As filed with the Securities and Exchange Commission
on _____________________, 1999
Registration No.: _______
FORM S-4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MERCURY CAPITAL CORP.
(Name of small business issuer in its charter)
3360 W. Sahara Ave., Las Vegas, Nevada (702) 732-2253
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Shawn F. Hackman, Esq. 3360 W. Sahara Ave., LasVegas, Nevada
(702) 732-2253
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registratio
of registered offering aggregate n fee
securities (1) price per offering
to be unit (12) price
registered
Common 10,440,000 $ 0.10 $1,000,000 $100.00
shares
(1) This Registration Statement relates to the securities of the
Registrant to be issued to the shareholders of Mercury Capital,
pursuant to an Agreement and plan of Merger. This Registration
Statement covers such additional indeterminate number of shares
of Common Stock as may be issued by reason of adjustments
pursuant to the Merger Agreement. Because those additional shares
will be issued for no additional consideration, no additional
registration fee is required.
(2) Estimated solely for purposes of calculating the
registration fee.
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.
MERCURY CAPITAL CORP.
CROSS REFERENCE SHEET
(Showing Location in the Prospectus/Proxy of Information
Required by Items 1 through 19, Part I, of Form S-4)
Item in Form S-4 Prospectus/Proxy Caption
1. Front of Registration Facing Page of Registration
Statement and Outside Front Statement; Outside Front Page
Cover of Prospectus of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page of
Cover Pages of Prospectus Prospectus; Outside Back Page
of Prospectus
3. Summary Information and Risk Prospectus Summary; Risk
Factors Factors
4. Terms of Transaction Prospectus Summary - The
Merger; The Transaction; Tax
Consequences
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with Management; Certain
Company Being Acquired Transaction
7. Reoffering by Persons deemed Shares Eligible for Future
Underwriters Sale
8. Interest of Named Experts and Experts; Legal Matters
Counsel
9. Disclosure of Commission Indemnification of Directors
Position on Indemnification and Officers
for Securities Act
Liabilities
14. A. Description of Business Mercury - Business
B. Description of Property Properties
C. Legal Proceedings Legal Proceedings
17. Information regarding Gain The Companies; Certain
Master Transactions Gain Master
18. Information if Proxies, Proxy Information
Consents or Authorizations
are to be Solicited
SUBJECT TO COMPLETION, DATED ____________, 1999
<PAGE>
PROSPECTUS/PROXY STATEMENT
MERCURY CAPITAL CORP.
A Colorado Corporation
This Prospectus/Proxy relates to the proposed merger between
Mercury Capital Corp. with Gain Master, pursuant to an Agreement
and Plan of Merger.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK
VALUE OF THE COMMON STOCK AND SHOULD BE CONSIDERED ONLY BY
PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"DILUTION" and "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS/PROXY. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus/proxy shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
Prior to this registration, there has been no public market for
the shares of Common Stock other than trading on the "Over-the
Counter Bulletin Board". See "RISK FACTORS" and "DESCRIPTION OF
SECURITIES".
Mercury Capital intends to apply for inclusion of the Common
Stock on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or listing on the American Stock
Exchange ("AMEX"), although there can be no assurances that an
active trading market will develop even if the securities are
accepted for quotation or listing. Additionally, even if the
Company's securities are accepted for quotation or listing and
active trading develops, Mercury is still required to maintain
certain minimum criteria, of which there can be no assurance (See
"RISK FACTORS").
The date of this Prospectus/Proxy Statement is ___________, 1999.
<PAGE>
AVAILABLE INFORMATION
Mercury Capital filed a Form 10-12G with the Securities and
Exchange Commission (the "Commission") on March 9, 1999, and is
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and in accordance
therewith will file reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission").
Reports and other information filed by Mercury Capital can be
inspected and copied at the public reference facilities
maintained at the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can be
obtained upon written request addressed to the Commission, Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company has filed with the
Commission a registration statement on Form S-4 (herein together
with all amendments and exhibits referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the
"Act") of which this Prospectus forms a part. This Prospectus
does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted
in accordance with the rules and regulations of the Commission.
For further information reference is made to the Registration
Statement.
Mercury Capital's Form 10-12G is hereby incorporated herein by
reference. This includes the following Exhibits:
2.1 Agreement of Merger
3.1 Articles of Incorporation
3.2 By-Laws -
3.3 Financial Statements
Mercury Capital will provide copies of its Form 10-12G and any
exhibit upon request made to Mercury Capital's offices, as
identified herein.
ITEM 3. PROSPECTUS/PROXY SUMMARY AND RISK FACTORS
The following summary is qualified in its entirety by reference
to the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere in this
Prospectus/Proxy. Each prospective investor is urged to read this
Prospectus/Proxy in its entirety.
THE COMPANIES
Mercury Capital Corp. (the "Company"), was incorporated on
December 9, 1996, under the laws of the State of Colorado, to
engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. The Company has
been in the developmental stage since inception and has no
operations to date Other than issuing shares to its original
shareholders, the Company never commenced any operational
activities. The Company was formed by Timothy J. Brasel, the
initial director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr. Brasel
asked Joseph J. Peirce, a close friend who has been an investor
in a number of other companies managed by Mr. Brasel, to serve as
President and a director, and these two persons invited Mr.
Brasel's sister to participate as a founding shareholder. No
further action was taken in connection with the organization of
the Company until February 1999 when the management determined to
proceed with filing a Form 10-SB. Management then raised $12,000
from three business acquaintances to pay the expense of preparing
the Form 10-SB. The Board of Directors of the Company has elected
to commence implementation of the Company's principal business
purpose.
GAIN MASTER, LTD. The market responses from the United States
and Europe regarding our innovative electronic and digital
databanks and desktop organizers were exceptionally encouraging
and impressive. During the 5 months ended 30 November 1998, the
division created over 20 new models of databanks and desktop
organizers launched to the markets. The management believes that
over 30 new models will be added to our lines of high quality
products by the end of year 1999. In view of the fast growing and
earning potential of the division, we have decided to allocate
double the resources to further develop and explore the markets
of databanks and desktop organizers. For future development, we
have already made a series of business plans.
Thanks to our state-of-the-art new factory complex in Dongguan,
China, together with sophisticated machinery and highly
experienced R&D team, we believe that our new products can be
more than satisfactory to our customers' appetites. However, in
order to fulfil the increasing demands for high technology and
high quality products from customers, we have planned to invest
several millions of US dollars in more advanced production
facilities. We plan to build a completely new factory complex in
China in three years. The new high technology factory complex
will be equipped with automatic production lines and advanced
telecommunication networks. On completion of the complex, the
management believes that the production capacity for the
electronic and digital databanks and desktop organizers can
triple existing current capacity. Further with the more the more
advanced production facilities, we can increase the product
quality and decrease the defect level significantly. For example,
we target to reduce the level of defect from the present 5% to
less than 1.5%.
In order to enjoy the advantages of electronic connectivity, we
started to do business by means of Internet about two years ago.
Since the establishment of our frequently visited web sites, we
have received a number of business opportunities and inquiries
about our products. The results of the usage of Internet are
unexpectedly good. In view of the effectiveness and efficiencies
of electronic connectivity and Internet, we have planned to
implement a comprehensive trade management system that can
integrate our order processing, sourcing, manufacturing and EDI
capabilities to link each step in the production and trading
process. The new system can make the workflow more efficient
improve productivity, reduce errors, and save time and money. The
EDI capabilities allow for electronic order processing and
documentation between our suppliers and trading partners
worldwide especially those in the United States and Europe. Since
our traditional distribution channels are both costly and time
consuming, we are also planning to utilize Internet connection to
centralize orders, and together with the sales and marketing
network to better distribute our products and better serve our
clients. We will deploy the E-commerce strategy for our product
lines and will utilize it to broaden the distribution and
marketing channels. We are studying the establishment of such
channels together with certain US partners, and hope that they
can be established in one year. These new channels are expected
to double our revenue level.
Since both the size and technology level of our existing R&D team
may not be able to support future's fast growing technology
demands, we plan to provide double or even more resources and
supports to the R&D and engineering department. For example, the
number of R&D team members is expected to increase from 30 to
more than 100 people in two years. More professionals with Ph.D.
qualification will be invited to join us as well. Highly
qualified professionals will total about 70% of the team. At
present, a number of researches have been conducting. For
example, we are doing a research on a special project called
"Personal Digital Assistants." This innovative product can be
equipped with the link-up capability with personal computer, fax
modem, touch panel and printing functions. The research is
expected to be completed in year 2000. Moreover, we are
developing the new product series named "Smart Doctor". This
"Smart Doctor" has a number of strong functions including large
memory and educational games playing. Again, we will deploy the E-
commerce strategy for these 2 new product lines and will utilize
the distribution and marketing channel. These 2 new product
lines are expected to generate US $10 million in revenue.
To diversify our existing business and ensure a stable
contribution of long-term income, we plan to further explore the
business opportunities of OEM and ODM. We our negotiating with
certain large and well-known multi-national electronic product
manufacturers from Japan and the United States in establishing
OEM and ODM partnerships. Due to our outstanding production
facilities and strong R&D team, we recently obtained the contract
from one of the world largest electronic product manufacturers
from Japan, in addition to several signed letter of intents
("LOIs"). We expect this contract and the LOIs will contribute
additional US$ 15 million to our current revenue level, and
provide a platform for us to share our advanced technologies with
these global providers of electronic products.
THE MERGER - SUMMARY
Mercury Capital has entered into a Definitive Agreement and Plan
of Merger with Gain Master. At some time after the effective date
of this Registration Statement, the two companies will be joined.
Mercury Capital will be the surviving corporation of that merger.
The Shareholders of Mercy Capital and Gain Master will vote on
this merger at a special meeting.
Securities Outstanding:
Prior to the Offering: 4,000,000
Common Stock Shares
Subsequent to the Offering: 12,000,000
Common Stock Shares
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND SHOULD
BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT IN THE COMPANY. EACH PROSPECTIVE INVESTOR SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS ALL
OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS.
Dependence Upon Management. The Company is substantially
dependent upon the personal efforts and ability of its President,
Chief Executive Officers and Directors. The loss or inability of
them to perform their duties may have a serious adverse effect
upon the Company's activities and could significantly delay the
achievements of the Company's goals. (See "MANAGEMENT").
Requirement of Audited Financial Information for Businesses That
May Be Acquired. The Company is subject to the periodic reporting
requirements of the Exchange Act. Current reports will be
required each time a reportable event occurs relating to the
affairs of the Company. Should the Company contemplate the
acquisition of a significant amount of assets of another company
or of the other company itself, it will be required to provide
the Securities and Exchange Commission with certified financial
statements of the company or companies to be acquired. No
assurances can be given that such certified financial statements
of a contemplated acquisition will be available to the Company.
The Company may, therefore, be precluded from making such
acquisition or acquisitions if the requisite financial
information is unavailable or can only be obtained at excessive
cost to the Company.
No Assurance of NASD or American Stock Exchange Listing. Prior to
this Offering, no public trading market existed for the Common
Stock of Mercury. There can be no assurances that a public
trading market for the Units or Common Stock will develop or that
a public trading market, if developed, will be sustained.
Although the Company anticipates that the will be eligible for
inclusion on the National Association of Securities Dealers
Automated Quotation System Small-Cap Market ("NASDAQ") or
American Stock Exchange ("AMEX"), no assurance can be given that
the Company's securities will be listed on NASDAQ or AMEX as of
the Effective Date. Consequently, there can be no assurance that
a regular trading market, other than existing OTC trading, for
the Company's securities, will develop after the completion of
the Merger. If a trading market does in fact develop for the
securities offered hereby, there can be no assurance that it will
be maintained. If for any reason such securities are not listed
on NASDAQ or AMEX, the listing is not maintained, or a public
trading market does not develop, holders of such securities may
have difficulty in selling their securities should they desire to
do so.
No Dividends. The Company has paid no dividends on its Common
Stock since its inception and does not intend to pay dividends on
its Common Stock in the foreseeable future. Any earnings which
the Company may realize in the foreseeable future will be
retained to finance the growth of the Company (See "DESCRIPTION
OF SECURITIES").
Loss of Control of Company by Present Shareholders After
Offering. After completion of the merger, the present
shareholders of the Company will own 13.5% of the shares then
outstanding. Accordingly, as a practical matter, the present
shareholders will no longer be in a position to elect all of the
directors of the Company and control its policies. (See
"DILUTION," and "PRINCIPAL SHAREHOLDERS").
Shares Available for Resale. The 4,000,000 shares of the
Company's Common Stock may be deemed "restricted securities" and,
in the future, may be sold in compliance with Rule 144 adopted
under the Securities Act, as amended. Possible or actual sales of
the Company's Common Stock by present shareholders under Rule 144
may have a depressive effect on the price of the Company's Common
Stock in any market which may develop (See "DILUTION" and
"CERTAIN TRANSACTIONS").
ITEM 4. TERMS OF TRANSACTION
THE SPECIAL MEETING
A special meeting of the shareholders of Mercury Capital and Gain
Master will be held at the executive offices of Shawn F. Hackman,
Esq. 3600 W. Sahara Ave. Las Vegas, Nevada.
At the special meeting, holders of Mercury Capital and Gain
Master shares will consider and vote upon (i) a proposal to adopt
the Agreement and Plan of Merger.
The affirmative vote of the holders of a majority of the
outstanding shares of Mercury Capital and Gain Master Common
Stock entitled to vote thereon is required to adopt the Merger
Agreement.
All shares of Mercury Capital and Gain Master Common Stock
represented at the special meeting by properly executed proxies
received prior to or at the special meeting, and not revoked,
will be voted in accordance with the instructions indicated on
such proxies. If no instructions are indicated, such proxies will
be voted for the adoption of the Merger Agreement.
Any proxy given may be revoked by the person giving it at any
time, without affecting any vote previously taken, by (i) giving
notice to the Secretary of Gain Master in writing or in open
meeting or (ii) duly executing a later dated proxy relating to
the same shares and delivering it to the Secretary of Gain Master
before the taking of the vote at the special meeting. Any written
notice of revocation or subsequent proxy should be sent and
delivered to Mercury Capital or Gain Master as the case may be,
3360 W. Sahara Ave. Suite 200, Las Vegas, Nevada, Attention:
Secretary, or hand delivered to the same address or before the
taking of the vote at the special meeting.
THE TRANSACTION
On the effective date of the merger, each share of Gain Master
common stock shall be exchanged for and converted shares of
Mercury Capital common stock as further detailed in stock
purchase agreement attached hereto.
TAX CONSEQUENCES
The merger contemplated by this Agreement is intended to qualify
as a tax-free reorganization, as contemplated by Section 368(A)
of the Internal Revenue Code of 1986, as amended. Mercury Capital
intends to obtain new auditors, from whom an opinion as to tax
consequences will be obtained.
ITEM 5. PRO-FORMA FINANCIAL INFORMATION-
See attached Financials Exhibit 13.1
ITEM 6. MATERIAL CONTRACTS WITH COMPANY BEING ACQUIRED
None
ITEM 7. REOFFERING BY PERSONS DEEMED UNDERWRITERS
Upon the consummation of this Merger, Mercury Capital will have
12,000,000 shares of Common Stock outstanding (not including
options). Of these shares, the 10,440,000 shares issued in the
Merger will be freely tradeable without restriction or further
registration under the Securities Act of 1933, as amended, except
for any shares purchased by an "affiliate" of the Company (in
general, a person who has a control relationship with the
Company) which will be subject to the limitations of Rule 144
adopted under the Act. All of these shares are being issued by
the company and thus are not being re-offered by any person
deemed to be underwriters.
ITEM 8. INTEREST OF NAMED EXPERTS AND COUNSEL
Mercury Capital has been represented in connection with the
Merger by Shawn F. Hackman, Esq. 3360 W. Sahara Ave. #200, Las
Vegas, NV. This does not include the tax consequences of this
transaction.
Certain of the financial statements of Mercury Capital included
in this Prospectus and elsewhere in the Registration Statement,
to the extent and for the periods indicated in their reports,
have been audited by independent certified public accountants,
whose reports thereon appear elsewhere herein and in the
Registration Statement.
ITEM 9. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The bylaws of Mercury Capital do not provide for the
indemnification of any director, officer, employee or agent of
the issuer, or any person serving in such capacity for any other
entity or enterprise at the request of the issuer against any and
all legal expenses (including attorneys fees), claims and
liabilities arising out of any action, suit or proceeding, except
an action by or in the right of the issuer. The bylaws of
Mercury Capital do provide for such indemnification, and
management intends that the bylaws of the surviving post-merger
entity shall provide for indemnification of officers and
directors to the extent permitted by Colorado law.
Colorado law provides liberal indemnification of officers and
directors of corporations. Section 78.7502 of the Colorado
Revised Statutes permits a corporation to indemnify any officer,
director, employee, or agent, who is, was, or is threatened to be
made a party to any action, whether civil, criminal,
administrative, or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was
an officer, director, employee, or agent, if he acted in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, in the
case of a criminal action, he had no reasonable cause to believe
that his conduct was unlawful. In the case in which a director,
officer, employee, or agent of a corporation has been successful
on the merits or otherwise in defense of such action, the
corporation must indemnify him for expenses, including attorneys'
fees, actually and reasonably incurred by him.
Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors and
controlling persons of the issuer, the issuer has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
law and is, therefor, unenforceable. In the event a demand for
indemnification is made, the issuer 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 such indemnification by it is against public
policy as expressed in the law and will be governed by the final
adjudication of such issue.
ITEM 10. INFORMATION WITH RESPECT TO REGISTRANT
MERCURY CAPITAL BUSINESS
Mercury Capital Corp. (the "Company"), was incorporated on
December 9, 1996, under the laws of the State of Colorado, to
engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. The Company has
been in the developmental stage since inception and has no
operations to date. Other than issuing shares to its original
shareholders, the Company never commenced any operational
activities. The Company was formed by Timothy J. Brasel, the
initial director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr. Brasel
asked Joseph J. Peirce, a close friend who has been an investor
in a number of other companies managed by Mr. Brasel, to serve as
President and a director, and these two persons invited Mr.
Brasel's sister to participate as a founding shareholder. No
further action was taken in connection with the organization of
the Company until February 1999 when the management determined to
proceed with filing a Form 10-SB. Management then raised $12,000
from three business acquaintances to pay the expense of preparing
the Form 10-SB. The Board of Directors of the Company has elected
to commence implementation of the Company's principal business
purpose.". As such, the Company can be defined as a "shell"
company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The
proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to cause a market to develop in the
Company's securities until such time as the Company has completed
an acquisition or merger.
SELECTED FINANCIAL INFORMATION
The following summary financial information has been summarized
from the Company's Financial Statements included elsewhere in
this Prospectus/Proxy. The information should be read in
conjunction with the Financial Statements and the related Notes
thereto. See "FINANCIAL STATEMENTS".
MERCURY CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
YEAR ENDED DECEMBER 31
Assets
Current Assets $0
Organizational costs, Net of $30.00
accumulated amortization
Liabilities and Stockholders Equity
Current Liabilities $0
Total Liabilities $0
Stockholder's Equity:
Preferred stock, no par value
5,000,000 shares authorized, none
issued and outstanding
Common stock, no par value $50
100,000,000 authorized 3,600,000
issued and outstanding
Additional Paid In Capital $7,200
Accumulated (Deficit) $(7,200)
Total Stockholders' Equity $30
Total Liabilities and Stockholders' $30
Equity
MANAGEMENT
Name / Title Age
John E. Dhonau 42
President and
Director/Sec./Treasurer
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the
ownership of the Company's Common Stock (1) before the Merger as
of the date of this Prospectus, and (ii) as adjusted to reflect
the shares issued in the Merger, by each person who is known by
the Company to own more than 5% of the Company's outstanding
Common Stock; each of the Company's directors; and directors of
the Company as a group:
Security ownership of certain beneficial owners - Mercury Capital Corp.
Title of Name/Address of Owner Shares Percent
Class Beneficially of Class
Owned
Common Timothy J. Brasel 1,365,000 34.1%
5770 South Beech Court
Greenwood Village, CO
80121
Common Joseph J. Peirce 1,4,15,000 35.4%
5125 West Lake Ave.
Littleton, CO 80123
Common Brasel Family Partners 645,000 16.1%
5770 S. Beech Court
Greenwood Village, CO
80121
Common La Mirage Trust 720,000 18.0%
5770 S. Beech Court
Greenwood Village, CO
80121
Common Nasus Lesarb, Ltd. 720,000 18.0%
16198 East Prentice
Place
Aurora, CO 80015
Common Kurt Turekl IRA 200,000 5.0%
8101 E. Dartmounth
No. 1
Denver, CO 80231
Common All Executive Officers 0 0.0%
Directors as a Group
(2 Persons)
MARKET PRICE AND DIVIDEND POLICY
Registrant's common stock is not traded. The following are
available high and low bids.
Mercury Capital HIGH LOW
$0 $0
The Registrant has never paid a cash dividend and has no present
intention of so doing.
DESCRIPTION OF SECURITIES
Common Stock. The holders of Common Stock are entitled to one
vote for each share held of record on all matters to be voted on
by the shareholders. There is no cumulative voting with respect
to the election of directors, with the result that the holders of
more than 50 percent of the shares have the ability to elect the
directors. The holders of Common Stock are entitled to receive
dividends when, as, and if declared by the Board of Directors out
of funds legally available therefor. In the event of liquidation,
dissolution or winding up of the Company the holders of Common
Stock are entitled to share ratably in all assets remaining
available for distribution to them after payment of liabilities
and after provision has been made for each class of stock, if
any, having preference the Common Stock. Holders of shares of
Common Stock, as such, have no conversion, preemptive or other
subscription rights, and there are no redemption provisions
applicable to the Common Stock. All of the outstanding shares of
Common Stock are, and the shares of Common Stock offered hereby
when issued against the consideration set forth in this
Prospectus, will be, fully paid and nonassessable. The Company's
Certificate of Incorporation, as amended, authorizes 100,000,000
shares of no par value Common Stock, of which 4,000,000 shares
were issued and outstanding as of October 1, 1999. All of the
issued and outstanding shares of Common Stock are fully paid,
validly issued and non-assessable.
Transfer Agent. The Transfer Agent and Registrar for the Common
Stock is Corporate Stock Transfer.
LITIGATION
No material legal proceedings are pending to which Mercury or any
of its property is subject and to the knowledge of Mercury, there
are no other proceedings threatened.
ITEM 17. INFORMATION WITH RESPECT TO GAIN MASTER
GAIN MASTER BUSINESS
GAIN MASTER, LTD. The market responses from the United States
and Europe regarding our innovative electronic and digital
databanks and desktop organizers were exceptionally encouraging
and impressive. During the 5 months ended 30 November 1998, the
division created over 20 new models of databanks and desktop
organizers launched to the markets. The management believes that
over 30 new models will be added to our lines of high quality
products by the end of year 1999. In view of the fast growing and
earning potential of the division, we have decided to allocate
double the resources to further develop and explore the markets
of databanks and desktop organizers. For future development, we
have already made a series of business plans.
Thanks to our state-of-the-art new factory complex in Dongguan,
China, together with sophisticated machinery and highly
experienced R&D team, we believe that our new products can be
more than satisfactory to our customers' appetites. However, in
order to fulfil the increasing demands for high technology and
high quality products from customers, we have planned to invest
several millions of US dollars in more advanced production
facilities. We plan to build a completely new factory complex in
China in three years. The new high technology factory complex
will be equipped with automatic production lines and advanced
telecommunication networks. On completion of the complex, the
management believes that the production capacity for the
electronic and digital databanks and desktop organizers can
triple existing current capacity. Further with the more the more
advanced production facilities, we can increase the product
quality and decrease the defect level significantly. For example,
we target to reduce the level of defect from the present 5% to
less than 1.5%.
In order to enjoy the advantages of electronic connectivity, we
started to do business by means of Internet about two years ago.
Since the establishment of our frequently visited web sites, we
have received a number of business opportunities and inquiries
about our products. The results of the usage of Internet are
unexpectedly good. In view of the effectiveness and efficiencies
of electronic connectivity and Internet, we have planned to
implement a comprehensive trade management system that can
integrate our order processing, sourcing, manufacturing and EDI
capabilities to link each step in the production and trading
process. The new system can make the workflow more efficient
improve productivity, reduce errors, and save time and money. The
EDI capabilities allow for electronic order processing and
documentation between our suppliers and trading partners
worldwide especially those in the United States and Europe. Since
our traditional distribution channels are both costly and time
consuming, we are also planning to utilize Internet connection to
centralize orders, and together with the sales and marketing
network to better distribute our products and better serve our
clients. We will deploy the E-commerce strategy for our product
lines and will utilize it to broaden the distribution and
marketing channels. We are studying the establishment of such
channels together with certain US partners, and hope that they
can be established in one year. These new channels are expected
to double our revenue level.
Since both the size and technology level of our existing R&D team
may not be able to support future's fast growing technology
demands, we plan to provide double or even more resources and
supports to the R&D and engineering department. For example, the
number of R&D team members is expected to increase from 30 to
more than 100 people in two years. More professionals with Ph.D.
qualification will be invited to join us as well. Highly
qualified professionals will total about 70% of the team. At
present, a number of researches have been conducting. For
example, we are doing a research on a special project called
"Personal Digital Assistants." This innovative product can be
equipped with the link-up capability with personal computer, fax
modem, touch panel and printing functions. The research is
expected to be completed in year 2000. Moreover, we are
developing the new product series named "Smart Doctor". This
"Smart Doctor" has a number of strong functions including large
memory and educational games playing. Again, we will deploy the E-
commerce strategy for these 2 new product lines and will utilize
the distribution and marketing channel. These 2 new product
lines are expected to generate US $10 million in revenue.
To diversify our existing business and ensure a stable
contribution of long-term income, we plan to further explore the
business opportunities of OEM and ODM. We our negotiating with
certain large and well-known multi-national electronic product
manufacturers from Japan and the United States in establishing
OEM and ODM partnerships. Due to our outstanding production
facilities and strong R&D team, we recently obtained the contract
from one of the world largest electronic product manufacturers
from Japan, in addition to several signed letter of intents
("LOIs"). We expect this contract and the LOIs will contribute
additional US$ 15 million to our current revenue level, and
provide a platform for us to share our advanced technologies with
these global providers of electronic products.
Security Ownership of Certain Beneficial Owners, Gain Master -
Pre-merger:
Title of Name/Address of Owner Shares Percent of Percent
Class Beneficially Class of Class
Owned Diluted
Ordinary Yue Fong International 9 94.25% N/A
Group Holding Limited
Ordinary LI Wing Kei 575 5.75% N/A
INFORMATION REGARDING MERCURY CAPITAL, CORP. SECURITIES
Mercury stock is not traded.
Gain Master has never paid a cash dividend and has no present
intention of so doing.
MANAGEMENT
LI Wing Bun is the President and Chairman of the Board of
Directors of Gain master.
ITEM 18. PROXY INFORMATION
FINANCIAL STATEMENTS
Financial Statements - Mercury Capital
No dealer, salesman or other person has been authorized to give
any information or to make any representations not 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. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any
person to make such offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
Available Information Inside Front Cover
Prospectus/Proxy Summary
The Companies
The Merger - Summary
Risk Factors
Terms of Transaction
Special Meeting
The Transaction
Tax Consequences
Pro Forma Financial Information
Material Contacts with Company Being Acquired
Reoffering by Persons Deemed Underwriters
Interest of Named Experts and Counsel
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
Information with Respect to Registrant
Mercury Capital- Business
Dilution
Capitalization
Selected Financial Information
Management
Principal Stockholders
Market Price and Dividend Policy
Description of Securities
Litigation
Information with Respect to Gain Master
Gain Master - Business
Information Regarding Gain Master Securities
Management
Proxy Information
PART II
ITEM 20. INDEMNIFICATIONS OF OFFICERS AND DIRECTORS
The bylaws of Gain Master do not provide for the indemnification
of any director, officer, employee or agent of the issuer, or any
person serving in such capacity for any other entity or
enterprise at the request of the issuer against any and all legal
expenses (including attorneys fees), claims and liabilities
arising out of any action, suit or proceeding, except an action
by or in the right of the issuer. The bylaws of Gain Master do
provide for such indemnification, and management intends that the
bylaws of the surviving post-merger entity shall provide for
indemnification of officers and directors to the extent permitted
by Colorado law.
Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors and
controlling persons of the issuer, the issuer has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
law and is, therefor, unenforceable. In the event a demand for
indemnification is made, the issuer 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 such indemnification by it is against public
policy as expressed in the law and will be governed by the final
adjudication of such issue.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Registration Statement incorporates Mercury's Form 10SB and the
following Exhibits thereto:
EXHIBITS
3.1 Articles of Incorporation - Mercury Capital
3.2 By-Laws - Mercury Capital
The following financial statements are also incorporated by
reference to the Form 10-SB:
FINANCIAL STATEMENTS - Mercury Capital
Report of Independent Auditor
Reports of Independent Auditor
Balance Sheets
Statement of Operation
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
EXHIBITS
3.1 Articles of Incorporation Gain Master
3.2 By-Laws - Gain Master
10.1 Stock Purchase Agreement - Gain Master
ITEM 22. UNDERTAKINGS
(a) 1. The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual
report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not
set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of any employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by person who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.
4. The registrant undertakes that every prospectus (i) that is
filed pursuant to paragraph (1) that is filed pursuant to
paragraph (i) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used
in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(c) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on
November 19, 1999
MERCURY CAPITAL
By:/s/John E. Dhonau
John E. Dhonau, President, Secretary and Treasurer
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMAPANIES ACT (NO. 8 OF 1984)
MEMERANDUM OF ASSOCIATION OF
GAIN MASTER LIMITED NAME
The name of the Company is: Gain Master Limited
REGISTERED OFFICE
The Registered Office of the Company will by Jipfa Building, 3rd
Floor, Road Town, Tortole, British Virgin Islands.
The Registered Agent of the Company will be Portcullis Trust
(BVI) Ltd. of Jipfa Building, 3rd Floor, Road Town, Tortola,
British Virgin Islands.
GENERAL OBJECTS AND POWERS
(1) The object of the Company is to engage in any act or
activity that is not prohibited under any law for the time being
in force in the British Virgin Islands.
The Company may not
carry on business with persons resident in the British Virgin
Islands;
own an interest in real property situate in the British Virgin
Islands;
carry on banking or trust business, unless it is licensed to do
so under the Banks and Trust Companies Act, 1990;
carry on business as an insurance or reinsurance company,
insurance agent or insurance broker unless it is licensed under
the Company Management Act, 1990; or
carry on the business of company management, unless it is
licensed under the enactment authorizing it to carry on business;
carry on the business of providing the registered office or the
registered agent for companies incorporated in the British Virgin
Islands.
For purposes of paragraph (a) of subclause (2), the Company shall
not be treated as carrying on business with persons resident in
the British Virgin Islands if;
it makes or maintains deposits with a person carrying on the
banking business within the British Virgin Islands.
it makes or maintains professional contact with solicitiers,
barristers, accountants, bookkeepers, trust companies,
administration companies, investment advisors or other similar
persons carrying on business within the British Virgin Islands;
it prepares or maintains books and records with the British
Virgin Islands;
it holds, within the British Virgin Islands, meetings of its
directors and members;
it holds a lease of property for use as an office from which to
communicate with members or where books and records of the
Company are prepared or maintained;
it holds shares, debt obligations or other securities in a
company incorporated under the International Business Companies
Act or under the Companies Act ; or
shares, debt obligations or other securities in the Company are
owned by any person resident in the British Virgin Islands or by
a company incorporated under the International Business Companies
Act or under the Companies Act.
The Company shall have all such powers as are permitted by law
for the time being in force in the British Virgin Islands,
irrespective of corporate benefit, to perform all acts and engage
in all activities necessary or conductive to the conduct,
promotion or attainment of the object of the Company.
CURRENCY
Shares in the Company shall be issued in the currency of the
United States of America.
AUTHORIZED CAPITAL
6. The authorized capital of the Company is US$50,000.
CLASSES, NUMBER AND PAR VALUE OF SHARES
The authorized capital is made up of one class and one series of
shares dividend into 50,000 shares of US$1.00 par value.
DESIGNATIONS, POWERS, PREFERENCES, ETC. OF SHARES
All shares shall: have one vote each;
be subject to redemption, purchase or acquisition by the Company
for fair value; and
have the same rights with regard to dividends and distributions
upon liquidation of the Company.
VARIATION OF CLASS RIGHTS
If at any time the authorized capital is dividend into different
classes or series or shares, the rights attached to any class of
series (unless otherwise provided by the terms and issue of the
shares of that class or series) may, whether or not the Company
is being wound up, be varied with the consent in writing of the
holders of not less than three-fourths of the issued shares of
that class or series and of the holders of the not less than
three-fourths of the issued shares of any other class or series
of shares which may be affected by such variation.
RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU
The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise
expressly provided by the terms of issue of the shares of that
class, be deemed to be varied by the creation or issue of further
shares ranking pari passu therewith.
REGISTERED SHARES AND BEARER SHARES
Shares in the Company may be issued as registered shares or so
shares issued to bearer. Registered shares may be exchanged for
shares issued to bearer and bearer shares exchanged for
registered shares.
TRANSFER OF SHARES
Subject to the provisions relating to the transfer of shares set
forth in the Articles of Association annexed hereto (the
"Articles of Association") shares in the Company may be
transferred subject tot he prior or subsequent approval of the
Company as evidences by a resolution of directors or by a
resolution of members.
AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION
The Company may amend its Memorandum of Association and Articles
of Association by a resolution of members or by a resolution of
directors.
DEFINITIONS
The meanings of words in this Memorandum of Association are as
defined in the Articles of Association.
We, PORTCULLIS TRUST (BVI)LTD. of Jipfa Building Road Town,
Tortola, British Virgin Islands for the purpose of incorporating
an International Business Company under the laws of the British
Virgin Islands hereby subscribe our name in this Memorandum of
Association the 23rd day of March, 1999.
Witness Subscriber
/s/ /s/
JIPFA Building Authorized Signatory
Road Town, Tortola Portcullis Trust (BVI) Ltd.
By-Laws
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") dated as of
September, 1999 is made and entered into by and among
Blencathia Acquisition Corp., a Delaware corporation (the
"Company"); Gain Master Limited, a company organized under the
laws of the British Virgin Islands ("GML"); and Pierce Mill
Associates, and TPG Capital Corporation, (collectively, the
"Stockholders") with reference to the following:
The Company desires to sell to GML and GML desires to purchase
from the Company, shares of the Common Stock of the
Company (the "Company Shares") which shall represent 89% of all
issued and outstanding capital stock of the Company, computed on
a fully diluted basis, upon the terms and conditions hereafter
set forth but after the issuance to certain financial consultants
(the "Financial Consultants") of shares (the "Financial
Consultant Shares") of the Company's Common Stock which, as of
the Closing, will represent an aggregate of 4% of all issued and
outstanding shares.
The Stockholders own all of the capital stock of the Company and
will benefit by the consummation of the transactions contemplated
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and in reliance upon the
representations and warranties hereinafter set forth, the parties
agree as follows:
DEFINITIONS
When used in this Agreement, the following terms shall have the
respective meanings set forth below:
"GML Contracts and Other Agreements" shall mean those contracts,
agreements, leases and other undertakings of GML which are listed
on Schedule 3.3 attached hereto and those contracts, agreements,
leases and other undertakings entered into in the ordinary course
of business from the date hereof.
"Cash and Cash Equivalents" shall mean all cash and cash
equivalents, monies in bank accounts, certificates of deposit,
bankers' acceptance, or government securities.
"Closing" shall mean the consummation of the transactions
contemplated in this Agreement which shall be on the date set
forth in Section 2.1 hereof.
"Company Contracts" shall have the meaning set forth in Section
4.8 hereof.
"Company Financial Statements" shall have the meaning set forth
in Section 4.4 hereof.
"Losses" shall have the meaning set forth in Section 8.1 hereof.
"Securities Act" shall mean the Securities Act of 1933 of the
United States of America, as amended.
PURCHASE OF SHARES
Purchase of Shares. Subject to the terms and conditions set
forth in this Agreement and in reliance upon the representations
and warranties of the Company and GML herein set forth, at the
Closing, GML shall sell, issue and deliver the Company Shares to
GML, and GML shall purchase, acquire and accept the Company
Shares from the Company.
Consideration. As consideration for the Company Shares,
Purchaser shall: pay to the Company in cash the aggregate amount
of U.S. $288,000.
CLOSING
Closing. Subject to the satisfaction of the conditions precedent
specified in Section 7 hereof, the Closing of the transactions
contemplated by this Agreement shall take place at 11:00 a.m.
(Los Angeles time) at the offices of Loeb & Loeb LLP, 1000
Wilshire Blvd., Los Angeles, CA 90017 on or before September,
1999 (or on such other date as may be mutually agreed upon by the
parties). At the Closing the following shall take place:
The Company shall deliver to GML a certificate evidencing the
Company Shares.
The Company shall execute and deliver a counterpart copy of the
Registration Rights Agreement referred to in Section 7.1(a)
below.
The Company shall deliver the Certificate referred to in Section
7.1(h) below.
GML shall deliver a check payable to the Company in the amount of
$288,000.
GML shall execute and deliver a counterpart copy of the
Registration Rights Agreement.
GML shall deliver the Certificate referenced to in Section
7.2(d).
The Company shall deliver certificates representing the Financial
Consultant Shares to the Financial Consultants in such
denominations and to such issues as designated by Mr. Bernard
Chan prior to the Closing.
The Company shall issue to GML and deliver to Loeb & Loeb LLP a
certificate representing the Escrow Shares (as defined in Section
8.6 below.)
REPRESENTATIONS AND WARRANTIES OF GML
GML hereby represents and warrants to the Company as follows:
Organization.
GML is a company duly organized, validly existing, and in good
standing under the laws of the British Virgin Islands. GML has
the power and authority to carry on its business as presently
conducted; and GML is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on its business.
No Conflict. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any term or provision of,
or constitute a default under, the charter documents of GML or
any agreement, contract or instrument to which it is a party or
by which it or any of its assets are bound.
Authority. GML has full power and authority to enter into this
Agreement and to carry out the transactions contemplated herein.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, have been duly
authorized and approved by the Board of Directors of GML and no
other corporate or other proceedings on the part of GML are
necessary to authorize this Agreement and the transactions
contemplated hereby.
Securities Laws. GML understands that the Company Shares are not
being registered under the Securities Act, on the ground that the
offer and sale of the Company Shares under this Agreement are
exempt from the registration provisions of Section 5 of the
Securities Act pursuant to Section 4(2) thereof, as transactions
by an issuer not involving any public offering, and/or may be
deemed not to involve an offer or sale within the meaning of
Section 5 of the Securities Act pursuant to Regulation D
promulgated thereunder, and that the Company Shares may not be
resold in any transaction subject to Section 5 of the Securities
Act unless registered or an exemption from registration is
available for such sale, and that the certificates representing
the Company Shares will bear a legend to that effect,
substantially in the form set forth on Schedule 3.4 attached
hereto. GML is acquiring the Company Shares for investment
purposes only and not with a view to distribution or resale
thereof, except that the Company Shares may be distributed to the
shareholders of GML in complete liquidation of GML provided that
each such shareholder delivers to the Company a written
representation substantially to the effect of this Section 3.4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE STOCKHOLDERS
The Company and the Stockholders hereby represent and warrant to
GML as follows:
Organization
The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, has
the corporate power and authority to carry on its business as
presently conducted, and is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on the business of the Company.
The copies of the Certificate of Incorporation of the Company,
and the By-laws of the Company heretofore furnished to GML are
complete and correct copies of the Certificate of Incorporation
and the By-laws of the Company as amended and in effect on the
date hereof.
Capitalization of the Company. The authorized capital stock of
the Company consists of 100,000,000 shares of Common Stock, par
value U.S.$.0001 per share, of which 5,000,000 shares are
presently, and will be immediately prior to the Closing,
outstanding and 20,000,000 shares of Preferred Stock, par value
U.S. $.0001 per share, none of which is outstanding. All
outstanding shares are duly authorized, validly issued, fully
paid and non-assessable, and, at the Closing, the Company Shares
will be duly authorized, validly issued, fully paid and non-
assessable. There are no other outstanding shares of capital
stock or other securities or other equity interests of the
Company or contracts, options, warrants or rights of any kind to
acquire such stock, other securities or other equity interests.
There are no outstanding agreements which impose an obligation to
file a registration statement or register any of the capital
stock of the Company.
Subsidiaries and Investments. The Company does not own any
capital stock or have any interest in any corporation,
partnership or other form of business organization or investment.
Financial Statements. The unaudited balance sheet of the
Company as of June 30, 1999 (the "Company Financial Statements")
(a) was prepared in accordance with the books and records of the
Company; (b) was prepared in accordance with U.S. generally
accepted accounting principles consistently applied; and (c) is
complete, accurate and truly and fairly presents the Company's
financial condition as of such date.
Absence of Material Changes. Since June 30, 1999, there has not
been:
any material change in the condition (financial or otherwise) of
the properties, assets, liabilities or business of Company.
any redemption, purchase or other acquisition of any shares of
the capital stock of Company, or any issuance of any shares of
capital stock or the granting, issuance or execution of any
rights, warrants, options or commitments by the Company relating
to its authorized or issued capital stock.
Litigation. There is no dispute, claims, arbitration,
litigation, proceeding or investigation pending or, to the best
knowledge of the Company and the Stockholders, threatened against
the Company affecting any of its properties or assets or that
might call into question the validity of this Agreement, or any
action taken or to be taken pursuant hereto.
Title to Assets. The Company has good and marketable title to
all of its assets and properties now carried on its books
including those reflected in the balance sheet contained in the
Company Financial Statements, free and clear of all liens,
claims, charges, security interests or other encumbrances, except
as described in the Company Financial Statements or arising
thereafter in the ordinary course of business (none of which will
be material).
Contracts and Undertakings. The Company has no contracts,
agreements, leases, licenses, arrangements, commitments or other
undertakings (collectively, the "Company Contracts") to which the
Company is a party or to which it or its property is subject.
Transactions with Affiliates, Directors and Shareholders. Except
as set forth on Schedule 4.9 attached hereto, there are no
contracts, agreements, arrangements or other transactions between
the Company and any officer, director, or 5% stockholder, a
member of any such officer, director or 5% stockholder's family,
or any affiliate of any such officer, director or 5% stockholder.
No Conflict. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any term or provision of,
or constitute a default under, the charter documents or By-laws
of the Company or any Stockholder, or any agreement, contract or
instrument to which the Company or any Stockholder is a party or
by which it or any of its respective assets are bound.
Authority. Each of the Stockholders and the Company has full
power and authority to enter into this Agreement and to carry out
the transactions contemplated herein without the consent,
approval, license or concurrence of any other party. The
execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and the issuance of the Company
Shares in accordance with the terms hereof, have been duly
authorized and approved by the Board of Directors of the Company
and no other corporate proceedings on the part of Company are
necessary to authorize this Agreement, the transactions
contemplated hereby and the issuance of the Company Shares in
accordance with the terms hereof.
Compliance with Law. The Company has in all material respects
complied with and it is now in all material respects in
compliance with, all applicable laws, rules and regulations. All
outstanding securities have been, and, assuming the accuracy of
the investment representations provided by GML to the Company
pursuant to the provisions hereof, the Company Shares will be,
issued in full compliance in all material respects with all state
and federal securities laws. The filings of the Company with the
United States Securities and Exchange Commission contain no
material misstatement or fail to state a material fact necessary
to make the statements made, in light of the circumstances under
which they were made, not misleading.
Directors and Employees and Service Contracts.
Other than the directors and officers set forth on Schedule 4.13
attached hereto, the Company has no other directors or officers.
The Company has no employees.
Business Operations. The Company has never engaged in any
business operations other than to attempt to effect a merger,
exchange of capital stock, asset acquisition or other business
combination.
COVENANTS AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO CLOSING
Corporate Examinations and Investigations. Prior to the Closing,
each party shall be entitled, through its advisors, employees and
representatives, to make such investigations and examinations of
the books, records and financial condition of the Company and GML
as each party may request. In order that each party may have the
full opportunity to do so, the Company, and GML shall furnish
each party and its representatives during such period with all
such information concerning the affairs of the Company and GML,
as the case may be, as each party or its representatives may
reasonably request and cause the Company and GML, as the case may
be, and their respective officers, employees, consultants,
agents, accountants and attorneys to cooperate fully with each
party's representatives in connection with such review and
examination and to make full disclosure of all information and
documents requested by each party and/or its representatives.
Any such investigations and examinations shall be conducted at
reasonable times and under reasonable circumstances, it being
agreed that any examination or original documents will be at each
party's premises, with copies thereof to be provided to each
party and/or its representatives upon request.
Cooperation; Consents. Prior to the Closing, each party shall
cooperate with the other party to the end that the party shall
(i) in a timely manner make all necessary filings with, and
conduct negotiations with, all authorities and other persons the
consent or approval of which, or the license or permit from which
is required for the consummation of the transactions contemplated
by this Agreement and (ii) provide to each other party such
information as the other party may reasonably request in order to
enable it to prepare such filings and to conduct such
negotiations.
Conduct of Business. Subject to the provisions hereof, from the
date hereof through the Closing, the Company and GML shall
conduct its respective businesses in the ordinary course and in
such a manner so that the representations and warranties
contained herein shall continue to be true and correct in all
material respects during the period from the date hereof and the
date of the Closing and as of the date of the Closing as if made
at and as of the Closing.
Litigation. From the date hereof through the Closing, each
party hereto shall promptly notify the other party of any
lawsuits, claims, proceedings or investigations which after the
date hereof are threatened or commenced against such party or any
of its affiliates or any officer, director, employee, consultant,
agent or shareholder thereof, in their capacities as such, which,
if decided adversely, could reasonably be expected to have a
material adverse effect upon the condition (financial or
otherwise), assets, liabilities, business, operations or
prospects of such party or any of its subsidiaries.
Notice of Default. From the date hereof through the Closing,
each party hereto shall give to the other parties prompt prior
written notice of the occurrence or existence of any event,
condition or circumstance occurring which would constitute a
violation or breach of this Agreement by such party or which
would render inaccurate in any material respect any of such
party's representations or warranties herein.
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants of the parties
hereto contained herein shall survive the consummation of the
transactions contemplated by this Agreement and remain in full
force and effect for a period of one year from the Closing.
CONDITIONS TO CLOSING
Conditions to Obligation of GML. The obligations of GML under
this Agreement shall be subject to each of the following
conditions precedent:
Representations and Warranties of Company to be True. The
representations and warranties of the Company herein contained
shall be true, accurate and complete at the Closing with the same
effect as though made at such time, except as to effect of
transactions, payments and liabilities incurred in the ordinary
course of business since the date hereof. The Company shall have
performed in all material respects all obligations and complied
in all material respects, with all covenants and conditions
required by this Agreement to be performed or complied with by it
at or prior to the Closing.
No Legal Proceedings. No injunction or restraining order shall
be in effect prohibiting this Agreement, and no action or
proceeding shall have been instituted and remain pending as of
the Closing to restrain or prohibit the transactions contemplated
by this Agreement.
Statutory Requirements. All statutory requirements for the valid
consummation by the Company of the transactions contemplated by
this Agreement shall have been fulfilled. All authorizations,
consents and approvals of all governments and other persons
required to be obtained in order to permit consummation by the
Company of the transactions contemplated by this Agreement shall
have been obtained.
Registration Rights Agreement. The Company and GML shall have
entered into a Registration Rights Agreement in the form attached
hereto as Exhibit A.
Assets. The Company shall have no assets as of the Closing..
No Liabilities. There shall be no liabilities of the Company as
of the Closing of any nature whatsoever.
Officers. Upon the Closing, the Board of Directors of the
Company shall have appointed the following persons to the offices
set forth opposite his/her name:
Name Office
Trading. The Company's Common Stock shall be trading on the OTC
Bulletin Board.
Certificate. The Company shall have delivered to GML an
officer's certificate substantially in the form of Exhibit 7.1(h)
as to the satisfaction of the foregoing conditions.
Conditions to Obligations of the Company. The obligation of the
Company under this Agreement shall be subject to the following
conditions precedent:
Representations and Warranties of GML to be True. The
representations and warranties of GML herein contained shall be
true, accurate and complete in all material respects at the
Closing with the same effect as though made at such time, except
as to effect of transactions, payments and liabilities incurred
in the ordinary course of business since the date hereof. GML
shall have performed in all material respects all obligations and
complied in all material respects, with all covenants and
conditions required by this Agreement to be performed or complied
with by it prior to the Closing.
No Legal Proceedings. No injunction or restraining order shall
be in effect prohibiting this Agreement, and no action or
proceeding shall have been instituted and, at what would
otherwise have been the Closing, remain pending before the court
to restrain or prohibit the transactions contemplated by this
Agreement.
Statutory Requirements. All statutory requirements for the valid
consummation by GML of the transactions contemplated by this
Agreement shall have been fulfilled. All authorization, consents
and approvals of all governments and other persons required to be
obtained in order to permit consummation by GML of the
transactions contemplated by this Agreement shall have been
obtained.
Certificate. GML shall have delivered to the Company an
officer's certificate substantially in the form of Exhibit
7.2(d), as to the satisfaction of the foregoing conditions.
INDEMNIFICATION/ESCROW
Indemnification by GML. Provided the Company's claim therefor is
instituted by written notice within the time period specified in
Section 6 hereof, GML shall indemnify, defend and hold harmless
and in all respects make whole the Company from and against any
and all damages, judgments and payments ("Losses") which may be
incurred or suffered by the Company or to which it may be
subject, which may arise out of or result from any breach of or
exist in violation of any representation, warranty, covenant or
agreement of GML contained in this Agreement. Notwithstanding
the foregoing, GML shall have no liability to the Company
hereunder until such time as the aggregate amount of Losses
exceeds U.S.$5,000 and then only for the amounts, if any, in
excess thereof. Payment of the indemnity hereunder shall be made
by the return to the Company of Company Shares valued at
U.S.$______ per Share.
Indemnification by the Company and the Stockholders. Provided
the claim therefor is instituted by written notice within the
time period specified in Section 6 hereof, the Company and the
Shareholders shall jointly indemnify, defend and hold harmless
and in all respect make whole GML from and against any Losses
which may be incurred or suffered by any such party or to which
any such party may be subject, which may arise out of or result
from any breach of or exist in violation of any representation,
warranty, covenant or agreement of the Company contained in this
Agreement or with respect to any liability of the Company and
Stockholders as of the Closing. Notwithstanding the foregoing,
the Company and the Stockholders shall have no liability to GML
hereunder until such time as the aggregate amount of Losses
exceeds U.S.$5,000 and then only for the amounts in excess, if
any, in excess thereof. Notwithstanding the foregoing, if, as a
result of a breach of representation by the Company or the
Stockholders hereunder, GML and or its designees receives Company
shares representing less than 89% of the outstanding capital
stock of the Company on a fully diluted basis then the Company
shall issue such additional Company Shares so that GML and/or its
designees shall have received 89% of the outstanding capital (on
a fully diluted basis) as of the Closing.
Computation of Losses. For purposes of calculating any Losses
suffered by an indemnified party pursuant to Sections 8.1 or 8.2
hereof, the amount of the Losses suffered by the indemnified
party shall be the net amount of damage so suffered after giving
effect to any insurance proceeds recovered with respect to such
matter and to any tax benefits attributable to such damage and
actually derived therefrom in the same year or in a subsequent
taxable period.
Notice to Indemnifying Party. If any party (the "Indemnified
Party") receives notice of any claim or other commencement of any
action or proceeding with respect to which any other party (or
parties) (the "Indemnifying Party") is obligated to provide
indemnification pursuant to Sections 8.1 or 8.2 hereof, the
Indemnified Party shall promptly give the Indemnifying Party
written notice thereof which notice shall specify, if known, the
amount or an estimate of the amount of the Losses arising
therefrom. Such notice shall be a condition precedent to any
liability of the Indemnifying Party for indemnification
hereunder. The Indemnified Party shall not settle or compromise
any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably
withheld or delayed) unless suit shall have been instituted
against it and the Indemnifying Party shall not have taken
control of such suit after notification thereof as provided in
Section 8.4 hereof.
Defense by Indemnifying Party. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out
of any claim or legal proceeding by a person who is not a party
to this Agreement, the Indemnifying Party at its sole cost and
expense shall assume the defense of any such claim or legal
proceeding using counsel of its choice (subject to the approval
of the Indemnified Party, which approval may not be unreasonably
withheld or delayed). The Indemnified Party shall be entitled to
participate in the defense of any such action, with its counsel
and at its own expense; provided, however, that if the
Indemnified Party, in its sole reasonable discretion, determines
that there exists a conflict of interest between the Indemnifying
Party (or any constituent party thereof) and the Indemnified
Party or that the Indemnifying Party does not have sufficient
financial resources to fully defend the proceeding or to pay the
claim or judgment, the Indemnified Party (or any constituent
party thereof) shall have the right to engage separate counsel,
the reasonable costs and expenses of which shall be paid by the
Indemnifying Party, but in no event shall the Indemnifying Party
be liable for the costs and expenses of more than one such
separate counsel unless with the prior written consent of the
Indemnifying Party. If the Indemnifying Party does not assume
the defense of any such claim or litigation resulting therefrom,
the Indemnified Party may defend against such claim or
litigation, after giving notice of the same to the Indemnifying
Party, on such terms as the Indemnified Party may deem
appropriate, and the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with
its counsel and at its own expense.
Escrow of Company Shares. At the Closing, the Company shall
deliver a certificate evidencing shares representing 2% of
the issued and outstanding shares of the Company's Common Stock
on a fully diluted basis (the "Escrow Shares") to Loeb & Loeb LLP
to be held in escrow and applied in accordance with the
provisions of this Section 8.6. Loeb & Loeb LLP is hereby
authorized and instructed to deliver the Escrow Shares to GML at
such time as the Company enters into an agreement with a third
party for financial public relations services. The parties
acknowledge that Loeb & Loeb LLP presently represents GML and
will represent the Company after the Closing and hereby consent
to having Loeb & Loeb LLP act as escrow agent hereunder and agree
to indemnify and hold harmless Loeb & Loeb LLP from any
liability, loss or damage suffered or incurred by Loeb & Loeb LLP
acting hereunder.
COVENANTS AFTER THE CLOSING
As soon as reasonably practicable after the Closing, GML will, at
is expense, cause the Company to organize a wholly subsidiary
(the "Subsidiary") to manufacture and sell electronic and digital
organizers under the "Amax" name. GML will arrange for the
establishment of a new business under the Subsidiary relating to
electronic and digital organizers including recruiting employees,
establishing manufacturing facilities, sourcing of raw materials
and registering the Amax trademark in relevant territories, it
being understood, however, that it is contemplated that financing
(debt, equity or a combination thereof) will be undertaken in
connection with such business.
MISCELLANEOUS
Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties
will execute and deliver to the others such documents and take
such action as the other party may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
Expenses of Sale. Except as otherwise provided herein, each
party shall bear its own direct and indirect expenses incurred in
connection with the negotiation and preparation of this Agreement
and the consummation and performance of the transactions
contemplated herein, except that the Stockholders shall be
resopnsible for any expenses of the Company. Without limitation,
such expenses shall include the fees and expenses of all
attorneys, brokers, investment bankers, accountants, agents and
finders and other professionals incurred in connection herewith,
acting on behalf of such party.
Use and Confidentiality. All of the information, records, books,
and data to which the parties are given access as set forth
herein shall be used by the parties solely for the purpose of
confirming the representations and warranties set forth herein.
Subject to any obligation to comply with (i) any law (ii) any
rule or regulation of any authority or securities exchange of
(iii) any subpoena or other legal process to make information
available to the persons entitled thereto, whether or not the
transactions contemplated herein shall be concluded, all
information obtained by any party about the other, and all of the
terms and conditions of this Agreement, shall be kept in
confidence by each party, and each party shall cause its
shareholders, directors, trustees, officers, employees, agents
and attorneys to hold such information confidential. Such
confidentiality shall be maintained to the same degree as such
party maintains its own confidential information and shall be
maintained until such time, if any, as any such data or
information either is, or becomes, published or a matter of
public knowledge; provided, however, that the foregoing shall not
apply to any information obtained by either party through its own
independent investigations of the other party or received by such
party from a third party not under any obligation to keep such
information confidential nor to any information obtained by such
party which is generally known to others engaged in the trade or
business; and provided, further, that, from and after the
Closing, such party shall be under no obligation to maintain
confidential any such information concerning the other party. If
this Agreement shall be terminated for any reason, each party
shall return or cause to be returned to the other all written
data, information, files, records and copies of documents,
worksheets and other materials obtained by such party in
connection with the transactions contemplated herein.
Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier
or other means of personal service (including by means of a
nationally recognized courier service or professional messenger
service), or sent by telex or telecopy or mailed first class,
postage prepaid, by certified mail, return receipt requested, or
by Federal Express or other reputable overnight delivery service,
in all cases, addressed to:
To GML:
Gain Master Limited
Jipfa Building
Main Street
P.O. Box 181
Road Town Tortola
British Virgin Islands
Attn: President
With a copy to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, California 90017
Tel: (213) 688-3698
Fax: (213) 688-3460
To the Company or the Stockholders:
Blencathia Acquisition Corp.
1404 R Street N.W.
Washington D.C. 20009
Attn: James R. Cassidy
Tel: (202) 387-5400
Fax: (202)_________
All notices, requests and other communications shall be deemed
given on the date of actual receipt or delivery as evidenced by
written receipt, acknowledgment or other evidence of actual
receipt or delivery to the address if sent by courier or other
means of personal service. In case of service by telecopy, the
notices, requests and other communications shall be deemed to
have been made on the date of dispatch provided that a copy of
such notice, request or other communication shall be personally
delivered or sent by registered or certified mail, in the manner
set forth above, within three (3) business days thereafter.
Either party hereto may from time to time by notice in writing
served as set forth above designate a different address or a
different or additional person to which all such notices or
communications thereafter are to be given.
Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be
enforceable by the respective heirs, beneficiaries, personal and
legal representatives, successors and assigns of the parties
hereto; provided, however, that no assignment or transfer by any
party of this Agreement or its rights or obligations hereunder
shall occur without the prior written consent of the other
parties hereto.
Entire Agreement, Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to
herein or delivered pursuant hereto, which form a part hereof,
contains the entire understanding of the parties with respect to
this subject matter. There are no restrictions, agreements,
promises, warranties, covenants or undertakings other than those
expressly set forth herein or therein. This Agreement supersedes
all prior agreements and understandings between the parties with
respect to its subject matter. This Agreement may be amended
only by a written instrument duly executed by the parties or
their respective permitted successors or assigns.
Headings, Etc. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretations of this
Agreement.
Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person, persons, entity or
entities may require.
Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
Governing Law. This Agreement shall be governed by the laws of
the State of California.
Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement or because of any
dispute, breach, default or claim hereunder, the successful or
prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be
entitled.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto as of the date first above
written.
Blencathia Acquisition Corp.
By:
Name:
Title:
Gain Master Limited
By:
Name:
Title:
Pierce Mill Associates
By:
Name:
Title:
TPG Capital Corporation
By:
Name:
Title:
SCHEDULE 3.4
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE
SECURITIES ACT OF 1933 (THE "ACT"). THE SECURITIES EVIDENCED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED OR
SOLD IN ANY TRANSACTION SUBJECT TO THE REGISTRATION REQUIREMENTS
OF THE ACT OR APPLICABLE STATE LAW UNLESS SUCH SECURITIES ARE
REGISTERED UNDER THE ACT OR APPLICABLE STATE LAW OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT OR APPLICABLE STATE
LAW IS AVAILABLE.
Law Office of Shawn F. Hackman, a P.C.
3360 West Sahara Avenue, Suite 200
Las Vegas, Nevada 89102
(702) 732-2253
November 19, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: MERCURY CAPITAL CORP. - Form S-4
Dear Sir/Madam:
We have acted as counsel to MERCURY CAPITAL CORP., a Colorado
corporation ("Company"), in connection with its Registration
Statement on Form S-4 relating to the registration of 10,440,000
shares of its common stock ("Shares"), at a maximum offering
price of $0.10 per Share.
In our representation we have examined such documents, corporate
records, and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including, but not
limited to, the Articles of Incorporation and Bylaws of the
Company.
Based upon the foregoing, it is our opinion that the Company is
duly organized and validly existing as a corporation under the
laws of the State of Colorado, and that the Shares, when issued
and sold, will be validly issued, fully paid, and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Shawn F. Hackman
Shawn F.Hackman, Esq.
