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EX-23.1 - Madison Enterprises Group, Inc. | ex23-1.htm |
EX-99.1 - Madison Enterprises Group, Inc. | ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
AMENDMENT
NO. 11
TO
FORM S-1/A
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
MADISON
ENTERPRISES GROUP, INC.
(Name of
small business issuer in its charter)
Delaware
(State
or other jurisdiction of incorporation or organization)
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67770
(Primary
Standard Industrial Classification Code Number)
|
20-8380322
(I.R.S.
Employer Identification
Number)
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488
Madison Avenue
Suite
1100
New
York, New York 10022
Telephone:
212-486-2500
(Address
and telephone number of principal executive offices)
Frederick
M. Mintz
488
Madison Avenue
Suite
1100
New
York, New York 10022
Telephone:
212-486-2500
(Name,
address and telephone number of agent for service)
Approximate
date of proposed sale to the public by the selling stockholders: From time
to time after the effective date of this registration statement as
determined by market conditions.
|
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box. þ
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. r
If this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. r
If this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. r
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. r
CALCULATION
OF REGISTRATION FEE
Title
of each class of securities to be registered
|
Amount
of shares
to be registered (1) |
Proposed
offering
price per Share (2) |
Proposed
aggregate offering
|
Amount
of registration fee
|
|||||||||||||
Common
Stock, $.001 par value per Share
|
210,000
|
$
|
0.20
|
$
|
$42,000
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$
|
$1.29
|
______________
1 This
registration statement shall also cover any additional shares of common stock
which become issuable by reason of any stock split, stock dividend,
anti-dilution provisions or similar transaction effected without the receipt of
consideration which results in an increase in the number of the outstanding
shares of common stock of the registrant.
2 The selling stockholders shares
are restricted from sale until this registration statement is effective;
provided, however, that after this registration statement is effective, at such
time as we become aware that our entry into a Business Combination Transaction
has become probable, we shall file an amendment to this registration statement
with the SEC which will again restrict the stockholders from sale. If
the potential Business Combination Transaction is not consummated, the selling
stockholders may sell shares again. If the Business Combination
Transaction is consummated, we shall file a post-effective amendment to this
registration statement with the SEC. After the effective date of the
amendment to this registration statement the shares can be sold freely
again. Our common stock is
presently not traded on any market or securities exchange, and we have not
applied for listing or quotation on any public market.
The
selling security holders and any broker-dealers participating in the
distributions of the shares are considered to be “underwriters”
within the meaning of Section 2(11) of the Securities
Act.
REGISTRANT
HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON DATES AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY
DETERMINE.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THIS
OFFERING IS A RESALE OF SECURITIES INITIALLY SOLD AT $0.10 PER SHARE AND IS
BEING CONDUCTED PURSUANT TO RULE 419 OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”). THE SELLING STOCKHOLDERS HAVE EACH ENTERED
INTO AN ESCROW AGREEMENT. IF AND WHEN ANY SALE OF SECURITIES IS MADE
BY A SELLING STOCKHOLDER PRIOR TO OUR ENTRY INTO A MERGER, ACQUISITION OR
SIMILAR TRANSACTION (HEREINAFTER COLLECTIVELY REFERRED TO AS A “BUSINESS
COMBINATION TRANSACTION”), THE SECURITIES BEING SOLD AND THE PURCHASE PRICE FOR
THE SECURITIES BEING SOLD (THE PURCHASERS OF THOSE SHARES ARE HEREINAFTER
REFERRED TO AS THE “PURCHASERS”) SHALL BE PLACED INTO ESCROW WITH AN INSURED
DEPOSITORY INSTITUTION.
WHEN
WE BECOME AWARE THAT OUR ENTRY INTO A BUSINESS COMBINATION TRANSACTION HAS
BECOME PROBABLE, WE SHALL FILE AN AMENDMENT TO THIS REGISTRATION STATEMENT WITH
THE SEC SUSPENDING THIS OFFERING, AND SHALL NOTIFY THE SELLING STOCKHOLDERS THAT
THIS OFFERING IS BEING SUSPENDED. IF THE POTENTIAL BUSINESS
COMBINATION TRANSACTION IS NOT CONSUMMATED, THIS OFFERING SHALL BE CONTINUED,
AND THE SELLING STOCKHOLDERS MAY SELL SHARES AGAIN PURSUANT TO THIS
OFFERING.
WHEN
WE HAVE ENTERED INTO AN AGREEMENT FOR A BUSINESS COMBINATION TRANSACTION WITH
ONE OR MORE BUSINESSES (THE “TARGETS”), WE SHALL FILE AN AMENDMENT TO THIS
REGISTRATION STATEMENT AND SEND THE PURCHASERS, IF ANY, EXTENSIVE INFORMATION
WITH RESPECT TO THE TARGETS INCLUDING, BUT NOT LIMITED TO, AUDITED FINANCIAL
STATEMENTS, AND EACH PURCHASER SHALL HAVE A PERIOD OF FORTY FIVE (45) BUSINESS
DAYS AFTER THE EFFECTIVE DATE OF THAT AMENDMENT (THE END OF SUCH PERIOD, THE
“DEADLINE”) IN WHICH TO INFORM US IF HE, SHE OR IT WISHES TO REMAIN AN INVESTOR
IN OUR COMPANY SUBSEQUENT TO THE CLOSING OF THE BUSINESS COMBINATION
TRANSACTION. IF A PURCHASER INFORMS US ON, OR PRIOR TO, THE DEADLINE
THAT HE, SHE OR IT WISHES TO REMAIN AN INVESTOR IN OUR COMPANY SUBSEQUENT TO THE
CLOSING OF THE BUSINESS COMBINATION TRANSACTION, WE SHALL RELEASE THE SHARES
PURCHASED BY HIM, HER OR IT TO HIM, HER OR IT AND RELEASE FROM ESCROW THE FUNDS
HE, SHE OR IT PAID FOR SUCH SHARES, PLUS ANY INTEREST OR DIVIDENDS WHICH HAVE
BEEN PAID THEREON DURING THE PERIOD WHILE SUCH FUNDS WERE HELD IN ESCROW, TO THE
SELLING STOCKHOLDER FROM WHOM HE, SHE OR IT PURCHASED THOSE
SHARES. IF A PURCHASER FAILS TO INFORM US ON, OR PRIOR TO, THE
DEADLINE THAT HE, SHE OR IT WISHES TO REMAIN AN INVESTOR IN OUR COMPANY
SUBSEQUENT TO THE CLOSING OF THE BUSINESS COMBINATION TRANSACTION, HIS, HER OR
ITS ESCROW FUNDS, PLUS ANY INTEREST OR DIVIDENDS THEREON, SHALL BE RETURNED TO
HIM, HER OR IT WITHIN FIVE (5) BUSINESS DAYS AFTER THE FORTY FIFTH (45TH)
BUSINESS DAY FOLLOWING THE EFFECTIVE DATE OF THAT AMENDMENT, AND HIS, HER OR ITS
SHARES SHALL BE RETURNED TO THE SELLING STOCKHOLDER FROM WHOM HE, SHE OR IT
PURCHASED HIS, HER OR ITS SHARES.
SUBSEQUENT
TO CONSUMMATING SUCH BUSINESS COMBINATION TRANSACTION AND THE EFFECTIVE DATE OF
THE AMENDMENT TO THIS REGISTRATION STATEMENT, WE WOULD NO LONGER BE DEEMED TO BE
A SHELL COMPANY, AND SHARES COULD BE TRANSFERRED WITHOUT COMPLYING WITH THE
PROVISIONS OF RULE 419.
IF
ANY SELLING STOCKHOLDERS SOLD ANY SHARES TO PURCHASERS, AND WE HAVE NOT
CONSUMMATED A BUSINESS COMBINATION TRANSACTION WITHIN EIGHTEEN (18) MONTHS AFTER
THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, ALL ESCROW FUNDS SHALL BE
RETURNED TO THE PURCHASERS, AND ALL OF THE SHARES HELD IN ESCROW SHALL BE
RETURNED TO THE SELLING STOCKHOLDERS FROM WHOM THOSE PURCHASERS PURCHASED
THEM. IN VIEW OF THE FACT THAT THE ESCROW FUNDS SHALL EITHER BE
RELEASED TO THE SELLING STOCKHOLDERS OR RETURNED TO THE PURCHASERS, WE SHALL NOT
RECEIVE ANY FUNDS FROM THIS OFFERING.
IF
THERE ARE NO SALES OF SECURITIES PURSUANT TO THIS OFFERING WITHIN 18 MONTHS
AFTER THE DATE THE SEC DECLARES THIS REGISTRATION STATEMENT EFFECTIVE, NO FUNDS
OR SECURITIES SHALL BE PLACED IN ESCROW, AND WE WILL FILE AN AMENDMENT TO THIS
REGISTRATION STATEMENT WITH THE SEC REMOVING THE SHARES FROM REGISTRATION AND,
SUBJECT TO THE NEXT PARAGRAPH, TERMINATING THIS OFFERING, IN WHICH EVENT THE
SHARES CANNOT BE SOLD UNLESS THEY ARE REGISTERED OR UNLESS A VALID EXEMPTION
FROM REGISTRATION IS THEN AVAILABLE.
IF
THERE ARE NO SALES PURSUANT TO THIS OFFERING, WE MAY ENTER INTO A BUSINESS
COMBINATION TRANSACTION AT ANY TIME, REGARDLESS OF WHETHER PRIOR TO, OR
SUBSEQUENT TO, EIGHTEEN (18) MONTHS AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT; PROVIDED, HOWEVER, THAT IF THERE ARE NO SALES OF
SECURITIES PURSUANT TO THIS OFFERING, AND DURING SAID 18 MONTH PERIOD WE BECOME
AWARE THAT A BUSINESS COMBINATION IS PROBABLE, WE SHALL SUSPEND THIS OFFERING
AND SHALL NOTIFY THE SELLING STOCKHOLDERS THAT THIS OFFERING HAS BEEN
SUSPENDED. IF THE POTENTIAL BUSINESS COMBINATION TRANSACTION IS NOT
CONSUMMATED BEFORE THE EIGHTEEN (18) MONTH PERIOD HAS EXPIRED, THIS OFFERING
SHALL BE CONTINUED DURING THE EIGHTEEN MONTH STATUTORY PERIOD, AND THE SELLING
STOCKHOLDERS MAY SELL SHARES AGAIN PURSUANT TO THIS OFFERING. IF THERE IS
NO BUSINESS COMBINATION TRANSACTION AFTER THE EIGHTEEN (18) MONTH PERIOD, THEN
THIS OFFERING SHALL BE TERMINATED. IF THERE ARE NO SALES
PURSUANT TO THIS OFFERING, THEN AFTER WE CONSUMMATE A BUSINESS COMBINATION
TRANSACTION, WE SHALL FILE A FORM 8-K WITH THE SECURITIES AND EXCHANGE
COMMISSION CONTAINING EXTENSIVE INFORMATION AS REQUIRED BY SEC REGULATIONS WITH
RESPECT TO THE TARGET(S), INCLUDING, BUT NOT LIMITED TO, AUDITED FINANCIAL
STATEMENTS. SUBSEQUENT TO CONSUMMATING SUCH BUSINESS COMBINATION
TRANSACTION, WE WOULD NO LONGER BE DEEMED TO BE A SHELL COMPANY, AND THE
PROVISIONS OF RULE 419 WITH RESPECT TO ESCROW OF FUNDS, AND PURCHASERS’
OPPORTUNITY TO RECEIVE A RETURN OF THEIR INVESTMENT FUNDS IF THEY DID NOT
APPROVE OF THE ACQUISITION WOULD NOT BE APPLICABLE.
Madison
Enterprises Group, Inc.
210,000
Shares, Common Stock, at $0.20 Per Share
We have a
total of 3,210,000 shares of common stock issued and outstanding. We
are not selling any of our shares pursuant to this
prospectus. Accordingly, (1) there is no minimum amount of shares we
must sell and (2) no money raised from the sale of the shares will be placed in
escrow, trust or any other similar arrangement. Our securities are
more fully described in the section of this prospectus titled "Description of
Securities" on page 21.
There is
currently no public market for our common stock. We intend to arrange
to have our common stock traded on a public market after complying with Rule 419
and with the availability of our shares to be sold on the public
market. Although we intend to apply for the trading of our common
stock on the OTC Bulletin Board after entering into a merger, acquisition, or
similar transaction (a “Business Combination Transaction”), public trading of
our common stock may never materialize. Although all of our selling
stockholders have entered into an escrow agreement, unless we determine that a
sale satisfies the applicable “Blue Sky” laws the sale of our common stock is
not permitted until the Business Combination Transaction is consummated in
accordance with Rule 419. If our common stock becomes traded on the OTC
Bulletin Board after we enter into a Business Combination Transaction, the sale
price will vary according to prevailing market prices or privately negotiated
prices by the selling stockholders.
All
shares currently have a restrictive legend and cannot be sold without
registration or an exemption from registration. In order to comply
with Rule 419 of the Securities Act, discussed in further detail below, all of
our selling stockholders have entered into an escrow agreement. If a
stockholder desires to sell his or her shares prior to our entering into a
Business Combination Transaction, he or she must notify us so that we can then
determine if the broker dealer arranged for the sale to comply with the
applicable “Blue Sky” laws. All sales of our stock are still subject
to the restrictions of the escrow agreement.
This
offering is a resale of securities initially sold at $0.10 a share and is being
conducted pursuant to Rule 419 of the Securities Act. The selling
stockholders have entered into an escrow agreement. If and when any
sale of securities is made by a selling stockholder prior to our entry into a
Business Combination Transaction, the securities and the purchase price for the
securities (the purchasers of those shares are hereinafter referred to as the
“Purchasers”) shall promptly be placed into escrow with Wilmington Trust
Company, an insured depository institution. When we have entered into
an agreement for a Business Combination Transaction with one or more businesses,
each Purchaser shall have a period of 45 business days after the effective date
of that amendment in which to inform us whether he, she or it wishes (A) to
remain an investor in our company subsequent to the closing of the Business
Combination Transaction, in which event the securities shall be released from
escrow to the Purchaser and the purchase price for those securities, plus any
interest or dividends, shall be released from escrow to the selling stockholder,
or (B) to receive the return of his, her or its escrow funds plus any interest
or dividends, in which event the securities shall be returned to the selling
stockholder.
The
selling security holders and any broker-dealers participating in the
distributions of the shares are considered to be “underwriters” within the
meaning of Section 2(11) of the Securities Act. Any profit on the
sale of shares by the selling security holders and any commissions or discounts
given to any such broker-dealer may be deemed to be underwriting commissions or
discounts.
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE
OUR SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR
INVESTMENT. SEE "RISK FACTORS" BEGINNING AT PAGE 3.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date
of this prospectus is November
10, 2009.
MADISON
ENTERPRISES GROUP, INC.
TABLE OF CONTENTS
PART
I
Page
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F-1
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PART
II
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II-1
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II-1
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II-2
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II-2
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II-4
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You
should rely only upon the information contained in this prospectus in deciding
whether to purchase our securities. We have not authorized anyone to
provide information different from that contained in this
prospectus. The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of delivery of
this prospectus or of any sale of securities. Our business, financial
condition, results of operations, and prospects may have changed since that
date.
The
information contained in this prospectus is not complete and is subject to
change. The selling stockholders are not permitted to sell securities
until the Registration Statement, of which this prospectus is a part, filed with
the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities, nor is it a solicitation of an offer
to buy these securities in any state where the offer or sale is not
permitted.
PART
I
PROSPECTUS SUMMARY
You
should rely only upon the information contained in this
prospectus. We have not, and the selling stockholders have not,
authorized anyone to provide you with information which is different from that
contained in this prospectus. The selling stockholders are offering to sell
shares of common stock and seeking offers to buy shares of common stock only in
jurisdictions where offers and sales are permitted. The information
in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our
common stock.
SUMMARY
INFORMATION AND RISK FACTORS.
The
following summary contains basic information about our company and this
offering. It does not contain all of the information which is
important to you in making an investment decision. You should read
this prospectus summary together with the entire prospectus, including the more
detailed information in our financial statements and accompanying notes
appearing elsewhere in this prospectus. Unless otherwise indicated, all
information contained in this prospectus relating to our shares of common stock
is based upon information as of June 30,
2009.
Madison
Enterprises Group, Inc. (“we”, “us”, “our”) was incorporated under the laws of
the State of Delaware on August 17, 2006. Since our inception we have
been engaged in developmental stage activities and organizational efforts,
including obtaining initial financing. Based upon proposed business
activities, we are a "blank check" company. The SEC defines those companies as
"any development stage company that is issuing a penny stock, within the meaning
of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Many states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their respective
jurisdictions. We are, as defined in Rule 12b-2 under the Exchange Act, also a
“shell company,” defined as a company with no or nominal assets (other than
cash) and no or nominal operations. We intend to comply with the periodic
reporting requirements of the Exchange Act for as long as we are subject to
those requirements.
Our
business purpose is to seek the acquisition of, or merger with, an existing
company. 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. We have
very limited capital, and it is unlikely that we will be able to take advantage
of more than one such business opportunity. We intend to seek opportunities
demonstrating the potential of long-term growth as opposed to short-term
earnings. We will not restrict potential candidate target companies
to any specific business, industry or geographical location and, thus, may
acquire any type of business. As of the date hereof, we have made no
efforts to identify a possible business combination including, but not limited
to, not conducting negotiations or entering into a letter of intent with respect
to any target business and we have not entered into a letter of intent or any
definitive agreement with respect to any target business.
The
analysis of new business opportunities has and will be undertaken by or under
the supervision of our officers and directors. We have unrestricted flexibility
in seeking, analyzing and participating in potential business opportunities. In
its efforts to analyze potential acquisition targets, we will
consider the following kinds of factors:
(a) Potential
for growth, indicated by new technology, anticipated market expansion or new
products;
(b) Competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole; and
(c) Strength
and diversity of management, either in place or scheduled for
recruitment.
Michael
Zaroff serves as President and as a Director. Frederick M. Mintz
serves as Chairman of the Board, and as a Director. Alan P. Fraade
was our original incorporator and presently serves as Principal Accounting
Officer, Principal Financial Officer Vice President, Secretary and as a
Director.
We have
not been involved in any bankruptcy, receivership or similar
proceeding. We have not been involved in any material
reclassification, merger consolidation, or purchase or sale of any
assets.
THE OFFERING
Securities
Offered
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We
are registering common shares on behalf of twenty one (21) selling
security holders. In the aggregate, the selling stockholders
are offering up to 210,000 shares of common stock, $.001 par value per
share. The aggregate amount of shares we are registering for
the selling security holders represents 6.5% of the issued and outstanding
shares of our common stock and .42% of the total authorized shares of our
common stock. See “Selling Security
Holders.”
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Plan
of Distribution
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Up
to 210,000 shares of common stock may be offered and sold by the selling
stockholders through agents or brokers, acting as principal, agent in
transactions, which may involve block transactions, on the Electronic
Bulletin Board, over-the-counter market or on other exchanges on which the
shares are then listed, pursuant to the rules of the applicable exchanges
or in the over-the-counter market, or otherwise; through brokers or agents
in private sales at negotiated prices; or by any other legally available
means. Because
it is not contemplated that any of the selling stockholders intend to sell
their shares until we enter into a Business Combination Transaction, and
any sales will have to be through a broker dealer, we will not know in
which states prospective purchasers will be
located. It will be the brokers’ responsibility to confirm that
sales can legally be made in the applicable
states.
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Offering
Price
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$0.20
per share.
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Use
of Proceeds
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We
will not receive any cash or other proceeds from the selling security
holders’ sales of their respective shares.
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Securities
Outstanding
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We
are authorized to issue up to an aggregate of 50,000,000 shares of common
stock and 5,000,000 of preferred stock of which 3,210,000 common shares
and 0 preferred shares were issued and outstanding as of June
30, 2009.
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Rule
419
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This
offering is being conducted pursuant to Rule 419 of the Securities
Act. All the selling stockholders have entered into an escrow
agreement. Consequently, if one of our stockholders sells
shares before we have entered into a merger, acquisition or similar
transaction (hereinafter collectively referred to as a “Business
Combination Transaction”), the shares and the funds paid for them (the
purchasers of those shares are hereinafter referred to as the
“Purchasers”) shall promptly be placed into escrow with Wilmington Trust
Company, an insured depository institution.
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When
we become aware that our entry into a Business Combination Transaction has
become probable, we shall file an amendment to this registration statement
with the SEC suspending this offering, and shall notify the selling
stockholders that this offering is being suspended. If the
potential Business Combination Transaction is not consummated, this
offering shall be continued, and the selling stockholders may sell shares
again pursuant to this offering.
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When
we have entered into an agreement for a Business Combination Transaction
with one or more businesses (the “Targets”), we shall file a
post-effective amendment to this registration statement with the SEC and
will send the Purchasers, if any, extensive information with respect to
the Targets including audited financial statements, and each Purchaser
shall have a period of forty five (45) business days after the effective
date of that amendment (the end of such period, the “Deadline”) in which
to inform us whether he, she or it wishes to remain an investor in our
company after the Business Combination Transaction. If a
Purchaser informs us on, or prior to, the Deadline that he, she or it
wishes to remain an investor in our company after the Business Combination
Transaction, we shall release the shares to him, her or it and release the
funds he, she or it paid for such shares, plus any interest or dividends
on those funds, to the stockholder from whom he, she or it purchased those
shares after the Business Combination Transaction is complete, which will
be at least forty five (45) business days after the date the SEC declares
the amendment effective. If a Purchaser fails to inform us on,
or prior to, the Deadline that he, she or it wishes to remain an investor
in our company after the Business Combination Transaction, his, her or its
escrow funds, plus any interest or dividends on those funds, shall be
returned to him, her or it within five business days after the forty fifth
(45th) business day following the date the SEC declares the amendment
effective, and his, her or its shares shall be returned to the stockholder
from whom he, she or it purchased his, her or its
shares.
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Subsequent
to consummating such Business Combination Transaction and the effective
date of the amendment to this registration statement, we would no longer
be deemed to be a shell company, and shares could be transferred without
complying with the provisions of Rule 419.
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If
any stockholders sold any shares to Purchasers, and we have not completed
a Business Combination Transaction within 18 months after the date the SEC
declares this registration statement effective, all escrow funds shall be
returned to the Purchasers within five days, plus any interest or
dividends on those funds, all of the shares held in escrow shall be
returned to the selling stockholders from whom those Purchasers purchased
them and we will file an amendment to this registration statement with the
SEC removing the shares from registration and terminating this offering,
in which event the shares would not be able to be sold unless they are
registered or unless a valid exemption from registration is then
available; please note that shares of a blank check company cannot be sold
pursuant to Rule 144. Since the escrow funds will either be
released to the selling stockholders or returned to the Purchasers, we
will not receive any funds from this offering.
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If
there are no sales in this offering within eighteen (18) months after the
date the SEC declares this registration statement effective, no funds or
shares shall be placed in escrow, and we will file an amendment to this
registration statement with the SEC removing the shares from registration
and, subject to the next paragraph, terminating this offering, in which
event the shares cannot be sold unless they are registered or unless a
valid exemption from registration is then available; please note that
shares of a blank check company cannot be sold pursuant to Rule
144.
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If
there are no sales in this offering, we may enter into a Business
Combination Transaction at any time, regardless of whether before or after
eighteen (18) months after the effective date of this registration
statement; provided, however, that if there are no sales of securities
pursuant to this offering, and during said eighteen (18) month period we
become aware that a business combination is probable, we shall suspend
this offering, and shall notify the selling stockholders that
this offering is being suspended. If
the potential Business Combination Transaction is not consummated before
the expiration of the 18 month period, this offering shall be continued,
and the selling stockholders may sell shares again pursuant to this
offering. After the 18 month period, if there is no Business
Combination Transaction, this offer will be terminated. If there
are no sales in this offering, then after we complete a Business
Combination Transaction, we will file a Form
8-K with the SEC containing extensive information about the
Target(s) as required by SEC regulations, including audited financial
statements. After completing such Business Combination
Transaction, we would no longer be deemed to be a shell company, and the
requirements of Rule 419 with respect to escrow of funds, and purchasers’
opportunity to receive a return of their investment funds if they did not
approve of the acquisition would not apply.
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All
shares currently have a restrictive legend and cannot be sold without
registration or an exemption from registration. In order to
comply with Rule 419 of the Securities Act, all of our selling
stockholders have entered into an escrow agreement. If a
stockholder desires to sell his or her shares prior to our entering into a
Business Combination Transaction, he or she must notify us so that we can
then determine if the broker dealer arranged for the sale to comply with
the applicable “Blue Sky” laws. All sales of our stock are
subject to the restrictions of the escrow
agreement.
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Escrow
Agreement
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In
order to comply with Rule 419, all of the selling stockholders have
entered into an escrow agreement with Wilmington Trust
Company. When we have entered into an agreement for a Business
Combination Transaction with one or more businesses and filed the required
amendment to this registration statement with the SEC suspending this
offering, we shall send the Purchasers, if any, extensive information with
respect to the Targets and each Purchaser shall have a period of 45
business days after the effective date of that amendment in which to
inform us whether he, she or it wishes (A) to remain an investor in our
company subsequent to the closing of the Business Combination Transaction,
in which event the Escrow Agent shall release all of the Purchaser’s
securities from escrow to the Purchaser and shall release the purchase
price for those securities, plus any interest or dividends, from escrow to
the selling stockholder, or (B) to receive the return of his, her or its
escrow funds plus any interest or dividends, in which event the securities
shall be returned to the selling stockholder.
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If
we give written instructions to the Escrow Agent that we have not (A)
negotiated an acquisition transaction, (B) filed a post-effective
amendment to our Registration Statement, (C) successfully completed a
reconfirmation offering meeting the requirements of Rule 419 and (D)
closed on the acquisition agreement within eighteen (18) months after the
date of our Registration Statement, then the Escrow Agent will return the
escrow funds to the Purchasers plus any interest or dividends, and return
the securities to the selling
stockholders.
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Risk Factors |
An
investment in our shares is highly speculative and purchasers may suffer
substantial dilution per common share compared to the purchase price. We
may need additional funding. No individual should invest in our common
shares who cannot afford to risk the loss of his or her entire investment.
All shares are currently restricted and may not be sold except subject to
the Escrow Agreement. If a stockholder wishes to sell his stock, he must
notify the Company. The Company must then determine if the sale complies
with the applicable “Blue Sky” laws. Any sale is subject to the terms of
the Escrow Agreement and would not be completed until a later date The
sale may never be completed as discussed in “Escrow Agreement” immediately
prior to this provision. See “Risk Factors” immediately following this
provision.
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An
investment in the Shares being registered pursuant to this prospectus involves a
high degree of risk. Any statements with respect to future events
contained in this prospectus are based upon circumstances and events which have
not yet occurred, and upon assumptions which may not materialize. The
actual results which are achieved by us may vary materially from those discussed
in this prospectus.
In
addition, this prospectus contains forward-looking statements which involve
risks and uncertainties. Forward-looking statements are based upon
the beliefs of our management, as well as assumptions made by and information
currently available to our management. When used in this prospectus,
the words “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and
similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect
to future events and are subject to risks and uncertainties which may cause our
actual results to differ materially from those contemplated in our
forward-looking statements. We caution you not to place undue
reliance upon such forward-looking statements, as our results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in the following risk
factors section and elsewhere in this prospectus. Any such statements
are representative only as of the date of this prospectus. We do not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances subsequent to the
date of this prospectus or to reflect the occurrence of unanticipated events,
except for such updates to this prospectus and the registration statement of
which it is a part as are required by federal securities laws and such periodic
reports as are required pursuant to the Securities Exchange Act of 1934, as
amended.
Accordingly,
prospective investors should consider carefully the following risk factors, in
addition to the other information with respect to our business contained in this
prospectus, before purchasing Shares pursuant to this prospectus.
There
is uncertainty as to our ability to receive additional financing.
We have
raised capital which we believe will be sufficient until we consummate a merger
or other business combination. We may need to raise additional
capital through the issuance of additional shares or through
debt. There is no existing commitment to provide additional
capital. There can be no assurance that we shall be able to receive
additional financing.
There
may be conflicts of interest between our management and our non-management
stockholders.
Conflicts of interest create the risk that management may have
an incentive to act adversely to the interests of
other stockholders. A conflict of interest may arise
between our management's personal pecuniary interests and their fiduciary duty
to our stockholders. Further, our management's own pecuniary interest
may at some point compromise its fiduciary duty to our stockholders. In
addition, our officers and directors are currently and in the future shall be
involved with other blank check companies and conflicts may arise in the pursuit
of business combinations with such other blank check companies with which they
are and may in the future be affiliated. Management currently has
interests in two other blank check companies, Madison Acquisition Ventures and
Madison Venture Capital Group, both of which have registration statements
pending with the SEC. Management plans to give the first suitable
transaction opportunity to Madison Acquisition Ventures, the second suitable
transaction opportunity to this company, and the third suitable transaction
opportunity to Madison Venture Capital Group. If management forms any
subsequent blank check companies, priority with respect to transaction
opportunities shall go to Madison Acquisition Ventures, this company and Madison
Venture Capital Group. In the future, after the close of a
transaction, the Company does not anticipate that our current officers and
directors will perform services in their current capacity.
Management
has adopted a policy that we will not seek a merger with, or acquisition of, any
entity in which management serves as officers, directors or partners, or in
which they or their family members own or hold any ownership
interest. The Company has not established other binding guidelines or
procedures for resolving potential conflicts of interest. Failure by
management to resolve conflicts of interest in our favor could result in
liability of management to us.
Our
management’s indirect ownership of a majority of our stock would enable it to
approve any business combination, regardless of whether other stockholders
wanted to approve such transaction.
Our
management also controls Sierra Grey Capital LLC and Mintz & Fraade
Enterprises LLC, which collectively own 93.5 % of our Common
Stock. If our management acted through Sierra Grey Capital LLC and
Mintz & Fraade Enterprises LLC, our management would be able to approve a
business combination requiring stockholder approval regardless of whether other
stockholders wanted to approve such transaction. If management wanted
to pursue a business combination that some stockholders purchasing shares
pursuant to this offering opposed, those investors would have the opportunity to
receive a return of their escrow funds, but would not be able to prevent the
proposed business combination.
Our
business is difficult to evaluate because we have no operating
history.
As we
have no operating history or revenue and only minimal assets, there is a risk
that we will be unable to continue as a going concern and consummate a business
combination. We have no operating history nor any revenues or
earnings from operations since inception. We have no significant
assets or financial resources. We will, in all likelihood, sustain
operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in our
incurring a net operating loss which will increase continuously until we can
consummate a business combination with a profitable business
opportunity. There can be no assurance that we will be able to
identify a suitable business opportunity and consummate a business
combination.
There
is competition for those private companies suitable for a merger transaction of
the type contemplated by management.
We are in
a highly competitive market for a small number of business opportunities which
could reduce the likelihood of consummating a successful business combination.
We are and will continue to be an insignificant participant in the business of
seeking mergers with, joint ventures with and acquisitions of, small private and
public entities. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies which may be desirable target candidates
for us. Virtually all of these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business
combination. These competitive factors may reduce the likelihood of
our identifying and consummating a successful business combination.
Our
future success is highly dependent upon the ability of management to locate and
attract a suitable acquisition.
The
nature of our operations is highly speculative and there is a consequent risk of
loss with respect to the purchase of shares. The success of our plan of
operation will depend to a great extent upon the operations, financial condition
and management of the identified business opportunity. Although
management intends to seek business combination(s) with entities having
established operating histories, there can be no assurance that we will be
successful in locating candidates meeting that criterion. If we
complete a business combination, the success of our operations may be dependent
upon management of the successor firm or venture partner firm and numerous other
factors beyond our control.
We
have no existing agreement for a business combination or other
transaction.
We have
no arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. There
can be no assurance that we will successfully identify and evaluate suitable
business opportunities or that we will conclude a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation. We cannot
guarantee that we will be able to negotiate a business combination upon
favorable terms, and there is consequently a risk that funds allocated to the
purchase of our shares will not be invested in a company with active business
operations.
Management intends
to devote only a limited amount of time to seeking a target
company which may adversely impact our ability to identify a suitable
acquisition candidate.
During
such time as management is seeking a business combination, management
anticipates devoting no more than a few hours per week to our business and
affairs. Our officers have not entered into written employment
agreements with us and are not expected to do so in the foreseeable
future. This limited commitment may adversely impact our ability to
identify and consummate a successful business combination.
However,
management intends to devote such time to the company as management deems
reasonably necessary to effectively manage our business and affairs and to
attempt to identify transaction opportunities. Management intends to
devote only a few hours per week to the business of the company until such time
as a potentially suitable transaction opportunity is
identified. After a potentially suitable transaction opportunity has
been identified, management expects to devote such time to due diligence with
respect to that transaction opportunity as management determines is reasonably
necessary, and if management believes such transaction to be in our best
interests, then management expects to devote a substantial amount of time to
consummating such transaction.
The
time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the most
attractive private companies.
Target
companies which fail to comply with SEC reporting requirements may delay or
preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the
relative size of the acquisition. The time and additional costs which
may be incurred by some target entities to prepare these statements may
significantly delay or essentially preclude consummation of an
acquisition. Otherwise suitable acquisition prospects which do not
have or are unable to obtain the required audited statements may be
inappropriate for acquisition as long as the reporting requirements of the
Exchange Act are applicable.
We
may be subject to further government regulation which would adversely affect our
operations.
If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation pursuant to
the Investment Company Act. If so, we would be required to register
as an investment company and could be expected to incur significant registration
and compliance costs. We have obtained no formal determination from the SEC as
to our status pursuant to the Investment Company Act and, consequently,
violation of the Investment Company Act could subject us to material adverse
consequences. We have not yet located a suitable entity with which to
enter into a business combination, and we do not have any reason to believe that
the entity will result in us being subject to the Investment Company
Act.
Our
business will have no revenues unless and until we merge with or acquire an
operating business.
We are
a development stage company and have had no revenues from
operations. We may not realize any revenues unless and until we
successfully merge with, or acquire, an operating business.
We
intend to issue more shares in a merger or acquisition, which will result in
substantial dilution to our stockholders.
Our
Certificate of Incorporation authorizes the issuance of a maximum of 50,000,000
shares of common stock and a maximum of 5,000,000 shares of Preferred Stock. Any
merger or acquisition effected by us may result in substantial dilution in the
percentage of our Common Stock held by our then existing stockholders. Although
to date we have not issued any Preferred Stock, any merger or business
combination effected by us which includes the issuance of Preferred Stock may
result in a substantial dilution in the rights of holders of Common Stock or
Preferred Stock held by our then existing stockholders. Moreover, the Common
Stock issued in any such merger or acquisition transaction may be valued on an
arbitrary or non-arm's-length basis by our management, resulting in an
additional reduction in the percentage of Common Stock held by our then existing
stockholders. To the extent that additional shares of Common Stock or Preferred
Stock are issued in connection with a business combination or otherwise,
dilution of the interests of our stockholders will occur and the rights of the
holders of Common Stock might be materially adversely
affected.
We
have conducted no market research or identification of business opportunities,
which may affect our ability to identify a business to merge with or
acquire.
We have
neither conducted nor have others made available to us results of
market research with respect to prospective business opportunities.
Therefore, there can be no assurance that market demand exists for a merger or
acquisition as contemplated by us. Our management has not identified
any specific business combination or other transactions for formal evaluation by
us, such that it may be expected that any such target business or transaction
will present such a level of risk that conventional private or public offerings
of securities or conventional bank financing will not be
available. There can be no assurance that we will be able to acquire
a business opportunity upon terms favorable to us. Decisions as to
which business opportunity to participate in will be unilaterally made by our
management, which may act without the consent, vote or approval of our
stockholders.
We
are likely seeking to complete a business combination through a "reverse
merger". Following such a transaction we may not be able to attract
the attention of major brokerage firms.
Additional
risks may exist because we will assist a privately held business to become
public through a “reverse merger.” Securities analysts of major brokerage firms
may not provide coverage of our Company because there is no incentive to
brokerage firms to recommend the purchase of our common stock. There can be no
assurance that brokerage firms will want to conduct any secondary offerings on
behalf of our post-merger company in the future.
There
can be no assurance that our common stock will ever be listed on NASDAQ, the New
York Stock Exchange, the American Stock Exchange, or one of the other national
securities exchanges or markets.
Until
such time as our common stock is listed upon any of the several NASDAQ markets,
the New York Stock Exchange, the American Stock Exchange, or one of the other
national securities exchanges or markets, of which there can be no assurance,
accurate quotations as to the market value of our securities may not be
possible. Sellers of our securities are likely to have more
difficulty disposing of their securities than sellers of securities which are
listed upon any of the several NASDAQ markets, the New York Stock Exchange, the
American Stock Exchange, or one of the other national securities exchanges or
markets.
There
is no public market for our Common Stock.
There is
no public trading market for
our Common Stock and none is
expected to develop in
the foreseeable future unless and until we
complete a business combination with an
operating business and such business files a prospectus pursuant to
the Securities Act.
We
have never paid dividends on our Common Stock.
We have
never paid dividends on our common stock, and there can be no assurance that we
will have sufficient earnings to pay any dividends with respect to the common
stock. Moreover, even if we have sufficient earnings, we are not
obligated to declare dividends with respect to the common stock. The future
declaration of any cash or stock dividends will be in the sole and absolute
discretion of the Board of Directors and will depend upon our earnings, capital
requirements, financial position, general economic conditions and other
pertinent factors. It is also possible that the terms of any future
debt financing may restrict the payment of dividends. We presently
intend to retain earnings, if any, for the development and expansion of its
business.
Our
directors and officers will have substantial influence over our operations and
control substantially all business matters.
As
indicated elsewhere herein, because management consists of only three persons,
while seeking a business combination, our officers and directors will be the
only persons responsible for conducting our day-to-day operations. We
do not benefit from multiple judgments that a greater number of directors or
officers may provide, and we will rely completely upon the judgment of our
officers and directors when selecting a target company.
Our
management also controls Sierra Grey Capital LLC and Mintz & Fraade
Enterprises LLC, which collectively own 93.5 % of our Common
Stock. If our management acted through Sierra Grey Capital LLC and
Mintz & Fraade Enterprises LLC, our management would be able to approve a
business combination requiring stockholder approval regardless of whether or not
other stockholders approved such transaction.
Further,
Michael Zaroff, Frederick M. Mintz, and Alan P. Fraade intend to devote such
time to the company as they deem reasonably necessary to effectively manage our
business and affairs and to attempt to identify transaction
opportunities. Messrs. Zaroff, Mintz and Fraade intend to devote only
a few hours per week to the business of the company until such time as a
potentially suitable transaction opportunity is identified. After a
potentially suitable transaction opportunity has been identified, Messrs.
Zaroff, Mintz and Fraade expect to devote such time to due diligence with
respect to that transaction opportunity as they determine is reasonably
necessary, and if they believe such transaction to be in our best interests,
then they would expect to devote a substantial amount of time to consummating
such transaction.
Messrs.
Zaroff, Mintz and Fraade have not entered into written employment agreements
with us and are not expected to do so. We have not obtained key man
life insurance on any of our officers or directors. The loss of the
services of Michael Zaroff, Frederick M. Mintz, or Alan P. Fraade would
adversely affect the development of our business and our likelihood of
continuing operations.
There
can be no assurance that following a business combination with an operating
business, our common stock will not be subject to the “penny stock” regulations,
which would likely make it more difficult to transfer or resale.
To the
extent that we consummate a business combination and our common stock becomes
listed for trading on a quotation service, our common stock may constitute a
“penny stock,” which generally is a stock trading under $5.00 and which is not
registered on national securities exchanges or quoted on one of the higher
NASDAQ tiers. The SEC has adopted rules which regulate broker-dealer practices
in connection with transactions in penny stocks. This regulation generally has
the result of reducing trading in such stocks, restricting the pool of potential
investors for such stocks, and making it more difficult for investors to sell
their shares. Prior to a transaction in a penny stock, a
broker-dealer is required to:
·
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deliver
a standardized risk disclosure document which provides information about
penny stocks and the nature and level of risks in the penny stock
market;
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·
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provide
the customer with current bid and offer quotations for the penny
stock;
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·
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explain
the compensation of the broker-dealer and its salesperson in the
transaction;
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·
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provide
monthly account statements showing the market value of each penny stock
held in the customer’s account; and
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·
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make
a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser’s written agreement
to the transaction.
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These
requirements may have the effect of reducing the level of trading activity in
the secondary market for a stock which is subject to the penny stock rules. To
the extent that our common stock becomes subject to the penny stock rules,
investors in our common stock may find it more difficult to sell their
shares.
We
may be subject to further government regulation which may delay or preclude
acquisition.
Pursuant
to the requirements of Section 13 of the Exchange Act, we are required to
provide certain information about significant acquisitions including audited
financial statements of the acquired company. Such audited financial
statements must be furnished within seventy five (75) days following the
effective date of a business combination. Obtaining audited financial
statements are the economic responsibility of the target company. The
additional time and costs which may be incurred by some potential target
companies to prepare such financial statements may significantly delay or
essentially preclude consummation of an otherwise desirable acquisition by
us. Acquisition prospects which do not have or are unable to obtain
the required audited statements may not be appropriate for acquisition so long
as the reporting requirements of the Exchange Act are
applicable. Notwithstanding a target company's agreement to obtain
audited financial statements within the required time frame, such audited
financials may not be available to us at the time of effecting a business
combination. In cases where audited financials are unavailable, we
will have to rely upon unaudited information which has not been verified by
outside auditors in making its decision to engage in a transaction with the
business entity. This risk increases the prospect that a business
combination with such a business entity might prove to be unfavorable for
us.
A
business combination is likely to result in a change of control and a change of
management.
In
conjunction with completion of a business acquisition, it is anticipated that we
will issue an amount of our authorized but unissued common stock which
represents the majority of the voting power and equity of our common stock,
which will, in all likelihood, result in stockholders of a target company
obtaining a controlling interest in us. As a condition of the
business combination agreement, our current stockholders may agree to sell or
transfer all or a portion of our common stock as to provide the target company
with all or majority control. The resulting change in control will likely result
in removal of our present officers and directors and a corresponding reduction
in or elimination of their participation in any future affairs.
Our
Directors have the right to authorize the issuance of Preferred
Stock.
Our
directors, without further action by our stockholders, have the authority to
issue shares of Preferred Stock from time to time in one or more series and to
fix the number of shares, the relative rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and any other preferences, special
rights and qualifications of any such series. Any issuance of
Preferred Stock would adversely affect the rights of holders of Common
Stock.
We
may be subject to additional risks associated with doing business in a foreign
country.
We may
effectuate a business combination with a merger target whose business operations
or even headquarters, place of formation or primary place of business are
located outside the United States of America. In such event, we may
face significant additional risks associated with doing business in that
country. In addition to the language barriers, different
presentations of financial information, different business practices, and other
cultural differences and barriers which may make it difficult to evaluate such a
merger target, ongoing business risks result from the international political
situation, uncertain legal systems and applications of law, prejudice against
foreigners, corrupt practices, uncertain economic policies and potential
political and economic instability which may be exacerbated in various foreign
countries.
In doing
business with a foreign target we may also be subject to such risks, including,
but not limited
to, currency fluctuations, regulatory problems,
punitive tariffs, unstable local tax policies, trade embargoes, risks related to
shipment of
raw materials and finished goods across national borders
and cultural and
language differences. Foreign economies may
differ favorably or unfavorably from the United States economy in
growth of gross national product, rate of inflation, market
development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and
in other respects.
We
could be subject to various taxes which may have an adverse effect upon
us.
Federal
and state tax consequences will, in all likelihood, be major considerations in
any business combination which we may undertake. Currently, such
transactions may be structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions to minimize the
federal and state tax consequences to both us and the target
entity. There can be no assurance that such business combination will
meet the statutory requirements of a tax-free reorganization or that the parties
will obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization could result in the
imposition of both federal and state taxes, which may have an adverse effect
upon both parties to the transaction.
There
can be no assurance that we will be able to complete a Business Combination
Transaction with a suitable entity during the eighteen (18) month period set
forth in Rule 419, and if we do not complete such a transaction, all funds held
in escrow will be returned to the purchasers of shares from selling stockholders
pursuant to this offering, plus any interest and dividends thereon, and the
shares purchased pursuant to this offering will be returned to the selling
stockholders pursuant to this offering. If there are no sales
pursuant to this offering, there will be no funds and no shares held in escrow,
and we will not be required to take any action, but we may enter into a business
combination at any time, whether prior to, or subsequent to, said eighteen (18)
month period; provided, however, that if there are no sales of securities
pursuant to this offering, and during said eighteen (18) month period we become
aware that a business combination is probable, we shall suspend this
offering.
We are
conducting this offering pursuant to Rule 419. Pursuant to that rule,
if a Business Combination Transaction is not completed within eighteen (18)
months after the effective date of this Registration Statement, we will be
required to return all funds held in escrow to the purchasers of shares from
selling stockholders pursuant to this offering, plus any interest or dividends
thereon. There can be no assurance that we will find a suitable
entity with which to enter into such transaction during said eighteen (18) month
period. Even if we do identify a suitable entity for such
transaction, there can be no assurance that such entity would enter into such a
transaction, or that the transaction could be completed within said eighteen
(18) month period.
If there
are no sales of securities pursuant to this offering within eighteen (18) months
after the date the SEC declares this registration statement effective, no funds
or securities shall be placed in escrow, and we will file an amendment to this
registration statement with the SEC removing the shares from registration and,
subject to the next paragraph, terminating this offering, in which event the
shares cannot be sold unless they are registered or unless a valid exemption
from registration is then available.
If there
are no sales of securities pursuant to this offering, we may enter into a
Business Combination Transaction at any time, whether prior to, or subsequent
to, said eighteen (18) month period; provided, however, that if there are no
sales of securities pursuant to this offering, and during said eighteen (18)
month period we become aware that a business combination is probable, we shall
file an amendment to this registration statement with the SEC which shall
suspend this offering, and will then notify the selling stockholders that this
offering has been suspended. If the potential Business Combination
Transaction is not consummated prior to the expiration of the eighteen (18)
month period, we will resume this offering, and the selling stockholders may
sell shares again pursuant to this offering. If the potential
Business Combination Transaction is not consummated within the eighteen (18)
month period, we will file an amendment to this registration statement with the
SEC removing the shares from registration and terminating this offering, in
which event the shares would not be able to be sold unless they are registered
or unless a valid exemption from registration is then available.
If there
are no sales of securities pursuant to this offering, then after we complete a
Business Combination Transaction, we will file a Form 8-K with the SEC
containing extensive information about the target company as required by SEC
regulations, including audited financial statements. After completing
such Business Combination Transaction, we would no longer be deemed to be a
shell company, and the requirements of Rule 419 with respect to escrow of funds,
and purchasers’ opportunity to receive a return of their investment funds if
they did not approve of the acquisition would not apply.
In
view of the fact that there are numerous other ways in which private companies
can become public or raise capital, and because of the availability of blank
check companies for Business Combination Transactions, there can be no assurance
that the terms of a potential Business Combination Transaction would be
favorable to us.
Even if
we find a suitable entity for a Business Combination Transaction during the
eighteen (18) month period, and that entity is willing to enter into such a
transaction, there can be no assurance that we would be able to complete that
transaction on terms which would be favorable to us. Private
companies seeking to become public have many options other than a business
combination with a blank check company, such as initial public offerings, direct
public offerings, Regulation A offerings, public offerings on foreign exchanges,
and business combinations with defunct public companies, and have many other
options for access to capital other than becoming public, such as private
offerings, Regulation S offerings, venture capital, and private equity
transactions. The wide range of options available to such companies
may result in those companies being able to require favorable terms from a blank
check company in a Business Combination Transaction, and may reduce the
potential profitability to us of such a Business Combination
Transaction. In addition, there are a large number of blank check
companies seeking to engage in Business Combination Transactions, and the
availability of such companies may result in private companies being able to
require favorable terms from any particular blank check company in a Business
Combination Transaction, which may reduce the potential profitability to us of
such a Business Combination Transaction.
If
we are unable to complete a Business Combination Transaction during the eighteen
(18) month period, we will be required to return all funds held in escrow, plus
any interest and dividends thereon, and any investors purchasing shares pursuant
to this offering would be unable to benefit from any subsequent transaction
consummated by our company.
If we are
unable to complete a Business Combination Transaction during the eighteen (18)
month period, we will be required to return all funds held in escrow, plus any
interest and dividends thereon, and any investors purchasing shares pursuant to
this offering would be unable to benefit from any subsequent transaction
consummated by our company; if subsequent to that eighteen (18) month period, we
complete a Business Combination Transaction which is highly profitable for all
of our stockholders, any investors purchasing shares pursuant to this offering
would have had their escrow funds returned at the end of the eighteen (18) month
period, plus any interest and dividends thereon, would not have remained holders
of our shares subsequent to the eighteen (18) month period, and would not have
benefited from that transaction.
Shares
purchased pursuant to this offering will be held in escrow pending the
completion of a Business Combination Transaction and the purchasers’
confirmation that they wish to remain investors in our company subsequent to
such transaction, and purchasers are prohibited from selling shares purchased
pursuant to this offering or entering into contracts for sale to be satisfied by
the delivery of the shares purchased pursuant to this offering until after such
Business Combination Transaction is completed and the shares are released from
escrow to them pursuant to such confirmation.
Shares
purchased pursuant to this offering will be held in escrow, and will only be
released to purchasers subsequent to the completion of a Business Combination
Transaction, and subsequent to those purchasers’ confirmation that they wish to
remain investors in our company subsequent to such
transaction. Pursuant to Rule 15g-8 of the Exchange Act, it is
unlawful for any person to sell or offer to sell securities (or any interest in
or related to the securities) held in a Rule 419 escrow account other than
pursuant to (A) a qualified domestic relations order issued by a court in
connection with divorce proceedings or (B) Title I under the Employee Retirement
Income Security Act (ERISA). As a result, sales of the shares held in
escrow, or contracts for sale to be satisfied by delivery of the shares held in
escrow (e.g. contracts for sale on a when, as, and if issued basis) will be
prohibited. Such rule prohibits sales of other interests in the shares held in
escrow, including, but not limited to, derivative securities with respect to
those shares, whether or not physical delivery is
required. Therefore, investors will not be able to realize any return
on their investment for the period of the escrow, which may be up to eighteen
(18) months after the effective date of this Registration
Statement.
If
there are any sales pursuant to this offering, the selling stockholders will not
have access to their funds during the period the funds are held in escrow, and
the Purchasers will not receive shares during the period of the
escrow.
The funds
from a purchase pursuant to this offering shall be held in escrow until the
sooner of (A) we enter into an agreement for a Business Combination Transaction
and the Purchaser declines to confirm that he, she or it wishes to remain an
investor in the Company and (B) the date which is eighteen (18) months after the
effective date of this registration statement. If a Purchaser
purchases shares from selling stockholders pursuant to this offering and we do
not enter into a Business Combination Transaction for whatever reason, the
Purchaser will have to wait until eighteen (18) months after the effective date
of this registration statement before the Purchaser’s proportionate portion of
the escrow funds are returned to the Purchaser, which escrow funds shall include
any interest and dividends which have been paid thereon during the period while
such funds were held in escrow. The Purchaser will be offered the
return of his, her or its proportionate portion of the escrow funds only upon
the execution of an agreement for a Business Combination Transaction or upon the
expiration of said eighteen (18) month period.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Forward-looking
statements are based upon the beliefs of our management, as well as assumptions
made by and information currently available to our management. When
used in this prospectus, the words “estimate,” “project,” “believe,”
“anticipate,” “intend,” “expect” and similar expressions are intended to
identify forward-looking statements. These statements reflect our
current views with respect to future events and are subject to risks and
uncertainties which may cause our actual results to differ materially from those
contemplated in our forward-looking statements. We caution you not to
place undue reliance upon such forward-looking statements, as our results could
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including those set forth in the following risk
factors section and elsewhere in this prospectus. Any such statements
are representative only as of the date of this prospectus. We do not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances subsequent to the
date of this prospectus or to reflect the occurrence of unanticipated events,
except for such updates to this prospectus and the registration statement of
which it is a part as are required by federal securities laws and such periodic
reports as are required pursuant to the Securities Exchange Act of 1934, as
amended.
USE OF PROCEEDS
This
prospectus relates to shares of our common stock which may be offered and sold
from time to time by the selling stockholders. We will not receive
any proceeds from the sale of shares of common stock in this
offering.
This
offering is being conducted pursuant to Rule 419 of the Securities
Act. All of the selling stockholders have entered into an escrow
agreement. If one of our stockholders sells shares before we have
entered into a Business Combination Transaction, the shares and the funds paid
for them shall promptly be placed into escrow with Wilmington Trust Company, an
insured depository institution.
When we
become aware that our entry into a Business Combination Transaction has become
probable, we shall file an amendment to this registration statement with the SEC
suspending this offering, and shall notify the selling stockholders that this
offering is being suspended. If the potential Business Combination
Transaction is not consummated, this offering shall be resumed, and the selling
stockholders may sell shares again pursuant to this offering.
When we
have entered into an agreement for a Business Combination Transaction with one
or more businesses (the “Targets”), we shall file an amendment to this
registration statement and send the Purchasers, if any, extensive information
with respect to the Targets including, but not limited to, audited financial
statements, and each Purchaser shall have a period of forty five (45) business
days after the effective date of that amendment (the end of such period, the
“Deadline”) in which to inform us if he, she or it wishes to remain an investor
in our company subsequent to the closing of the Business Combination
Transaction. If a Purchaser informs us on, or prior to, the Deadline
that he, she or it wishes to remain an investor in our company subsequent to the
closing of the Business Combination Transaction, then, after the Business
Combination Transaction is complete, which will be at least forty five (45)
business days after the date the SEC declares the amendment effective, we shall
release the shares purchased by him, her or it to him, her or it and release
from escrow the funds he, she or it paid for such shares, plus any interest or
dividends which have been paid thereon during the period while such funds were
held in escrow, to the selling stockholder from whom he, she or it purchased
those shares. If a Purchaser fails to inform us on, or prior to, the
Deadline that he, she or it wishes to remain an investor in our company
subsequent to the closing of the Business Combination Transaction, his, her or
its escrow funds, plus any interest or dividends thereon, shall be returned to
him, her or it within five (5) business days after the forty fifth (45th)
business day following the effective date of that amendment, and his, her or its
shares shall be returned to the selling stockholder from whom he, she or it
purchased his, her or its shares.
Subsequent
to consummating such Business Combination Transaction and the effective date of
the amendment to this registration statement, we would no longer be deemed to be
a shell company, and shares could be transferred without complying with the
provisions of Rule 419.
If any
selling stockholders sold any shares to Purchasers, and we have not consummated
a Business Combination Transaction within eighteen (18) months after the
effective date of this registration statement, all escrow funds shall be
returned to the Purchasers, plus any interest or dividends thereon, all of the
shares held in escrow shall be returned to the selling stockholders from whom
those Purchasers purchased them and we will file a post-effective amendment to
this registration statement with the SEC removing the shares from registration
and terminating this offering, in which event the shares would not be able to be
sold unless they are registered or unless a valid exemption from registration is
then available; please note that shares of a blank check company cannot be sold
pursuant to Rule 144. In view of the fact that the escrow funds shall
either be released to the selling stockholders or returned to the Purchasers, we
shall not receive any funds from this offering.
If there
are no sales of securities pursuant to this offering within eighteen (18) months
after the date the SEC declares this registration statement effective, no funds
or securities shall be placed in escrow, and we will file an amendment to this
registration statement with the SEC removing the shares from registration and,
subject to the next paragraph, terminating this offering, in which event the
shares cannot be sold unless they are registered or unless a valid exemption
from registration is then available; please note that shares of a blank check
company cannot be sold pursuant to Rule 144.
If there
are no sales pursuant to this offering, we may enter into a Business Combination
Transaction at any time, regardless of whether prior to, or subsequent to,
eighteen (18) months after the effective date of this registration statement;
provided, however, that if there are no sales of securities pursuant to this
offering, and during said 18 month period we become aware that a business
combination is probable, we shall suspend this offering, and shall notify the
selling stockholders that this offering is being suspended. If the
potential Business Combination Transaction is not consummated, this offering
shall be resumed, and the selling stockholders may sell shares again pursuant to
this offering.
If there
are no sales pursuant to this offering, then after we consummate a Business
Combination Transaction, we shall file a Form 8-K with the Securities and
Exchange Commission containing extensive information as required by SEC
regulations with respect to the Target(s), including, but not limited to,
audited financial statements. Subsequent to consummating such
Business Combination Transaction, we would no longer be deemed to be a shell
company, and the provisions of Rule 419 with respect to escrow of funds, and
purchasers’ opportunity to receive a return of their investment funds if they
did not approve of the acquisition would not be applicable. If the potential Business Combination Transaction is not
consummated during the eighteen (18) month period, we will file an amendment to
this registration statement with the SEC removing the shares from registration
and terminating this offering, in which event the shares would not be able to be
sold unless they are registered or unless a valid exemption from registration is
then available.
DETERMINATION OF OFFERING PRICE
Prior to
this offering of our common stock, there has been no public market for any of
our securities and there can be no assurance that a market will
develop. The offering price of $0.20 per share was determined by us.
The principal factors considered in determining the offering price included the
following:
•
|
the
information set forth in this prospectus,
|
|
•
|
market
conditions for business combinations involving blank check
companies,
|
|
•
|
the
estimated profitability of business combinations involving similar blank
check companies,
|
DILUTION
In view
of the fact that the selling stockholders are offering for sale shares of our
common stock which are already issued and outstanding, the sale by the selling
stockholders of their shares of our common stock pursuant to this prospectus
will not result in any dilution to our stockholders.
CAPITALIZATION
The
following table sets forth our capitalization as of June 30,
2009
June
30, 2009
|
||||
Stockholders
Equity
|
||||
Common
Stock, $.001 Par Value, 50 Million Authorized, 3,210,000 issued and
outstanding
|
$
|
3,210
|
||
Additional
Paid in Capital
|
$
|
17,790
|
||
Preferred
stock, $.001 par value, 5 Million authorized, none issued or
outstanding
|
-
|
|||
Deficit
accumulated during the development stage
|
$
|
(20,914
|
)
|
|
Total
stockholders’ equity (deficiency)
|
$
|
86
|
||
Total
capitalization
|
$
|
86
|
MARKET FOR COMMON EQUITY
AND
RELATED STOCKHOLDER MATTERS
Our
Common Stock is not presently trading on any stock exchange. We are
not aware of any market active in our stock since inception through the date of
this filing. While we intend to arrange to have our common stock
traded on the public market after complying with Rule 419 and with the
availability of our shares to be sold on the public market, we have not yet
applied to have our stock listed on an exchange or quoted on a quotation
service. We do intend to apply for quotation of our common stock on
the OTC Bulletin Board subsequent to (A) our consummation of a Business
Combination Transaction, (B) filing a Form 8-K with the SEC with current
information with respect to the combined company and (C) the SEC declaring such
Form 8-K effective. There can be no assurance that a trading market
will ever develop, or if developed, that it will be
sustained.
Because
it is not contemplated that any of the selling stockholders intend to sell their
shares until we enter into a Business Combination Transaction, and any sales
will have to be through a broker dealer, we will not know in which
states prospective purchasers will be located. It will be the
brokers’ responsibility to confirm that sales can legally be made in the
applicable states.
Pursuant
to Rule 419, any shares held in escrow are prohibited from being resold or
transferred while in escrow except pursuant to a qualified domestic relations
order or Title I of the Employee Retirement Income Security Act (ERISA), or the
rules thereunder. Any shares released from escrow may only be resold
pursuant to registration under the Securities Act or pursuant to a valid
exemption therefrom.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
We were
organized as a vehicle to investigate and, if such investigation warrants, merge
or acquire a target company or business seeking the perceived advantages of
being a publicly held corporation. As of the date of this prospectus, we have no
particular acquisitions in mind and have not entered into any negotiations with
respect to the possibility of a merger or acquisition between us and such other
company.
We
were organized as a
vehicle to investigate and, if such
investigation warrants, merge or acquire a
target company or business seeking the
perceived advantages of being a publicly held corporation. As of the
date of this prospectus, we have no particular acquisitions in mind and have not
entered into any negotiations with respect to the possibility of a merger or
acquisition between us and such other company.
If we
consummate a business combination, we will use our best efforts to have our
stock quoted on the OTC Bulletin Board (the “OTCBB”), and anticipate that our
common stock will be eligible to trade on the OTCBB subsequent to such business
combination. In addition, subsequent to such business combination, we
may seek the listing of our common stock on any of the several NASDAQ markets or
the American Stock Exchange, either immediately after such business combination
or sometime in the future. There can be no assurance that after we consummate a
business combination we will be quoted on the OTCBB or be able to meet the
initial listing standards of any stock exchange or quotation service, or that we
will be able to maintain a listing of our common stock on any of those or any
other stock exchange or quotation service.
Our
principal business objective for the next twelve (12) months and beyond such
time will be to achieve long-term growth potential through a combination with a
business rather than immediate, short-term earnings. We will not restrict our
potential candidate target companies to any specific business, industry or
geographical location and, thus, may acquire any type of business.
We do not
currently engage in any business activities. We do not currently have
any cash
flow. The costs of investigating and analyzing business
combinations for the next twelve (12) months and beyond such time
will be paid with money in our treasury or will be loaned to
or invested in us by our stockholders, management or other
investors. There can be no assurance that we will be able to
obtain any additional money for our treasury should it become
necessary. We have raised capital which we believe will be
sufficient until we consummate a merger or other business
combination. If not, we will either cease operations or will need to
raise additional capital through the issuance of additional shares or through
debt. There is no existing commitment to provide additional capital,
and there can be no assurance that we shall be able to receive additional
financing.
During
the next twelve (12) months we anticipate incurring costs related
to:
(i)
filing of Exchange Act reports, and
(ii)
costs relating to consummating a merger or acquisition.
We may consider a business which has recently commenced
operations, is a developing company in need of
additional funds for expansion into new products or markets, is
seeking to develop a new product or service, or is an established business which
may be experiencing financial or operating difficulties and is in
need of additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires
to establish a public trading market for its shares, while
avoiding, among other things, the time
delays, significant expense, and loss of voting control
which may occur in a public offering.
None of
our officers or directors has had
any preliminary contact or discussions with
any representative of any other
entity regarding a business combination with
us. Any target business which is selected by us may be a financially
unstable company or an entity in its early stages of development or growth,
including entities without established records of revenues or
earnings. In that event, we will be subject to numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies. In addition, we may effect a
business combination with an entity in an industry characterized by a high level
of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business,
there can be no assurance that
we will properly ascertain or assess all
significant risks.
Our
management anticipates that it will likely be able to effect only one
business combination, due primarily to our limited
financing, and the dilution of interest for present and
prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a target
business in order to
achieve a tax free reorganization. This lack of
diversification should be considered a substantial risk in
investing in us, because it will not permit us
to offset potential losses from
one venture against gains from another.
We intend
to seek to carry out our business plan as discussed herein. In order
to do so, we need to pay ongoing expenses, including particularly accounting
fees incurred in conjunction with preparation and filing of this prospectus, and
in conjunction with future compliance with its on-going reporting
obligations. Although we have raised capital pursuant to a private
offering to pay these anticipated expenses, we may not have sufficient funds to
pay all or a portion of such expenses. If we fail to pay such
expenses, we have not identified any alternative sources. We have
raised capital which we believe will be sufficient until we consummate a merger
or other business combination. If not, we will either cease
operations or we will need to raise additional capital through the issuance of
additional shares or through debt. There is no existing commitment to
provide additional capital. There can be no assurance that we shall be able to
receive additional financing
We do not
intend to make any loans to any prospective merger or acquisition candidates or
unaffiliated third parties. We have adopted a policy that we will not
seek an acquisition or merger with any entity in which any of our officers,
directors, and controlling stockholders or any affiliate or associate serves as
an officer or director or holds any ownership interest.
We
anticipate that the selection of a business combination will be complex and
extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of available
capital, our management believes that there are numerous firms seeking the
perceived benefits of becoming a publicly traded corporation. Such
perceived benefits of becoming a
publicly traded corporation include, among other things, facilitating or
improving the terms on
which additional equity financing may
be obtained, providing liquidity for the principals of and investors
in a business, creating a means
for providing incentive stock options or similar benefits to
key employees, and offering greater flexibility in
structuring acquisitions, joint ventures and
the like through the issuance of
stock. Potentially available business combinations may occur in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
We do not
currently intend to retain any entity to act as a finder to identify and analyze
the merits of potential target businesses. However, we presently
contemplate that Michael Zaroff, one of our officers, directors and controlling
stockholders, may introduce potential business combinations to us. No
finder’s fees will be paid to Mr. Zaroff.
After
this prospectus is declared effective by the Commission, our officers and
directors intend to contact a number of registered broker-dealers to advise them
of our existence and to determine if any companies or businesses they represent
have an interest in considering a merger or acquisition with
us. Business opportunities may also come to our attention from
various sources, including professional advisers such as attorneys and
accountants, venture capitalists, members of the financial community, and others
who may present unsolicited proposals. If such person is not a
registered broker-dealer, we will not pay any fees unless legally permitted to
do so. All securities transactions effected in connection with our
business plan as described in this prospectus will be conducted through or
effected by a registered broker-dealer.
As to
date there have been no discussions, agreements or understandings with any
broker-dealers or finders regarding our search for business opportunities. Our
management is not affiliated with any broker-dealers, and has not in the past
retained a broker-dealer to search for business opportunities.
In the
event of a successful acquisition or merger, we may pay a finder's fee, in the
form of cash or common stock in the merged entity retained by us, to individuals
or entities legally authorized to do so, if such payments are permitted under
applicable federal and state securities law. The amount of any
finder's fee will be subject to negotiation, and cannot be estimated at this
time, but is expected to be comparable to consideration normally paid in like
transactions. Management believes that such fees are customarily
between 1% and 5% of the size of the transaction, based upon a sliding scale of
the amount involved. Such fees are typically in the range of 5% on a
$1,000,000 transaction ratably down to 1% in a $4,000,000
transaction. Any cash finder's fee earned will need to be paid by the
prospective merger or acquisition candidate, because we do not have sufficient
cash assets with which to pay any such obligation. If we are required
pursuant to applicable federal or state securities laws, any finder retained by
us will be a registered broker-dealer, who shall be compensated solely in
accordance with the NASD regulations. No fees of any kind will be
paid by us to our promoters and management or to our associates or
affiliates.
We may
merge with a company which has retained one or more consultants or outside
advisors. In such situation, we expect that the business opportunity
will compensate the consultant or outside advisor. As of the date of
this filing, there have been no discussions, agreements or understandings with
any third-parties or with any representatives of the owners of any business or
company regarding the possibility of a merger or acquisition between us and such
other company. Consequently, we are unable to predict how the amount
of such compensation will be calculated at this time. It is
anticipated that any finder which the target company retains would likely be a
registered broker-dealer.
We will
not restrict our search to any specific kind of firm, but may acquire a venture
which is in its preliminary or development stage, one which is already in
operation, or in a more mature stage of its corporate existence. The acquired
business may desire to have its shares publicly traded, or may seek other
perceived advantages which we may be able to offer by virtue of being a public
shell with no liabilities, which shall be up to date in its reporting
requirements, which management anticipates shall be eligible for trading on the
OTC Bulletin Board subsequent to such Business Combination Transaction, and
which shall be in good standing in the United States and the State of
Delaware. There are no existing loan arrangements or arrangements for
any financing whatsoever relating to any business opportunities.
This
offering is being conducted pursuant to Rule 419 of the Securities
Act. Accordingly, if and when any sale of securities is made by a
selling stockholder prior to our entry into a merger, acquisition, or similar
transaction (hereinafter collectively referred to as a “Business Combination
Transaction”), the selling stockholders shall be required to enter into an
escrow agreement as a condition of the sale prior to the consummation of the
sale, and the securities being sold and the purchase price for the securities
being sold (the purchasers of those shares are hereinafter referred to as the
“Purchasers”) shall promptly be placed into escrow with an insured depository
institution.
When we
become aware that our entry into a Business Combination Transaction has become
probable, we shall file an amendment to this registration statement with the SEC
suspending this offering, and shall notify the selling stockholders that this
offering is being suspended. If the potential Business Combination
Transaction is not consummated, this offering shall be resumed, and the selling
stockholders may sell shares again pursuant to this offering.
When we
have entered into an agreement for a Business Combination Transaction with one
or more businesses (the “Targets”), we shall file an amendment to this
registration statement and send the Purchasers, if any, extensive information
with respect to the Targets including, but not limited to, audited financial
statements, and each Purchaser shall have a period of forty five (45) business
days after the effective date of that amendment (the end of such period, the
“Deadline”) in which to inform us if he, she or it wishes to remain an investor
in our company subsequent to the closing of the Business Combination
Transaction. If a Purchaser informs us on, or prior to, the Deadline
that he, she or it wishes to remain an investor in our company subsequent to the
closing of the Business Combination Transaction, then, after the Business
Combination Transaction is complete, which will be at least forty five (45)
business days after the date upon which the SEC declares the amendment
effective, we shall release the shares purchased by him, her or it to him, her
or it and release from escrow the funds he, she or it paid for such shares, plus
any interest or dividends which have been paid thereon during the period while
such funds were held in escrow, to the selling stockholder from whom he, she or
it purchased those shares. If a Purchaser fails to inform us on, or
prior to, the Deadline that he, she or it wishes to remain an investor in our
company subsequent to the closing of the Business Combination Transaction, his,
her or its escrow funds, plus any interest or dividends thereon, shall be
returned to him, her or it within five (5) business days after the forty fifth
(45th) business day following the effective date of that amendment, and his, her
or its shares shall be returned to the selling stockholder from whom he, she or
it purchased his, her or its shares.
Subsequent
to consummating such Business Combination Transaction and the effective date of
the amendment to this registration statement, we would no longer be deemed to be
a shell company, and shares could be transferred without complying with the
provisions of Rule 419.
If any
selling stockholders sold any shares to Purchasers, and we have not consummated
a Business Combination Transaction within eighteen (18) months after the
effective date of this registration statement, all escrow funds shall be
returned to the Purchasers, plus any interest or dividends thereon, all of the
shares held in escrow shall be returned to the selling stockholders from whom
those Purchasers purchased them and we shall file a post-effective amendment to
this registration statement removing the securities from registration and
terminating the offering, in which event the shares would not be able to be sold
unless they are registered or unless a valid exemption from registration is then
available; please note that shares of a blank check company cannot be sold
pursuant to Rule 144. In view of the fact that the escrow funds shall
either be released to the selling stockholders or returned to the Purchasers, we
shall not receive any funds from this offering.
If there
are no sales of securities pursuant to this offering within eighteen (18) months
after the date the SEC declares this registration statement effective, no funds
or securities shall be placed in escrow, and we will file an amendment to this
registration statement with the SEC removing the shares from registration and,
subject to the next paragraph, terminating this offering, in which event the
shares can
$
0.10
10,000
$
1,000
11/10/2006
Kurt
Marty
$
0.10
10,000
$
1,000
1/18/2007
Andreas
Pliakas
$
0.10
10,000
$
1,000
11/10/2006
Arne
Rupp
$
0.10
10,000
$
1,000
11/10/2006
Margrit
Stocker Rupp
$
0.10
10,000
$
1,000
11/10/2006
Haldun
Sacbüken
$
0.10
10,000
$
1,000
11/10/2006
Raul
Senn
$
0.10
10,000
$
1,000
11/10/2006
Claude
Schurch
$
0.10
10,000
$
1,000
2/5/2007
Siegfried
Schurch
$
0.10
10,000
$
1,000
11/10/2006
Ulrich
Schurch
$
0.10
10,000
$
1,000
11/10/2006
Kerstin
Schurch-Rupp
$
0.10
10,000
$
1,000
11/10/2006
Tell
Capital AG
$
0.10
10,000
$
1,000
11/10/2006
The sale
of all shares except for the sale to the Keyes Family Trust were made outside
the United States to “non U.S. persons” and are therefore
exempt from registration under the Securities Act of 1933 pursuant to Regulation
S. Pursuant to the subscription agreement signed by Richard Keyes,
the trust’s trustee, on behalf of the Keyes Family Trust, Richard Keyes has
sufficient knowledge and experience in business and financial matters to
evaluate the information set forth in the subscription agreement, and the risks
of the investment, to make an informed decision with respect
thereto. Therefore, the sale of shares to the Keyes Family Trust
through Richard Keyes was also exempt from registration pursuant to Section 4(2)
of the Securities Act of 1933 as amended.
Section 145
of the Delaware General Corporation Law provides that a corporation
may indemnify directors and officers as well as other employees and
individuals against expenses including attorneys' fees, judgments,
fines and amounts paid in settlement in connection with
various actions, suits or proceedings, whether civil, criminal, administrative
or investigative other than an action by or in the right of the
corporation, a derivative action, if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, if they had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses
including attorneys' fees incurred in connection with the defense or settlement
of such actions, and the statute requires court approval before there
may be any indemnification where the person
seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of other
indemnification which may be granted by a
corporation's certificate of incorporation, bylaws, agreement,
a vote of stockholders or disinterested directors or otherwise.
Our
Certificate of Incorporation provides that we will indemnify and hold harmless,
to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such section
grants us the power to indemnify.
The
Delaware General Corporation Law permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability
for:
o any
breach of the director's duty of loyalty to the corporation or its
stockholders;
o acts
or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o
payments of unlawful dividends or
unlawful stock repurchases or redemptions;
or
o
any transaction from which the director derived an improper personal
benefit.
Our
Certificate of Incorporation provides that, to the fullest extent permitted by
applicable law, none of our directors will be
personally liable to us or our stockholders for
monetary damages for breach of fiduciary duty as
a director. Any
repeal or modification of
this provision will be prospective only and will not
adversely affect any limitation, right or protection of a director of our
company existing at the time of such repeal or modification.
ITEM
25: OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
We will
pay all costs and expenses in connection with this offering, including but not
limited to all expenses related to the costs of preparing, reproducing or
printing this registration statement, legal expenses, and other expenses
incurred in qualifying or registering the offering for sale under state laws as
may be necessary, as well as the fees and expenses of our attorneys and
accountants. It is anticipated that the total of all costs and expenses in
connection with this offering will be approximately $17,000. This
includes:
Attorney
fees
|
$
|
0.00
|
|
CPA
fees
|
$
|
9,000.00
|
|
SEC
filing fee
|
1.29
|
||
Escrow
agent fee
|
$
|
5,000.00
|
|
Filing
Service
|
$
|
3,000.00
|
|
Total
|
$
|
17,001.29
|
ITEM 26: EXHIBITS SCHEDULE
The
following exhibits are filed with this prospectus:
Exhibit
|
Description
|
|
3.1
|
Articles of Incorporation (Previously
filed with the Securities and Exchange Commission as Exhibit 3.1 to the
Registrant’s Registration Statement on Form S-1 on July 24, 2009 and
incorporated herein by reference)
|
|
3.2
|
By-Laws (Previously
filed with the Securities and Exchange Commission as Exhibit 3.2 to the
Registrant’s Registration Statement on Form S-1 on July 24, 2009 and
incorporated herein by reference)
|
|
5.1
|
Opinion of Mintz & Fraade,
P.C. (Previously
filed with the Securities and Exchange Commission as Exhibit 5.1 to the
Registrant’s Registration Statement on Form S-1 on July 24, 2009 and
incorporated herein by reference)
|
|
23.1
|
||
99.1
|
The
undersigned Registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a)
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(b)
reflect in the prospectus any facts or events which, individually or,
together, represent a fundamental change in the information in the registration
statement. Notwithstanding the forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(c) include
any additional or changed material information on the plan of
distribution.
2. For
determining liability under the Securities Act, to treat each such
post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the initial bona
fide offering.
3.
To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
4. For
determining liability of the undersigned small business issuer under the
Securities Act to any purchaser in the initial distribution of the securities,
that in a primary offering of securities of the undersigned small business
issuer pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned small business issuer will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
i.
|
Any
preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to Rule
424;
|
ii.
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned small business issuer or used or referred to by the
undersigned small business issuer;
|
iii.
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business
issuer or its securities provided by or on behalf of the undersigned small
business issuer; and
|
iv.
|
Any
other communication that is an offer in the offering made by the
undersigned small business issuer to the
purchaser.
|
5. For
the purpose of determining liability under the Securities Act to any
purchaser each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectus filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities, other than the
payment by us of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding,
is asserted by one of our directors, officers, or controlling persons in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification is
against public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
Signatures
Pursuant
to the requirements of the Securities Act of 1933, Madison Enterprises Group has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York in the State of
New York, on November 9, 2009.
Madison
Enterprises Group, Inc.
|
|||
By:
/s/
Michael
Zaroff
|
|||
Michael
Zaroff, President
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
|
Title
|
Date
|
||
Chairman
of the Board
|
||||
/s/
Frederick M.
Mintz
|
Director
|
November
9, 2009
|
||
Frederick
M. Mintz
|
||||
President
|
||||
/s/ Michael
Zaroff
|
Director
|
November
9, 2009
|
||
Michael
Zaroff
|
Principal
Executive Officer
|
|||
Principal Accounting Officer | ||||
Principal
Financial Officer
|
||||
/s/ Alan
P.
Fraade
|
Vice-President &
Secretary
|
November
9, 2009
|
||
Alan
P. Fraade
|
Director
|