UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
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
(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:
NONE
Securities to be registered pursuant to
Section 12(g) of the Act:
COMMON STOCK PAR VALUE $.001
(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
ii
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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 10
Legal Proceedings 10
Indemnification of Directors and Officers 10
Financial Information 11
Financial Statements 11
Signatures 12
iii
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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
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.
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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.
3
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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.")
4
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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.
5
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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 SUMmedia.com, Inc., a publicly-held corporation. Since 1991, he has
served as President and Director of California Investment Co., and Argyle
Ventures, Inc., and Avocet Ventures, Inc. all publicly-held corporations. Since
1997 he has served as President and Director of Fountain Colony Ventures Inc., a
publicly-held corporation. Since November 1997, he has served as a Director and
President of Laurel Dental Plan, Inc., a privately-held dental managed care
organization based in southern California. Additionally, he serves as a Director
and Officer of three 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 RELATIONSHIPS 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 spouse 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.
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RECENT SALES OF UNREGISTERED SECURITIES
The Company has not made any sales of securities during the past five
years.
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 OF DIRECTORS AND OFFICERS
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 December 31, 1999, the Company has no assets and liabilities of $20,175 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: January 28, 2000 By /s/ Patrick C. Brooks
------------------------
Patrick C. Brooks
President and Secretary
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GOLDCREST CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
As of September 30, 1999 and for the
Three Months Then Ended
With Independent Audit Report
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
As of September 30, 1999 and for the Three Months Then Ended
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 S. Beverly Glen Boulevard, Suite 106
Los Angeles, California 90024
Telephone (310) 275-4650 Fax (310) 275-4611
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 September 30, 1999 and the
related statements of operations, stockholders' equity, and cash flows for the
three months 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 September 30, 1999 and the results of its
operations, stockholders' equity and cash flows for the three months then ended
in conformity with generally accepted accounting principles.
/s/ Gerald R. Perlstein
- -----------------------
Gerald R. Perlstein
Los Angeles, California
January 25, 2000
F-1
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
BALANCE SHEET
ASSETS
------
September 30, 1999
------------------
Current Assets:
None 0
--------
Total Assets 0
========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Due to Stockholder 18,675
--------
Total Liabilities 18,675
--------
Stockholders' Equity
Common Stock - 50,000,000 shares
authorized; issued and outstanding
3,000,000 shares @ $.001 par value 3,000
Paid-in-capital 9,250
Deficit accumulated during the development stage (30,925)
Total Stockholders' Equity (deficit) (18,675)
--------
Total Liabilities and Stockholders' Equity $ 0
========
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For The Three Months Ended September 30, 1999
and for the Period April 27, 1989 (Date of Inception)
to September 30, 1999
July 1 - Since
September 30, 1999 Inception
------------------ ---------
Operating Expenses:
General and administrative $ 2,273 $ 30,925
----------- -----------
Total operating Expenses 2,273 30,925
----------- -----------
Net loss $ (2,273) $ (30,925)
=========== ===========
Weighted number of shares
outstanding: 3,000,000 3,000,000
=========== ===========
Net loss per share nil $ (.01)
=========== ===========
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
As of September 30, 1999 and for the Period
April 27, 1989 (Date of Inception) to September 30, 1999
Accum. Def.
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)
Net loss for period
July 1-September 30, 1999 (2,273) (2,273)
----------- ----------- ----------- ----------- -----------
Balance September 30, 1999 3,000,000 $ 3,000 $ 9,250 $ (30,925) $ (18,675)
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-4
</TABLE>
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For The Three Months Ended September 30, 1999
and for the Period April 27, 1989 (Date of Inception)
to September 30, 1999
July 1 - Since
September 30, 1999 Inception
------------------ ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the periods $ (2,273) $(30,925)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization 0 250
Increase in organizational costs 0 (250)
Increase in due to stockholder 2,273 18,675
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 0 12,250
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
None 0 0
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 12,000
Proceeds from contributed capital 0 250
--------
Net cash provided by financing activities 0 12,250
-------- --------
NET INCREASE (DECREASED) IN CASH 0 0
CASH BALANCE, BEGINNING OF PERIOD 0 0
-------- --------
CASH BALANCE, END OF PERIOD 0 0
======== ========
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
For The Three Months Ended September 30, 1999
and for the Period April 27, 1989 (Date of Inception)
to September 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 September 30, 1999 of $30,925, 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 September 30, 1999.
F-6
<PAGE>
GOLDCREST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS continued
For The Three Months Ended September 30, 1999
and for the Period April 27, 1989 (Date of Inception)
to September 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 $18,675. For the
period from July 1, through September 30, 1999, these advances amounted to
$2,273.
F-7
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Description
3.1* Articles of Incorporation
3.2* By-laws
4.1* Specimen of Stock Certificate
23.2 Opinion of Experts
* Previuosly filed
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
January 25, 2000, to the financial statements of Goldcrest Corporation for the
quarter ended September 30, 1999, 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
January 27, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 18,675
<BONDS> 0
0
0
<COMMON> (30,925)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 2,273
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,273)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,273)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
