As filed with the Securities and Exchange Commission on June 28, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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C.A.T.-N-K., Inc.
(Name of small business issuer in our charter)
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Texas 6770 75-2679524
(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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223 East FM 1382, Suite 12720, Cedar Hill, Texas 75104;
(972) 293-1151 (Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Calvin K. Mees, President, 223 East FM 1382,
Suite 12720, Cedar Hill, Texas 75104;
(972) 293-1151
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices and name, address and telephone number
of agent for service)
Copies of Communications to:
Kevin S. Woltjen, P.C.
900 Jackson Street, Suite 600
Dallas, Texas 75202
Telephone: 214-712-5673
Facsimile: 214-712-5674
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If this Prospectus is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please check
the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Prospectus is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this Prospectus is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
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If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Amount of Proposed Proposed
Title of each class of securities to offering maximum Amount of
securities to be be registered price per aggregate registration
registered share offering price fee
<S> <C> <C> <C> <C>
----------------------------------- -------------------- ------------------ ---------------------- -------------------
Common stock, par
value $0.001 per share 1,000,000 $0.10 $100,000 26.40
=================================== ==================== ================== ====================== ===================
</TABLE>
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant will
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS SUBJECT TO COMPLETION DATED ___________, 2000
1,000,000 SHARES
C.A.T.-N-K., INC.
COMMON STOCK
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The delivery of this Prospectus or a sale of the mentioned securities shall
not create an implication that there has been any change in the information in
this Prospectus. If a material change does occur, however, this Prospectus will
be amended or supplemented accordingly for all existing shareholders and
prospective investors.
Our common stock has never been traded or been quoted over-the-counter or
on any exchange.
We were incorporated as C.A.T.-N-K., Inc. to develop the Travel Enhanced
Network ("iTravel10.com"), an Internet website which provided for the sharing of
travel information between the public, a network of travel agencies and
preferred travel suppliers. We are no longer actively involved in the travel
industry and have had limited operations to date. We are a blank check company
as defined in Rule 419 of Regulation C under the Securities Act of 1933.
This Prospectus relates to our offer and sale of a maximum of 1,000,000
shares of our common stock, $0.001 par value. Because we are a blank check
company, this offering is subject to the provisions of Rule 419. Accordingly,
the offering proceeds, less 10% of the deposited funds which will be delivered
to us, and the securities purchased by investors will be held in an escrow
account pursuant to Rule 419.
We will not receive any of the funds deposited into the escrow account
until a specified type of acquisition has been made. Pursuant to Rule 419, a
Re-Offer Prospectus describing the acquisition candidate, including the
candidate's audited financial statements, must be delivered to all investors
prior to consummation of an acquisition. Unless a sufficient number of investors
(sufficient in number to permit an acquisition of a business or asset having a
value of 80% of the maximum offering proceeds) elect to remain investors, all
investors will be entitled to the return of a pro-rata portion of the deposited
funds (and any interest earned or dividends paid thereon) and none of the
deposited securities will be issued to investors. If a sufficient number of
investors elect to remain investors, the acquisition described in the Re-Offer
Prospectus will be consummated; however, we must return the pro-rata portion of
the deposited funds (and any interest earned or dividends paid thereon) to any
investor who does not elect to remain an investor. In the event an acquisition
is not consummated within 18 months of the effective date of the registration
statement of which this Prospectus is a part, the deposited funds (and any
interest earned or dividends paid thereon) will be returned to investors. See
"Investors' Rights and Substantive Protection under Rule 419."
These securities are highly speculative, involve a high degree of risk and
immediate substantial dilution. See "Risk Factors" beginning on page 12. Neither
the
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Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The shares are being offered directly by us on a best efforts basis. See
"Distribution of Securities." All offers and sales of shares shall be effected
only by our officers and directors who are not required to register as
broker/dealers and each is permitted to offer securities under applicable local
law. See "Risk Factors."
PROHIBITION AGAINST SELLING DEPOSITED SECURITIES
No public trading market for the common stock exists. Rule 15g-8 under the
Exchange Act makes it unlawful for any person to sell or offer to sell the
securities deposited in an escrow account (or any interest in or related to the
deposited securities). Thus, investors are prohibited from making any
arrangements to sell the deposited securities until they are released from the
escrow account.
We have no present plans, proposals, arrangements or understandings with
any person with regard to the development of a trading marking for the common
stock offered hereby. Management does not intend to undertake any efforts to
cause a market to develop in the common stock until such time as we have
successfully implemented our business plan described herein. There can be no
assurance that any trading market in the shares will develop hereafter, or if it
does develop, that it will be sustained.
The public offering price has been arbitrarily determined by us and bears
no relationship to our assets, prospective earnings, book value or any other
recognized criteria of value. This offering will be conducted by us without the
use of a professional underwriter or securities dealer. See "Risk Factors" and
"Distribution of Securities."
STATE SECURITIES REGULATION
This Prospectus does not constitute an offer to sell or a solicitation of
any offer to buy any of these securities in a jurisdiction where it is unlawful
to make such an offer or solicitation.
We intend to offer and sell shares in the states of Colorado and North
Dakota, to the extent and pursuant to their respective registration requirements
or limited offering exemptions. The shares are offered by us subject to prior
sale, acceptance of an offer to purchase, and withdrawal, cancellation or
modification of the offer, without notice. We reserve the right to reject any
offer in whole or in part, for the purchase of any of the shares offered hereby.
In order to subscribe for shares, a subscription application and a check
made payable to Charter Escrow as escrow agent, must be submitted to us at 223
East FM 1382, Suite 12720, Cedar Hill, Texas 75104.
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AVAILABLE INFORMATION
We intend to furnish our stockholders with annual reports containing
financial statements audited and reported upon by our independent public
accounting firm and intend to make available quarterly reports for the first
three quarters of each fiscal year containing unaudited financial information.
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act with respect to the shares. This
Prospectus does not contain all of the information set forth in the registration
statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to us and
this offering, reference is made to the registration statement, including the
exhibits filed therewith, which may be examined at the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, where copies may be
obtained upon payment of the fees prescribed by the Commission. Descriptions
contained in this Prospectus as to the contents of any contract or other
documents filed as an exhibit to the registration statement are not necessarily
complete and each such description is qualified by reference to such contract or
document. We will provide a copy of any of the information we have incorporated
by reference free of charge to all persons who receive a Prospectus and request
a copy of such information in writing.
All offerees and subscribers will be asked to acknowledge in the
subscription agreement that they have read this Prospectus carefully and
thoroughly, they were given the opportunity to obtain additional information,
and they did so to their satisfaction.
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TABLE OF CONTENTS
PROSPECTUS SUMMARY.............................................................1
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ABOUT OUR COMPANY..............................................................1
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INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419....................2
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RISK FACTORS...................................................................5
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ............................12
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USE OF PROCEEDS...............................................................13
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MARKET PRICE FOR OUR COMMON STOCK.............................................13
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BUSINESS......................................................................13
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MANAGEMENT'S DISCUSSION & ANALYSIS & RESULTS OF OPERATION.....................14
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.....................................................17
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MANAGEMENT....................................................................17
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EXECUTIVE COMPENSATION........................................................18
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................19
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PRINCIPAL STOCKHOLDERS........................................................20
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PLAN OF DISTRIBUTION..........................................................20
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DESCRIPTION OF SECURITIES.....................................................20
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INDEMNIFICATION FOR SECURITIES ACT LIABILITIES................................21
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LEGAL MATTERS.................................................................21
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EXPERTS.......................................................................21
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WHERE YOU CAN FIND MORE INFORMATION...........................................22
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TRANSFER AGENT AND ESCROW AGENT...............................................22
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FINANCIAL STATEMENTS..........................................................22
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PROSPECTUS SUMMARY
This summary contains basic information about us and the offering. Because
it is a summary, it does not contain all the information that you should
consider before investing. You should read the entire Prospectus carefully,
including the risk factors beginning on page 5 and our financial statements and
the notes to those statements appearing elsewhere in this Prospectus and the
information under "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." Except as otherwise
required by the context, references in this Prospectus to "we," "our" and "us"
refer to C.A.T.-N-K., Inc.
ABOUT OUR COMPANY
We were incorporated in Texas as C.A.T.-N-K., Inc., on October 21, 1996, to
develop an Internet travel website. Due to lack of profitability, we are no
longer actively involved in the travel industry and are a development stage
company. We intend to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination or acquisition with a business
entity which has not yet been identified. We have not identified any specific
business or company for investigation and evaluation and we do not have any
agreement, understanding or arrangement to acquire or merge with any specific
business or company. Other than general corporate activities, including but not
limited to the negotiation and consummation of a business combination, we will
not engage in any substantive commercial business immediately following this
blank check offering until such time as we have effected a business combination.
Our executive offices are located at 223 East FM 1382, Suite 12720, Cedar
Hill, Texas 75104, and our telephone number is (972) 293-1115.
The Offering
The offering is being conducted as a blank check offering subject to a
variety of conditions imposed by Rule 419. We are offering a maximum of
1,000,000 shares for sale on a best efforts basis at a price of $0.10 per share.
To subscribe for shares, a Subscription Application and a check made payable to
Charter Escrow as escrow agent, should be forwarded to us at 223 East FM 1382,
Suite 12720, Cedar Hill, Texas 75104. All offers and sales of shares will
initially be made to residents of the states of Colorado and North Dakota.
Offers and sales of shares shall be effected only by our officers and directors
who are not required to register as broker/dealers and are permitted to offer
securities under applicable local law. No one shall receive any compensation for
services in connection with the sales of shares.
There are 8,000,000 shares of common stock issued and outstanding. Upon
completion of this offering, if the maximum number of shares are sold, there
will be 9,000,000 shares of common stock issued and outstanding.
At the completion of this offering, our present shareholders will own
approximately 88.2% of the then outstanding shares if the maximum number of
shares is sold and assuming they do not acquire any shares in the offering.
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We may, in our sole discretion, terminate the offering at any time prior to
the sale of the maximum number of shares.
Rule 419
We are conducting the offering as a blank check offering subject to Rule
419. Under Rule 419, securities sold by us and funds paid for such securities,
will be deposited and held in a Rule 419 escrow until an acquisition meeting
specific criteria is completed. Before the acquisition can be completed and
before the deposited funds and deposited securities can be released from escrow,
we are required to amend the registration statement of which this Prospectus is
part, with a post-effective amendment and furnish it to investors within 5 days
after it becomes effective. This post-effective amendment must contain the terms
of a reconfirmation offer and information regarding the proposed acquisition
candidate and its business, including audited financial statements.
Investors shall have no fewer than 20 and no more than 45 business days
from the effective date of the post-effective amendment to decide to reconfirm
his investment and remain an investor or alternatively, require the return of
his investment (plus any interest earned or dividends paid thereon), less any
amounts delivered to us as permitted under Rule 419. Any investor not making any
decision within said 45 day period will automatically have his investment funds
returned within 5 business days. If we do not complete an acquisition meeting
the specified criteria within 18 months of the effective date, the deposited
funds (and any interest earned or dividends paid thereon, but 10% of the
offering proceeds which will be delivered to us) must be returned to investors
within 5 business days. If the offering period is extended to its limit (180
days), we will have only 12 months in which to consummate a merger or
acquisition.
Determination of Offering Price
The offering price of $0.10 per Share has been arbitrarily determined by
us. This price bears no relation to our assets, book value, or any other
customary investment criteria, including our prior operating history. Among the
factors considered by us in determining the offering price were estimates of our
business potential, our limited financial resources, the amount of dilution to
public investors and the general conditions of the securities market.
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
All funds we receive shall be deposited into and held in an escrow account.
We shall receive 10% of the offering proceeds immediately. The Escrow is
governed by an agreement which provides that the deposited funds and deposited
securities be released to us and to the investors, respectively, only after we
have:
(1) Executed an agreement for the consummation of a business combination
meeting certain prescribed criteria; and
(2) Filed a post-effective amendment to this registration statement which
includes the terms of a reconfirmation offer, and other information
regarding the acquired business, including its audited financial
statements; and
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(3) Conducted a reconfirmation offer whereby the requisite number of investors
(sufficient in number to permit an acquisition of a business or asset
having a value of 80% of the maximum offering proceeds) have elected to
remain stockholders.
In the event the foregoing conditions are satisfied we will submit a signed
representation to the escrow agent that the requirements of Rule 419 have been
satisfied and that the business combination has been (or is being) consummated.
Upon satisfaction of these conditions, the escrow agent will release the
deposited funds to the Company and deposited securities to the investors.
Due to the many limitations and restrictions relating to this offer, we
have entered into an escrow agreement with Charter Escrow which provides, among
other things, that:
(1) All funds raised in the offering be deposited into an escrow account
maintained by Charter Escrow as escrow agent. The deposited funds and
interest or dividends thereon, if any, are to be held for the sole benefit
of the investors, except for the 10% we will receive, and shall only be
invested in bank deposits, in money market mutual funds or federal
government securities or securities for which the principal or interest is
guaranteed by the federal government.
(2) All shares and any other securities issued during the escrow period with
respect to such shares, including securities issued with respect to stock
splits, stock dividends or similar rights, are to be deposited directly
into the escrow account promptly upon issuance. The identity of the
investors shall be included on the stock certificates or other documents
evidencing the deposited securities. The deposited securities held in
escrow are to remain as issued and deposited and are to be held for the
sole benefit of the investors who retain the voting rights, if any, with
respect to the deposited securities held in their names. The deposited
securities held in Escrow may not be transferred, disposed of, nor any
interest created therein other than by will or the laws of descent and
distribution, or pursuant to a court order issued in conjunction with or as
part of a divorce judgment.
Before the deposited funds and the deposited securities can be released, we
must execute an agreement to acquire an acquisition candidate(s) meeting
specified criteria. The acquisition(s) must involve a business(es) or assets for
which the fair value of the business or net assets represents at least 80% of
the maximum offering proceeds, excluding underwriting commissions, underwriting
expenses, dealer allowances payable to non-affiliates and amounts permitted to
be delivered to us. As a condition precedent to consummation of the agreement,
it must include a requirement that a sufficient number of investors confirm
their investment so as to permit consummation of a business combination
satisfying the criteria of Rule 419.
Once the agreement governing a business combination meeting the above
criteria has been executed, we must update the registration statement with a
post-effective amendment. The post-effective amendment must contain information
required by the applicable registration form concerning the acquired business
including financial statements of the acquired business as required thereby, the
results of this offering, and the use of the funds disbursed from Escrow. The
post-effective amendment must also include the terms of the reconfirmation
offer. The reconfirmation offer must include certain prescribed conditions which
must be satisfied before the deposited funds and deposited securities can be
released from Escrow.
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The reconfirmation offer must commence within five (5) business days after
the effective date of the post-effective amendment. The reconfirmation offer
must involve the following:
(1) A copy of the prospectus contained in the post-effective amendment sent to
each investor whose securities are held in Escrow within 5 business days
after the effective date of the post-effective amendment.
(2) Each investor must be provided with no fewer than 20 and no more than 45
business days from the effective date of the post-effective amendment to
notify us in writing that the investor elects to remain an investor.
(3) The pro-rata portion of the deposited funds and any related interest or
dividends, less the 10% we shall receive, held in escrow on each investor's
behalf must be returned to the investor within 5 business days by first
class mail or other equally prompt means if we do not receive written
notification from such investor within 45 business days following the
effective date.
(4) The business combination may be consummated only if a sufficient number of
investors (sufficient in number to permit an acquisition of a business or
asset having a value of 80% of the maximum offering proceeds) elect to
reconfirm their investment.
(5) If a business combination is not consummated within 18 months after the
effective date of the initial registration statement, the deposited funds
and any related interest or dividends held in Escrow be returned to all
investors on a pro-rata basis within 5 business days by first class mail or
other equally prompt means and the Deposited Securities will be returned to
us.
The deposited funds may be released to us and the shares released to
investors after:
(a) We have executed an agreement for a business combination for which the fair
value of the business represents at least 80% of the maximum offering
proceeds and we have filed the required post-effective amendment;
(b) The post-effective amendment has been declared effective, the mandated
Reconfirmation Offer having the conditions prescribed by Rule 419 has been
completed and we have satisfied all of the prescribed conditions of the
Reconfirmation Offer;
(c) A sufficient number of investors (sufficient in number to permit an
acquisition of a business or asset having a value of 80% of the maximum
offering proceeds) have reconfirmed their investments; and
(d) The business combination described in paragraph (a) above has been
consummated.
Consequently, notwithstanding the fact that investors of a majority of the
proceeds raised may be in favor of a prospective business combination, such
investors may nevertheless have to accept the return of their investment in
accordance with Rule 419, if investors representing more than 20% of the
proceeds raised do not reconfirm their investment. Rule 419 further provides
that if we do not complete a qualified acquisition within 18 months of the
effectiveness of our initial registration statement, all of the deposited funds
in the Rule 419 Escrow must be returned to investors.
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If an investor does not reconfirm an investment, his subscription amount
(less any amount permitted to be and actually delivered to us) plus any interest
earned thereon will be returned. If a business combination is not consummated
within 18 months of the date of the Prospectus, his subscription amount (less
any amount permitted to be and actually delivered to us) together with interest
earned thereon will be returned to each investor in accordance with his
subscription agreement.
RISK FACTORS
An investment in our common stock is highly speculative and involves a high
degree of risk. Therefore, you should carefully consider all of the risk factors
discussed below, as well as the other information contained in this document.
You should not invest in our common stock unless you can afford to lose your
entire investment and you are not dependent on the funds you are investing. The
following risk factors are interrelated and, consequently, investors should
treat such risk factors as a whole.
Risk Factors Specific To Our Operations
Our Limited Operating History Can Provide No Assurances of Future Success.
We were incorporated to develop the Travel Enhanced Network
("iTravel10.com"), an Internet website which provided for the sharing of travel
information between the public, a network of travel agencies and preferred
travel suppliers. We are no longer involved in the travel industry and have had
limited operations to date. As a result, we are in the early formative and
development stage. Potential investors should be aware of the difficulties
normally encountered by a new enterprise. There is nothing at this time upon
which to base an assumption that our business plan will prove successful, and
there is no assurance that we will be able to operate profitably. We have
limited resources and have had no revenues to date.
We Cannot Give Any Assurance That We Will Effect a Business Combination.
We have no arrangement, agreement or understanding with respect to engaging
in a merger with, joint venture or acquisition of a private entity. We may not
be successful in identifying and evaluating suitable business opportunities or
in concluding a business combination. Management has not identified any
particular industry or specific business within an industry for evaluation as a
possible merger or acquisition candidate.
The Speculative Nature of Our Proposed Operations Makes an Evaluation of Us Very
Difficult.
The success of our proposed plan of operation will depend to a great extent
on the operations, financial condition and management of the identified business
opportunity. While management intends to seek business combinations with
entities having established operating histories, there can be no assurance that
we will be successful in locating candidates with any operating history. In the
event we complete a business combination, of which there can be no assurance,
the success of our operations will be largely dependent upon management of the
successor firm or venture partner firm and numerous other factors related to the
new business entity.
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Competition for Business Opportunities and Combinations May Be Fierce and
Prevent the Execution of Our Merger/Acquisition Goals.
We are, and will continue to be, an insignificant participant in the
business of seeking mergers, joint ventures and acquisitions with small private
entities. A large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of companies which
may be desirable target candidates for us. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than us and, consequently, we will be at a competitive disadvantage
in identifying possible business opportunities and successfully completing a
business combination. Moreover, we will also compete in seeking merger or
acquisition candidates with numerous other small public companies.
Management's Discretionary Use of Proceeds Prevents a Meaningful Review of the
Usages of Funds We Seek to Raise from this Offering.
Although substantially all of the net proceeds of this offering are
intended generally to be applied toward effecting a business combination, such
proceeds are not otherwise being designated for any more particular purposes.
Accordingly, prospective investors will invest in us without an opportunity to
evaluate the specific merits or risks of any one or more business combinations.
There can be no assurance that determinations ultimately made by us relating to
the specific allocation of the net proceeds of this offering will permit us to
achieve our business objective of effecting a merger or acquisition.
We May Merge with Operations in Foreign Countries and a Meaningful Review of
Operational Risks Abroad May Not Be Possible.
Our business plan is to seek to acquire or merge with potential businesses
that may, in the opinion of management, warrant our involvement. Management's
discretion is unrestricted, and we may participate in any business whatsoever
that may in the opinion of management meet the business objectives discussed
herein. Therefore, we may effect a business combination with another business
outside the United States. We have not limited the scope of our search to a
particular region or country. Accordingly, to the extent that the acquired
business may be located or operate in a foreign jurisdiction, our operations may
be adversely affected to the extent of the existence of unstable economic,
social and/or political conditions in such foreign regions and countries. We may
not be capable of reviewing the potential operational risks surrounding foreign
businesses.
Our Proposed Operations, Even If Successful, Will Likely Result in Engaging in a
Business Combination with Only One Business Opportunity, Which Will Prevent
Diversification of Risk.
Our proposed operations, even if successful, will likely result in engaging
in a business combination with only one business entity. Our inability to
diversify our activities into a number of areas may subject us to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with our operations.
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We Are Highly Dependent on Our Executive Officers, the Loss of Any of Whom Could
Have an Adverse Impact on Our Future Operations.
We are largely dependent upon the personal efforts of Calvin K. Mees for
the successful implementation of our business plan and the execution of our
planned merger and/or acquisition operations. The loss of this person could have
a material adverse effect upon our business and prospects. We do not presently
have key-man life insurance upon the life of any of our officers, directors or
key personnel.
Although a Change in Management or Ownership Control May Occur, We Do Not Know
If this Will Occur Or, If So, Who Will Assume Control.
In the event that we effect a business combination by issuing additional
common stock, our present stockholders may no longer have control. The
successful completion of this transaction could result in a change in our
control due to the issuance of a large percentage of our authorized but unissued
securities or the sale by the present stockholders of all or a portion of their
stock or a combination thereof. Although we have no present plans,
understandings or arrangements with respect to any business combination, the
successful completion of such a transaction could result in a change in our
control. This could result from the issuance of a large percentage of our
authorized securities or the sale by the present stockholders of all or a
portion of their stock, or a combination thereof. Any change in control may also
result in the resignation or removal of our present officers and directors.
Since we do not know who may acquire control, we cannot present possible
managerial replacements or risks associated with them.
To the Extent the IRS or State Tax Authorities Ultimately Prevail in
Recharacterizing the Tax Treatment of a Business Combination, Adverse Tax
Consequences May Result Us, the Acquired Business and its Respective
Stockholders.
We will evaluate the possible tax consequences of any prospective business
combination and endeavor to structure a business combination to achieve the most
favorable tax treatment to us, the acquired business and their respective
stockholders. There can be no assurance, however, that the Internal Revenue
Service or appropriate state tax authorities will ultimately assent to our tax
treatment of a consummated business combination.
We Will Be Required to Satisfy Reporting Requirements, Including Unaudited
Financial Statements, Which May Delay, Hinder or Preclude Acquisition.
We intend to become subject to Section 13 of the Securities Exchange Act of
1934, which requires disclosure of certain information about significant
acquisitions, including financial statements for the acquired business entity.
Any potential business opportunity must provide audited financial statements for
review before we will effect a merger or acquisition. The time and additional
costs that may be incurred to prepare such information may significantly delay
or essentially preclude consummation of an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain the required
information may become disinterested in us as a result of these requirements.
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Our Capital Requirements May Require Additional Financing Which May Not Be
Available.
We anticipate having sufficient working capital to satisfy our operating
expenses for 18 months. However, no assurance may be given that the proceeds
from the offering will be sufficient to allow us to realize our goals and engage
in a business venture chosen by our management. If our cash resources prove to
be insufficient, we may be required to seek additional debt or equity financing
to fund the costs of continuing operations until we achieve positive cash flow.
We have no current commitments or arrangements for additional financing and
there can be no assurance that any additional debt or equity financing will be
available to us on acceptable terms, or at all.
We May Acquire a Business With Obligations Requiring Additional Financing.
An acquired business may already have previously incurred debt or equity
financing which it may not be able to satisfy. Such an entity would require an
infusion of capital we might not be able to satisfy.
The Possible Need To Finance an Acquired Business May Severely Impair Our
Operations.
We may engage in a business combination with an entity which requires
additional financing. To the extent we engage in a business combination with an
entity requiring additional financing, such additional financing (which could be
derived from the public or private offering of other securities or from the
acquisition of debt through conventional bank financing), may not be available.
We Do Not Face Limits in Pursuing Debt Financing Options.
There are currently no limitations on our ability to borrow funds to effect
a business combination or finance the operations of any acquired business. The
amount and nature of any attempted borrowings by us will depend on numerous
factors, including our capital requirements, our perceived ability to meet debt
services on any such borrowings, and then-prevailing conditions in the financial
markets as well as general economic conditions. There can be no assurance that
debt financing, if required or otherwise sought, will be available on terms
deemed to be commercially acceptable or in our best interest.
Our Cash Position May Not Support Any Debt Financing Obligations.
To the extent that debt financing ultimately proves to be available, any
borrowings may subject us to various risks traditionally associated with
incurring indebtedness, including a risk of default, foreclosure, acceleration
of indebtedness, interest rate fluctuations, demand for payment at times of low
cash reserves, and the possible need to seek other financing to satisfy previous
financing requirements.
The Possible Issuance of Additional Shares of Our Common Stock May Reduce the
Ownership and Voting Power of the Other Stockholders and May Result in a Change
of Our Control.
Our Articles of Incorporation authorize the issuance of 100,000,000 shares
of common stock and 50,000,000 shares of preferred stock. If we sell all one
million shares offered hereby, approximately 91% of our authorized shares of
common stock will remain unissued. Our Board of Directors has the power to issue
additional shares without stockholder approval. We
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anticipate issuing a substantial amount of shares to acquire a business interest
or other type of property in the future. Although we presently have no
commitments, contracts or intentions to issue any additional shares, we may
issue shares for the purpose of raising additional capital. Potential investors
should be aware that any such stock issuances may result in a reduction of the
book value or market price, if any, of the outstanding shares. If we issue
additional shares, such issuance will reduce the proportionate ownership and
voting power of the other stockholders. Also, any new issuance of shares may
result in a change of our control.
We May Be Deemed to Be Subject to Investment Company Act Considerations Which
May Result in Additional Regulatory Restrictions and Costly Obligations.
The regulatory scope of the Investment Company Act of 1940, as amended,
which was enacted principally for the purpose of regulating vehicles for pooled
investments in securities, extends generally to companies engaged primarily in
the business of investing, reinvesting, owning, holding or trading in
securities. The Investment Company Act may, however, also be deemed to be
applicable to a company which does not intend to be characterized as an
investment company but which, nevertheless, engages in activities which may be
deemed to be within the definitional scope of certain provisions of the
Investment Company Act.
Although we intend to take measures to avoid being classified as an
investment company, in the event we are deemed to be an investment company, we
may become subject to certain restrictions relating to our activities, including
restrictions on the nature of our investments and the issuance of securities. In
addition, the Investment Company Act imposes certain requirements on companies
deemed to be within its regulatory scope, including registration as an
investment company, adoption of a specific form of corporate structure and
compliance with certain burdensome reporting, record keeping, voting, proxy,
disclosure and other rules and regulations. In the event we are characterized as
an investment company, our failure to satisfy regulatory requirements, whether
on a timely basis or at all, would, under certain circumstances, have a material
adverse affect on us. We intend to take all measures possible to avoid such
characterization.
General Liability Exposure.
We do not carry a general liability insurance policy.
Casualty Loss Exposure.
We do not possess any property casualty insurance for our office facility
located at 223 East FM 1382, Suite 12720, Cedar Hill, Texas 75104.
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Risks Associated with an Investment in This Offering.
A Business Entity May Enter Into a Business Combination With Us In an Attempt To
Avoid Adverse Consequences of Undertaking Its Own Public Offering.
We may enter into a business combination with an entity that desires to
establish a public trading market for its shares. A business entity may attempt
to avoid what it deems to be adverse consequences of undertaking its own public
offering by seeking a business combination with us. Such consequences may
include, but are not limited to, time delays of the registration process,
significant expenses to be incurred in such an offering, loss of voting control
to public shareholders and the inability or unwillingness to comply with various
federal and state securities laws enacted for the protection of investors. These
securities laws primarily relate to provisions regarding the registration of
securities which require full disclosure of business, management and financial
statements.
State, or 'Blue Sky,' laws strictly regulate blank check offerings, which
will severely limit the initiation of a trading market in our securities.
Transferability of the shares of common stock of the Company is very limited
because a significant number of states have enacted regulations pursuant to
their securities laws restricting the initial sale and subsequent resale of
securities of "blank check" companies such as the Company within that state.
Many states, while not specifically prohibiting or restricting "blank check"
companies, do not register the securities of the Company for sale or resale in
their states. We anticipate that a secondary trading market for the Company's
securities will only develop, if at all, subsequent to consummation of a
Business Combination.
The Offering Price Was Arbitrarily Determined.
We have arbitrarily determined the offering price at $0.10 per share. The
price may not bear any relationship to established valuation criteria such as
assets, book value or prospective earnings. Factors we considered included our
lack of operating history, the proceeds to be raised by the offering, the amount
of capital to be contributed by the public in proportion to the amount of stock
to be retained by present stockholders, and current market conditions in the
over-the-counter market.
We Have Not Declared and Do Not Intend to Declare Dividends.
Any investor who purchases our common stock should not anticipate receiving
any dividends on the common stock at any time in the foreseeable future. Payment
of dividends is within the absolute discretion of our board of directors. We
have not paid dividends nor, by reason of our contemplated financial
requirements, do we anticipate paying any dividends upon our common stock at any
time in the future.
The Return of Total Subscription Proceeds Is Not Guaranteed.
Rule 10b-9 of the Exchange Act provides for a guaranteed return of proceeds
in contingent offerings when a certain minimum number of securities offered is
not sold. This offering does not qualify as a contingent offering because the
securities in this offering are being offered on a
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best efforts basis. The rights of the subscribers to a return of the
subscription proceeds (together with interest thereto) will be governed by Rule
419, which allows for 10% of the proceeds to be released to us. Accordingly, if
we file a post-effective amendment describing a business combination, it is
possible that if enough investors (sufficient in number to permit an acquisition
of a business or asset having a value of 80% of the maximum offering proceeds)
reconfirm their investment, to the extent that there are subscribers who do not
reconfirm their investment, we may effect the Acquisition with less than the
maximum number of shares being distributed to the Stockholders and less than the
full amount of the offering proceeds being released to us.
A Secondary Market May Never Develop for Shares of Our Stock and Investors in
this Offering May Be Forced to Hold the Shares Indefinitely.
No public trading market for our common stock has ever existed. We cannot
provide any assurance that an active trading market will develop or that
purchasers of the shares will be able to resell their securities at prices equal
to or greater than the respective initial public offering prices. Any future
market price of the shares may be affected significantly by factors such as
announcements by us or our competitors, variations in our results of operations,
and market conditions. Movements in prices of other stocks may also affect the
market price in general. As a result of these factors, purchasers of the shares
offered hereby may not be able to liquidate an investment in the shares readily
or at all.
We May Sell Shares Pursuant to State Exemptions, Which May Not Facilitate
Secondary Trading.
We intend to attempt to register the securities offered hereby with at
least the states of Colorado and North Dakota. The securities registered
hereunder have not yet been registered for resale under the securities 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 restrictions upon new investors to purchase
the securities which could reduce the size of the potential market. Some states
attempt to restrict the trading or resale of blind-pool or blank-check
securities. Accordingly, investors should consider any potential secondary
market for our securities to be very limited, speculative and unlikely.
Any Future Trading Market in Our Common Stock May Be Diminished by Sales of
Shares Which Cannot Currently Be Sold Without Registration or Pursuant to
Exemptions from Registration Requirements.
Of the 100,000,000 shares of our common stock authorized for issuance,
8,000,000 shares are issued and outstanding. All of these are restricted
securities as that term is defined under the Act. Therefore, they may only be
sold in compliance with Rule 144 of the Act, or pursuant to a registration
statement filed under the Act. Investors should be aware that sales of our
common stock under Rule 144, or made pursuant to a registration statement filed
under the Act, may have a depressive effect on any future market price of our
securities which may develop.
Our Common Stock May Be Subject to the Penny Stock Reform Act. This May Impair
the Development or Continuance of a Trading Market of Our Common Stock.
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Congress enacted the Penny Stock Reform Act of 1990 to counter fraudulent
practices common in penny stock transactions. Rule 3a51-1 of the Securities
Exchange Act of 1934 defines a penny stock as an equity security that is not,
among other things: (a) a reported security (i.e., listed on certain national
securities exchanges); (b) a security registered or approved for registration
and traded on a national securities exchange that meets certain guidelines,
where the trade is effected through the facilities of that national exchange;
(c) a security listed on the NASDAQ National Market System; (d) a security of an
issuer that meets certain minimum certified financial requirements (net tangible
assets in excess of $2,000,000 (if the issuer has been continuously operating
for more than three years) or $5,000,000 (if the issuer has been continuously
operating for less than three years), or average revenue of at least $6,000,000
for the last three years); or (e) a security with a price of at least $5.00 per
share for the transaction in question or that has a bid quotation (as defined in
the Rule) of at least $5.00 per share. As we currently do not meet any of these
items, our common stock falls within the definition of a penny stock.
Before brokers and/or dealers may effect a penny stock transaction, they
are required by the Act to provide investors with written disclosure documents
containing information on various aspects of markets for penny stocks as well as
specific information about the penny stock and the transaction involving the
purchase and sale of that stock (e.g., price quotes and broker/dealer and
associated person compensation). Subsequent to the transaction, the broker is
required to deliver monthly or quarterly statements containing specific
information about the penny stock. Because our common stock does not satisfy any
of the penny stock exceptions, and it is not expected to in the near future,
these added disclosure requirements will most likely negatively affect the
ability of purchasers herein to sell our common stock in the secondary market,
if any develops. You should seek outside advice before buying any stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis and Results of Operations," "Business" and
elsewhere in this Prospectus constitute forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our, or our industry's, actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. Such factors include those listed under "Risk
Factors" and elsewhere in this Prospectus.
This Prospectus should be read in conjunction with the financial statements
and notes thereto appearing elsewhere herein. Except for historical information
contained herein, certain statements herein are forward-looking statements that
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements relate to future events or to
our future financial performance. In some cases, you can identify forward-
looking statements by terminology such as "may," "will," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, you should specifically consider various
factors, including the risks outlined under "Risk Factors." These factors may
cause our actual results to differ materially from any forward-looking
statement.
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Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements. We
are under no duty to update any of the forward-looking statements after the date
of this Prospectus to conform such statements to actual results.
USE OF PROCEEDS
The proceeds of the offering, after the release to us of an amount equal to
10% (up to an aggregate of $90,000 if the maximum number of shares is sold),
will remain deposited in an escrow account pending consummation of an
acquisition satisfying Rule 419, including reconfirmation by investors and
delivery to investors of a Reoffer Prospectus or the lapse of 18 months from the
date of this Prospectus. Consequently, after delivery to us of 10% of the
proceeds, as permitted by Rule 419, the net amount to be maintained in escrow is
$90,000 if the maximum number of shares is sold, plus any interest earned or
dividends paid thereon. We will use 10% of the proceeds released to pay for
expenses with respect to the preparation of this prospectus.
We intend to apply the deposited funds, if and when available, to pay the
costs and expenses incurred in attempting to effect a business combination,
including selecting and evaluating business entities, structuring and
consummating a business combination and preparing and filing a post-effective
amendment detailing the reconfirmation offer pursuant to Rule 419. Rule 419
requires that the fair market value of any acquired business be equal to at
least 80% of the maximum offering proceeds.
MARKET PRICE FOR OUR COMMON STOCK
Our common stock has never been traded or quoted over-the-counter or on any
other exchange and there has never been a trading market for our common stock.
Pursuant to the requirements of Rule 15g-8 of the Exchange Act, a trading market
will not develop prior to or after the effectiveness of this Prospectus or while
the deposited securities remain in Escrow. The deposited securities under this
offering will remain in Escrow until, among other things, our consummation of a
business combination which satisfies the requirements of Rule 419. There can be
no assurance that a trading market will develop even if a business combination
is consummated and the deposited securities from Escrow are subsequently
released.
BUSINESS
We were incorporated in Texas on October 21, 1996, under the name
C.A.T.-N-K., Inc. Our initial business plan and operations consisted of the
development of an Internet travel website. As we did not generate any revenues
from our inception through 1998, we discontinued our sales efforts at that time.
Our main business focus is to engage in a merger, exchange of capital
stock, asset acquisition or other similar business combination or acquisition
with a business entity which has not been identified. Other than general
corporate activities, including the negotiation and consummation of a business
combination, we will not engage in any substantive commercial business until
such time as we have effected a business combination.
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We have not yet identified a prospective acquired business. Because this
offering and our merger and acquisition goals form the basis of our operations,
our adherence to and satisfaction of the restrictions applicable to blank check
offerings is essential to our business. These restrictions may make raising
funds in this offering difficult and may make locating an entity with which to
merge or acquire also more difficult. However, if we are successful in raising
funds in this offering consistent with Rule 419, we believe we can effect a
merger or acquisition with a business entity.
Office Facilities
The nominal amount of office space required by our current state of
operations is located at 223 East FM 1382, Suite 12720, Cedar Hill, Texas 75104
and is provided rent-free by our president. We do not own or lease any property.
In the event a merger or acquisition is effected, which cannot be assured,
we expect to relocate to the office of the acquired business, which may have
leased and/or owned office space. Such office space may be subject to various
types of ownership limitations, such as mortgages or liens.
Employees
We currently have no employees. In the event we merge with or acquire a
business entity, any such acquired business may or may not have its own
employees.
MANAGEMENT'S DISCUSSION & ANALYSIS & RESULTS OF OPERATION
Our business focus is to acquire or merge with a business entity that will
allow us to generate revenues and earn profit. Management's discretion is
unrestricted on deciding which entity to merge with or acquire, and we may
participate in any business. In seeking to attain our business objectives, we
will not restrict our search to any particular industry. We may investigate
businesses of any kind or nature, including those in finance, technology,
manufacturing, service, research and development, communications, insurance,
brokerage and transportation. Management may also seek to become involved with
other development stage companies or companies that could be categorized as
financially troubled. At the present time, we have not chosen the particular
area of business in which we propose to engage and have not conducted any market
studies with respect to any business, property or industry. We have not limited
the scope of our search to a particular region, and therefore may effectuate a
business combination with another business outside the United States.
We do not intend to utilize any notices or advertisements in our search for
business opportunities. We anticipate making contact with business prospects
primarily through the efforts of our directors and officers, who may meet
personally with management and key personnel of combination prospects, visit and
inspect such prospects' facilities, assets, products and services, and undertake
such further reasonable investigation as management deems appropriate, in
consideration of our limited financial resources. However, all of our officers
and directors are engaged full-time in other activities and therefore will
devote only a minimal amount of time to our business. The lack of full-time
management may have a materially
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adverse effect upon our business. At present, we have no employees. Even upon
completion of the offering, our present intention is to avoid paying personnel
except those whose services are required to satisfy Commission requirements,
part-time secretarial and clerical help, and management and employees of any
acquired business that we may acquire. It is contemplated that after the
offering is consummated, management will spend such time in conducting our
affairs as may be necessary, including, but not limited to, our efforts in
connection with seeking out potential target companies and consummating a
business combination. At this time, we cannot speculate as to the specific
amount of time that will be spent by management in conducting our affairs.
We will not restrict our search for a merger or acquisition candidate to
those referred by our officers or directors. We anticipate that certain acquired
business candidates may be brought to our attention from various unaffiliated
sources, including securities broker/dealers, investment bankers, venture
capitalists, bankers, other members of the financial community, and affiliated
sources. While we do not presently anticipate engaging the services of
professional firms that specialize in business acquisitions on any formal basis,
in the event we do, we would consider paying a finder's fee or other
compensation.
As a development stage company, we have not realized a profit for any
fiscal period nor achieved profitability, and expect to continue to incur
operating losses for the foreseeable future. This lack of profitability results
in our inability to assure that we will achieve profitability in the future or
if profitability is achieved, that it can be sustained at a level sufficient to
enable us to continue our operations and expansion. We recognize that as a
result of our limited financial, managerial or other resources, the number of
suitable potential businesses that may otherwise be available may be extremely
limited.
Evaluation Criteria
We propose to internally analyze potential business opportunities.
Management is comprised of individuals of varying business experiences, and
management will rely on their own business judgment in formulating decisions as
to the types of businesses that we may acquire or in which we may participate.
It is possible that management will not possess business experience or expertise
in the area in which a sought business entity engages.
Management anticipates that the selection of a business entity will be
complex and risky because of the competition for such business opportunities
among all segments of the financial community. The nature of our search for an
acquired business requires maximum flexibility inasmuch as we may be required to
consider various factors and divergent circumstances which may preclude
meaningful direct comparison among the various business enterprises, products or
services investigated. Investors should recognize that the possible lack of
diversification among our acquisition candidates may not permit us to offset
potential losses from one venture against profits from another. This should be
considered a negative factor affecting any decision to purchase the shares. We
will have virtually unrestricted flexibility in identifying and selecting a
prospective acquired business, but in evaluating a prospective acquired business
and determining the fair market value thereof, we will consider as many
traditional business attributes as feasible.
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Although it is anticipated that locating and investigating specific
business proposals will take at least several months, the time this process may
take cannot be assured. However, if we don't effect a merger or acquisition
within 18 months, we will have to return any proceeds we generate from this
offering. The time and costs required to select and evaluate an acquired
business candidate (including conducting a due diligence review) and to
structure and consummate the business combination (including negotiating
relevant agreements and preparing requisite documents for filing pursuant to
applicable securities laws and state corporate laws) cannot presently be
ascertained with any degree of certainty.
Form and Structure of Acquisition
The methods and forms which we may utilize to effect a business combination
include, for example, various types of mergers, acquisitions, consolidations,
asset purchases and may also involve third party transactions with subsidiaries.
The likelihood of any merger or acquisition involving the issuance of our
common stock is considered by management to be high. To the extent we issue
shares of our common stock in connection with an acquisition, our existing
shareholders will experience a dilution of their ownership interest.
Additionally, a change in our control may occur. The actual form and structure
of a business combination may be also dependent upon numerous other factors
pertaining to the acquired business and its stockholders as well as potential
tax and accounting treatments afforded the business combination. We have no
commitments as of the date of this Prospectus to issue any shares of common
stock.
If our securities are issued as part of an acquisition, we cannot predict
whether such securities will be issued in reliance upon exemptions from
registration under applicable federal or state securities laws or will be
registered for public distribution. Although we believe public registration of
securities will not be involved in a business combination, if registration of
securities is required, substantial cost may be incurred and time delays
encountered.
Management of Growth
If we are successful in effecting a business combination, we may experience
significant growth in the number of our employees and the scope of our operating
and financial systems. This growth may result in new and increased
responsibilities for both existing and new management personnel. Our success
depends largely on the ability of our managers to operate effectively, and the
ability of the management of the acquired business to maintain its current
operations. There can be no assurance that our management or the acquired
business' management will be sufficient to manage any future growth in our
business or that we will be able to implement in whole or in part of our
expansion program, and any failure to do so could have a material adverse effect
on our operating results.
Cost and Expenses
As we are unable to predict what type of acquisition candidate may be found
or introduced, we cannot accurately project or give any assurance regarding
management's ability to implement new business operations, control our
development, operating costs and expenses. Consequently, even if we are
successful in effecting a business combination (of which there can be no
assurance), if management is not able to adequately control costs and expenses,
such new business operations may not generate any profit or may result in
operating losses.
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Results of Operations
We have not generated any revenue from operations since inception and did
not engage in operations for the fiscal year ending 1999. Since the end of 1998,
our primary operations have consisted of issuing shares of our common stock and
preparing this prospectus. We have also been searching for a merger or
acquisition candidate. Aside from our officers and directors, we do not have any
full or part time employees.
The costs and expenses and our net loss for the year ended May 31, 2000,
totaled $19,856 as compared to $129 in total costs and expenses and net loss
incurred for the year ended May 31, 1999. This increase is attributable to
increased legal and operating expenses associated with our attempt to locate a
merger or acquisition candidate.
There were no revenues generated for the period ending March 31, 2000, or
for the period ending May 31, 1999.
Capital Resources And Liquidity
During the fiscal year ending May 31, 2000, we generated a total of $28,000
in cash flow from financing activities as compared to $1,000 during the fiscal
year ending May 31, 1999. This increase is attributable to the additional
issuances of our common stock for services rendered, and a note payable to David
Clifton for $20,000, as discussed more fully below.
We secured a $20,000 loan from David Clifton on January 19, 2000 pursuant
to a nonrecourse promissory note bearing 10% interest per year. On January 19,
2002, the lump sum of interest and principal is due to be repaid, although we
may prepay with no penalty.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We appointed Clyde Bailey, P.C. as our independent auditor in February
2000. We have never retained any other independent auditor or accountant.
MANAGEMENT
Current Directors, Executive Officers and Key Employees.
All of our directors serve one year terms and are reappointed annually. Our
directors receive no compensation for serving or for attending meetings.
Calvin K. Mees, age 40, has been our president and a director since our
inception. He has been self-employed as a small business financial consultant
since March 1996. Mr. Mees was a securities broker and account executive with
Lew Lieber Baum & Company from April 1994 through March 1996, and held a Series
7 license until March 1996.
Arlin K. Mees, age 41, has been our director and vice president since May
12, 2000. He has been an account executive with Research Group of Texas since
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June 1993 working as a property tax consultant. Mr. Mees is the brother of
Calvin K. Mees.
Norma A. Ballard, age 22, has been our director and secretary/treasurer
since May 12, 2000. She has been self employed as a secretary/bookkeeper since
May 1995. Ms. Ballard has also been a distributor of Quixtar products since May
1999.
Board of Directors
Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Officers are appointed to serve for a tenure to be determined by the board of
directors and until their successors have been elected and have qualified.
EXECUTIVE COMPENSATION
The following tables set forth information with respect to the compensation
received by our chief executive officer since inception. No compensation in
excess of $100,000 has ever been awarded to, earned by, or paid to any executive
officer or director during any year since our inception. Norma A. Ballard and
Arlin K. Mees received 940,000 and 1,000,000 shares for agreeing to serve as
officers and directors on May 12, 2000.
Annual Compensation
---------------------------------------------------------------------------
Name and Fiscal Year Other Annual
Principal Position End Salary ($) Bonus ($) Compensation ($)
--------------------------------------------------------------------------------
Calvin Mees, 1996 - 0- - 0- - 0-
President
--------------------------------------------------------------------------------
Calvin Mees, 1997 - 0- - 0- - 0-
President
---------------------------------------------------------------------------
Calvin Mees, 1998 - 0- - 0- - 0-
President
---------------------------------------------------------------------------
Calvin Mees, 1999 - 0- - 0- - 0-
President
--------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------------------------
Awards Payouts
------------------------------------------------------
Restricted Securities LTIP All Other
Name and Principal Fiscal Stock Underlying Payouts Compensation
Position Year End Award(s)($) Options/ ($) ($)
SARs(#)
------------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvin Mees, 1996 -0- -0- -0- -0-
President
------------------------------------------- -----------------------------------------------------------------------
Calvin Mees, 1997 -0- -0- -0- -0-
President
------------------------------------------- -----------------------------------------------------------------------
Calvin Mees, 1998 -0- -0- -0- -0-
President
------------------------------------------- -----------------------------------------------------------------------
Calvin Mees, 1999 -0- -0- -0- -0-
President
------------------------------------------- -----------------------------------------------------------------------
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Calvin K. Mees, our president and director, is the brother of Arlin K.
Mees, our vice president and director.
We secured a $20,000 loan from one of our shareholders, David Clifton, on
January 19, 2000. In return for this loan we made executed a nonrecourse
promissory note bearing 10% interest per year due, in one lump sum, on January
19, 2002.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to us. In the event we affect a
merger or acquisition with an entity, we may pay a finder's fee or other
consideration normally paid for referrals. No such amount has been established
and is expected to be determined by us and the acquired business.
No officer, director, or affiliate has or proposes to have any direct or
indirect material interest in any asset proposed to be acquired through security
holdings, contracts, options, or otherwise, although we are not precluding
potential acquired businesses in which an officer, director, or affiliate may
have such an interest.
Although management has no current plans to cause us to do so, it is
possible that we may enter into an agreement with an acquisition candidate
requiring the sale of all or a portion of our common stock held by our current
stockholders to the acquisition candidate or principals thereof, or to other
individuals or business entities; requiring some other form of payment to our
current stockholders. It is likely that any sale of securities by our current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition of our common stock would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information concerning ownership of
each entity known to be the beneficial owner of more than five percent (5%) of
our common stock, as well as the ownership of our directors and the shares held
by our officers and directors as a group as of June 28, 2000. The notes
accompanying the information in the table below are necessary for a complete
understanding of the figures provided.
Name and Address of Number of Shares
Beneficial Owner Beneficially Owned Percent of Class
Calvin K. Mees
223 East FM 1382, Suite 12720 6,000,000 75%
Cedar Hill, Texas 75104
Arlin K. Mees
4727 Thunder Road 1,000,000 12.5%
Dallas, Texas 75244
Norma A. Ballard
1525 Jesse Ramsey 940,000 11.75%
Cedar Hill, Texas 75104
Officers and Directors as a Group 7,940,000 99.25%
---------------------------------
PLAN OF DISTRIBUTION
We will sell a maximum of 1,000,000 shares to the public on a best efforts
basis. There can be no assurance that any of these shares will be sold. The
gross proceeds to us will be $100,000 if all the shares offered are sold. No
commissions or other fees will be paid, directly or indirectly, by us, or any of
our principals, to any person or firm in connection with solicitation of sales
of the shares. We are paying the costs incurred in connection with the offering
(see "Use of Proceeds").
The shares may be sold or distributed from time to time by our officers and
directors to purchasers directly. All shares we sell and all proceeds tendered
for such shares will be deposited into an escrow account with Charter Escrow.
DESCRIPTION OF SECURITIES
The following is a summary description of our capital stock and certain
provisions of our Articles of Incorporation and Bylaws, copies of which are
exhibits to the registration statement of which this Prospectus forms a part.
The following discussion is qualified in its entirety by reference to such
exhibits.
Our common stock has never traded or been quoted over-the-counter or on any
exchange. However, we intend to have our common stock listed on the NASD OTC
Bulletin Board if we are successful in effecting a business combination.
20
<PAGE>
On May 10, 2000, we filed an amendment to our articles of incorporation
increasing the number of authorized shares of common stock from 1,000 with no
par value to 100,000,000 with a par value of $0.001, and authorizing 50,000,000
shares of preferred stock with a par value of $0.001.
On May 11, 2000, we approved and adopted a six thousand-for-one (6,000-1)
forward stock split of our issued and outstanding common stock.
The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Holders of
our common stock have no preemptive rights and no right to convert our common
stock into any other securities. There are no redemption or sinking fund
provisions applicable to our common stock.
Record Holders
As of June 28, 2000, there were 8,000,000 shares of common stock, par value
$0.001, issued and outstanding, held of record by six (6) stockholders.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our By-laws as amended, provide that our directors or officers shall not be
personally liable to C.A.T.-N-K. or its shareholders for damages for breach of
such director's or officer's fiduciary duty. The effect of this provision of our
By-laws, as amended, is to eliminate the right of C.A.T.-N-K. and its
shareholders (through shareholders' derivative suits on behalf of C.A.T.-N- K.)
to recover damages against a director or officer for breach of the fiduciary
duty of care as a director or officer (including breaches resulting from
negligent or grossly negligent behavior), except under certain situations
defined by statute.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to its directors, officers and controlling persons pursuant to
the foregoing provisions or otherwise, C.A.T.-N-K. has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the shares of common stock offered in this Prospectus has
been passed upon for us by Kevin S. Woltjen, P.C., Dallas, Texas.
EXPERTS
Audited financial statements of our operations appearing in this Prospectus
and registration statement have been audited by Clyde Bailey, P.C., independent
auditors, as indicated in their reports thereon, appearing elsewhere herein and
are included in reliance upon the authority of such firm as experts in
accounting and auditing in rendering the reports.
21
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form SB-2 with the Securities and
Exchange Commission to register the shares of our common stock to be sold by the
selling stockholders. This Prospectus is part of that registration statement
and, as permitted by the Commission's rules, does not contain all of the
information set forth in the registration statement. For further information
with respect to us or our common stock, you may refer to the registration
statement and to the exhibits and schedules filed as part of the registration
statement. You can review a copy of the registration statement and its exhibits
and schedules at the Public Reference Room by calling the Commission at
1-800-SEC-0330, on the Commission's Electronic Data Gathering Analysis and
Retrieval, or EDGAR, system, or on the Commission's website at
http://www.sec.gov. You should note that statements contained in this Prospectus
that refer to the contents of any contract or other document are not necessarily
complete. Such statements are qualified by reference to the copy of such
contract or other document filed as an exhibit to the registration statement.
TRANSFER AGENT AND ESCROW AGENT
The transfer agent and registrar for the common stock is Signature Stock
Transfer, Inc. which is located at 14675 Midway Road, Suite 221, Dallas, Texas
75244. Their phone number is (972) 788-4193.
The escrow agent for the Rule 419 escrow account is Charter Escrow, 3300
Oak Lawn Avenue, Suite 500, P.O. Box 190669, Dallas, Texas 75219, telephone
number (214) 526-8383.
FINANCIAL STATEMENTS
Our audited balance sheets from inception through May 31, 2000, the related
audited statements of operations, stockholders' equity and cash flows for the
fiscal years ended May 31, 2000, and unaudited financial information for the
first quarter ended March 31, 2000, as prepared by Clyde Bailey, P.C., are
attached hereto as Pages F-1 through F-9 and incorporated herein by this
reference.
22
<PAGE>
CAT -N- K INC.
May 31, 2000
Clyde Bailey, P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
F-1
<PAGE>
CLYDE BAILEY P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
(210) 699-1287(ofc.)
(888) 699-1287 (210) 691-2911 (fax)
Member:
American Institute of CPA's
Texas Society of CPA's
Board of Directors CAT -N- K Inc.
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of CAT -N- K Inc. (Company) as of
May 31, 2000 and the related statement of operations, statement of stockholders'
equity, and the statement of cash flows for the years ended May 31, 2000, and
from October 21, 1996 (inception) to May 31, 2000. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting all of its present
efforts in securing and establishing a new business, and its planned principal
operations have not commenced, and, accordingly, no revenue has been derived
during the organizational period.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of May 31, 2000 and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has no viable operations to date and little or
no tangible assets that raise substantial doubt about its ability to continue as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Clyde Bailey
Clyde Bailey P.C.
San Antonio, Texas
June 7, 2000
F-2
<PAGE>
CAT -N- K Inc.
(A Development Stage Enterprise)
Balance Sheet
As of May 31, 2000
A S S E T S
Current Assets
Cash 460
Prepaid Legal Fees 9,756
Total Current Assets 10,216
Total Assets $ 10,216
============
L I A B I L I T I E S
Current Liabilities
Accounts Payable 1,200
Total Current Liabilities 1,200
Long-Term Liabilities
Note Payable 20,000
Total Long-Term Liabilities 20,000
Total Liabilities 21,200
Commitments and Contingencies 0
S T O C K H O L D E R S ' E Q U I T Y
Preferred Stock -
Common Stock 8,001
Additional Paid-in-Capital 1,000
Accumulated Deficit (19,985)
Total Stockholders' Equity (Deficit) (10,984)
Total Liabilities and Stockholders' Equity $ 10,216
============
The accompanying notes are integral part of the consolidated
financial statements.
F-3
<PAGE>
<TABLE>
CAT -N- K Inc.
(A Development Stage Enterprise)
Statement of Operations
For the Year Ended From 10/21/96
May 31, to May 31,
----- ---- ----------------------------- ---- --------------------------------- ------------------
<S> <C> <C> <C>
2000 1999 2000
Revenues:
Revenues - - -
------------ ------------ ----------
Total Revenues $ - $ - $ -
Expenses:
Legal Expenses 10,245 10,245
Operating Expenses 9,611 129 9,740
------------ ------------ ----------
Total Expenses 19,856 129 19,985
Net loss from Operations $ (19,856) $ (129) $ (19,985)
Provision for Income Taxes:
Income Tax Benefit - - -
Net Income (Loss) $ (19,856) $ (129) $ (19,985)
================= ================== ===========
Basic and Diluted Earnings Per Common Share $ (0.01) Nil $ (0.01)
Weighted Average number of Common Shares
used in per share calculations 666,750 - 666,750
================= ================== ===========
</TABLE>
The accompanying notes are integral part of the consolidated
financial statements.
F-4
<PAGE>
<TABLE>
CAT -N- K Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
As of May 31, 2000
<CAPTION>
$0.001 Paid-In Accumulated Stockholders'
Shares Par Value Capital Deficit Equity
------------------------------ ------------ --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Balance, October 21,
1996 - $ - $ - $ - $ -
Stock Issuance - # 1 1,000 (129) 872
Balance, May 31, 1999 1,000 1 1,000 (129) 872
Stock Issued for Services 8,000,000 8,000 8,000
Net Income (Loss) (19,856) (19,856)
Balance May 31, 2000 8,001,000 $ 8,001 $ 1,000 $ (19,985) $ (10,984)
============= ========== ========== ========== =============
Retroactively Restated
</TABLE>
See accompanying notes to Consolidated Financial Statements.
F-5
<PAGE>
<TABLE>
CAT -N- K Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
As of May 31, 2000
<CAPTION>
For the Year
Ended From 10/21/96
May 31, to May 31,
------------------------------------------------------------ --------------------- ----------------------- ------------------
2000 1999 2000
------------------------------------------------------------ --------------------- ----------------------- ------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $ (19,856) $ (129) $ (19,985)
Changes in operating assets and liabilities:
Accounts Payable 1,200 - 1,200
Prepaid Legal Expenses (9,755) - (9,755)
------------- -------------- -------------
Total Adjustments (8,555) - (8,555)
Net Cash Used in Operating Activities $ (28,411) $ (129) $ (28,540)
Cash Flows from Investing Activities:
Fixed Assets - - -
Net Cash Used in Investing Activities $ - $ $ -
Cash Flows from Financing Activities:
Note Payable 20,000 20,000
Common Stock 8,000 1,000 9,000
------------- -------------- -------------
Net Cash Provided for Financing Activities $ 28,000 $ 1,000 $ 29,000
Net Increase (Decrease) in Cash $ (411) $ 871 $ 460
Cash Balance, Begin Period 871 - -
Cash Balance, End Period $ 460 $ 871 $ 460
=================== ===================== ==================
Supplemental Disclosures:
Cash Paid for interest -
Cash Paid for income taxes -
Stock Issued for Services $ 8,000
</TABLE>
The accompanying notes are integral part of the consolidated
financial statements.
F-6
<PAGE>
CAT -N- K Inc.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
CAT -N- K Inc. ("the Company") was incorporated under the laws of the State of
Texas on October 21, 1996 for the purpose to promote and carry on any lawful
business for which a corporation may be incorporated under the laws of the State
of Texas. The company has a total of 100,000,000 authorized shares with a par
value of $.001 per share and with 3,000,000 shares issued and outstanding as of
May 31, 2000. On May 10, 2000, an amendment to the Articles of Incorporation was
filed with the Texas Secretary of State to increase the authorized common share
to 100,000,000, authorized 50,000,000 in preferred stock, and change the par
value to $.001 for both classes of stock. The Company has been inactive since
inception and has little or no operating revenues and expenses.
Development Stage Enterprise
The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting all of its present
efforts in securing and establishing a new business, and its planned principal
operations have not commenced, and, accordingly, no revenue has been derived
during the organizational period.
Federal Income Tax
The Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109, Accounting for Income Taxes. The Company accounts for income
taxes pursuant to the provisions of the Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes", which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax basis of assets and liabilities.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure on
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes.
F-7
<PAGE>
CAT -N- K Inc.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies (con't)
Earnings per Common Share
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.
Comprehensive Income
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any assets requiring disclosure
of comprehensive income.
Segments of an Enterprise and Related Information
Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.
Note 2 - Common Stock
In May of 2000, a total of 8,000,000 shares of stock were issued for consulting
services. The shares were valued at par value ($.001) for a total of $8,000 in
consulting expense.
F-8
<PAGE>
CAT -N- K Inc.
Notes to Financial Statements
Note 3 - Related Parties
Note Payable in the amount of $20,000 to David Clifton - Shareholder.
Note 4 - Going Concern
The Company has had little or no operations to date, has little or no tangible
assets or financial resources, and incurred losses since inception. These losses
and lack of operations raise substantial doubt about the Company's ability to
continue as a going concern.
Note 5 - Income Taxes
Deferred income taxes arise from temporary differences resulting from the
Company's subsidiary utilizing the cash basis of accounting for tax purposes and
the accrual basis for financial reporting purposes. Deferred taxes are
classified as current or non-current, depending on the classification of the
assets and liabilities to which they relate. Deferred taxes arising from timing
differences that are not related to an asset or liability are classified as
current or non-current depending on the periods in which the timing differences
are expected to reverse. The Company's previous principal temporary differences
relate to revenue and expenses accrued for financial purposes, which are not
taxable for financial reporting purposes. The Company's material temporary
differences consist of bad debt expense recorded in the financial statements
that is not deductible for tax purposes and differences in the depreciation
expense calculated for financial statement purposes and tax purposes.
The net deferred tax asset or liability is composed of the following:
From
2000 1999 Inception
---- ---- ---------
Total Deferred Tax Assets $ 2,978 $ 19 $2,998
Less: Valuation Allowance ( 2,978 ) (19) (2,998)
--------------- --------- ---------
Net Deferred Tax Asset - -
Total Deferred Tax Liabilities - -
--------------- --------- ---------
Net Deferred Tax Liability - - -
Less Current Portion - - -
--------------- ----------- ---------
Long-Term Portion $ - $ - $
=============== ========== ==========
Note 6 - Notes Payable
On January 19, 2000, a note payable was executed in the amount of $20,000 to an
individual and shareholder for payment of a retainer for legal services. The
note matures on January 19, 2002 and carries an interest rate of 10% payable at
the maturity date.
Note 7 - Subsequent Events
There were no other material subsequent events that have occurred since the
balance sheet date that warrants disclosure in these financial statements.
F-9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certain sections of the Texas Business Corporation Act provide for
indemnification of our directors in certain situations where they might
otherwise personally incur liability, judgments, penalties, fines and expenses
in connection with a proceeding or lawsuit to which they might become parties
because of their position with us. To the extent that indemnification may be
related to liability arising under the Securities Act, the Securities and
Exchange Commission takes the position that indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses of this offering,
all of which we will pay:
SEC Registration Fee $ 26
Blue Sky Fees and Expenses $ 3,000
Accounting Fees and Expenses $ 5,000
Legal Fees and Expenses $25,000
Transfer Agent and Registrar Fees and Expenses $ 1,500
Escrow Agent Expenses $ 750
Miscellaneous $ 2,000
Total $37,278
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On October 22, 1996, we issued 1,000 shares of our common stock to Calvin
K. Mees pursuant to exemptions from registration, including, but not limited to,
Rule 504 of Regulation D under the Securities Act of 1933. Mees tendered $1,000
to us in exchange for these shares.
The 1,000 shares purchased by Mees now represent 6,000,000 as a result of
our May 11, 2000, 6,000-to-1 forward stock split of our outstanding shares of
common stock.
On May 12, 2000, we issued the following shares of our common stock to the
following individuals pursuant to exemptions from registration, including, but
not limited to, Rule 504 of Regulation D under the Securities Act of 1933:
Name Amount of Shares Sold Consideration
Arlin K. Mees 1,000,000 Officer and director services(1)
Norma A. Ballard 940,000 Officer and director services (1)
26
<PAGE>
Wade J. Vogel 20,000 Consulting services (2)
David R. Clifton 20,000 Consulting services (2)
Tammy Hayes 20,000 Consulting services (2)
(1) Arlin Mees and Norma Ballard received these shares in exchange for
their serving as officers and directors.
(2) Consulting services rendered relating to our structuring, financing and
investment transactions.
ITEM 27. EXHIBITS
Number Description
3.1 Articles of Incorporation.
3.2 By-laws.
5.1 Opinion of Legality.
10.1 Escrow Agreement dated June 7, 2000 by and between C.A.T. -N- K.,
Inc. and Charter Escrow Company.
10.2 Promissory Note dated January 19, 2000 between C.A.T. -N- K., Inc.
and David Clifton.
23.1 Consent of Clyde Bailey, P.C.
23.2 Consent of Kevin S. Woltjen, P.C.
27.1 Financial Data Schedule.
ITEM 28. UNDERTAKINGS
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the registration statement; and
(iii)Include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
27
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) Undertaking Required by Regulation S-B, Item 512(e):
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(C) Undertaking Required by Regulation S-B, Item 512(f):
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering thereof.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cedar Hill, State of
Texas, on this 26th day of June 2000.
C.A.T.-N-K., Inc.
/s/ Calvin K. Mees
By: ____________________
Calvin K. Mees
Title: President
POWER OF ATTORNEY
The undersigned directors and officers of C.A.T.-N-K., Inc. hereby
constitute and appoint Calvin K. Mees, with full power to act without the other
and with full power of substitution and resubstitution, our true and lawful
attorney-in-fact with full power to execute in our name and behalf in the
capacities indicated below any and all amendments (including post-effective
amendments and amendments thereto) to this registration statement under the
Securities Act of 1933 and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission
and hereby ratify and confirm each and every act and thing that such attorney-
in-fact, or his substitute, shall lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Calvin K. Mees
_______________________ President & Director June 26, 2000
Calvin K. Mees
/s/ Arlin K. Mees
_______________________ Vice President & Director June 26, 2000
Arlin K. Mees
/s/ Norma A. Ballard
_______________________ Secretary/Treasurer & Director June 26, 2000
Norma A. Ballard
29
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
3.1 * Articles of Incorporation.
3.2 * By-laws.
5.1 ** Opinion of Legality.
10.1 * Escrow Agreement executed by and between the Company and Charter
Escrow Company on June 7, 2000.
23.1 * Consent of Clyde Bailey, P.C.
23.2 ** Consent of Kevin S. Woltjen, P.C.
27.1 * Financial Data Schedule.
* Filed herewith
** To be filed by Amendment
30
