Amendment to Registration of Securities of a Small-Business Issuer — Form 10-SB
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1: 10SB12G/A Amendment to Registration of Securities of a 34± 162K
Small-Business Issuer
2: EX-3 Articles of Incorporation/Organization or By-Laws 7± 28K
3: EX-3 Articles of Incorporation/Organization or By-Laws 26± 107K
4: EX-99 Miscellaneous Exhibit 8 23K
10SB12G/A — Amendment to Registration of Securities of a Small-Business Issuer
Document Table of Contents
U. S. Securities and Exchange Commission
Washington, D.C. 20549
First Amended
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
BOULDER CAPITAL OPPORTUNITIES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1341980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4750 Table Mesa Drive, Boulder, CO 80303
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (303) 442-1021
Securities to be registered under Section 12(b) of the
Act:
Title of each class Name of each exchange on
to be so registered which each class is to be
registered
Not Applicable
Securities to be registered under Section 12(g) of the
Act:
Common Stock
(Title of class)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
The Company was incorporated under the laws
of the State of Colorado on April 22, 1996, and is in
the early developmental and promotional stages. To
date the Company's only activities have been
organizational ones, directed at developing its business
plan and raising its initial capital. The Company has
not commenced any commercial operations. The
Company has no full-time employees and owns no real
estate.
The Company's business plan is to seek,
investigate, and, if warranted, acquire one or more
properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The
acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and
may encompass assets or a business entity, such as a
corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely
that the Company will be able to take advantage of
more than one such business opportunity. The
Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to
short-term earnings.
At the present time the Company has not
identified any business opportunity that it plans to
pursue, nor has the Company reached any agreement
or definitive understanding with any person concerning
an acquisition. The Company's officer and director
has previously been involved in transactions involving
a merger between an established company and a blind
pool or blank check entity, and has a number of
contacts within the field of corporate finance. As a
result, he has had preliminary contacts with
representatives of numerous companies concerning the
general possibility of a merger or acquisition by a
blind pool or blank check company. However, none
of these preliminary contacts or discussions involved
the possibility of a merger or acquisition transaction
with the Company.
It is anticipated that the Company's officer and
director will contact broker-dealers and other persons
with whom he is acquainted who are involved in
corporate finance matters to advise them of the
Company's existence and to determine if any
companies or businesses they represent have an interest
in considering a merger or acquisition with the
Company. No assurance can be given that the
Company will be successful in finding or acquiring a
desirable business opportunity, given the limited funds
that are expected to be available for acquisitions, or
that any acquisition that occurs will be on terms that
are favorable to the Company or its stockholders.
The Company's search will be directed toward
small and medium-sized enterprises which have a
desire to become public corporations and which are
able to satisfy, or anticipate in the reasonably near
future being able to satisfy, the minimum asset
requirements in order to qualify shares for trading on
NASDAQ (See "Investigation and Selection of
Business Opportunities"). The Company anticipates
that the business opportunities presented to it will (i)
be recently organized with no operating history, or a
history of losses attributable to under-capitalization or
other factors; (ii) be experiencing financial or
operating difficulties; (iii) be in need of funds to deve-
lop a new product or service or to expand into a new
market; (iv) be relying upon an untested product or
marketing concept; or (v) have a combination of the
characteristics mentioned in (i) through (iv). The
Company intends to concentrate its acquisition efforts
on properties or businesses that it believes to be
undervalued. Given the above factors, investors
should expect that any acquisition candidate may have
a history of losses or low profitability.
The Company does not propose to restrict its
search for investment opportunities to any particular
geographical area or industry, and may, therefore,
engage in essentially any business, to the extent of its
limited resources. This includes industries such as
service, finance, natural resources, manufacturing, high
technology, product development, medical,
communications and others. The Company's
discretion in the selection of business opportunities is
unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.
As a consequence of this registration of its
securities, any entity which has an interest in being
acquired by, or merging into the Company, is expected
to be an entity that desires to become a public
company and establish a public trading market for its
securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock
constituting control of the Company would be issued
by the Company or purchased from the current
principal shareholders of the Company by the
acquiring entity or its affiliates. If stock is purchased
from the current shareholders, the transaction is very
likely to result in substantial gains to them relative to
their purchase price for such stock. In the Company's
judgment, none of its officers and directors would
thereby become an "underwriter" within the meaning
of the Section 2(11) of the Securities Act of 1933, as
amended. The sale of a controlling interest by certain
principal shareholders of the Company could occur at
a time when the other shareholders of the Company
remain subject to restrictions on the transfer of their
shares.
Depending upon the nature of the transaction,
the current sole officer and director of the Company
may resign his management positions with the
Company in connection with the Company's
acquisition of a business opportunity. See "Form of
Acquisition," below, and "Risk Factors - The
Company - Lack of Continuity in Management." In
the event of such a resignation, the Company's current
management would not have any control over the
conduct of the Company's business following the
Company's combination with a business opportunity.
It is anticipated that business opportunities will
come to the Company's attention from various sources,
including its officer and director, its other
stockholders, 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 individual for such person to
act as a finder of opportunities for the Company.
The Company does not foresee that it would
enter into a merger or acquisition transaction with any
business with which its sole officer or director is
currently affiliated. Should the Company determine in
the future, contrary to foregoing expectations, that a
transaction with an affiliate would be in the best
interests of the Company and its stockholders, the
Company is in general permitted by Colorado law to
enter into such a transaction if:
(1) The material facts as to the
relationship or interest of the affiliate and as to the
contract or transaction are disclosed or are known to
the Board of Directors, and the Board in good faith
authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested
directors, even though the disinterested directors
constitute less than a quorum; or
(2) The material facts as to the
relationship or interest of the affiliate and as to the
contract or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good
faith by vote of the stockholders; or
(3) The contract or transaction is fair as
to the Company as of the time it is authorized,
approved or ratified, by the Board of Directors or the
stockholders.
INVESTIGATION AND SELECTION OF BUSINESS
OPPORTUNITIES
To a large extent, a decision to participate in
a specific business opportunity may be made upon
management's analysis of the quality of the other
company's management and personnel, the anticipated
acceptability of new products or marketing concepts,
the merit of technological changes, the perceived
benefit the company will derive from becoming a
publicly held entity, and numerous other factors which
are difficult, if not impossible, to analyze through the
application of any objective criteria. In many
instances, it is anticipated that the historical operations
of a specific business opportunity may not necessarily
be indicative of the potential for the future because of
the possible need to shift marketing approaches
substantially, expand significantly, change product
emphasis, change or substantially augment
management, or make other changes. The Company
will be dependent upon the owners of a business
opportunity to identify any such problems which may
exist and to implement, or be primarily responsible for
the implementation of, required changes. Because the
Company may participate in a business opportunity
with a newly organized firm or with a firm which is
entering a new phase of growth, it should be
emphasized that the Company will incur further risks,
because management in many instances will not have
proved its abilities or effectiveness, the eventual
market for such company's products or services will
likely not be established, and such company may not
be profitable when acquired.
It is anticipated that the Company will not be
able to diversify, but will essentially be limited to one
such venture because of the Company's limited
financing. This lack of diversification will not permit
the Company to offset potential losses from one
business opportunity against profits from another, and
should be considered an adverse factor affecting any
decision to purchase the Company's securities.
It is emphasized that management of the
Company may effect transactions having a potentially
adverse impact upon the Company's shareholders
pursuant to the authority and discretion of the
Company's management to complete acquisitions
without submitting any proposal to the stockholders
for their consideration. Holders of the Company's
securities should not anticipate that the Company
necessarily will furnish such holders, prior to any
merger or acquisition, with financial statements, or any
other documentation, concerning a target company or
its business. In some instances, however, the proposed
participation in a business opportunity may be
submitted to the stockholders for their consideration,
either voluntarily by such directors to seek the
stockholders' advice and consent or because state law
so requires.
The analysis of business opportunities will be
undertaken by or under the supervision of the
Company's President, who is not a professional
business analyst. See "Management." Although there
are no current plans to do so, Company management
might hire an outside consultant to assist in the
investigation and selection of business opportunities,
and might pay a finder's fee. Since Company
management has no current plans to use any outside
consultants or advisors to assist in the investigation
and selection of business opportunities, no policies
have been adopted regarding use of such consultants or
advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the
term of service, or regarding the total amount of fees
that may be paid. However, because of the limited
resources of the Company, it is likely that any such
fee the Company agrees to pay would be paid in stock
and not in cash. Otherwise, the Company anticipates
that it will consider, among other things, the following
factors:
(1) Potential for growth and profitability,
indicated by new technology, anticipated market
expansion, or new products;
(2) The Company's perception of how
any particular business opportunity will be received by
the investment community and by the Company's
stockholders;
(3) Whether, following the business
combination, the financial condition of the business
opportunity would be, or would have a significant
prospect in the foreseeable future of becoming
sufficient to enable the securities of the Company to
qualify for listing on an exchange or on a national
automated securities quotation system, such as
NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of Rule
15c2-6 recently adopted by the Securities and
Exchange Commission. See "Risk Factors - The
Company - Regulation of Penny Stocks."
(4) Capital requirements and anticipated
availability of required funds, to be provided by the
Company or from operations, through the sale of
additional securities, through joint ventures or similar
arrangements, or from other sources;
(5) The extent to which the business
opportunity can be advanced;
(6) Competitive position as compared to
other companies of similar size and experience within
the industry segment as well as within the industry as
a whole;
(7) Strength and diversity of existing
management, or management prospects that are
scheduled for recruitment;
(8) The cost of participation by the
Company as compared to the perceived tangible and
intangible values and potential; and
(9) The accessibility of required
management expertise, personnel, raw materials,
services, professional assistance, and other required
items.
In regard to the possibility that the shares of
the Company would qualify for listing on NASDAQ,
the current standards include the requirements that the
issuer of the securities that are sought to be listed have
total assets of at least $4,000,000 and total capital and
surplus of at least $2,000,000. Many, and perhaps
most, of the business opportunities that might be
potential candidates for a combination with the
Company would not satisfy the NASDAQ listing
criteria.
No one of the factors described above will be
controlling in the selection of a business opportunity,
and management will attempt to analyze all factors
appropriate to each opportunity and make a
determination based upon reasonable investigative
measures and available data. Potentially available
business opportunities may occur in many different in-
dustries and at various stages of development, all of
which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex. Potential investors must
recognize that, because of the Company's limited
capital available for investigation and management's
limited experience in business analysis, the Company
may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.
The Company is unable to predict when it may
participate in a business opportunity. It expects,
however, that the analysis of specific proposals and the
selection of a business opportunity may take several
months or more.
Prior to making a decision to participate in a
business opportunity, the Company will generally
request that it be provided with written materials
regarding the business opportunity containing such
items as a description of products, services and
company history; management resumes; financial
information; available projections, with related
assumptions upon which they are based; an
explanation of proprietary products and services;
evidence of existing patents, trademarks, or services
marks, or rights thereto; present and proposed forms of
compensation to management; a description of
transactions between such company and its affiliates
during relevant periods; a description of present and
required facilities; an analysis of risks and competitive
conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or
if they are not available, unaudited financial
statements, together with reasonable assurances that
audited financial statements would be able to be
produced within a reasonable period of time not to
exceed 60 days following completion of a merger
transaction; and other information deemed relevant.
As part of the Company's investigation, the
Company's executive officers and directors may meet
personally with management and key personnel, may
visit and inspect material facilities, obtain independent
analysis or verification of certain information
provided, check references of management and key
personnel, and take other reasonable investigative
measures, to the extent of the Company's limited
financial resources and management expertise.
It is possible that the range of business
opportunities that might be available for consideration
by the Company could be limited by the impact of
Securities and Exchange Commission regulations
regarding purchase and sale of "penny stocks." The
regulations would affect, and possibly impair, any
market that might develop in the Company's securities
until such time as they qualify for listing on NASDAQ
or on another exchange which would make them
exempt from applicability of the "penny stock"
regulations. See "Risk Factors - Regulation of Penny
Stocks."
Company management believes that various
types of potential merger or acquisition candidates
might find a business combination with the Company
to be attractive. These include acquisition candidates
desiring to create a public market for their shares in
order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for
raising capital through the public sale of securities and
believe that the possible prior existence of a public
market for their securities would be beneficial, and
acquisition candidates which plan to acquire additional
assets through issuance of securities rather than for
cash, and believe that the possibility of development of
a public market for their securities will be of
assistance in that process. Acquisition candidates
which have a need for an immediate cash infusion are
not likely to find a potential business combination with
the Company to be an attractive alternative.
FORM OF ACQUISITION
It is impossible to predict the manner in which
the Company may participate in a business
opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of
the Company and the promoters of the opportunity
and, upon the basis of that review and the relative
negotiating strength of the Company and such
promoters, the legal structure or method deemed by
management to be suitable will be selected. Such
structure may include, but is not limited to leases,
purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company
may act directly or indirectly through an interest in a
partnership, corporation or other form of organization.
Implementing such structure may require the merger,
consolidation or reorganization of the Company with
other corporations or forms of business organization,
and although it is likely, there is no assurance that the
Company would be the surviving entity. In addition,
the present management and stockholders of the
Company most likely will not have control of a
majority of the voting shares of the Company
following a reorganization transaction. As part of such
a transaction, the Company's existing directors may
resign and new directors may be appointed without
any vote by stockholders.
It is likely that the Company will acquire its
participation in a business opportunity through the
issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction
cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or
not an acquisition is a so-called "tax free"
reorganization under the Internal Revenue Code of
1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e.
80% or more) of the common stock of the combined
entities immediately following the reorganization. If
a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions
provided under the Internal Revenue Code, the
Company's current stockholders would retain in the
aggregate 20% or less of the total issued and
outstanding shares. This could result in substantial
additional dilution in the equity of those who were
stockholders of the Company prior to such
reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or
transfer of shares representing a controlling interest in
the Company by the current officers, directors and
principal shareholders. (See "Description of Business -
General").
It is anticipated that any new securities issued
in any reorganization would be issued in reliance upon
exemptions, if any are available, from registration
under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register
such securities either at the time the transaction is
consummated, or under certain conditions or at
specified times thereafter. The issuance of substantial
additional securities and their potential sale into any
trading market that might develop in the Company's
securities may have a depressive effect upon such
market.
The Company will participate in a business
opportunity only after the negotiation and execution of
a written agreement. Although the terms of such
agreement cannot be predicted, generally such an
agreement would require specific representations and
warranties by all of the parties thereto, specify certain
events of default, detail the terms of closing and the
conditions which must be satisfied by each of the
parties thereto prior to such closing, outline the
manner of bearing costs if the transaction is not
closed, set forth remedies upon default, and include
miscellaneous other terms.
As a general matter, the Company anticipates
that it, and/or its officers and principal shareholders
will enter into a letter of intent with the management,
principals or owners of a prospective business
opportunity prior to signing a binding agreement.
Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the
parties to consummate the transaction. Execution of
a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither
the Company nor any of the other parties to the letter
of intent will be bound to consummate the acquisition
unless and until a definitive agreement concerning the
acquisition as described in the preceding paragraph is
executed. Even after a definitive agreement is
executed, it is possible that the acquisition would not
be consummated should any party elect to exercise any
right provided in the agreement to terminate it on
specified grounds.
It is anticipated that the investigation of
specific business opportunities and the negotiation,
drafting and execution of relevant agreements,
disclosure documents and other instruments will
require substantial management time and attention and
substantial costs for accountants, attorneys and others.
If a decision is made not to participate in a specific
business opportunity, the costs theretofore incurred in
the related investigation would not be recoverable.
Moreover, because many providers of goods and
services require compensation at the time or soon after
the goods and services are provided, the inability of
the Company to pay until an indeterminate future time
may make it impossible to procure goods and services.
INVESTMENT COMPANY ACT AND OTHER
REGULATION
The Company may participate in a business
opportunity by purchasing, trading or selling the
securities of such business. The Company does not,
however, intend to engage primarily in such activities.
Specifically, the Company intends to conduct its
activities so as to avoid being classified as an
"investment company" under the Investment Company
Act of 1940 (the "Investment Act"), and therefore to
avoid application of the costly and restrictive
registration and other provisions of the Investment
Act, and the regulations promulgated thereunder.
Section 3(a) of the Investment Act contains the
definition of an "investment company," and it
excludes any entity that does not engage primarily in
the business of investing, reinvesting or trading in
securities, or that does not engage in the business of
investing, owning, holding or trading "investment
securities" (defined as "all securities other than
government securities or securities of majority-owned
subsidiaries") the value of which exceeds 40% of the
value of its total assets (excluding government
securities, cash or cash items). The Company intends
to implement its business plan in a manner which will
result in the availability of this exception from the
definition of "investment company." Consequently, the
Company's participation in a business or opportunity
through the purchase and sale of investment securities
will be limited.
The Company's plan of business may involve
changes in its capital structure, management, control
and business, especially if it consummates a
reorganization as discussed above. Each of these areas
is regulated by the Investment Act, in order to protect
purchasers of investment company securities. Since
the Company will not register as an investment
company, stockholders will not be afforded these
protections.
Any securities which the Company might
acquire in exchange for its Common Stock will be
"restricted securities" within the meaning of the
Securities Act of 1933, as amended (the "Act"). If the
Company elects to resell such securities, such sale
cannot proceed unless a registration statement has been
declared effective by the Securities and Exchange
Commission or an exemption from registration is
available. Section 4(1) of the Act, which exempts
sales of securities not involving a distribution, would
in all likelihood be available to permit a private sale.
Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be
necessary, the Company would be required to comply
with the provisions of the Act to effect such resale.
An acquisition made by the Company may be
in an industry which is regulated or licensed by
federal, state or local authorities. Compliance with
such regulations can be expected to be a
time-consuming and expensive process.
COMPETITION
The Company expects to encounter substantial
competition in its efforts to locate attractive
opportunities, primarily from business development
companies, venture capital partnerships and
corporations, venture capital affiliates of large
industrial and financial companies, small investment
companies, and wealthy individuals. Many of these
entities will have significantly greater experience,
resources and managerial capabilities than the
Company and will therefore be in a better position
than the Company to obtain access to attractive
business opportunities. The Company also will
experience competition from other public "blind pool"
companies, many of which may have more funds
available than does the Company.
ADMINISTRATIVE OFFICES
The Company currently maintains a mailing
address at 4750 Table Mesa Drive, Boulder, Colorado
80303, which is the office address of its legal counsel.
The Company's telephone number there is (303) 442-
1021. Other than this mailing address, the Company
does not currently maintain any other office facilities,
and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. The
Company pays no rent or other fees for the use of this
mailing address.
EMPLOYEES
The Company is a development stage company
and currently has no employees. Management of the
Company expects to use consultants, attorneys and
accountants as necessary, and does not anticipate a
need to engage any full-time employees so long as it
is seeking and evaluating business opportunities. The
need for employees and their availability will be
addressed in connection with the decision whether or
not to acquire or participate in specific business
opportunities. Although there is no current plan with
respect to its nature or amount, remuneration may be
paid to or accrued for the benefit of, the Company's
sole officerprior to, or in conjunction with, the
completion of a business acquisition. See "Executive
Compensation" and under "Certain Relationships and
Related Transactions."
RISK FACTORS
A. CONFLICTS OF INTEREST. Certain
conflicts of interest exist between the Company and its
sole officer and director. He has other business
interests to which he devotes his attention, and he may
be expected to continue to do so although management
time should be devoted to the business of the
Company. As a result, conflicts of interest may arise
that can be resolved only through his exercise of such
judgment as is consistent with his fiduciary duties to
the Company. See "Management," and "Conflicts of
Interest."
The Company's President may elect, in the
future, to form one or more additional blind pool or
blank check companies with a business plan similar or
identical to that of the Company. Any such additional
blind pool or blank check companies would also be in
direct competition with the Company for available
business opportunities. (See Item 5 - "Directors,
Executive Officers, Promoters and Control Persons -
Conflicts of Interest.")
It is anticipated that Company's President may
actively negotiate or otherwise consent to the purchase
of a portion of his common stock as a condition to, or
in connection with, a proposed merger or acquisition
transaction. In this process, the Company's President
may consider his own personal pecuniary benefit rather
than the best interests of other Company shareholders,
and the other Company shareholders are not expected
to be afforded the opportunity to approve or consent
to any particular stock buy-out transaction. See
"Conflicts of Interest."
B. POSSIBLE NEED FOR ADDITIONAL
FINANCING. The Company has very limited funds,
and such funds may not be adequate to take advantage
of any available business opportunities. Even if the
Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business
opportunity, the Company may not have enough
capital to exploit the opportunity. The ultimate
success of the Company may depend upon its ability
to raise additional capital. The Company has not
investigated the availability, source, or terms that
might govern the acquisition of additional capital and
will not do so until it determines a need for additional
financing. If additional capital is needed, there is no
assurance that funds will be available from any source
or, if available, that they can be obtained on terms
acceptable to the Company. If not available, the
Company's operations will be limited to those that can
be financed with its modest capital.
C. REGULATION OF PENNY STOCKS.
The Company's securities, when available for trading,
will be subject to a Securities and Exchange
Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such
securities to persons other than established customers
or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or
individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or
that, when combined with a spouse's income, exceeds
$300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability
determination for the purchaser and receive the
purchaser's written agreement to the transaction prior
to the sale. Consequently, the rule may affect the
ability of broker-dealers to sell the Company's
securities and also may affect the ability of purchasers
in this offering to sell their securities in any market
that might develop therefor.
In addition, the Securities and Exchange
Commission has adopted a number of rules to regulate
"penny stocks." Such rules include Rules 3a51-1, 15g-
1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under
the Securities Exchange Act of 1934, as amended.
Because the securities of the Company may constitute
"penny stocks" within the meaning of the rules, the
rules would apply to the Company and to its securities.
The rules may further affect the ability of owners of
Shares to sell the securities of the Company in any
market that might develop for them.
Shareholders should be aware that, according
to Securities and Exchange Commission Release No.
34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the
security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of
prices through prearranged matching of purchases and
sales and false and misleading press releases; (iii)
"boiler room" practices involving high-pressure sales
tactics and unrealistic price projections by
inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differentials and markups by
selling broker-dealers; and (v) the wholesale dumping
of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those
prices and with consequent investor losses. The
Company's management is aware of the abuses that
have occurred historically in the penny stock market.
Although the Company does not expect to be in a
position to dictate the behavior of the market or of
broker-dealers who participate in the market,
management will strive within the confines of practical
limitations to prevent the described patterns from
being established with respect to the Company's
securities.
D. NO OPERATING HISTORY. The
Company was formed in April of 1996 for the purpose
of registering its common stock under the 1934 Act
and acquiring a business opportunity. The Company
has no operating history, revenues from operations, or
assets other than cash from private sales of stock. The
Company faces all of the risks of a new business and
the special risks inherent in the investigation,
acquisition, or involvement in a new business
opportunity. The Company must be regarded as a new
or "start-up" venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such
ventures are subject.
PROFITABILITY. There is no assurance that the
Company will acquire a favorable business op-
portunity. Even if the Company should become
involved in a business opportunity, there is no
assurance that it will generate revenues or profits, or
that the market price of the Company's Common
Stock will be increased thereby.
F. POSSIBLE BUSINESS - Not Identified
and Highly Risky. The Company has not identified
and has no commitments to enter into or acquire a
specific business opportunity and therefore can
disclose the risks and hazards of a business or
opportunity that it may enter into in only a general
manner, and cannot disclose the risks and hazards of
any specific business or opportunity that it may enter
into. An investor can expect a potential business
opportunity to be quite risky. The Company's
acquisition of or participation in a business opportunity
will likely be highly illiquid and could result in a total
loss to the Company and its stockholders if the
business or opportunity proves to be unsuccessful. See
Item 1 "Description of Business."
G. TYPE OF BUSINESS ACQUIRED. The
type of business to be acquired may be one that
desires to avoid effecting its own public offering and
the accompanying expense, delays, uncertainties, and
federal and state requirements which purport to protect
investors. Because of the Company's limited capital,
it is more likely than not that any acquisition by the
Company will involve other parties whose primary
interest is the acquisition of control of a publicly
traded company. Moreover, any business opportunity
acquired may be currently unprofitable or present other
negative factors.
H. IMPRACTICABILITY OF
EXHAUSTIVE INVESTIGATION. The Company's
limited funds and the lack of full-time management
will likely make it impracticable to conduct a complete
and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or
other resources thereto. Management decisions,
therefore, will likely be made without detailed
feasibility studies, independent analysis, market
surveys and the like which, if the Company had more
funds available to it, would be desirable. The
Company will be particularly dependent in making
decisions upon information provided by the promoter,
owner, sponsor, or others associated with the business
opportunity seeking the Company's participation. A
significant portion of the Company's available funds
may be expended for investigative expenses and other
expenses related to preliminary aspects of completing
an acquisition transaction, whether or not any business
opportunity investigated is eventually acquired.
I. LACK OF DIVERSIFICATION. Because
of the limited financial resources that the Company
has, it is unlikely that the Company will be able to
diversify its acquisitions or operations. The
Company's probable inability to diversify its activities
into more than one area will subject the Company to
economic fluctuations within a particular business or
industry and therefore increase the risks associated
with the Company's operations.
J. POSSIBLE RELIANCE UPON
UNAUDITED FINANCIAL STATEMENTS. The
Company generally will require audited financial
statements from companies that it proposes to acquire.
No assurance can be given, however, that audited
financials will be available to the Company. In cases
where audited financials are unavailable, the Company
will have to rely upon unaudited information received
from target companies' management that has not been
verified by outside auditors. The lack of the type of
independent verification which audited financial
statements would provide, increases the risk that the
Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and
accurate information about the financial condition and
operating history of the target company. This risk
increases the prospect that the acquisition of such a
company might prove to be an unfavorable one for the
Company or the holders of the Company's securities.
Moreover, the Company will be subject to the
reporting provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about
significant acquisitions, including audited financial
statements for any business that it acquires. Conse-
quently, acquisition prospects that do not have, or are
unable to provide reasonable assurances that they will
be able to obtain, the required audited statements
would not be considered by the Company to be
appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
Should the Company, during the time it remains
subject to the reporting provisions of the Exchange
Act, complete an acquisition of an entity for which
audited financial statements prove to be unobtainable,
the Company would be exposed to enforcement actions
by the Securities and Exchange Commission (the
"Commission") and to corresponding administrative
sanctions, including permanent injunctions against the
Company and its management. The legal and other
costs of defending a Commission enforcement action
are likely to have material, adverse consequences for
the Company and its business. The imposition of
administrative sanctions would subject the Company to
further adverse consequences.
In addition, the lack of audited financial
statements would prevent the securities of the
Company from becoming eligible for listing on
NASDAQ, the automated quotation system sponsored
by the National Association of Securities Dealers, Inc.,
or on any existing stock exchange. Moreover, the lack
of such financial statements is likely to discourage
broker-dealers from becoming or continuing to serve
as market makers in the securities of the Company.
Without audited financial statements, the Company
would almost certainly be unable to offer securities
under a registration statement pursuant to the
Securities Act of 1933, and the ability of the Company
to raise capital would be significantly limited until
such financial statements were to become available.
K. OTHER REGULATION. An acquisition
made by the Company may be of a business that is
subject to regulation or licensing by federal, state, or
local authorities. Compliance with such regulations
and licensing can be expected to be a time-consuming,
expensive process and may limit other investment
opportunities of the Company.
L. DEPENDENCE UPON MANAGEMENT;
LIMITED PARTICIPATION OF MANAGEMENT.
The Company currently has a single individual who is
serving as its sole officer and director. The Company
will be heavily dependent upon his skills, talents, and
abilities to implement its business plan, and may, from
time to time, find that the inability of the sole officer
and director to devote his full time attention to the
business of the Company results in a delay in progress
toward implementing its business plan. Furthermore,
since one individual is serving as the sole officer and
director of the Company, it will be entirely dependent
upon his experience in seeking, investigating, and
acquiring a business and in making decisions regarding
the Company's operations. See "Management."
Because investors will not be able to evaluate the
merits of possible business acquisitions by the
Company, they should critically assess the information
concerning the Company's sole officer and director.
M. LACK OF CONTINUITY IN
MANAGEMENT. The Company does not have an
employment agreement with its sole officer and
director, and as a result, there is no assurance that he
will continue to manage the Company in the future.
In connection with acquisition of a business
opportunity, it is likely the current officer and director
of the Company may resign. A decision to resign will
be based upon the identity of the business opportunity
and the nature of the transaction, and is likely to occur
without the vote or consent of the stockholders of the
Company.
N. INDEMNIFICATION OF OFFICERS
AND DIRECTORS. The Company's Articles of
Incorporation provide for the indemnification of its
directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other
expenses incurred by them in any litigation to which
they become a party arising from their association with
or activities on behalf of the Company. The Company
will also bear the expenses of such litigation for any
of its directors, officers, employees, or agents, upon
such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall
not have been entitled to indemnification. This
indemnification policy could result in substantial
expenditures by the Company which it will be unable
to recoup.
O. DIRECTOR'S LIABILITY LIMITED.
The Company's Articles of Incorporation exclude
personal liability of its directors to the Company and
its stockholders for monetary damages for breach of
fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have
a much more limited right of action against its
directors than otherwise would be the case. This
provision does not affect the liability of any director
under federal or applicable state securities laws.
P. DEPENDENCE UPON OUTSIDE
ADVISORS. To supplement the business experience
of its sole officer and director, the Company may be
required to employ accountants, technical experts,
appraisers, attorneys, or other consultants or advisors.
The selection of any such advisors will be made by the
Company's President without any input from stock-
holders. Furthermore, it is anticipated that such
persons may be engaged on an "as needed" basis
without a continuing fiduciary or other obligation to
the Company. In the event the President of the
Company considers it necessary to hire outside
advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required
services.
Q. LEVERAGED TRANSACTIONS. There
is a possibility that any acquisition of a business
opportunity by the Company may be leveraged, i.e.,
the Company may finance the acquisition of the
business opportunity by borrowing against the assets
of the business opportunity to be acquired, or against
the projected future revenues or profits of the business
opportunity. This could increase the Company's
exposure to larger losses. A business opportunity
acquired through a leveraged transaction is profitable
only if it generates enough revenues to cover the
related debt and expenses. Failure to make payments
on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all
of the assets acquired. There is no assurance that any
business opportunity acquired through a leveraged
transaction will generate sufficient revenues to cover
the related debt and expenses.
R. COMPETITION. The search for
potentially profitable business opportunities is
intensely competitive. The Company expects to be at
a disadvantage when competing with many firms that
have substantially greater financial and management
resources and capabilities than the Company. These
competitive conditions will exist in any industry in
which the Company may become interested.
S. NO FORESEEABLE DIVIDENDS. The
Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the
foreseeable future.
T. LOSS OF CONTROL BY PRESENT
MANAGEMENT AND STOCKHOLDERS. The
Company may consider an acquisition in which the
Company would issue as consideration for the business
opportunity to be acquired an amount of the
Company's authorized but unissued Common Stock
that would, upon issuance, represent the great majority
of the voting power and equity of the Company. The
result of such an acquisition would be that the
acquired company's stockholders and management
would control the Company, and the Company's
management could be replaced by persons unknown at
this time. Such a merger would result in a greatly
reduced percentage of ownership of the Company by
its current shareholders. In addition, the Company's
President could sell his control block of stock at a
premium price to the acquired company's stockholders.
U. NO PUBLIC MARKET EXISTS. There
is no public market for the Company's common stock,
and no assurance can be given that a market will
develop or that a shareholder ever will be able to
liquidate his investment without considerable delay, if
at all. If a market should develop, the price may be
highly volatile. Factors such as those discussed in this
"Risk Factors" section may have a significant impact
upon the market price of the securities offered hereby.
Owing to the low price of the securities, many
brokerage firms may not be willing to effect transac-
tions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in these
securities, the combination of brokerage commissions,
state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending
institutions will not permit the use of such securities as
collateral for any loans.
V. RULE 144 SALES. All of the
outstanding shares of Common Stock held by present
stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933,
as amended. As restricted shares, these shares may be
resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or
other applicable exemptions from registration under
the Act and as required under applicable state sec-
urities laws. Rule 144 provides in essence that a
person who has held restricted securities for a
prescribed period may, under certain conditions, sell
every three months, in brokerage transactions, a
number of shares that does not exceed the greater of
1.0% of a company's outstanding common stock or
the average weekly trading volume during the four
calendar weeks prior to the sale. There is no limit on
the amount of restricted securities that may be sold by
a nonaffiliate after the restricted securities have been
held by the owner for a period of three years. A sale
under Rule 144 or under any other exemption from the
Act, if available, or pursuant to subsequent
registrations of shares of Common Stock of present
stockholders, may have a depressive effect upon the
price of the Common Stock in any market that may
develop. Of the total 1,010,00 shares of common
stock held by present stockholders of the Company
710,000 shares will become available for resale under
Rule 144 ninety (90) days after the Company registers
its common stock under Section 12(g) of the Securities
and Exchange Commission, all of which will be
subject to applicable volume restrictions under the
Rule, and the remaining 300,000 shares will become
available for resale starting in April, 1998.
W. BLUE SKY CONSIDERATIONS.
Because the securities registered hereunder have not
been registered for resale under the blue sky laws of
any state, the holders of such shares and persons who
desire to purchase them in any trading market that
might develop in the future, should be aware that there
may be significant state blue-sky law restrictions upon
the ability of investors to sell the securities and of
purchasers to purchase the securities. Some
jurisdictions may not under any circumstances allow
the trading or resale of blind-pool or "blank-check"
securities. Accordingly, investors should consider the
secondary market for the Company's securities to be
a limited one.
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development
stage and, since inception, has experienced no
significant change in liquidity or capital resources or
stockholder's equity other than the receipt of net
proceeds in the amount of $6,250.00 from its inside
capitalization funds. Consequently, the Company's
balance sheet for the period of April 22, 1996
(inception) through April 30, 1996, reflects a current
asset value of $6,249 and a total asset value of $8,024,
primarily in the form of cash.
The Company will carry out its plan of
business as discussed above. The Company cannot
predict to what extent its liquidity and capital
resources will be diminished prior to the
consummation of a business combination or whether
its capital will be further depleted by the operating
losses (if any) of the business entity which the
Company may eventually acquire.
RESULTS OF OPERATIONS
During the period from April 22, 1996
(inception) through April 30, 1996, the Company has
engaged in no significant operations other than
organizational activities, acquisition of capital and
preparation for registration of its securities under the
Securities Exchange Act of 1934, as amended. No
revenues were received by the Company during this
period.
For the current fiscal year, the Company
anticipates incurring a loss as a result of organizational
expenses, expenses associated with registration under
the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition
candidates. The Company anticipates that until a
business combination is completed with an acquisition
candidate, it will not generate revenues other than
interest income, and may continue to operate at a loss
after completing a business combination, depending
upon the performance of the acquired business.
NEED FOR ADDITIONAL FINANCING
The Company believes that its existing capital
will be sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act
of 1934, as amended, for a period of approximately
one year. Accordingly, in the event the Company is
able to complete a business combination during this
period, it anticipates that its existing capital will be
sufficient to allow it to accomplish the goal of
completing a business combination. There is no
assurance, however, that the available funds will
ultimately prove to be adequate to allow it to complete
a business combination, and once a business
combination is completed, the Company's needs for
additional financing are likely to increase substantially.
No commitments to provide additional funds
have been made by management or other stockholders.
Accordingly, there can be no assurance that any
additional funds will be available to the Company to
allow it to cover its expenses.
Irrespective of whether the Company's cash
assets prove to be inadequate to meet the Company's
operational needs, the Company might seek to
compensate providers of services by issuances of stock
in lieu of cash. For information as to the Company's
policy in regard to payment for consulting services,
see "Certain Relationships and Transactions."
ITEM 3. DESCRIPTION OF PROPERTY.
The Company does not currently maintain an
office or any other facilities. It does currently
maintain a mailing address at 4750 Table Mesa Drive,
Boulder, Colorado 80303, which is the office address
of its legal counsel. The Company pays no rent for
the use of this mailing address. The Company does
not believe that it will need to maintain an office at
any time in the foreseeable future in order to carry out
its plan of operations described herein. The
Company's telephone number is (303) 442-1021.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date of
this Registration Statement, the number of shares of
Common Stock owned of record and beneficially by
executive officers, directors and persons who hold
5.0% or more of the outstanding Common Stock of
the Company. Also included are the shares held by all
executive officers and directors as a group.
[Download Table]
Name and Address Number of Shares % of Class
Owned Beneficially Owned
Robert Soehngen <F1> 660,000 65.35
2434 Vine Place
Boulder, Colorado 80304
All directors and executive 660,000 65.35
officers as a group (1 person)
<FN>
<F1>
(1) The person listed is the sole officer and
director of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS.
The directors and executive officers currently
serving the Company are as follows:
Name Age Positions Held and Tenure
Robert Soehngen 45 President and Director
since April, 1996
The director named above will serve until the
first annual meeting of the Company's stockholders.
Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold
their positions at the pleasure of the board of directors,
absent any employment agreement, of which none
currently exists or is contemplated. There is no
arrangement or understanding between the sole director
and officer of the Company and any other person
pursuant to which any director or officer was or is to
be selected as a director or officer.
The sole director and officer of the Company
will devote his time to the Company's affairs on an
"as needed" basis. As a result, the actual amount of
time which he will devote to the Company's affairs is
unknown and is likely to vary substantially from
month to month.
BIOGRAPHICAL INFORMATION
ROBERT SOEHNGEN. Mr. Soehngen, who
is the Company's President, has served as the sole
officer and director of the Company since its
inception.
Mr. Soehngen is currently self-employed as a
business consultant, providing consulting services
relating to mergers and acquisitions. From 1980 to
1995 he was a partner in Sawyer/Soehngen
Partnership, a real estate partnership which owned
commercial property in downtown Boulder, Colorado.
Mr. Soehngen has also been engaged in the securities
business in various capacities from 1975 to the
present. From 1984 through 1990 he was President of
National Securities Network, Inc. From 1991 through
1994 he was Director of Corporate Finance for
Spencer Edwards, Inc., Nutmeg Securities, Inc., and
Brookstreet Securities Corporation, and from 1994
through 1995 was an Account Executive with Toluca
Pacific Securities. From 1989 through 1995, Mr.
Soehngen was President of National Securities Holding
Corporation and in that capacity maintained the books
and records of a publicly-held subsidiary corporation
until it was merged with an operating business in
September 1995. Mr. Soehngen graduated from the
University of Colorado in 1972, with a B.S. in
Finance.
INDEMNIFICATION OF OFFICERS AND
DIRECTORS
As permitted by Colorado law, the Company's
Articles of Incorporation provide that the Company
will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action brought against
them on account of their being or having been
Company directors or officers unless, in any such
action, they are adjudged to have acted with gross
negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been
informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore,
unenforceable.
EXCLUSION OF LIABILITY
Pursuant to the Colorado Business Corporation
Act, the Company's Articles of Incorporation exclude
personal liability for its directors for monetary
damages based upon any violation of their fiduciary
duties as directors, except as to liability for any breach
of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section
7-106-401 of the Colorado Business Corporation Act,
or any transaction from which a director receives an
improper personal benefit. This exclusion of liability
does not limit any right which a director may have to
be indemnified and does not affect any director's
liability under federal or applicable state securities
laws.
OTHER BLIND POOL ACTIVITIES
The Company's sole officer and director is not
currently affiliated with any other blind pool
companies. However, he may elect, in the future, to
form, or to seek to become affiliated with one or more
such entities.
In September 1995, Mr. Soehngen merged
National Securities Holding Corporation, a public shell
corporation he controlled, with New Frontier Media,
Inc., a CD-ROM manufacturer. In conjunction with
that transaction, Mr. Soehngen retained a total of
66,055 shares, representing approximatelly 1.65% of
the issued and outstanding stock of New Frontier
Media, Inc. Mr. Soehngen also has a consulting
agreement with New Frontier Media, Inc. pursuant to
which he has agreed to provide consultation services
and assistance in merger and acquisition activities and
in locating interim or "bridge financing" for any such
mergers and acquisitions. The compensation payable
to Mr. Soehngen for such consultation services may
include cash or securities, and will be payable upon
the successful closing of a merger/acquisition
transaction or the completion of any financing.
CONFLICTS OF INTEREST
The sole officer and director of the Company
will not devote more than a portion of his time to the
affairs of the Company. There will be occasions when
the time requirements of the Company's business
conflict with the demands of his other business and
investment activities. Such conflicts may require that
the Company attempt to employ additional personnel.
There is no assurance that the services of such persons
will be available or that they can be obtained upon
terms favorable to the Company.
The Company's sole officer and director may
actively negotiate or otherwise consent to the purchase
of a portion of his common stock as a condition to, or
in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial
premium over the initial cost of such shares may be
paid by the purchaser in conjunction with any sale of
shares by the Company's officer and director which is
made as a condition to, or in connection with, a
proposed merger or acquisition transaction. The fact
that a substantial premium may be paid to the
Company's sole officer and director to acquire his
shares creates a potential conflict of interest for him in
satisfying his fiduciary duties to the Company and its
other shareholders. Even though such a sale could
result in a substantial profit to him, he would be
legally required to make the decision based upon the
best interests of the Company and the Company's
other shareholders, rather than his own personal
pecuniary benefit.
ITEM 6. EXECUTIVE COMPENSATION.
At inception of the Company, its sole Director,
Robert Soehngen, received 560,000 shares of Common
Stock valued at $.0025 per share in consideration of
pre-incorporation services rendered to the Company
related to investigating and developing the Company's
proposed business plan and capital structure, and
completion of the incorporation and organization of
the Company. Three other persons each received a
total of 50,000 shares valued at $0.0025 per share in
consideration of pre-incorporation services rendered to
the Company related to investigating and developing
the Company's proposed business plan and capital
structure. No officer or director has received any
other remuneration. Although there is no current plan
in existence, it is possible that the Company will adopt
a plan to pay or accrue compensation to its sole officer
and director for services related to seeking business
opportunities and completing a merger or acquisition
transaction. See "Certain Relationships and Related
Transactions." The Company has no stock option,
retirement, pension, or profit-sharing programs for the
benefit of directors, officers or other employees, but
the Board of Directors may recommend adoption of
one or more such programs in the future.
ITEM 7. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS.
Prior to the date of this Registration Statement,
the Company issued to its officer and director, and to
other shareholders, a total of 1,010,000 shares of
Common Stock for a total of $6,250.00 in cash and
$1,775.00 in services. Certificates evidencing the
Common Stock issued by the Company to these
persons have all been stamped with a restrictive
legend, and are subject to stop transfer orders by the
Company. For additional information concerning
restrictions that are imposed upon the securities held
by current stockholders, and the responsibilities of
such stockholders to comply with federal securities
laws in the disposition of such Common Stock, see
"Risk Factors - Rule 144 Sales."
No officer, director, promoter, or affiliate of
the Company has or proposes to have any direct or
indirect material interest in any asset proposed to be
acquired by the Company through security holdings,
contracts, options, or otherwise.
The Company has adopted a policy under
which any consulting or finder's fee that may be paid
to a third party for consulting services to assist
management in evaluating a prospective business
opportunity would be paid in stock or in cash. Any
such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict
whether or in what amount such a stock issuance
might be made.
Although there is no current plan in existence,
it is possible that the Company will adopt a plan to
pay or accrue compensation to its sole officer and
director for services related to seeking business
opportunities and completing a merger or acquisition
transaction.
The Company maintains a mailing address at
the office of its legal counsel, but otherwise does not
maintain an office. As a result, it pays no rent and
incurs no expenses for maintenance of an office and
does not anticipate paying rent or incurring office
expenses in the future. It is likely that the Company
will establish and maintain an office after completion
of a business combination.
Although management has no current plans to
cause the Company to do so, it is possible that the
Company may enter into an agreement with an
acquisition candidate requiring the sale of all or a
portion of the Common Stock held by the Company's
current stockholders to the acquisition candidate or
principals thereof, or to other individuals or business
entities, or requiring some other form of payment to
the Company's current stockholders, or requiring the
future employment of specified officers and payment
of salaries to them. It is more likely than not that any
sale of securities by the Company's current
stockholders to an acquisition candidate would be at a
price substantially higher than that originally paid by
such stockholders. Any payment to current
stockholders in the context of an acquisition involving
the Company would be determined entirely by the
largely unforeseeable terms of a future agreement with
an unidentified business entity.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation
authorize the issuance of 100,000,000 shares of
Common Stock. Each record holder of Common
Stock is entitled to one vote for each share held on all
matters properly submitted to the stockholders for their
vote. Cumulative voting for the election of directors
is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common
Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors
out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of
the Company, holders are entitled to receive, ratably,
the net assets of the Company available to
stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights
upon liquidation. Holders of outstanding shares of
Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares
when offered and sold will be, duly authorized, validly
issued, fully paid, and nonassessable. To the extent
that additional shares of the Company's Common
Stock are issued, the relative interests of then existing
stockholders may be diluted.
PREFERRED STOCK
The Company's Articles of Incorporation
authorize the issuance of 10,000,000 shares of
preferred stock. The Board of Directors of the
Company is authorized to issue the preferred stock
from time to time in series and is further authorized to
establish such series, to fix and determine the
variations in the relative rights and preferences as
between series, to fix voting rights, if any, for each
series, and to allow for the conversion of preferred
stock into Common Stock. No preferred stock has
been issued by the Company. The Company anti-
cipates that preferred stock may be utilized in making
acquisitions.
TRANSFER AGENT
The Company is currently serving as its own
transfer agent, and plans to continue to serve in that
capacity until such time as management believes it is
necessary or appropriate to employ an independent
transfer agent in order to facilitate the creation of a
public trading market for the Company's securities.
Since the Company does not currently expect any
public market to develop for its securities until after it
has completed a business combination, it does not
currently anticipate that it will seek to employ an
independent transfer agent until it has completed such
a transaction.
REPORTS TO STOCKHOLDERS
The Company plans to furnish its stockholders
with an annual report for each fiscal year containing
financial statements audited by its independent
certified public accountants. In the event the
Company enters into a business combination with
another company, it is the present intention of
management to continue furnishing annual reports to
stockholders. Additionally, the Company may, in its
sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems
appropriate. The Company intends to comply with the
periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to
those requirements.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON
THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
No public trading market exists for the
Company's securities and all of its outstanding
securities are restricted securities as defined in Rule
144. There were nine (9) holders of record of the
Company's common stock on April 30, 1996. No
dividends have been paid to date and the Company's
Board of Directors does not anticipate paying
dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending
legal proceedings, and no such proceedings are known
to be contemplated.
No director, officer or affiliate of the
Company, and no owner of record or beneficial owner
of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or
security holder is a party adverse to the Company or
has a material interest adverse to the Company in
reference to pending litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED
SECURIITES.
Since April 22, 1996 (the date of the
Company's formation), the Company has sold its
Common Stock to the persons listed in the table below
in transactions summarized as follows:
[Enlarge/Download Table]
Name Date of Shares Aggregate Purchase Price
Sale Purchase Price per Share
Robert Soehngen 04/22/96 560,000 1,400.00 <F1> 0.0025
Gary S. Joiner 04/22/96 50,000 125.00 <F2> 0.0025
Grant W. Peck 04/22/96 50,000 125.00 <F2> 0.0025
Dean F. Sessions 04/22/96 50,000 125.00 <F2> 0.0025
Robert Soehngen 04/23/96 100,000 250.00 0.0025
Steven C. Signer 04/26/96 50,000 1,500.00 0.03
Dev K. Mahanti 04/26/96 50,000 1,500.00 0.03
Thomas Soehngen 04/28/96 40,000 1,200.00 0.03
John F. O'Neil 04/29/96 30,000 900.00 0.03
Douglas L. Ray 04/29/96 30,000 900.00 0.03
<FN>
<F1>
(1) Consideration consisted of pre-incorporation
consulting services rendered to the Registrant
related to investigating and developing the
Registrant's proposed business plan and capital
structure and completing the organization and
incorporation of the Registrant.
<FN>
<F2>
(2) Consideration consisted of pre-incorporation
consulting services rendered to the Registrant
related to investigating and developing the
Registrant's proposed business plan and capital
structure.
Each of the sales listed above was made for
cash or services. All of the listed sales were made in
reliance upon the exemption from registration offered
by Section 4(2) of the Securities Act of 1933, as
amended. Based upon Purchaser Questionnaires
completed by each of the subscribers and the pre-
existing relationship between the subscribers of the
Company's sole officer and director, the Company had
reasonable grounds to believe immediately prior to
making an offer to the private investors, and did in
fact believe, when such subscriptions were accepted,
that such purchasers (1) were purchasing for invest-
ment and not with a view to distribution, and (2) had
such knowledge and experience in financial and busi-
ness matters that they were capable of evaluating the
merits and risks of their investment and were able to
bear those risks. The purchasers had access to
pertinent information enabling them to ask informed
questions. The shares were issued without the benefit
of registration. An appropriate restrictive legend is
imprinted upon each of the certificates representing
such shares, and stop-transfer instructions have been
entered in the Company's transfer records. All such
sales were effected without the aid of underwriters,
and no sales commissions were paid.
ITEM 5. INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The Articles of Incorporation and the Bylaws
of the Company, filed as Exhibits 3.1 and 3.2,
respectively, provide that the Company will indemnify
its officers and directors for costs and expenses
incurred in connection with the defense of actions,
suits, or proceedings where the officer or director
acted in good faith and in a manner he reasonably
believed to be in the Company's best interest and is a
party by reason of his status as an officer or director,
absent a finding of negligence or misconduct in the
performance of duty.
FINANCIAL STATEMENTS
PART III
ITEM 1. INDEX TO EXHIBITS
The Exhibits listed below are filed as part of
this Registration Statement.
Exhibit
No. Document
2.1 Articles of Incorporation
2.2 Bylaws
3.1 Specimen Stock Certificate
Item 2. Description of Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the registrant caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BOULDER CAPITAL OPPORTUNITIES, INC.
By: /s/ Robert Soehngen, President and Director
(Principal Executive Officer)
Date: July 29, 1996
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange
Act of 1934
BOULDER CAPITAL OPPORTUNITIES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1341980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
4750 Table Mesa Drive, Boulder, CO 80303
(Address of principal executive offices)
Issuer's telephone number, (303) 442-1021
EXHIBIT INDEX
Exhibit
No.
2.1 Articles of Incorporation
2.2 Bylaws
EXHIBIT 2.1
ARTICLES OF INCORPORATION
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EXHIBIT 2.2
BYLAWS
Dates Referenced Herein
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| | 4/30/96 | | 2 |
| | 4/22/96 | | 2 |
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