UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
GOLDCREST CORPORATION
---------------------
(Exact name of registrant as specified in its charter)
Delaware 33 - 31528 95-4590541
-------- ---------- ----------
(State or Other Jurisdiction of SEC File No. (IRS Employer
Incorporation or Organization) Identification No.)
1621 Altivo Way
Los Angeles, California 90026
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(Address of principal executive offices)
Registrant's telephone number, including area code:
(818) 980-0929
Securities to be registered pursuant to
Section 12(b) of the Act:
COMMON STOCK PAR VALUE $.001
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(Title of class)
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CROSS-REFERENCE SHEET
BETWEEN FORM 10 SB FILING
AND ITEMS OF FORM 10 SB
Item Item Caption Location in Filing
No.
1. Description of Business The Company; Business
2. Management's Discussion and Analysis Financial Information
or Plan of Operation
3. Description of Property Property
4. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management
5. Directors, Executive Officers, Management
Promoters and Control Persons
6. Executive Compensation Executive Compensation
7. Certain Relationships and Related Certain Relationships with
Transactions Management
8. Legal Proceedings Legal Proceedings
9. Market for Common Equity and Related Market for Common Stock
Stockholder Matters
10. Recent Sales of Unregistered Securities Recent Sales of Unregistered
Securities
11. Description of Securities Description of Capital Stock
12. Indemnification of Directors and Officers Indemnification of Directors
and Officers
13. Financial Statements Financial Statements
14. Changes in and Disagreements with Financial Information
Accountants and Financial Disclosure
15. Financial Statements and Exhibits Financial Statements; Exhibits
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TABLE OF CONTENTS
Page No.
The Company 1
Business 1
Executive Compensation 6
Property 7
Management 7
Certain Relationships with Management 8
Principal Stockholders 8
Description of Capital Stock 9
Market for Common Stock 9
Recent Sales of Unregistered Securities 9
Legal Proceedings 10
Indemnification 10
Financial Information 11
Financial Statements 11
Signatures 12
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THE COMPANY
Goldcrest Corporation (the "Company"), is a Delaware corporation organized
on April 27, 1989. Since organization, the Company's operations have been
limited to capital formation.
The Company's business purpose is to acquire a business opportunity which
Management believes offers potential long-term growth. The Company will seek to
acquire majority interests in an existing business or purchase assets which it
will use to establish a business.
The Company does not intend to become involved in any business which would
require it to register as a securities broker-dealer under the Securities
Exchange Act of 1934, as an investment advisor under the Investment Advisor's
Act of 1940, or as an investment company under the Investment Company Act of
1940. Except as set forth herein under BUSINESS - Forms of Combination,
Management's discretion is otherwise unrestricted and it may participate in any
business which may, in the opinion of Management, meet the business objectives
discussed herein. (See "BUSINESS.")
Management believes that business opportunities will become available to
the Company due primarily to its status as a publicly-held company, and its
flexibility in structuring and participating in business opportunities. The
Company has no agreement or understanding to acquire or participate in any
business opportunity, nor does it currently have any opportunity under
investigation. Decisions as to which business opportunity to pursue will be made
by Management of the Company, which will in all probability act without the
consent, vote, or approval of the Company's stockholders. (See "BUSINESS".)
The Company's offices are located at 1621 Altivo Way, Los Angeles,
California 90026. Its telephone number is (818) 980-0929 and telecopier number
is (818) 980-8746.
BUSINESS
Introduction
The Company is a development stage enterprise which proposes to engage in
the active search for a business combination or merger opportunity which, in the
opinion of Management, will enhance stockholder value.
Management believes that business opportunities will become available to
the Company due primarily to its status as a publicly-held company, and its
flexibility in structuring and participating in business opportunities. The
proposed corporate structure of the Company has not been the subject of a
feasibility study or market research nor is Management aware of statistical data
which would support the perceived benefits of a merger or acquisition
transaction for target company stockholders. Therefore, there can be no
assurance that a market exists for such a corporate vehicle. At present, there
are no plans, agreements, understandings, or commitments to acquire or
participate in any business opportunity nor has the Company solicited, received
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or considered any proposals regarding a possible combination or merger. Further,
there can be no assurance that the Company will be successful in locating a
suitable entity for a merger or that the Company will be able to consummate a
combination.
Forms of Combination
The manner in which the Company participates in a business opportunity is
predicated on the nature of the opportunity, the respective needs and desires of
the Company and the promoters of the combination, and the relative negotiating
strength of the Company and such promoters. It is likely that a combination will
take the form of a merger, consolidation, asset acquisition or some other form
of combination. The "target" entities may include private companies,
partnerships, or sole proprietorships.
In transacting a combination, a significant amount of additional shares of
the Company's Common Stock may be issued. The Company is authorized to issue
50,000,000 shares of Common Stock of which 3,000,000 shares are issued and
outstanding. In the event that a substantial number of shares are issued
pursuant to a transaction, present Management and current stockholders may not
have control of a majority of the voting shares of the Company. Further, as part
of such a transaction, the Company's Management may be requested to relinquish
its positions and new directors and officers may be appointed without a vote by
stockholders. Moreover, no assurance can be given as to the experience or
qualifications of such persons either in the operation of the activities of the
Company or in the operation of the business, asset or property being combined.
The Company does not propose to restrict its search for combination
opportunities to any particular industry, and may, therefore, engage in
essentially any business. Management contemplates that the Company will seek to
merge with or acquire a target company with either assets or earnings, or both.
The Company has not established a specific level of earnings or assets below
which it would not consider a merger or acquisition with a target company.
The Company intends to obtain, if possible, audited financial statements
for the entity which it acquires. It is expected that audited financials will
help Management to understand the financial position of the company it acquires
and will also help the Company in complying with the financial reporting
requirements of the Securities Exchange Act of 1934, if the acquisition would
fall within the ambit of such law.
It is anticipated that business opportunities will become available to the
Company from various sources, including its Directors and Officers, professional
advisors such as attorneys and accountants, securities broker-dealers, venture
capitalists, members of the financial community, and others who may present
unsolicited proposals. The Company has no plans, understandings, agreements, or
commitments with any individuals other than its Directors and Officers to act as
finders of opportunities for the Company.
Plan of Acquisition
The Directors and Officers of the Company will undertake the analysis of
business opportunities. Management will have unrestricted flexibility in
seeking, analyzing and participating in business opportunities. In its efforts,
Management intends to follow a systematic approach to identify its most suitable
acquisition candidates.
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Management intends to concentrate on identifying any number of preliminary
prospects which may be brought to its attention through present associations or
unsolicited. Management will then apply certain broad criteria to the
preliminary prospects. Essentially, this will entail a determination by
Management whether or not the prospects are in an industry which appears
promising and whether or not the prospects themselves have potential within
their own industries.
During this initial screening process, Management will ask and receive
answers to questions framed to provide appropriate threshold information,
depending upon the nature of the prospect's business. Such evaluation is not
expected to be an in-depth analysis of the target company's operations, although
it will encompass a look at most, if not all, of the same areas to be examined
once, if and when, a target company is selected for an in-depth review. For
example, at this stage, Management may look at a prospect's unaudited balance
sheet. However, when a prospect is selected for an in-depth review, Management
will review the prospect's audited financial statements. Nevertheless,
Management anticipates this evaluation will entail a broad overview of the
business of the target company and should allow a significant percentage of
preliminary prospects to be eliminated from further consideration.
Management will conduct an in depth analysis of five major areas of concern
with respect to the target company as follows:
1. Managerial and Financial Stability. Management will review audited
financial statements of the target company and will also research the background
of each director and member of management of the target company in order to
discern whether the stability of the target company is such that further
negotiations are warranted.
2. Industry Status. Management will research the potential of the target
company's industry. The concern here is whether the industry is in a growth,
stagnant or declining stage.
3. Production of Product. If the target company is a manufacturer,
Management will review whether it has the necessary resources or access to the
necessary resources and supplies to produce a quality product in a timely
manner.
4. Acceptance and Potential of Product. Management will review the
acceptance of the target company's product in the market place. Management will
also determine whether or not there is potential for the product to be workable
and to fulfill its intended purpose.
5. Development of Target Company. Management will review the target
company's state of development (examples: start-up stage, established company,
etc.).
The foregoing is an outline of the areas of concern which most often arise
and merit careful scrutiny by Management. Because of the possible varieties of
target companies which may come to the attention of Management, additional
factors will most likely be considered in any given analysis. Also, the
procedures used in such a review are expected to vary depending on the target
company being analyzed. Management may select a target company for further
negotiations even though the target may not receive a favorable evaluation in
one or more of the five primary areas of concern.
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Management expects to enter into further negotiations with various target
company managements following successful conclusion of the initial financial and
evaluation studies. Negotiations with target company management will be expected
to focus on the percentage of the Company which target company stockholders
would acquire in exchange for their shareholdings in the target company.
Depending on, amongst other things, the target company's assets and liabilities.
The Company's stockholders will, in all likelihood, hold a lesser
percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company acquires a target company with substantial assets. 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
stockholders.
Management does not intend to force an active participation in the affairs
of the acquired company. However, Management will evaluate any opportunity
offered for such participation if such participation was a necessary ingredient
of a merger. It is not the intention of Management to seek such participation.
Management will in all likelihood be requested to relinquish any voting control
it may exercise prior to a merger to the present management of the business
which is acquired.
Current Management would clearly not control the surviving company
following such a dilution and will not be in a position to demand an active
participation and therefore would not participate unless invited to do so.
The final stage of any merger or acquisition to be effected by the Company
will require the Company to retain the services of counsel and a qualified
accounting firm in order to properly effect the merger or acquisition. The
Company may be expected to incur significant legal fees and accounting costs
during the final stages of a merger or acquisition. Management intends to retain
legal and accounting services only on an as-needed basis in the latter stages of
a proposed merger or acquisition.
The interest of Management is to increase stockholder value. If successful
all the stockholders, including Management, will benefit. Management's objective
is to issue restricted shares of the Company to acquire a private company which
is a going concern. If Management is requested to sell a portion of its shares,
give away a portion of its shares or cancel a portion of its shares to obtain
such a merger, then Management will face a conflict of interest. Presently,
Management has no plan on how to deal with this conflict and believes no general
plan can be formulated at this time; this may adversely affect the Company's
ability to successfully conclude a subsequent merger or acquisition. Conflict
resolutions will otherwise be handled on a case-by-case basis. If the conflict
cannot be resolved, litigation could therefore occur, which would likely damage
the Company's prospects.
There are no corporate policies, board resolutions or bylaws which deal
with conflicts of interest with respect to the sale of shares of the company's
shares by Management and none are anticipated to be placed into effect. (See
"Conflicts of Interest.")
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Management cannot commit at this time as to whether a stockholder will have
the right to vote to complete a merger/acquisition as the nature of the
transaction, and the needs of the candidate will dictate the legal requirements
of the transaction.
In connection with the acquisition of a private business, the Company may
not obtain an independent appraisal of the value of the acquired business. Such
omission by the Company could result in an overvaluation or other related errors
which then could adversely effect the price paid by the Company for the private
business. It is probable that an existing stockholder's future share values
would be adversely effected by factors including but not limited to excess
dilution, reduced dividends, if any, and the lack of a market for his or her
shares.
Should a stockholder wish to challenge the Company in Court to reverse a
merger or otherwise assert damages against the Company's Management for neglect
of fiduciary duties in the construction of a merger or acquisition, the legal
remedy available to that stockholder under state corporate law will most likely
be prohibitively expensive and time consuming to the Company.
The Company has in effect no bylaws understandings, agreements or
resolutions which prevent related party transactions. Such bylaws or resolutions
could be changed by Management initiative. No such changes are presently being
considered.
There are no present plans, proposals, or arrangements to sell or issue
additional shares of the Company prior to an acquisition or a merger.
Competition
- -----------
The Company is and will remain an insignificant participant amongst the
firms which engage in mergers with and acquisitions of privately-held entities.
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 lack of working capital resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to its competitors.
Regulation and Taxation
- -----------------------
The Company could be subject to regulation under the Investment Company Act
of 1940 in the event the Company obtains and continues to hold a minority
interest in a number of entities. However, Management intends to seek at most
one or two mergers or acquisitions and Management's plan of operation is based
on the Company obtaining a controlling interest in any merger or acquisition
target company and, accordingly, the Company may be required to discontinue any
prospective merger or acquisition of any company in which a controlling interest
will not be obtained.
The Company could also be required to register under the Investment Company
Act of 1940 in the event the Company comes within the definition of an
Investment Company contained in that Act due to its assets consisting
principally of shareholdings held in a number of subsidiaries. Management
intends to seek at most one or two mergers or acquisitions, which transactions
will result in the Company holding only majority interest in subsidiaries.
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Any securities which the Company acquires in exchange for its Common Stock
will be "restricted securities" within the meaning of the Securities Act of 1933
(the "1933 Act"). If the Company elected to resell such securities, such sale
could not proceed unless the Securities and Exchange Commission had declared a
Registration Statement effective or an exemption from registration was
available. Section 4(2) of the 1933 Act, which exempts sales of securities not
involving a public offering, would in all likelihood be available since it is
likely that any such sale would be a block sale to a private investor to raise
additional capital. Although Management's plan of operation does not contemplate
resale of securities acquired, in the event such a sale were necessary, the
Company would be required to comply with the provisions of the 1933 Act.
As a condition of a merger or acquisition, it is possible that the target
company's management may request registration of the Company's Common Stock to
be received by target company stockholders. In such event, the Company could
incur significant registration costs. Management intends to require the target
company to bear most, if not all, of the cost of any such registration.
Alternatively, the Company may issue "restricted securities" to a prospective
target company, which securities may be subsequently registered for sale or sold
in accordance with Rule 144 of the Securities Act of 1933.
The Company intends to structure a merger or acquisition in such a manner
as to minimize federal and state tax consequences to the Company and any target
company.
In the course of a merger or acquisition 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 of the reorganization. This generally requires the company to acquire at
least 80% of the combined voting power of the acquired company plus at least 80%
of the total number of shares of all other classes of stock in exchange for the
voting stock of the acquiring company.
While the Company expects to structure any merger or acquisition in a
manner which will minimize federal and state tax consequences to both the
Company and the target company, there is no assurance that such a business
combination will meet the statutory requirements of a re-organization 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. Further, there is no assurance that federal and state tax laws may not
be amended in the foreseeable future to preclude the Company, as well as others,
from availing itself of the tax-free treatment presently afforded business
entities engaged in mergers and acquisitions.
As of the date hereof no arrangements for merger or acquisition have been
made.
Executive Compensation
Pursuant to an oral agreement, the Company's sole Director and Officer does
not receive any remuneration for his services but will be compensated for
expenses, if any, incurred on behalf of the Company. Future compensation to the
Directors and or Officers will be decided by the Board of Directors. Such
transactions will not be conducted at arm's length. (See "Property" and "Certain
Transactions with Management.")
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Employees
The Company is a development stage operation and currently has no employees
other than its sole Director and Officer. The need for employees and their
availability will be addressed as circumstances warrant.
Property
The Company utilizes the offices of its sole Director and Officer, Patrick
C. Brooks, on a month-to-month basis. With effect from July 1, 1999, the Company
pays Mr. Brooks $500 per month for this usage, which includes the use of
telephone, telecopier, computers, office fixtures and fittings, and secretarial
services. Management does not foresee the need for separate offices until
business circumstances dictate otherwise.
MANAGEMENT
The following sets forth information concerning the Directors and Officers
of the Company:
Name Age Positions
---- --- ---------
Patrick C. Brooks 52 Director, President, Chief Financial
Officer and Secretary
The following sets forth certain biographical information pertaining to the
Directors and Officers of the Company:
Patrick C. Brooks
Mr. Brooks has served as the Company's sole member of the Board of
Directors and as its President, Chief Financial Officer and Secretary since
1989.
Formerly, Mr. Brooks served as Chairman and President of Bio-Dental
Technologies Corporation, a publicly-held company traded on the NASDAQ Stock
Exchange. Additionally, he served as joint principal and owner of Thunderbird
Securities Corporation and Meridian Securities, Inc., both companies being
securities-broker dealers licensed by the Securities and Exchange Commission and
the N.A.S.D.
From 1987 to 1990, Mr. Brooks was the promoter and sponsor of three
publicly-held Business Investment Companies. In the fifteen years prior to 1987
he served in the casualty insurance industry in successively advancing
underwriting positions with major European and American insurance companies.
From August 1997 to June 1999, Mr. Brooks has served of President and
Director of Reliance Resources, Inc., a publicly-held corporation. Since August
1997 he has served as President and Director of Fountain Colony Ventures Inc., a
publicly-held corporation. Since November 1997, Mr. Brooks has served as a
Director and President of Laurel Dental Plan, Inc., a dental HMO based in
southern California. Additionally, he serves as a director and officer of
several privately-held corporations.
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Conflicts of Interest
The Directors and Officers of the Company are not required to devote their
full-time efforts to the business of the Company. They are engaged in and may
continue to be engaged in other business pursuits outside the Company, and
potential conflicts may arise regarding, amongst other things, time, effort and
corporate opportunities. The Company's sole Director and Officer, Mr. Brooks
serves as a Director and full-time President of a privately-held dental HMO.
Therefore, the time he can devote to the Company is necessarily limited. He
expects to devote not more than 24 hours per month to the Company's business.
Mr. Brooks also serves as sole Officer and Director of Fountain Colony Ventures
Inc., a publicly-held development stage company which is currently seeking
business opportunities. Accordingly, if Mr. Brooks became aware of a business
opportunity, he may be faced with a question as to which company he may refer
such an opportunity. The Company's Directors and Officers are not obligated to
present any particular business opportunity to the Company. However, Mr. Brooks
has undertaken to submit to the Company any business opportunity submitted to
him in his capacity as a Director or Officer of the Company. Whilst the
Directors and Officers intend to observe their duties as Directors and Officers
and controlling stockholders of the Company, there can be no assurance that in
the event of a conflict of interests, the conflict will be resolved wholly in
favor of the Company to the satisfaction of its stockholders. The Company has
not established policies or procedures for the resolution of current or
potential conflicts of interest between the Company, and its Directors and
Officers. All conflicts will be resolved by Mr. Brooks. Stockholders who believe
that the Company has been harmed by the failure of a Director or Officer to
appropriately resolve any conflict may, subject to applicable rules of civil
procedure, be able to bring a class action or derivative suit to enforce their
rights and the Company's rights.
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company utilizes the offices of its sole Officer and Director, Patrick
C. Brooks, on a month-to-month basis. With effect from July 1, 1999, the Company
pays Mr. Brooks $500 per month for this usage, which includes the use of
telephone, telecopier, computers, office fixtures and fittings, and secretarial
services. This transaction was not conducted at arm's length.
As of the date hereof, the Company accrued liabilities of $17,402 to its
sole Officer and Director in consideration for satisfying Company liabilities to
third parties and accrued rental charges. No interest is being charged at this
time for the provision of this capital. (See "Financial Information.")
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding ownership of the
Company's Common Stock by each person known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock, by each director and by
each executive officer of the Company. All shares are held beneficially and of
record, and each recorded stockholder has sole voting, investment and
dispositive power.
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Shares Beneficially Percentage of
Name Owned Shares Owned
- ---- ----- ------------
Patrick C. Brooks (1) 2,000,000 66
1621 Altivo Way
Los Angeles, CA 90026
Stephanie A. Brooks (2) 500,000 16.7
3159 La Clede Avenue
Los Angeles, CA 90039
Directors and Officers as a Group 2,000,000 66
(1) Director and/or Officer of the Company
(2) Mrs. Stephanie A. Brooks is the former wife of Patrick C. Brooks. Mr.
Brooks disclaims any beneficial interest in the shares held by Mrs. Brooks
DESCRIPTION OF CAPITAL STOCK
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock with a
par value of $.001 per share. There are 3,000,000 shares of Common Stock issued
and outstanding held by 28 stockholders of record.
Holders of Common Stock are entitled to one vote per share in each matter
to be decided by stockholders. The Common Stock has no redemption provisions and
no preemptive rights. Holders of Common Stock are entitled to receive ratably
such dividends, if any, as the Board of Directors may declare from time to time
out of funds legally available thereof. Upon liquidation of the Company, after
provisions for payment of all of the Company's debts and obligations, if any,
the holders of Common Stock may share ratably in the Company's assets. The
outstanding shares of Common Stock are fully paid and nonassessable.
Transfer Agent and Registrar
The Transfer Agent sand Registrar for the Common Stock of the Company is
First American Stock Transfer, Inc. of Phoenix, Arizona.
MARKET FOR COMMON STOCK
There has not been a public market for the Company's securities during the
past five years.
RECENT SALES OF UNREGISTERED SECURITIES
The Company has not made any sales of securities during the past five
years.
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DIVIDENDS
Holders of the shares of Common Stock are entitled to dividends when, as
and if declared by the Board of Directors out of funds legally available
therefor. The Company has not paid any dividends on its Common Stock and intends
to retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
capital requirements and the financial condition of the Company.
REPORTS
The Company will furnish annual audited financial information to its
stockholders and such other interim reports as Management deems appropriate.
LEGAL PROCEEDINGS
The Company knows of no litigation pending, threatened or contemplated, or
unsatisfied judgment against it, or any proceedings in which the Company is a
party. The Company knows of no legal actions pending or threatened or judgment
entered against any officer or director of the Company in his capacity as such.
INDEMNIFICATION
The Directors and Officers of the Company are accountable to the Company as
fiduciaries, which means that such Directors and Officers are required to
exercise good faith and integrity in handling the Company's affairs. A
stockholder may be able to institute legal proceedings on behalf of himself and
all other similarly situated stockholders to recover damages where the Company
has failed or refused to obey the law. Stockholders may, subject to applicable
rules of civil procedure, be able to bring a class action or derivative suit to
enforce their rights, including rights under certain federal and state
securities laws and regulations.
The Company's By-laws provide for the indemnification of Directors and
Officers relating to their activities on behalf of the Company to the fullest
extent permitted by the laws of the state of Delaware.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to officers, directors or persons
controlling the Company, the Company acknowledges that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by an officer, director or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such officer, director or controlling person, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of competent jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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FINANCIAL INFORMATION
Management's Discussion and Analysis of Plan of Operation
Goldcrest Corporation is a Delaware corporation organized on April 27,
1989. The Company has not conducted any operations since incorporation other
than capital formation.
The Company's business purpose is to acquire a business opportunity which
Management believes offers potential long-term growth. The Company will seek to
acquire majority interests in an existing business or purchase assets which it
will use to establish a business.
Between the period mid-1991 and the first quarter of 1999, the Company was,
essentially, inactive. Operations resumed during the second quarter of 1999. As
of the date hereof, the Company has no assets and liabilities of $17,402 owed to
its sole Director and Officer in consideration for satisfying Company
liabilities to third parties and accrued rental charges. No interest is being
charged at this time for the provision of this capital. The Company continues to
experience a lack of working capital and a source for such capital. In these
circumstances, there can be no assurance that the Company will be able to meet
its current and ongoing financial obligations or continue in business. In the
absence of working capital or a source of such funds, Management may recommend
the liquidation of the Company in which event stockholders will loose any value
their investment may have had. Until such an eventuality arises, Management will
continue to use all available resources in its endeavor to successfully complete
a business combination.
The Company does not presently have the funds or a source for funds to
repay its indebtedness. No assurance can be given as to the ultimate source of
the funds which may be used to repay the indebtedness. In the absence of the
ability to repay the indebtedness and in the absence of a satisfactory
restructuring of the indebtedness, the Company would be faced with a potential
default of its indebtedness, which may adversely affect its ability to continue
in business. The continued viability of the Company is therefore predicated on
the continued financial support of Mr. Brooks, of which there is no assurance.
Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure
There has been no change in auditors nor is Management of the Company in
disagreement with its independent auditors regarding any matter of accounting
principles or practices or financial statements disclosures.
FINANCIAL STATEMENTS
See Audited Financial Statements as attached hereto.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
GOLDCREST CORPORATION
Dated: September 28, 1999 By /s/ Patrick C. Brooks
- ------------------------- ------------------------
Patrick C. Brooks
President and Secretary
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GOLDCREST CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
For the Years Ended June 30, 1999, 1998 and 1997
with Independent Auditor's Report
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
For the Years Ended June 30, 1999, 1998 and 1997
Independent Auditor's Report...............................................F-1
Financial Statements:
Balance Sheets.............................................................F-2
Statements of Operations...................................................F-3
Statement of Stockholders' Equity..........................................F-4
Statements of Cash Flows...................................................F-5
Notes to Financial Statements............................................F-6-F-7
<PAGE>
GERALD R. PERLSTEIN
Certified Public Accountant
1260 Beverly Glen Blvd., Suite 106
Los Angeles, CA 90024
Tel. (310) 275-4650 Fax (310) 275-4611
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
GOLDCREST CORPORATION
Los Angeles, California
I have audited the accompanying statements of financial position of GOLDCREST
CORPORATION (a development stage company) as of June 30, 1999, 1998, and 1997
and the related statements of operations, stockholders' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of GOLDCREST CORPORATION (a
development stage company) as of June 30, 1999, 1998 and 1997 and the results of
its operations, stockholders' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Gerald R. Perlstein
- -----------------------
Los Angeles, California
July 12, 1999
F-1
<PAGE>
<TABLE>
<CAPTION>
GOLDCREST CORPORATION
(A Development Stage Company)
BALANCE SHEETS
For the Years Ended June 30, 1999, 1998 and 1997
ASSETS
------
1999 1998 1997
---- ---- ----
Current Assets:
- ---------------
<S> <C> <C> <C>
Cash $ 0 $ 0 $ 0
-------- -------- --------
Total Current Assets 0 0 0
-------- -------- --------
Total Assets 0 0 0
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
- --------------------
Due to Stockholder 16,402 14,652 12,902
-------- -------- --------
Total Liabilities 16,402 14,652 12,902
-------- -------- --------
Stockholders' Equity
- --------------------
Common Stock - 50,000,000 shares
authorized; issued and outstanding
3,000,000 shares at June 30, 1999, 1998, and 1997
@ $.001 par value 3,000 3,000 3,000
Paid-in-capital 9,250 9,250 9,250
Deficit accumulated during the development stage (28,652) (26,902) (25,152)
-------- -------- --------
Total Stockholders' Equity (deficit) (16,402) (14,652) (12,902)
-------- -------- --------
Total Liabilities and Stockholders' Equity $ 0 $ 0 $ 0
======== ======== ========
The accompanying notes are an integral part of these financial statements.
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For The Years Ended June 30, 1999, 1998 and
1997 and for the Period April 27, 1989 (Date of
Inception) to June 30, 1999
Since
1999 1998 1997 Inception
---- ---- ---- ---------
Operating Expenses:
<S> <C> <C> <C> <C>
General and administrative $ 1,750 $ 1,750 $ 1,750 $ 28,652
----------- ----------- ----------- -----------
Total operating Expenses 1,750 1,750 1,750 28,652
----------- ----------- ----------- -----------
Net loss $ (1,750) $ (1,750) $ (1,750) $ (28,652)
=========== =========== =========== ===========
Weighted number of shares
outstanding: 3,000,000 3,000,000 3,000,000 3,000,000
=========== =========== =========== ===========
Net loss per share nil nil nil $ (.01)
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For The Years Ended June 30, 1999, 1998 and
1997 and for the Period April 27, 1989 (Date of
Inception) to June 30, 1999
Accumulated
Deficit
During Total
Common Stock Paid-In- Development Stockholders'
Number Amount Capital Stage Equity
------ ------ ------- ----- ------
<S> <C> <C> <C> <C> <C>
Contributed capital $ 250 $ 250
Shares issued for cash 2,000,000 $ 2,000 2,000
Net loss for period $ (136) (136)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1990 2,000,000 2,000 250 (136) 2,114
Shares issued for cash 1,000,000 1,000 9,000 10,000
Net loss for period (11,816) (11,816)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1991 3,000,000 3,000 9,250 (11,952) 298
Net loss for period (4,350) (4,350)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1992 3,000,000 3,000 9,250 (16,302) (4,052)
Net loss for period (1,800) (1,800)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1993 3,000,000 3,000 9,250 (18,102) (5,852)
Net loss for period (1,800) (1,800)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1994 3,000,000 3,000 9,250 (19,902) (7,652)
Net loss for period (1,750) (1,750)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1995 3,000,000 3,000 9,250 (21,652) (9,402)
Net loss for period (1,750) (1,750)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1996 3,000,000 3,000 9,250 (23,402) (11,152)
Net loss for period (1,750) (1,750)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1997 3,000,000 3,000 9,250 (25,152) (12,902)
Net loss for period (1,750) (1,750)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1998 3,000,000 3,000 9,250 (26,902) (14,652)
Net loss for period (1,750) (1,750)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1999 3,000,000 $ 3,000 $ 9,250 $ (28,652) $ (16,402)
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For The Years Ended June 30, 1999, 1998 and
1997 and for the Period April 27, 1989 (Date of
Inception) to June 30, 1999
Since
1999 1998 1997 Inception
---- ---- ---- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net loss for the period $ (1,750) $ (1,750) $ (1,750) $(28,652)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization 0 0 0 250
Increase in organizational costs 0 0 0 (250)
Increase in due to stockholder 0 0 0 16,402
-------- -------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES
0 0 0 12,250
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
None 0 0 0 0
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
Proceeds from contributed capital 0 0 0 12,000
Net cash provided by financing activities 0 0 0 250
-------- -------- -------- --------
0 0 0 12,250
-------- -------- -------- --------
NET INCREASE (DECREASED) IN CASH
0 0 0 0
CASH BALANCE, BEGINNING OF PERIOD
0 0 0 0
-------- -------- -------- --------
CASH BALANCE, END OF PERIOD 0 0 0 0
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
F-5
</TABLE>
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended June 30, 1999, 1998 and
1997 and for the Period April 27, 1989 (Date
of Inception) to June 30, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
A. Organization and Business:
Goldcrest Corporation (the "Company") was incorporated in the State of
Delaware on April 27, 1989. The Company is an enterprise in the
development stage as defined by Statement No. 7 of the Financial
Accounting Standard Board, and has not engaged in any significant
business other than organizational efforts. The Company intends to
merge with a privately held corporation, desirous of being publicly
traded, without effecting a securities offering of its own, and does
not propose to engage in any business activity prior to this
combination.
B. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
C. Loss Per Share:
Loss per share of common stock is computed using the weighted average
number of common shares outstanding during the periods shown.
D. Income Taxes:
The Company owes no federal income taxes. The Company has a loss carry
forward at June 30, 1999 of $28,652, which expires from 2004 to 2019.
Any loss carry forward incurred prior to a change in control of the
Company may be disallowed.
E. Statement of Cash Flows:
Supplemental disclosure of cash flow information is as follows:
There has been no cash paid for interest or taxes for the period April
27, 1989 (date of inception) to June 30, 1999.
F-6
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS continued
For The Years Ended June 30, 1999, 1998 and
1997 and for the Period April 27, 1989 (Date
of Inception) to June 30, 1999
2. STOCKHOLDERS' EQUITY
--------------------
On September 29, 1989, the Company sold 2,000,000 shares of its $.001 par
value common stock to its President, for par value of $2,000.
On June 18, 1991, the Company issued 1,000,000 shares of its $.001 par
value common stock to its president, in consideration for satisfying
liabilities of $10,000. These shares have subsequently been transferred to
non-related parties.
3. COMMITMENTS
-----------
The Company has no outstanding commitments or obligations, nor is it a
party to any litigation. The Company presently utilizes office space
provided by its President at no cost.
4. RELATED PARTY TRANSACTIONS
--------------------------
Since inception, the Company's President has provided working capital
advances to the Company by the payment of certain expenses totaling
$16,402. For the period from July 1, 1996 through June 30, 1999, these
advances amounted to $5,250.
F-7
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Description
- ----------- -----------
3.1 Articles of Incorporation
3.2 By-laws
4.1 Specimen of Stock Certificate
23.1 Opinion of Experts
CERTIFICATE OF INCORPORATION
OF
GOLDCREST CORPORATION
1. The name of the corporation is:
GOLDCREST CORPORATION
2. The address of its registered office in the State of Delaware is No.
1102 West Street, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is the Colonial Charter Company.
3. The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is fifty million (50,000,000) and the par value of each of
such shares is $.OO1, amounting in the aggregate to fifty thousand dollars
($50,000).
At all elections of directors of the corporation, each stockholder shall be
entitled to as many votes as shall equal the number of votes which (except for
such provision as to cumulative voting) he would be entitled to cast for the
election of directors with respect to his shares of stock multiplied by the
number of directors to be elected by him, and he may cast all of such votes for
a single director or may distribute them among the number to be voted for, or
for any two or more of them as he may see fit.
5. The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Jan. E. Harvey 1427 Sanborn Avenue
Los Angeles, CA 90027
6. The corporation is to have perpetual existence.
7. Elections of directors need not be by written ballot unless the by-laws
of the corporation shall so provide.
<PAGE>
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.
8. The corporation reserves the right to amend, alter, change or repeal any
provision contained in these articles of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
this is my act and deed and the facts herein stated are true, and accordingly
have hereunto set my hand this 24th day of April, 1989.
/s/ Jan E. Harvey
--------------------------------
JAN E. HARVEY, Incorporator
BYLAWS OF
GOLDCREST CORPORATION
ARTICLE 1
Identification
--------------
Section 1.01 Name. The name of this corporation is Goldcrest Corporation.
The Corporation may conduct operations under such other trade names as the Board
of Directors may designate.
Section 1.02 Seal. The Corporation shall be authorized, but not required,
to use a corporate seal, which if used shall be circular in form and contain the
name of the Corporation and the words "Corporate Seal". The corporate seal shall
be affixed by the Secretary upon such instruments or documents as may be deemed
necessary. The presence or absence of such seal on any instrument shall not,
however, affect its character or validity or legal effect in any respect.
Section 1.03 Offices. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware. The Corporation may also
have offices at such other places as the Board of Directors may from time to
time determine or the business of the Corporation may require.
The books of the Corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such place or places
as may be designated from time to time by the Board of Directors.
Section 1.04 Fiscal Year. The fiscal year of the Corporation shall be the
calendar year, unless otherwise established by the Board of Directors.
ARTICLE 2
Capital Stock
-------------
Section 2.01 Consideration for Shares. Except as otherwise permitted by
law, the Capital Stock having par value may be issued for such consideration,
expressed in dollars, not less than the par value thereof, as shall be fixed
from time to time by the Board of Directors. Treasury shares may be disposed of
by the Corporation for such consideration expressed in dollars as may be fixed
from time to time by the Board of Directors.
Except as otherwise permitted by law, Capital Stock without par value may
be issued for such consideration as may be fixed by the Board of Directors, all
of which consideration shall constitute stated capital unless prior to or within
sixty (60) days after issuance the Board of Directors allocates to capital
surplus a portion, but not all, of such consideration.
Section 2.02 Payment for Shares. The consideration for the issuance of
shares may be paid, in whole or in part, in money, in other property, tangible
or intangible, or in labor or services already performed for the Corporation.
<PAGE>
When payment of the consideration for which shares are to be issued shall have
been received by the Corporation, such shares shall be deemed to be fully paid
and nonassessable. Neither promissory notes nor future services shall constitute
payment or part payment for shares of the Corporation. In absence of fraud in
the transaction, the judgment of the Board of Directors as to the value of the
consideration received for shares shall be conclusive. No certificate shall be
issued for any share until the share is fully paid.
Section 2.03 Certificate Representing Shares. The certificates of stock of
the Corporation shall be numbered consecutively and entered in the books of the
Corporation as they are issued. Each holder of the Capital Stock of the
Corporation shall be entitled to a certificate exhibiting the holder's name and
number of shares and signed by the President or a Vice President and the
Secretary of the Corporation certifying the number of shares owned by him in the
Corporation. Where any such certificate is signed by a transfer agent the
signature of either or both of such officers may be facsimile, engraved or
printed. Each certificate shall have noted thereon any restriction on voting or
transferability or any preference or call provision.
ARTICLE 3
Meetings of Shareholders
------------------------
Section 3.01 Place of Meeting. Meetings of the shareholders of the
Corporation shall be held in the City of Los Angeles, State of California, or at
such other place as shall be determined by the Board of Directors.
Section 3.02 Annual Meeting. The annual meeting of the shareholders shall
be held within 90 days after the close of the fiscal year of the Corporation, at
which annual meeting the shareholders shall elect a Board of Directors and
transact such other business as may properly come before the meeting. Failure to
hold the annual meeting within the designated time shall not work a forfeiture
or dissolution of the Corporation. As permitted by the Certificate of
Incorporation and Article 7 of these Bylaws, the shareholders may take action by
consent in lieu of the annual meeting.
Section 3.03 Special Meetings. Special meetings of the shareholders may be
called by the President and shall be called by the Secretary or any other
officer at the request in writing of a majority of the Board of Directors or the
holders of not less than one-tenth (1/10) of all shares entitled to vote at the
meeting. Any written request for a meeting shall state the purpose or purposes
of the proposed meeting and no action other than that specified in the notice
may be considered.
Section 3.04 Notice of Meetings - Waiver. Written notice stating the place,
day, and hour of the meeting, and in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten,
nor more than forty, days before the date of the meeting, either personally or
by mail to each shareholder entitled to vote at such meeting. Waiver by a
shareholder in writing or by telegram of notice of a shareholders' meeting,
signed by him, whether before or after the time of the meeting, shall be
equivalent to the giving of such notice. Attendance by a shareholder, without
objection to the notice, whether in person or by proxy, at a shareholders'
meeting shall constitute a waiver of notice of the meeting.
2
<PAGE>
Section 3.05 Record Date. In determining the shareholders entitled to
notice of and to vote at any annual or special meeting of shareholders, the
stock transfer books of the Corporation shall not be closed, but in lieu thereof
the Board of Directors shall fix a date no less than ten nor more than sixty
days before any such meeting as a record date and only the shareholders whose
names appear on the stock transfer books at the close of business on that date
shall be entitled to notice of and to vote at such meeting, notwithstanding the
transfer of shares thereafter.
Section 3.06 Quorum. A majority of the shares entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of shareholders.
The shareholders present at a duly organized meeting may continue to do business
until adjournment, notwithstanding the withdrawal of a number of shareholders so
that less than a quorum remains. A meeting may be adjourned despite the absence
of a quorum.
Section 3.07 Proxies and Voting. Unless otherwise provided by the
Certificate of Incorporation, each shareholder entitled to notice of and to vote
at a meeting of shareholders shall be entitled to one vote for each share of
Capital Stock standing in his name on the transfer books of the Corporation on
the record date fixed for such meeting. A shareholder may vote either in person
or by proxy executed in writing by the shareholder. No proxy shall be valid
after three years from the date of its execution, unless otherwise provided in
the proxy.
Section 3.08 Shareholder List. The Secretary of the Corporation shall
produce at each meeting of shareholders a list of the shareholders entitled to
notice of and to vote at such meeting.
Section 3.09 Order of Business. Unless otherwise specified by the Chairman
of the Board or the chairman of the meeting, the order of business at the annual
meeting, and as far as practicable, at all other meetings of the shareholders,
shall be (1) calling of roll, (2) proof of due notice of meetings, (3) reading
and disposal of any unapproved minutes, (4) annual reports of officers and
committees, (5) election of directors, (6) unfinished business, (7) new business
and (8) adjournment. The Chairman of the Board shall preside at all meetings of
the shareholders and in his absence the President or his designate.
ARTICLE 4
The Board of Directors
----------------------
Section 4.01 General Powers. The business and affairs of the Corporation
shall be managed by a Board of Directors. The directors shall in all cases act
as a Board and they may adopt such rules and regulations for the conduct of
their meetings and the management of the Corporation, as they may deem proper,
not inconsistent with these Bylaws and the laws of this state.
Section 4.02 Number, Qualifications and Tenure. The number of directors of
the Corporation shall be a maximum of twelve persons. Directors need not be
residents of the State of Delaware or shareholders of the Corporation.
3
<PAGE>
The Board of Directors shall be divided into three classes as nearly equal
in number as possible. The terms of directors elected in 1992 shall expire as of
the annual meeting of shareholders for the years indicated below:
Class I Directors............................................1993
Class II Directors...........................................1994
Class III Directors..........................................1995
Upon expiration of the initial term specified for each class of directors, their
successors shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain or attain, if possible, the equality of the number of directors in
each class, but in no case will a decrease in the number of directors shorten
the term of any incumbent director. If an equality in number is not possible,
the increase or decrease shall be apportioned among the classes in such a way
that the difference in the number of directors in any two classes shall not
exceed one.
Section 4.03 Removal of Directors. Directors may be removed from office at
any time for cause by a majority vote of the shareholders at their annual
meeting, or at a special meeting called for the purpose, and may be removed for
cause at any time by a majority of the Board of Directors at its annual meeting,
or at a special meeting called for the purpose.
Section 4.04 Vacancies. Any vacancies in the Board of Directors for any
reason and any newly created directorships resulting by reason of any increase
in the number of directors shall be filled by the Board of Directors, acting by
a majority of the remaining directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the next election of
the class for which directors have been chosen and until their successors are
elected and qualified.
Section 4.05 Place of Meeting. Meetings of the Board of Directors, annual,
regular, or special, may be held either within or without the State of Delaware
at such place as shall be designated by the Board of Directors and stated in the
notice of the meeting.
Section 4.06 Annual and Regular Meetings. Subject to the authority of the
Board to take action by consent as permitted by the Certificate of Incorporation
immediately after the annual meeting of the shareholders, the Board of Directors
shall meet each year for the purpose of organization, election of officers, and
consideration of any other business that may properly be brought before the
meeting. Regular meetings shall be held at such time and place as the Board of
Directors may determine. No notice of any kind to either old or new members of
the Board of Directors for the annual meeting or any regular meeting shall be
required.
Section 4.07 Special Meetings Special meetings of the Board of Directors
may be held upon notice by letter, telegram, cable, or radiogram, delivered for
transmission not later than during the third day immediately preceding the day
for the meeting, or by word of mouth, telephone, or radiophone received not
later than during the second day immediately preceding the day for the meeting,
upon the call of a majority of the Directors, the Chairman of the Board, the
President or the Secretary of the Corporation. Special meetings shall be called
by the President, any Vice President or the Secretary in a like manner upon the
written request of a majority of the Directors. Attendance in person at a
special meeting without objection to the notice shall constitute a waiver of
notice of the meeting. Notice of any meeting of the Board of Directors may be
4
<PAGE>
waived orally if confirmed in writing or by telegram signed by the person
entitled to the notice, whether before or after the time of the meeting. Neither
the business to be transacted at, nor the purpose of, any meeting of the Board
of Directors need be specified in the notice or waiver of notice of the meeting.
Section 4.08 Quorum and Voting. A majority of the Board of Directors shall
constitute a quorum for the transaction of business. The act 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 unless the act of a greater number is required by
these Bylaws or by the law.
Section 4.09 Telephone Conferences. Members of the Board of Directors, or
any committee designated by the Board, may participate in a meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this subsection shall
constitute presence in person at such meeting.
Section 4.10 Chairman of the Board. At its annual organization meeting, the
Board of Directors shall elect by vote of a majority of the entire Board a
Chairman of the Board who shall preside at all meetings of the Board.
Section 4.11 Committees. The Board of Directors, by resolution adopted by a
majority of the Directors, may designate and appoint an Executive Committee or
other committees from its members and may delegate to such Committee or
committees such authority as is consistent with these Bylaws and permitted by
law.
ARTICLE 5
The Officers
------------
Section 5.01 Officers. The officers of the Corporation shall consist of a
President and Secretary and, as deemed appropriate by the Board of Directors,
one or more Vice Presidents, Assistant Secretaries, Treasurers, Assistant
Treasurers, and such other officers and assistant officers and agents as may be
deemed necessary by the Board of Directors. Any two or more offices may be held
by the same person. Officers need not be Directors or shareholders of the
Corporation.
Section 5.02 Vacancies. Vacancies occurring in any office shall be filled
by the Board of Directors at any regular or special meeting.
Section 5.03 The President. The President shall be the chief executive
officer and have active executive management and supervision of the operations
of the Corporation. He shall perform such duties as these Bylaws provide or the
Board of Directors may prescribe or his capacity as chief executive officer by
custom may provide.
Section 5.04 The Vice President. The Vice President or Vice Presidents, in
the order designated by the Board of Directors, shall be vested with all the
executive powers and required to perform all the duties of that portion or area
5
<PAGE>
of responsibility of the President in the event the President is not able to
perform his functions and shall perform such other duties as may be prescribed
by the Board of Directors. Each Vice President shall report to the President or
his delegate who shall be responsible for the Vice President's actions.
Section 5.05 The Secretary. The Secretary shall attend all meetings of the
shareholders and of the Board of Directors and shall keep a true and complete
record of the proceedings of these meetings. He shall be custodian of the
records of the Corporation. He shall attend to the giving of all notices,
attest, when requested, to the authority of the President or other officers, as
revealed by the minutes or these Bylaws, to execute legal documents binding the
Corporation, and shall perform such other duties as these Bylaws may provide or
the Board of Directors may prescribe.
Section 5.06 The Treasurer. The Treasurer shall keep correct and complete
records of account, showing accurately at all times the financial condition and
results of operation of the Corporation. He shall be the legal custodian of all
moneys, notes, securities and other valuables that may from time to time come
into possession of the Corporation. He shall immediately deposit all funds of
the Corporation coming into his hands in some reliable bank or other depository
to be designated by the Board of Directors, and shall keep this bank account in
the name of the Corporation. He shall furnish at meetings of the Board of
Directors, or whenever requested, a statement of the financial condition and
results of the Corporation, and shall perform such other duties as these Bylaws
may provide or the Board of Directors may prescribe. The Treasurer may be
required to furnish bond in such amount as shall be determined by the Board
Directors.
Section 5.07 Other Officers. The duties of other officers elected by the
Board of Directors shall be such as are customary to their respective offices
and as shall be given them by the President.
ARTICLE 6
Special Corporate Acts
----------------------
Section 6.01
A. Any Business Combination Transaction (as defined in Section 6.01.B(3)
below) shall require the affirmative vote of the holders of at least 66
2/3% of the voting power of all of the shares of capital stock of the
Corporation then entitled to vote generally in the election of directors,
voting together as a single class. Such affirmative vote shall be required,
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
B. For the purposes of this Article 6:
(1) "Affiliate" of "Associate" shall have the respecttive meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act'), as in effect on December 31, 1985.
(2) "Beneficial owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act, as in effect on December 31, 1985.
(3) "Business Combination Transaction" shall mean:
6
<PAGE>
(a) any merger or consolidation of the Corporation or any Subsidiary
with (i) an Interested Stockholder or (ii) any other Person
(whether or not itself an Interested Stockholder) which is, or
after such merger or consolidation would be, an Affiliate or
Associate of an Interested Stockholder: or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to
or with, or proposed by or on behalf of, an Interested
Stockholder or an Affiliate or Associate of an Interested
Stockholder, of any assets of the Corporation or any Subsidiary
constituting not less than 10% of the total assets of the
Corporation as reported in the consolidation balance sheet of the
Corporation as of the end of the most recent quarter with respect
to which such balance sheet has been prepared; or
(c) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to, or proposed by or on behalf
of an Interested Stockholder or an Affiliate or Associate of an
Interested Stockholder in exchange for cash, securities or other
property (or a combination thereof) constituting not less than
10% of the total assets of the Corporation as reported in the
consolidated balance sheet of the Corporation as of the end of
the most recent quarter with respect to which such balance sheet
has been prepared; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or any spin-off or split-up of
any kind of the Corporation or any Subsidiary, proposed by or on
behalf of an Interested Stockholder or an Affiliate or Associate
of an Interested Stockholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any Subsidiary or any other
transaction (whether or not with or into or otherwise involving
an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the percentage of the outstanding
shares of (i) any class of equity securities of the Corporation
or any Subsidiary or (ii) any class of securities of the
Corporation or any Subsidiary convertible into equity securities
of the Corporation or any Subsidiary, represented by securities
of such class which are directly or indirectly owned by an
Interested Stockholder and all of its Affiliates and Associates.
(4) "Continuing Directors" means (a) any member of the Board of Directors
of the Corporation who (i) is neither the Interested Stockholder
involved in the Business Combination Transaction as to which a vote of
Continuing Directors is provided hereunder, nor an Affiliate,
Associate, employee, agent, or nominee of such Interested Stockholder,
or the relative of any of the foregoing, and (ii) was a member of the
Board of Directors of the Corporation prior to the time that such
Interested Stockholder became an Interested Stockholder, and (b) any
successor of a Continuing Director described in clause (a) who is
recommended or elected to succeed a Continuing Director by the
affirmative vote of a majority of Continuing Directors then on the
Board of Directors of the Corporation.
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<PAGE>
(5) "Fair Market Value" means: (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape or, if
such stock is not reported on the Composite Tape, on the New York
Stock Exchange, or, if such stock is not listed on such Exchange, in
the principal United States securities exchange registered under the
Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding
the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any similar interdealer
quotation system then in use, or, if no such quotation is available,
the fair market value on the date in question of a share of such stock
as determined by a majority of the Continuing Directors in good faith;
and (b) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by
a majority of the Continuing Directors in good faith.
(6) "Interested Stockholder" shall mean any Person (other than the
Corporation or any Subsidiary, any employee benefit plan maintained by
the Corporation or any Subsidiary or any trustee or fiduciary with
respect to any such plan when acting in such capacity) who or which:
(a) is or was at any time within the three-year period immediately
prior to the date in question, the Beneficial Owner, directly or
indirectly, of 15% or more of the voting power of the then
outstanding Voting Stock of the Corporation; or
(b) is an Affiliate of the Corporation and at any time within the
three-year period immediately prior to the date in question was
the Beneficial Owner, directly or indirectly, of 15% or more of
the voting power of the outstanding Voting Stock of the
Corporation; or
(c) is an assignee of, or has otherwise succeeded to, any shares of
Voting Stock of the Corporation of which an Interested
Stockholder was the Beneficial Owner, directly or indirectly, at
any time within the threeyear period immediately prior to the
date in question, if such assignment or succession shall have
occurred in the course of a transaction, or series of
transactions, not involving a public offering within the meaning
of the Securities Act of 1933, as amended.
For the purpose of determining whether a Person is an Interested
Stockholder, the outstanding Voting Stock of the Corporation shall include
unissued shares of Voting Stock of the Corporation of which the Interested
Stockholder is the Beneficial Owner but shall not include any other shares of
Voting Stock of the Corporation which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise, to any Person who is not the Interested Stockholder.
(7) A "Person means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person pursuant to
Section 14(d)(2) of the Exchange Act.
8
<PAGE>
(8) "Subsidiary" means any corporation of which the Corporation owns,
directly or indirectly, (a) a majority of the outstanding shares of
equity securities of such corporation, or (b) shares having a majority
of the voting power represented by all of the outstanding Voting Stock
of such corporation. For the purpose of determining whether a
corporation is a Subsidiary, the outstanding Voting Stock and shares
of equity securities thereof shall include unissued shares of which
the Corporation is the Beneficial Owner but, except for the purposes
of Article 6.01(B)(6), shall not include any other shares which may be
issuable pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, warrants or options, or
otherwise, to any Person who is not the Corporation.
(9) "Voting Stock" shall mean outstanding shares of capital stock of the
relevant corporation entitled to vote generally in the election of
directors.
C. The provisions of Article 6.01(A) shall not be applicable to any particular
Business Combination Transaction, and shall require only such affirmative
vote of the stockholders, if the conditions specified in either of the
following paragraphs (1) and (2) are met:
(1) The Business Combination Transaction shall have been approved by the
affirmative vote of a majority of the Continuing Directors, even if
the Continuing Directors do not constitute a quorum of the entire
Board of Directors.
(2) All of the following conditions shall have been met:
(a) With respect to each share of each class of outstanding Voting
Stock of the Corporation (including Common Stock), the holder
thereof shall be entitled to receive on or before the date of the
consummation of the Business Combination Transaction (the
"Consummation Date"), cash and consideration, in the form
specified in Article 6.01(C)(2)(b) hereof, with an aggregate Fair
Market Value as of the Consummation Date at least equal to the
highest of the following:
(i) the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers' fees)
paid by the Interested Stockholder to which the Business
Combination Transaction relates, or by any Affiliate or
Associate of such Interested Stockholder, for any shares of
such class of Voting Stock acquired by it (x) within the
two-year period immediately prior to the first public
announcement of the proposal of the Business Combination
Transaction (the "Announcement Date") or (y) in the
transaction in which it became an Interested Stockholder,
whichever is higher;
(ii) the Fair Market Value per share of such class Voting Stock
of the Corporation on the Announcement Date; and
(iii) the highest preferential amount per share, if any, to which
the holders of shares of such class of Voting Stock of the
Corporation are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation.
9
<PAGE>
(b) The consideration to be received by holders of a particular class
of outstanding Voting Stock of the Corporation (including Common
Stock) as described in Article 6.01(C)(2)(a) hereof shall be in
cash or, if the consideration previously paid by or on behalf of
the Interested Stockholder in connection with its acquisition of
beneficial ownership of shares of such class of Voting Stock
consisted, in whole or in part, of consideration other than cash,
then in the same form as such consideration. If such payment for
shares of any class of Voting Stock of the Corporation has been
made in varying forms of consideration, the form of consideration
for such class of Voting Stock shall be either cash or the form
used to acquire the beneficial ownership of the largest number of
shares of such class of Voting Stock previously acquired by the
Interested Stockholder.
(c) After such Interested Stockholder has become an Interested
Stockholder and prior to the Consummation Date: (i) there shall
have been no failure to declare and pay at the regular date
therefor any full dividends (whether or not cumulative) on the
outstanding Preferred Stock of the Corporation, if any, except as
approved by the affirmative vote of a majority of the Continuing
Directors; (ii) there shall have been (x) no reduction in the
annual rate of dividends paid on the Common Stock of the
Corporation (except as necessary to reflect any subdivision of
the Common Stock), except as approved by the affirmative vote of
a majority of the Continuing Directors, and (y) an increase in
such annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of
the Common Stock, unless the failure so to increase such annual
rate is approved by the affirmative vote of a majority of the
Continuing Directors; and (iii) such Interested Stockholder shall
not have become the Beneficial Owner of any additional shares of
Voting Stock of the Corporation except as part of the transaction
which results in such Interested Stockholder becoming an
Interested Stockholder.
(d) After such Interested Stockholder has become an Interested
Stockholder, neither such Interested Stockholder nor any
Affiliate or Associate thereof shall have received the benefit,
directly or indirectly (except protionately as shareholder of the
Corporation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation.
(e) A proxy or information statement describing the proposed Business
Combination Transaction and complying with the requirements of
the Exchange Act and the General Rules and Regulations thereunder
(or any subquent provisions replacing such Act, Rules or
Regulations) shall be mailed to the shareholders of the
Corporation at least 30 days prior to the Consummation Date
(whether or not such proxy or information statement is required
to be mailed pursuant to such Act or subsequent provisions
thereof).
10
<PAGE>
D. A majority of the Continuing Directors shall have the power and duty to
determine, on the basis of information known to them after reasonable
inquiry, all facts necessary to determine compliance with this Article 6,
including, without limitation, (1) whether a Person is an Interested
Stockholder, (2) the number of shares of Voting Stock of the Corporation
beneficially owned by any Person, (3) whether a Person is an Affiliate or
Associate of another, (4) whether the requirements of Article 6.01 (C)(2)
have been met with respect to any Business Combination Transaction, and (5)
whether the assets which are the subject of any Business Combination
Transaction have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Business
Combination Transaction constitutes not less than 5% of the total assets of
the Corporation as reported in the consolidated balance sheet of the
Corporation as of the end of the most recent quarter with respect to which
such balance sheet has been prepared. The good faith determination of a
majority of the Continuing Directors on such matters shall be conclusive
and binding for all the purposes of this Article 6.
E. Nothing contained in this Article shall be construed to relieve the members
of the Board of Directors or an Interested Stockholder from any fiduciary
obligation imposed by law. The fact that any Business Combination
Transaction complies with the provisions of Article 6.01(C) shall not be
construed to impose any fiduciary duty, obligation or responsibility on the
Board of Directors, or any member thereof, to approve such
BusinessCombination Transaction or recommend its adoption or approval to
the shareholders of the Corporation, nor shall such compliance limit,
prohibit or otherwise restrict in any manner the Board of Directors, or any
member thereof, with respect to evaluations of or actions and responses
taken with respect to such Business Combination Transactions.
6.02 In evaluating a Business Combination Transaction (as defined in
Article 6.01 above) or a tender or exchange transaction and other acquisition
proposal, the Board of Directors in determining what is in the best interest of
the Corporation, may consider, among others, the following factors:
(a) the financial aspects of the offer, the long-term interests of the
Corporation's shareholders, the present and historical market value of
the Corporation's shares and the premiums paid in other relevant
transactions,the liquidation value of the Corporation's assets and
component operations, the prospects of the Corporation, and (to the
extent estimable) its stock on a goingconcern basis over the
subsequent several years;
(b) the prospects for obtaining and methods of achieving a better offer,
such as seeking other bids, pursuing negotiating strategies (which may
include defensive tactics), and partial or total liquidation;
(c) the impact, if the offer is partial or two-tier, on the remaining
shareholders and on the prospects of the Corporation in the event the
offer is successful;
(d) the value and investment attributes of the noncash consideration if
the offer involves consideration other than cash;
(e) the potential of the offer (if partial or two-tier), including the
offeror's competence, experience, integrity, management, reputation
and financial condition; an
11
<PAGE>
(f) legal and regulatory matters, or other considerations that could
impede or prevent the transaction's consummation:
(g) the effect of the transaction on the Corporation's (and its
Subsidiaries') customers, including policyholders, suppliers and
employees; and
(h) local community interests.
Section 6.03 The affirmative vote of the holders of at least 66 2/3% of the
voting power of all of the shares of capital stock of the Corporation then
entitled to vote generally in the election ofdirectors, voting together as a
single class, shall be required to amend, alter, change or repeal, or adopt any
provision or provisions inconsistent with any provision of Article 6 hereof,
unless such amendment, alteration, change, repeal or adoption of any
inconsistent provision or provisions is delcared advisable by the Board of
Directors by the affirmative vote of (A) two-thirds of the entire Board of
Directors and (B) a majority of the Continuing Directors (as defined herein).
Section 6.04 In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized:
(a) To adopt, amend or repeal the Bylaws of the Corporation by vote of a
majority of the members of the Board of Directors, but any Bylaws
adopted by the Board of Directors may be amended or repealed by the
shareholders of the Corporation;
(b) To distribute to the shareholders of the Corporation out of capital
surplus of the Corporation a portion of its assets, in cash or
property, subject to the requirements of law, and such distribution is
expressly permitted without the vote of the shareholders;
(c) To cause the Corporation to make purchases of its shares, directly or
indirectly, to the extent of unreserved and unrestricted earned
surplus available therefor, without the vote of the shareholders:
(d) If at any time the Corporation has more than one class of authorized
or outstanding stock, to pay dividends in shares of any class to the
holders of shares of any class, without the vote of the shareholders
of the class in which the payment is to be made; and
(e) To take any action which the Board of Directors is required or
permitted to take without a meeting by written consent, setting forth
the action so taken, signed by all of the directors entitled to vote
thereon.
ARTICLE 7
Action Without Meeting
----------------------
Any action which properly may be taken by the directors, shareholders or
subscribers before there are shareholders may be taken without a meeting on
written consent, setting forth the action so taken, signed by all the persons or
entities entitled to vote thereon.
12
<PAGE>
ARTICLE 8
Indemnification
---------------
The Corporation shall indemnify any person (including his estate) made or
threatened to be made a party to any suit or proceeding, whether civil or
criminal, by reason of the fact that he was a director or officer of the
Corporation or served at its request as a director or officer of the Corporation
or served at its request as a director or officer of another Corporation,
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorney fees actually and necessarily incurred as a result of such
threat, suit or proceeding, or any appeal therein, to the full extent permitted
by the General Corporation law of Delaware. Promptly after receipt by a party to
be indemnified under this section of notice of the commencement of any such suit
or proceeding, such party will, if a claim in respect thereof is to be made
against this Corporation, notify the Corporation of the commencement thereof.
This Corporation shall be entitled to participate at its own expense in the
defense or to assume the defense of any such suit or proceeding. In the event
this Corporation elects to assume the defense of any such suit or proceedings,
such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the party to be indemnified and the party to be indemnified
shall bear the fees and expenses of any additional counsel retained by him.
ARTICLE 9
Amendments
----------
Unless provisions within these Bylaws expressly state otherwise, these
Bylaws may be altered, amended or repealed and new Bylaws adopted by the
affirmative vote of the holders of a majority of the outstanding stock at any
regular meeting of the shareholders or special meeting called for the purpose,
or by the affirmative vote of a majority of the entire Board of Directors at any
regular or special meeting of the Board, provided, however, that if any
shareholder or Director, as the case may be, should object to the consideration
of any proposed amendment, the proposal may not be voted upon unless notice of
the proposed amendment was given at least ten (10) days prior to the meeting at
which such objecting shareholder or Director is entitled to vote. Any amendment,
modification, repeal or addition to these Bylaws adopted by the Board of
Directors may be amended or repealed by the shareholders. The Board is without
authority to amend this Article 9.
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NUMBER SHARES
------ ------
SEE REVERSE FOR
LEGENDS
GOLDCREST CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK - $.001 PAR VALUE
This certifies that
is the owner of
fully paid and non-assessable shares of Common Stock of GOLDCREST CORPORATION
transferable on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be subject to all the provisions of the Certificate of Incorporation, as
amended, to all of which the holder, by acceptance hereby assents.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by
its duly authorized officers and the facsimile Cororation seal to be duly
affixed hereto.
Dated:
(Corporate Seal)
- -------------------------------- --------------------------------
PRESIDENT SECRETARY
<PAGE>
GOLDCREST CORPORATION
For value received, ________
hereby sell, assign and transfer unto
- --------------------------------------------------------------------------------
shares of Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
____________________________________________________ Attorney to transfer the
said Shares of Common Stock on the books of the within named Corporation with
full power of substitution in the premises.
Signature:
---------------------------------------------------
In the presence of
--------------------------------------------
Note: The signature of this assignment must correspond with the name as written
upon the face of the Certificate, in every particular without alteration or
enlargement or any change whatever
GERALD R. PERLSTEIN
Certified Public Accountant
1260 S. Beverly Glen Road, Suite 106
Los Angeles, California 90024
Telephone (310) 275-4650
Fax (310) 275-4611
Board of Directors
Goldcrest Corporation
Los Angeles, California
As an independent certified accountant, I consent to the use of my report, dated
July 12, 1999, to the financial statements of Goldcrest Corporation for the
years ended June 12, 1999, 1998, and 1997, and the reference to my firm under
the caption "Experts" included in or made part of this Form 10-SB registration
statement.
/s/ Gerald R. Pertlstein
- ------------------------
Los Angeles, California
September 22, 1999
