UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Montana Acquisition Corporation (Name of small
business issuer in its charter)
Delaware 6770 14-182-4753
(State or Jurisdiction (Primary Standard (I.R.S.
of Incorporation or Industrial Employer
Organization) Classification Identi-
Code Number) fication
No.)
Montana Acquisition Corporation, 241 Morner Road,
Rensselaer, New York 12144, (518) 462-7879
(Address and telephone number of principal executive
offices)
Montana Acquisition Corporation, 241 Morner Road,
Rensselaer, New York 12144
(Address of Principal place of business or intended
principal place of business)
Whiteman Osterman & Hanna, One Commerce Plaza,
Albany, New York 12260, (518) 487-7600
(Name, address, and telephone number of agent for
service)
Approximate date of proposed sale to the public as
soon as practicable after the effective date of this
Registration Statement and Prospectus.
Whiteman Osterman & Hanna
One Commerce Plaza
Albany, New York 12260
(518) 487-7600
Attn: Keith M. Goldstein, Esq.
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
thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until
the registration statement shall become effective
on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
Title of Each Amount Proposed Proposed
Class of Being Maximum Maximum
Securities Registered Offering Aggregate
Being Per Share Offering
Registered (1) Price (1)
Shares of 10,000 $1.00 $10,000
Common
Stock
TOTAL 10,000 $1.00 $10,000
(1) Estimated for purposes of computing the
registration fee pursuant to Rule 457.
Cross Reference Sheet Showing the
Location In Prospectus of Information
Required by Items of Form SB-2
Part I. Information Required Item No.
in Prospectus Location or
Required Item Caption
1. Front of Registration Front of
Statement and Outside Registration
Front Cover of Statement and
Prospectus Outside Front
Cover of
Prospectus
2. Inside Front and Inside Front
Outside Back Cover Cover Page
Pages of Prospectus of Prospectus
and Outside
Front Cover
Page of
Prospectus
3. Summary Information Prospectus
and Risk Factors Summary;
High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Prospectus
Offering Price Summary -
Determination
of Offering
Price; High Risk
Factors
6. Dilution Dilution
7. Selling Security Not Applicable
Holders
8. Plan of Distribution Plan of
Distribution
9. Legal Proceedings Litigation
10. Directors, Executive Management
Officers, Promoters
and Control Persons
11. Security Ownership of Principal
Certain Beneficial Stockholders
Owners and Management of Common Stock
12. Description of Description of
Securities Securities
13. Interest of Named Legal Opinions;
Experts and Counsel Experts
14. Disclosure of Statement as to
Commission Position Indemnification
on Indemnification for Securities
Act Liabilities
15. Organization Within Management,
Last Five Years Certain
Transactions
16. Description of Business Proposed
Business,
Remuneration
17. Management's Discussion Proposed
and Analysis or Plan of Business, Plan
Operation of Operation
18. Description of Property Proposed Business
19. Certain Relationships Certain
and Related Transactions
Transactions
20. Market for Common Stock Prospectus
and Related Stockholder Summary, Market
Matters for Registrant's
Common Stock and
Related
Stockholders
Matters; Shares
Eligible for
Future Sale
21. Executive Compensation Remuneration
22. Financial Statements Financial
Statements
23. Changes in and Not Applicable
Disagreements with
Accountants on
Accounting and
Financial Disclosure
PROSPECTUS
Montana Acquisition Corporation
(A Delaware Corporation)
10,000 Shares of Common Stock Offered at $1.00 per
Share
Montana Acquisition Corporation (the "Company")
hereby offers (the "Offering") for sale 10,000 shares
(the "Shares") of common stock, $.001 par value per
share ("Common Stock") at a purchase price of $1.00
per Share. The Shares shall be sold exclusively by
the Company on a "best-efforts" basis, for a period
not to exceed one hundred eighty days (180) days.
This Offering shall be conducted directly by the
Company without the use of a professional underwriter
or securities dealer. The Offering is being made in
compliance with Rule 419 of Regulation C, pursuant
to which the offering proceeds (the "Offering
Proceeds") and the securities to be issued to
purchasers will be placed in an escrow account (the
"Escrow Account") until the Offering has been
reconfirmed by the Company's shareholders and a
Business Combination (as hereinafter defined)
consummated in accordance with the provisions of
such Rule. Pursuant to Rule 3a51-1(d) under the
Securities Exchange Act, the securities being
offered hereto constitute "penny stock," and as
such, certain sales restrictions apply to these
securities. (See "Risk Factors"). This Offering
is being made on a best efforts basis on behalf of
the Company by the Company. (See "Description of
Securities"). The sole officer, director and
shareholder of the Company is Leslie M. Apple.
(See "Principal Shareholder.")
Maximum
Underwriting Proceeds
Price to Discounts and to
Public Commissions Issuer (1)
Per Share $1.00 n/a $1.00
Total(2) $1.00 n/a $10,000
___________________
(1) Before deducting offering expenses which
include: Blue Sky fees, legal fees, accounting fees,
printing fees, filing fees, estimated at $8,352.64.
(2) The Shares are offered by the Company on a
"best-efforts" basis.
Pursuant to the terms of an escrow agreement (the
"Escrow Agreement"), upon receipt by the Company,
investors' funds will immediately be deposited in
the Escrow Account which will be maintained by
Whiteman Osterman & Hanna, One Commerce Plaza,
Albany, New York 12260 (the "Escrow Agent"). All
investors' checks or money orders must be made
payable to "Whiteman Osterman & Hanna, as Escrow
Agent for Montana Acquisition Corporation."
Upon the sale of the Shares within the Offering
Period, other terms of the Escrow Agreement which
have been included therein to comply with Rule 419
(the "Rule 419 Escrow Provisions") will govern the
treatment of the Shares purchased by investors and
the investors' funds tendered in payment thereof.
Pursuant to the Rule 419 Escrow Provisions, the
Common Stock certificates evidencing the Shares are
to be issued in the respective names of the investors
and promptly deposited into the Escrow Account upon
issuance. The investors' funds will remain as
deposited in the Escrow Account except for up to 10%
of the amount on deposit after such payments which
may be released to the Company under Rule 419 (the
"Deposited Funds.")
Rule 419 permits 10% of the proceeds to be disbursed
to the Company from the Rule 419 Escrow Account prior
to the consummation of a Business Combination. The
Company is entitled to 10% of the Deposited Funds of
this Offering, and the Company's current management
(the "Management") intends to request release of
these funds from the Escrow Account. The Company
will receive the remainder of the Deposited Funds in
the event a Business Combination is consummated
pursuant to the provisions of Rule 419.
THE COMPANY IS CONDUCTING A BLANK CHECK OFFERING
SUBJECT TO THE COMMISSION'S RULE 419 OF REGULATION
C. IF THE ENTIRE OFFERING IS SOLD, THE TOTAL
OFFERING PROCEEDS BEFORE OFFERING EXPENSES, WILL
BE $10,000, AND THE SECURITIES PURCHASED BY
INVESTORS MUST BE DEPOSITED INTO AN ESCROW ACCOUNT
(THE "DEPOSITED FUNDS" AND "DEPOSITED SECURITIES,"
RESPECTIVELY). WHILE HELD IN THE ESCROW ACCOUNT,
THE DEPOSITED SECURITIES MAY NOT BE TRADED OR
TRANSFERRED. EXCEPT FOR AN AMOUNT UP TO 10% OF
THE DEPOSITED FUNDS (A MAXIMUM OF $1,000),
OTHERWISE RELEASABLE UNDER THE RULE, THE DEPOSITED
FUNDS AND THE DEPOSITED SECURITIES MAY NOT BE
RELEASED UNTIL AN ACQUISITION IS MADE WHICH MEETS
THE CRITERIA SPECIFIED IN RULE 419, AND A SUFFICIENT
NUMBER OF INVESTORS RECONFIRM THEIR INVESTMENT IN
ACCORDANCE WITH RULE 419's PROCEDURES. PURSUANT
TO THESE PROCEDURES, A NEW PROSPECTUS, WHICH
DESCRIBES AN ACQUISITION CANDIDATE AND ITS
BUSINESS AND INCLUDES AUDITED FINANCIAL
STATEMENTS, WILL BE DELIVERED TO ALL INVESTORS.
THE COMPANY MUST RETURN THE PRO RATA PORTION OF
THE DEPOSITED FUNDS TO ANY INVESTOR WHO DOES
NOT ELECT TO REMAIN AN INVESTOR. UNLESS A
SUFFICIENT NUMBER OF INVESTORS ELECT TO REMAIN
SO, ALL INVESTORS WILL BE ENTITLED TO THE RETURN
OF THEIR PRO RATA PORTION OF THE DEPOSITED FUNDS
AND NONE OF THE DEPOSITED SECURITIES WILL BE
ISSUED TO INVESTORS. IN THE EVENT AN ACQUISITION
IS NOT CONSUMMATED WITHIN 18 MONTHS OF THE
EFFECTIVE DATE, THE DEPOSITED FUNDS WILL BE
RETURNED ON A PRO RATA BASIS TO ALL INVESTORS.
(SEE "INVESTORS' RIGHTS AND SUBSTANTIVE
PROTECTIONS UNDER RULE 419.")
Montana Acquisition Corporation
241 Morner Road
Rensselaer, New York 12144
(518) 462-7879
The date of this Prospectus is September 18, 2000.
THESE SECURITIES ARE HIGHLY SPECULATIVE, INVOLVE
A HIGH DEGREE OF RISK, AND SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR
SPECIAL RISKS CONCERNING THE COMPANY AND
"DILUTION" FOR INFORMATION CONCERNING DILUTION
OF THE BOOK VALUE OF THE INVESTORS' SHARES FROM
THE PUBLIC OFFERING PRICE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SHARES HAVE BEEN REGISTERED IN NEW YORK, AND
MAY ONLY BE TRADED IN SUCH STATE. PURCHASERS OF
SUCH SECURITIES EITHER IN THIS OFFERING OR IN ANY
SUBSEQUENT TRADING MARKET WHICH MAY DEVELOP
MUST BE RESIDENTS OF NEW YORK. THE COMPANY WILL
AMEND THIS PROSPECTUS FOR THE PURPOSE OF
DISCLOSING ADDITIONAL STATES, IF ANY, IN WHICH THE
COMPANY'S SECURITIES ARE REGISTERED. (SEE "HIGH
RISK FACTORS -STATE LAW VIOLATIONS.")
PRIOR TO THIS OFFERING THERE HAS BEEN NO PUBLIC
MARKET FOR THE COMMON STOCK OF THE COMPANY.
THERE IS NO ASSURANCE THAT ANY TRADING MARKET IN
THESE SECURITIES WILL EVER DEVELOP.
The Company has filed with the Securities and
Exchange Commission (the "Commission") a
Registration Statement (the "Registration
Statement") on Form SB-2 under the Securities
Act of 1933 with respect to the Shares offered
hereby. This Prospectus does not contain all of
the information set forth in the Registration
Statement, certain parts of which are omitted in
accordance with the rules and regulations of the
Commission. The Company will be subject to the
reporting requirements of the Securities Exchange
Act of 1934 (the "Exchange Act"), but is currently
not a reporting company. The Company will file
periodic reports voluntarily in the event that its
obligation to file such reports is suspended under
Section 15(d) of the Exchange Act. The reports and
other information filed by the Company may be
inspected and copied at the public reference
facilities of the Commission in Washington, D.C.
Copies of such material can be obtained from the
Public Reference Section of the Commission,
Washington, D.C., 20549, at prescribed rates.
Descriptions contained in this Prospectus as to
the contents of any contract or other document
filed as an exhibit to the Registration Statement
are not necessarily complete and each such
description is qualified by reference to such
contract or document.
The Company intends to furnish to its stockholders,
after the close of each fiscal year, an annual
report relating to the operations of the Company
and containing audited financial statements examined
and reported upon by an independent certified public
accountants. In addition, the Company may furnish
to stockholders such other reports as may be
authorized, from time to time, by the Board of
Directors.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
ANY OFFER TO BUY ANY SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE DELIVERY OF THIS
PROSPECTUS SHALL NOT UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN
ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF; HOWEVER, ANY CHANGES THAT MAY
HAVE OCCURRED ARE NOT MATERIAL TO AN
INVESTMENT DECISION. IN THE EVENT THERE HAS BEEN
ANY MATERIAL CHANGES IN THE AFFAIRS OF THE
COMPANY, A POST-EFFECTIVE AMENDMENT WILL BE
FILED. THE COMPANY RESERVES THE RIGHT TO REJECT
ANY ORDER, IN WHOLE OR IN PART, FOR THE PURCHASE
OF ANY OF THE SHARES OFFERED HEREBY.
Until ninety (90) days after the date when the
Deposited Funds and Deposited Securities are
released from the Escrow Account, all dealers
effecting transactions in the Common Stock, whether
or not participating in this distribution, may be
required to deliver a prospectus. This is in
addition to the obligation of dealers to deliver
a prospectus when acting as underwriters with
respect to their unsold allotments or
subscriptions.
TABLE OF CONTENTS
PROSPECTUS SUMMARY . . . . . . . . . . . . .1
The Company . . . . . . . . . . . . . .1
The Offering. . . . . . . . . . . . . .1
Offering in Compliance with Rule 419. .2
High Risk Factors . . . . . . . . . . .2
Determination of Offering Price . . . .2
Use of Proceeds . . . . . . . . . . . .3
SUMMARY FINANCIAL INFORMATION. . . . . . . .4
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419 . . . . . . . . . . . . . . .4
Deposit of Offering Proceeds and Securities4
Prescribed Acquisition Criteria . . . .6
Post-Effective Amendment. . . . . . . .6
Reconfirmation Offering . . . . . . . .6
Release of Deposited Securities and Deposited
Funds..................................7
HIGH RISK FACTORS. . . . . . . . . . . . . .7
DILUTION . . . . . . . . . . . . . . . . . 15
USE OF PROCEEDS. . . . . . . . . . . . . . 17
CAPITALIZATION . . . . . . . . . . . . . . 19
PROPOSED BUSINESS . . . . . . . . . . . . 19
History and Organization. . . . . . . 19
Plan of Operation . . . . . . . . . . 20
Evaluation of Business Combinations . 22
Business Combinations . . . . . . . . 23
Regulation. . . . . . . . . . . . . . 25
Employees . . . . . . . . . . . . . . 25
Facilities. . . . . . . . . . . . . . 25
MANAGEMENT . . . . . . . . . . . . . . . . 26
Biographies . . . . . . . . . . . . . 26
Other Blank Check Companies . . . . . 26
Conflicts of Interest . . . . . . . . 26
Remuneration. . . . . . . . . . . . . 27
Management Involvement. . . . . . . . 27
Management Control. . . . . . . . . . 27
STATEMENT AS TO INDEMNIFICATION . . . . . 27
MARKET FOR THE COMPANY'S COMMON STOCK. . . 28
PRINCIPAL STOCKHOLDERS . . . . . . . . . . 29
DESCRIPTION OF SECURITIES. . . . . . . . . 30
Common Stock. . . . . . . . . . . . . 30
Future Financing. . . . . . . . . . . 30
Reports to Stockholders . . . . . . . 31
Dividends . . . . . . . . . . . . . . 31
Transfer Agent. . . . . . . . . . . . 31
PLAN OF DISTRIBUTION . . . . . . . . . . . 31
EXPIRATION DATE. . . . . . . . . . . . . . 33
LITIGATION . . . . . . . . . . . . . . . . 33
LEGAL OPINIONS . . . . . . . . . . . . . . 33
EXPERTS. . . . . . . . . . . . . . . . . . 33
FURTHER INFORMATION. . . . . . . . . . . . 33
FINANCIAL STATEMENTS . . . . . . . . . . . 34
INFORMATION NOT REQUIRED IN PROSPECTUS . . 39
EXHIBITS . . . . . . . . . . . . . . . . . 42
UNDERTAKINGS . . . . . . . . . . . . . . . 43
PROSPECTUS SUMMARY
The following is a summary of certain information
contained in this Prospectus and is qualified in
its entirety by the more detailed information and
financial statements (including notes thereto)
appearing elsewhere in the Prospectus and in the
Registration Statement. Investors should carefully
consider the information set forth in this
Prospectus under the heading "High Risk Factors".
The Company
Montana Acquisition Corporation (the "Company"), was
organized under the laws of the State of Delaware on
June 9, 2000. The Company was organized as a
vehicle to acquire or merge (a "Business
Combination") with a business or company, (the
"Target Business"). Management believes that the
Company's characteristics as an enterprise with
liquid assets, nominal liabilities, a registered
class of securities and flexibility in structuring
will make the Company an attractive combination
candidate. None of the Company's officers,
directors, promoters, their affiliates or
associates have had any preliminary contact or
discussions and there are no arrangements or
understandings with any representative of the
owners of any business regarding the possibility
of an acquisition or merger transaction. The
Company does not intend to engage in the business
of investing, reinvesting or trading in securities
as its primary business or pursue any business
which would render the Company an "investment
company" pursuant to the Investment Company Act of
1940.
Since its organization, the Company's activities
have been limited to the sale of founder's shares
in connection with its organization and its
preparation for filing a registration statement and
prospectus for its initial public offering. The
Company will not engage in any substantive
commercial business following the offering.
(See "Proposed Business.") The Company maintains its
office at 241 Morner Road, Rensselaer, New York
12144. The Company's phone number is
(518) 462-7879.
The Offering
Securities offered 10,000 Shares of Common
Stock, $.001 par value,
being offered at $1.00
per Share.
(See "Description
Securities".)
Shares of Common Stock
outstanding prior to
the offering 25,000
Shares of Common Stock
to be outstanding after
the offering 35,000
Offering Conducted in Compliance with Rule 419
The Company is a "blank check" company and
consequently this Offering is being conducted in
compliance with the Commission's Rule 419 (the
"Rule"). Investors have certain rights and will
receive the substantive protection provided by the
Rule. To that end, the securities purchased by
investors and the funds received in the Offering
will be deposited and held in the Escrow Account
until an acquisition meeting specific criteria is
completed (hereinafter the "Deposited Funds" and
"Deposited Securities"). Before the acquisition
can be completed and before the Deposited Funds and
Deposited Securities can be released to the Company
and the investors, respectively, the Company is
required to update the Registration Statement with
a post-effective amendment, and within the five days
after the effective date thereof, the Company is
required to furnish investors with the prospectus
produced thereby containing the terms of a
reconfirmation offer and information regarding the
proposed acquisition candidate and its business,
including audited financial statements. According
to Rule 419, investors must have no fewer than 20
and no more than 45 business days from the effective
date of the post-effective amendment to decide to
reconfirm their investment and remain an investor
or alternately, require the return of their
investment, minus certain deductions. Any investor
not making any decision within said 45 day period
will automatically have his investment funds
returned. The rule further provides that if the
Company does not complete an acquisition meeting
the specified criteria within 18 months of the
Effective Date, all of the Deposited Funds in the
Escrow Account must be returned to investors. If
the Offering period is extended to its limit
(6 months), the Company will have only 12 months
in which to consummate a merger or acquisition.
(See "Investors' Rights and Substantive Protection
Under Rule 419 - Reconfirmation Offering.")
High Risk Factors
Investments in the securities of the Company are
highly speculative, involve a high degree of risk,
and should be purchased only by persons who can
afford to lose their entire investment. See
"High Risk Factors" for special risks concerning
the Company and "Dilution" for information
concerning dilution of the book value of the
investors shares from the public offering. (See
"High Risk Factors" and "Dilution.")
Determination of Offering Price
The offering price of $1.00 per Share for the
Shares offered hereby has been arbitrarily
determined by the Company. This price bears no
relation to the Company's assets, book value, or
any other customary investment criteria,
including the Company's prior operating history.
Among factors considered by the Company in
determining the offering price were estimates of
the Company's business potential, the limited
financial resources of the Company, the amount of
equity and control desired to be retained by the
present shareholders, the amount of dilution to
public investors and the general condition of the
securities markets. (See "Determination of
Offering Price" and "High Risk Factors.")
Use of Proceeds
If all of the Shares are sold, then of the $10,000
Offering Proceeds deposited into the Escrow Account
(the "Deposited Funds"), 10% ($1,000) may be
released to the Company prior to a reconfirmation
offering whereby investors reconfirm their
investment in accordance with procedures proscribed
by Rule 419. (See "Investors' Rights and
Substantive Protection Under Rule 419 -
Reconfirmation Offering.") The Company is entitled
to such funds, and the Company's current Management
intends to request release of these funds from the
Escrow Account. The Company will receive the
remainder of the Deposited Funds in the event a
Business Combination is consummated pursuant to the
provisions of Rule 419. The Deposited Funds will
remain in the non-interest-bearing Escrow Account
maintained by Whiteman Osterman & Hanna, to act as
Escrow Agent pursuant to Rule 419 of Regulation C.
No portion of the Deposited Funds will be expended
to acquire a Target Business. The Deposited Funds
will be transferred to the Target Company when
a Business Combination is effected. To the extent
that the Common Stock is used as consideration to
effect a Business Combination, the balance of the
Deposited Funds expended will be used to finance the
operation of the Target Business. The Company has
not incurred and does not intend to incur in the
future, any debt in connection with its
organizational activities. Management is not aware
of any circumstances under which this policy,
through their own initiative, may be changed.
Accordingly, no portion of the proceeds are being
used to repay debt. Management is not aware of
any circumstances under which such policy through
their own initiative may be changed. Since the role
of present management after a Business Combination
is uncertain, the Company has no ability to
determine what remuneration, if any, will be paid
to such persons after such Business Combination.
(See "Use of Proceeds.")
SUMMARY FINANCIAL INFORMATION
The following is a summary of the Company's
consolidated financial information and is
qualified in its entirety by the audited
financial statements appearing herein. As
the Company was incorporated on June 9, 2000
and the date of this Prospectus is September 18,
2000, the Company's consolidated financial
information is limited to its balance sheet
as of its date of incorporation.
Statement of Operations Data:
Net Revenues. . . . . . . . . . $ -0-
Net Loss. . . . . . . . . . . . $ -0-
Net Loss Per Share. . . . . . . $ -0-
Shares Outstanding. . . . . . . . 25,000
As of Pro-Forma
July 18, After
2000 Offering(1)
Balance Sheet Data:
Working Capital $2,064 $12,064
Total Assets $2,500 $12,500
Long Term Debt $ -0- $ -0-
Total Liabilities $ -0- $ -0-
Shareholders' Deficit $ -0- $ -0-
______________________
(1) If all of the Shares are sold $9,000 of this
amount will be restricted pursuant to Rule 419.
Upon the sale of all the Shares in this Offering,
the Company will receive Deposited Funds of
approximately $10,000, all of which must be
deposited in the Escrow Account. $1,000 may be
used by the Company as capital in order to seek
a Business Combination. The Company's Management
intends to request release of these funds from
escrow.
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that Offering Proceeds after
deduction for underwriting commissions,
underwriting expenses and dealer allowances, if
any, and the securities purchased by investors in
this Offering, be deposited into an escrow or
trust account (the "Deposited Funds" and "Deposited
Securities," respectively) governed by an agreement
which contains certain terms and provisions specified
by the Rule. Under Rule 419, the Deposited Funds
and Deposited Securities will be released to the
Company and to the investors, respectively, only
after the Company has met the following three basic
conditions. First, the Company must execute an
agreement(s) for an acquisition(s) meeting certain
prescribed criteria. Second, the Company must file
a post-effective amendment to the Registration
Statement which includes the terms of a
reconfirmation offer that must contain conditions
prescribed by the rules. The post-effective
amendment must also contain information regarding
the acquisition candidate(s) and its business(es),
including audited financial statements. Third, the
Company must conduct the reconfirmation offer and
satisfy all of the prescribed conditions, including
the condition that a certain minimum number of
investors must elect to remain investors. After
the Company submits a signed representation to the
Escrow Agent that the requirements of Rule 419 have
been met and after the acquisition(s) is
consummated, the Escrow Agent can release the
Deposited Funds and Deposited Securities.
Accordingly, the Company has entered into an
Escrow Agreement with Whiteman Osterman & Hanna
which provides that:
(1) The proceeds are to be deposited into the
Escrow Account maintained by the Escrow Agent
promptly upon receipt. Rule 419 permits 10% of
the Deposited Funds to be released to the Company
prior to the reconfirmation offering. The Deposited
Funds and any dividends or interest thereon, if
any, are to be held for the sole benefit of the
investors and can only be invested in bank deposits,
in money market mutual funds or federal government
securities or securities for which the principal
or interest is guaranteed by the federal government.
(2) All securities issued in connection with the
Offering and any other securities issued with
respect to such securities, including securities
issued with respect to stock splits, stock
dividends or similar rights are to be deposited
directly into the Escrow Account promptly upon
issuance. The identity of the investors are to
be included on the stock certificates or other
documents evidencing the Deposited Securities.
The Deposited Securities held in the Escrow Account
are to remain as issued, and are to be held for the
sole benefit of the investors who retain the voting
rights, if any, with respect to the Deposited
Securities held in their names. The Deposited
Securities held in the Escrow Account may
not be transferred, disposed of nor any interest
created therein other than by will or the laws of
descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Table 1 of the
Employee Retirement Income Security Act.
(3) Warrants, convertible securities or other
derivative securities, if any, relating to
Deposited Securities held in the Escrow
Account may be exercised or converted in
accordance with their terms; provided that,
however, the securities received upon exercise
or conversion together with any cash or other
consideration paid in connection with the
exercise or conversion are to be promptly
deposited into the Escrow Account.
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds
and the Deposited Securities can be released, the
Company must first execute an agreement to acquire
an acquisition candidate(s) meeting certain
specified criteria. The agreement(s) must provide
for the acquisition(s) of a business(es) or assets
for which the fair value of the business represents
at least 80% of the maximum Offering Proceeds.
The Agreement(s) must include, as a condition
precedent to their consummation, a requirement that
the number of investors representing 80% of the
maximum Offering Proceeds must elect to reconfirm
their investment. For purposes of the Offering, the
fair value of the business(es) or assets to be
acquired must be at least $8,000 (80% of $10,000).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s)
of a business(es) meeting the above criteria has
been executed, Rule 419 requires the Company to
update the registration statement with a post-
effective amendment. The post-effective amendment
must contain information about the proposed
acquisition candidate(s) and its business(es),
including audited financial statements, the results
of this offering and the use of the funds disbursed
from the Escrow Account. The post-effective
amendment must also include the terms of the
reconfirmation offer mandated by Rule 419. The
reconfirmation offer must include certain prescribed
conditions which must be satisfied before the
Deposited Funds and Deposited Securities can be
released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the
effective date of the post-effective amendment.
Pursuant to Rule 419, the terms of the
reconfirmation offer must include the following
conditions:
(1) The prospectus contained in the post-effective
amendment will be sent to each investor whose
securities are held in the Escrow Account within
5 business days after the effective date of the
post-effective amendment.
(2) Each investor will have no fewer than 20 and
no more than 45 business days from the effective
date of the post-effective amendment to notify the
Company in writing that the investor elects to
remain an investor.
(3) If the Company does not receive written
notification from any investor within 45 business
days following the Effective Date, the pro rata
portion of the Deposited Funds (and any related
interest or dividends) held in the Escrow Account
on such investor's behalf will be returned to the
investor within 5 business days by first class
mail or other equally prompt means.
(4) The acquisition(s) will be consummated only if
investors representing 80% of the maximum Offering
Proceeds ($8,000) elect to reconfirm their
investment.
(5) If a consummated acquisition (s) has not
occurred by (18 months from the date of this
prospectus), the Deposited Funds held in the
Escrow Account shall be returned to all investors
on a pro rata basis within 5 business days by
first class mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may
be released to the Company and the investors,
respectively, after:
(1) The Escrow Agent has received a signed
representation from the Company and any other
evidence acceptable by the Escrow Agent that:
(a) The Company has executed an agreement for
the acquisition(s) of a Target Business(es) for
which the fair market value of the business
represents at least 80% of the maximum Offering
proceeds and has filed the required post-effective
amendment;
(b) The post-effective amendment has been
declared effective, that the mandated
reconfirmation offer having the conditions
prescribed by Rule 419 has been completed and
that the Company has satisfied all of the
prescribed conditions of the reconfirmation
offer.
(2) The acquisition(s) of the business(es) with
the fair value of at least 80% of the maximum
proceeds.
HIGH RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY
SPECULATIVE IN NATURE AND INVOLVE AN EXTREMELY
HIGH DEGREE OF RISK AND SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. SEE "DILUTION" FOR INFORMATION
CONCERNING DILUTION OF THE BOOK VALUE OF THE
INVESTORS' SHARES FROM THE PUBLIC OFFERING.
1. Anticipated Change in Control and Management.
If the initial public offering is completely sold,
Management and the sole officer and director will
own approximately ninety (90%) percent of the Common
Stock of the Company. Therefore, Management and
the sole officer and director would continue to
control the Company and be able to elect all the
directors to the board. Upon the successful
completion of a Business Combination, the Company
anticipates that it will have to issue to the
Target Company authorized but unissued Common
Stock in the Company which when issued will comprise
a majority of the then issued and outstanding shares
of Common Stock of the Company. Therefore, the
Company anticipates that upon the consummation of
a Business Combination there will be a change of
control in the Company which will most likely result
in the resignation or removal of the Company's
present officer and director. If there is a change
in management, no assurance can be given as to
the experience or qualification of such persons
either in the operation of the Company's activities
or in the operation of the business, assets
or property being acquired. (See "Proposed
Business.")
2. New Business Development Stage. The Company
was incorporated in the State of Delaware on June
9, 2000 and has had no operations to date. The
Company was formed to serve as a vehicle to
effect a Business Combination. There is no
assurance the Company's intended acquisition or
merger activities will be successful or result
in revenue or profit to the Company. Since the
Company has not yet attempted to seek a Business
Combination, and due to the Company's lack of
experience, there is only a limited basis upon
which to evaluate the Company's prospectus for
achieving its intended business objectives. The
Company faces all risks which are associated with
any new business. Any investment in this Company
should be considered an extremely high risk
investment. As of the date of this Prospectus, the
Company has not entered into or negotiated any
arrangements for a Business Combination with a
Target Business. (See "Proposed Business.")
3. Use of Proceeds. 90% of the net proceeds of
this Offering (the "Net Proceeds"), pursuant to
Rule 419, must be held in escrow pending the
consummation of a Business Combination which
transaction must occur within eighteen (18) months
of the Effective Date herein. The funds from this
Offering may not be sufficient in order for the
Company to find a Business Combination. Rule 419
permits 10% of the Net Proceeds to be disbursed to
the Company from the Rule 419 Escrow Account prior
to the consummation of a Business Combination. The
Company intends to request release of this money.
If the Company does not request release of these
funds, the Company will receive these funds in the
event a business combination is consummated in
accordance with Rule 419. (See "Use of Proceeds",
"Business" and "Investors' Rights and Substantive
Protection under Rule 419.")
4. No Access to Investors' Funds While Held In
Escrow. The Company is offering for sale 10,000
shares, at $1.00 per Share. The maximum offering
period is 180 days. There is no commitment by any
other person to purchase all or any portion of the
Shares offered hereby. Investors have no right to
the return or the use of their funds and cannot
earn interest thereon until conclusion of the
Offering. Moreover, the investors' funds (reduced
to reflect payments for expense amounts, if any,
otherwise released as permitted by Rule 419) may
remain in the Escrow Account, which is non-interest
bearing, and the investors will have no right to
the return of or the use of their funds for a
period of 18 months from the Effective Date.
Investors will be offered return of their pro rata
portion of the funds held in escrow only in
connection with the reconfirmation offering required
to be conducted upon execution of an agreement to
acquire a target business which represents 80% of
the maximum Offering proceeds. If the Company is
unable to locate a Target Business meeting the
above acquisition criteria, investors will have
to wait 18 months from the Effective Date before
a pro rata portion of their funds is returned
without interest thereon.
5. Failure of Sufficient Number of Investors to
Reconfirm Investment. A Business Combination with
a Target Business cannot be consummated unless, in
connection with the reconfirmation offering
required by Rule 419, the Company can successfully
convince a sufficient number of investors
representing 80% of the maximum Offering Proceeds
to elect to reconfirm their investments. If, after
completion of the reconfirmation offering, a
sufficient number of investors do not reconfirm
their investment, the business combination will not
be consummated. In such event, none of the
Deposited Securities held in escrow will be issued
and the Deposited Funds will be returned to
investors on a pro rata basis.
6. Extremely Limited Capitalization. As of
July 18, 2000, the Company had assets of $2,064
and no liabilities. There was cash of $2,064
available in the Company's treasury as of July 18,
2000. Upon the sale of all the Shares in this
Offering, the Company will receive Net Proceeds
of approximately $10,000, all of which must be
deposited in the Escrow Account. Of the Offering
Proceeds, $1,000 may be used by the Company as
capital in order to seek a Business Combination.
The Company's Management intends to request release
of these funds from escrow. If the Company does not
request release of these funds, the Company will
receive the funds in the event a Business
Combination is consummated in accordance with Rule
419. The costs of conducting the Company's business
activities will be paid by the money in the
Company's treasury. Assuming suitable prospects
are identified, if ever, the Company may be
unable to complete an acquisition or merger due to
a lack of sufficient funds. Therefore, the Company
may require additional financing in the future in
order to consummate a Business Combination. Such
financing may consist of the issuance of debt or
equity securities. The Company cannot give any
assurances that such funds will be available, if
needed, or whether they will be available on terms
acceptable to the Company. It is unlikely that
the Company will need additional funds, but it may
occur if a Target Company insists the Company
obtain additional capital. Such financing will
not occur without shareholder approval. If the
Company does not consummate an acquisition or
purchase within 18 months of the Effective Date,
the Company must return all the funds, minus
certain deductions, back to the investors. (See
"Use of Proceeds," "Proposed Business," and
"Investors' Rights and Substantive Protection
Under Rule 419.")
7. No Transfer of Escrowed Securities. No
transfer or other disposition of the Deposited
Securities shall be permitted other than by will
or the laws of descent and distribution, or pursuant
to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986 as amended,
or Title 7 of the Employee Retirement Income
Security Act, or the rules thereunder. Pursuant
to Rule 15g-8, it is unlawful for any person to
sell or offer to sell the securities (or any
interest in or related to the securities) held
in the Rule 419 Escrow Account other than pursuant
to a qualified domestic relations order (i.e.,
divorce proceedings). Therefore, any and all
contracts for sale to be satisfied by delivery
of the Deposited Securities (e.g. contracts for
sale on a when as, and if issued basis) and
sales of derivative securities to be settled
by delivery of the securities are prohibited.
It is further prohibited to sell any interest
in the Deposited Securities (or any derivative
securities) whether or not physical delivery is
required. (See "Investors' Rights and Substantive
Protection Under Rule 419.")
8. No Assurances of a Public Market. Pursuant
to Rule 419, all securities purchased in an offering
by a blank check company, as well as securities
issued in connection with an offering to
underwriters, promoters or others as compensation
or otherwise, must be placed in the Rule 419 Escrow
Account. These securities will not be released
from escrow until the consummation of a merger
or acquisition as provided for in Rule 419. There
is no present market for the Common Stock of the
Company and there is no likelihood of any active
and liquid public trading market developing
following the release of securities from the Rule
419 account. Thus, shareholders may find it
difficult to sell their shares. To date, neither
the Company nor anyone acting on its behalf has
taken any affirmative steps to request or encourage
any broker dealer to act as a market maker for the
Company's Common Stock. Further, there have been
no discussions or understandings, preliminary or
otherwise, between the Company or anyone acting on
its behalf and any market maker regarding the
participation of any such market maker in the
future trading market, if any, for the Company's
Common Stock. Present management of the Company
has no intention of seeking a market maker for the
Company's Common Stock at any time prior to the
reconfirmation offer to be conducted prior to the
consummation of a Business Combination. The
officer of the Company after the consummation of
a Business Combination may employ consultants
or advisors to obtain such market makers.
Management expects that discussions in this
area will ultimately be initiated by the
management of the Company in control of the
entity after a Business Combination is reconfirmed
by the stockholders. There is no likelihood of any
active and liquid trading market for the Company's
Common Stock developing. (See "Market for the
Company's Common Stock" and "Investors' Rights and
Substantive Protection Under Rule 419.")
9. Unspecified Industry and Acquired Business;
Unascertained Risks. To date, the Company has not
selected any particular industry in which to
concentrate its Business Combination efforts. In
relation to its competitors, the Company is and will
continue to be an insignificant participant in the
business of seeking Business Combinations. A large
number of established and well-financed entities,
including venture capital firms, have recently
increased their merger and acquisition activities.
Nearly all such entities have significantly greater
financial resources, technical expertise and
managerial capabilities than the Company and,
consequently, the Company will be at a competitive
disadvantage in identifying suitable merger or
acquisition candidates and successfully consummating
a proposed merger or acquisition. Also, the Company
will be competing with a large number of other
small, blank check companies. (See "Conflicts of
Interest - Management's Fiduciary Duty" and
"Business.")
10. Conflicts of Interest. The Company's sole
director and officer is or may become, in his
individual capacity, officer, director, controlling
shareholder and/or partner in other entities engaged
in a variety of businesses. The Company's sole
officer and director is engaged in business
activities outside of the Company, and will only
devote time and efforts in connection with the
Company's business and operations on part time
basis. There exists potential conflicts of
interest including, among other things, time,
effort and Business Combinations with such other
business entities. Conflicts with other blank
check companies with which members of Management
may become affiliated in the future may arise in
the pursuit of Business Combinations. To aid the
resolution of such conflicts, the Company will
adopt a procedure whereby a special meeting of
the Company's shareholders will be called to vote
upon a Business Combination with an affiliated
entity, and shareholders who also hold securities
of such affiliated entity will be required to
vote their shares of the Company's stock in the
same proportion as the Company's publicly held
shares are voted. Such procedure shall be in
the form of an oral agreement between Management
and the Company. The Company's officer and director
is not currently involved in other blank check
companies. The Company's officer and director may
be involved as officers and directors of other
blank check companies in the future. A potential
conflict of interest may result if and when any
officer of the Company becomes an officer or
director of another company, especially another
blank check company. There is presently no
requirement contained in the Company's Articles
of Incorporation, Bylaws or minutes which requires
the Company's officers and directors to disclose to
the Company Target Businesses which come to their
attention. The officers and directors do, however,
have a fiduciary duty of loyalty to the Company to
disclose to the Company any Target Businesses which
come to their attention in their capacity as an
officer and/or director of the Company or otherwise.
Included in this duty would be Target Businesses
which the person learns about through his
involvement as an officer and director of another
Company. The Company will not purchase the assets
of any Company which is beneficially owned by any
officer, director, promoter or affiliate or associate
of this Company. Management plans on examining a
Target Business's financial statements (including
balance sheets, statements of cash flow,
stockholders' equity, etc.) its assets and
liabilities and its projections for future growth.
This information will also be considered by the
shareholders who, based on this information, will
determine, as part of the Rule 419 reconfirmation
offering, whether a merger with such a Target
Business is "beneficial" to the Company. (See
"Management.")
11. Potential Related Party Business Combination.
The Company may acquire a business in which the
Company's promoters, Management or their affiliates
own a beneficial interest. In such event, such
transaction may be considered a related party
transaction not at arms-length. No related party
transaction is presently contemplated. If in the
event a related party transaction is contemplated
sometime in the future, the Company intends to seek
shareholder approval through a vote of shareholders.
However, shareholders objecting to any such related
party transaction will be able only to request the
return of the pro-rata portion of their invested
funds held in escrow in connection with the
reconfirmation offering to be conducted in
accordance with Rule 419 upon execution of the
acquisition agreement.
12. Possible Disadvantages of Blank Check Offering.
The Company's business may involve the acquisition
of or merger with a company which does not need
substantial additional capital but which desires to
establish a public trading market for its shares.
A company which seeks the Company's participation
in attempting to consolidate its operations through
a merger, reorganization, asset acquisition, or
some other form of combination may desire to do
so to avoid what they may deem to be adverse
consequences of themselves undertaking a public
offering. Factors considered may include time
delays, significant expense, loss of voting
control and the inability or unwillingness to
comply with various federal and state laws enacted
for the protection of investors. In making an
investment in the Company, investors should
recognize that they may be doing so under
terms which may ultimately be less favorable
than making an investment directly in a company
with a specific business. Investors herein may
not be afforded an opportunity to specifically
approve or consent to any particular stock buy-out
transaction. (See "Proposed Business.")
13. Lack of Market Research or Identification of
Acquisition or Merger Candidate. The Company has
neither conducted nor have others made available
to it results of market research concerning the
feasibility of a Business Combination with a
Target Business. Therefore, Management has no
assurances that market demand exists for an
acquisition or merger as contemplated by the
Company. Management has not selected any
particular industry or specific business within
an industry for evaluation by the Company. There
is no assurance the Company will be able to form
a Business Combination with a Target Business on
terms favorable to the Company. (See "Proposed
Business.")
14. Success Dependent on Management. The Company's
sole officer and director has only limited
experience in the business activities in which the
Company intends to engage. Management believes it
has sufficient experience to implement the Company's
plan, although there is no assurance that additional
managerial assistance will not be required. Success
of the Company depends on the active participation
of its officer. The officer has not entered into
an employment agreement with the Company and they
are not expected to do so in the foreseeable future.
The Company has not obtained key man life insurance
on its sole officer and director. (See "Proposed
Business," "Management", "Use Of Proceeds," and
"Prior Blank Check Offerings").
15. No Current Contemplated Business Combinations.
As of the date of this Prospectus, there are no
present arrangements or understandings with any
representatives of the owners of any business
(Target Business) regarding the possibility of a
Business Combination.
16. Lack of Diversification. In the event the
Company is successful in identifying and
evaluating a suitable Business Combination, the
Company will in all likelihood, be required to
issue its Common Stock in an acquisition or
merger transaction. Inasmuch as the Company's
capitalization is limited and the issuance of
additional Common Stock will result in a dilution
of interest for present and prospective
shareholders, it is unlikely the Company will
be capable of negotiating more than one
acquisition or merger. Consequently, the
Company's lack of diversification may subject
the Company to economic fluctuation within a
particular industry in which a Target Company
conducts business. (See "Proposed Business.")
17. Regulation. Although the Company will be
subject to regulation under the Securities Act of
1933 and the Securities Exchange Act of 1934,
Management believes the Company will not be subject
to regulation under the Investment Company Act of
1940. The regulatory scope of the Investment
Company Act of 1940, as amended (the "Investment
Company Act"), was enacted principally for the
purpose of regulatory vehicles for pooled
investments in securities, extends generally to
Companies primarily in the business of investing,
reinvesting, owning, holding or trading securities.
The Investment Company Act may, however, also be
deemed to be applicable to a Company which does not
intend to be characterized as an Investment Company
but which, nevertheless, engages in activities
which may be deemed to be within the definition
of the scope of certain provisions of the
Investment Company Act. The Company believes that
its principal activities will not subject it to
regulation under the Investment Company Act.
Nevertheless, there can be no assurances that
the Company will not be deemed to be an Investment
Company. The Net Proceeds may be invested primarily
in certificates of deposit, interest bearing savings
accounts or government securities. In the event
the Company is deemed to be an Investment Company,
the Company may be subject to certain restrictions
relating to the Company's activities, including
restrictions on the nature of its investments and
the issuance of securities. The Company has
obtained no formal determination from the
Securities and Exchange Commission as to the
status of the Company under the
Investment Company Act of 1940.
18. Taxation. In the course of any acquisition
or merger the Company may undertake, a substantial
amount of attention will be focused upon federal
and state tax consequences to both the Company and
the "target" company. Presently, under the
provisions of federal and various state tax laws,
a qualified reorganization between business
entities will generally result in tax-free
treatment to the parties to the reorganization.
While the Company expects to undertake any merger
or acquisition so as to minimize federal and
state tax consequences to both the Company and the
"target" company, there is no assurance that such
Business Combination will meet the statutory
requirements of a reorganization or that the parties
will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying
reorganization could result in the imposition
of both federal and state taxes which may have a
substantial adverse effect on the Company. (See
"Business-Regulation and Taxation.")
19. No Dividends. The Company was only recently
organized, has no earnings, and has paid no
dividends to date. Since the Company was formed as
a blank check company with its only intended
business being the search for an appropriate
Business Combination, the Company does not
anticipate having any earnings until such time
that a Business Combination is effected. However,
there are no assurances that upon the consummation
of a Business Combination, the Company will have
earnings or issue dividends. Therefore, it is not
expected that cash dividends will be paid, if at all,
to stockholders until after a Business Combination
is effected. (See "Dividends.")
20. Arbitrary Determination of Offering Price.
The initial offering price of $1.00 per Share has
been arbitrarily determined by the Company, and
bears no relationship whatsoever to the Company's
assets, earnings, book value or any other objective
standard of value. Among the factors considered
by the Company were the lack of operating history
of the Company, the Net Proceeds to be raised by
the Offering, the amount of capital to be
contributed by the public in proportion to the
amount of stock to be retained by present
stockholders, the relative requirements of the
Company, and the current market conditions in the
over-the-counter market.
21. Control by Present Management and Shareholders.
Investors should note that the present shareholder
of the Company will own a minimum of 71% of the
Company after the Offering is completed and would
therefore have continuing control of the Company.
Assuming the sale of all the Shares offered, the
Shares of Common Stock purchased by the public
will represent approximately 29% of the Company's
outstanding Common Stock after the completion of
this Offering. Therefore, the present stockholder
of the Company and Management, will own a minimum
of 71% interest in the Company and will continue
to be able to elect all of the Company's directors,
appoint its officers, and control the Company's
affairs and operations. The Company's Certificate
of Incorporation does not provide for cumulative
voting. There are no arrangements, agreements or
understandings between non-Management shareholders
and Management under which non-Management
shareholders may directly or indirectly participate
in or influence the Management of the Company's
affairs or to exercise their voting rights to
continue to elect the current directors.
Non-Management shareholders will exercise their
voting rights to continue to elect the current
directors to the Company's board. (See "Principal
Stockholders", "Dilution" and "Description of
Securities").
22. Immediate Substantial Dilution. As of July 18,
2000, the net tangible book value of the Company's
Common Stock was approximately $0.08 per share,
substantially less than the $1.00 per share to be
paid by the public investors. In the event all the
Shares are sold, public investors will sustain an
immediate dilution of approximately $0.66 per share
in the book value of public investors' holdings.
(See "Dilution.")
23. Purchase of Shares. The Company's officer,
director, current shareholder and any of their
affiliates or associates may purchase shares
offered in this Offering. Shares purchased by the
Company's officer, director and principal
shareholder will be acquired for investment
purposes and not with a view towards distribution.
24. State Law Violations. The Company will use
its best efforts to ensure that sales of Shares
will only occur in those states in which such
sales would not be a violation of any of said
states laws. The Company will notify the Transfer
Agent to aid in such compliance. The Company's
securities may be sold in New York only, and may
be resold by investors in New York.
25. Business Combination Through A Leveraged
Transaction. The Company is not prohibited from
consummating a Business Combination through a
leveraged transaction. However, investors should
be aware that such a transaction could result in
the Company's assets being mortgaged and possibly
foreclosed. The use of leverage to consummate a
Business Combination may reduce the ability of the
Company to incur additional debt, make other
acquisitions or declare dividends. Such leverage
may also subject the Company's operations to
strict financial controls and significant
interest expense.
26. Penny Stock Regulation. Broker-dealer
practices in connection with transactions in
"penny stocks" are regulated by certain penny
stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity
securities with a price of less than $5.00 (other
than securities registered on certain national
securities exchanges or quoted on the NASDAQ system,
provided that current price and volume information
with respect to transactions in such securities is
provided by the exchange or system). The penny
stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk
disclosure document prepared by the Commission
that provides information about penny stocks and
the nature and level of risks in the penny stock
market. The broker-dealer also must provide the
customer with current bid and offer quotations for
the penny stock, the compensation of the
broker-dealer and its salesperson in the
transaction, and monthly account statements
showing the market value of each penny stock
held in the customer's account. In addition,
the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt
from such rules the broker-dealer must make a
special written determination that the penny stock
is a suitable investment for the purchaser and
receive the purchaser's written agreement to the
transaction. These disclosure requirements may
have the effect of reducing the level of trading
activity in the secondary market for a stock that
becomes subject to the penny stock rules. If the
Company's Common Stock becomes subject to the Penny
Stock rules, investors in this Offering may find
it more difficult to sell their shares.
DILUTION
The net tangible book value of the Company as of
July 18, 2000 was $0.08 per share. Net tangible
book value is the net tangible assets of the
Company (generally, total assets less total
liabilities) (See "Financial Statements.") The
public offering price per share is $1.00. The
pro forma net tangible book value per share after
the Offering will be $0.34. The shares purchased
by investors in this Offering will be diluted
$0.66. As of July 18, 2000, there were 25,000
shares of the Company's Common Stock outstanding
(See "Certain Transactions"). Dilution represents
the difference between the public offering price
and the pro forma net tangible book value per share
immediately after the completion of the public
offering. The following table illustrates this
per share dilution to be experienced by investors
in the Offering:
Public offering price per share $ 1.00
Net tangible book value per share
before Offering $ 0.08
Pro forma net tangible book value
per share after Offering $ 0.34
Increase per share attributable
to shares offered hereby $ 0.26
Dilution to public investors $ 0.66
# Shares Money Received Net Tangible
Before for Shares Book Value
Offering Before Offering Per Share
Before Offering
25,000 $2,500 $0.08
Total # Total Amount Pro Forma Net
of Shares of Money Tangible Book
After Received For Value Per Share
Offering Shares After Offering
35,000 $10,000 $0.34
Pro Forma Net Tangible Increase Per
Net Book Value Per Share Attributed
Tangible Share Before To Shares
Book Value Offering Offered Hereby
Per Share
After
Offering
$0.34 $0.08 $0.26
Public Pro Forma Net Dilution to
Offering Tangible Book Public Investors
Price Per Value Per Share
Share After Offering
$1.00 $0.34 $0.66
As of the date of this Prospectus, the following
table sets forth the percentage of equity to be
purchased by public investors in this Offering
compared to the percentage of equity to be owned
by the present stockholder, and the comparative
amounts paid for the shares by the public investors
as compared to the total consideration paid by
the present stockholder of the Company. (See
"Certain Transactions" and "Financial
Statements.")
Stockholders Shares Approx. Total Approx.
Purchased % Total Consid- % Total
Shares eration Consid-
Out- eration
standing
New 10,000 29 $10,000 80%
Investors
Existing 25,000 71 $2,500 20%
Stockholder
USE OF PROCEEDS
The gross proceeds of this Offering will be $10,000,
if all of the Shares are sold. Pursuant to Rule 419
under the Securities Act, after all of the Shares
are sold, 10% of the Deposited Funds ($1,000) may
be released from escrow to the Company. The Company
intends to request release of this 10%. In the
event that the Company does not request release of
these funds, the Company will receive these funds
in the event a Business Combination is consummated
in accordance with Rule 419. Upon the consummation
of a Business Combination and the reconfirmation
thereof, which reconfirmation offering must precede
such consummation, pursuant to Rule 419, $9,000
(plus any dividends received, but less any portion
disbursed to the Company pursuant to Rule
419(b)(2)(C)(vi) and any amount returned to
investors who did not reconfirm their investment
pursuant to Rule 419) will be released to the
Company.
Approximate Percentage
Amount Total
Escrowed funds $9,000 90%
pending Business
Combination (1)(2)
(1) Does not include the estimated $8,352.64 of
Offering expenses.
(2) The Company expects to request release of 10%
of the Deposited Funds ($1,000) pursuant to Rule
419. While the Company presently anticipates that
it will be able to locate and consummate a Business
Combination, which adheres to the criteria
discussed under "Investors' Rights and Substantive
Protection Under Rule 419", if the Company
determines that a Business Combination requires
additional funds, it may seek such additional
financing through loans, issuance of additional
securities or through other financing arrangements.
No such financial arrangements presently exist,
and no assurances can be given that such additional
financing will be available or, if available,
whether such additional financing will be on terms
acceptable to the Company. Persons purchasing
Shares in this Offering will not, unless required
by law, participate in the determination of whether
to obtain additional financing or as to the terms
of such financing. Because of the Company's
limited resources, it is likely that the Company
will become involved in only one Business
Combination.
The Company does not intend to advertise or
promote the Company. Instead, the Company's
Management will actively search for potential
Target Businesses. In the event Management decides
to advertise (in the form of an ad in a legal
publication) to attract a Target Business, the
cost of such advertising will be assumed by
Management.
Upon the consummation of a Business Combination, the
Company anticipates that there will be a change in
the Company's Management, which management may
decide to change the policies as to the use of
proceeds as stated herein. The Company's present
Management anticipates that the Deposited Funds
will be used by the post-merger management at its
sole discretion. No compensation will be paid or
due or owing to any officer or director until after
a Business Combination is consummated. Such policy
is based upon a written agreement among Management.
Management is unaware of any circumstances under
which such policy through their own initiative may
be changed. The Company is not presently considering
any outside individual for a consulting position;
however, the Company cannot rule out the need for
outside consultants in the future. No decisions
have been made as to payment of these
consultants.
Present Management of the Company will not make any
loans of the $1,000 available from the Deposited
Funds of this offering, nor will present Management
borrow funds and use either the Company's working
capital or Deposited Funds as security for such.
This policy is based upon an oral agreement among
Management. Management is unaware of any
circumstances under which such policy through
their own initiative may be changed. Once the
deposited Funds are released from escrow the then
existing Management may loan the proceeds or borrow
funds and use the proceeds as security for such
loan, on terms it deems appropriate.
The proceeds received in this Offering will be put
into the Escrow Account pending consummation of a
Business Combination and reconfirmation by
investors. Such Deposited Funds will be in an
interest bearing account by Whiteman Osterman
& Hanna.
CAPITALIZATION
The following table sets forth the capitalization
of the Company as of July 18, 2000, and as adjusted
to give effect to the sale of all of the Shares
offered by the Company.
Actual Pro-Forma
As Adjusted
Long-term debt(1) $0 $0
Stockholders' equity: $.08 $.34
Common stock, $.001
par value; authorized
50,000 shares, issued
and outstanding 25,000
shares and 35,000
shares, pro-forma as
adjusted
Additional paid-in
capital $0 $10,000
Deficit accumulated $0 $0
during the
development period
Stockholders' deficit, $0 $0
net
Total capitalization $2,500 $12,500
(1) For the terms of the Company's long-term debt,
see "Certain Transactions," and "Description of
Securities."
PROPOSED BUSINESS
History and Organization
The Company was organized under the laws of the
State of Delaware on June 9, 2000. Since
inception, the primary activity of the Company
has been directed to organizational efforts and
obtaining initial financing. The Company was
formed as a vehicle to pursue a Business
Combination. The Company has not engaged in any
preliminary efforts intended to identify possible
Business Combination and has neither conducted
negotiations concerning, nor entered into a letter
of intent concerning any such Target Business.
The Company's initial public offering will
comprise 10,000 shares of Common Stock at a
purchase price of $1.00 per share.
The Company is filing this registration statement
in order to effect a public offering for its
securities. (See "Description of Securities.")
Plan of Operation
The Company was organized for the purposes of
creating a corporate vehicle to seek, investigate
and, if such investigation warrants, engaging in
Business Combinations presented to it by persons
or firms who or which desire to employ the Company's
funds in their business or to seek the perceived
advantages of publicly-held corporation. The
Company's principal business objective will be to
seek long-term growth potential in a Business
Combination venture rather than to seek immediate,
short-term earnings. The Company will not restrict
its search to any specific business, industry or
geographical location, and the Company may engage
in a Business Combination.
The Company does not currently engage in any
business activities which provide any cash flow.
The costs of identifying, investigating, and
analyzing Business Combinations will be paid with
money in the Company's treasury. Persons
purchasing shares in this Offering and other
shareholders will most likely not have the
opportunity to participate in any of these
decisions. The Company's proposed business is
sometimes referred to as a "blank check" company
because investors will entrust their investment
monies to the Company's Management before they
have a chance to analyze any ultimate use to
which their money may be put. Although
substantially all of the Deposited Funds of this
offering are intended to be utilized generally
to effect a Business Combination, such proceeds
are not otherwise being designated for any specific
purposes. Pursuant to Rule 419, prospective
investors who invest in the Company will have an
opportunity to evaluate the specific merits
or risks of only the Business Combination
management decides to enter into. Cost overruns
will be borne equally by all current
shareholders of the Company.
The Company may seek a Business Combination in the
form of firms which have recently commenced
operations, are developing companies in need of
additional funds for expansion into new products
or markets, are seeking to develop a new product
or service, or are established businesses which
may be experiencing financial or operating
difficulties and are in need of additional capital.
A Business Combination may involve the acquisition
of, or merger with, a Company which does not need
substantial additional capital but which desires
to establish a public trading market for its shares,
while avoiding what it may deem to be adverse
consequences of undertaking a public offering
itself, such as time delays, significant expense,
loss of voting control and compliance with various
Federal and State securities laws.
The Company will not acquire a Target Business
unless the fair value of the Target Business
represents 80% of the maximum Offering Proceeds
(the "Fair Market Value Test.") To determine the
fair market value of a Target Business, the
Company's Management will examine the audited
financial statements (including balance sheets
and statements of cash flow and stockholders'
equity) of any candidate, focusing attention on
a potential Target Business's assets, liabilities,
sales and net worth. In addition, management of the
Company will participate in a personal inspection of
any potential Target Business. If the Company
determines that the financial statements of a
proposed Target Business does not clearly indicate
that the Fair Market Value Test has been satisfied,
the Company will obtain an opinion from an
investment banking firm (which is a member of
National Association of Securities Dealers, Inc.,
(the "NASD") with respect to the satisfaction of
such criteria. (See "Investors' Rights and
Substantive Protection Under Rule 419.")
Based upon Management's experience with and
knowledge of blank check companies, the probable
desire on the part of the owners of target
businesses to assume voting control over the
Company (to avoid tax consequences or to have
complete authority to manage the business) will
almost assure that the Company will combine with
just one target business. Management also
anticipates that upon consummation of a Business
Combination, there will be a change in
control in the Company which will most likely
result in the resignation or removal of the
Company's present officer and director.
The Company's officer and director has had
no preliminary contact or discussions with any
representative of any other entity regarding a
business Combination. Accordingly, any Target
Business that is selected may be a financially
unstable Company or an entity in its
early stage of development or growth (including
entities without established records of sales
or earnings), the Company will become
subjected to numerous risks inherent in the
business and operations of financially unstable
and early stage or potential emerging growth
companies. In addition, the Company may affect
a Business Combination with an entity in an
industry characterized by a high level of risk,
and although Management will endeavor to evaluate
the risks inherent in a particular industry or
Target Business, there can be no assurance that
the Company will properly ascertain or assess all
significant risks. (See "High Risk Factors.")
Management anticipates that it may be able to effect
only one potential Business Combination, due
primarily to the Company's limited financing, and
the dilution of interest for present and
prospective shareholders of the Company, which
is likely to occur as a result of Management's
plan to offer a controlling interest on the
Company to a Target Business in order to achieve
a tax free reorganization. This lack of
diversification should be considered a
substantial risk in investing in the Company
because it will not permit the Company to offset
potential losses from one venture against gains
from another.
The Company anticipates that the selection of a
Business Combination will be complex and extremely
risky. Because of general economic conditions,
rapid technological advances being
made in some industries, and shortages
of available capital, management believes
that there are numerous firms seeking even the
limited additional capital which the Company
will have and/or the benefits of a publicly
traded corporation. Such perceived benefits of
a publicly traded corporation may include
facilitating or improving the terms on which
additional equity financing may be sought,
providing liquidity for the principals of a
business, creating a means for providing
incentive stock options or similar benefits
to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all
shareholders, and other factors. Potentially
available Business Combinations may occur in
many different industries and at various stages
of development, all of which will make the task of
comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Evaluation of Business Combinations
The analysis of Business Combinations will be
undertaken by or under the supervision of the
officer and director of the Company,
who is not a professional business analyst.
(See "Management.") Management intends to
concentrate on identifying preliminary
prospective Business Combinations which
may be brought to its attention through
present associations. In analyzing prospective
Business Combinations, Management will consider
such matters as the available technical, financial,
and managerial resources; working
capital and other financial requirements;
history of operation, if any; prospects for
the future; nature of present and expected
competition; the quality and experience of
management services which may be
available and the depth of that management;
the potential for further research, development,
or exploration; specific risk factors not now
foreseeable but which then may be anticipated to
impact the proposed activities of the Company;
the potential for growth or expansion; the
potential for profit; the perceived public
recognition or acceptance or products, services,
or trades; name identification; and other relevant
factors. The officer and director of the Company
will meet personally with management and key
personnel of the firm sponsoring the
business opportunity as part of their
investigation. To the extent possible, the
Company intends to utilize written reports and
personal investigation to evaluate the above
factors.
Since the Company will be subject to Section 13 or
15 (d) of the Securities Exchange Act of 1934, it
will be required to furnish certain information
about significant acquisitions, including audited
financial statements for the Company(s) acquired,
covering one, two or three years depending upon
the relative size of the acquisition.
Consequently, acquisition prospects that do
not have or are unable to obtain the required
audited statements may not be appropriate for
acquisition so long as the reporting requirements
of the Exchange Act are applicable. In the event
the Company's obligation to file periodic
reports is suspended under Section 15(d), the
Company intends on voluntarily filing such reports.
It may be anticipated that any Business Combination
will present certain risks. Many of these risks
cannot be adequately identified prior to selection,
and investors herein must, therefore, depend on the
ability of management to identify and evaluate such
risks. In the case of some of the potential
combinations available to the Company, it may be
anticipated that the promoters thereof have
been unable to develop a going concern or that
such business is in its development stage in that
it has not generated significant revenues
from its principal business activity prior to
the Company's merger or acquisition, and there
is a risk, even after the consummation of such
Business Combinations and the related expenditure
of the Company's funds, that the combined
enterprises will still be unable to become a
going concern or advance beyond the development
stage. Many of the Combinations may involve new
and untested products, processes, or market
strategies which may not succeed. Such risks
will be assumed by the Company and, therefore,
its shareholders.
Business Combinations
In implementing a structure for a particular
business acquisition, the Company may become a
party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another
corporation or entity. It may also purchase stock
or assets of an existing business.
Investors should note that any merger or acquisition
effected by the Company can be expected to have a
significant dilutive effect on the percentage of
shares held by the Company's then-shareholders,
including purchasers in this Offering. On the
consummation of a Business Combination, the Target
Business will have significantly more assets than
the Company; therefore, management plans to offer
a controlling interest in the Company to the Target
Business. While the actual terms of a transaction
to which the Company may be a party cannot be
predicted, it may be expected that the parties to
the business transaction will find it desirable to
avoid the creation of a taxable event and thereby
structure the acquisition in a so-called "tax-
free" reorganization under Sections 368(a)(1) or
351 of the Internal Revenue Code of 1986, as amended
(the "Code"). In order to obtain tax-free treatment
under the Code, it may be necessary for the owners
of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such
event, the shareholders of the Company,
including investors in this Offering, would
retain less than 20% of the issued and
outstanding shares of the surviving entity,
which would be likely to result in significant
dilution in the equity of such shareholders.
Management of the Company may choose to avail the
Company of these provisions. In addition, a
majority of all of the Company's directors and
officers may, as part of the terms of the
acquisition transaction, resign as directors
and officers. (See "High Risk Factors" and
"Dilution.")
Management will not actively negotiate or otherwise
consent to the purchase of any portion of their
Common Stock as a condition to or in connection
with a proposed Business Combination unless
such a purchase is requested by a Target Company
as a condition to a merger or acquisition. The
officer and director of the Company has
agreed to comply with this provision which
is based on a written agreement among Management.
Management is unaware of any circumstances under
which such policy through their own initiative
may be changed. (See "Management").
It is anticipated that any securities issued in any
such reorganization would be issued in reliance on
exemptions from registration under applicable
federal and state securities laws. In
some circumstances, however, as a negotiated
element of this transaction, the Company may
agree to register such securities either
at the time the transaction is consummated,
under certain conditions, or at specified times
thereafter. The issuance of substantial additional
securities and their potential sale into any
trading market which may develop in the Company's
Common Stock may have a depressive
effect on such market.
As a part of the Company's investigation, the
Company's officer and director will meet personally
with management and key personnel, visit and inspect
material facilities, obtain independent
analysis or verification of certain information
provided, check references of management and key
personnel, and take other reasonable investigative
measures, to the extent of the Company's
limited financial resources and Management
expertise.
The manner of the Business Combination will depend
on the nature of the Target Business, the
respective needs and desires of the Company and
other parties, the management of the Target
Business opportunity, and the relative
negotiating strength of the Company and
such other management.
If at any time prior to the completion of this
Offering the Company enters negotiations with a
possible merger candidate and such a transaction
becomes probable, then this Offering will be
suspended so that an amendment can be filed which
will include financial statements (including
balance sheets and statements of cash
flow and stockholders' equity) of the proposed
target.
The Company will not purchase the assets of any
company which is beneficially owned by any
officer, director, promoter or affiliate or
associate of the Company. Furthermore, the Company
intends to adopt a procedure whereby a special
meeting of the Company's shareholders will be
called to vote upon a Business Combination with
an affiliated entity, and shareholders who also
hold securities of such affiliated entity will
be required to vote their shares of the Company's
stock in the same proportion as the Company's
publicly held shares are voted. The Company's
officer and director has not approached and has
not been approached by any person or entity with
regard to any proposed business ventures with
respect to the Company. The Company will evaluate
all possible Business Combinations brought to it.
If at any time a Business Combination is brought
to the Company by any of the Company's promoters,
Management, or their affiliates or associates,
disclosure as to this fact will be included in the
post-effective amendment, thereby allowing
the public investors the opportunity to fully
evaluate the Business Combination.
The Company has adopted a policy that it will not
pay a finder's fee to any member of Management for
locating a merger or acquisition candidate. No
member of Management intends to or may seek and
negotiate for the payment of finder's fees. In
the event there is a finder's fee, it will be paid
at the direction of the successor management after
a change in Management control resulting from a
Business Combination. The Company's policy
regarding finder's fees is based on an oral
agreement among Management. Management is
unaware of any circumstances under which such
policy through their own initiative may be
changed.
The Company will remain an insignificant player
among the firms which engage in Business
Combinations. There are many established venture
capital and financial concerns which have
significantly greater financial and personnel
resources and technical expertise than the
Company. In view of the Company's combined
limited financial resources and limited management
availability, the Company will continue to be at
a significant competitive disadvantage compared
to the Company's competitors. Also, the Company
will be competing with a large number of other
small, blank check public companies located
throughout the United States.
The Company does not intend to advertise or promote
the Company. Instead, the Company's Management will
actively search for potential Target Businesses.
In the event Management decides to advertise (in
the form of an ad in a legal publication) to attract
a Target Business, the cost of such advertising
will be assumed by Management.
Regulation
The Investment Company Act defines an "investment
company" as an issuer which is or holds itself out
as being engaged primarily in the business of
investing, reinvesting or trading of securities.
While the Company does not intend to engage in such
activities, the Company could become subject to
regulations under the Investment Company Act in
the event the Company obtains or continues to hold
a minority interest in a number of enterprises. The
Company could be expected to incur significant
registration and compliance costs if required to
register under the Investment Company Act.
Accordingly, management will continue to review
the Company's activities from time to time with
a view toward reducing the likelihood the Company
could be classified as an "Investment
Company."
Employees
The Company currently does not have any employees.
The sole officer and director of the Company is
engaged in business activities outside of the
Company, and thus will only devote time and
effort in connection with the Company's business
and operations on a part time basis. Upon
completion of the public offering, it is
anticipated that the officer and director of
the Company will devote the time necessary each
month to the affairs of the Company until a
successful business opportunity has been acquired.
Facilities
The Company is presently using the office of an
affiliated entity, located at 241 Morner Road,
Rensselaer, New York 12144, at no cost to the
Company. Such arrangement is expected to continue
after completion of this Offering only until a
Business Combination is consummated, although
there is currently no such agreement. The
Company at present owns no equipment, and does
not intend to own any upon completion of this
Offering.
MANAGEMENT
The sole officer and director of the Company, and
further information concerning them, is as
follows:
Name(1) Age Position
Leslie M. Apple 50 President,
Secretary,
Treasurer,
Director
(1) May be deemed "Promoters" of the Company, as
that term is defined under the Securities Act of
1933.
Biographies
Leslie M. Apple has been a practicing attorney in
Albany, New York for approximately 25 years. Since
January, 1995, Mr. Apple has been a partner in the
Albany, New York law firm of Whiteman Osterman
& Hanna. Prior to January, 1995, Mr Apple was
President and CEO of Apple Honen Sims and Wood,
P.C. a law firm he founded as Leslie M. Apple,
P.C. in August, 1985.
Other Blank Check Companies
Competing searches for combination candidates
among blank check affiliates may present conflicts
of interest. Management intends to present each
Business Combination candidate to the shareholders
for their approval. There are currently no other
blank check affiliates seeking combination
candidates. The Company's Offering and other
contemplated offerings (if any) by other blank
check companies do not constitute a single plan
of financing.
The Company may not acquire, be acquired by or
merged with any affiliated blank check companies
or join with such companies in acquiring a
business.
Conflicts of Interest
No member of Management is currently affiliated or
associated with any blank check company.
Management does not currently intend to promote
blank check entities other than the Company.
However, Management may become involved with the
promotion of other blank check companies in the
future. A potential conflict of interest may
occur in the event of such involvement. (See
"HIGH RISK FACTORS - Conflicts of Interest.")
Management intends to present each Business
Combination candidate to the shareholders for
their approval.
Remuneration
The Company's sole officer and director has not
received any cash remuneration since the Company's
inception, and none is to receive or accrue any
remuneration or reimbursements of expenses
from the Company upon completion of this Offering.
No remuneration of any nature has been paid for or
on account of services rendered by a director in
such capacity.
The legal fee to be paid to Whiteman Osterman
& Hanna, counsel for the corporation, is five
thousand dollars ($5,000.00), which has not been
paid to prior to this Offering and is contingent on
the Company successfully completing a Business
Combination.
Management Involvement
The Company has conducted no business as of yet,
and aside from the search for shareholders
associated with the Company's formation, Management
has done no work with or for the Company.
Management will speak to business associates
and acquaintances and will search the New York
Times, the Wall Street Journal and other
business publications for Target Businesses.
After the closing of this Offering, Management
intends to search for, consider and negotiate
with a Target Business. Management has not
divided these duties among its members. No
member of Management has any distinct
influence over the others in connection
with their participation in the
Company's affairs.
Management Control
Management may not divest themselves of ownership
and control of the Company prior to the
consummation of an acquisition or merger
transaction. Management is not aware of any
circumstances under which such policy through
their own initiative, may be changed.
STATEMENT AS TO INDEMNIFICATION
Section 145 of the Delaware General Corporation Law
provides for indemnification of the officers,
directors, employees and agents of registrants
by the Company. Complete disclosure of this
statute is provided in Part II hereof. This
information can be examined as described in
"Further Information", herein.
Paragraph Seventh of the Certificate of
Incorporation of the Montana Acquisition
Corporation provides as follows:
The corporation shall, to the fullest extent
permitted by Section 145 of the General
Corporation Law of the State of Delaware,
as the same may be amended and
supplemented, indemnify any and all
persons whom it shall have power to
indemnify under said section
from and against any and all of
the expenses, liabilities, or other
matters referred to in or covered by
said section, and the indemnification
provided for herein shall not be deemed
exclusive of any other rights to which those
indemnified may be entitled under any by-law,
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.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to
directors, officers or persons controlling the
registrant pursuant to the foregoing provisions,
the registrant has been informed that in the
opinion of the Commission such indemnification
is against the public policy as expressed
in the Securities Act and is therefore,
unenforceable.
MARKET FOR THE COMPANY'S COMMON STOCK
Prior to the date hereof, there has been no trading
market for the Company's Common Stock. Pursuant to
the requirements of Rule 15g-8 of the Exchange Act,
a trading market will not develop prior to or after
the effectiveness of this prospectus or while the
Common Stock under this offering is maintained in
escrow. The Common Stock under this Offering will
remain in escrow until the Company's consummation
of a Business Combination pursuant to the
requirements of Rule 419. There is currently
one (1) holder of the Company's outstanding
Common Stock. Current shareholders will
own a minimum of 71% of the outstanding shares
upon completion of the offering and, as a result,
there is no likelihood of an active public trading
market, as that term is commonly understood,
developing for the shares. There can be no
assurance that a trading market will develop upon
the consummation of a Business Combination and the
subsequent release of the Common Stock and
other escrowed shares from escrow. To date,
neither the Company nor anyone acting on its
behalf has taken any affirmative steps to
retain or encourage any broker dealer to act
as a market maker for the Company's Common Stock.
Further, there have been no discussions
or understandings, preliminary or otherwise,
between the Company or anyone acting on its
behalf and any market maker regarding the
participation of any such market maker in
the future trading market, if any, for the
Company's Common Stock. Further, there have been
no discussions or understandings, preliminary or
maker regarding the participation of any such market
maker in the future trading market, if any, for the
Company's Common Stock. (See "HIGH RISK
FACTORS - No Assurance of a Public Market"
and "HIGH RISK FACTORS - Control by Present
Management and Shareholders.")
Present Management does not anticipate that any such
negotiations, discussions or understandings shall
take place prior to the execution of an acquisition
agreement. Management expects that discussions in
this area will ultimately be initiated by the party
or parties controlling the entity or assets which
the Company may acquire. Such party or parties may
employ consultants or advisors to obtain such
market maker but present management of the Company
has no intention of doing so at the present time.
The Company's sole officer and director and
controlling shareholder has not in the past
used particular consultants or advisers, and
the Company has no set criteria to use in its
possible evaluation of any consultants or
advisers.
Whiteman Osterman & Hanna's legal fees will
total five thousand dollars ($5,000), none of
which has yet been paid by the Company for
legal services rendered. (See "Certain
Transactions").
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information
regarding the beneficial ownership of the Company's
Common Stock as of the date of this prospectus,
and as adjusted to reflect the sale of the shares
offered hereby, by (i) each person who is known by
the Company to own beneficially more than 5% of the
Company's outstanding Common Stock; (ii) each of
the Company's officers and directors; and (iii) all
directors and officers of the Company as a group.
Name/ Shares of Percent Percent
Address Common of Class of Class
Beneficial Stock Owned Owned
Owner Beneficially Before After
Owned Offering Offering
Leslie M. Apple 25,000 100% 71%
6 Greyledge
Drive,
Loudonville,
NY 12211
Total Officers 25,000 100% 71%
and Directors
(1 Person)
Total (1 Person) 25,000 100% 71%
(1) May be deemed "promoters" of the Company, as
that tem is defined under the Securities Act of
1933, as amended.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50, 000 shares
of Common Stock, $.001 par value per share, of
which 25,000 shares were issued and outstanding
as of the date of this Prospectus. Each
outstanding share of Common Stock is entitled
to one vote, either in person or by proxy, on
all matters that may be voted upon by the
owners thereof at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable
rights to dividends from funds legally available
therefor, when, as and if declared by the Board of
Directors of the Company; (ii) are entitled
to share ratably in all of the assets of the
Company available for distribution to holders of
Common Stock upon liquidation, dissolution or
winding up of the affairs of the Company;
(iii) do not have preemptive, subscription or
conversion rights, or redemption or sinking fund
provisions applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on
all matters on which stockholders
may vote at all meetings of stockholders.
All shares of Common Stock which are the subject of
this Offering, when issued, will be fully paid for
and non-assessable, with no personal liability
attaching to the ownership thereof. The holders
of shares of Common Stock of the Company do not
have cumulative voting rights, which means that
the holders of more than 50% of such outstanding
shares voting for the election of directors can
elect all of the directors of the Company if they
so choose and, in such event, the holders of the
remaining shares will not be able to elect any of
the Company's directors. At the completion of this
Offering, the present officer and director and
present shareholders will beneficially own 90
percent of the outstanding shares. Accordingly,
after completion of this Offering, the present
shareholders of the Company will be in a
position to control all of the affairs of the Company.
Future Financing
In the event the proceeds of this Offering are not
sufficient to enable the Company to successfully
find a Business Combination the Company may seek
additional financing. At this time the Company
believes that the proceeds of this Offering will
be sufficient for such purpose and therefore does
not expect to issue any additional securities
before the consummation of a Business Combination.
However, the Company may issue additional
securities, incur debt or procure other types of
financing if needed. The Company has not
entered into any agreements, plans or proposals
for such financing through the issuance of
additional securities and as of present has no
plans to do so. The Company will not use the
Deposited Funds as collateral or security for
any loan or debt incurred. Further, the
Deposited Funds will not be used to pay back
any loan or debts incurred by the Company. If
the Company does require additional financing,
there is no guarantee that such financing will
be available to it or if available that such
financing will be on terms acceptable to
the Company. (See "Use of Proceeds.")
Reports to Stockholders
The Company intends to furnish its stockholders
with annual reports containing audited financial
statements as soon as practicable
at the end of each fiscal year.
Dividends
The Company was only recently organized, has no
earnings, and has paid no dividends to date.
Since the Company was formed as a blank check
company with its only intended business being the
search for an appropriate Business Combination,
the Company does not anticipate having any
earnings until such time that a Business
Combination is reconfirmed by the stockholders.
However, there are no assurances that upon the
consummation of a Business Combination, the
Company will have earnings or issue dividends.
Therefore, it is not expected that cash dividends
will be paid to stockholders until after a
Business Combination is reconfirmed.
Transfer Agent
The Company will act as its own transfer agent.
PLAN OF DISTRIBUTION
The Company hereby offers the right to subscribe
for 10,000 shares at $1.00 per share. The Company
proposes to offer the Shares directly on a "best
efforts basis," and no compensation is to be paid
to any person in connection with the offer and sale
of the Shares. The Company's sole officer and
director (the "Sole Principal"), shall distribute
prospectuses related to this Offering. The Company
estimates that no more than one hundred (100)
prospectuses shall be distributed in such a manner.
The Sole Principal intends to distribute
prospectus to friends and business associates.
Although the Sole Principal is an "associated
person" of the Company as that term is
defined in Rule 3a4-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), he is deemed not to be a broker for
the following reasons: (1) the Sole Principal
is not subject to a statutory disqualifications
as that terms is defined in Section 3(a)(39)
of the Exchange Act at the time of his
participation in the sale of the Company's
securities; (2) he will not be compensated
in connection with his participation in the sale
of the Company's securities by the payment of
commission or other remuneration based either
directly or indirectly on transactions in
securities; (3) the Sole Principal is not
an associated person of a broker or dealers
at the time of his participation in the sale
of the Company's securities; and (4) the Sole
Principal shall restrict his participation to
the following activities:
(a) preparing any written communication or
deliveringsuch communication through the mails
or other means that does not involve oral
solicitation by the associated person of a
potential purchaser;
(b) responding to inquiries of a potential
purchasers in a communication initiated by
potential purchasers; provided however,
that the content of such responses are
limited to information contained in a
registration statement filed under the
Securities Act of 1933 or other offering
document; or
(c) performing ministerial and clerical work
involved in effecting any transaction.
As of the date of this Prospectus, no broker has
been retained by the Company in connection with
the sale of securities being offered hereby. In
the event a broker who may be deemed an
Underwriter is retained by the Company, an
amendment to the Company's Registration Statement
will be filed with the Securities and Exchange
Commission.
Neither the Company nor anyone acting on its
behalf including the Company's shareholder,
officer, director, promoters, affiliates or
associates will approach a market maker or take
any steps to request or encourage a market in
these securities either prior or subsequent to
an acquisition of any business opportunity. There
have been no preliminary discussions or
understandings between the Company (or anyone
acting on its behalf) and any market maker
regarding the participation of any such market
maker in the future trading market (if any) for
the Company's securities, nor does the Company
have any plans to engage in such discussions. The
Company does not intend to use consultants to obtain
market makers. No member of Management, promoter
or anyone acting at their direction will recommend,
encourage or advise investors to open brokerage
accounts with any broker-dealer that is obtained
to make a market in the Shares subsequent to the
acquisition of any business opportunity. The
Company's investors shall make their own decisions
regarding whether to hold or sell their Shares.
The Company shall not exercise any influence over
such decisions.
Method of Subscribing
Persons may subscribe by filling in and signing a
subscription agreement (the "Subscription
Agreement") and delivering it, prior to
the expiration date (as defined below), to
the Company. The subscription price of $1.00
per share must be paid in cash or by check,
bank draft or postal express money order payable
in United States dollars to the order of the
Company. This Offering is being
made on a "best efforts basis."
The Company's Sole Principal and any of his
affiliates or associates may purchase a portion
of the Shares offered in this Offering. The
aggregate number of Shares which may be purchased
by such persons shall not exceed 20% of the number
of shares sold in this Offering. Shares purchased
by the Company's officer, director and principal
shareholder will be acquired for investment
purposes and not with a view towards distribution.
EXPIRATION DATE
This Offering will expire 180 days from the date
of this Prospectus.
LITIGATION
The Company is not presently a party to any
litigation, nor to the knowledge of management
is any litigation threatened against the
Company which may materially affect the Company.
LEGAL OPINIONS
Whiteman Osterman & Hanna, One Commerce Plaza,
Albany, New York 12260, special counsel to the
Company, has rendered an opinion that the Shares
are validly issued and non-assessable.
EXPERTS
The balance sheet of the Company as of July 18,
2000, and the related statements of operations,
changes in stockholders' deficit and
cash flows for the initial period from
June 6, 2000 (date of incorporation) through
July 18, 2000 included in this Prospectus and
incorporated by reference in the Registration
Statement, have been audited by Arthur Place
& Company, P.C., 1218 Central Avenue,
Albany, New York 12205, independent
auditors, as stated in their report appearing
herein and incorporated by reference in the
Registration Statement, and are included and
incorporated by reference in reliance upon the
reports of such firm given upon their
authority as experts in accounting and auditing.
FURTHER INFORMATION
The Company has filed with the Securities and
Exchange Commission (the "Commission"), a
Registration Statement on Form SB-2 with respect
to the securities offered by this Prospectus. This
prospectus omits certain information contained in
the Registration Statement as permitted by the
Rules and Regulations of the Commission. Reports
and other information filed by the Company
may be inspected and copied at the public
reference facilities of the Commission in
Washington, D.C. Copies of such material can be
obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549 at prescribed
rate or at the Commission's website, www.sec.gov.
Statements contained in this prospectus as to
the contents of any contract or other document
referred to are not complete and where such
contract or other document is an exhibit to
the Registration Statement, each such statement
is deemed qualified and amplified in all respects
by the provisions of the exhibit.
FINANCIAL STATEMENTS
Balance Sheet at July 18, 2000
Statement of Changes in Stockholders' Equity for the
Period June 6, 2000 Through July 18, 2000
Statement of Income for the Period June 6, 20000 Through
July 18, 2000
Notes to Financial Statements
MONTANA ACQUISITION CORPORATION
(A Development Stage Company)
BALANCE SHEET AS OF JULY 18, 2000
ASSETS
Current Assets:
Cash $2,500
TOTAL ASSETS $2,500
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable $436
Total Liabilities $436
STOCKHOLDERS' EQUITY
Common Stock - Par Value $.001 per share;
50,000 Shares Authorized; 25,000 Shares
Issued and Outstanding 25
Additional Paid-In Capital 2,475
Accumulated Deficit, incurred during the
Development Stage (436)
Total Stockholders' Equity 2,064
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,500
MONTANA ACQUISITION CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD JUNE 6, 2000 THROUGH JULY 18, 2000
Common Additional Accumulated Total
Stock Paid-In Deficit
Capital
Balance $0 $0 $0 $0
June 6,
2000
Common 25 2,475 -- 2,500
Stock
Issued
Net -- -- (436) (436)
(Loss)
Balance $25 $2,475 (436) 2,064
July 18,
2000
MONTANA ACQUISITION CORPORATION
(A Development Stage Company)
STATEMENT OF INCOME FOR THE PERIOD
JUNE 6, 2000 THROUGH JULY 18, 2000
Revenue $0
Operating Costs
Legal Expense (436)
NET (LOSS) (436)
MONTANA ACQUISITION CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS FOR THE PERIOD
JUNE 6, 2000 THROUGH JULY 18, 2000
Cash Flows From Operating Activities:
Net (Loss) (436)
Adjustments to Reconcile Net Income to Net
Cash Provided by (Used by) Operating
Activities:
Increase in Accounts Payable 436
Net Cash (Used By)
Operating Activities 0
Cash Flows From Financing Activities:
Capital Contributions 2,500
Net Cash Provided by Financing
Activities 2,500
Net Increase in Cash 2,500
Beginning Bank Balance 0
Ending Bank Balance $2,500
Supplemental Disclosure:
Cash is defined as cash in savings account
MONTANA ACQUISITION CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: Summary of Significant Accounting Policies:
Organization Information - The Company was organized
for the purpose of creating a corporate vehicle to
seek, investigate, and, if such investigation
warrants, engaging in Business Combinations
presented to it be persons or firms who or which
desire to employ the Company's funds in their
business or to seek the perceived
advantages of a publicly-held corporation.
The Company was incorporated on June 6, 2000.
As the Company is in its development stage,
operations are devoted to organizing the business
and activities associated with its preparation
for filing a registration statement and
prospectus for its initial public offering.
The Company has not engaged in any preliminary
efforts intended to identify possible business
combinations and has neither conducted
registrations concerning, nor entered into a
letter of intent concerning any such target
business.
The Company's initial public offering will
comprise of 10,000 shares of common stock at
a purchase price of $1.00 per share. The
Company is filing a registration statement
in order to effect a public offering for
its securities.
Use of Estimates - The presentation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the
reported amounts of assets and liabilities
and disclosure of contingent assets and
liabilities at the date of the financial
statement and the reported amounts of revenues
and expenses during the reporting period.
Actual results could differ from those estimates.
Cash - The Company maintains its cash balance in
a national bank. The balance is insured by the
Federal Deposit Insurance Corporation up to
$100,000. There are no balances in excess of
insured amounts at July 18, 2000.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Delaware General Corporation Law, as amended,
provides for the indemnification of the Company's
officers, directors and corporate employees and
agents under certain circumstances as
follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE. - - (a) A
corporation shall have power to indemnify any
person who was or is a party or is threatened
to be made a party to any threatened, pending or
completed action, suit or proceeding, whether
civil, criminal, administrative or investigative
(other than an action by or in the right of the
corporation) by reason of the fact that the
person 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 the person in connection with such action,
suit or proceeding if the person acted in good
faith and in a manner the person 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 the person's
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, shall not, of
itself, create a presumption that the person
did not act in good faith and in a manner which
the person 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 reasonable cause to believe
the person's conduct was unlawful.
(b) A corporation shall have power to
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 the person 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) actually
and reasonably incurred by the person in
connection with the defense or settlement
of such action or suit if the person acted in
good faith and in a manner the person reasonably
believed to be in or not opposed to the best
interests of the corporation and except that no
indemnification shall be made in respect of any
claim, issue or matter as to which such person
shall have been adjudged to be liable to the
corporation unless and only to the extent that
the Court of Chancery or the court in which such
action or suit was brought shall determine upon
application that, despite the adjudication of
liability but in view of all the circumstances of
the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the
Court of Chancery or such court shall deem proper.
(c) To the extent that a present or former
director or officer of a corporation has been
successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in
defense of any claim, issue or matter therein,
such person shall be indemnified against expenses
(including attorneys' fees) actually and
reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a)
and (b) of this section (unless ordered by a court)
shall be made by the corporation only as authorized
in the specific case upon a determination that
indemnification of the present or former director,
officer, employee or agent is proper in the
circumstances because the person has met the
applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such
determination shall be made, with respect to a
person who is a director or officer at the time
of such determination, (1) by a majority vote of
the directors who are not parties to such action,
suit or proceeding, even though less than a quorum,
or (2) by a committee of such directors designated
by majority vote of such directors, even though less
than a quorum, or (3) if there are no such
directors, or if such directors so direct, by
independent legal counsel in a written opinion, or
(4) by the stockholders.
(e) Expenses (including attorneys' fees)
incurred by an officer or director in defending
any civil, criminal, administrative or
investigative action, suit or proceeding
may be paid by the corporation in advance
of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or
on behalf of such director or officer to repay
such amount if it shall ultimately be determined
that such person is not entitled to be indemnified
by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred
by former directors and officers or other
employees and agents may be so paid upon such
terms and conditions, if any, as the corporation
deems appropriate.
(f) The indemnification and advancement
expenses provided by, or granted pursuant to,
the other subsections of this section shall
not be deemed exclusive of any other rights
to which those seeking indemnification or
advancement expenses may be entitled under any
bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as
to action in such person's official capacity
and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase
and maintain insurance 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 against any liability asserted
against such person and incurred by such person
in any such capacity or arising out of such
person's status as such, whether or not the
corporation would have the power to indemnify
him against such liability under this section.
(h) For purposes of this section, references
to "the corporation" shall include, in addition to
the resulting corporation, any constituent
corporation (including any constituent of a
constituent) or absorbed in a consolidation
of merger which, if its separate existence had
continued, would have had power and authority to
indemnify its directors, officers and employees
or agents, so that any person who is or was a
director, officer, employee or agent of such
constituent corporation, or is or was serving
at the request of such constituent corporation
as a director, officer, employee or agent
of another corporation, partnership, joint
venture, trust or other enterprise, shall stand
in the same position under this section with
respect to the resulting or surviving corporation
as such person would have with respect to such
constituent corporation as if its separate
existence had continued.
(i) For purposes of this section, references
to "other enterprises" shall include employee
benefit plans; references to "fines" shall include
any excise taxes assessed on a person with
respect to an employee benefit plan; and
references to "serving at the request of the
corporation" shall include any service as a
director, officer, employee or agent of the
corporation which imposes duties on, or
involves services by, such director, officer,
employee, or agent with respect to an employee
benefit plan, its participants, or
beneficiaries; and a person who acted
in good faith and in a manner such person
reasonably believed to be in the interest of
the participants and beneficiaries of an
employee benefit plan shall be
deemed to have acted in a manner "not
opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of
expenses provided by, or granted pursuant to,
this section shall, unless otherwise provided
when authorized or ratified, 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 person.
(k) The Court of Chancery is hereby vested
with exclusive jurisdiction to hear and determine
all actions for advancement of expenses or
indemnification brought under this section or
under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The
Court of Chancery may summarily determine a
corporation's obligation to advance expenses
(including attorneys' fees).
Article 7 of the Company's By-laws provides for
the indemnification of the Company's officers,
directors, and corporate employees and agents
under certain circumstances as follows:
The corporation shall, to the fullest extent
permitted by Section 145 of the General
Corporation Law of the State of Delaware, as
the same may be amended and supplemented,
indemnify any and all persons whom it shall
have power to indemnify under said section
from and against any and all of the expenses,
liabilities, or other matters referred to in or
covered by said section, and the
indemnification provided for herein shall not
be deemed exclusive of any other rights to
which those indemnified may be entitled
under any by-law, 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.
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Registrant
in connection with the issuance and distribution
of the securities being registered are estimated
as follows:
Escrow Fee $1,000.00
Securities and Exchange
Commission Registration Fee $2.64
Legal Fees $5,000.00
Accounting Fees $1,000.00
Printing and Engraving $0
Blue Sky Qualification
Fees and Expenses $350.00
Miscellaneous $1,000.00
Transfer Agent Fee $0
TOTAL $8,352.64
EXHIBITS
Item 26.
3.1 Certificate of Incorporation.
3.2 By-Laws.
4.1 Specimen Certificate of Common Stock.
4.6 Form of Escrow Agreement.
4.8 Independent Auditors' Report.
5.0 Opinion of Counsel.
24.0 Accountant's Consent to Use Opinion.
24.1 Counsel's Consent to Use Opinion.
Item 27.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers
or sales are being made, post-effective amendment
to this registration statement:
(i) To include any Prospectus required by Section
10 (a) (3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or
events arising after the Effective Date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information
set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement, including (but not
limited to) any addition or deletion of managing
underwriter;
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each
such post-effective amendment shall be treated 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 thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(4) To deposit into the Escrow Account at the
closing, certificates in such denominations and
registered in such names as required by the
Company to permit prompt delivery to each
purchaser upon release of such securities from
the Escrow Account in accordance with Rule 419
of Regulation C under the Securities Act.
Pursuant to Rule 419, these certificates shall
be deposited into an escrow account, not to be
released until a Business Combination is
consummated.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of
the registrant pursuant to any provisions contained
in its Certificate of Incorporation, or by-laws,
or otherwise, the registrant has been advised that
in the opinion of the Commission such
indemnificationis against public policy as
expressed in the Securities Act of 1933 and
is, therefore, unenforceable. In the event
that a claim for indemnification against such
liabilities (other than the payment by the
registrant of expenses incurred or paid by a
director, officer or controlling person of the
registrant 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 registrant will, unless in the opinion of its
counsel the matter has been settled by controlling
precedent, submit to a court of appropriate
jurisdiction the question whether indemnification
by it is against public policy as expressed in
the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
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 of filing on
Form SB-2 and authorized this registration
statement to be signed on its behalf by the
undersigned, in the City of Albany, State of
New York, on September 18, 2000.
Montana Acquisition Corporation
BY: LESLIE M. APPLE
LESLIE M. APPLE
PRESIDENT
In accordance with the requirements of the
Securities Act of 1933, this registration
statement was signed by the following persons
in the capacities and on the dates stated.
Leslie M. Apple Dated: September 18, 2000
CERTIFICATE OF INCORPORATION
OF
MONTANA ACQUISITION CORPORATION
The undersigned, in order to form a corporation
for the purposes hereinafter stated, under and
pursuant to the General Corporation Law of the
State of Delaware, does hereby certify as
follows:
FIRST: The name of the corporation
(hereinafter referred to as the "corporation")
is Montana Acquisition Corporation.
SECOND: The registered office of the corporation
in the State of Delaware is to be located at
1013 Centre Road, Wilmington, Delaware, County
of New Castle. The name of the corporation's
registered agent at such address is
Corporation Service Company.
THIRD: The purpose of the corporation is to
engage in any lawful act or activity for which
corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock
which the corporation shall have authority to
issue is 50,000 shares. The par value of each
of such shares is $.001. All such shares are
of one class and are shares of common stock.
FIFTH: The name and mailing address of the
incorporator are as follows:
NAME MAILING ADDRESS
Leslie M. Apple 241 Morner Road
Rensselaer, NY 12144
SIXTH: The following provisions are inserted
for the management of the business and for the
conduct of the affairs of the corporation, and
for further definition, limitation and regulation
of the powers of the corporation and of its
directors and stockholders:
(1) The number of directors of the
corporation shall be such as from time
to time shall be fixed by, or in
the manner provided in, the by-laws.
Election of directors need not
be by written ballot.
(2) The Board of Directors of the
corporation shall have the power to adopt,
amend or repeal the by-laws of the corporation;
provided, however, that the fact that such
power has been conferred upon the Board of
Directors shall not divest the corporation's
stockholders of the power, nor limit their
power to adopt, amend or repeal the by-laws
of the corporation.
(3) In addition to the powers and
authorities hereinbefore or by statute
expressly conferred upon them, the directors
are hereby empowered to exercise all such
powers and do all such acts and things as
may be exercised or done by the corporation;
subject, nevertheless, to the provisions of
the statutes of Delaware, of this certificate,
and to any by-laws from time to time made by
the stockholders; provided, however, that
no by-laws so made shall invalidate any prior
act of the directors which would have
been valid if such by-laws had not been made.
SEVENTH: The corporation shall, to the fullest
extent permitted by Section 145 of the General
Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify
any and all persons whom it shall have power to
indemnify under said section from and against any
and all of the expenses, liabilities, or other
matters referred to in or covered by said section,
and the indemnification provided for herein shall
not be deemed exclusive of any other rights to
which those indemnified may be entitled under any
by-law, 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.
EIGHTH: The personal liability of the directors
of the corporation is hereby eliminated to the
fullest extent permitted by paragraph (7) of
subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware, as
the same may be amended and supplemented.
NINTH: Whenever a compromise or arrangement is
proposed between this corporation and its creditors
or any class of them and/or between this corporation
and its stockholders or any class of them, any court
of equitable jurisdiction within the State of
Delaware may, on the application in a summary
way of this corporation or of any creditor or
stockholder thereof or on the application of
any receiver or receivers appointed for this
corporation under the provisions of section 291
of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of
any receiver or receivers appointed for this
corporation under the provisions of section 279 of
Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the
stockholders or class of stockholders of this
corporation, as the case may be, to be summoned
in such manner as the said court directs. If a
majority in number representing three-fourths in
value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders
of this corporation, as the case may be, agree to
any compromise or arrangement and to any
reorganization of this corporation as consequence
of such compromise or arrangement, the said
compromise or arrangement and the said
reorganization shall, if sanctioned by the
court to which the said application has been
made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or
class of stockholders, of this corporation, as
the case may be, and also on this corporation.
TENTH: From time to time any of the provisions
of this certificate of incorporation may be
amended, altered or repealed, and other
provisions authorized by the laws of the
State of Delaware at the time in force may
be added or inserted in the manner and at the
time prescribed by said laws, and all rights
and powers at any time conferred herein on
stockholders, directors and officers are
subject to the provisions of this Article
TENTH.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 6th day of June, 2000.
LESLIE M. APPLE
LESLIE M. APPLE
INCORPORATOR
BY-LAWS
OF
MONTANA ACQUISITION CORPORATION
ARTICLE I
OFFICES
The registered office of the corporation shall be
established and maintained in the City of
Wilmington, County of New Castle, State of
Delaware. The corporation may also have offices
at such other places within or without the State
of Delaware as the board of directors may from
time to time determine or the business of the
corporation may require.
ARTICLE II
STOCKHOLDERS
1. Place of Meetings. Meetings of stockholders
shall be held at the registered office of the
corporation or at such other place within
or without the State of Delaware as the board
of directors shall authorize.
2. Annual Meetings. An annual meeting of the
stockholders shall be held for the election of
directors on any business day, chosen
by the board of directors, within five
months after the close of the
corporation's preceding fiscal year,
at 10:00 o'clock A.M., local time.
Any other proper business may be transacted
at the annual meeting.
3. Special Meetings. Special meetings of the
stockholders may be called by the board of
directors or by the president or secretary.
Business transacted at a special meeting of
the stockholders shall be confined to the
purpose or purposes set forth in the notice
of such meeting.
4. Notice of Stockholders' Meetings. Written
notice, stating the place, date and hour of the
meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting
is called, shall be given either personally or
by mail to each stockholder entitled to vote at
such meeting, not less than ten nor more than sixty
days before the date of the meeting. If mailed,
notice is given when deposited in the United
States mail, postage prepaid, directed to the
stockholder at his address as it appears on the
records of the corporation.
5. Quorum of Shareholders. Unless the certificate
of incorporation provides otherwise, the holders of
a majority of the shares entitled to vote thereat,
present in person or represented by proxy, shall
constitute a quorum at a meeting of stockholders
for the transaction of any business.
6. Adjourned Meetings. The stockholders present
at a meeting may adjourn the meeting despite the
absence of a quorum. When a determination of
stockholders of record entitled to notice of or
to vote at any meeting of stockholders has been
made, such determination shall apply to any
adjournment thereof, unless the board of directors
fixes a new record date for the adjourned meeting.
When a meeting is adjourned to another time or
place, notice need not be given of the adjourned
meeting if the time and place thereof are
announced at the meeting at which the adjournment
is taken. At the adjourned meeting any business
may be transacted which might have been transacted
at the original meeting. If the adjournment is
for more than thirty days, or if after the
adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of
record entitled to vote at the meeting.
7. List of Stockholders. The officer who has
charge of the stock ledger of the corporation
shall prepare and make, at least ten days before
every meeting of stockholders, a complete list
of the stockholders entitled to vote at the
election, arranged in alphabetical order,
showing the address of each stockholder and the
number of shares registered in the name of each
stockholder. Such list shall be open to the
examination of any stockholder, for any purpose
germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to
the meeting, either at a place within the city
where the meeting is to be held, which place
shall be specified in the notice of the meeting,
or, if not so specified, at the place where the
meeting is to be held. The list shall also be
produced and kept at the time and place of the
meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
8. Voting. Unless otherwise provided in the
certificate of incorporation, all elections of
directors shall be by written ballot. Except as
otherwise required by applicable law or as
provided in the certificate of incorporation,
at each and every meeting of the stockholders,
every stockholder shall be entitled to vote in
person or by proxy appointed by an instrument in
writing. Each stockholder shall be entitled to
one vote for each share of capital stock held by
such stockholder. Directors shall be elected by
a plurality of the votes cast at a meeting of the
stockholders by the holders of shares
entitled to vote in the election, and any
other corporate action to be taken by vote of
the stockholders shall be authorized by a majority
of the votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon;
provided, however, that where a separate vote by
class is required, the affirmative vote of the
majority of shares of such class present in
person or represented by proxy at the meeting
shall be the act of such class.
9. Proxies. Each stockholder entitled to vote
at a meeting of stockholders or to express consent
or dissent to corporate action in writing without
a meeting may authorize another person or persons
to act for him by proxy, but no such proxy shall
be voted or acted upon after three years from its
date, unless the proxy provides for a longer
period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power.
A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is
an interest in the stock itself or an interest in
the corporation generally.
10. Written Consent of Stockholders. Any action
required by the General Corporation Law of the
State of Delaware to be taken at any annual or
special meeting of stockholders or any action
which may be taken at any annual or special
meeting of stockholders, may be taken without a
meeting, without prior notice and without a vote,
if a consent in writing, setting forth the action
so taken, shall be signed by the holders of
outstanding stock having not less than the
minimum number of votes that would be necessary
to authorize or take such action at a meeting
at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking
of the corporate action without a meeting by
less than unanimous written consent shall be
given to those stockholders who have not
consented in writing.
ARTICLE III
DIRECTORS
1. Board of Directors. Except as provided by
the General Corporation Law of the State of Delaware
or the certificate of incorporation, the business
and affairs of the corporation shall be managed by
or under the direction of its board of directors.
2. Number of Directors. The number of directors
initially constituting the whole board shall be one
(1). The number of directors may be increased or
decreased by action of a majority of the whole
board subject to the limitation that no such
decrease in the number of directors shall shorten
the term of any incumbent director.
3. Election and Term of Directors. At each annual
meeting of the stockholders, the stockholders shall
elect directors to hold office until the next annual
meeting. Each director shall hold office until the
expiration of the term for which he is elected, and
until his successor has been elected and qualified,
or until his prior resignation or removal.
4. Vacancies and Newly Created Directorships.
Unless otherwise provided in the certificate of
incorporation, vacancies and newly created
directorships resulting from any increase in
the authorized number of directors elected by
all of the stockholders having the right to
vote as a single class may be filled by a
majority of the directors then in office,
although less than a quorum, or by a sole
remaining director. A director elected to
fill a vacancy shall hold office until the
next meeting of stockholders at which the
election of directors is in the regular
order of business, and until his successor
has been elected and qualified.
5. Removal of Directors. Any director or
the entire board of directors may be removed,
with or without cause, by the holders of
a majority of the shares then entitled to
vote at an election of directors.
6. Resignation of Directors. A director may
resign at any time by giving written notice to
the corporation. Unless otherwise specified in
the notice, the resignation shall take effect
upon receipt thereof by the corporation. The
acceptance of a resignation shall not be
necessary to make it effective.
7. Quorum of Directors. Unless otherwise
provided in the certificate of incorporation,
a majority of the whole board shall constitute
a quorum for the transaction of business.
8. Action of the Board. Unless otherwise
required by law or the certificate of
incorporation, the vote of the majority of the
directors present at a meeting at which a
quorum is present shall be the act of the
board of directors.
9. Place and Time of Board Meetings. The
board of directors may hold its meetings at
the office of the corporation or at such other
places, either within or without the State of
Delaware, as it may from time to time determine.
10. Regular Annual Meeting. A regular annual
meeting of the board of directors shall be held
immediately following the annual meeting of
stockholders at the place of such annual
meeting of stockholders.
11. Notice of Meetings of the Board; Adjournment.
Regular meetings of the board of directors may be
held without notice at such time and place as it
shall from time to time determine. Special
meetings of the board of directors shall be
held upon notice to the directors and may be
called by the president upon three days' notice
to each director either personally or by mail or
by wire; special meetings shall be called by the
president or by the secretary in a like manner on
written request of two directors. A majority of
the directors present, whether or not a quorum is
present, may adjourn any meeting to another time
and place. Notice of the adjournment shall be
given to all directors who were not present at
the time of the adjournment and, unless such time
and place are announced at the meeting, to the
other directors.
12. Chairman of Meetings of the Board. At all
meetings of the board, a chairman chosen by the
board shall preside.
13. Action by Board of Directors by Written
Consent. Any action required or permitted to be
taken at any meeting of the board of directors,
or of any committee thereof, may be taken without
a meeting if all members of the board or
committee, as the case may be, consent thereto
in writing, and the writing or writings are
filed with the minutes of proceedings of the
board or committee.
14. Director and Committee Action by Conference
Telephone. Members of the board of directors, or
any committee thereof, may participate in a meeting
of such board or committee by means of a
conference telephone or similar communications
equipment by means of which all persons
participating in the meeting can hear each other,
and participation by such means shall constitute
presence in person at such meeting.
15. Committees of the Board. The board of
directors may, by resolution passed by a majority
of the whole board, designate one or more
committees, each committee to consist of one
or more of the directors. The board may
designate one or more directors as alternate
members of any such committee, who may replace
any absent or disqualified member at any meeting
of such committee.
16. Compensation of Directors. No compensation
shall be paid to directors, as such, for their
services, but by resolution of the board, a fixed
sum and expenses of actual attendance at each
regular or special meeting of the board may be
authorized. Nothing herein contained shall be
construed to preclude any director from serving
the corporation in any other capacity and
receiving compensation therefor.
17. Interested Directors. (a) No contract or
transaction between the corporation and one or
more of its directors or officers, or between
the corporation and any other corporation,
partnership, association, or other organization
in which one or more of its directors or officers
are directors or officers, or have a financial
interest, shall be void or voidable solely for
this reason, or solely because the director or
officer is present at or participates in the
meeting of the board or committee thereof which
authorizes the contract or transaction, or solely
because his or their votes are
counted for such purpose, if:
(1) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the board of directors
or the committee, and the board or committee in
good faith authorizes the contract or transaction
by the affirmative votes of a majority of the
disinterested directors, even though the
disinterested directors be less than a quorum;
provided, however, that in the event the whole
board shall consist of one director, the contract
or transaction shall be approved or ratified by
vote of the stockholders, as provided below; or
(2) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of
the stockholders; or
(3) The contract or transaction is fair as to the
corporation as of the time it is authorized,
approved or ratified, by the board of
directors, a committee thereof, or the
stockholders.
(b) Common or interested directors may be
counted in determining the presence of a quorum
at a meeting of the board of directors or of
a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
1. Offices; Election; Term. The officers of
the corporation shall be a president, a secretary
and a treasurer, and such other officers
(including one or more vice presidents) as the
board of directors may determine, each of whom
shall be elected or appointed by the board of
directors and shall have such duties, powers and
functions as hereinafter provided. Any number of
offices may be held by the same person. Each
officer shall hold office for the term for which
he is elected or appointed, and until his
successor has been elected or appointed and
qualified, or until his earlier resignation or
removal. Any officer may resign at any time
upon written notice to the corporation.
2. President. The president shall preside at
all meetings of stockholders. He shall be an ex
officio member of all standing committees and
shall, in general, supervise, manage, and control
all of the business and affairs of the corporation,
subject to the control of the board of directors.
He shall have power to sign certificates
representing shares of the corporation and to
sign and execute all contracts and instruments
of conveyance in the name of the corporation,
to sign checks, drafts, notes and orders for
the payment of money, and to appoint and
discharge agents and employees of the corporation,
subject to the control of the board of directors.
He shall perform all the duties usually incident
to the office of president.
3. Secretary. The secretary shall keep the
minutes of all meetings of the board of directors,
and the minutes of all meetings of the
stockholders, and also, unless otherwise directed,
the minutes of all meetings of committees in
books provided for that purpose. He shall give,
or cause to be given, notice of all meetings of
stockholders and directors, and all other notices
required by law or by these by-laws, and in case
of his absence or refusal so to do, any such
notice may be given by any person thereunto
directed by the president or by the directors
or stockholders upon whose requisition the
meeting is called. He shall have charge of
the corporate books and records. He shall have
custody of the seal of the corporation and affix
the same to all instruments requiring it when
authorized by the directors or the president,
and attest the same. He shall sign with the
president or vice-president all certificates
representing shares of the corporation. And
he shall, in general, perform all the duties
incident to the office of secretary.
4. Treasurer. The treasurer shall have custody
of all funds, securities, evidences of indebtedness
and other valuable documents of the corporation;
when necessary or proper he shall endorse on
behalf of the corporation for collection checks,
notes and other obligations and shall deposit the
same to the credit of the corporation in such bank
or banks or depository as the board of directors
may designate. He shall receive and give or cause
to be given receipts and acquittances for moneys
paid in on account of the corporation and shall
pay out of the funds on hand all just debts of
the corporation of whatever nature upon maturity
of the same; he shall enter or cause to be entered
in books of the corporation to be kept for that
purpose full and accurate accounts of all moneys
received and paid out on account of the
corporation, and whenever required by the
president or the directors, he shall render a
statement of his accounts. He shall keep or
cause to be kept such other books as will show
a true record of the expenses, losses, gains,
assets and liabilities of the corporation; he
shall at all reasonable times exhibit his books
and accounts to any director of the corporation
upon application at the office of the
corporation during business hours; he shall
sign with the president or a vice-president
certificates representing shares of the
corporation; he shall perform all other
duties and acts incident to the office of
treasurer. He shall, if required by the board
of directors, give the corporation security
for the faithful performance of his duties
in such sum and with such surety as the
board of directors may determine.
5. Vice-President. The vice-president, if there
be one (or, if there be more than one, the executive
vice-president) shall, in the absence or disability
of the president, perform the duties and exercise
the powers of the president. The vice-president(s)
shall have such powers and perform such duties
as may be delegated to him by the president or
prescribed by the board of directors.
6. Assistant Secretaries and Assistant Treasurers.
The assistant secretaries and the assistant
treasurers, if there be any, may sign with the
president or vice-president, certificates
representing shares of the corporation. The
assistant secretaries and the assistant
treasurers shall have such other powers
and shall perform such other duties as may be
assigned to them by the board of directors, the
president or by the secretary or treasurer,
respectively. In the absence or disability of
the secretary or the treasurer, the assistant
secretary or the assistant treasurer,
respectively, shall perform all their duties and
exercise all their powers. The assistant
treasurer may be required to give security for
the faithful performance of his duties in such
sum and with such surety as the board of
directors may require.
7. Removal of Officers. Any officer elected
or appointed by the board of directors may be
removed by the board of directors with or
without cause.
8. Vacancies. If the office of any officer
becomes vacant, the directors may appoint any
qualified person to fill such vacancy, who
shall hold office for the unexpired term of
his predecessor and until his successor is
elected or appointed and qualified.
9. Compensation of Officers. The officers shall
receive such salary or compensation as may be
determined by the board of directors. No officer
shall be precluded from receiving any
compensation by reason of the fact that
he is also a director of the corporation.
ARTICLE V
SHARES
1. Certificates Representing Shares. The shares
of the corporation shall be represented by
certificates in such form as shall be prepared
or approved by the board of directors and shall
be numbered consecutively. The certificates shall
be signed by the president or vice-president,
and by the treasurer or an assistant treasurer,
or the secretary or an assistant secretary of the
corporation. Any or all of the signatures on the
certificate may be a facsimile. In case any
officer, transfer agent or registrar who has
signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the
corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of
issue.
2. Lost, Destroyed and Stolen Share Certificates.
Any person claiming a certificate representing
shares to be lost, apparently destroyed or
wrongfully taken shall make an affidavit or
affirmation of that fact, and, if required by
the board of directors, shall give the corporation
an indemnity bond in such form and in such amount
as the board may determine, to protect it or any
person injured by the issue of the new
certificate from any liability or expense
which it or they may incur by reason of the
original certificate remaining outstanding,
whereupon a new certificate may be issued
of the same tenor and for the same number of
shares as the one alleged to be lost, destroyed
or wrongfully taken if the claimant so requests
prior to notice to the corporation that the lost,
apparently destroyed or wrongfully taken
certificate has been acquired by a bona fide
purchaser.
3. Transfer of Shares. The certificated shares
of the corporation shall be transferable only upon
its books by the holders thereof in person or by
their duly authorized attorneys or legal
representatives, and upon such transfer the
old certificates duly endorsed or accompanied
by evidence of succession, assignment or authority
to transfer shall be surrendered to the corporation
by the delivery thereof to the person in charge
of the list of stockholders and the transfer books
and ledgers, or the transfer agent, or to such other
person as the board may designate, by whom they
shall be canceled, and new certificates shall
thereupon be issued. A record shall be made of
each transfer, and whenever any transfer of shares
shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry
of transfer if, when the certificates are presented
to the corporation for transfer, both the
transferor and transferee request the corporation
to do so.
4. Record of Stockholders. The corporation shall
keep at its office or at the office of its transfer
agent or registrar a record containing the names
and addresses of all stockholders, the number and
class of shares held by each and the dates when
they respectively became the owners of record
thereof in written form or in any other form
capable of being converted into written form
within a reasonable time. The corporation shall
be protected in treating the persons in whose
names shares stand on the record of stockholders
as the owners thereof for all purposes, and,
accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such
shares on the part of any other person whether
or not it shall have express or other notice
thereof, except as expressly provided by the
laws of the State of Delaware.
5. Fixing Record Date. In order that the
corporation may determine the stockholders entitled
to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to
express consent to corporate action in writing
without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance,
a record date, which shall not be more than sixty
nor less than ten days before the date of such
meeting, nor more than sixty days prior to any
other action. If no record date is fixed, it
shall be determined in accordance with the
provisions of the laws of the State of Delaware.
ARTICLE VI
AMENDMENT AND REPEAL OF BY-LAWS
Except as provided in the certificate of
incorporation, the by-laws may be adopted,
amended or repealed by vote of the
stockholders entitled to vote in the
election of directors.
ARTICLE VII
MISCELLANEOUS PROVISIONS
1. Fiscal Year. The fiscal year of the
corporation shall begin on the first day of
January and terminate on the thirty-first (31st)
day of December in each calendar year.
2. Dividends. The board of directors may, but
shall not be required to, declare, and the
corporation may pay, dividends in cash, in
property, or in shares of the corporation's
capital stock. Such dividends may be declared
or paid out of surplus, or, in case there
shall be no such surplus, out of the
corporation's net profits for the fiscal year
in which the dividend is declared and/or the
preceding fiscal year, upon such terms and
conditions provided by the certificate
of incorporation or by law. The directors
may set apart out of any of the funds of the
corporation available for dividends a reserve or
reserves for any proper purpose and may abolish
any such reserve.
3. Seal of Corporation. The seal of the
corporation shall be circular in form and have
inscribed thereon the name of the corporation,
the year of its organization, and the words
"Corporate Seal" and "Delaware". The seal shall
be in the charge of the secretary. If and when
so directed by the board of directors or the
president, a duplicate of the seal may be kept
and used by the secretary, assistant secretary,
treasurer or assistant treasurer. The seal
may be used by causing it or a facsimile to be
affixed or impressed or reproduced in any other
manner.
4. Waivers. Whenever notice is required to be
given under any provision of the General Corporation
Law of the State of Delaware or of the certificate
of incorporation or these by-laws, a written
waiver thereof, signed by the person entitled
to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting,
except when the person attends a meeting for the
express purpose of objecting, at the beginning of
the meeting, to the transaction of any business
because the meeting is not lawfully called
or convened. Neither the business to be transacted
at, nor the purpose of any regular or special
meeting of the stockholders, directors or
members of a committee of directors, need be
specified in any written waiver of notice unless
so required by the certificate of incorporation.
5. Execution of Instruments. All checks, drafts,
notes, contracts or other obligations of the
corporation shall be signed or countersigned,
executed, verified, or acknowledged by the president
or such of the officers of the corporation or by
such other person or persons as may be authorized
by the board of directors.
6. Reference to Certificate of Incorporation.
References in these by-laws to the certificate of
incorporation shall include all amendments thereto
or changes thereof unless specifically excepted.
ARTICLE VIII
INDEMNIFICATION
The corporation shall, to the full extent permitted
by Section 145 of the General Corporation Law of the
State of Delaware, as amended from time to time,
indemnify all persons it may indemnify pursuant
thereto.
SAMPLE STOCK CERTIFICATE
INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE
MONTANA ACQUISITION CORPORATION
AUTHORIZED CAPITAL STOCK 50,000, PAR VALUE
$.001 PER SHARE
THIS CERTIFIES THAT is the owner of fully paid
and nonassessable shares of the Capital Stock
of the above named Corporation transferable only
on the books of the Corporation by the holder
hereof in person or by duly authorized Attorney
upon surrender of this Certificate properly
endorsed.
IT WITNESS WHEREOF, the said Corporation has
caused this Certificate to be signed by its
duly authorized officers and its Corporate Seal
to be hereunto affixed this day of ,
2000.
Secretary
ESCROW AGREEMENT (SECURITIES REGISTRATION)
AGREEMENT made this 11th day of September, 2000 by
and among Montana Acquisition Corporation, a
Delaware corporation having a principal place
of business at 241 Morner Road, Rensselaer,
New York 12144, (the "Issuer") and Whiteman,
Osterman & Hanna, a New York general partnership
having a principal place of business at One
Commerce Plaza, Albany, New York 12260 (the
"Escrow Agent"). The Issuer and Escrow Agent
are sometimes referred to herein individually
as a "Party," and collectively as the "Parties."
W I T N E S S E T H :
WHEREAS, the Issuer has filed with the Securities
and Exchange Commission (the "Commission") a
registration statement (the "Registration
Statement") covering a proposed limited public
offering of its securities (collectively, the
"Securities", and individually, a "Share") as
described on the Information Sheet; and
WHEREAS, the Issuer proposes to offer the
Securities, as agent for the Issuer, for sale
to the public (the "Investors") on a "best
efforts basis" at the price per Share all as
set forth on the information sheet attached
hereto as Exhibit A (the "Information
Sheet "); and
WHEREAS, Commission Regulations require and the
Issuer proposes to establish an escrow account
with the Escrow Agent in connection with such
public offering and the Escrow Agent is willing
to establish such escrow account on the terms
and subject to the conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the premises
and mutual covenants herein contained, the
Parties hereby agree as follows:
1. Information Sheet. Each capitalized term not
otherwise defined in this Agreement shall have the
meaning set forth for such term on the Information
Sheet which is attached to this Agreement and is
incorporated by reference herein and made a part
hereof.
2. Establishment of Escrow Account.
2.1 The Parties shall establish a non-interest
bearing escrow account (the "Escrow Account") at
the office of the Escrow Agent, bearing the
designation set forth on the Information Sheet.
2.2 On or before the date of the initial deposit
in the Escrow Account pursuant to this Agreement,
the Issuer shall notify the Escrow Agent in writing
of the effective date of the Registration
Statement (the "Effective Date") and the Escrow
Agent shall not be required to accept any amount
for deposit in the Escrow Account
prior to its receipt of such notification.
2.3 The Offering Period, which shall be deemed to
commence on the Effective Date, shall consist of
the number of calendar days or business days set
forth on the Information Sheet. The Offering
Period shall be extended by an Extension Period
only if the Escrow Agent shall have received
written notice thereof at least five (5) business
days prior to the expiration of the Offering
Period. The Extension Period, which shall be
deemed to commence on the next calendar day
following the expiration of the Offering Period,
shall consist of the number of the calendar
days or business days set forth on the Information
Sheet. The last day of the Offering Period,
or the last day of the Extension Period (if the
Escrow Agent has received written notice thereof
as hereinabove provided), is referred to herein
as the "Termination Date." After the Termination
Date, the Issuer shall not deposit, and the Escrow
Agent shall not accept, any additional amounts
representing payments by prospective purchasers.
3. Deposits in the Escrow Account.
3.1 Upon receipt, the Issuer shall promptly
deliver to the Escrow Agent all monies (the
"Deposited Proceeds") received from Investors,
all of which shall be in the form of checks or
money orders. All checks or money orders deposited
into the Escrow Account shall be made payable to
"Whiteman, Osterman & Hanna, Escrow Agent."
Any such tendered check or money order (a
"Tendered Payment") payable other than to the
Escrow Agent as required hereby shall be
returned to the prospective Investor, or if
the Escrow Agent has insufficient information
to do so, then to the Issuer (together with any
Subscription Information, as defined below, or
other documents delivered therewith) by noon of
the next business day following receipt of such
Tendered Payment by the Escrow Agent, and such
Tendered Payment shall be deemed not to have been
delivered to the Escrow Agent pursuant to the terms
of this Agreement. The Deposited Proceeds and
interest or dividends thereon, if any, shall be
held for the sole benefit of the Investors.
3.2 The Deposited Proceeds shall be invested
in either:
(a) an obligation that constitutes a "deposit"
as that term is defined in Section (3)(1) of the
Federal Deposit Insurance Act;
(b) securities of any open-end investment
company registered under the Investment Company
Act of 1940 that holds itself out as a money
market fund meeting the conditions of paragraphs
(c)(2), (c) (3), and (c)(4) of Rule 2a-7 under
the Investment Company Act; or
(c) securities that are direct obligations of, or
obligations guaranteed as to principal or interest
by, the United States.
3.3 Simultaneously with each deposit into the
Escrow Account, the Issuer shall inform the
Escrow Agent by confirmation slip, or other
writing, of the name and address of the
prospective Investor, the number of Securities
subscribed for by such person, and the
aggregate dollar amount of such subscription
(collectively, the "Subscription Information").
3.4 The Escrow Agent shall not be required to
accept for deposit into the Escrow Account checks
which are not accompanied by the appropriate
Subscription Information. Tendered Payments
representing payments by prospective Investors
shall not be deemed deposited in the Escrow Account
until the Escrow Agent has received in writing
the Subscription Information required with respect
to such payments.
3.5 The Escrow Agent shall not be required to
accept any amounts representing payments by
prospective Investors, whether by check or money
order, except during the Escrow Agent's regular
banking hours. Any check, money order or cash
not received prior to 1:00 P.M. shall be
deposited the following business day.
3.6 Interest or dividends earned on the Deposited
Proceeds, if any, shall be held in the Escrow
Account until the Deposited Proceeds are released
in accordance with the provisions of Section 4 of
the Escrow Agreement. If the Deposited Proceeds
are released to an Investor, the Investor shall
receive interest or dividends earned, if any, on
such Deposited Proceeds up to the date of release.
If the Deposited Proceeds held in the Escrow
Account are released to the Company, any interest
or dividends earned on such funds up to
the date of release may be released to the
Company.
3.7 The Issuer shall deposit the Securities
directly into the Escrow Account promptly upon
issuance (the "Deposited Securities"). The
identity of the purchaser of the Securities
shall be included on a common stock certificate.
3.8 The Deposited Securities shall be held for
the sole benefit of the Investors. No transfer
or other disposition of Securities held in the
Escrow Account or any interest related to such
Securities shall be permitted other than by will
or the laws of descent and distribution, or
pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code of 1986,
as amended, or Title I of the Employee Retirement
Income Security Act, or the rules thereunder.
3.9 The Escrow Agent shall refund any portion
of the Deposited Proceeds prior to disbursement
of the Deposited Proceeds in accordance with
Section 4 hereof upon instructions in writing
signed by the Issuer.
4. Disbursements from the Escrow Account.
4.1 The Deposited Proceeds may be released to the
Company and the Securities delivered to the
Investors or other registered holders only at
the same time as or after:
(a) the Escrow Agent has received a signed
representation from the Company, together with
an opinion of counsel that the following events
have already occurred and the following
requirements have already been met:
(1) Upon execution of an agreement(s) for
the acquisition(s) of a business(es) or assets
that will constitute the business (or a line
of business) of the Company and for which the
fair value of the business(es) or net assets
to be acquired represents at least 80 percent
of the maximum offering proceeds, including
proceeds received or to be received upon the
exercise or conversion of the Securities
offered, but excluding amounts payable to non-
affiliates for underwriting commissions,
underwriting expenses, and dealer allowances,
if any, the Company filed a post-effective
amendment that:
(i) Discloses the information specified by the
SB-2 registration statement form and Industry
Guides, including financial statements of the
Company and the company or business with which
it plans to merge or acquire (the "Target
Company"), and pro forma financial information
required by the SB-2 and applicable rules and
regulations;
(ii) Discloses the results of the initial offering,
including but not limited to: (a) the gross
offering proceeds received to date, specifying
the amounts paid for underwriter commissions,
underwriting expenses and dealer allowances,
if any, amounts disbursed to the Company, and
amounts remaining in the Escrow Account; and
(b) the specific amount, use and application of
funds disbursed to the Company to date, including,
but not limited to, the amounts paid to officers,
directors, promoters, controlling shareholders or
affiliates, either directly or indirectly
specifying the amounts and purposes of such
payments; and
(iii) Discloses the terms of the offering as
described pursuant to Section 4 of this Escrow
Agreement.
(2) The terms of the offering provided, and
the Company satisfied, the following conditions:
(i) Within five business days after the effective
date of the post-effective amendment(s), the Company
shall send by first class mail or other equally
prompt means, to each purchaser of securities held
in escrow, a copy of the prospectus contained in
the post-effective amendment and any amendment or
supplement thereto;
(ii) Each Investor shall have no fewer than 20
business days and no more than 45 business days
from the effective date of the post-effective
amendment to notify the Company in writing that
such person elects to remain an Investor. If
the Company has not received such written
notification by the 45th business day following
the effective date of the post-effective
amendment, funds and interest or dividends,
if any, held in the Escrow Account shall be
sent by first class mail or other equally
prompt means to the purchaser within five
business days;
(iii) The acquisition(s) meeting the criteria
set forth in paragraph (a) (1) of this Section 4
will be consummated if a sufficient number of
Investors confirm their investments; and
(iv) If a consummated acquisition(s) meeting the
requirements of this section has not occurred by
a date 18 months after the Effective Date, the
Deposited Funds shall be returned by first class
mail or equally prompt means to the Investor
within five business days following that date.
(b) Funds held in the Escrow Account may be
released to the Company and securities may be
delivered to the Investor or other registered
holder identified on the deposited securities
only at the same time as or after consummation
of an acquisition(s) meeting the requirements
set forth in Section 4.1(a)(1)(iii) of this
Escrow Agreement.
4.2 In the event that at the close of regular
banking hours on the Termination Date less than
all of the Shares have been sold, the Escrow Agent
shall promptly refund to each prospective Investor
the amount of payment received from such purchaser
held in Escrow without interest thereon or
deduction therefrom, and the Escrow Agent shall
notify the Issuer of its distribution of the
Deposited Proceeds.
4.3 In the event that at any time up to the close
of banking hours on the Termination Date all of the
Shares have been sold, the Escrow Agent shall
notify the Issuer of such fact in writing within a
reasonable time thereafter. The Escrow Agent shall
hold the Deposited Proceeds until the events
described in Section 4.1 of this Escrow Agreement
take place.
4.4 Upon disbursement of the Deposited Proceeds
pursuant to the terms of this Section 4, the
Escrow Agent shall be relieved of all further
obligations and released from all liability under
this Agreement. It is expressly agreed and
understood that in no event shall the aggregate
amount of payments made by the Escrow Agent
exceed the amount of the Deposited Proceeds.
5. Rights, Duties and Responsibilities of
Escrow Agent.
It is understood and agreed that the duties
of the Escrow Agent are purely ministerial in
nature, and that:
5.1 The Escrow Agent shall not be responsible
for the performance by the Issuer of its
obligations under this Agreement.
5.2 The Escrow Agent shall not be required to
accept from the Issuer any Subscription
Information pertaining to prospective Investors
unless such Subscription Information is
accompanied by checks or money orders
representing the payment of money, nor shall
the Escrow Agent be required to keep records
of any information with respect to payments
deposited by the Issuer except as to the amount
of such payments; however, the Escrow Agent
shall notify the Issuer within a reasonable time
of any discrepancy between the amount delivered
to the Escrow Agent therewith. Such amount need
not be accepted for deposit in the Escrow Account
until such discrepancy has been resolved.
5.3 The Escrow Agent shall be under no duty or
responsibility to enforce collection of any check
delivered to it hereunder. The Escrow Agent,
within a reasonable time, shall return to the
Issuer any check received which is dishonored,
together with the Subscription Information,
if any, which accompanied such check.
5.4 The Escrow Agent shall be entitled to rely
upon the accuracy, act in reliance upon the
contents, and assume the genuineness of any
notice, instruction, certificate, signature
instrument or other document which is given
to the Escrow Agent pursuant to this Agreement
without the necessity of the Escrow Agent
verifying the truth or accuracy thereof. The
Escrow Agent shall not be obligated to make any
inquiry as to the authority, capacity, existence
or identity of any person purporting to give any
such notice or instructions or to execute any
such certificate, instrument or other document.
The Escrow Agent must, however, determine for
itself whether the conditions permitting the
release of the funds in the Escrow Account have
been met.
5.5 In the event that the Escrow Agent shall
be uncertain as to its duties or rights hereunder
or shall receive instructions with respect to the
Escrow Account or the Deposited Proceeds which, in
its sole determination, are in conflict either
with other instructions received by it or with
any provision of this Agreement, the Escrow
Agent, at its sole option, may deposit the
Deposited Proceeds (and any other amounts that
thereafter become part of the Deposited Proceeds)
with the registry of a court of competent
jurisdiction in a proceeding to which all
Parties in interest are joined. Upon the
deposit by the Escrow Agent of the Deposited
Proceeds with the registry of any court, the
Escrow Agent shall be relieved of all further
obligations and released from all liability
hereunder.
5.6 The Escrow Agent shall not be liable for
any action taken or omitted hereunder, or for
the misconduct of any employee, agent or attorney
appointed by it, except in the case of willful
misconduct. The Escrow Agent shall be entitled
to consult with counsel of its own choosing and
shall not be liable for any action taken,
suffered or omitted by it in accordance with
the advice of such counsel.
5.7 The Escrow Agent shall have no responsibility
at any time to ascertain whether or not any
security interest exists in the Deposited
Proceeds or any part thereof or to file any
financing statement under the Uniform
Commercial Code with respect to the
Deposited Proceeds or any part thereof.
5.8 The Escrow Agent shall determine whether or
not the Offering has been successful, and if it
determines that less than all of the Securities
being offered have been sold, thus rendering the
Offering unsuccessful, the Escrow Agent shall
return the proceeds of the Offering to the
Investors on a pro-rata basis.
6. Amendment; Resignation. This Agreement
may be altered or amended only with the written
consent of the Issuer and the Escrow Agent
pursuant to a separate written instrument which
specifically references this Agreement and which
is signed by the Issuer and the Escrow Agent.
The Escrow Agent may resign for any reason upon
seven (7) business days written notice to the
Issuer. Should the Escrow Agent resign as herein
provided, it shall not be required to accept any
deposit, make any disbursement or otherwise
dispose of the Deposited Proceeds, but its only
duty shall be to hold the Deposited Proceeds for
a period of not more than ten (10) business days
following the effective date of such resignation,
at which time (a) if a successor escrow agent shall
have been appointed and written notice thereof
(including the name and address of such successor
escrow agent) shall have been given to the resigning
Escrow Agent by the Issuer and such successor escrow
agent, the resigning Escrow Agent shall pay over to
the successor escrow agent the Deposited Proceeds,
less any portion thereof previously paid out in
accordance with this Agreement, or (b) if the
resigning Escrow Agent shall not have received
written notice signed by the Issuer and a successor
escrow agent, then the resigning Escrow Agent shall
promptly refund the amount in the Deposited
Proceeds to each prospective Investor without
interest thereon or deduction therefrom, and the
resigning Escrow Agent shall notify the Issuer
in writing of its liquidation and distribution
of the Deposited Proceeds; whereupon, in either
case, the Escrow Agent shall be relieved of all
further obligations and released from all
liability under this Agreement. Without limiting
the provisions of Section 8 hereof, the resigning
Escrow Agent shall be entitled to be reimbursed
by the Issuer for any expenses incurred in
connection with its resignation, transfer of the
Deposited Proceeds to a successor Escrow Agent or
distribution of the Deposited Proceeds pursuant
to this Section 6.
7. Representations and Warranties. The Issuer
hereby represents and warrants to the Escrow Agent
that:
7.1 No party other than the Parties hereto and the
prospective Investors have, or shall have any lien,
claim or security interest in the Deposited
Proceeds or any part thereof.
7.2 No financing statement under the Uniform
Commercial Code is on file in any jurisdiction
claiming a security interest in or describing
(whether specifically or generally) the
Deposited Proceeds or any part thereof.
7.3 The Subscription Information submitted with
each deposit shall, at the time of submission
and at the time of the disbursement of the
Deposited Proceeds, be deemed a representation
and warranty that such deposit represents a bona
fide sale to the Investor described therein of
the amount of Securities set forth in such
Subscription Information.
7.4 All of the information contained in the
Information Sheet is, as of the date hereof and
will be, at the time of any disbursement of the
Deposited Proceeds, true and correct.
8. Fees and Expenses. The Escrow Agent shall be
entitled to the Escrow Agent Fee set forth in the
Information Sheet, payable upon execution of this
Agreement. In addition, the Issuer agrees to
reimburse the Escrow Agent for any reasonable
expenses incurred in connection with this
Agreement, including, but not limited to,
reasonable counsel fees, but not including
the review of this Agreement.
9. Indemnification and Contribution.
9.1 The Issuer (sometimes referred to in this
Section 9 as the "Indemnitor") agrees to
indemnify the Escrow Agent and its officers,
directors, employees, agents and shareholders
(jointly and severally the "Indemnitees")
against, and hold them harmless of and
from, any and all loss, liability, cost,
damage and expense, including, without
limitation, reasonable counsel fees, which
the Indemnitees may suffer or incur by
reason of any action, claim or proceeding
brought against the Indemnitees arising out
of or relating in any way to this Agreement
or any transaction to which this Agreement
relates, unless such action, claim or
proceeding is the result of the willful
misconduct of the Indemnitees.
9.2 If the indemnification provided for in this
Section 9 is applicable, but for any reasons held
to be unavailable, the Indemnitor shall contribute
such amounts as are just and equitable to pay, or
to reimburse the Indemnitees for, the aggregate of
any and all losses, liabilities, costs, damages
and expenses, including counsel fees, actually
incurred by the Indemnitees as a result of or in
connection with, and any amount paid in settlement
of any action, claim or proceeding arising out of
or relating in any way to any actions or
omissions of the Indemnitor.
9.3 Any Indemnitee which proposes to assert
the right to be indemnified under this Section 9,
promptly after receipt of notice of commencement
of any action, suit or proceeding against such
Indemnitee in respect of which a claim is to be
made against the Indemnitor under this Section 9,
will notify the Indemnitor of the commencement
of such action, suit or proceeding, enclosing
a copy of all papers served, but the omission
so to notify the Indemnitor of any such action,
suit or proceeding shall not relieve the
Indemnitor from any liability which they may
have to any Indemnitee otherwise than under this
Section 9. In case any such action, suit or
proceeding shall be brought against any
Indemnitee and it shall notify the Indemnitor
of the commencement thereof, the Indemnitor
shall be entitled to participate in and, to
the extent that they shall wish, to assume
the defense thereof, with counsel satisfactory
to such Indemnitee. The Indemnitee shall have
the right to employ its counsel in any such
action, but the fees and expenses of such
counsel shall be at the expense of such
Indemnitee unless (i) the employment
of counsel by such Indemnitee has been
authorized by the Indemnitor, (ii) the
Indemnitee shall have concluded reasonably
that there may be a conflict of interest
among the Indemnitor and the Indemnitee in the
conduct of the defense of such action (in
which case the Indemnitor shall not have
the right to direct the defense of such
action on behalf of the Indemnitee) or
(iii) the Indemnitor in fact shall not have
employed counsel to assume the defense of such
action, in each of which cases the fees and
expenses of counsel shall be borne by the
Indemnitor.
9.4 The Indemnitor agrees to provide the
Indemnitees with copies of all registration
statements pre- and post-effective amendments
to such registration statements including
exhibits, whether filed with the SEC prior
to or subsequent to the disbursement
of the Deposited Proceeds.
9.5 The provisions of this Section 9 shall
survive any termination of this Agreement,
whether by disbursement of the Deposited Proceeds,
resignation of the Escrow Agent or otherwise.
10. Governing Law and Assignment. This
Agreement shall be construed in accordance
with and governed by the laws of the
State of New York without giving effect
to choice of law or conflict of laws rules,
and shall be binding upon the Parties hereto
and their respective successors and assigns;
provided, however, that any assignment or
transfer by any Party of its rights under
this Agreement or with respect to the
Deposited Proceeds shall be void as against
the Escrow Agent unless:
(a) written notice thereof shall be given to
the Escrow Agent; and
(b) the Escrow Agent shall have consented in
writing to such assignment or transfer.
11. Notices. All notices required to be given
in connection with this Agreement shall be sent
by certified mail, postage prepaid, return receipt
requested, or by hand delivery with receipt
acknowledged, or by the Express Mail service
offered by the United States Post Office, and
addressed, if to the Issuer, at its address set
forth on the Information Sheet, and if to the
Escrow Agent, Whiteman Osterman & Hanna. Notice
shall be deemed complete on the earlier of actual
receipt or on the fourth business day after
mailing in accordance with this Section 11.
12. Severability. If any provision of this
Agreement or the application thereof to any
person or circumstance shall be determined
to be invalid or unenforceable, the remaining
provisions of this Agreement or the application
of such provision to persons or circumstances
other than those to which it is held invalid or
unenforceable shall not be affected thereby and
shall be valid and enforceable to the fullest
extent permitted by applicable law.
13. Closing. The closing shall take place
within 90 days of the Effective Date unless
an additional 90 days is approved by the
Company, but in no instance later than 180
days after the Effective Date.
14. Pronouns. All pronouns and any variations
thereof shall be deemed to refer to the masculine,
feminine, neuter, singular, or plural as the
context may require.
15. Captions. All captions are for convenience
only and are without substantive effect.
16. Execution in Counterparts. This Agreement
may be executed in several counterparts or by
separate instruments and all of such counterparts
and instruments shall constitute one agreement,
binding on all of the parties herein.
17. Entire Agreement. This Agreement constitutes
the entire agreement between the parties hereto
with respect to the subject matter hereof and
supersedes all prior agreements and understandings
(written or oral) of the parties in connection
herewith.
IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the date first above written.
THE ISSUER: Montana Acquisition Corporation
By: LESLIE M. APPLE
LESLIE M. APPLE
PRESIDENT
ESCROW AGENT: Whiteman, Osterman & Hanna
By: PHILIP H. DIXON
PHILIP H. DIXON
PARTNER
ESCROW AGREEMENT INFORMATION SHEET
1. The Company
Montana Acquisition Corporation
241 Morner Road
Rensselaer, New York 12144
State of incorporation or organization: Delaware
2. Self-Underwriting
State of incorporation or organization: N/A
3. The Securities
Description of the Securities to be offered
(e.g., shares of common stock or warrants for
common stock, debentures, units consisting of
shares and warrants, etc.): Shares of Common Stock.
4. Type of Offering
Registration Statement filed on form SB-2
Offering Statement filed pursuant to Regulation C
of the General Rules and Regulations under the
Securities Act of 1933.
5. Offering Amount: $ 10,000
6. Plan of Distribution of the Securities
Offering Period: 180 (calendar days)
Collection Period, if any: None
7 The Escrow Account
Title of the Escrow Account: Montana Acquisition
Corporation, ESCROW ACCOUNT.
8. Escrow Account Fee
Amount due on execution of the Escrow
Agreement: $1,000.00
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Montana Acquisition Corp.
2411 Morner Road
Rensselaer, New York 12144
We have audited the accompanying balance sheet
of Montana Acquisition Corporation (the
"Company"), a development stage company, as of
July 18, 2000 the related statements of changes in
stockholders' equity, income, and cash flows for
the period June 9, 2000 (date of incorporation)
through July 18, 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 represent fairly, in all
material respects, the financial position of
Montana Acquisition Corporation as of July
18, 2000, and the result of its operations
and its cash flows for the period June 6, 2000
(date of incorporation) through July 18, 2000,
in conformity with generally accepted
accounting principles.
ARTHUR PLACE & COMPANY, P.C.
ARTHUR PLACE & COMPANY, P.C.
Albany, New York
August 30, 2000
September 18, 2000
Securities and Exchange Commission
Washington, D.C.
Re: Montana Acquisition Corporation
To Whom it May Concern:
We have acted as counsel for Montana Acquisition
Corporation (the "Corporation") in connection
with the registration with the Securities and
Exchange Commission, pursuant to Form SB-2,
of Ten Thousand (10,000) shares and common stock
of the Corporation (the "Shares"), at a price of
$1.00 per share, for sale in the Corporation's
proposed public offering (the "Offering").
All capitalized terms used in this opinion that
are not otherwise defined herein shall, unless
the context requires otherwise, have the meaning
set forth in the Form SB-2. As used in this
opinion letter, the phrase "our knowledge"
means the actual knowledge (that is, the
conscious awareness of facts or other information)
of lawyers in our firm who have given substantive
legal attention to representing the Corporation
in connection with the Offering.
We have examined an executed original of the Form
SB-2 and certified copies of the proceedings of
the Corporation authorizing the execution and
delivery of the Form SB-2. In addition, we have
examined such other documents and made such
investigation and such examination of law as
we have deemed necessary or appropriate
for the purposes of the following opinion.
In our examination of the foregoing materials,
we have assumed the authenticity and completeness
of all documents submitted to us as originals,
the conformity with original documents of all
documents submitted to us as certified, telecopied,
photostatic or reproduced copies, the genuineness
of all signatures (whether original or photostatic)
except the signatures of persons acting in behalf
of the Corporation and the correctness of public
files, records, certificates and information of,
or furnished by, government or regulatory agencies
or authorities, except where we have specific
knowledge to the contrary. This opinion letter
also is governed by, and to the extent not
inconsistent with any of the foregoing, shall be
qualified by, and interpreted in accordance with,
the Legal Opinion Accord of the American Bar
Association Section of Business Law.
For purposes of this opinion, we have relied as
to factual matters solely upon representations
made to us by the Corporation, our examination
of public files, records, certificates and
information of, or furnished by, government
or regulatory agencies or authorities,
our examination of records and information
in our files, and our knowledge of matters
relating to the Corporation. We have not made
any independent investigations of the
Corporation's factual representations.
Nothing has come to our attention, however, that
causes us to doubt the accuracy of such
representations.
Based upon and subject to the foregoing and
to the limitations and qualifications stated
below, we are of the opinion that:
1. The Corporation is a corporation duly
incorporated and validly existing and in good
standing under the laws of the State
of Delaware.
2. The Corporation has full corporate powers
to own its property and conduct its business, as
such business is described in the
prospectus.
3. The Corporation is qualified to do
business as a foreign corporation in good
standing in every jurisdiction in which
the ownership of property and the conduct
of business requires such qualification.
4. The Shares are authorized but unissued.
5. The Shares being registered for sale by the
Corporation, when issued and sold pursuant to
this Registration Statement will be legally issued,
fully paid and non-assessable and there will be
no personal liability to the owners thereof.
Very truly yours,
WHITEMAN OSTERMAN & HANNA
WHITEMAN OSTERMAN & HANNA
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Registration
Statement of Montana Acquisition Corporation
on Form SB-2 of our Report of Independent
Auditors dated August 30, 2000 appearing in the
Prospectus, which is part of this Registration
Statement.
We also consent to the reference to us under
the heading "Experts" in such Prospectus.
Arthur Place & Company, P.C.
Certified Public Accountants
By: ARTHUR H. PLACE
ARTHUR H. PLACE
PRESIDENT
CONSENT OF COUNSEL
Whiteman Osterman & Hanna does hereby consent
to the use of our opinion dated September 18,
2000 to Montana Acquisition Corporation to be
used and filed in connection with the SB-2
Registration Statement and Prospectus, as
filed with the Securities and Exchange
Commission.
Whiteman Osterman & Hanna
By: PHILIP H. DIXON
PHILIP H. DIXON
PARTNER
