As filed with the Securities and Exchange Commission on December 28, 2000
Registration No. 333-45780
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CREST VIEW, INC.
(Name of Small Business Issuer in its Charter)
Nevada 6799 88-0462761
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
1700 W. Horizon Ridge Parkway
Henderson, Nevada 89012
Telephone: (702) 614-1750
Telecopier: (702) 614-1790
(Address and telephone number of principal executive offices)
--------------------
JOHNNY R. THOMAS
Chief Executive Officer
CREST VIEW, INC.
1700 W. Horizon Ridge Parkway
Henderson, Nevada 89012
Telephone: (702) 614-1750
Telecopier: (702) 614-1790
(Name, address and telephone number of agent for service)
--------------------
Copies to:
ELLIOT H. LUTZKER, ESQ.
SNOW BECKER KRAUSS P.C.
605 Third Avenue
New York, New York 10158-0125
Telephone: (212) 687-3860
Telecopier: (212) 949-7052
--------------------
Approximate Date of Proposed Sale to the Public:
As soon as practicable after the effective date of this registration statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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 Form 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities to Amount to be Aggregate Offering Aggregate Offering Amount of
be Registered Registered Price Per Security (1) Price (1) Registration Fee
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units, consisting of one share of 600,000 uts. (2) $.02 $ 12,000 $ 3
common stock and one-third class A
warrant
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Common stock, $.001 par value 600,000 shs. (3) (3) (3)
------------------------------------------------------------------------------------------------------------------------------------
Class A warrants 200,000 wts. (4) $6.00 (5) $ 1,200,000 $317(5)
------------------------------------------------------------------------------------------------------------------------------------
Common stock, $.001 par value 200,000 shs. (6)(7) (8) (8) (8)
------------------------------------------------------------------------------------------------------------------------------------
Class B warrants 200,000 wts. (9) $9.00 (10) $ 1,800,000 $475(10)
------------------------------------------------------------------------------------------------------------------------------------
Common stock, $.001 par value 200,000 shs. (11)(12) (8) (8) (8)
------------------------------------------------------------------------------------------------------------------------------------
Common stock, $.001 par value 3,000,000 shs. (13) $.02 (14) $60,000(14) $16(14)
------------------------------------------------------------------------------------------------------------------------------------
Class A warrants 1,000,000 wts. (15) $6.00 (5) $ 6,000,000 $1,584(5)
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Common stock $.001 par value 1,000,000 shs. (7)(16) (8) (8) (8)
------------------------------------------------------------------------------------------------------------------------------------
Class B common stock purchase 1,000,000 wts. (17) $9.00 (10) $ 9,000,000 $2,376(10)
warrrants
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Common stock, $.001 par value 1,000,000 shs. (12)(18) (8) (8) (8)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 4,771
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933 (the "Act").
(2) Consists of Units, each consisting of one share of Common Stock and
one-third Class A warrant being issued by the registrant and sold to the
public hereunder commencing on the effective date of this Registration
Statement for $.02 per Unit
(3) The purchase price of the Common Stock included in the Units is the entire
purchase price of the Units for purposes of this calculation of fee, and
such fee has already been computed with respect to the Units.
(4) Consists of Class A warrants included in the Units being issued by the
registrant and sold to the public hereunder.
(5) Pursuant to Rule 457(g) under the Act, the registration fee has been
calculated on the basis of the price at which the Class A warrants may be
exercised.
(6) Consists of shares of Common Stock issuable upon exercise of the Class A
Warrants being issued by the registrant and sold to the public hereunder.
(7) Pursuant to Rule 416(a) under the Act, this registration statement also
relates to such number of shares of Common Stock as may become issuable as
a result of anti-dilution adjustments in accordance with the terms of the
Class A warrants.
(8) Pursuant to Rule 457(g) under the Act, no additional registration fee is
required for these securities.
(9) Consists of Class B warrants issuable upon exercise of the Class A warrants
being issued by the registrant and sold to the public hereunder.
(10) Pursuant to Rule 457(g) under the Act, the registration fee has been
calculated on the basis of the price at which the Class B warrants may be
exercised.
(11) Consists of shares of Common Stock issuable upon exercise of the Class B
Warrants issued upon exercise of the Class A warrants sold to the public.
(12) Pursuant to Rule 416(a) under the Act, this Registration Statement also
relates to such number of shares of common stock as may become issuable as
a result of ant-dilution adjustments in accordance with the terms of the
Class B warrants.
(13) Consists of the shares of common stock or warrants, as the case may be,
being offered by selling securityholders who purchased 3,000,000 shares of
Common Stock and 1,000,000 Class A warrants for an aggregate investment of
$3,000.
(14) Since there is presently no public market for the Common Stock, the
registration fee has been calculated based on the offering price of the
Units to the public, assuming that no portion of the purchase price payable
by the public is allocated to the Class A warrants.
(15) Consists of Class A warrants being offered by selling securityholders
referred to in footnote 13 above.
(16) Consists of shares of Common Stock issuable upon exercise of Class A
warrants being offered by selling securityholders.
(17) Consists of Class B warrants issuable upon exercise of Class A warrants
being offered by selling securityholders.
(18) Consists of Common Stock issuable upon exercise of Class B warrants
described in footnote l7 above.
--------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall 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 Section 8(a), may
determine.
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Crest View, Inc.
Cross Reference Sheet Showing Location
In Prospectus Of Information
Required by Items 1 through 23, Part I of Form SB-2
Item and Heading Location in Prospectus
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<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.................................Outside Front Cover Page
2. Inside Front and Outside Back Cover Page of
Prospectus.............................................................Inside Front and Outside Back
Cover Pages of Prospectus;
Where You Can Find More
Information
3. Summary Information, Risk Factors......................................Prospectus Summary; Risk Factors
4. Use Of Proceeds........................................................Use of Proceeds
5. Determination of Offering Price........................................Outside Front Cover Page; Plan of
Distribution
6. Dilution...............................................................Dilution and Other Comparative per
Share Data
7. Selling Security Holders...............................................Principal and Selling Stockholders
8. Plan of Distribution...................................................Plan of Distribution
9. Legal Proceedings......................................................Proposed Business - Legal
Proceedings
10. Directors, Executive Officers
Promoters and/Control Persons..........................................Management
11. Security Ownership of Certain Beneficial Owners
and Management.........................................................Principal and Selling Stockholders
12. Description of the Securities..........................................Description of Securities
13. Interest of Named Experts and Counsel..................................Legal Matters; Experts
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.........................Plan of Distribution
15. Organization Within Last Five Years....................................Prospectus Summary; Proposed
Business
16. Description of Business................................................Prospectus Summary; Proposed
Business
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iii
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<S> <C> <C>
17. Management's Discussion and Analysis or Plan of
Operation..............................................................Plan of Operation
18. Description of Property................................................Proposed Business - Property
19. Certain Relationships and Related Transactions.........................Risk Factors - Our management
controls another "blank
check" company that competes
directly with our company;
Management - Conflicts of
Interest; Principal and
Selling Stockholders
20. Market for Common Equity and Related
Stockholder Matters....................................................Risk Factors - There is no
public market for our
securities and one may never
develop; The trading price of
our common stock and our
ability to complete an
acquisition may be effected by
the sale of your shares; If we
redeem the warrants, the value
of your investment may be
reduced; We may issue a
substantial amount of
additional shares without
stockholder approval;
Description of Securities
21. Executive Compensation.................................................Management
22. Financial Statements...................................................Not Applicable
23. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.................................Not Applicable
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iv
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The information in this prospectus is not complete and may be changed. These
securities may not be sold 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.
SUBJECT TO COMPLETION - December 28, 2000
PROSPECTUS
600,000 Units
4,800,000 Shares of Common Stock
CREST VIEW, INC.
600,000 shares of common Stock and 200,000 class A
redeemable warrants each to purchase one share
of common stock
and one class B redeemable warrant; and 3,000,000
additional shares of common stock and 1,000,000 class A
warrants offered by
selling securityholders
Investing in our securities involves a high degree of risk and immediate
substantial dilution. See "Risk Factors" on page 6 and "Dilution And Other
Comparative Per Share Data" on page 21.
We are offering 600,000 units at a price of $0.02 per unit on a "best
efforts all or none basis." Each unit consists of one share of our common stock
and one class A redeemable common stock purchase warrant. The minimum purchase
required by any one investor is six hundred (600) units and the number of units
purchased must be in multiples of three. For every three units held, a holder is
entitled to exercise one class A warrant to purchase one share of our common
stock and one class B redeemable stock purchase warrant. A holder may exercise
the class A warrants for four years from _____________, 2000 at an exercise
price of $6.00 per share. For every one class B warrant held, a holder is
entitled to purchase one share of common stock. A holder may exercise the class
B warrants for five years from ____________, 2000, subject to earlier
redemption. The exercise price of the class B warrants is $9.00 per share.
This prospectus also relates to an additional 3,000,000 shares of common
stock and 1,000,000 class A warrants offered by selling securityholders named in
this prospectus. All of the shares, warrants, units and the proceeds of the
offering, as well as the securities of the selling securityholders, will be held
in an escrow account with Southwest Escrow Company until an acquisition is
completed. See "Principal and Selling Stockholders - Escrow Account."
The units will be registered only in the State of Nevada and may only be
traded in Nevada. Purchasers of such securities in this offering and in any
secondary trading market which may develop must be residents of Nevada. See Risk
Factors "Restricted Resales Of The Offered Securities."
Prior to this offering there has been no public market for the units,
common stock or warrants. No assurance can be given that such a market will
develop after the completion of this offering or that the units, common stock or
warrants can be sold at or near the public offering price. The offering price of
the units and the exercise price and other terms of the warrants have been
arbitrarily determined by us and are not necessarily related to any recognized
criteria of value.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _______________, 2000
<PAGE>
TABLE OF CONTENTS
Page
Where You Can Find More Information..........................................2
Forward Looking Statements...................................................3
Prospectus Summary...........................................................3
Risk Factors.................................................................6
Dilution and Other Comparative Per Share Data...............................21
Use of Proceeds.............................................................22
Plan of Operation...........................................................23
Proposed Business...........................................................24
Management..................................................................36
Principal and Selling Stockholders..........................................39
Description of Securities...................................................41
Plan of Distribution........................................................45
Certain Market Information..................................................48
Additional Information......................................................48
Legal Matters...............................................................48
Experts.....................................................................48
Financial Statements.......................................................F-1
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information that is different. This
prospectus is intended to offer no securities other than the common stock and
the warrants. This prospectus may be used only where it is legal to offer and
sell these securities. The information in this prospectus may be accurate on the
date of this document only.
--------------------
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the Public Reference Room of the SEC
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Regional Offices of the SEC at Seven World Trade Center, Suite 1300, New York,
New York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Please call 1-800-SEC-0330 for further information concerning the
Public Reference Room. Our filings will be available to the public from the
SEC's website at www.sec.gov. We will distribute to our stockholders annual
reports containing audited financial statements.
The company is a blank check company within the meaning of Rule 419 under
the Securities Act of 1933, as amended. As described herein, the Rule requires
that all securities issued and 90% of the funds received in the offering be
deposited in an escrow account; prohibits trading in the deposited securities;
requires a supplemental prospectus with audited financial statements concerning
the target business to be filed with the SEC and provided to stockholders; and
requires the company to provide purchasers with the right to rescind their
2
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investment and receive back their deposited funds prior to the closing of the
acquisition described in the supplemental prospectus; and requires the company
to return the escrowed funds with interest to the purchasers in this offering if
no acquisition is made within 18 months of the effective date of this
prospectus.
We will not acquire a target business if audited financial statements
cannot be obtained for such target business. Additionally, management will
provide the public stockholders with, and file with the SEC, a supplemental
prospectus containing audited financial statements of the prospective target
business to assist them in assessing the target business for purposes of
confirming their investment. While the requirement of audited financial
statements may limit the pool of potential target businesses which we may
acquire, management believes that there are many businesses potentially
available for acquisition that either have or can produce audited financial
statements, although there can be no assurance that we will be able to
successfully conclude an acquisition of any of such businesses.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including "could," "may," "will," "should," "expect," "intend,"
"plan," "anticipate," "believe," "estimate," "predict," "potential," "continue"
or "opportunity," the negative of these 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 described above and in other parts of this
prospectus. These factors may cause our actual results to differ materially from
any forward-looking statements.
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. We are under no duty to update any of
the forward-looking statements after the date of this prospectus to conform them
to actual results or to changes in our expectations.
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by reference
to the more detailed information and financial statements, including the notes
thereto, appearing elsewhere in this prospectus. Each prospective investor is
urged to read this prospectus in its entirety.
The Company
Crest View, Inc. was organized under the laws of the State of Nevada on
January 20, 2000. To date, our efforts have been limited to organizational
activities. We will not engage in any substantive commercial business
immediately following this offering. Until we consummate an "acquisition",
including a:
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o merger;
o acquisition of stock or assets;
o other business combination; or
o strategic transaction;
our only activities will be to evaluate and select an appropriate target
business for acquisition, and to:
o structure;
o negotiate; and
o complete an acquisition.
The implementation of our business plan is dependent upon the successful
consummation of this offering. See "Proposed Business." Our management consists
of persons with extensive experience in:
o operating and/or advising public companies;
o seeking out and merging with public shell companies;
o financial public relations;
o legal services; and
o interfacing with the investment banking community.
Our investors must be prepared to rely completely on the ability of our
management, which in the exercise of its sole and unlimited discretion, will
ultimately select the target business which we will acquire. We have no plans,
arrangements or understandings with any prospective acquisition candidates and
have not targeted any business for investigation and evaluation.
We are considered a "blank check" company in that we:
o have no revenues;
o own no operating business;
o have no understanding or arrangement to acquire any target business; and
o have designated no specific geographical area, industry or type of
operation in which we will seek to participate.
The company will not acquire a target business unless the fair market value
of such business, as determined by our Board of Directors based upon standards
generally accepted by the financial community, such as:
o earnings and potential therefor;
o cash flow; and
o book value
is at least 80% of the maximum proceeds to the company from this offering.
4
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If the Board of Directors determines that the financial statements of a
proposed target business do not clearly indicate that it has a sufficient fair
market value, we will obtain an opinion from an unaffiliated, independent
investment banking firm which is a member of the National Association of
Securities Dealers, Inc. with respect to the satisfaction of such criteria.
If a vote of stockholders is required, all of our initial stockholders
prior to this offering, including all of our officers and directors, have agreed
to vote the shares of common stock owned by them in accordance with the vote of
the majority of all other shares of common stock voted on any acquisition.
Our offices are located at 1700 W. Horizon Ridge Parkway, Suite 202,
Henderson, NV 89012. Our telephone number is (702) 614-1750.
The Offering
Unit offering price........................................$0.02
Securities offered.........................................600,000 units (1)
Common stock......................................600,000 shares
Class A warrants..................................200,000 warrants
Class B warrants..................................200,000 warrants
Selling securityholders
Common stock......................................3,000,000 shares (2)
Class A warrants..................................1,000,000 warrants
Class B warrants..................................1,000,000 warrants
Shares of common stock outstanding as of the
date of this prospectus...........................3,000,000 (2)
Shares of common stock outstanding after
the offering......................................3,600,000 (3)
--------------------
(1) Each unit consists of one share of our common stock and one-third of a
class A warrant. Three class A warrants entitle the holder to purchase one
share of common stock and one class B warrant. One class B warrant entitles
the holder to purchase one share of common stock. See "Description of
Securities."
(2) All of the issued and outstanding common stock held by selling
securityholders named in this prospectus will be held in escrow until an
acquisition is completed. See "Selling Securityholders."
(3) Does not give effect to up to 1,200,000 shares of common stock reserved for
issuance upon exercise of each of the class A and class B warrants. See
"Description of Securities."
5
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Use of Proceeds
We will receive up to $12,000 of gross proceeds from the sale of the units
offered hereby if all 600,000 units are sold. All of the proceeds will be held
in the escrow account and invested either in FDIC insured bank deposits, a money
market fund or United States government securities that can be readily sold
without any dissipation of the offering proceeds. The portion of the escrow
account allocable to each purchaser of securities in this offering will not be
available for use by the company until the purchaser, at the time of an
acquisition of a target business, elects to remain an investor. We expect to
incur offering expenses of up to approximately $15,000 consisting of legal,
accounting, printing, Blue Sky and state filing fees, which amounts, have been
or will be loaned to us by our chief executive officer.
Summary Financial Information
The summary financial information set forth below is derived from the more
detailed financial statements appearing elsewhere in this prospectus. Such
information should be read in conjunction with such financial statements,
including the notes thereto.
As of
September 30, 2000 June 30, 2000
------------------ -------------
(Unaudited)
Balance Sheet Data:
Total assets $ 4,109 $ 2,900
Accrued Expenses 2,900 --
Loan payable--officer 11,000 --
Total current liabilities 13,900 --
Deficit accumulated during the
development stage (12,791) (100)
Shareholders' equity (deficit) ( 9,791) 2,900
Cumulative during the
development stage (Jan. 28,
2000 to Sept. 30, 2000)
Revenues. $ --
Costs and expenses 12,791
Net loss. (12,791)
========
RISK FACTORS
The securities offered hereby are highly speculative and subject to
numerous and substantial risks, and they should not be purchased unless a
prospective investor can afford the loss of his entire investment. Therefore,
prospective purchasers of the securities offered hereby
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should carefully consider the risk factors relating to our business and the
purchase of the common stock or Warrants, including, but not limited to, those
risk factors discussed below.
We are recently organized, in our development stage, have no operations and may
never be able to complete an acquisition.
We were organized on January 20, 2000. Our efforts have been limited
primarily to organizational activities and this offering. We have extremely
limited resources, and no revenues. Neither we, nor anyone associated with us,
has conducted any discussions with any acquisition candidate. We have no plans,
arrangement or understandings, with any prospective acquisition candidates or
their representatives. We will not generate any revenues until, at the earliest,
after the consummation of an acquisition. Moreover, there can be no assurance
that any acquired business will derive any material revenues from its operations
or operate on a profitable basis. We have no experience relating to the
evaluation and acquisition of businesses although certain of our officers have
had such experience. Accordingly, investors must rely upon our management to a
greater extent then would be the case in other investments. No person should
purchase any securities if he is not willing to entrust such responsibilities
solely to our management. See "Management."
This is a "blank check" offering which provides little advance information.
"Blank check" offerings are inherently characterized by an absence of
substantive disclosure including, without limitation, disclosure of the bases on
which to evaluate the merits of an investment. Accordingly, investors in this
offering will have virtually no substantive information available at this time
for advance consideration of any specific target business. This increases the
uncertainty and risk of this investment. We are a "blank check" company in that
we were formed for the purpose of acquiring a target business, including
complete or partial interests in:
o properties;
o products; and/or
o businesses believed by management to hold potential for profit.
Potential purchasers in this offering should be aware that Rule 419 of the SEC
rules relates to "blank check" offerings. See "Use of Proceeds" and "Proposed
Business."
We have not identified any target business.
We do not yet have any understanding or arrangement to obtain any target
business. We may be unable to find a target business to acquire on favorable
terms. Therefore, investors will be entrusting their funds to our management,
which will have complete and unlimited discretion in determining specific
expenditures of the funds. This is the principal reason we may be described as a
"blank check" or "blind pool" offering. We cannot assure you as to when we will
locate a suitable target business to acquire. Our on-going inability to find one
would cause the proceeds of the offering to remain uncommitted for up to 18
months after the closing of this
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offering, which could cause a substantial decline in the market value of the
securities we are offering.
We have established limited criteria for future investments in target
businesses.
We do not propose to restrict our search for business opportunities to any
industry or to businesses which have achieved any particular stage of
development. Accordingly, we will consider firms which:
o have recently commenced operations;
o are developing companies in need of additional funds for expansion
into new products or markets;
o are seeking to develop a new product or service;
o are established businesses either experiencing financial or operating
difficulties and in need of the limited additional capital; or
o merely desirous of establishing a public trading market for its common
stock.
Therefore, we may engage in essentially any type and stage of business.
We cannot predict the manner in which we may participate in an acquisition.
Specific target businesses will be reviewed. We will also review our needs
and the needs of management. Upon the basis of these reviews and our relative
negotiating strength and that of the promoters, the legal structure or method
deemed by our management to be suitable will be selected. Such structure may
include, but is not limited to:
o leases;
o purchase and sales agreements;
o licenses;
o joint ventures; and
o other contractual arrangements.
We may act directly or indirectly through an interest in a:
o partnership;
o corporation; or
o other form of organization.
Implementing such structure may require us to:
o merge;
o consolidate; or
o reorganize with other corporations or forms of business organization.
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We cannot assure you that we would be the surviving entity. Typically, however,
a blank check company like ours would participate in a target business by
issuing to the owners of the target business a block of shares of common stock
which would transfer to the owners of the target business control of the blank
check company. As part of such a transaction, all of our directors likely will
resign, and new directors likely will be appointed without any vote by
stockholders.
We depend on part-time management and they may not have sufficient opportunity
to implement our business plan.
Our success will largely be dependent upon our officers, directors and
advisors for implementing our business plan. None of them is subject to any:
o employment agreement;
o key man life insurance policy; or
o requirement to make any specific amount or percentage of his business
time available to us.
Accordingly, our management should be expected to manage our affairs only on a
part-time or as-needed basis. This may be inadequate to properly conduct our
business. The loss of the services of such individuals could have a material
adverse effect on our ability to successfully achieve our objectives. Although
our management may retain independent professionals to evaluate potential
business opportunities in their respective areas of expertise. We cannot assure
you that they will.
Our stockholders will not participate in the determination of our choice of a
target business in which to invest.
Our management intends to structure our acquisition of a target business in
a way which does not provide stockholders with the legal right to review, vote
on or otherwise participate in our decision to acquire a target business. Our
management does not intend to provide stockholders with any opportunity to do so
unless they are required by law. However, the stockholders will receive
information on the target business prior to closing of a transaction.
Our management controls another "blank check" company that competes directly
with our company.
Johnny R. Thomas serves as the sole director, chief executive officer,
president and treasurer and is a principal stockholder of another "blank check"
company, Twin Lakes, Inc., that contemplates the same business activities as us.
Twin Lakes is in the process of registering an initial public offering of its
securities with the SEC on virtually identical terms as the offering of our
securities. As a result, Mr. Thomas will have a conflict of interest with
respect to prospective target businesses and presenting corporate opportunities
to acquire target businesses to us. Mr. Thomas may register securities for other
"blank check" companies in the future. We agreed that with respect to conflicts
of interest among these companies related to the allocation of opportunities to
acquire a target business, the company will waive any conflict or claim related
to Mr. Thomas' fiduciary duty. Mr. Thomas has agreed to present corporate
opportunities to the
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earliest registered company should he form other blank check companies. However,
the conflict may be mitigated by the fact that Mr. Thomas has the same ownership
interest in Twin Lakes as he does in us, and we and Twin Lakes have identical
stockholders, at least initially. The conflict will be more significant should,
at a later date, these facts change.
In addition, commencing on the date of this prospectus, an affiliate of Mr.
Thomas has agreed that it will make available to us a small amount of office
space, and certain office and secretarial services, as may be required by the
company from time to time until the acquisition of a target business. The
affiliate of Mr. Thomas requires an administrative fee of $50 per month.
Our management has other business interests which may conflict with our own.
Our management has other business interests as to which they devote their
primary attention and virtually all of their business time. As a result,
conflicts of interest may arise in the allocation of our management time among
various business and with respect to any joint ventures or other contractual
relationships that may be entered into between us and any of our affiliates.
These conflicts can only be resolved through exercise by the officers and
directors of such judgment as is consistent with their fiduciary duties to us
which arise under statutory laws and general corporate law.
In order to minimize potential conflicts of interest relating to non
arms-length transactions, (1) we will not merge with or acquire any target
business in which its officers, directors or non-public stockholders, or their
respective affiliates, serve as officers, directors or partners or own or hold
an ownership interest, or (2) neither ourselves nor the acquired target business
or its principals will pay to any of them finder's fees or similar compensation
whether in cash, securities or otherwise, for introducing to us a target
business subsequently acquired by us.
We may need outside advisors who will not have continuing obligations to the
company.
In order to supplement the business experience of management, we may be
required to employ:
o accountants;
o technical experts;
o appraisers;
o attorneys;
o other consultants; or
o advisors.
The selection of any such advisors will be made by our management and without
any control by stockholders. Furthermore, it is anticipated such persons may be
engaged on an ad hoc basis without a continuing fiduciary or other obligation to
us. We do not intend to hire outside consultants or advisors on a retainer
basis.
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<PAGE>
We will be liquidated if we do not acquire a target business within 18 months
and the stockholders may not get their full investment returned.
If we do not consummate an acquisition within 18 months from the completion
of this offering, we are required to distribute 90% of the amount in the escrow
account, including any interest thereon, plus any remaining net assets to all
public stockholders in proportion to their respective equity interests in us. We
will then liquidate the company and the remaining assets, if any, held by the
company after satisfaction of the company's obligations. It is likely that, in
the event of distribution of 90% of the proceeds held in the escrow account and
of any remaining assets upon liquidation, the aggregate distribution will be
less than the initial per share public offering price (assuming no value is
attributed to the warrants included in the units as a consequence of the
expenses of this offering). The initial stockholders have waived their
respective rights to participate in any liquidation distribution with respect to
the shares of common stock owned by them, however will receive 10% of the
offering proceeds to be applied against loans to the company for offering
expenses.
Our limited funds and lack of full-time management limits our ability to do
proper "due diligence" on target businesses.
Our limited funds and the lack of full-time management may make it impracticable
to conduct a complete or substantial "due diligence" investigation and analysis
of a target business before we commit our capital or other resources to such
target business. Therefore, management decisions may be made without:
o detailed feasibility studies;
o independent analysis;
o market surveys; and
o the like if we had more funds available to us, which would be
desirable.
We will be particularly dependent in making decisions upon information
provided by:
o promoter;
o owner;
o sponsor; or
o others associated with the target business seeking our participation.
We cannot assure you that our management will have the relevant background
knowledge to accurately assess such target business or, even it does, that its
assessment will prove to be correct. In fact, as potentially available business
opportunities are expected to be in different industries and at various stages
of development, the task of comparative investigation and analysis of such
business opportunities will be extremely difficult and complex. Potential
investors must recognize that we may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
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<PAGE>
Since we have not identified the target business, we cannot be certain of the
risks associated with the target business.
In general, it may be expected that any such business will present such a
high level of risk that conventional financing is unavailable to it on favorable
terms, if at all. This would be especially applicable to a business interested
in a transaction with us in order to obtain access to our extremely limited cash
on hand. Such business may involve an:
o unproven product;
o technology; or
o marketing strategy the viability and success of which is uncertain.
Such business may also possess management which lack the necessary:
o skills;
o qualifications; or
o abilities to manage a public company.
To the extent we complete an acquisition with:
o a financially unstable company;
o a company in its early stage of growth; or
o without earnings,
the company will become subject to all of the risks inherent in the operation of
such a business. Although our management will try to evaluate the risks inherent
in any particular target business, we cannot assure you that we will properly
ascertain all such risks.
Alternatively, a business opportunity may be presented by a company which
does not need any additional capital but which desires to establish a public
market for its common stock while avoiding what it may deem to be the adverse
consequences of itself undertaking a public offering. These include:
o time delays;
o significant expense;
o possible loss of voting control; and
o the disclosures required by federal and applicable
o state securities laws.
An acquired target business may be in competition with larger, established
firms with greater
o personnel;
o financial; and
o other resources
12
<PAGE>
with whom it is likely to be at a distinct competitive disadvantage. The
specific risks of a target business will not be disclosed to our stockholders
prior to its acquisition. Our investment in a target business may be expected to
be highly illiquid and could result in a total loss to us if the opportunity is
unsuccessful. Furthermore, the structure of an acquisition with a target
business presently cannot be determined since we have not had any preliminary
contacts with representatives of any prospective target business regarding the
possibility of an acquisition. See "Proposed Business-Selection and Evaluation
of Target Businesses."
We may not be able to accurately evaluate the management of a target business.
We cannot assure you that our key personnel will have sufficient experience or
knowledge relating to the operations of a particular target business. Although
we intend to closely scrutinize the management of a prospective target business
in connection with evaluating the desirability of effecting an acquisition, we
cannot assure you that our assessment of management will prove to be correct. In
addition, we can not assure you that management of the target business will have
the necessary skills to manage a company intending to embark on a program of
business development. See "Proposed Business-Selection and Evaluation of Target
Businesses."
We may never complete an acquisition because some or all of the funds from this
offering may have to be returned.
This offering is being conducted in accordance with Rule 419 under the
Securities Act ("Rule 419"), which regulates securities offerings by "blank
check" companies. Rule 419 requires that the securities to be issued and the
funds received in a blank check offering be deposited and held in an escrow
account until an acquisition meeting specified criteria is completed. Before the
acquisition can be completed and before the funds and securities can be
released, the blank check company is required to update its registration
statement with a post-effective amendment and, after the effective date of the
post-effective amendment, the blank check company is required to furnish
investors with a supplemental prospectus (which forms a part of the
post-effective amendment to its registration statement) containing specified
information, including a discussion of the business and the audited financial
statements of the proposed acquisition candidate. According to Rule 419, the
investors must have no less than 20 and no more than 45 days from the effective
date of the post-effective amendment to decide whether to remain an investor or
require the return of their investment funds. Any investor not making any
decision within such 45-day period is automatically entitled to receive a return
of his investment funds. Unless at least 80% in interest of investors elect to
remain investors, all of the deposited funds in the escrow account must be
returned to all investors and none of the securities will be issued. Rule 419
further provides that if the blank check company does not complete an
acquisition meeting the specified criteria within 18 months, at least 90% of the
deposited funds, with interest, must be returned to investors.
13
<PAGE>
Since we only intend to effect one acquisition, investors may lose their entire
investment if the target business is unsuccessful.
Since we do not intend to participate in more than one acquisition, we will
not benefit from the possible spreading of risks or offsetting of losses. Since
we only intend to effect one acquisition, investors may lose their entire
investment if the target business is unsuccessful. We will be subject to the
economic and regulatory risks applicable to the particular industry in which the
target business operates. In addition, the impact of this non-diversification
would be heightened in the event we participate in a target business dependent
on the development or market acceptance of a single or limited member of
products, processes or services. This lack of diversification also means that
the failure of our acquisition would have a disastrous effect on us and the
value of an investment in the securities we are offering, and probably would
result in a total loss to investors.
We will not acquire a target business unless it has audited financial
statements.
We will be subject to Section 15(d) of the Securities Exchange Act of 1934
and required to furnish certain information about significant acquisitions,
including certified financial statements for any business that we acquire.
Consequently, acquisition prospects that have not or are unable to obtain the
required certified statements at the time of closing may not be appropriate for
acquisition. We cannot assure you that audited financials always will be
available to us, and in such cases we will not be able to make such acquisition.
We may not have the financing necessary to acquire or develop a target business.
The net proceeds of this offering available to us may not be adequate for
us to acquire an interest in any property, business or opportunity which we
ordinarily would choose. We may have to settle for a less attractive one. We do
not, however, believe that we will be foreclosed from all business
opportunities. Assuming that we do have sufficient funds to make such
acquisition, we cannot anticipate that we will have sufficient capital to fully
exploit any property, business or opportunity acquired. Accordingly, our
ultimate success may depend upon our ability to raise additional funds or to
have other parties bear a portion of the required costs to further develop or
exploit any business opportunity in which we become involved. We cannot assure
you that funds will be available from any source. If funds are not available, it
will be necessary for us to limit our operations to those that can be financed
from the immediate proceeds of this offering.
We may have to be registered under the Investment Company Act.
The Investment Company Act of 1940, as amended, may 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. We cannot assure you that we will not be deemed to be an
investment company, especially during the period prior to acquiring a target
business. 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
14
<PAGE>
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:
o registration as an investment company;
o adoption of a specific form of corporate structure;
o compliance with certain burdensome reporting; and
o other rules and regulations.
In the event of characterization of us as an investment company, the failure by
us to satisfy regulatory requirements, whether on a timely basis or at all,
would, under certain circumstances, have a material adverse effect on us. We
believe that our anticipated principal activity, which will involve acquiring a
target business, will not subject us to regulation under the Investment Company
Act. See "Proposed Business - Investment Company Act Considerations."
The acquisition of a target business would likely give control of us to the
target business.
As part of the acquisition of a target business the current Board of
Directors is likely to authorize the issuance of a majority of our common stock
to the stockholders of the target business and to resign after appointing their
successors. Purchasers of the units would be unable to elect or remove such new
directors.
We may never effect an acquisition because of the competition for acquisition
opportunities.
The search for potentially profitable acquisition opportunities is
intensely competitive. Many "blank check" companies have gone public with
greater:
o net proceeds;
o other financial resources; and
o technical and personnel resources.
Many of these entities, include:
o venture capital funds;
o leveraged buyout funds; and
o operating business,
are well established and have extensive experience in connection with
identifying and effecting acquisitions directly or through affiliates. We cannot
assure you that we will be able to compete successfully in acquiring an
attractive target business. While we believe that there are numerous potential
target businesses that we could acquire with the net proceeds of this offering,
our ability to compete in acquiring certain target businesses may be limited by
our available our financial resources. This inherent competitive limitation
gives others an advantage in pursuing the acquisition of certain target
businesses. Further, our obligation to seek public stockholder affirmation of
their investment may delay the consummation of a transaction and may place us at
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<PAGE>
a competitive disadvantage in successfully negotiating an acquisition. See
"Proposed Business-Competition."
There is no public market for our securities and one may never develop.
Prior to this offering there has been no public trading market for our
securities. No one acting on behalf of us is likely to make any effort to
encourage any broker-dealer to make a market for our securities until after we
acquire a target business or enter into a letter of intent to do so. We cannot
assure you that a regular trading market will develop at the conclusion of this
offering or, if developed, that any such market will be sustained. If such a
market does develop the price of such securities may be volatile. Our securities
are expected to be quoted on NASD's OTC Bulletin Board.
The public offering and warrant exercise prices are not indicative of our value.
The public offering price of the units, and the exercise price and other
terms of the warrants, are arbitrary and not to be considered an indication of
our actual value. Such prices do not necessarily bear any relationship to our:
o book value;
o assets;
o current or prospective earnings; or
o any other recognized criteria of value.
We may issue a substantial amount of additional shares without stockholder
approval.
It is likely that a substantial number of such shares will be used in
connection with our acquisition of a target business. Any such issuances would
substantially dilute our percentage ownership held by purchasers in this
offering and could adversely affect prevailing market prices. All of such shares
may be issued without any action or approval by our stockholders.
Our public investors will have no effective voice in our management.
After completion of this offering the non-public stockholders will continue
to exercise effective control of us by virtue of owning approximately 83% of our
outstanding common stock.
Accordingly, they will be able effectively to:
o elect all of our directors;
o cause us to declare or refrain from declaring dividends;
o increase the authorized capital;
o issue additional shares of stock; and
o generally to direct our affairs and the use of all funds
o available to us. See "Principal Stockholders".
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<PAGE>
We may experience considerable tax consequences
We will evaluate the possible tax consequences of any prospective
acquisition of a target business and will endeavor to structure the same so as
to achieve the most favorable tax treatment to us, the acquired business and
their respective stockholders. We cannot assure you that the Internal Revenue
Service or appropriate state tax authorities will ultimately assent to our tax
treatment. To the extent the IRS or state tax authorities ultimately prevail in
recharacterizing such treatment there may be adverse tax consequences to us, the
acquired business and/or our respective stockholders.
We may have to pay finder's fees.
A person or entity who introduces us to a prospective target business
ultimately acquired by us may be entitled to receive a finder's fee. We are not
presently obligated to pay any finder's fees.
We have not and do not intend to pay dividends.
We have not paid any dividends on our common stock to date and do not
intend to pay dividends prior to the acquisition of a target business. The
payment of dividends after any such acquisition, if any, will be within the
discretion of our Board of Directors, which may be expected to take into account
our:
o revenues and earnings, if any;
o capital requirements; and
o general financial condition.
The trading price of our common stock and our ability to complete an acquisition
may be effected by the sale of your shares.
This prospectus is available for use by selling securityholders for the
sale in the public trading markets, if such markets develop, of up to 3,000,000
shares of common stock and 1,000,000 class A warrants presently owned by them.
The public sale or resale, or the possibility of the public sale or resale, of
all or a portion of such shares or warrants could have an adverse effect on the
trading price of the shares. A decline in the price of our shares may also
impair our ability to consummate an acquisition of a target business or to do so
on favorable terms.
If we redeem the warrants, the value of your investment may be reduced.
The warrants may be redeemed by us at a price of $.001 per warrant upon 30
days' written notice at any time during the warrant exercise period. Redemption
of the warrants would force the warrant holder to:
o exercise the warrants;
o pay the exercise price, at a time when it may be disadvantageous for
the holder to do so;
17
<PAGE>
o sell the warrants at the current market price for the warrants when he
might otherwise wish to hold the warrants for possible additional
appreciation; or
o accept the redemption price, which is likely to be substantially less
than the market value of the warrants at the time of redemption.
Any holder who does not exercise his warrants prior to their expiration or
redemption, as the case may be, will forfeit his right to purchase the shares of
common stock underlying his warrants. We cannot assure you that we will redeem
the warrants at a time when they can be exercised pursuant to a current
prospectus. Any redemption in the absence of such a prospectus could subject us
to litigation. For five days after the end of the notice period, we reserve the
right to have standby purchasers exercise any or all of the warrants which are
not exercised. See "Description of Securities - Class A Redeemable Warrants" and
"Description of Securities - Class B Redeemable Warrants." If your warrants are
exercised by standby purchasers your ownership interest will be reduced.
If we do not keep this registration statement current, you will not be able to
exercise the warrants.
In order for holders of the warrants to exercise such warrants there must
be a current registration statement on file with the SEC. This prospectus will
not be current 9 months from the effective date. At that time we will instruct
our warrant agent to suspend the exercise of warrants and when this or any
future prospectus is no longer current. We intend to keep the registration
statement effective with respect to the warrants for so long as they remain
exercisable by filing appropriate post-effective amendments. However,
maintenance of an effective registration statement will subject us to
substantial continuing expenses for legal and accounting fees. We cannot assure
you that we will be able to maintain a current registration statement throughout
the period during which the warrants remain exercisable. In such event the
warrants would no longer be exercisable and would be deprived of value.
Accordingly, it is possible that at the time the warrants expire they might not
be exercisable and would expire worthless, even if the common stock was trading
above the Warrant exercise price.
If we do not qualify the warrants in states other than Nevada, you may not be
able to exercise the warrants.
The warrants and underlying common stock will be saleable only in Nevada.
While certain exemptions in the securities or "blue sky" laws of certain states
might permit the warrants to be transferred even though the units were not
initially registered for sale there, we will be prevented from issuing common
stock to residents of any state upon exercise of the warrants unless either the
common stock issuable upon the warrants' exercise is registered in that state or
an exemption from registration is available. We may decide not to seek, or may
not be able to obtain, registration for the issuance of common stock in all of
the states in which the ultimate holders of the warrants reside during the
period when the warrants are exercisable. In this event, we would be unable to
issue common stock to those persons desiring to exercise their warrants unless
an exemption from such qualification exists. We cannot assure you that we will
effect any required qualification, in default of which the warrants would become
unexercisable and deprived of value. Although the units will not knowingly be
sold to purchasers in jurisdictions in
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<PAGE>
which the units are not registered or otherwise qualified for sale, purchasers
may buy units in the after-market or may move to jurisdictions in which the
warrants and the common stock underlying the warrants are not so registered or
qualified. See "Description of Securities" and "Underwriting."
We may not be able to satisfy or maintain the NASDAQ listing requirements.
The National Association of Securities Dealers, Inc., which administers the
NASDAQ system, has strict criteria for both initial and continued NASDAQ
eligibility. None of the units, common stock or warrants will qualify for
inclusion in the NASDAQ system. If after we effect the acquisition of a target
business, we met the criteria for initial inclusion in NASDAQ, the shares could
be delisted in the event we were unable to obtain any additional financing to
meet the maintenance standards. Such delisting could cause a precipitous
deadline in the price of the shares and adversely affect their liquidity in the
secondary market. We will attempt to acquire a target business which, either by
virtue of such opportunity's own financial position or with the benefit of
additional financing from a private placement, would allow us to satisfy the
then applicable listing requirements, although we cannot assure you that such
acquisition would enable us to do so.
The SEC rules limit who we can sell to in the offering, which may effect the
transferability of the units.
Our securities are covered by an SEC rule that imposes additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors. For transactions
covered by this rule, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser's written agreement to
the transaction prior to the sale. Consequently, the rule may adversely affect
the ability of broker-dealers to sell the units and also may affect the ability
of purchasers in this offering to sell their securities in the secondary market.
Our directors' may not be liable to you under certain circumstances.
Under our certificate of incorporation, our directors cannot be held liable
to us or our stockholders for monetary damages for breach of fiduciary duties
unless the breach involves:
o the director's duty of loyalty to us or our stockholders;
o acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o unlawful dividends or stock purchases or redemptions by us; or
o a transaction from which the director derived an improper personal
benefit.
This provision does not affect the liability of any director under federal or
applicable state securities laws.
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If we acquire a foreign target business, your rights may be affected by
different laws.
In the event we acquire a target business or make an investment outside of
the United States the enforcement of civil liabilities against new management by
investors may be affected. Investors may:
o have difficulty effecting service of process within the United States;
and
o have difficulty enforcing any judgments against foreign persons in
United States courts.
In addition, any such transaction may impose additional political or economic
risks not necessarily associated with a domestic acquisition.
We will not permit you to sell our securities outside of Nevada.
In order to prevent resale transactions in violation of state securities
laws, we intend to limit resale transactions in the securities included in this
offering to Nevada by placing on the certificates for the common stock and
warrants a legend to the effect that resale transactions in such securities may
only be made in Nevada and in such other states, if any, where the securities
are qualified. Such restriction on resales may limit the ability of purchasers
to resell the securities purchased in this offering. We will amend this
prospectus for the purpose of disclosing additional states, if any, in which our
securities become qualified.
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DILUTION AND OTHER COMPARATIVE PER SHARE DATA
General
The following tables summarize as of the date of this prospectus:
o the number of shares of common stock purchased from us;
o the number of shares purchased as a percentage of our total
outstanding shares;
o the aggregate consideration for such shares;
o the aggregate consideration as a percentage of total consideration;
and
o the average consideration per share for such shares by the present and
public stockholders, assuming no exercise of the warrants, and in the
second table assuming exercise of the class A warrants, but not the
class B warrants.
<TABLE>
<CAPTION>
Shares of Average
common stock % of total Aggregate % of total consideration
purchased shares consideration consideration per share
--------- ------ ------------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Common stock without exercise of warrants
Public investors 600,000 16.7% $12,000 80% $.02
Present stockholders 3,000,000 83.3 3,000 20 $.001
--------- ---- ----- -- -----
Total 3,600,000 100% $15,000 100%
========= ==== ======= ====
Common stock with exercise of class A warrants
Public investors 800,000 16.67% $1,212,000 16.8% $1.52
Present stockholders 4,000,000 83.33 6,003,000 83.2 $1.50
--------- ----- --------- ---- -----
Total 4,800,000 100% $7,215,000 100%
========= === ========== ===
</TABLE>
Dilution
"Dilution" is the difference between the public offering price of the
common stock and the net tangible book value per share immediately after the
offering. "Net tangible book value" is the amount that results from subtracting
our total liabilities and intangible assets from our total assets. As of
September 30, 2000, we had a net tangible book value deficiency for our common
stock of $9,791, or approximately $(.003) per share. See "Financial Statements."
After the sale of the units, and deducting all commissions and estimated
expenses, the pro forma net tangible book value of our outstanding common stock
at September 30, 2000 would be $2,209, or approximately $.001 per share. After
the exercise of the class A warrants by our present stockholders and the public
investors (but not the class B warrants), the pro forma net tangible book value
of our common stock at September 30, 2000, would be $7,202,209, or approximately
$1.50 per share.
The following table illustrates the dilution described above:
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Shares Warrants
Public offering price per share/warrant......................$.02 $6.00
Net tangible book value (deficiency)
per share before offering ..........................(.003) .001
Increase per share attributable
to amount invested by the public ................... .004 1.499
Net tangible book value per share
after offering ..................................... .001 1.50
Dilution to public investors.................................$.019 $4.50
USE OF PROCEEDS
We will receive $12,000 of gross proceeds from the sale of the units if all
600,000 units are sold. We expect to incur offering expenses of up to
approximately $15,000 consisting of:
o legal;
o accounting;
o printing;
o Blue Sky; and
o state filing fees
all of which will be loaned to us by our chief executive officer. One hundred
(100%) percent of the proceeds will be held in the escrow account pursuant to
Rule 419. Rule 419 permits prior to the investors election to remain an
investor, ten (10%) percent of the offering proceeds ($1,200) to be released
from escrow to us. However, we do not intend to request the release of these
funds. If an acquisition is consummated, the proceeds held in the escrow account
will be used to repay indebtedness to our chief executive officer. The escrowed
funds will be invested in either:
o FDIC insured bank deposits;
o securities of any registered open-end investment company that holds
itself out as a money market fund meeting the applicable conditions of
the Investment Company Act; or
o United States government securities that can be readily sold
o without any dissipation of the offering proceeds.
However, the escrow agent will attempt not to invest such proceeds in a manner
which may result in our being deemed to be an investment company under the
Investment Company Act. The portion of the escrow account allocable to each
purchaser of securities in this offering will not be available for use by the
company until the purchaser, at the time of an acquisition of a target business,
elects to remain an investor. Furthermore, we will not acquire a target business
unless the fair market value of such business is at least 80% of the maximum
proceeds to us from
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this offering, including proceeds received or to be received upon the exercise
of the warrants, but excluding amounts payable to non-affiliates for:
o underwriting commissions;
o underwriting expenses; and
o dealer allowances.
The proceeds held in the escrow account will not be available for our use
prior to completion of an acquisition, for any:
o expenses related to this offering;
o expenses which may be incurred by us related to the investigation and
selection of a target business; or
o the negotiation of an agreement to acquire the target business.
If an acquisition is consummated, any amount in the escrow account not
paid to the sellers of the target business may be used to:
o repay our chief executive officer; and
o pay expenses relating to the consummation of the acquisition.
We believe however, that, unless and until the warrants are exercised or
additional financing is obtained, it is unlikely that we would have sufficient
proceeds remaining after its initial acquisition and the payment of expenses
relating to such acquisition to undertake additional acquisitions. If an
acquisition is not consummated within 18 months, 90% of the proceeds of this
offering which may be distributed from the escrow account will be distributed,
with interest, only to the public stockholders.
PLAN OF OPERATION
As described in detail elsewhere in this prospectus, we plan to acquire a
target business. None of our officers, directors, promoters or affiliates have
had any preliminary contact or discussion and have no plans with any
representatives of any business or company regarding the possibility of any
agreement or merger transaction contemplated in this prospectus. In addition, we
have not identified any specific business or company for investigation and
evaluation. We will not restrict our search to any specific:
o business;
o industry; or
o geographical location.
We may participate in business ventures of virtually any kind or nature. We will
not acquire a target business unless the fair market value of such business is
at least 80% of the maximum proceeds to the company from this offering,
including proceeds received or to be received upon the exercise of the warrants,
but excluding amounts payable to non-affiliates; for:
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o underwriting commissions;
o underwriting expenses; and
o dealer allowances.
As at September 30, 2000, we had cash on hand, including cash of $4,109. We
will receive $12,000 of gross proceeds from the sale of the units offered hereby
if all 200,000 units are sold. We expect offering expenses will be loaned to us
by our chief executive officer, who has loaned $11,000 to us as of September 30,
2000. All of the proceeds of this offering will be held in an escrow account
with Southwest Escrow Company. The portion of the escrow account allocable to
each purchaser of securities in this offering will not be available for use by
us until the purchaser, at the time of an acquisition of a target business,
elects to remain an investor.
The time and costs required to select and evaluate a target business and to
structure and complete an acquisition cannot presently be ascertained by us with
any degree of certainty. Our chief executive officer intends to devote only a
small portion of his time to our affairs. Accordingly, selection of a target
business and consummation of an acquisition may require a greater period of time
than if our management devoted its full time to our affairs. While no current
steps have been taken nor agreements reached, we may engage consultants and
other third parties providing goods and services, including assistance in the
identification and evaluation of target businesses. These consultants or third
parties may be paid in
o cash;
o stock;
o options; or
o other securities.
The proceeds held in the escrow account will not be available for our use
for any expenses:
o related to this offering;
o incurred by us related to the investigation and selection of a target
business; and
o the negotiation of an agreement to acquire the target business.
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PROPOSED BUSINESS
Characteristics of a Blind Pool
Crest View, Inc. is a newly organized blind pool incorporating the selected
investor safeguards set forth below. Immediately after the consummation of an
acquisition, these safeguards (other than as described under "Escrow of Initial
Stockholders' Shares") will no longer be applicable.
Fair Market Value of Target Business; Available Authorized Shares
We will not acquire a target business unless the fair market value of such
business is at least 80% of the maximum proceeds to us from this offering. This
includes proceeds received or to be received upon the exercise of the warrants
but excludes amounts payable to non-affiliates for:
o underwriting commissions,
o underwriting expenses; and
o dealer allowances.
If the board of directors determines that the financial statements of a proposed
target business do not clearly indicate that the target business has a
sufficient fair market value, we will obtain an opinion from an unaffiliated,
independent investment banking firm (which is a member of the NASD) with respect
to the satisfaction of such criteria. Since any opinion, if obtained, would
merely state that fair market value meets the 80% of the maximum proceeds of
this offering threshold, it is not anticipated that copies of such opinion would
be distributed to our stockholders. Copies will be provided to stockholders who
request it. We will not be required to obtain an opinion from an investment
banking firm as to fair market value if the Board of Directors determines that
the target business does have sufficient fair market value. See "Proposed
Business-Selection and Evaluation of Target Business." We have 40,000,000
authorized shares of common stock. 3,600,000 shares will be issued and
outstanding upon completion of this offering, 2,400,000 are reserved for
issuance upon exercise of the warrants, and up to 34,000,000 are available for
issuance, at the sole discretion of management, in connection with the
acquisition of a target business.
Commitment of Initial Stockholders in the Event a Stockholder Vote is Required
If a vote of stockholders is required to approve an acquisition under
applicable state law, all of our stockholders prior to this offering, including
all of our officers and directors, have agreed to vote the shares of common
stock owned by them on the date hereof in accordance with the vote of the
majority of all other shares of common stock voted on any acquisition.
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Election to Remain an Investor
After we sign a definitive agreement for the acquisition of a target
business, but prior to the consummation of any acquisition, we will file a
post-effective amendment to this registration statement with the SEC concerning
the target business. Within five business days after we file the post-effective
amendment with respect to a proposed acquisition, we will send the prospectus
contained in the post effective amendment, including any amendment or supplement
(the "supplemental prospectus") thereto, to each purchaser of securities in this
offering (hereinafter a "purchaser") by first class mail or other equally prompt
means. In the supplemental prospectus we will give each purchaser the right to
elect to remain an investor by giving notice to the company within the 20 to 45
business day period from the effective date of the post-effective amendment that
we will specify in the supplemental prospectus. If a purchaser does not notify
us of his election to remain an investor within such 20 to 45 business day
period and the proposed acquisition is consummated, then within five business
days after the end of such period, we will send the investor his or her pro rata
share of the escrow account, including interest or dividends earned thereon as
at the end of such period. Without taking into account interest or dividends, if
any, earned on the escrow account, the per Unit share of the escrow account
would be approximately $.02, or approximately the same as the per-Unit offering
price. We will not consummate any acquisition if 20% or more in interest of the
purchasers are entitled to receive back their pro rata share of the escrow
account. If we do not proceed with the acquisition, the company may elect to
retain all of the proceeds of this offering, pending further efforts on the part
of the company to find a suitable target business within l8 months from the
closing of this offering.
Liquidation If No Acquisition
In the event the company does not acquire a target business within 18
months after the closing of this offering, 90% of the escrowed proceeds will be
returned, with interest, to the holders of securities purchased in this offering
in proportion to their investment within five business days after the end of
such 18 month period. Upon notice from us, the escrow agent will commence
liquidating the investments constituting the escrow account and will turn over
the proceeds to the transfer agent for the common stock for distribution to the
public stockholders. In addition, after distribution of such escrowed funds, the
company will be dissolved and we will distribute our remaining assets, if any,
after satisfaction of our obligations to all public stockholders in proportion
to their respective equity interests in us. The initial stockholders have waived
their respective rights to participate in any liquidation distribution with
respect to the shares of common stock owned by them on the date hereof exclusive
of the repayment of loans to the chief executive officer. The aggregate amount
per share that would be distributed to each of the public stockholders both from
the escrow account and upon liquidation would be $.018, without taking into
account interest, if any, earned on the escrow account.
A public stockholder shall be entitled to receive funds from the escrow
account only in the event of:
o an acquisition in which such public stockholder does not elect to
remain an investor and we proceed with the acquisition; or
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o in the event we do not acquire a target business within 18 months
after the closing of this offering.
In addition, in the event the acquisition is required to be submitted to a vote
of our common stockholders, the public stockholder will have the right to seek
at their expense the appraised value of their shares. We believe that the
amounts received in an appraisal would not be more, and possibly less, than the
pro rata portion of the escrow account to which the public stockholder is
otherwise entitled. In no other circumstances shall a public stockholder have
any right or interest of any kind to or in the escrow account.
General
Our plan is to seek, investigate and, if warranted, complete an acquisition
with a target business desiring the perceived advantages of a publicly held
corporation. At this time, we have no:
o plan;
o proposal;
o agreement;
o understanding; or
o arrangement to merge with any specific business or company.
We have not identified any specific business or company for investigation and
evaluation. No member of management or any promoter, or an affiliate of either,
has had any material discussions with any other company with respect to any
acquisition. We will not restrict our search to any specific:
o business;
o industry; or
o geographical location.
We may participate in business ventures of virtually any kind or nature. We do
not propose to restrict our search for business opportunities to any industry or
to businesses which have achieved any particular stage of development.
Accordingly, we will consider firms which:
o have recently commenced operations;
o are developing companies in need of additional funds for expansion
into new products or markets;
o are seeking to develop a new product or service;
o are established businesses either experiencing financial or operating
difficulties and in need of the limited additional capital or merely
desirous of establishing a public trading market for its common stock.
Discussion of our proposed business under this caption and throughout this
prospectus is purposefully general and is not meant to restrict our virtually
unlimited discretion to search for and enter into a potential acquisition.
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Our capital will be extremely limited, and it is not anticipated that we will be
able to participate in more than one such acquisition. We presently intend to
seek long-term growth potential, however, we may also seek short-term earnings.
We expect that the selection of a target business in which to participate
will be complex and extremely risky. Because of, among other things:
o rapid technological advances being made in some industries;
o shortages of available capital; and
o depressed conditions in other industries;
management believes that there are numerous firms seeking the capital structure
which we will have and/or the benefits of a publicly traded corporation. Such
perceived benefits of a publicly traded corporation may include:
o facilitating or improving the terms upon which additional equity
financing may be sought;
o providing liquidity for estate planning needs of principal
stockholders;
o providing incentive stock options or similar benefits to key
employees; and
o providing liquidity for all stockholders.
Potential target businesses may exist in many different industries and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such target businesses extremely difficult and
complex.
We will have insufficient capital with which to provide the owners of a
target business significant cash or other assets. We believe we will offer
owners of target businesses the opportunity to acquire a controlling ownership
interest in a public company at substantially less cost than is required to
conduct an initial public offering. Nevertheless, we have not conducted market
research and are not aware of statistical data which would support the perceived
benefits of a merger or acquisition transaction for the owners of a target
business.
It is impossible to predict at this time the status of any business in
which we may become engaged, in that such business may:
o need to seek additional capital;
o desire to have its shares publicly traded; or
o may seek other perceived advantages which we may offer.
However, we do not intend to obtain funds in one or more private placements to
finance the operation of any acquired target business until such time as we have
successfully negotiated such an acquisition.
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It is anticipated that business opportunities will be available to us from
various sources, including our:
o officers and directors;
o professional advisors, such as attorneys and accountants;
o investment bankers;
o securities broker-dealers;
o venture capitalists;
o bankers,
o other members of the financial community; and
o others who may present unsolicited proposals.
While we do not presently anticipate engaging the services of professional firms
that specialize in finding business acquisitions on any formal basis, we may
engage such firms in the future, in which event we may pay a finder's fee or
other compensation. In no event, however, will we pay a finder's fee or
commission to any officer and director of our company or any entity with which
he is affiliated for such service. Moreover, in no event shall we issue any of
our securities to any officer, director or promoter of the company, or any of
their respective affiliates or associates, in connection with activities
designed to locate a target business.
We have no plans, understandings, agreements or commitments with any
individual for such persons to act as a finder of opportunities for us. In order
to minimize potential conflicts of interest relating to non arms-length
transactions, we will not merge with or acquire any entity in which our
officers, directors or non-public stockholders, or their respective affiliates,
serve as officers, directors or partners or own or hold an ownership interest,
nor pay to any of them finder's fees for introducing a target business
subsequently acquired by us. By virtue of having signed the registration
statement of which this prospectus is a part, our directors and officers confirm
that they know of no circumstances under which, through their own initiative,
this understanding will change.
Selection and Evaluation of Target Businesses
We will have complete discretion and flexibility in identifying and
selecting a prospective target business. In connection with our evaluation of a
prospective target business, management anticipates that we will conduct a due
diligence review which will encompass, among other things:
o meeting with incumbent management;
o inspection of facilities; and
o a review of financial, legal and other information which will be made
available to us.
Under the Federal securities laws, public companies must furnish
stockholders certain information about significant acquisitions. Such
information includes audited financial statements for an acquired company with
respect to two or more fiscal years, depending upon the relative size of the
acquisition. Consequently, we will only be able to effect an acquisition with a
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prospective target business that has available audited financial statements or
has financial statements which can be audited.
The time and costs required to select and evaluate a target business and to
structure and consummate the acquisition cannot presently be ascertained with
any degree of certainty. Our current officers and directors intend to devote
only a small portion of their time to our affairs. Therefore, completion of an
acquisition may require a greater period of time than if our management devoted
their full time to our affairs. We may engage consultants and other third
parties providing goods and services, including assistance in the identification
and evaluation of potential target businesses. These consultants or third
parties may be paid in:
o cash;
o stock, options; or
o other of our securities.
The consultants or third parties may be placement agents or their affiliates.
Prior to considering participation in an acquisition, we intend to request
that we receive written materials regarding the target business containing such
items as:
o a description of product, service and company history;
o management resumes;
o financial information;
o available projections with related assumptions upon which they are
based;
o an explanation of proprietary products and services;
o evidence of existing patents, trademarks or service marks or rights
thereto;
o present and proposed forms of compensation to management;
o a description of transactions between us and our affiliates during
relevant prior periods;
o a description of present and required facilities;
o an analysis of risks and competitive conditions;
o a financial plan of operation and estimated capital requirements;
o audited financial statements; and
o other information deemed relevant.
As part of our "due diligence" investigation, officers and directors intend to:
o meet personally with management and key personnel;
o visit and inspect material facilities;
o obtain independent analysis or verification of certain information
provided;
o check references of management and key personnel; and
o take other reasonable investigative measures, to the extent of our
limited financial resources and management expertise.
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The analysis of target businesses will be undertaken by or under the
supervision of the officers and directors, who intend to consider, among other
relevant matters, the following factors:
1) the available technical, financial and managerial resources;
2) history of operations, if any;
3) prospects for the future;
4) competitive position as compared to other firms of similar size and
experience within the industry segment as well as within the industry
as a whole;
5) capital requirements and anticipated availability of required funds,
to be provided by us or from operations, through the sale of
additional securities, through joint ventures or similar arrangements
or from other sources;
6) the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items;
7) the quality and experience of management services which may be
available and the depth of that management;
8) the potential for further research, development or exploration;
9) specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the target business;
10) the potential for growth or expansion;
11) the potential for profit;
12) the perceived public recognition or acceptance of products, services
or trades; and
13) name identification.
Merger opportunities in which we may participate will present certain
risks, many of which we cannot adequately identify prior to selecting a specific
opportunity. Our stockholders must, therefor, depend on management to identify
and evaluate such risks. The investigation of specific acquisition opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific acquisition opportunity the
cost incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the
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participation in a specific acquisition opportunity, the failure to consummate
that transaction may result in the loss of the related costs incurred.
To a large extent, a decision to participate in a specific acquisition may
be made upon:
o management's analysis of the quality of the other firm's management
and personnel;
o the anticipated acceptability of new products or marketing concepts;
o the merit of technological changes; and
o numerous other factors which are difficult, if not impossible, to
analyze through the application of any objective criteria.
In many instances, it is anticipated that the historical operations of a
specific firm may not necessarily be indicative of the potential for the future
because of the requirement to:
o substantially shift marketing approaches;
o obtain additional capital;
o change product emphasis;
o change or substantially augment management; or
o make other changes.
Because of the lack of training or experience of management, we will be
dependent upon the owners and/or promoters of a target business to identify such
problems and to implement, or be primarily responsible for the implementation
of, required changes. Because we may participate in an acquisition with a newly
organized firm or with a firm which is entering a new phase of growth, it should
be emphasized that we will incur further risks since management in many
instances will not have proven its abilities or effectiveness. The eventual
market for such firm's product or services will likely not be established, and
the profitability of the firm will be unpredictable.
In seeking target businesses, management's decision will not be controlled
by an attempt to time anticipated enthusiasm in the securities market for a
specific industry, management group or product or service industry. Such
factors, however, may influence management significantly. Management will
attempt to base its decisions upon the objective of seeking long-term capital
appreciation in our real value and consider current income only a minor factor
in such decisions.
It is anticipated we will not be able to diversify. We will essentially be
limited to one venture because of our limited financing. This lack of
diversification is unlikely to permit us to offset potential losses from one
target business against profits from another, and should be considered an
adverse factor affecting any decision to purchase our securities.
It is emphasized that our management may effect transactions having a
potentially adverse impact on the public investors pursuant to the authority of
our board of directors, without submitting the proposal to the stockholders for
their consideration absent a requirement of state law to do so.
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We are unable to predict when we may participate in an acquisition. We
expect, however, that the analysis of specific proposals and the selection of a
target business may take several months or more. Persons should not purchase our
securities if they expect a short-term appreciation in our value.
Form of Acquisition
It is impossible to predict the manner in which we may participate in an
acquisition. Specific target businesses will be reviewed and, the legal
structure or method deemed by management to be suitable will be selected. Such
structure may include, but is not limited to:
o leases;
o purchase and sales agreements;
o licenses;
o joint ventures; and other
o contractual arrangements.
We may act directly or indirectly through an interest in a:
o partnership;
o corporation; or
o other form of organization.
Implementing such structure may require our:
o merger;
o consolidation; or
o organization with other corporations or forms of business
organization.
We cannot assure you that we would be the surviving entity. In addition, the
present management likely will not have control of a majority of our voting
shares following a reorganization transaction. As part of such a transaction,
all of our directors likely will resign, and new directors likely will be
appointed without any vote by stockholders.
It is anticipated that there may be target businesses presented to us
primarily because our common stock is publicly traded and a private company
stockholders desire to obtain the benefits of a combination with an existing
publicly held corporation. Such benefits may include avoiding what may be deemed
to be adverse consequences of undertaking for itself a public offering, as
distinguished from reorganizing with an existing public corporation. Adverse
factors set forth by the Blue Sky and state securities laws may include:
o the substantial cost and time delays encountered in, and the
disclosure requirements related to, obtaining SEC and state securities
agency clearances believed required prior to the registered offer and
sale of securities;
o the requirement that public stockholders have a substantial share of
voting control of the combined firm which may be smaller following a
reorganization or asset acquisition than
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would be permitted under applicable laws or be acceptable to an
underwriter in a public offering;
o the requirement that the public stockholders obtain sufficient shares
so that the tangible net book value of the shares will not be diluted
by more than a specified percentage; and
o other conditions or requirements imposed by various state laws.
These requirements generally have the stated purpose of protecting public
stockholders so that the participation in an acquisition by an investment in us
may have the effect of depriving persons purchasing securities in this offering
from such purported protections. In making an investment in us, it should be
recognized that persons purchasing securities in our company may do so under
terms which may ultimately be less favorable under the foregoing criteria than
if such persons were investing in a firm with a specific business which was
undertaking its own public offering.
As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of acquisitions. We will evaluate the
possible tax consequences of any prospective acquisition. We will endeavor to
structure an acquisition so as to achieve the most favorable tax treatment to
us, the target business and their respective stockholders. We cannot assure you
that the Internal Revenue Service or relevant state tax authorities will
ultimately assent to our tax treatment of a particular consummated acquisition.
To the extent the IRS or any relevant state tax authorities ultimately prevail
in recharacterizing the tax treatment of an acquisition, there may be adverse
tax consequences to us, the target business and their respective stockholders.
Tax considerations as well as other relevant factors will be evaluated in
determining the precise structure of a particular acquisition.
It is likely that we will acquire our participation in a target business
through the issuance of our common stock. We cannot predict the terms of any
such transaction you should note that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax free"
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended, depends upon the issuance to the stockholders of the acquired company
of at least 80% of the common stock of the combined entities immediately
following the reorganization. If a transaction were structured to take advantage
of these provisions rather than other "tax free" provisions provided under the
Internal Revenue Code, the persons who became stockholders through the purchase
of our common stock would retain 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution to the equity of
those who were our stockholders prior to such reorganization.
We may utilize available cash and equity securities in effecting an
acquisition. We will likely issue a substantial number of additional shares in
connection with the consummation of an acquisition. In most cases equal to nine
or more times the amount held by our stockholders prior to the acquisition. We
currently have no intention to issue preferred stock. We may have to effect
reverse stock splits prior to any acquisition. To the extent that such
additional shares are issued, dilution to the interests of our stockholders will
occur. Additionally, a change in control of us may occur which may affect, among
other things, our ability to utilize net operating loss carryforwards, if any.
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We intend to participate in an acquisition only after the negotiation and
execution of a written agreement. Generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify:
o certain events of default;
o detail the terms of closing;
o the conditions which must be satisfied by each of the parties
prior to such closing;
o outline the manner of bearing costs if the transaction is not
closed;
o set forth remedies upon default; and
o include miscellaneous other terms.
Investment Company Act Considerations
We may participate in a business or opportunity by purchasing, trading or
selling the securities of such business. However, we do not intend to engage
primarily in such activities. Specifically, we intend to conduct our activities
so as to avoid being classified as an "investment company" under the Investment
Company Act of 1940, to avoid application of the costly and restrictive
registration and other provisions of the `40 Act. Consequently, our
participation in a business or opportunity through the purchase and sale of
investment securities will be limited. Although we intend to act to avoid
classification as an investment company, the provisions of the `40 Act are
extremely complex and it is possible that it may be classified as an inadvertent
investment company. We intend to vigorously resist classification as investment
company. The `40 Act allows an entity a one-time option during any three-year
period to claim an exemption as a "transient" investment company. If we have to
assert any resistance, or make any claim of exemption, it could be time
consuming and costly, or even prohibitive, given our limited resources.
Our plan of business may involve changes in its:
o capital structure;
o management;
o control; and
o business, especially if it consummates a reorganization.
Each of these areas is regulated by the Investment Company Act.
Competition
We expect to encounter substantial competition in our efforts to locate
attractive opportunities for the employment of our capital. The primary
competition for desirable investments is expected to come from:
o business development companies;
o "blank checks";
o venture capital partnerships and corporations;
o venture capital affiliates of large industrial and financial
companies;
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o small business investment companies; and
o wealthy individuals.
Virtually all of these entities will have significantly greater:
o financial resources;
o experience;
o personnel resources; and
o managerial capabilities
than us and will therefor be in a better position than us to obtain access to
attractive target businesses. See also "Management -Conflicts of Interest."
Employees
We are a development stage company and currently have no employees.
Following the closing of this offering our officers are expected to continue to
devote only a minor portion of their time (less than 10%) to our affairs on as
"as needed" basis. See "Management." Our management expects to use outside
consultants, advisors, attorneys and accountants as necessary, none of which
will be hired on a retainer basis, and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to acquire or participate in a
specific acquisition.
Property
Our offices are located at 1700 W. Horizon Ridge Parkway, Suite 202,
Henderson, Nevada 89012. See "Management - Certain Relationships and Related
Transactions"
Legal Proceedings
The company is not a party to any legal proceedings.
MANAGEMENT
Executive Officers and Directors
The following table provides information concerning each officer and
director of the company. All directors hold office until the next annual meeting
of stockholders or until their successors have been elected and qualified.
Age Title
--- -----
Johnny R. Thomas 59 Chief Executive Officer,
President, Treasurer and Director
Elliot H. Lutzker 47 Secretary
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Johnny R. Thomas, Chief Executive Officer, President, Treasurer and sole
director since our formation, has been a Managing Member of Falcon Financial
Group LLC since January 14, 2000 and since March 1999, has been engaged in the
business of venture capital. Falcon is engaged in the business of providing
assistance or advice to private companies on capital formation and on becoming a
publicly traded company and introductions to investment banking firms. Mr.
Thomas is Chief Executive Officer, President, Treasurer and sole director of
Twin Lakes, Inc., a "blank check" company whose securities are, or will be,
offered pursuant to a public offering registered with the SEC. From April 1,
1994 until February 22, 1999 he served as Chairman of the Board and Chief
Executive Officer of AgriBioTech ("ABT"), a director of ABT since September 30,
1993, and was also President of ABT from April 1, 1994 until December 31, 1997.
On January 25, 2000, approximately 11 months after Mr. Thomas resigned from ABT,
ABT and several of the subsidiaries filed a voluntary case with the United
States Bankruptcy Court in the District of Nevada under Chapter 11 of the United
States Bankruptcy Code. ABT is operating its business as a debtor in possession
while its assets are being sold. Prior thereto, Mr. Thomas was President,
Chairman of the Board and Chief Executive Officer of FiberChem, Inc., now known
as Decision Link, Inc. ("FCI") from its inception in December 1986 until March
31, 1994. Dr. Thomas received his Ph.D. degree in genetics/plant breeding from
Oregon State University in 1966.
Elliot H. Lutzker, Secretary since our formation, is a senior partner in
the law firm of Snow Becker Krauss P.C., counsel to the company. He has been a
partner with Snow Becker Krauss P.C. since 1985 and was formerly an attorney
with the Division of Enforcement of the U.S. Securities and Exchange Commission.
Each member of management intends to devote less than 10% of his time to
our affairs.
Neither Johnny R. Thomas nor Elliot H. Lutzker has been involved in a prior
blank check offering. Both ABT and FCI described above, were formed as blank
check offerings which merged with operating entities controlled by Mr. Thomas
and for which Mr. Lutzker's law firm was counsel. Neither person had any
interest with those blank check offerings prior to the merger.
Executive Compensation
Since its inception, we have paid no cash compensation to our officers or
directors. Following the closing of the offering made hereby, our officers and
directors will not receive executive compensation. No officer or director is
required to make any specific amount or percentage of his business time
available to us.
Certain Relationships and Related Transactions
On January 20, 2000, upon the formation of the company, Johnny R. Thomas,
founder and Chief Executive Officer, purchased through Estancia LLC, an entity
established by Mr. Thomas for estate planning purposes, 2,960,000 shares of
common stock from the company for an aggregate of $2,960, or $.001 per share.
Mr. Thomas tendered a recourse promissory note to
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the company for his shares which was paid in June 2000 when the company opened a
bank account.
The company is renting office space, telephone and secretarial services
from Falcon Financial Group LCC, at l700 W. Horizon Ridge Parkway, Suite 202,
Henderson, NV 89012. Falcon is an entity controlled by the company's chief
executive officer. See "Management." Upon completion of an acquisition, the
company intends to pay Falcon $50 per month from the loans made by the company's
chief executive officer.
On August 23, 2000 and September 7, 2000 the company received $6,000 and
$5,000, respectively, from Johnny R. Thomas. These loans are repayable one year
from date of receipt and bear interest at 6% per annum. As of September 30,
2000, the company had accrued $57 in interest charges, which was unpaid.
Conflicts of Interest
In order to minimize potential conflicts of interest relating to non
arms-length transactions, (1) we will not merge with or acquire any target
business in which our officers, directors or non-public stockholders, or their
respective affiliates, serve as officers, directors or partners or own or hold
an ownership interest, (2) none of such persons shall receive from us or the
acquired target business or its principals any finder's fees, consulting fees or
similar compensation, whether in cash, securities or otherwise, for introducing
to us a target business subsequently acquired by us, and (3) members of
Management will not negotiate or otherwise consent to the purchase of their
respective common stock as a condition of or in connection with the proposed
acquisition by us of a target business. By virtue of having signed the
registration statement of which this prospectus is a part, our directors and
officers confirm that they know of no circumstances under which, through their
own initiative, this understanding will change.
In addition to the company, Mr. Thomas serves as the sole director, Chief
Executive Officer, President and Treasurer, and is a principal stockholder, and
Mr. Lutzker serves as secretary of another "blank check" company, Twin Lakes,
Inc., that contemplates the same business activities as the company and thus
competes directly with the company. Mr. Lutzker also serves as secretary and his
law firm is a shareholder in a third "blank check" company, Hunapu Inc., which
is affiliated with another managing member of Falcon Financial Group LLC, Mr.
Thomas' company, but Mr. Thomas has no affiliation with Hunapu Inc.
As a result of his role as the sole director of these companies, and
possibly others in the future, Mr. Thomas will have a conflict of interest with
respect to prospective target acquisitions and presenting the corporate
opportunity to the company. Management has no present intention to form any
other blank check companies prior to completion of an acquisition involving the
company. In general, officers and directors of a corporation incorporated under
the laws of the State of Nevada are required to present certain business
opportunities to such corporation, and the laws of the State of Nevada further
provide rights and remedies to the shareholders in the event such duty is
breached. As a result of Mr. Thomas's business associations with several
companies he will have conflicting interests. Therefore, the company has agreed
that with respect to conflicts of interest among these companies related to the
allocation of opportunities to
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negotiate and merge with targets, the company will waive any conflict or claim
related to Mr. Thomas's fiduciary duty.
In addition, each of these companies has different capital structures and
acquisition opportunities will generally be presented to the oldest company,
unless the target business prefers one capital structure over another. However,
the conflict may be mitigated by the fact that Mr. Thomas has the same ownership
interest in Twin Lakes as he does in the company, and each of Twin Lakes and its
company has identical stockholders, at least initially. The conflict will be
more significant should, at a later date, these facts change.
Similarly, in general, officers and directors of a corporation incorporated
under the laws of the State of Nevada owe certain fiduciary obligations to the
shareholders of such corporation. Among these are the duties of fiduciary care
and loyalty, prudent business judgment, and the above-mentioned duty regarding
the presentation of corporate business opportunities. Essentially, officers and
directors have a duty to act in manner so as to advance the financial interests
of the corporation and the shareholders. When these obligations and duties are
breached, aggrieved shareholders can seek redress through a derivative action
brought on behalf of the corporation and occasionally, depending on the facts
and circumstances, through suits brought individually.
Our officers and directors currently have and/or may in the future have
real or potential conflicts of interest with us in connection with their
allocation of business time and with respect to corporate opportunities. See
Risk Factor "Other Conflicts of Interest," for a discussion of this subject.
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the number and
percentage of common stock (being the company's only voting securities)
beneficially owned by each officer and director, each person (including any
"group" as that term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934) known by the company to own 5% or more of the common stock of the
company, and all officers and directors as a group, as of the date of this
prospectus and as adjusted to give pro forma effect, first to the sale of the
units offered hereby and then to the sale of the units and the exercise of the
Class A warrants. This table does not reflect the fact that all 3,000,000 shares
beneficially owned by the two selling securityholders in the table have been
registered for resale and if sold the selling securityholders will own zero
shares of common stock of the company.
<TABLE>
<CAPTION>
Amount and Percentage of
Nature of Outstanding
Beneficial Shares Owned
Name Ownership (1) Before Offering(2) After Offering (3)
---- ------------- ------------------ ------------------
<S> <C> <C> <C>
Johnny R. Thomas (4) 3,946,667(5) 98.67% 82.2%
1700 W. Horizon Ridge Parkway
Henderson, NV 89012
</TABLE>
39
<PAGE>
<TABLE>
<S> <C> <C> <C>
Snow Becker Krauss P.C. (6) 53,333(7) 1.33% 1.1%
605 Third Avenue
New York, NY 10158
All Officers and 4,000,000 100% 83.33%
Directors as a Group
(two persons)
--------------------
</TABLE>
(1) Unless otherwise indicated, the company has been advised that all
individuals listed have the sole power to vote and dispose of the number of
shares set forth opposite their names. For purposes of computing the number
and percentage of shares beneficially owned by a selling securityholder,
any shares which such person has the right to acquire within 60 days are
deemed to be outstanding, but those shares are not deemed to be outstanding
for the purpose of computing the percentage ownership of any other selling
securityholder.
(2) Based on 3,000,000 shares issued and outstanding as of the date of this
prospectus.
(3) Based on 3,600,000 shares issued and outstanding without giving effect to
the potential issuance of additional common stock upon the exercise of the
class A and class B warrants.
(4) Mr. Thomas is President, Treasurer and sole director of the company.
(5) Consists of 2,960,000 shares of common stock and 986,667 class A warrants
registered in the name of Estancia LLC, an entity established by Mr. Thomas
for estate planning purposes, with an address c/o the company, 1700 Horizon
Ridge Parkway, Henderson, NV 89012.
(6) This partnership consists of members of Snow Becker Krauss P.C., counsel to
the company. Elliot H. Lutzker, a member of Snow Becker Krauss P.C., is
secretary of the company.
(7) Consists of 40,000 shares of common stock and 13,333 class A warrants.
Escrow Account
The gross proceeds of this offering will be placed in an escrow account
with Southwest Escrow Company, a Nevada corporation, with an address at 401
North Buffalo, Suite 205, Las Vegas, Nevada 89145. The portion of the escrow
account allocable to each purchaser of securities in this offering will not be
available for use by the company until the purchaser, at the time of an
acquisition of a target business, elects to remain an investor. Within five
business days after we file a post-effective amendment with respect to a
proposed acquisition, we will send the prospectus contained in the post
effective amendment, including any amendment or supplement, to each purchaser of
securities in this offering. From that time, each purchaser will have the right
to elect to remain an investor by giving notice to the company within 20 to 45
business days from the effective date of the post-effective amendment. In the
event a purchaser does not elect
40
<PAGE>
to remain an investor and the company proceeds with the acquisition, such
purchaser's pro rata share of the principal amount of the escrow account plus
any interest or dividends will be returned to such purchaser and his units will
be canceled. In the event the company does not acquire a target business within
18 months after the closing of this offering:
o 90% of the escrowed proceeds will be returned with interest earned to
the holders of securities purchased in this offering in proportion to
their investments;
o 10% of the escrowed proceeds will be used to repay loans made by the
company's chief executive officer to pay expenses of the offering;
o the company will be liquidated; and
o any assets held by the company after satisfaction of the company's
obligations will be distributed to such security holders.
The initial stockholders have waived their respective rights to participate
in any liquidation distribution with respect to the shares of common stock owned
by them. In the event the acquisition is required to be submitted to a vote of
our common stockholders, such as in the case of some merger transactions, the
public stockholder will have the right to seek the appraised value of their
shares. We believe that the amounts received in an appraisal would not be more,
and possibly less, than the pro rata portion of the escrow account to which the
public stockholder would otherwise be entitled.
The units and underlying securities sold in this offering, as well as the
securities owned by the initial stockholders, will also be placed in escrow. We
will proceed with the acquisition only if at least 80% in interest of our public
stockholders elect to remain an investor within than 20 to 45 business days from
the effective date of the post-effective amendment to this registration
statement; provided, however, that we will not consummate any acquisition if 20%
or more in interest of the public stockholders do not make such election. We
may, however, complete an acquisition once 80% or more in interest of the
purchasers elect to remain investors before the end of the 45 business day
period. If we do not proceed with the acquisition, the company may elect to
retain all of the proceeds of this offering, pending further efforts to on the
part of the company to find a suitable target business within 18 months from the
closing of this offering.
In order to minimize potential conflicts of interest relating to non
arms-length transactions, the company will not merge with or acquire any target
business in which its officers, directors, parents, promoters or non-public
stockholders, or their respective affiliates, serve as officers, directors or
partners or own or hold an ownership interest, nor pay to any of them finder's
fees for introducing to the company a target business subsequently acquired by
the company. By virtue of having signed the registration statement of which this
prospectus is a part, the directors and officers of the company confirm that
they know of no circumstances under which, through their own initiative, this
understanding will change. See also Risk Factor, "Our management has other
business interests which may conflict with our own" and "Management - Conflicts
of Interest."
41
<PAGE>
DESCRIPTION OF SECURITIES
General
The company has authorized 40 million shares of common stock, par value
$.001 per share and 8 million shares of preferred stock, par value $.001 per
share. There are issued and outstanding as of the date of this prospectus
3,000,000 shares of common stock (held by two holders of record) and no shares
of preferred stock. All shares of common stock currently outstanding are validly
issued, fully paid and non-assessable. There are no plans, proposals,
arrangements or understandings with respect to the sale of additional securities
of the company after the completion of the offering and prior to the location of
a target business.
Units
Each unit consists of one share of common stock, $.001 par value, and
one-third redeemable warrants. The common stock and the warrants which comprise
the units are immediately detachable and separately transferable. The holder of
three units is entitled to exercise one class A warrant and purchase one share
of common stock and one class B warrant.
Voting Rights
Each share of common stock entitles the holder thereof to one vote, either
in person or by proxy, at meetings of stockholders. The holders are not
permitted to vote their shares cumulatively. Accordingly, the holders of more
than 50% of the issued and outstanding shares of common stock can elect all of
the directors of the company. See "Principal and Selling Stockholders."
Dividends
All shares of common stock are entitled to participate ratably in dividends
when and as declared by the company's Board of Directors out of the funds
legally available therefor. Any such dividends may be paid in cash, property or
additional shares of common stock. The company has not paid any dividends since
its inception and presently anticipates that no dividends will be declared in
the foreseeable future. Any future dividends will be subject to the discretion
of the company's Board of Directors and will depend upon, among other things,
future earnings, the operating and financial condition of the company, its
capital requirements, general business conditions and other pertinent facts.
Therefore, there can be no assurance that any dividends on the common stock will
be paid in the future.
Miscellaneous Rights and Provisions
Holders of common stock have no preemptive or other subscription rights,
conversion rights, redemption or sinking fund provisions. In the event of the
dissolution, whether voluntary or involuntary, of the company, each share of
common stock is entitled to share ratably in any assets available for
distribution to holders of the equity securities of the company after
satisfaction of all liabilities.
42
<PAGE>
Class A Redeemable Warrants
Subject to adjustment as described below, the holders of three (3) units
will entitle the holder to exercise one class A warrant, purchase from the
company, for cash, one share of common stock at a price of $6.00 per share for a
period of four years from the date of this prospectus and one class B redeemable
warrant. The exercise price of the class A warrants may, at the company's
option, upon 30 days prior written notice, be reduced from time to time for a
period or periods, none of which shall be for less than 15 nor more than 90
days. The exercise period may also be extended at the company's sole option.
As of the date of this prospectus, the company has authorized 1,200,000
class A warrants, of which 1,000,000 were issued and held by two persons. The
company has the right to redeem the class A warrants at a price of $.001 per
warrant on at least 30 days prior notice, at any time during the exercise
period. Any holder who does not exercise his warrants prior to their expiration
or redemption, as the case may be, will forfeit his right to purchase the
underlying shares of common stock. We reserve the right to have standby
purchasers exercise any or all of the warrants which are not exercised at the
end of the 30-day notice period for a five day period thereafter.
Set forth below is a brief summary of other significant information
concerning the class A warrants. This summary is subject to the provisions of
the actual class A warrant certificates, specimens of which have been filed as
exhibits to the registration statement of which this prospectus is a part, and
reference is made to such exhibits for a detailed description of the provisions
thereof summarized below.
The class A warrants are immediately detachable and exercisable. The holder
of a class A warrant may exercise it during the exercise period by surrendering
it, with the form of election to purchase on the reverse side of the class A
warrant properly executed, together with the payment of the exercise price to
the warrant agent. The class A warrants may be exercised in whole at any time or
in part from time to time. A new class A warrant will be issued for the
remaining number of shares purchasable under the unexercised portion of the
class A warrant. No fractional shares will be issued upon the exercise of class
A warrants.
The exercise price and the number of shares of common stock purchasable
upon exercise of the warrants are subject to anti-dilutive adjustment upon the
occurrence of stock dividends, stock splits, combinations, reclassifications and
other similar events. No such adjustments will be made upon the issuance of
shares of common stock in connection with the company's acquisition of a target
business. No adjustment of the exercise price will be made until cumulative
adjustments therein amount to $.05. No adjustments as to dividends will be made
upon any exercise of class A warrants.
The warrants do not confer upon the holders thereof voting or pre-emptive
rights or any other rights (including the right to participate in the
distribution of the company's assets in the event of its liquidation or
dissolution) as a stockholder of the company.
43
<PAGE>
The company must have a current registration statement on file with the SEC
in order to continue the registration of the common stock underlying the class A
warrants, and accordingly it will be necessary for the company to file
post-effective amendments to the registration statement of which this prospectus
is a part when subsequent events require. There can be no assurance that such
registration statement can or will be kept current, and if it is not kept
current the class A warrants will not be exercisable and may be deprived of
value. In addition, the common stock issuable upon the exercise of the class A
warrants cannot be sold in various jurisdictions without the registration
therein of the common stock in accordance with local law, or the availability of
an exemption from such registration. The company may find it impractical or
impossible so to qualify the common stock in those jurisdictions where it does
not initially qualify this offering. Class A warrant holders who are residents
of jurisdictions in which the company does not qualify the common stock
underlying the class A warrants for sale will have no choice but to sell their
class A warrants or to let them expire.
Class B Redeemable Warrants
Subject to adjustment as described below, each class B warrant will entitle
the holder to purchase from the company, for cash, one share of common stock at
a price of $9.00 per share for a period of five years from the date of this
prospectus. The exercise price of the class B warrants may, at the company's
option, upon 30 days prior written notice, be reduced from time to time for a
period or periods, none of which shall be for less than 15 nor more than 90
days. The exercise period may also be extended at the company's sole option.
As of the date of this prospectus, the company has authorized 1,200,000
class B warrants, none of which were issued and outstanding. The company has the
right to redeem the class B warrants at a price of $.001 per warrant on at least
30 days prior notice, at any time during the exercise period. Any holder who
does not exercise his warrants prior to their expiration or redemption, as the
case may be, will forfeit his right to purchase the underlying shares of common
stock. We reserve the right to have standby purchasers exercise any or all of
the warrants which are not exercised at the end of the 30-day notice period for
a five day period thereafter.
Set forth below is a brief summary of other significant information
concerning the class B warrants. This summary is subject to the provisions of
the actual class B warrant certificates, specimens of which have been filed as
exhibits to the registration statement of which this prospectus is a part, and
reference is made to such exhibits for a detailed description of the provisions
thereof summarized below.
The class B warrants are immediately detachable and exercisable. The holder
of a class B warrant may exercise it during the exercise period by surrendering
it, with the form of election to purchase on the reverse side of the class B
warrant properly executed, together with the payment of the exercise price to
the warrant agent. The class B warrants may be exercised in whole at any time or
in part from time to time. A new class B warrant will be issued for the
remaining number of shares purchasable under the unexercised portion of the
class B warrant. No fractional shares will be issued upon the exercise of class
B warrants.
44
<PAGE>
The exercise price and the number of shares of common stock purchasable
upon exercise of the warrants are subject to anti-dilutive adjustment upon the
occurrence of stock dividends, stock splits, combinations, reclassifications and
other similar events. No such adjustments will be made upon the issuance of
shares of common stock in connection with the company's acquisition of a target
business. No adjustment of the exercise price will be made until cumulative
adjustments therein amount to $.05. No adjustments as to dividends will be made
upon any exercise of class B warrants.
The warrants do not confer upon the holders thereof voting or pre-emptive
rights or any other rights (including the right to participate in the
distribution of the company's assets in the event of its liquidation or
dissolution or as a stockholder of the company) and they do not confer upon the
holders the right to receive a distribution of any portion of the escrow
account.
The company must have a current registration statement on file with the SEC
in order to continue the registration of the common stock underlying the class B
warrants, and accordingly it will be necessary for the company to file
post-effective amendments to the registration statement of which this prospectus
is a part when subsequent events require. There can be no assurance that such
registration statement can or will be kept current, and if it is not kept
current the class B warrants will not be exercisable and may be deprived of
value. In addition, the common stock issuable upon the exercise of the class B
warrants cannot be sold in various jurisdictions without the registration
therein of the common stock in accordance with local law, or the availability of
an exemption from such registration. The company may find it impractical or
impossible so to qualify the common stock in those jurisdictions where it does
not initially qualify this offering. Class B warrant holders who are residents
of jurisdictions in which the company does not qualify the common stock
underlying the class B warrants for sale will have no choice but to sell their
class B warrants or to let them expire.
State Blue Sky Information
The units offered hereby will be sold in the state of Nevada. Additionally,
the company believes that the units, upon completion of this offering, and the
common stock and warrants comprising the units, once they become separately
transferable, will be eligible for sale on a secondary market basis in various
other states based upon the registration of such securities in such states or
the availability of an applicable exemption from the state's registration
requirements, subject in each case to the exercise of the broad discretion and
powers of the securities commission or other administrative bodies having
jurisdiction in each state and any changes in statutes and regulations which may
occur after the date hereof. The company will amend this prospectus for the
purpose of disclosing additional states, if any, in which the company's
securities will be eligible for resale in the secondary trading market.
Transfer and Warrant Agent
The company will act as its own transfer agent and warrant agent until the
completion of an acquisition.
45
<PAGE>
Escrow Agent
The company's escrow agent is Southwest Escrow Company, with an address of
401 North Buffalo, Suite 205, Las Vegas, Nevada 89145.
PLAN OF DISTRIBUTION
The securities being offered by us are being offered on a "best efforts all
or none basis." The minimum number of units which can be purchased by any one
investor is six hundred (600), and the total number of units purchased must be
in multiples of three.
This offering will expire on ___________, 2001, 90 days after the date of
this prospectus, however, we may extend the offering for an additional 90 days
at our sole discretion. The securities offered hereby will be offered on behalf
of the company by Johnny Thomas, chief executive officer, who will rely on the
safe-harbor from broker dealer registration set out in Rule 3a4-1 under the
Securities Exchange Act of 1934, in particular under subsection (a)(4)(ii) or
(iii) of Rule 3a4-1.
The shares of common stock issuable upon exercise of our warrants are being
offered by us directly to the securityholders, without an underwriter.
The holders of the warrants who exercise such warrants may sell the common
stock purchased upon their exercise from time to time in public transactions, on
or off the NASD's OTC Bulletin Board, or private transactions, at prevailing
market prices or at privately negotiated prices. They may sell their shares in
the following types of transactions:
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus; and
o face-to-face transactions between sellers and purchasers without a
broker-dealer, or otherwise.
To our knowledge, the selling securityholders have not entered into any
underwriting arrangements for the sale of the shares. As used in this
prospectus, selling securityholders include donees, pledgees, distributees,
transferees and other successors-in-interest of the selling securityholders
named in this prospectus.
Each selling securityholder must pay brokerage commissions and discounts
for the sale of its shares. We have agreed to indemnify the selling
securityholders against certain liabilities, including liabilities under the
Securities Act. The selling securityholders may agree to indemnify
46
<PAGE>
any agent, dealer or broker-dealer participating in sales of the shares against
certain liabilities, including liabilities under the Securities Act. The selling
securityholders have agreed to indemnify us and our directors, officers and
controlling persons against certain liabilities related to the sale of the
shares, including liabilities under the Securities Act. Insofar as
indemnification for liabilities under the Securities Act may be permitted to our
directors, officers or controlling persons, in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefor unenforceable.
The 1,200,000 class A warrants being offered by this prospectus are being
offered and 1,200,000 class B warrants issuable upon exercise of the class A
warrants will be offered by the holders of these securities and may be sold by
these holders in the over-the-counter market, or privately, or through
broker-dealers selected by these holders, or as principals.
There are 3,000,000 shares of outstanding common stock covered by this
prospectus offered by the holders thereof for their own account and not that of
the company. Such shares will be held in an escrow account until a target
business is identified and only then be sold in the over-the-counter market
through brokers, or otherwise.
Usual and customary or negotiated brokerage fees or commissions may be paid
by the holders in connection with such sales.
The selling securityholders, their respective transferees, intermediaries,
donees, pledgees or other successors in interest through whom the selling
securityholders' common stock and warrants are sold may be deemed "underwriters"
within the meaning of Section 2(11) of the Securities Act, with respect to the
securities offered and any profits realized or commissions received may be
deemed to be underwriting compensation. Any broker-dealers that participate in
the distribution of the selling securityholders' securities may be deemed to be
"underwriters," as defined in the Securities Act, and any commissions,
discounts, concessions or other payments made to them, or any profits realized
by them upon the resale of any selling securityholders' securities purchased by
them as principals, may be deemed to be underwriting commissions or discounts
under the Securities Act.
We will pay all expenses incident to the registration of the securities
covered by this prospectus. We will not pay, among other expenses, commissions
and discounts of brokers, dealers or agents.
The sale of the common stock and warrants are subject to the prospectus
delivery and other requirements of the Securities Act. To the extent required,
we will use our best efforts to file and distribute, during any period in which
offers or sales are being made, one or more amendments or supplements to this
prospectus or a new registration statement to describe any material information
with respect to the plan of distribution not previously disclosed in this
prospectus, including, but not limited to, the number of securities being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, if any, the purchase price paid by the
underwriter for securities purchased from a selling securityholder, any
discounts, commissions or concessions allowed or reallowed or paid to dealers
and the proposed selling price to the public.
47
<PAGE>
Under the Exchange Act and the regulations thereunder, any person engaged
in a distribution of our securities offered by this prospectus may not
simultaneously engage in market-making activities with respect to our common
stock during the applicable "cooling off" period five business days prior to the
commencement of this distribution. The selling securityholders will also be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, Regulation M, in connection with transactions
in the securities, which provisions may limit the timing of purchases and sales
of securities by the selling securityholders.
CERTAIN MARKET INFORMATION
The offering made by this prospectus is the initial public offering of the
company's securities and, accordingly, there has been, and there currently is,
no public trading market for its units, common stock or Warrants. There can be
no assurance that any public trading market therefor will ever develop or, if
one develops, that it will be sustained.
ADDITIONAL INFORMATION
A registration statement relating to the securities offered hereby has been
filed by the company with the SEC. This prospectus does not contain all of the
information set forth in such registration statement. For further information
with respect to the company and to the securities offered hereby, reference is
made to such registration statement, including the exhibits thereto. Statements
contained in this prospectus as to the content of any contract or other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference.
LEGAL MATTERS
The validity of the issuance and sale of the units being offered by this
prospectus is being passed on for the company by Snow Becker Krauss P.C., 605
Third Avenue, New York, New York. Snow Becker Krauss P.C., counsel to the
company, owns 40,000 shares of our common stock and 13,333 class A warrants.
Elliot H. Lutzker, a member of Snow Becker Krauss P.C., is Secretary of the
company.
EXPERTS
The financial statements as of June 30, 2000 included in the registration
statement of which this prospectus is a part, have been included herein in
reliance on the report of Lazar Levine & Felix LLP, independent accountants,
given on the authority of that firm as an expert in accounting and auditing.
48
<PAGE>
CREST VIEW, INC.
(A Development Stage Company)
INDEX
Page(s)
Independent Auditors' Report F-2
Financial Statements:
Balance Sheets as of June 30, 2000 and
September 30, 2000 (unaudited) F-3
.
Statements of Operations for the Period from
Inception January 20, 2000 to June 30, 2000,
the Three Months Ended September 30, 2000
(unaudited) and the cumulative period during
the development stage from January 20, 2000
(inception) to September 30, 2000 (unaudited) F-4
Statement of Shareholders' Equity for the
Period from Inception January 20, 2000 to
June 30, 2000 and the Three Months ended
September 30, 2000 (unaudited) F-5
Statements of Cash Flows for the Period from
Inception January 20, 2000 to June 30, 2000,
the Three Months Ended September 30, 2000
(unaudited) and the cumulative period during
the development stage from January 20, 2000
(inception) to September 30, 2000 (unaudited) F-6
Notes to Financial Statements F-7
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders
Crest View, Inc.
Henderson, Nevada
We have audited the accompanying balance sheet of Crest View, Inc. (a
development stage company), as of June 30, 2000, and the related statements of
operations, shareholders' equity and cash flows for the period from inception
(January 20, 2000) to June 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of Crest View, Inc. (a development
stage company) as of June 30, 2000, and the results of its operations and its
cash flows for the period then ended, in conformity with generally accepted
accounting principles.
--------------------------
LAZAR LEVINE & FELIX LLP
New York, New York
August 15, 2000
F-2
<PAGE>
CREST VIEW, INC.
(A Development Stage Company)
BALANCE SHEETS
September 30, June 30,
--------------------- --------------------
2000 2000
(unaudited)
- ASSETS -
CURRENT ASSETS:
Cash $ 4,109 $ 2,900
-------- -------
TOTAL ASSETS $ 4,109 $ 2,900
======== =======
- LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) -
CURRENT LIABILITIES:
Accrued expenses $ 2,900 $ --
Loans payable - officer (Note 3) 11,000 --
-------- -------
13,900 --
-------- -------
COMMITMENTS AND CONTINGENCIES (Note 4)
SHAREHOLDERS' EQUITY (DEFICIT) (Note 4):
Preferred stock, $.001 par
value; 8,000,000 shares
authorized, none issued -- --
Common stock, $.001 par value;
40,000,000 shares authorized,
3,000,000 shares issued and
outstanding 3,000 3,000
Deficit accumulated during the
development stage (12,791) (100)
-- --
(9,791) 2,900
-------- -------
$ 4,109 $ 2,900
======== =======
The accompanying notes are an integral part of these financial startements.
F-3
<PAGE>
CREST VIEW, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
During the For the
Development For the Period
Stage Three January
(January 20, Months 20, 2000
2000 to Ended (inception)
September September to June
30, 2000) 30, 2000 30, 2000
----------- ----------- -----------
(unaudited) (unaudited)
REVENUES $ -- $ -- $ --
-------- -------- -----
COSTS AND EXPENSES:
Filing fees 4,871 4,771 100
Professional fees 6,000 6,000 --
Other expenses 1,863 1,863 --
Interest expense 57 57 --
-------- -------- -----
12,791 12,691 100
-------- -------- -----
NET LOSS $(12,791) $(12,691) $(100)
======== ======== =====
The accompanying notes are an integral part of these financial startements.
F-4
<PAGE>
CREST VIEW, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Shares During the
---------------------- Development Shareholders'
Number Amount Stage Equity
---------- --------- ----------- ---------
<S> <C> <C> <C>
At inception, January 20, 2000 -- $ -- $ -- $ --
Issuance of common units 3,000,000 3,000 -- 3,000
Net loss for period ended June 30, 2000 -- -- (100) (100)
--------- ------ -------- --------
BALANCE AT JUNE 30, 2000 3,000,000 3,000 (100) 2,900
Net loss for period from July 1, 2000 to September 30, 2000 (unaudited) -- -- (12,691) (12,691)
--------- ------ -------- --------
BALANCE AT SEPTEMBER 30, 2000 (UNAUDITED) 3,000,000 $3,000 $(12,791) $ (9,791)
========= ====== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial startements.
F-5
<PAGE>
CREST VIEW, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative During
the Development
Stage
(January 20, 2000 For the Three For the Period
to Months Ended January 20, 2000
September 30, September 30, (inception) to
2000) 2000 June 30, 2000
---------------- ---------------- ----------------
(unaudited) (unaudited)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $(12,791) $(12,691) $ (100)
Adjustment to reconcile net loss to net cash utilized by -- -- --
operating activities
Increase in accrued expenses 2,900 2,900 --
-------- -------- -------
Net cash utilized by operating activities (9,891) (9,791) (100)
-------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from officers' loans 11,000 11,000 --
Sale of common units 3,000 -- 3,000
-------- -------- -------
Net cash provided by financing activities 14,000 11,000 3,000
-------- -------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,109 1,209 2,900
Cash and cash equivalents at beginning of period -- 2,900 --
-------- -------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,109 $ 4,109 $ 2,900
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial startements.
F-6
<PAGE>
CREST VIEW INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Information as of and for the Three Months Ended September 30, 2000 is
unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
Crest View, Inc., ("the Company"), was organized in the state of
Nevada on January 20, 2000. The Company was formed to serve as a
vehicle to raise capital to acquire a business and is currently
considered a "blank check" company inasmuch as the Company is not
generating revenues and does not own an operating business. The
Company has no employees and no material assets. Administrative
services are currently being provided by an entity controlled by an
officer of the Company. The Company's efforts to date have been
limited to organizational activities.
The Company is considered as being in the development stage, since its
inception, in accordance with Statement of Financial Accounting
Standards No. 7, and its fiscal year end is December 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's accounting policies are in accordance with generally
accepted accounting principles. Outlined below are those policies
considered particularly significant.
(a) Use of Estimates:
In preparing financial statements in accordance with generally
accepted accounting principles, management makes certain estimates and
assumptions, where applicable, that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period.
While actual results could differ from those estimates, management
does not expect such variances, if any, to have a material effect on
the financial statements.
(b) Statements of Cash Flows:
For purposes of the statement of cash flows the Company considers all
highly liquid investments purchased with a remaining maturity of three
months or less to be cash equivalents.
NOTE 3 - LOANS PAYABLE - OFFICER:
On August 23, 2000 and September 7, 2000 the Company received $6,000
and $5,000, respectively from an officer of the Company. These loans
are repayable one year from the date of receipt and bear interest at
6% per annum. As of September 30, 2000, the Company had accrued $57 in
interest charges, which was unpaid.
F-7
<PAGE>
CREST VIEW INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Information as of and for the Three Months Ended September 30, 2000 is
unaudited)
NOTE 4 - SHAREHOLDERS' EQUITY:
As of June 30, 2000, the Company had issued an aggregate of 3,000,000
units at a price of $.001 per unit, with each unit consisting of one
(1) share of common stock and one-third (1/3) Class A Redeemable
Common Stock Purchase Warrant, for cash proceeds of $3,000. The holder
of 3 units is entitled to exercise one Class A Warrant to purchase one
share of common stock and one Class B Redeemable Common Stock Purchase
Warrant at a price of $6.00 per share. One class B Warrant entitles
the holder to purchase one share of Common stock at a price of $9.00
per share.
The Company is preparing to file a registration statement on Form
SB-2, with the Securities and Exchange Commission, to register
4,800,000 shares of its common stock. The Company intends to offer for
sale, 600,000 units (each unit consisting of one (1) share of common
stock and one-third (1/3) Class A Redeemable Common Stock Purchase
Warrant) at a per unit price of $.02.
The proposed offering also covers the resale of an aggregate of
1,000,000 shares of common stock underlying the warrants previously
issued and an aggregate of 3,000,000 shares currently held by certain
shareholders. The Company will not receive any of the proceeds from
the resale of these shares.
F-8
<PAGE>
No dealer, salesperson or other
person is authorized to give any
information or to represent anything
not contained in this prospectus.
You must not rely on any
unauthorized information or
representations. This prospectus is
an offer to sell only the shares
offered hereby, but only under
circumstances and in jurisdictions
where it is lawful to do so. The
information contained in this
prospectus is current only as of its
date
600,000 Units
4,800,000 Shares of Common Stock
Crest View, Inc.
Through and including ____________,
2001 (90 days from the date funds
and securities are released from
escrow), all dealers effecting
transactions in these securities,
whether or not participating in this
offering, may be required to deliver January __, 2001
a prospectus. This is in addition to
a dealer's obligation to deliver a
prospectus when acting as an
underwriter and with respect to an
unsold allotment or subscription.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The following statutes and by-law provisions are the only statutes, charter
provisions, by-laws, contracts or other arrangements known to the registrant
that insure or indemnify a controlling person, director or officer of the
registrant in any manner against liability which he or she may incur in his or
her capacity as such.
Article EIGHTH of the registrant's Articles of Incorporation provides that:
The registrant may, to the fullest extent permitted by the General
Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Law from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
Article VI of the registrant's By-laws provides that:
On the terms, to the extent, and subject to the condition prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion impose in general or particular cases
or classes of cases, (a) the Corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise which any director or officer of the registrant
served in any capacity at the request of the registrant, by reason of the fact
that he, his testator or intestate, was a director or officer of the registrant,
or served such other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys, fees,
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, and (b) the registrant may pay, in advance of final
disposition of any such action or proceeding, expenses incurred by such person
in defending such action or proceeding.
On the terms, to the extent, and subject to the conditions prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion impose in general or particular cases
or classes of cases, (a) the registrant shall indemnify any person made a party
to an action by or in the right of the registrant to procure a judgment in its
favor, by reason of the fact that he, his testator or intestate, is or was a
director or officer of the registrant, against the reasonable expenses,
including attorneys, fees, actually and
II-1
<PAGE>
necessarily incurred by him in connection with the defense of such action, or in
connection with an appeal therein, and (b) the registrant may pay, in advance of
final disposition of any such action, expenses incurred by such person in
defending such action or proceeding.
Section 78.751 of the Nevada General Corporation Law ("GCL"), provides
that:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
II-2
<PAGE>
4. Any indemnification under subsections 1 and 2, unless ordered by a court
or advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were
not parties to the act, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
act, suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to subsection 2 or
for the advancement of expenses made pursuant to subsection 5, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct,
fraud or a knowing violation of the law and was material to the cause of
action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
II-3
<PAGE>
Section 78.752 of the GCL provides that:
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in his
capacity as a director, officer, employee or agent, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection nay provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a person
pursuant to this section may be provided by the corporation or any other person
approved by the board of directors, even if all or part of the other person's
stock or other securities is owned by the corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the
insurance or other financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal
liability for his action, even if a director approving the insurance
or other financial arrangement is a beneficiary of the insurance or
other financial arrangement.
II-4
<PAGE>
5. A corporation or its subsidiary which provides self-insurance for itself
or for another affiliated corporation pursuant to this section is not subject to
the provisions of Title 57 of the Nevada Revised Statutes.
Item 25. Other Expenses of Issuance and Distribution
SEC Registration Fee............................................. $4,771
Printing Expenses................................................ 1,000
Legal Fees and Expenses.......................................... 5,000
State Securities Qualification Fees and Expenses................. 3,000
Accounting and Auditing Fees and Expenses........................ 1,500
Miscellaneous.................................................... 4,729
--------
Total............................................................ $ 20,000
========
Item 26..Recent Sales of Unregistered Securities
(a) As of January 20, 2000, the registrant had issued an aggregate of
2,960,000 shares of its common stock and 986,667 class A redeemable common stock
purchase warrants to its founder for $2,960 in cash. The registrant is using the
proceeds for working capital and the general corporate purposes. There were no
underwriters in connection with the above transaction. The registrant believes
that these securities were issued in a transaction not involving a public
offering in reliance upon an exemption from registration provided by Section
4(2) of the Act; as the investor is an accredited investor.
(b) As of January 20, 2000, the registrant issued an aggregate of 40,000
shares of its common stock and 13,333 class A redeemable common stock purchase
warrants to Snow Becker Krauss P.C. in connection with legal services being
rendered to registrant. See "Legal Matters" in the prospectus which is included
in this registration statement. There were no underwriters in connection with
the above transaction. The registrant believes that these securities were issued
in a transaction not involving a public offering in reliance upon an exemption
from registration provided by Section 4(2) of the Act. The investor is a
sophisticated investor and was involved in the formation of the registrant and
the preparation of the registration statement.
The Board of Directors and executive officers were elected as of January
20, 2000 and are not aware of any other sales of unregistered securities of the
registrant. John C. Francis, who is listed as a director in the registrants'
Articles of Incorporation, resigned from all positions with the registrant on
January 20, 2000.
Item 27..Exhibits and Financial Statement Schedules
(a) Exhibits
3.1 Articles of Incorporation of the registrant.
3.2 By-Laws of the registrant.
II-5
<PAGE>
4.1 Specimen Common Share Certificate.
4.2 Specimen Class A Warrant Certificate.
4.3 Specimen Class B Warrant Certificate.
5.1 Opinion of Snow Becker Krauss P.C.
10.1 Escrow Agreement
23.1 Consent of Snow Becker Krauss P.C.
23.2 Consent of Lazar Levine & Felix LLP
Item 28. Undertakings
The 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 of 1933, as amended (the "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;
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Act, to treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under 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
II-6
<PAGE>
opinion of its 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 Act and will
be governed by the final adjudication of such issue.
(5) For determining any liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Act as part of this registration statement as of the time the
Commission declared it effective.
(6) For determining any liability under the Securities Act, to treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
II-7
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada on the 27th day of
December 2000.
CREST VIEW, INC.
By: /s/ Johnny R. Thomas
------------------------------
Johnny R. Thomas, President
and Treasurer
In accordance with 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 stated:
Signature Title Date
--------- ----- ----
/s/ Johnny R. Thomas President, Treasurer December 27, 2000
----------------------------- (Principal Executive
Johnny R. Thomas Officer and Chief
Financial Officer) and
Chairman of the Board
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
------ ----------- ----
3.1 Article of Incorporation of the registrant.*
3.2 By-Laws of the registrant.*
4.1 Specimen Common Share Certificate.*
4.2 Specimen Class A Warrant Certificate.*
4.3 Specimen Class B Warrant Certificate.*
5.1 Opinion of Snow Becker Krauss P.C.*
10.1 Escrow Agreement
23.1 Consent of Snow Becker Krauss P.C.*
23.2 Consent of Lazar Levine & Felix LLP
----------------------
* Indicates documents filed with registrant's Form SB-2 filed on September
14, 2000.
