expenses incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a manner he
reasonably believed to be in the Company's best interest and is a party by
reason of his status as an officer or director, absent a finding of negligence
or misconduct in the performance of duty.
Part F/S
The Financial Statements of RCA Trading Co. required by regulation S-B
commence on page F-1 hereof and are incorporated herein by reference.
Part III
Items 1 & 2 Index to exhibits and description of Exhibits
2.1 Articles of Incorporation
2.1a Amendment to Articles of Incorporation
2.2 By-Laws
- 20 -
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: May 17, 2000 /s/ Dominick Pope
------------------------ ------------------------
Dominick Pope, President
- 21 -
<PAGE>
RCA TRADING CO.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND FOR THE PERIOD MAY 6, 1996 (INCEPTION)
THROUGH DECEMBER 31, 1999
<PAGE>
TABLE OF CONTENTS
Page No.
AUDITOR'S REPORT..................................................... 1
FINANCIAL STATEMENTS
Balance sheets.................................................. 2
Statements of Operations........................................ 3
Statements of Changes in Stockholders' Deficit.................. 4
Statements of Cash Flows........................................ 5
Notes to Financial Statements................................... 6
<PAGE>
STEWART H. BENJAMIN
CERTIFIED PUBLIC ACCOUNTANT, P.C.
27 SHELTER HILL ROAD
PLAINVIEW, NY 11803
-----------
TELEPHONE: (516) 933-9781
FACSIMILE: (516) 827-1203
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
RCA Trading Co.
New York, New York
I have audited the accompanying balance sheets of RCA Trading Co. (a Florida
corporation in the development stage) as of December 31, 1999 and 1998, and the
related statements of operations, stockholders' deficit, and cash flows for the
years then ended and for the period from May 6, 1996 (inception), to December
31, 1999. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of RCA Trading Co. as of December 31,
1999 and 1998, and the results of its operations and cash flows for the years
then ended and from May 6, 1996 (inception) to December 31, 1999, in conformity
with generally accepted accounting principles.
Stewart H. Benjamin
Certified Public Accountant, P.C.
Plainview, New York
May 8, 2000
1
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
December 31,
1999 1998
------------- --------------
<S> <C> <C>
Current assets:
Cash $ 1,888 $ 107
Securities available-for-sale (Note 2) 4,680 41,250
-------------- ---------------
Total current assets 6,568 41,357
-------------- ---------------
Other assets: (Note 1)
Organization costs, net 53 93
-------------- ---------------
$ 6,621 $ 41,450
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accrued expenses $ 1,000 $ --
Due to stockholder (Note 5) 8,076 1,576
------------- --------------
Total current liabilities 9,076 1,576
------------- --------------
Stockholders' equity (deficit): (Note 3)
Common stock; $.001 par value; authorized -
10,000,000 shares; issued and outstanding -
6,422,925 shares in 1999 and 6,163,500 in 1998 6,423 6,164
Additional paid-in capital 47,658 41,587
Deficit accumulated during the development stage (58,216) (46,127)
Unrealized gain on marketable securities 1,680 38,250
-------------- ---------------
Total stockholders' equity (deficit) (2,455) 39,874
-------------- ---------------
$ 6,621 $ 41,450
============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
May 6, 1996
(inception) to
Year Ended December 31, December 31,
-----------------------------
1999 1998 1999
------------ ----------- --------------
<S> <C> <C> <C>
Commission income $ 27,500 $ -- $ 27,500
------------- ------------- ------------
Costs and expenses:
Amortization $ 40 $ 40 $ 147
General and administrative 39,549 2,868 85,569
------------ ------------ ------------
39,589 2,908 85,716
------------ ------------- ------------
Net loss $ (12,089) $ (2,908) $ (58,216)
============= ============= ============
Loss per common share $ (.00) $ (.00)
============= =============
Weighted average common shares outstanding 6,228,356 6,161,352
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity (Deficit)
For the Period May 6, 1996 (Inception) to December 31, 1999
<TABLE>
<CAPTION>
Deficit Unrealized
Common Stock Additional Accumulated Gain on
------------------------------------ Paid-in from Marketable
Shares Amount Capital Inception Securities
----------- ----------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balances, May 6, 1996 (inception) -- $ -- $ -- $ -- $ --
Sale of common stock 400,000 400 33,500 -- --
Net loss for the period (32,748)
----------- --------- ------------ ----------- ----------
Balances, December 31, 1996 400,000 400 33,500 (32,748) --
Sale of common stock 5,758,000 5,758 4,842 -- --
Net loss (10,471)
----------- --------- ------------ ----------- ----------
Balances, December 31, 1997 6,158,000 6,158 38,342 (43,219) --
Sale of common stock 5,500 6 3,245 -- --
Change in unrealized gain on
marketable securities -- -- -- -- 38,250
Net loss (2,908)
----------- --------- ------------ ----------- ----------
Balances, December 31, 1998 6,163,500 6,164 41,587 (46,127) 38,250
Sale of common stock 259,425 259 6,071 -- --
Change in unrealized gain on
marketable securities -- -- -- -- (36,570)
Net loss (12,089)
----------- --------- ------------ ----------- ----------
Balances, December 31, 1999 6,422,925 $ 6,423 $ 47,658 $ (58,216) $ 1,680
=========== ========= ============ =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
May 6, 1996
Year Ended December 31, (inception) to
----------------------------- December 31,
1999 1998 1999
------------ ------------ -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (12,089) $ (2,908) $ (58,216)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 40 40 147
Common stock issued for services -- -- --
Changes in assets and liabilities:
Increase in accrued expenses 1,000 -- 1,000
Increase (decrease) in amounts
due to stockholder 6,500 (1,624) 8,076
----------- ----------- -----------
Net cash used in operating activities (4,549) (4,492) (48,993)
----------- ----------- -----------
Cash flows from investing activities:
Organization costs -- -- (200)
Investment in marketable securities -- -- (3,000)
----------- ----------- -----------
Net cash used in investing activities -- -- (3,200)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from sale of common stock 6,330 3,251 54,081
----------- ----------- -----------
Net cash provided by financing activities 6,330 3,251 54,081
----------- ----------- -----------
Net increase (decrease) in cash 1,781 (1,241) 1,888
Cash at beginning of year 107 1,348 --
----------- ----------- -----------
Cash at end of year $ 1,888 $ 107 $ 1,888
============ ============ ============
Supplemental disclosure of noncash investing
and financing activities:
Common stock issued for organizational costs $ -- $ -- $ --
============ ============ ============
Common stock issued for services and costs advanced $ -- $ -- $ --
============ ============ ============
Change in unrealized gain on securities available-for-sale $ (36,570) $ 38,250 $ 1,680
============ =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Description of Business
The financial statements presented are those of RCA Trading Co., a development
stage company (the "Company"). The Company was incorporated under the laws of
the State of Florida on May 6, 1996. The Company's activities, to date, have
been primarily directed towards the raising of capital.
As shown in the financial statements, as of December 31, 1998, the Company has
incurred an accumulated deficit of $58,216. The Company's continued existence is
dependent on its ability to generate sufficient cash flow to meet its
obligations on a timely basis. Accordingly, the financial statements do not
include any adjustments that might be necessary should the Company be unable to
continue in existence. The Company has been exploring sources to obtain
additional equity or debt financing. The Company has also indicated its
intention to participate in one or more as yet unidentified business ventures,
which management will select after reviewing the business opportunities for
their profit or growth potential.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reporting amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
Securities Available-For-Sale
Securities available-for-sale consist of marketable equity securities not
classified as trading securities. Securities available-for-sale are stated at
fair value, and unrealized holding gains and losses are reported as a separate
component of stockholders' equity.
Dividends on marketable equity securities are recognized in income when
declared. Realized gains and losses are determined on the basis of the actual
cost of the securities sold.
Organization Costs
Organization costs are amortized using the straight-line method over five years.
Fair Value of Financial Instruments
The fair value of the Company's payables due to a stockholder is not practicable
to estimate due to the related party nature of the underlying transactions and
the indefinite payment terms.
6
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Notes to Financial Statements
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date.
Loss Per Common Share
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.
Note 2 - Securities Available-For-Sale
The unrealized gain and fair value of securities available-for-sale were $1,680
and $4,680 at December 31, 1999. The Company sold no securities during the years
ended December 31, 1999 and 1998.
Note 3 - Stockholders' Equity (Deficit)
Common Stock
Since the date of inception, the Company has issued 6,422,925 shares of common
stock, 5,410,000 of which were for services and costs advanced, valued at $.001
per share. These shares were issued to officers and consultants of the Company.
Dividends may be paid on outstanding shares as declared by the Board of
Directors. Each share of common stock is entitled to one vote.
Note 4 - Income Taxes
There is no provision for income taxes since the Company has incurred net
operating losses. At December 31, 1999, the Company has net operating loss
carryforwards of $58,216 which may be available to offset future taxable income
through 2019.
Note 5 - Related Party Transactions
The Company was indebted to a stockholder for the purchase of marketable equity
securities and expenses advanced on behalf of the Company, in the amount of
$8,076 at December 31, 1999.
Office facilities are provided to the Company by an officer at no cost.
7
<PAGE>
RCA TRADING CO.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
AND FOR THE PERIOD MAY 6, 1996 (INCEPTION)
THROUGH MARCH 31, 2000
<PAGE>
TABLE OF CONTENTS
Page No.
ACCOUNTANT'S REPORT................................................... 1
FINANCIAL STATEMENTS
Balance sheets................................................... 2
Statements of Operations......................................... 3
Statements of Changes in Stockholders' Deficit................... 4
Statements of Cash Flows......................................... 5
Notes to Financial Statements.................................... 6
<PAGE>
STEWART H. BENJAMIN
CERTIFIED PUBLIC ACCOUNTANT, P.C.
27 SHELTER HILL ROAD
PLAINVIEW, NY 11803
----------
TELEPHONE: (516) 933-9781
FACSIMILE: (516) 827-1203
To the Board of Directors and Stockholders
RCA Trading Co.
New York, New York
I have reviewed the accompanying balance sheets of RCA Trading Co. (a Florida
corporation in the development stage) as of March 31, 2000 and 1999, and the
related statements of operations, stockholders' deficit and cash flows, for the
three months then ended and for the period from May 6, 1996 (inception), to
March 31, 2000 in accordance with Statements on Standards for Accounting and
Review Services, issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of RCA Trading Co.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my reviews, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
Stewart H. Benjamin
Certified Public Accountant, P.C.
Plainview, New York
May 10, 2000
1
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- ---------
<S> <C> <C>
Current assets:
Cash $ 634 $ 1,888
Securities available-for-sale (Note 2) 4,500 4,680
-------------- ---------------
Total current assets 5,134 6,568
-------------- ---------------
Other assets: (Note 1)
Organization costs, net 43 53
-------------- ---------------
$ 5,177 $ 6,621
============== ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accrued expenses $ -- $ 1,000
Due to stockholder (Note 5) 8,076 8,076
-------------- ---------------
Total current liabilities 8,076 9,076
-------------- ---------------
Stockholders' deficit: (Note 3)
Common stock; $.001 par value; authorized -
10,000,000 shares; issued and outstanding -
6,422,925 shares 6,423 6,423
Additional paid-in capital 47,983 47,658
Deficit accumulated during the development stage (58,805) (58,216)
Unrealized gain on marketable securities 1,500 1,680
--------------- ---------------
Total stockholders' deficit (2,899) (2,455)
--------------- ---------------
$ 5,177 $ 6,621
============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Three Three May 6, 1996
Months Ended Months Ended (inception) to
March 31, March 31, March 31,
2000 1999 2000
--------------- --------------- ----------------
<S> <C> <C> <C>
Commission income $ -- $ -- $ 27,500
------------ ------------ ------------
Costs and expenses:
Amortization $ 10 $ 10 $ 157
General and administrative 579 19,310 86,148
----------- ----------- ------------
589 19,320 86,305
Net loss $ (589) $ (19,320) $ (58,805)
============ ============ ============
Loss per common share $ (.00) $ (.00)
============ ============
Weighted average common shares outstanding 6,422,925 6,163,500
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Changes in Stockholders' Deficit
For the Period May 6, 1996 (Inception) to March 31, 2000
<TABLE>
<CAPTION>
Deficit Unrealized
Common Stock Additional Accumulated Gain on
------------------------------------ Paid-in from Marketable
Shares Amount Capital Inception Securities
----------- ----------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balances, May 6, 1996 (inception) -- $ -- $ -- $ -- $ --
Sale of common stock 400,000 400 33,500 -- --
Net loss for the period (32,748)
------------ ---------- --------------- ----------- ----------
Balances, December 31, 1996 400,000 400 33,500 (32,748) --
Sale of common stock 5,758,000 5,758 4,842 -- --
Net loss (10,471)
------------ ---------- --------------- ----------- ----------
Balances, December 31, 1997 6,158,000 6,158 38,342 (43,219) --
Sale of common stock 5,500 6 3,245 -- --
Change in unrealized gain on
marketable securities -- -- -- -- 38,250
Net loss (2,908)
------------ ---------- --------------- ----------- ----------
Balances, December 31, 1998 6,163,500 6,164 41,587 (46,127) 38,250
Sale of common stock 259,425 259 6,071 -- --
Change in unrealized gain on
marketable securities -- -- -- -- (36,570)
Net loss (12,089)
------------ ---------- --------------- ----------- ----------
Balances, December 31, 1999 6,422,925 $ 6,423 $ 47,658 $ (58,216) $ 1,680
Common stock subscribed -- -- 325 -- --
Change in unrealized gain on
marketable securities -- -- -- -- (180)
Net loss (589)
------------ ---------- --------------- ----------- ----------
Balances, March 31, 2000 6,422,925 $ 6,423 $ 47,983 $ (58,805) $ 1,500
============ ========== =============== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Three Three May 6, 1996
Months Ended Months Ended (inception) to
March 31, March 31, March 31,
2000 1999 2000
------------ ------------ -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (589) $ (19,320) $ (58,805)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Amortization 10 10 157
Common stock issued for services -- -- --
Changes in assets and liabilities:
Increase (decrease) in accrued expenses (1,000) 13,000 --
Increase (decrease) in amounts
due to stockholder -- 6,500 8,076
----------- ------------ -------------
Net cash provided by (used in) operating activities (1,579) 190 (50,572)
----------- ------------ -------------
Cash flows from investing activities:
Organization costs -- -- (200)
Investment in marketable securities -- -- (3,000)
----------- ----------- ------------
Net cash used in investing activities -- -- (3,200)
----------- ----------- ------------
Cash flows from financing activities:
Proceeds from common stock subscriptions 325 -- 325
Proceeds from sale of common stock -- -- 54,081
----------- ----------- -----------
Net cash provided by financing activities 325 -- 54,406
----------- ----------- -----------
Net increase (decrease) in cash (1,254) 190 634
Cash at beginning of period 1,888 107 --
----------- ------------ ============
Cash at end of period $ 634 $ 297 $ 634
============ ============ ============
Supplemental disclosure of noncash investing
and financing activities:
Common stock issued for organizational costs $ -- $ -- $ --
============ ============ ============
Common stock issued for services and costs advanced $ -- $ -- $ --
============ ============ ============
Change in unrealized gain on securities available-for-sale $ (180) $ -- $ 1,500
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Description of Business
The financial statements presented are those of RCA Trading Co., a development
stage company (the "Company"). The Company was incorporated under the laws of
the State of Florida on May 6, 1996. The Company's activities, to date, have
been primarily directed towards the raising of capital.
As shown in the financial statements, as of March 31, 2000, the Company has
incurred an accumulated deficit of $58,805 and has $634 in cash. The Company's
continued existence is dependent on its ability to generate sufficient cash flow
to meet its obligations on a timely basis. Accordingly, the financial statements
do not include any adjustments that might be necessary should the Company be
unable to continue in existence. The Company has been exploring sources to
obtain additional equity or debt financing. The Company has also indicated its
intention to participate in one or more as yet unidentified business ventures,
which management will select after reviewing the business opportunities for
their profit or growth potential.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reporting amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
Securities Available-For-Sale
Securities available-for-sale consist of marketable equity securities not
classified as trading securities. Securities available-for-sale are stated at
fair value, and unrealized holding gains and losses are reported as a separate
component of stockholders' equity.
Dividends on marketable equity securities are recognized in income when
declared. Realized gains and losses are determined on the basis of the actual
cost of the securities sold.
Organization Costs
Organization costs are amortized using the straight-line method over five years.
Fair Value of Financial Instruments
The fair value of the Company's payables due to a stockholder is not practicable
to estimate due to the related party nature of the underlying transactions and
the indefinite payment terms.
6
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Notes to Financial Statements
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date.
Loss Per Common Share
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.
Note 2 - Securities Available-For-Sale
The unrealized gain and fair value of securities available-for-sale were $1,500
and $4,500 at March 31, 2000. The Company sold no securities during the three
months ended March 31, 2000 and 1999.
Note 3 - Stockholders' Deficit
Common Stock
Since the date of inception, the Company has issued 6,422,925 shares of common
stock, 5,410,000 of which were for services and costs advanced, valued at $.001
per share. These shares were issued to officers and consultants of the Company.
Dividends may be paid on outstanding shares as declared by the Board of
Directors. Each share of common stock is entitled to one vote.
Note 4 - Income Taxes
There is no provision for income taxes since the Company has incurred net
operating losses. At March 31, 2000, the Company has net operating loss
carryforwards of $58,805 which may be available to offset future taxable income
through 2020.
Note 5 - Related Party Transactions
The Company was indebted to a stockholder for the purchase of marketable equity
securities and expenses advanced on behalf of the Company, in the amount of
$8,076 at March 31, 2000.
Office facilities are provided to the Company by an officer at no cost.
7
ARTICLES OF INCOPORATION
OF
RCA TRADING CO.
The undersigned does hereby subscribe to, acknowledge and file the
following Articles of Incorporation for the purpose of creating a corporation
under the laws of the State of Florida.
ARTICLE ONE
The name of the corporation is: RCA TRADING CO
The principle address of the corporation is: 332 W. Boynton Beach Blvd.,
Suite 4, Boynton Beach, Florida 33435
ARTICLE TWO
This corporation shall commence its existence upon filing and shall exist
perpetually thereafter unless sooner dissolved according to law.
ARTICLE THREE
The purpose for which the corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under the
Florida Corporation Act.
ARTICLE FOUR
This corporation is authorized to issue Ten Million (10,000,000) Value
Common Stock, which shall be designated as "Common Shares" with a par value of
$.001 per share. All of said stock shall be payable in cash, property (real or
personal) or labor or services in lieu thereof at a just valuation to be fixed
by the Board of Directors.
Page 1
<PAGE>
ARTICLE FIVE
Except as otherwise provided by law, the entire voting power for the
election of directors and for all other purposes shall be vested exclusively in
the holders of the outstanding Common Shares.
ARTICLE SIX
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he already holds,
shall have the right to purchase his pro rata share thereof (as nearly as may be
done without issuance of fractional shares) at the prices at which it is offered
to others.
ARTICLE SEVEN
The street address and mailing address of the initial principal registered
office is: 332 W. Boynton Beach Blvd, Suite 4, Boynton Beach, Florida 33435 and
the name of its initial registered agent of this corporation is: Linda Brown.
I hereby am familiar with and accept the duties and responsibilities as
registered agent for said corporation.
/s/ Linda Brown
- - - - - - --------------------------
Linda Brown
Page 2
<PAGE>
ARTICLE EIGHT
This corporation shall have at lease one director initially with the exact
number of directors to be specified by the shareholders from time to time unless
the shareholders shall by a majority vote, determine that this corporation be
managed by the shareholders. The names and addresses of the initial directors of
this corporation is:
Name Mailing Address
- - - - - - ------ ---------------------
Mark Anthony 225 Park Avenue, Suite 211, New York, NY 10169
ARTICLE NINE
The Board of Directors is empowered to make, alter or repeal the Bylaws of
the corporation without restriction of their powers conferred by statue.
ARTICLE TEN
The name and address of the incorporator for this corporation is:
Linda Brown
332 W. Boynton Beach Blvd.
Suite 4
Boynton Beach, Florida 33435
/s/ Linda Brown
- - - - - - -------------------------
Incorporator: Linda Brown
Page 3
<PAGE>
ARTICLE ELEVEN
No contract or other transaction between this corporation and any other
corporation, and no act of this corporation shall in any way be affected or
invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors, or officers of, such
other corporation. Any director individually, or any firm of which any director
may be a member, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of this corporation, provided that
the fact that he or such firm is so interested shall be disclosed or shall have
been known to the Board of Directors or a majority thereof, and any director of
this corporation who is also a director or an officer of such corporation, or
who it is so interested may be counted in determining the exisitence of a quorum
at any meeting of the Board of Directors of this corporation which shall
authorize any suxh contract or transaction with like force and effect as if he
were not such director or officer of such other corporation, or not so
interested.
ARTICLE TWELVE
The private property of the stockholders shall not be subject to the
payment of the corporate debts to any extent whatsoever. The corporation shall
have a first lien not the shares of its stockholders and upon the dividends due
them for any indebtedness of such stockholders to the corporation.
IN WITNESS WHEREOF, the undersigned subscriber has executed thses Articles
of Incorporation this 24th day of April, 1996.
/s/ Linda Brown
- - - - - - -------------------------
Linda Brown
Page 4
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR
THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM
PROCESS MAY BE SERVED.
In pursuance of Chapter 48.091 of the Florida Statutes, the following is
submitted, in compliance with said act:
FIRST: that RCA TRADING CO., desiring to organize under the laws of the
State of Florida, with its principal office, as indicated in the Articles of
Incorporation, at City of Boynton Beach, County of Palm Beach, State of Florida,
has named Linda Brown located at: 332 W. Boynton Beach, Suite 4, Boynton Beach,
Florida 33435, City of Boynton Beach, County of Palm Beach, State of Florida, as
its agent to accept service of process with the state.
ACKNOWLEDGEMENT: MUST BE SIGNED BY DESIGNATED AGENT
Having been named to accept service of process for the above corporation,
at place designated in this certificate, I hereby accept to act in this
capacity, and agree to comply with the provision of said Act relative to keeping
open said office.
/s/ Linda Brown
- - - - - - -------------------------
Linda Brown
Registered Agent
MINUTES
AND
BYLAWS
OF
RCA TRADING CO.
INCORPORATED UNDER THE LAWS OF
FLORIDA
MAY 6, 1996
<PAGE>
RCA TRADING Co.
BYLAWS
ARTICLE I
Offices, Corporate Seal
Section 1.01. Registered Office. The registered office of the corporation
in Florida shall be that set forth in the Articles of Incorporation or in the
most recent amendment of the Articles of Incorporation or resolution of the
directors filed with the Secretary of State of Florida changing the registered
office.
Section 1.02. Other Offices. The corporation may have such other offices,
within or without the State of Florida, as the directors shall
from time to time determine.
Section 1.03. Corporate Seal. The corporate seal shall be circular in form
and shall have inscribed heron the name of the corporation and the word
"Florida" and the words "Corporate Seal" and the year of incorporation "1996."
<PAGE>
ARTICLE II
Meetings of Shareholders
Section 201. Place and Time of Meetings Meetings of the shareholders
maybe held at any place, within or without the State of Florida, designated by
the directors, and in the absence of such designation shall be held at the
registered office of the corporation in the State of Florida. The directors
shall designate the time of day for each meeting and in the absence of such
designation every meeting of shareholders shall be held at 10 o'clock A.M.
Section 2 02. Annual Meetings. (a) The first annual meeting of the
shareholders shall be held on a day designated by the directors which shall be
not more than 16 months after the date of incorporation. Each subsequent annual
meeting, subject to the power of the shareholders to change the date, shall be
held on the same day, or if that day shall fall upon a legal holiday, on the
next succeeding business day.
(b) At the annual meeting, the shareholders, voting as provided in the
Articles of Incorporation, shall designate the number of directors to constitute
the Board of Directors, shall elect directors and transact such other business
as may properly come before them.
Section 2.03. Special Meetings. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, any two directors, or by one or more shareholders
holding ten percent (10%) or more of the shares entitled to vote on the matters
to be presented to the meetings.
Section 2.04. Ouorum: Adiourned Meetings The holders of a majority of
the shares outstanding and entitled to vote shall constitute a quorum for the
transaction of business at any annual or special meeting. In case a quorum shall
not be present at a meeting, those present shall adjourn to such day as they
shall by majority vote agree upon, and a notice of such adjournment shall be
mailed to each shareholder entitled to vote at least five (5) days before such
adjourned meeting. If a quorum is present, a meeting may be adjourned from time
to time without notice other than announcement at the meeting. At adjourned
meetings at which a quorum is present, any business may be transacted which
might have been transacted at the meeting as originally noticed If a quorum is
present, the shareholders may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy Each shareholder, unless the Articles of Incorporation provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation Upon the demand of any shareholder, the
vote upon any question before the meeting shall be by ballot. All questions
shall be decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote except where otherwise
required by statute, the Articles of Incorporation or these Bylaws.
<PAGE>
Section 2.06. Closing of Books. The Board of Directors may fix a time,
not exceeding sixty (60) days preceding the date of any meeting of shareholders,
as a record date for the determination of the shareholders entitled to notice
of, and to vote at, such meeting, notwithstanding any transfer of shares on the
books of the corporation after any record date so fixed. The Board of Directors
may close the books of the corporation against the transfer of shares during the
whole or any part of such period. If the Board of Directors fails to fix a
record date for determination of the shareholders entitle to notice of, and to
vote at, any meeting of shareholders, the record date shall be the twentieth
(20th) day preceding the date of such meeting.
Section 2.07. Notice of Meetings. There shall be mailed to each
shareholder, shown by the books of the corporation to be holder of record of
voting shares, at his address as shown by the books of the corporation, a notice
setting out the time and place of each annual meeting and each special meeting,
which notice shall be mailed at least five (5) days prior thereto; except that
notice of a meeting at which an agreement of merger or consolidation is to be
considered shall be mailed to all shareholders of record, whether entitled to
vote or not, at least two (2) weeks prior thereto; and except that notice of a
meeting at which a proposal to dispose of all, or substantially all, of the
property and assets of the corporation is to be considered shall e mailed to all
shareholders of record, whether entitled to vote or not, at least ten (10) days
prior thereto; and except the notice of a meeting at which a proposal to
dissolve the corporation or to amend the Articles of Incorporation is to be
considered shall be mailed to all shareholders of record, whether entitle to
vote or not, at least ten (10) days prior thereto. Every notice of any special
meeting shall state the purpose or purposes for which the meeting has been
called pursuant to Section 2.03, and the business transacted at all special
meetings shall be confined to the purpose stated in the call.
Section 2.08. Waiver of Notice. Notice of any annual or special
meeting may be waived either before, at or after such meeting in writing signed
by each shareholder or representative thereof entitled to vote the shares so
represented.
Section 2.09. Written Action. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by all of the shareholders.
<PAGE>
ARTICLE III
Directors
Section 3.01. General Powers The property, affairs and business of the
corporation shall be managed by the Board of Directors.
Section 3.02. Number, qualifications and Term of Office. Until the
first meeting of shareholders, the number of directors shall be the number named
in the Articles of Incorporation. Thereafter, the number of directors shall be
established by resolution of the shareholders but shall not be less than the
lesser of(i) the number of shareholders of record and beneficially or (ii)
three. In the absence of such resolution, the number of directors shall be the
number last fixed by the shareholders or the Articles of Incorporation.
Directors need not be shareholders. Each of the directors should hold office
until the annual meeting of shareholders next held after his election and until
his successor shall have been elected and shall qualiPy, or until he shall
resin, or shall have been removed as hereinafter provide.
Section 3.03. Annual Meeting. As soon as practicable after each annual
election of directors, the Board of Directors shall meet at the registered
office of the corporation, or at such other place within or without the State of
Florida as may be designated by the Board of Directors, for the purpose of
electing the officers of the corporation and for the transaction of such other
business as shall come before the meeting.
Section 3.04. Regular Meetings. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Florida as may be fixed by resolution adopted by a majority
of the whole Board of Directors.
Section 3.05. Special Meetings Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designed in the notice of such meeting.
Section 3.06. Notice of Meetings. No notice need be given of any
annual or regular meeting of the Board of Directors. Notice of each special
meeting of the Board of Directors shall be given by the Secretary who shall give
at least twenty-four (24) hours' notice thereof to each director by mail,
telephone, telegram or in person.
Section 3.07. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived either before, at or after such meeting in writing,
signed by each director. A director, by his attendance and participation in the
action taken at any meeting of the Board of Directors. shall be deemed to have
waived notice of such meeting.
Section 3.08. Ouorum. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business, except that when a
vacancy or vacancies exist, a majority of the remaining directors (provided
<PAGE>
such majority consists of not less than the lesser of(i) the number of directors
required by Section 3 02 or (ii) two directors) shall constitute a quorum.
Section 3.09. Vacancies. If there be a vacancy among the directors of
this corporation by reason of death, resignation, increase in the number of
directors required by Section 3 02 or otherwise, such vacancy shall be filled
for the unexpired term by a majority of the remaining directors of the Board,
and each person so elected shall be a director until his successor is elected by
the shareholders, who may make such election at their next annual meeting or at
any meeting duly called for that purpose.
Section 3.10. Removal. The entire Board of Directors or any individual
director may be removed from office, with or without cause, by a vote of the
shareholders holding a majority of the shares entitle to vote at an election of
directors, except as otherwise provided by law where the shareholders have the
right to cumulate their votes. In the event that the entire Board or any one or
more directors be so removed, new directors shall be elected at the same
meeting.
Section 3. 11. Executive Committee. The Board of Directors by
unanimous affirmative action of the entire Board, may establish an executive
committee consisting of two (2) or more directors. Such committee may meet at
stated times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation and generally perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such committee authority to exercise all the
powers of the Board of Directors, except the power to amend the Bylaws, while
the Board of Directors is not in session. Vacancies in the membership of the
committee shall be filled by the Board of Directors at a regular meeting or at a
special meeting called for that purpose.
Section 3.12. Other Committees The Board of Directors may establish
other committees from time to time making such regulations as it deems advisable
with respect to the membership, authority and procedures of such committees.
Section 3.13. Written Action. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by all of the
directors or committee members.
Section 3.14. ComDensation. Directors who are not salaried officers of
this corporation shall receive such fixed sum per meeting attended or such fixed
annual sum as shall be determined from time to time by resolution of the Board
of the Directors. All directors shall receive their expenses, if any, of
attendance at meetings of the Board of Directors, or any committee thereof
Nothing herein contained shall be construed to preclude any director from
serving this corporation in any other capacity and receiving proper compensation
therefor.
<PAGE>
ARTICLE IV
Officers
Section 4 01. Number The officers of the corporation shall consist of
a Chairman of the Board (if one is elected by the Board), the President, one or
more Vice Presidents (if desired by the Board), a Secretary, a Treasurer and
such other officers and agents as may from time to time be elected by the Board
of Directors. Any two offices, except those of President and Vice President, may
be held by one person.
Section 4.02. Election. Term of Office and Oualifications. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such other
officers as may be deemed advisable. Such officers shall hold office until the
next annual meeting of the directors or until their successors are elected and
qualify. The President and all other officers who may be directors shall
continue to hold office until the election and qualification of their
successors, notwithstanding an earlier termination of their directorship.
Section 4.03. Removal and Vacancies. Any officer may be removed from
his office by a majority of the whole Board of Directors, with or without cause.
Such removal, however, shall be without prejudice to the contract rights of the
person so removed. If there be a vacancy among the officers of the corporation
by reason of death, resignation, or other wise, such vacancy shall be filled for
the unexpired term by the Board of Directors.
Section 4.04. Chairman of the Board. The Chairman of the Board, if one
is elected, shall preside at all meetings of the shareholders and directors and
shall have such other duties as may be prescribed from time to time by the Board
of Directors.
Section 4.05. President. The President shall have general active
management of the business of the corporation. In the absence of the Chairman of
the Board, he shall preside at all meetings of the shareholders and directors.
He shall be the chief executive officer of the corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. He
shall be ex officio a member of all standing committees. He may execute and
deliver in the name of the corporation any deeds, mortgages, bonds, contracts or
other instruments pertaining to the business of the corporation and, in general,
shall perform all duties usually incident to the office of President. He shall
have such other duties as may from time to time be prescribed by the Board of
Directors.
Section 4 06 Vice President. Each Vice President shall have such
powers and shall perform such duties as may be specified in the by-laws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
<PAGE>
Section 4 07. Secretary. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of shareholders and directors. He shall
keep the seal of the corporation and shall affix the same to any instrument
requiring it and may, when necessary, attest the seal by his signature. He shall
perform such other duties as may from time to time be prescribed by the Board of
Directors or by the President.
Section 4.08. Treasurer. The Treasurer shall keep accurate accounts of
all moneys of the corporation received or disbursed. He shall deposit all
moneys, drafts and checks in the name of, and to the credit of, the corporation
in such banks and depositories as a majority of the whole Board of Directors
shall from time to time designate. He shall have power to endorse for deposit
all notes, checks and drafts received by the corporation. He shall disburse the
finds of the corporation as ordered by the Board of Directors, making proper
vouchers therefor. He shall render to the President and the directors, whenever
required, an account of all his transactions as Treasurer and of the financial
condition of the corporation and shall perform such other duties as may from
time to time be prescribed by the Board of Directors or by the President.
Section 4.09. Compensation. The officers of this corporation shall receive
such compensation for their services as may be determined from time to time by
resolution of the Board of Directors.
<PAGE>
ARTICLE V
Shares and Their Transfer
Section 5.01 Certificates for Shares. Every owner of shares of the
corporation shall be entitled to a certificate, to be in such form as shall be
prescribed by the Board of Directors, certifying the number of shares of the
corporation owned by him. The certificates for such shares shall be numbered in
the order in which they shall be issues and shall be signed in the name of the
corporation by the President or a Vice President and by the Secretary or an
Assistant Secretary or by such officers as the Board of Directors may designate.
Such signatures may be by facsimile if authorized by the Board of Directors.
Every certificate surrendered to the corporation for exchange or transfer shall
be canceled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
canceled, except in cases provided for in section 5.04.
Section 5.02. Issuance of Shares. The Board of Directors is authorized
to cause to be issued shares of the corporation up to the full amount authorized
by the Articles of Incorporation in such amounts as may be determined by the
Board of Directors and as may be permitted by law. No shares shall be allotted
except in consideration of cash or other property, tangible or intangible,
received or to be received by the corporation of services rendered or to be
rendered to the corporation, or of an amount transferred from surplus to stated
capital upon a share dividend. At such time of such allotment of shares, the
Board of Directors making such allotments shall state, by resolution, their
determination of the fair value to the corporation in monetary terms of any
consideration other than cash for which shares are allotted. The amount of
consideration to be received in cash, or otherwise, shall not be less than the
par value of the shares so allotted.
Section 5.03. Transfer of Shares. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares The corporation may treat as the absolute owner of
shares of the corporation the person or persons in whose name shares are
registered on the books of the corporation.
Section 5.04. Loss of Certificates. Any shareholder claiming a
certificate for shares to be lost or destroyed shall make an affidavit of that
fact in such form as the Board of Directors shall require and shall, if the
Board of Directors so requires, give the corporation a bond of indemnity in
form, in an amount and with one or more sureties satisfactory to the Board of
Directors in indemnify the corporation against any claim which may be made
against it on account of reissue of such certificate, whereupon a new
certificate may be made against it on account of the reissue of such
certificate, whereupon a new certificate may be issued in the same tenor and for
the same number of shares as the one alleged to have been destroyed or lost.
<PAGE>
ARTICLE VI
Dividends, Surplus. Etc.
Section 6.01 Dividends. Subject to the provisions of the Articles of
Incorporation, of these Bylaws and of law, the Board of Directors may declare
dividends from paid-in surplus. earned surplus or from net earnings for the
current or preceding fiscal year of the corporation whenever, and in such
amounts as, in its opinion, the condition of the affairs of the corporation
shall render it advisable.
Section 6.02. Use of Surplus. Reserves. Subject to the provisions of the
Articles of Incorporation and of these Bylaws, the Board of Directors, in its
discretion, may use and apply any of the net assets or net profits of the
corporation applicable for such purpose in purchasing or acquiring any of the
shares of the corporation in accordance with law, or any of its bonds,
debentures. notes, scrip or other securities or evidences of indebtedness, or
from time to time may set aside from its net assets or net profits such sum or
sums as it. in its absolute discretion, may think proper as a reserve fund for
any purpose it may think proper
Section 6.03. Unrealized ApDreciation. The Board of Directors, in
computing the fair value of the assets of the corporation to determine whether
the corporation may pay a dividend or purchase its shares, shall not include
unrealized appreciation of assets, except that readily marketable securities of
other issuers may be valued at not more than market value.
Securities 6.04. Record Date. Subject to any provisions of the
Articles of Incorporation, the Board of Directors may fix a date not exceeding
40 days preceding the date fixed fro the payment of any dividend as the record
date for the determination of the shareholders entitled to receive payment of
the dividend, and in such case only shareholders of record on the date so fixed
shall be entitled to receive payment of such dividend notwithstanding any
transfer of shares on the books of the corporation after the record date. The
Board of Directors may close the books of the corporation against the transfer
of shares during the whole or any part of such period.
<PAGE>
ARTICLE VII
Books and Records, Audit, Fiscal Year
Section 7.01. Books and Records. The Board of Directors of the corporation
shall cause to be kept:
(1) a share register, giving the names and addresses of the shareholders, the
number and classes held by each, and the dates on which the certificates
therefore were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.02. Documents Kept at Registered Office. The Board of Directors
shall cause to be kept at the registered office of the corporation originals or
copies of:
(1) records of all proceedings of shareholders and directors;
(2) Bylaws of the corporation and all amendments thereto; and
(3) reports made to any or all of the shareholders within the next preceding
three (3) years.
Section 7.03 Audit. The Board of Directors shall cause the records and
books of account of the corporation to be audited at least once in each fiscal
year and at such other times as it may deem necessary or appropriate.
Section 7.04. Fiscal Year. The fiscal year of the corporation shall be
determined by the Board of Directors.
<PAGE>
ARTICLE VIII
Inspection of Books
Section 801. Examination by Shareholders. Every shareholder of the
corporation and every holder of a voting trust certificate shall have a right to
examine, in person or by agent or attorney, at any reasonable time or times, for
any proper purpose, and at the place or places where usually kept, the share
register, books of account and records of the proceedings of the shareholders
and directors and to make extracts therefrom.
Section 8.02. Information to Shareholders. Upon request by a
shareholder of the corporation, the Board of Directors shall furnish to him a
statement of profit and loss for the last fiscal year and a balance sheet
containing a summary of the assets and liabilities as of the close of such
fiscal year.
<PAGE>
ARTICLE XI
Amendments
Section 11 .01. These Bylaws may be amended or altered by a vote of
the majority of the whole Board of Directors at any meeting provided that notice
of such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the shareholders to change or repeal such Bylaws by a majority
vote of the shareholders present or represented at any annual or special meeting
of shareholders called for such purpose, and the Board of Directors shall not
make or alter any Bylaws fixing their number, qualifications or terms of office.
