As filed with the Securities & Exchange Commission on July 24, 2001
Registration No. 333-38788
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
EASTERN MANAGEMENT CORP.
(formerly Inforetech Inc.)
(Name of small business issuer in its charter)
Nevada
(State or jurisdiction of Incorporation or organization)
6770
(Primary Standard Industrial Identification No.)
98-0204682
(I.R.S. Employer Classification No.)
Suite 1500, 885 West Georgia Street
Vancouver, B.C.
V6C 3E8 Canada
(Address of principal place of business or intended principal place of business)
Jason John
Eastern Management Corp.
Suite 1500, 885 West Georgia Street
Vancouver, B.C.
V6C 3E8 Canada
(604)687-0717
(Name, address and telephone number of agent for service)
Copies to:
Gerald R. Tuskey, Personal Law Corporation
Suite 1000, 409 Granville Street
Vancouver, B.C.
V6C 1T2 Canada
(604)681-9588
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
TITLE OF EACH
CLASS OF PROPOSED PROPOSED AMOUNT OF
SECURITIES TO AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
BE REGISTERED REGISTERED PRICE PER UNIT (1) OFFERING PRICE FEE
- --------------------------------------------------------------------------------
Common Stock, 500,000 $0.10 $50,000 $12.50
Par value
$0.0001
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
PART I - INFORMATION REQUIRED IN PROSPECTUS
Cross Reference Sheet Showing the Location in Prospectus of Information Required
by Items of Form SB-2:
ITEM NO. REQUIRED ITEM LOCATION OF CAPTION IN PROSPECTUS
1. Forepart of the Registration Statement Cover Page; Outside Front Page of
and Outside Front Cover of Prospectus Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside Back Cover
Pages of Prospectus Pages of Prospectus
3. Summary Information and Risk Factors Prospectus Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Prospectus Summary - Determination of
Offering Price; Risk Factors; Plan of
Distribution
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Director, Executive Officer, Management
Management and Promoters and
Control Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts and Counsel Not Applicable
14. Disclosure of Commission Position on Disclosure of Commission Position on
Indemnification for Securities Act Indemnification for Securities Act
Liabilities Liabilities
15. Organization within Last Five Years Management, Certain Relationships and
Related Transactions
16. Description of Business Business
17. Management's Discussion and Analysis Plan of Operation
or Plan of Operation
18. Description of Property Description of Property
19. Certain Relationships and Related Certain Relationships and Related
Transactions Transactions
20. Market for Common Equity and Related Prospectus Summary, Market for Our
Stockholder Matters Common Stock; Shares Eligible for
Future Sale
21. Executive Compensation Executive Compensation
22. Financial Statements Financial Statements
23. Changes in and Disagreements with Changes in and Disagreements with
Accountants on Accounting and Accountants on Accounting and
Financial Disclosure Financial Disclosure
PART II
24. Indemnification of Directors and Indemnification of Directors and
Officers Officers
25. Other Expenses of Issuance and Other Expenses of Issuance and
Distribution Distribution
26. Recent Sales of Unregistered Securities Recent Sales of Unregistered Securities
27. Exhibits Exhibits
28. Undertakings Undertakings
2
INITIAL PUBLIC OFFERING
PROSPECTUS
EASTERN MANAGEMENT CORP.
500,000 SHARES OF COMMON STOCK
$0.10 PER SHARE
Eastern Management Corp. is a startup company organized in the State of Nevada
as a blank check company. Our sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
We are offering these shares through our president, Mr. Jason John, without the
use of a professional underwriter. We will not pay commissions on stock sales.
This is our initial public offering, and no public market currently exists for
our shares. The offering price may not reflect the market price of our shares
after the offering.
This offering will expire 12 months from the effective date of this prospectus.
The offering may be extended for an additional 90 days in our discretion.
-------------------------------------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
--------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------
Offering Information
PER SHARE TOTAL
--------- -----
Initial public offering price $0.10 $50,000
Underwriting discounts/commissions $0.00 $0.00
Estimated offering expenses $0.00 $0.00
Net offering proceeds to Eastern Management Corp. $0.10 $50,000
The date of this Prospectus is July 24, 2001.
TABLE OF CONTENTS
PROSPECTUS SUMMARY......................................................................................................3
LIMITED STATE REGISTRATION..............................................................................................4
SUMMARY FINANCIAL INFORMATION...........................................................................................4
RISK FACTORS............................................................................................................6
We have no operating history or revenue which would permit you to judge the probability of our success...............6
Money you invest will be unavailable for your use for an extended period of time.....................................6
The amount of money we are raising may not be enough for us to succeed financially or to fund the development
of our business acquisition..........................................................................................6
We have no funds and do not have a full time management team that can conduct a complete investigation and
analysis of a target, merger or acquisition candidate. We may not find a suitable candidate.........................6
A change in control of the company and change in management may occur which could adversely affect our
success..............................................................................................................6
There is no market on which our shares trade and there is a limited number of states in which you may sell your
shares which severely limits your liquidity..........................................................................7
We have no agreement for a business combination or other transaction in place........................................7
Our management is under no contractual obligation to remain with us and their departure could cause our business
to fail..............................................................................................................7
Our sole director and officer is affiliated with other blank check companies which creates a conflict of interest....7
Our proposed acquisition may result in new management and a loss of control of corporate affairs.....................8
We will not engage professional underwriters to help sell our shares.................................................8
Determination of Offering Price......................................................................................8
Management may sell shares at a premium to the price paid to other shareholders......................................8
Our Offering is Not Subject to a Minimum Subscription and We May Raise Only Nominal Proceeds.........................8
HOW RULE 419 PROTECTS YOU UNTIL WE FIND AN ACQUISITION CANDIDATE........................................................9
DILUTION................................................................................................................9
USE OF PROCEEDS........................................................................................................10
CAPITALIZATION.........................................................................................................11
DESCRIPTION OF BUSINESS................................................................................................12
PLAN OF OPERATION......................................................................................................12
DESCRIPTION OF PROPERTY................................................................................................15
PRINCIPAL SHAREHOLDERS.................................................................................................15
MANAGEMENT.............................................................................................................16
EXECUTIVE COMPENSATION.................................................................................................17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................................................18
LEGAL PROCEEDINGS......................................................................................................18
MARKET FOR OUR COMMON STOCK............................................................................................18
DESCRIPTION OF SECURITIES..............................................................................................20
SHARES ELIGIBLE FOR FUTURE RESALE......................................................................................20
WHERE CAN YOU FIND MORE INFORMATION?...................................................................................21
REPORTS TO STOCKHOLDERS................................................................................................21
PLAN OF DISTRIBUTION...................................................................................................21
LEGAL MATTERS..........................................................................................................22
EXPERTS................................................................................................................23
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES....................................23
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...................................23
FINANCIAL STATEMENTS..................................................................................................F-1
INDEMNIFICATION OF OFFICERS AND DIRECTORS............................................................................II-1
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION..........................................................................II-1
RECENT SALES OF UNREGISTERED SECURITIES..............................................................................II-1
2
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
We are a blank check company subject to Rule 419. We were organized as a vehicle
to acquire or merge with another business or company. We have no present plans,
proposals, agreements or arrangements to acquire or merge with any specific
business or company nor have we identified any specific business or company for
investigation and evaluation for a merger with us. Since our organization, our
activities have been limited to the sale of initial shares for our organization
and to producing a prospectus for our initial public offering. We will not
engage in any substantive commercial business following the offering. We
maintain our office at Suite 1500, 885 West Georgia Street, Vancouver, British
Columbia, V6C 3E8. Our phone number is (604)687-0717.
The Offering
Securities offered by the 500,000 shares of common stock, $0.0001 par value, being
Company offered at $0.10 per share.
Common stock outstanding 500,000 shares
prior to the offering
Common stock to be 1,000,000 shares
outstanding after the offering
Expiration Date
- ---------------
This offering will expire 12 months from the date of this prospectus. There is
no minimum number of securities that must be sold in the offering. The offering
may be extended for an additional 90 days in our discretion.
Prescribed Acquisition Criteria
- -------------------------------
Rule 419 requires that, before cash and shares from this offering can be
released, we must sign an agreement to acquire a business meeting certain
criteria. The agreement must provide for the acquisition of a business or assets
for which the fair value represents at least 80% of the maximum offering
proceeds. The agreement must include a requirement that the number of investors
representing 80% of the maximum offering proceeds must elect to reconfirm their
investment. For purposes of the offering, the fair value of the business or
assets to be acquired must be at least $40,000 (80% of $50,000).
Post-Effective Amendment
- ------------------------
Once the agreement governing the acquisition of a business meeting the required
criteria has been signed, Rule 419 requires us to update the registration
statement with a post-effective amendment. The post-effective amendment must
contain information about the business to be purchased including audited
financial statements, the results of this offering and the use of the money
disbursed from the escrow account. The post-effective amendment must also
include the terms of the reconfirmation offer mandated by Rule 419. The
reconfirmation offer must include certain prescribed conditions that must be
satisfied before the cash and shares can be released from escrow.
3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Reconfirmation Offering
- -----------------------
The reconfirmation offer must be made after the effective date of the
post-effective amendment. Under Rule 419, the terms of the reconfirmation offer
must include the following conditions:
The prospectus contained in the post-effective amendment will be sent
to each investor whose shares are held in the escrow account within 5
business days after the effective date of the post-effective amendment.
Each investor will have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to notify
us in writing that the investor elects to remain an investor.
If we do not receive written notification from any investor within 45
business days following the effective date, the portion of the funds
and any related interest or dividends held in the escrow account on the
investor's behalf will be returned to the investor within 5 business
days by first class mail.
The acquisition will be closed only if a minimum number of investors
representing 80% of the maximum offering proceeds equalling $40,000
elect to reconfirm their investment.
If an acquisition has not closed within 18 months of the effective date
of this prospectus, the funds held in the escrow account will be
returned to all investors on a proportionate basis within 5 business
days by first class mail.
Release Of Securities And Funds
- -------------------------------
The cash from this offering will be released to us, and the shares will be
released to you, only after:
* The escrow agent has received a signed representation from us.
* We have signed an agreement for the acquisition of a business
whose fair market value represents at least 80% of the maximum
offering proceeds and have filed the required post-effective
amendment.
* The post-effective amendment has been declared effective.
* We have satisfied all of the prescribed conditions of the
reconfirmation offer.
* We have closed the acquisition of a business with a fair value
of at least 80% of the maximum proceeds.
LIMITED STATE REGISTRATION
Our common shares may not be sold by us or resold by you in the states of
Alaska, Arizona, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland,
Massachusetts, Missouri, Nebraska, North Dakota, Pennsylvania, South Dakota,
Tennessee, Utah, Vermont and Washington.
SUMMARY FINANCIAL INFORMATION
The table below contains certain summary historical financial data. The
historical financial data for the fiscal year ended March 31, 2001 has been
derived from our audited financial statements which are contained in this
prospectus.
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
March 31, 2001
INCOME STATEMENT:
- --------------------------------------------------------------------------------
Fiscal Year Ended
March 31, 2001,
(Audited)
- --------------------------------------------------------------------------------
2000 2001
- --------------------------------------------------------------------------------
Revenue $ 0.00 $ 0.00
- --------------------------------------------------------------------------------
Expenses $ 8,052 $16,732.00
- --------------------------------------------------------------------------------
Net Income (loss) $ (8,052) $16,732.00
- --------------------------------------------------------------------------------
Basic Earnings (loss) per share $ (0.01) $ (0.03)
- --------------------------------------------------------------------------------
Basic Number of Common Shares Outstanding 500,000 500,000
- --------------------------------------------------------------------------------
BALANCE SHEET (at end of period):
- --------------------------------------------------------------------------------
Total Assets $ 0.00 $ 0.00
- --------------------------------------------------------------------------------
Total Liabilities $ 0.00 $7,171.00
- --------------------------------------------------------------------------------
Total Shareholders Equity (Net Assets) $ 0.00 $ 0.00
- --------------------------------------------------------------------------------
Net Income per share on a fully diluted basis $ (0.01) $ (0.02)
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
RISK FACTORS
An investment in our business is risky and could result in a loss of your entire
investment. The risk factors include the following:
We have no operating history or revenue which would permit you to judge the
- ---------------------------------------------------------------------------
probability of our success.
- ---------------------------
We have no operating history nor any revenues from operations since our
incorporation. We have no significant assets or financial resources. Our lack of
operating history makes it very difficult for you to make an investment decision
based upon our managerial skill or ability to successfully complete a merger
with an acquisition candidate. In the event our business fails as a result of
our lack of experience, you could lose your entire investment.
Money you invest will be unavailable for your use for an extended period of
- ---------------------------------------------------------------------------
time.
- -----
It is likely that we will require many months to locate an acquisition
candidate. It is possible that you will have to wait 18 months from the
effective date of this prospectus for the return of your funds without interest.
Your funds will be unavailable for any other use during this period. Any money
you invest in us will be returned only in the event investors representing 80%
of the maximum offering proceeds do not elect to reconfirm their investment in
the business combination which we may select.
The amount of money we are raising may not be enough for us to succeed
- ----------------------------------------------------------------------
financially or to fund the development of our business acquisition.
- -------------------------------------------------------------------
As of March 31, 2001, we had $0.00 in assets and $7,171.00 in liabilities. We
had $0.00 in our treasury. Even if all the shares which we are offering are
sold, the proceeds may not be enough for us to fund the development of our
acquisition candidate. Many of the acquisition candidates we will be reviewing
will require large sums of money to succeed, perhaps even millions of dollars.
If we are unable to raise additional financing, our company could fail and you
could lose your entire investment.
We have no funds and do not have a full time management team that can conduct a
- -------------------------------------------------------------------------------
complete investigation and analysis of a target, merger or acquisition
- ----------------------------------------------------------------------
candidate.
- ----------
We may not find a suitable candidate. We do not have funds to hire skilled
managers and current management of our company has limited time to complete a
full investigation of potential acquisition candidates. As a result, we may make
a poor decision of the business we acquire or we may be unable to identify any
acquisition candidate. In the event we do not identify an acquisition candidate,
you will lose the use of your investment money without interest for a period of
approximately 18 months. In the event management makes a poor decision on which
candidate should be acquired and this offering is reconfirmed as required by
Rule 419, you may lose your entire investment as a result of the failure of our
business.
A change in control of the company and change in management may occur which
- ---------------------------------------------------------------------------
could adversely affect our success.
- -----------------------------------
A business combination involving the issuance of our shares may result in
shareholders of a private company obtaining a controlling interest in our
company. A business combination may also result in our director being required
to resign or in management being required to sell all or a portion of their
shares. A change of control or change in management could result in the
appointment of new members of management who are not as capable as current
management or who may make business decisions which cause the failure of our
company.
6
There is no market on which our shares trade and there is a limited number of
- -----------------------------------------------------------------------------
states in which you may sell your shares which severely limits your liquidity.
- ------------------------------------------------------------------------------
Even if we are successful in completing a merger or acquisition, we may not be
successful in listing our shares on a public market. Until our shares are listed
on a public market, you have no liquidity to sell your shares and you will not
be able to obtain a return on your investment. If our shares are never listed on
a public market, it may be impossible for you to recover the money you invested
in our shares. The following states restrict the sale and resale of shares of
blank check companies: Alaska, Arizona, Idaho, Illinois, Iowa, Kansas, Kentucky,
Maryland, Massachusetts, Missouri, Nebraska, North Dakota, Pennsylvania, South
Dakota, Tennessee, Utah, Vermont and Washington. You are unable to liquidate
your investment by selling our shares in these states.
We have no agreement for a business combination or other transaction in place.
- ------------------------------------------------------------------------------
We have no arrangement, agreement or understanding to engage in a merger, joint
venture or acquisition of a private or public entity. We may not successfully
identify a suitable business opportunity or conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. In the event that we are unable to complete a
business acquisition, the funds you invest will be unavailable for your use for
up to 18 months.
Our management is under no contractual obligation to remain with us and their
- -----------------------------------------------------------------------------
departure could cause our business to fail.
- -------------------------------------------
Our sole director and officer, Mr. Jason John, has varied business interests and
is working for other blank check companies. Mr. John has not signed a written
employment agreement with us and we cannot afford to pay Mr. John. In the event
Mr. John decides to resign as director and officer of our company, we may be
unable to attract another qualified officer and director which would severely
impact the company's ability to find an acquisition candidate. In the event Mr.
John resigns after we conclude an acquisition, his departure could result in the
failure of our company and the loss of your entire investment.
Our sole director and officer is affiliated with other blank check companies
- ----------------------------------------------------------------------------
which creates a conflict of interest.
- -------------------------------------
Our sole director and officer is affiliated with two other blank check
companies, Tripacific Development Corp. and Triwest Management Resources Corp.
which creates a conflict of interest. The identification of a merger target or
acquisition candidate is the sole responsibility of Mr. John. He will decide
which of the blank check companies he is affiliated with will acquire which
acquisition candidate. As a result, it is possible that Mr. John may choose
acquisition candidates for other blank check companies instead of our company or
may choose a more successful acquisition candidate for another blank check
company. This conflict of interest could result in our company never identifying
an acquisition candidate or in selecting a poor acquisition candidate resulting
in the failure of our business. Mr. John also has other business interests which
demand his time and attention and which may conflict with his ability to devote
sufficient time to us to make our business a success.
7
Our proposed acquisition may result in new management and a loss of control of
- ------------------------------------------------------------------------------
corporate affairs.
- ------------------
A business combination involving the issuance of our common stock may result in
our current shareholders losing controlling interest to the shareholders of
another company. If this occurs, our sole officer and director, Mr. Jason John,
may be forced or requested to resign his positions in order for new management
to be appointed. New management may make business decisions which are not in the
interest of our current shareholders and a change of control may result in our
current shareholders losing direction over our corporate affairs.
We will not engage professional underwriters to help sell our shares.
- ---------------------------------------------------------------------
We are selling shares through our president, Mr. Jason John, without the use of
a professional securities underwriting firm. Professional underwriters have
extensive contacts and networks which they can rely on in raising money for
companies. Professional underwriters also conduct extensive due diligence on
potential acquisition candidates. Our management does not have an extensive
network of contacts which can finance our company nor does our management have
the time availability to complete a due diligence review of acquisition
candidates to the extent that would be completed by a professional underwriter.
Our decision not to use a professional underwriter could result in us not
raising enough capital to attract an acquisition candidate or in selecting a
poor acquisition candidate. The result could be the failure of our business and
the loss of your entire investment.
Determination of Offering Price
- -------------------------------
The offering price of $0.10 per share for the shares has been arbitrarily
determined by us. This price bears no relation to our assets, book value, or any
other customary investment criteria, including our prior operating history.
Among factors considered by us in determining the offering price were:
* Estimates of our business potential
* Our limited financial resources
* The amount of equity desired to be retained by present shareholders
* The amount of dilution to the public
* The general condition of the securities markets
Management may sell shares at a premium to the price paid to other shareholders.
- --------------------------------------------------------------------------------
Management may consent to the purchase of a portion or all of their
shareholdings as a condition or in connection with a proposed merger or
acquisition. A premium may be paid for management shares in connection with such
a merger or acquisition transaction as management shares represent a control
position in the company. The potential for management's shares being purchased
at a premium could put management in a conflict of interest position where
management's own pecuniary interests rank ahead of those of the company's other
shareholders. This could result in management agreeing to an acquisition which
is in management's best interests and which may be less beneficial to the
company's other shareholders.
Our Offering is Not Subject to a Minimum Subscription and We May Raise Only
- ---------------------------------------------------------------------------
Nominal Proceeds.
- -----------------
There is no minimum amount which we must raise and it is possible we may not
raise enough money to remain in operation or to be able to consummate a merger
or acquisition.
8
HOW RULE 419 PROTECTS YOU UNTIL WE FIND AN ACQUISITION CANDIDATE
Rule 419 requires that your money and the securities purchased by you and other
investors in this offering, be deposited into an escrow or trust account. Under
Rule 419, the funds will be released to us and the securities will be released
to you only after we have met the following three basic conditions:
(1) We must sign an agreement for the acquisition of a business or
asset which has a fair value of at least 80% of the maximum
offering proceeds.
(2) We must file a post-effective amendment to the registration
statement that includes the results of this offering including
how much we raised, how much we have spent and what we will
have in escrow. We must disclose the specific amount and use
of funds spent by us including, payments to officers,
directors, controlling shareholders or affiliates. The
post-effective amendment must also contain information
regarding the acquisition candidate and business, including
audited financial statements.
(3) We will mail a copy of the prospectus to each investor within
five business days of a post-effective amendment. After we
submit a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the
acquisition is closed, the escrow agent can release the cash
and shares.
Accordingly, we have entered into an escrow agreement with the City National
Bank which provides that:
Your funds are to be deposited into the escrow account maintained by
the escrow agent promptly upon receipt. While Rule 419 permits 10% of
the funds to be released to us prior to the reconfirmation offering, we
do not intend to release these funds. The funds and interest, if any,
are to be held for the sole benefit of the investor and can only be
invested in bank deposit, in money market mutual funds, Canadian
government or federal government securities or securities for which the
principal or interest is guaranteed by the Canadian government or
federal government.
All securities issued for the offering and any other securities issued,
including stock splits, stock dividends or similar rights are to be
deposited directly into the escrow account upon issuance. Your name
must be included on the stock certificates or other documents
evidencing the securities. The securities held in the escrow account
are to remain as issued, and are to be held for your sole benefit. You
retain the voting rights, if any, to the securities held in your name.
The securities held in the escrow account may neither be transferred or
disposed of.
DILUTION
The difference between the initial public offering price per share of our shares
and the net tangible book value per share after this offering constitutes the
dilution to investors in our offering. Net tangible book value per share of
common stock is determined by dividing our net tangible book value (total
tangible assets less total liabilities) by the number of shares of common stock
outstanding.
9
As of March 31, 2001, our net tangible book value was $(7,171.00) or $(0.01) per
share of common stock. Net tangible book value represents the amount of our
total assets, less any intangible assets and total liabilities. After giving
effect to the sale of the 500,000 shares of common stock offered through this
prospectus (at an initial public offering price of $0.10 per share), and after
deducting estimated expenses of the offering of $7,500), our adjusted pro forma
net tangible book value as of March 31, 2001, would have been $35,324.00 or
$0.04 per share. This represents an immediate increase in net tangible book
value of $0.05 per share to existing shareholders and an immediate dilution of
$0.06 per share to investors in this offering. The following table illustrates
this per share dilution:
Public offering price per share $0.10
Net tangible book value per share before offering $(0.01)
Increase per share attributable to new investors $0.05
-----
Dilution per share to new investors $0.06
=====
- ----------------------------------------------------------------------------------------
NUMBER OF SHARES BEFORE MONEY RECEIVED FOR SHARES NET TANGIBLE BOOK VALUE PER
OFFERING BEFORE OFFERING SHARE BEFORE OFFERING
- ----------------------------------------------------------------------------------------
500,000 $0.00 $0.00
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
NUMBER OF SHARES AFTER TOTAL AMOUNT OF MONEY PRO-FORMA NET TANGIBLE BOOK
OFFERING RECEIVED FOR SHARES VALUE PER SHARE AFTER OFFERING
- ----------------------------------------------------------------------------------------
1,000,000 $50,000.00 $0.04
- ----------------------------------------------------------------------------------------
As of the date of this prospectus, the following table sets forth the percentage
of equity to be purchased by investors in this offering compared to the
percentage of equity to be owned by the present stockholders, and the
comparative amounts paid for the shares by the investors in this offering as
compared to the total consideration paid by our present stockholders.
- ------------------------------------------------------------------------------------------------------------------
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
- ------------------------------------------------------------------------------------------------------------------
NUMBER PERCENT AMOUNT PERCENT PAID PER
SHARE
- ------------------------------------------------------------------------------------------------------------------
New Investors 500,000 50% $50,000.00 99.99% $0.10
- ------------------------------------------------------------------------------------------------------------------
Existing Shareholders 500,000 50% $50.00 .01% $0.0001
- ------------------------------------------------------------------------------------------------------------------
USE OF PROCEEDS
The gross proceeds of this offering will be $50,000. While Rule 419 permits 10%
of the funds ($5,000) to be released from escrow to us, we do not intend to
request release of these funds. This offering is not contingent on a minimum
number of shares to be sold and will be sold on a first come, first served
basis. If subscriptions exceed the amount being offered, these excess
subscriptions will be promptly refunded without deductions for commissions or
expenses. We will receive these funds if we close a business combination.
10
We have not incurred and do not intend to incur any debt from anyone other than
management for our organizational activities. Debt to management will not be
repaid. Management is not aware of any circumstances that would change this
policy. Accordingly, no portion of the proceeds are being used to repay debt. It
is anticipated that management will pay the expenses of the offering, estimated
to be $7,500.
After the reconfirmation offering and the closing of a business combination, we
will receive $50,000 less any amount returned to investors who did not reconfirm
their investment under Rule 419.
ASSUMING MAXIMUM OFFERING
-------------------------
AMOUNT PERCENT
------ -------
Offering Expenses $7,500 15%
Working Capital $42,500 85%
Total $50,000 100%
The money we receive will be put into the escrow account pending closing of a
business combination and reconfirmation. These funds will be in an insured bank
account in either a certificate of deposit, interest bearing savings account or
in short term Canadian or federal government securities as placed by City
National Bank.
CAPITALIZATION
The following table shows our capitalization as of March 31, 2001.
ACTUAL
------
Stockholders' Equity:
Common stock, $0.0001 par value;
Authorized 100,000,000 shares,
Issued and outstanding
500,000 shares $50.00
Additional paid-in capital $17,613.00
Deficit accumulated during the development $(24,834.00)
period
Total stockholders equity $0.00
Total Capitalization $0.00
11
DESCRIPTION OF BUSINESS
We were incorporated on July 23, 1997 under the laws of the State of Nevada to
engage in any lawful corporate purpose. We changed our name to "Inforetech Inc."
on September 23, 1999 and then changed our name back to "Eastern Management
Corp." on January 27, 2000. Other than issuing shares to our shareholders, we
have not commenced any operational activities. We are a blank check company,
whose sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity.
On September 27, 1999, seven corporate shareholders and four individual
shareholders reported on Schedule 13D under the Securities and Exchange Act of
1934 that they had acquired 500,000 common shares of the Company or 100% of our
issued common shares. Subsequent to the filing of the Schedule 13D, the share
purchase agreement was rescinded resulting in the Company's original
shareholders maintaining their interest in our common shares. Our original
shareholders were all party to lock up agreements which are described in detail
in our Form 10SB which was filed with the Securities and Exchange Commission on
June 28, 1999. The share purchase agreement was entered into in contemplation of
a business acquisition by the Company which would have permitted termination of
the original shareholders' lock up agreements.
Our initial business purpose remains unchanged, namely, to investigate business
opportunities presented to it by persons or firms who or which desire the
advantages of reporting status under the Securities and Exchange Act of 1934. We
remain a "blank check" company and we continue to seek potential business
opportunities for development by us.
The Securities and Exchange Commission defines blank check companies as any
development stage company that is issuing a penny stock 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. Management does not intend to
undertake any efforts to cause a market to develop in our securities until we
have successfully implemented our business plan.
Lock-up Agreement
- -----------------
Each of our shareholders has executed and delivered a lock-up letter agreement,
affirming that they will not sell their shares of common stock until we have
successfully consummated a merger or acquisition and we are no longer classified
as a blank check company.
PLAN OF OPERATION
We seek to acquire assets or shares of a business that generates revenues, in
exchange for our shares. When this registration statement becomes effective, our
President will attempt to find an acquisition candidate. Our President has not
engaged in any preliminary contact or discussions with any representative of any
other company regarding the possibility of an acquisition or merger as of the
date of this registration statement.
We will provide our shareholders with complete disclosure documentation
concerning potential business opportunities. Disclosure is expected to be in the
form of a proxy or information statement.
12
Our director intends to obtain certain assurances of value, including statements
of assets and liabilities, material contracts or accounts receivable statements
before closing a transaction.
We will remain a shell corporation until a merger or acquisition candidate is
identified. It is anticipated that our cash requirements will be minimal, and
that all necessary capital will be provided by the directors or officers. We do
not anticipate having to raise capital in the next twelve months. We do not
expect to acquire any plant or significant equipment.
We have not, and do not intend to enter into, any arrangement, agreement or
understanding with non-management shareholders allowing non-management
shareholders to directly or indirectly participate in or influence our
management of the Company.
We have no full time employees. Mr. Jason John is our only part time employee.
Mr. John has agreed to allocate a portion of his time to our activities, without
compensation. Mr. John anticipates that our business plan can be implemented by
him devoting approximately five (5) hours per month to our business affairs. We
do not expect any significant changes in the number of employees.
General Business Plan
- ---------------------
Our purpose is to acquire an interest in a business which seeks the perceived
advantages of an Exchange Act registered corporation. We will not restrict our
search to any specific business or industry. Management anticipates that it may
be able to participate in only one potential business venture because we have
nominal assets and limited financial resources.
We may seek a business combination with companies that have recently commenced
operations. It is likely that any business we select will require additional
capital to expand into new products or markets.
We anticipate that the selection of a business opportunity will be complex and
extremely risky. Due to general economic conditions, rapid technological
advances and shortages of available capital, management believes there are
numerous firms seeking the perceived benefits of a publicly registered
corporation. Business opportunities may occur in different industries and at
various stages of development.
We currently have no capital to provide to the owners of business opportunities.
However, management believes we will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time required to
conduct an initial public offering.
13
The analysis of new business opportunities will be undertaken by Mr. Jason John
who is not a professional business analyst. Management intends to concentrate on
identifying business opportunities that may be brought to our attention through
Mr. John's business associations. In analyzing prospective business
opportunities, management will consider:
* the available technical, financial and managerial resources;
* working capital and other financial requirements;
* history of operations, if any;
* prospects for the future;
* nature of present and expected competition;
* the quality and experience of management services that may be
available and the depth of that management;
* the potential for further research, development, or
exploration;
* specific risk factors which could be anticipated to impact our
proposed activities;
* the potential for growth or expansion;
* the potential for profit;
* the perceived public recognition of acceptance of products,
services, or trades;
* name identification; and
* other relevant factors.
We expect to meet personally with management and key personnel of the business
opportunity as part of our due diligence investigation. To the extent possible,
we intend to utilize written reports and personal investigations to evaluate
businesses. We will not acquire or merge with any company that cannot provide
audited financial statements within a reasonable period of time after closing of
the proposed transaction.
Our management will rely upon their own efforts and, to a much lesser extent,
the efforts of our shareholders, in accomplishing our business purposes. We do
not anticipate using outside consultants or advisors, except for legal counsel
and accountants. If we do retain an outside consultant or advisor, any cash fee
will be paid by the prospective merger/acquisition candidate, as we have no cash
assets.
We anticipate that we will incur nominal expenses in the implementation of our
business plan. Because we have no capital to pay these anticipated expenses,
present management will pay these charges with their personal funds, as interest
free loans. If additional funding is necessary, management and or shareholders
will continue to provide capital or arrange for additional outside funding. If a
merger candidate cannot be found within a reasonable period of time, management
will not continue to provide capital.
How Our Acquisition May be Structured
- -------------------------------------
To close our business acquisition, we may become a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement with
another corporation or entity. We may also acquire stock or assets of an
existing business. On closing, it is probable that our present
14
management and shareholders will no longer be in control. In addition, our
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of our shareholders. Management may
negotiate or consent to the purchase of all or a portion of our stock. Any terms
of sale of the shares presently held by officers and/or directors will be also
afforded to all other shareholders on similar terms and conditions. All sales
will be made in compliance with the securities laws of the United States and any
applicable state.
Management may visit material facilities, obtain independent verification of
information and check references of management and key personnel. We will
participate in a business opportunity only after the negotiation and signing of
appropriate written agreements.
Negotiations with target company management are expected to focus on the
percentage of our company that the target company shareholders will acquire. Our
percentage ownership in the combined company will likely be significantly lower
than our current ownership interest.
Competition
- -----------
We are an insignificant participant among the firms that engage in the
acquisition of business opportunities. There are many established venture
capital groups and financial concerns that have significantly greater financial
and personnel resources and technical expertise than we do. In view of our
extremely limited financial resources and limited management availability we
will continue to be at a significant competitive disadvantage.
DESCRIPTION OF PROPERTY
We have no properties and at this time have no agreements to acquire any
properties. We intend to acquire assets or a business in exchange for our
securities.
We operate from our offices at Suite 1500, 885 West Georgia Street, Vancouver,
British Columbia, V6C 3E8, Canada. Space is provided to the Company on a rent
free basis by Mr. Jason John, a director of the Company, and it is anticipated
that this arrangement will remain until we successfully consummate a merger or
acquisition. Management believes that this space will meet our needs for the
foreseeable future.
PRINCIPAL SHAREHOLDERS
The table below lists the beneficial ownership of our voting securities by each
person known by us to be the beneficial owner of more than 5% of our securities,
as well as the securities beneficially owned by all our directors and officers.
Unless specifically indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
15
NAME AND AMOUNT AND
ADDRESS OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT OF
TITLE OF CLASS OWNER OWNER CLASS
- -------------- ----- ----- -----
Common Devinder Randhawa
Suite 104 152,000 30.4%
1456 St. Paul Street,
Kelowna, B.C.
V1Y 2E6
Common Bob Hemmerling
1908 Horizon Drive 152,000 30.4%
Kelowna, B.C.
V1Z 3L3
Common Management as a group 0 0%
The balance of our outstanding common stock is held by eight (8) persons.
Mr. Devinder Randhawa and Mr. Bob Hemmerling are the founders and promoters of
our company. Both Mr. Randhawa and Mr. Hemmerling have prior experience with
blank check companies and are familiar with blank check company reporting
requirements and acquisition requirements.
MANAGEMENT
Our directors and officers are as follows:
NAME AGE POSITION
- ---- --- --------
Jason John 32 President, C.F.O., Secretary and
Director
The above listed officer and director will serve until the next annual meeting
of the shareholders or until his death, resignation, retirement, removal, or
disqualification, or until his successors have been elected. Vacancies in the
existing Board of Directors are filled by majority vote of the remaining
directors. Our officer serves at the will of the Board of Directors. There are
no family relationships between any executive officer or director.
Resumes
- -------
Mr. Jason John was appointed to his positions on September 17, 1999. He devotes
his time on an as needed basis which he expects to be nominal.
Prior to joining the Company, Mr. John was employed by the Shaftsbury Brewing
Company where he was involved in product promotion and marketing. Prior to
working with the Shaftsbury Brewing Company Mr. John was employed at Gray
Beverage as an account manager and merchandiser. While employed by Gray Beverage
Mr. John was responsible for implementing many new operational systems which
resulted in an increase in the company's efficiency in many areas. Currently,
Mr. John is employed at Ensign Drilling. Ensign Drilling is a leading company in
oil and gas exploration in Canada.
16
Prior "Blank Check" Experience
- ------------------------------
Mr. John has no prior experience as an officer or director of a blank check
company, and has no prior direct experience in identifying emerging companies
for investment and/or business combinations.
Conflicts of Interest
- ---------------------
Our sole officer and director is also an officer and director of Tripacific
Development Corp. and Triwest Management Resources Corp. These two companies are
also blank check companies.
Our officers and directors are now and may in the future become shareholders,
officers or directors of blank check companies. Accordingly, additional direct
conflicts of interest may arise in the future with respect to individuals acting
on our behalf and on behalf of other companies. We do not have a right of first
refusal to opportunities that come to management's attention.
EXECUTIVE COMPENSATION
No compensation has been awarded to, earned by or paid to our officers and/or
directors since our inception. Management has agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
we have generated revenues from operations. As of the date of this registration
statement, we have no funds available to pay officers or directors. Further, our
director is not accruing any compensation pursuant to any agreement with us.
- ------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
- ------------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------------------------------------------------------------------------------------------------------
Other All
Annual Restricted Securities Other
Name and Principle Comp- Stock Underlying LTIP Comp-
Position Salary Bonus ensation Award(s) Option/SARs Payouts ensation
Year ($) ($) ($) ($) (#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------
Jason John, 1999/ $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00
President, Secretary 2000
and Director
- ------------------------------------------------------------------------------------------------------------------------
If we successfully complete a merger or acquisition, it is possible that the
company may employ or retain one or more members of our management for the
purposes of providing services to the surviving entity. Management has agreed to
disclose any discussions concerning possible employment to the Board of
Directors and to abstain from voting on the transaction.
It is possible that management associates may refer a merger or acquisition
candidate to us. In the event we complete a transaction with any entity referred
by associates of management, it is
17
possible that the associate will be compensated for their referral in the form
of a finder's fee. It is anticipated that this fee will be either in the form of
restricted common stock issued by us as part of the terms of the proposed
transaction, or will be in the form of cash consideration. If compensation is in
the form of cash, payment will be made by the acquisition or merger candidate.
The amount of any finder's fee cannot be determined as of the date of this
registration statement, but is expected to be comparable to consideration
normally paid in like transactions, which ranges up to ten (10%) percent of the
transaction price. No member of management will receive a finders fee, either
directly or indirectly, as a result of their efforts to implement our business
plan.
No retirement, pension, profit sharing, stock option or insurance programs have
been adopted by us for the benefit of our employees.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against us.
MARKET FOR OUR COMMON STOCK
There is no trading market for our common stock. There has been no trading
market to date. Management has not discussed market making with any market maker
or broker dealer. We cannot guarantee that a trading market will ever develop or
if a market does develop, that it will continue.
Market Price
- ------------
Our common stock is not quoted at the present time. The Securities and Exchange
Commission has adopted a Rule that established the definition of a "penny
stock," as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require:
(i) that a broker or dealer approve a person's account for
transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:
(i) obtain financial information and investment experience and
objectives of the person; and
18
(ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has
sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule relating to the penny stock market, which, in
highlight form,
(i) sets forth the basis on which the broker or dealer made the
suitability determination; and
(ii) that the broker or dealer received a signed, written agreement
from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stock in
both public offering and in secondary trading, and about commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Escrow
- ------
The common stock under this offering will remain in escrow until the closing of
a business combination under the requirements of Rule 419.
Holders
- -------
There are ten (10) holders of our common stock. In July, 1997, we issued 500,000
of common stock for services in formation and organization valued at $0.0001 per
share ($50.00). All of our issued and outstanding shares of common stock were
issued in accordance with the exemption from registration afforded by Section
4(2) of the Securities Act of 1933.
As of the date of this statement, all of our common stock is eligible for sale
under Rule 144 promulgated under the '33 Act, as amended, subject to certain
limitations included in Rule 144. In general, under Rule 144, a person, who has
satisfied a one year holding period, under certain circumstances, may sell
within any three-month period a number of shares that does not exceed the
greater of one percent of the then outstanding common stock or the average
weekly trading volume during the four calendar weeks before the sale. Rule 144
also permits, under certain circumstances, the sale of shares without any
quantity limitation by a person who has satisfied a two-year holding period and
who is not, and has not been an affiliate for the preceding three months.
Dividends
- ---------
We have not paid any dividends to date, and have no plans to do so in the
immediate future.
19
Transfer Agent
- --------------
The Company's registrar and transfer agent is The Nevada Agency and Trust
Company Suite 880, Bank of America Plaza, 50 West Liberty Street, Reno, Nevada,
89501.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 100,000,000 shares, of common stock,
par value $0.0001 per share. There are 500,000 shares of common stock issued and
outstanding as of the date of this filing.
Common Stock
- ------------
All shares of common stock have equal voting rights and are entitled to one vote
per share in all matters to be voted upon by shareholders. Our shares have no
pre-emptive, subscription, conversion or redemption rights and may be issued
only as fully paid and non-assessable shares. Cumulative voting in the election
of directors is not permitted, which means that the holders of a majority of our
issued shares represented at any meeting where a quorum is present will be able
to elect the entire Board of Directors. In that event, the holders of the
remaining shares of common stock will not be able to elect any directors. In the
event of liquidation, each shareholder is entitled to receive a proportionate
share of our assets available for distribution to shareholders after the payment
of liabilities and after distribution of preferred amounts. All shares of our
common stock issued and outstanding are fully paid and non-assessable. Holders
of stock are entitled to share pro rata in dividends and distributions with
respect to the common stock out of funds legally available for that purpose. We
have no intention to issue additional shares other than under this registration
statement.
There are no outstanding options or warrants to acquire our shares. 304,000
shares of our 500,000 shares currently outstanding are held by affiliates and
are subject to resale restrictions. We are offering 500,000 shares of our common
stock at $0.10 per share. Dilution to the investors in this offering shall be
approximately $0.06 per share.
SHARES ELIGIBLE FOR FUTURE RESALE
There is no public market for our common stock. Sales of common stock in a
public market after this offering could cause our share price to drop and could
adversely affect our ability to raise further capital through an offering of
shares.
Upon completion of this offering, we will have 1,000,000 shares outstanding. The
500,000 shares sold in this offering will be freely tradeable without
restriction or further registration under the Securities Act unless purchased by
affiliates of Eastern Management Corp. Sales of our shares to residents of
Alaska, Arizona, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland,
Massachusetts, Missouri, Nebraska, North Dakota, Pennsylvania, South Dakota,
Tennessee, Utah, Vermont and Washington may only be effected by registration in
those states.
20
WHERE CAN YOU FIND MORE INFORMATION?
We are a reporting company, and are subject to the reporting requirements of the
Exchange Act. We voluntarily filed a Form 10-SB on June 28, 1999. We have filed
a registration statement with the SEC on form SB-2 to register the offer and
sale of the shares. This prospectus is part of that registration statement, and,
as permitted by the SEC's rules, does not contain all of the information in the
registration statement. For further information about us and the shares offered
under this prospectus, you may refer to the registration statement and to the
exhibits and schedules filed as a part of the registration statement. You can
review the registration statement and its exhibits and schedules at the public
reference facility maintained by the SEC at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
SEC at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. The registration statement is also available electronically on the World
Wide Web at http://www.sec.gov.
You can also call or write us at any time with any questions you may have. We'd
be pleased to speak with you about any aspect of our business and this offering.
REPORTS TO STOCKHOLDERS
We intend to furnish our stockholders with annual reports containing audited
financial statements as soon as practicable at the end of each fiscal year. Our
fiscal year ends on March 31.
PLAN OF DISTRIBUTION
We offer the right to subscribe for 500,000 shares at $0.10 per share. No
compensation is to be paid to any person for the offer and sale of the shares.
The offering shall be conducted by our president. Although he is an associated
person with us as that term is defined in Rule 3a4-1 under the Exchange Act, he
is deemed not to be a broker for the following reasons:
He is not subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Exchange Act at the time of his
participation in the sale of our securities.
He will not be compensated for his participation in the sale of our
securities by the payment of commission or other remuneration based
either directly or indirectly on transactions in securities.
He is not an associated person of a broker or dealer at the time of his
participation in the sale of our securities.
He will restrict his participation to the following activities:
A. Preparing written communications or delivering written
communications through the mails or other means that does not
involve oral solicitation by him of a potential purchaser; and
21
B. Responding to inquiries of potential purchasers in a
communication initiated by the potential purchasers, provided
however, that the content of responses are limited to information
contained in a registration statement filed under the Securities
Act or other offering document; or
C. Transactions involving offers and sales of our shares made under
a plan or agreement submitted for the vote or consent of
shareholders of any company we may acquire in connection with a
merger or plan of acquisition involving the exchange of the
acquired company's shares or assets for shares of our company.
Our shares may be sold under Rule 144 of the Securities Act of 1933 beginning
one year after the shares were issued, provided such date is at least 90 days
after the date of this prospectus.
Under the Securities Exchange Act of 1934, any person engaged in a distribution
of the common stock offered by this Prospectus may not simultaneously engage in
market making activities for our common stock during the applicable "cooling
off" periods before the start of the distribution.
We Arbitrarily Determined Our Offering Price
- --------------------------------------------
The initial offering price of $0.10 per share has been arbitrarily determined by
us, and bears no relationship to our assets, earnings, book value or any other
objective standard of value. Among the factors we considered were:
A. The lack of operating history;
B. The proceeds to be raised by the offering;
C. The amount of capital to be contributed by the public in
proportion to the amount of stock to be retained by present
stockholders;
D. The current market conditions in the over-the-counter market
How You Can Buy Our Shares
- --------------------------
You can purchase our shares by completing and signing the share purchase
agreement which is attached to this prospectus. The completed share purchase
agreement and your payment must be delivered to us before the expiration of our
offering. The purchase price of $0.10 per share must be paid by check, bank
draft or money order payable in U.S. dollars to "Eastern Management Corp.".
All funds received from investors will be placed into an escrow account until we
have complied with Rule 419.
LEGAL MATTERS
The validity of the shares offered under this prospectus is being passed upon
for us by Antoine Devine, of Evers & Hendrickson, LLP of San Francisco,
California.
22
EXPERTS
Our financial statements as of the period ended March 31, 2001 included in this
prospectus and in the registration statement, have been included in reliance on
the reports of Davidson & Company, independent certified public accountants,
included in this prospectus, and upon the authority of, Davidson & Company,
experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
The Nevada Revised Statutes authorize us to indemnify directors or officers
under certain circumstances and subject to certain limitations. Our Bylaws
provide for the indemnification of directors and officers to the full extent
permitted by Nevada law.
We may also purchase and maintain insurance for the benefit of any director or
officer that may cover claims for situations where we could not provide
indemnification.
In the opinion of the U.S. Securities and Exchange Commission, indemnification
for liabilities arising under the '33 Act to officers, directors or persons
controlling us is against public policy as expressed in the '33 Act, and is
therefore unenforceable.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
On October 20, 1999, we appointed Davidson & Company, Chartered Accountants to
replace Kish, Leake & Associates, P.C. as our principal accountants. The report
of Kish, Leake & Associates, P.C. on our financial statements did not contain an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope or accounting principles. We had no disagreements
with them on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure. We did not consult with
Davidson & Company on any accounting or financial reporting matters in the
periods prior to their appointment. The change in accountants was approved by
the Board of Directors. We filed a Form 8-K with the Commission (File No.
000-26518) on November 1, 1999.
23
FINANCIAL STATEMENTS
The following financial statements are attached to this report and filed as a
part of this Registration Statement.
Table of Contents - March 31, 2001 Financial Statements..............F-2
Independent Auditor's Report.........................................F-3
Balance Sheet as of March 31, 2001...................................F-4
Statement of Operations as of March 31, 2001.........................F-5
Statement of Cash Flows as of March 31, 2001.........................F-6
Statement of Changes in Stockholders' Equity as of March 31, 2001....F-7
Notes to Financial Statements as of March 31, 2001...................F-8
F-1
EASTERN MANAGEMENT CORP.
(Formerly Inforetech Inc.)
(A Development Stage Company)
Financial Statements
MARCH 31, 2001
EASTERN MANAGEMENT CORP.
(Formerly Inforetech Inc.)
TABLE OF CONTENTS
Independent Auditor's Report...................................F-3
Financial Statements
Balance Sheet..................................................F-4
Statement of Operations........................................F-5
Statement of Cash Flows........................................F-6
Statement of Shareholders' Equity..............................F-7
Notes to Financial Statements..........................F-8 to F-11
F-2
DAVIDSON & COMPANY Chartered Accountants A Partnership of Incorporated Professionals
----- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
To the Directors and Stockholders of
Eastern Management Corporation
(A Development Stage Company)
We have audited the accompanying balance sheets of Eastern Management
Corporation as at March 31, 2001 and 2000 and the related statements of
operations, stockholders' equity and cash flows for the years then ended and for
the period from inception on July 23, 1997 to March 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that Eastern
Management Corporation will continue as a going concern. The Company is in the
development stage and does not have the necessary working capital for its
planned activity which raises substantial doubt about its ability to continue as
a going concern. Management's plans in regards to these matters are discussed in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Eastern Management Corporation as at March
31, 2001 and 2000 and the results of its operations and its cash flows for the
years then ended and for the period from inception on July 23, 1997 to March 31,
2001 in conformity with generally accepted accounting principles in the United
States of America.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
June 21, 2001
A Member of SC INTERNATIONAL
----------------------------
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
F-3
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
BALANCE SHEETS
AS AT MARCH 31
=====================================================================================================
2001 2000
- -----------------------------------------------------------------------------------------------------
ASSETS $ -- $ --
===================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable $ 7,171 $ --
-------- --------
STOCKHOLDERS' EQUITY
Capital stock (Note 4)
Authorized
100,000,000 common shares with a par value of $0.0001
Issued and outstanding
March 31, 2000 - 500,000 common shares
March 31, 2001 - 500,000 common shares 50 50
Additional paid-in capital 17,613 8,052
Deficit accumulated during the development stage (24,834) (8,102)
-------- --------
(7,171) --
-------- --------
Total liabilities and stockholders' equity $ -- $ --
=====================================================================================================
On Behalf of the Board of Directors:
/s/Jason John
- --------------------------------
Jason John, Director
The accompanying notes are an integral part of these financial statements.
F-4
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
==================================================================================================================
Cumulative
Amounts
From Inception
on July 23,
1997
to Year Ended Year Ended
March 31, March 31, March 31,
2001 2001 2000
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
Office and miscellaneous $ 50 $ -- $ --
Professional fees 23,584 15,532 8,052
Transfer agent and filing fees 1,200 1,200 --
--------- --------- -----------
LOSS FOR THE PERIOD $ (24,834) $ (16,732) $ (8,052)
==================================================================================================================
BASIC AND DILUTED LOSS PER SHARE $ (0.03) $ (0.01)
==================================================================================================================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 500,000 500,000
==================================================================================================================
The accompanying notes are an integral part of these financial statements.
F-5
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
===========================================================================================================
Cumulative
Amounts
From Inception
on July 23,
1997
to Year Ended Year Ended
March 31, March 31, March 31,
2001 2001 2000
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $(24,834) $(16,732) $ (8,052)
Items not affecting cash:
Stock issued for services 50 -- --
Expenses paid by related party on behalf of the Company 17,613 9,561 8,052
Change in non-cash operating assets and liabilities
Increase in accounts payable 7,171 7,171 --
-------- -------- --------
Net cash used in operating activities -- -- --
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities -- -- --
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities -- --
-------- -------- --------
Change in cash position during the period -- --
Cash position, beginning of the period -- --
-------- -------- --------
Cash position, end of the period $ -- $ $ --
===========================================================================================================
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS:
Cash paid for income taxes $ -- $ -- $ --
Cash paid for interest -- -- --
===========================================================================================================
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Common shares issued for services $ 50 $ -- $ --
Expenses paid by related party on behalf of the Company 17,613 9,561 8,052
===========================================================================================================
The accompanying notes are an integral part of these financial statements.
F-6
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
=====================================================================================================================
Deficit
Accumulated
During
Common Stock Additional the Total
----------------------- Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
- ---------------------------------------------------------------------------------------------------------------------
BALANCE, JULY 23, 1997 -- $ -- $ -- $ -- $ --
Capital stock issued for services 500,000 50 -- -- 50
Loss for the period -- -- -- (50) (50)
-------- -------- -------- -------- --------
BALANCE, MARCH 31, 1998 AND 1999 500,000 50 -- (50) --
Shareholder capital contribution -- -- 8,052 -- 8,052
Loss for the year -- -- -- (8,052) (8,052)
-------- -------- -------- -------- --------
BALANCE, MARCH 31, 2000 500,000 50 8,052 (8,102) --
Shareholder capital contribution -- -- 9,561 -- 9,561
Loss for the year -- -- -- (16,732) (16,732)
-------- -------- -------- -------- --------
BALANCE, MARCH 31, 2001 500,000 $ 50 $ 17,613 $(24,834) $ (7,171)
=====================================================================================================================
The accompanying notes are an integral part of these financial statements.
F-7
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2001
================================================================================
1. ORGANIZATION OF THE COMPANY
The Company was incorporated on July 23, 1997 under the laws of Nevada
to engage in any lawful business or activity for which corporations may
be organized under the laws of the State of Nevada. On September 24,
1999, the Company changed its name to inFOREtech Inc. On January 17,
2000, the Company changed its name back to Eastern Management
Corporation.
The Company entered the development stage in accordance with Statement
of Financial Accounting Standards No. 7 on July 23, 1997. Its purpose
is to evaluate, structure and complete a merger with, or acquire a
privately owned corporation. The Company is a "Blank Check" company
which plans to search for a suitable business to merge with or acquire.
Operations since incorporation consisted primarily of obtaining capital
contributions by the initial investors and activities regarding the
registration of the offering with the Securities and Exchange
Commission.
2. GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company has no current
source of revenue. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. The
Company's management plans on advancing funds on an as needed basis and
in the longer term, revenues from the operations of the merger or
acquisition candidate, if found. The Company's ability to continue as a
going concern is dependent on these additional management advances,
and, ultimately, upon achieving profitable operations through a merger
or acquisition candidate.
3. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of
revenues and expenses during the year. Actual results could differ from
these estimates.
LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("SFAS 128"). Under SFAS 128, basic and diluted earnings per
share are to be presented. Basic earnings per share is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding in the period. Diluted
earnings per share takes into consideration common shares outstanding
(computed under basic earnings per share) and potentially dilutive
common shares.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of accounts payable. Unless
otherwise noted, it is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise noted.
F-8
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2001
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income
Taxes". A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss
carryforwards. Deferred tax expenses (benefit) result from the net
change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards No.
130 ("SFAS 130"), "Reporting Comprehensive Income". This statement
establishes rules for the reporting of comprehensive income and its
components. The adoption of SFAS 130 had no impact on total
stockholders' equity as of March 31, 2001.
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and
reporting standards for derivative instruments and for hedging
activities. SFAS 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued SFAS
137 to defer the effective date of SFAS 133 to fiscal quarters of
fiscal years beginning after June 15, 1999. In June 2000, the FASB
issued SFAS No. 138, which is a significant amendment to SFAS 133. The
Company does not anticipate that the adoption of these statements will
have a significant impact on its financial statements.
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require, companies
to record compensation cost for stock-based employee compensation plans
at fair value. The Company has chosen to account for stock-based
compensation using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Accordingly compensation
cost for stock options is measured as the excess, if any, of the quoted
market price of the Company's stock at the date of the grant over the
amount an employee is required to pay for the stock.
4. CAPITAL STOCK
The Company's authorized capital stock consists of 100,000,000 shares
of common stock, with a par value of $0.0001 per share. All shares of
common stock have equal voting rights and, when validly issued and
outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of common stock have no
pre-emptive, subscription, conversion or redemption rights and may be
issued only as fully paid and non-assessable shares. Holders of the
common stock are entitled to share pro-rata in dividends and
distributions with respect to the common stock, as may be declared by
the Board of Directors out of funds legally available.
On July 23, 1997, the Company issued 500,000 shares of common stock for
services at a deemed value of $50.
F-9
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2001
================================================================================
4. CAPITAL STOCK (cont'd.....)
On September 21, 1999, the Company implemented a 31:1 forward stock
split. Subsequent to year end, on April 3, 2000, the Company reversed
the previous 31:1 forward stock split.
Proposed public offering of common stock
The Company has commenced with a "Blank Check" offering subject to Rule
419 of the Securities Act of 1933, as amended, for 100,000 common
shares to be sold at a price of $1.00 per share.
Rule 419 requirements
Rule 419 requires that offering proceeds, after deduction for
underwriting commissions, underwriting expenses and deal allowances
issued, be deposited into an escrow or trust account (the "Deposited
Funds" and "Deposited Securities", respectively) governed by an
agreement which contains certain terms and provisions specified by the
Rule. Under Rule 419, the Deposited Funds and Deposited Securities will
be released to the company and to the investors, respectively, only
after the company has met the following three basic conditions. First,
the company must execute an agreement(s) for an acquisition(s) meeting
certain prescribed criteria. Second, the company must file a
post-effective amendment to the registration statement that includes
the terms of a reconfirmation offer that must contain conditions
prescribed by the rules. The post-effective amendment must also contain
information regarding the acquisition candidate(s) and its
business(es), including audited financial statements. The agreement(s)
must include, as a condition precedent to their consummation, a
requirement that the number of investors representing 80% of the
maximum proceeds must elect to reconfirm their investments. Third, the
company must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that investors
representing 80% of the Deposited Funds must elect to remain investors.
The post-effective amendment must also include the terms of the
reconfirmation offer mandated by Rule 419. The reconfirmation offer
must include certain prescribed conditions that must be satisfied
before the Deposited Funds and Deposited Securities can be released
from escrow. After the company submits a signed representation to the
escrow agent that the requirements of Rule 419 have been met and after
the acquisition(s) is consummated, the escrow agent can release the
Deposited Funds and Deposited Securities. Investors who do not
reconfirm their investments will receive the return of a pro-rata
portion thereof; and in the event investors representing less than 80%
of the Deposited Funds reconfirm their investments, the Deposited Funds
will be returned to the investors on a pro-rata basis.
5. INCOME TAXES
The Company's total deferred tax asset at March 31 is as follows:
=======================================================================
2001 2000
-----------------------------------------------------------------------
Tax benefit of net operating loss carryforward $ 3,724 $ 1,215
Valuation allowance (3,724) (1,215)
------- -------
$ -- $ --
=======================================================================
The Company has a net operating loss carryforward of approximately
$24,834, which if not used, will expire between the years 2019 and
2020. The Company has provided a full valuation allowance on the
deferred tax asset because of the uncertainty regarding realizability.
F-10
EASTERN MANAGEMENT CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2001
================================================================================
6. RELATED PARTY TRANSACTIONS
The Company does not maintain a checking account and all expenses
incurred by the Company are paid by an affiliate. For the year ended
March 31, 2001, the Company accrued $7,171 and paid $6,082 for
professional fees, and $1,200 for filing fees. In addition, the
affiliate paid $2,279 for existing accounts payable. The affiliate does
not expect to be repaid for the expenses it pays on behalf of the
Company. Accordingly, as the expenses are paid, they are classified as
additional paid-in capital.
F-11
PART II
INDEMNIFICATION OF OFFICES AND DIRECTORS
Article VI of our Bylaws states certain indemnification rights. Our Bylaws
provide that we possess and may exercise powers of indemnification for officers,
directors, employees, agents and other persons. Our Board of Directors is
authorized and empowered to exercise all of our powers of indemnification,
without shareholder action. Our assets could be used to satisfy any liabilities
subject to indemnification.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses of our offering are being paid by management. These expenses
include registration fees of $26.40, accounting fees of $2,500 and legal fees of
approximately $5,000.
RECENT SALES OF UNREGISTERED SECURITIES
In July, 1997, we issued 500,000 common shares at $0.0001 per share to our
founding shareholder in consideration of services rendered at a fair market
value of fifty dollars. The sale of our common shares was not a public offering
and no underwriter or agent was used. We relied on the exemption contained in
section 4(2) of the Securities Act of 1933.
Item 27-Exhibits
3.1* Articles of Incorporation
3.2* Amendment to Articles of Incorporation filed September 24, 1999
3.2* Amendment to Articles of Incorporation filed January 27, 2000
3.3* Bylaws
4.1* Form of Lock Up Agreement Executed by the Company's Shareholders
4.1.1* Specimen Informational Statement
5.1* Opinion of Evers & Hendrickson with respect to the legality of the
shares being registered
23.1* Consent of Davidson & Company
23.2* Consent of Evers & Hendrickson (included in
Exhibit 5.1)
27.1* Financial Data Schedule
99.1* Subscription Agreement
* Previously filed
II-1
Item 28 -- Undertakings
We undertake that we will:
1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) 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 foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities
offered would not exceed that which was registered) 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 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
(iii) Include any additional or changed material information on the
plan of distribution.
2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the bona fide offering.
3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
II-2
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement on Form SB-2 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Vancouver, Province of British Columbia, Canada,
on July 24, 2001.
EASTERN MANAGEMENT CORP.
(formerly Inforetech Inc.)
/s/ Jason John
--------------------------------
Jason John, President and C.F.O.
In accordance with 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 stated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Jason John President, C.F.O., Secretary July 24, 2001
- -------------- and Director
Jason John
II-3
Until 90 days after the date when the funds and securities are released from the
escrow account, all dealers effecting transactions in the shares, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters to their unsold allotments or subscriptions.
II-4
EXHIBIT INDEX
-------------
3.1* Articles of Incorporation
3.2* Amendment to Articles of Incorporation filed September 24, 1999
3.2* Amendment to Articles of Incorporation filed January 27, 2000
3.3* Bylaws
4.1* Form of Lock Up Agreement Executed by the Company's Shareholders
4.1.1* Specimen Informational Statement
5.1* Opinion of Evers & Hendrickson with respect to the legality of the
shares being registered
23.1* Consent of Davidson & Company
23.2* Consent of Evers & Hendrickson (included in
Exhibit 5.1)
27.1* Financial Data Schedule
99.1* Subscription Agreement
* Previously filed