SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SILVER STREAM CORPORATION
(Name of Small Business Issuer in its charter)
Nevada 8700 88-0448523
(State or Jurisdiction (Primary Standard Industrial (IRS Employer
of Classification Code Number) Identification No.)
Incorporation or
Organization)
3360 West Sahara Avenue, Suite 200, Las Vegas, Nevada 89102; (702) 732
2253.
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Shawn F. Hackman, Esq., 3360 West Sahara Avenue, Suite 200, Las Vegas,
Nevada 89102; (702) 732-2253, fax: (702) 732-2253
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to
register additional
securities for an offering
pursuant to Rule 462(b)
under the Securities Act,
please check the following
box and list the
Securities Act
registration number of the
earlier effective
registration statement for
the same offering.
If this Form is a post-
effective amendment filed
pursuant to Rule 462(c)
under the Securities Act,
check the following box
and list the Securities
Act registration statement
number of the earlier
effective registration
statement for the same
offering.
If this Form is a post-
effective amendment filed
pursuant to Rule 462(d)
under the Securities Act,
check the following box
and list the Securities
Act registration statement
number of the earlier
effective registration
statement for the same
offering.
If the delivery of the
prospectus is expected to
be made pursuant to Rule
434, check the following
box.
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered Common Shares
Amount to be registered 2,000,000
Proposed maximum offering
price per unit $0.05
Proposed maximum aggregate
offering price $100,000
Amount of registration
fee $26.40
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.
Initial Public Offering
Prospectus
SILVER STREAM
2,000,000 shares of Common Stock
$0.05 per share
Registrant
Silver Stream
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
Registrant's Attorney
Shawn F. Hackman
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
_________________________
The Offering
Per Share Total
Public Price $0.05 $100,000
Proceeds to
Silver Stream $0.05 $100,000
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.
________________________
The title of each class of securities to be registered is Common
Shares.
The amount to be registered is 2,000,000 shares.
Not traded on any national securities exchange or the Nasdaq Stock
Market.
This investment involves a high degree of Risk. You should purchase
shares only if you can afford a complete loss. Please consider carefully the
risk factors contained in this prospectus.
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.
Information contained herein is subject to completion or
amendment. The registration statement relating to the
securities has been filed with the Securities and Exchange
Commission. The securities may not be sold nor may offers
to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in
any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.
Subject to Completion, Dated _______________, 2000.
The shares being offered by Silver Stream, Inc. are subject to
prior sale, acceptance of the subscriptions by Silver Stream, Inc.
and approval of certain legal matters by counsel to
Silver Stream , Inc.
This is our initial public offering of common stock.
The initial offering price per share is $0.05. We will apply
to list our common stock on the OTC:BB. No public market
currently exists for the shares of common stock.
Silver Stream , Inc.. has the right to accept or reject any
subscriptions, in whole or in part, for any reason. Until
______ 2000, all dealers effecting transactions in
registered securities may be required to deliver a
prospectus This is true whether or not the dealer is
participating in this distribution. Dealers also have an
obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
Silver Stream is conducting a "Blank Check" offering subject
to Rule 419 of Regulation C as promulgated by the U.S. Securities and
Exchange Commission (the "S.E.C.") under the securities act of 1933, as
amended (the "Securities Act").The net offering proceeds, after
deduction for offering expenses (estimated at $20,000) and sales commissions,
and the securities to be issued to investors must be deposited in an escrow
account (the "deposited funds" and "deposited securities," respectively). While
held in the escrow account, the deposited securities may not be traded or
transferred. Except for an amount up to 10% of the deposited funds
otherwise releasable under rule 419, the deposited funds and the deposited
securities may not be released until an acquisition meeting certain specified
criteria has been consummated and a sufficient number of investors reconfirm
their investment in accordance with the procedures set forth in rule 419.
Pursuant to these procedures, a new prospectus, which describes an
acquisition candidate and its business and includes audited financial
statements, will be delivered to all investors. Silver Stream must return the
pro rata portion of the deposited funds to any investor who does not elect to
remain an investor.
Unless a sufficient number of investors elect to remain investors, all
investors will be entitled to the return of a pro rata portion of the
deposited funds (plus interest) and none of the deposited
securities will be issued to investors. In the event an acquisition is
not consummated within 18 months of the effective date of this prospectus,
the deposited funds will be returned on a pro rata basis to all investors.
See "risk factors" and "release of deposited securities and deposited
funds."
Until 90 days after the date funds and securities are
released from the escrow or trust account pursuant to Rule
419, all dealers effecting transactions in the registered
securities, whether or not participating in this
distribution, may be required to deliver a prospectus.
This prospectus is not an offer to sell or a solicitation to buy the
securities offered. It is unlawful to make such an offer or
solicitation.
The delivery of this prospectus, nor a sale of the mentioned securities
shall create an implication that there has been no change in the information
in this prospectus. If a material change does occur, however, this
prospectus will be amended or supplemented accordingly for all existing
shareholders and prospective investors.
This prospectus does not intentionally contain a false statement or
material fact, nor does it intentionally omit a material fact. No person or
entity has been authorized by Silver Stream , Inc.. to give any information or
make a representation, warranty, covenant, or agreement
which is not expressly provided for or continued in this
prospectus. Any such information that is given should not
be relied upon as having been authorized.
This Company is not a Reporting Company. Upon written
or oral request, any person who receives a prospectus will
have an opportunity to meet with representatives of
Silver Stream , Inc. to verify any of the information included
in the prospectus and to obtain additional information.
Such a person shall also, upon written or oral request,
receive a copy of any information that is incorporated by
reference in the prospectus and the address (including title
or department) and telephone number. Such information shall
be provided without charge.
All offerees and subscribers will be asked to
acknowledge in the subscription agreement that they have
read this prospectus carefully and thoroughly, they were
given the opportunity to obtain additional information;
and they did so to their satisfaction.
A maximum of 2,000,000 shares may be sold on a direct participation
offering basis. All of the proceeds from the sale of shares will be
placed in an interest-bearing escrow account by 12 o'clock noon of the
fifth business day after receipt thereof, until the sum of the minimum
offering, is received. If less than $20,000, is received from the sale
of the shares within 240 days of the date of this prospectus, all
proceeds will be refunded promptly to purchasers with interest and
without deduction for commission or other expenses. Subscribers will
not be able to obtain return of their funds while in escrow. No
commissions are anticipated.. There will be a minimum purchase of 5000
shares at $250.00.
No commissions are anticipated. No sales commission will be paid in
connection with the sales of these shares. The net proceeds to Silver
Stream are after the payment of certain expenses in connection with
this offering. See "Use of Proceeds."
TABLE OF CONTENTS PAGE
PROSPECTUS SUMMARY 1
RISK FACTORS
2
INVESTORS RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419 3
USE OF PROCEEDS 4
DETERMINATION OF OFFERING PRICE 5
DILUTION 6
PLAN OF DISTRIBUTION 7
LEGAL PROCEEDINGS 8
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 10
DESCRIPTION OF SECURITIES 11
INTEREST OF NAMED EXPERTS AND COUNSEL 12
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES 13
ORGANIZATION WITHIN LAST FIVE YEARS 14
DESCRIPTION OF BUSINESS 15
PLAN OF OPERATION 16
DESCRIPTION OF PROPERTY 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 18
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 19
EXECUTIVE COMPENSATION 20
FINANCIAL STATEMENTS 21
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 22
Prospectus Summary
The following summary is qualified in its entirety by
detailed information appearing elsewhere in this prospectus
("Prospectus"). Each prospective investor is urged to read
this Prospectus, and the attached Exhibits, in their
entirety.
Silver Stream
Silver Stream , Inc., was incorporated on
January 28th, 2000, under the laws of the State of Nevada,
to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to
its original shareholders, Silver Stream never commenced any
operational activities.
Silver Stream was formed by Shawn F. Hackman, the initial
director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr.
Hackman serves as Secretary and Director. Mr. John E. Dhonau
serves as president and director. Mr. Dhonau
determined next to proceed with filing a Form SB-2.
Mr. Dhonau, the President and Director, elected to
commence implementation of Silver Stream's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, Silver Stream can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify Silver Stream as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale securities of "blank check" companies in their
prospective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as Silver Stream has
successfully implemented its business plan described herein.
Accordingly, each shareholder of Silver Stream will execute
and deliver a "lock-up" letter agreement, affirming that
his/her respective shares of Silver Stream's common stock
until such time as Silver Stream has successfully consummated
a merger or acquisition and Silver Stream is no longer
classified as a "blank check" company. In order to provide
further assurances that no trading will occur in the
Silver Stream's securities until a merger or acquisition has been
consummated, each shareholder will place his/her
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated. However, while management believes that the
procedures established to preclude any sale of Silver Stream's
securities prior to closing of a merger or acquisition will
be sufficient, there can be no assurances that the
procedures established herein will unequivocally limit any
shareholder's modern to sell their respective securities
before such closing.
The Offering.
Shares of Silver Stream will be offered at $.05 per Share. See
"Plan of Distribution, page. The minimum purchase required
of an investor is $250.00. If all the Shares offered are
sold the net proceeds to Silver Stream will be $100,000
less certain costs associated with this offering. See "Use
of Proceeds." This balance will be used as working capital
for Silver Stream..
Liquidity of Investment.
Although the Shares will be "free trading," there is no
established market for the Shares and there may not be in
the future. Therefore, an investor should consider his
investment to be long-term. See "Risk Factors, page 6."
RISK FACTORS
The securities offered are highly speculative in nature and
involve a high degree of risk. They should be purchased only by persons
who can afford to lose their entire investment. Therefore, each
prospective investor should, prior to purchase, consider very carefully
the following risk factors among other things, as well as all other
information set forth in this prospectus.
Rule 419 contains restrictive provisions on the sale of shares.
Rule 419 generally requires that the securities to be issued
and the funds received in a blank check offering be deposited and held
in an escrow account until an acquisition meeting specified criteria is
completed.
Before the acquisition can be completed and before the funds and
securities can be released, the issuer in a blank check offering is required
to update its registration statement with a post-effective amendment.
After the effective date of any such post-effective
amendment, Silver Stream is required to furnish investors with
the prospectus produced thereby containing information, including
audited financial statements, regarding the proposed acquisition
candidate and its business. Investors must be given no fewer than
20 and no more than 45 business days from the effective date of
the post-effective amendment to decide to remain investors or
require the return of their investment funds. Any investor not
making a decision within said period is automatically to receive
a return of his investment funds.
Although investors may request the return of their investment
funds in connection with the reconfirmation offering required by Rule 419,
Silver Stream's shareholders will not be afforded an opportunity specifically
to approve or disapprove any particular transaction involving the purchase
of shares from management.
Investors are prohibited from selling or offering to sell shares held
in escrow.
According to Rule15g-8 as promulgated by the S.E.C. under the amended
Securities Exchange Act of 1934, it shall be unlawful for any person to
sell or offer to sell shares or any interest in or related to the shares held
in the Rule 419 escrow account other than pursuant to a qualified domestic
relations order or by will or the laws of descent and distribution. As a
result, contracts for sale to be satisfied by delivery of the deposited
securities are prohibited, for example contracts for sale on a when, as, and
if issued basis.
Because this is a blank check offering, investors will not be able to
evaluate the specific merits or risks of business combinations
As a result of management's broad discretion with respect to the
specific application of the net proceeds of this offering, this offering can be
characterized as a blank check offering. Although substantially all of the net
proceeds of this offering are intended generally to be applied toward
effecting a business combination, such proceeds are not otherwise being
designated for any more specific purposes.
Accordingly, prospective investors will invest in Silver Stream without
an opportunity to evaluate the specific merits or risks of any one or more
business combinations. Determinations ultimately made by Silver Stream relating
to the specific allocation of the net proceeds of this offering do not
guarantee Silver Stream will achieve its business objectives.
The Silver Stream to register shares is limited.
The Silver Stream to register or qualify for sale the shares for both
initial sale and secondary trading is limited because a number of
states have enacted regulations pursuant to their securities or "blue
sky" laws restricting or, in some instances, prohibiting, the sale of
securities of blank check issuers, such as Silver Stream, within that
state.
In addition, many states, while not specifically prohibiting or
restricting blank check companies, may not register the shares for sale in
their states.
Because of such regulations and other restrictions, Silver Stream's selling
efforts, and any secondary market which may develop, may only be conducted in
those jurisdictions where an applicable exemption is available or a blue sky
application has been filed and accepted or where the shares have been
registered.
Silver Stream has had no operating revenue to date and may not become
profitable.
Silver Stream has had no operating history nor any revenues or earnings
from operations. Silver Stream has no significant assets or financial
resources. Silver Stream will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in Silver
Stream incurring a net operating loss which will increase continuously
until Silver Stream can consummate a business combination with a
profitable business opportunity. Silver Stream may not be able to
identify such a business opportunity and consummate such a business
combination. Additionally, because
Success of Silver Stream's business operations may depend on management
outside of Silver Stream's control.
The success of Silver Stream's proposed plan of operation will depend
to a great extent on the operations, financial condition and management
of the identified business opportunity. While management intends to
seek business combinations with entities having established operating
histories, there can be no assurance that Silver Stream will be
successful in locating candidates meeting such criteria. In the event
Silver Stream completes a business combination, the success of Silver
Stream's operations may be dependent upon management of the successor
firm or venture partner firm and numerous other factors beyond Silver
Stream's control.
Silver Stream is at a competitive disadvantage and in a highly
competitive market searching for business combinations and
opportunities.
Silver Stream is and will continue to be an insignificant participant
in the business of seeking mergers with, joint ventures with and
acquisitions of small private entities. A large number of established
and well-financed entities, including venture capital firms, are active
in mergers and acquisitions of companies which may be desirable target
candidates for Silver Stream. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than Silver Stream and, consequently, Silver
Stream will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business
combination. Moreover, Silver Stream will compete in seeking merger or
acquisition candidates with numerous other small public companies.
Silver Stream has no agreement for a merger nor any standards set for
acceptable candidates for merger.
Silver Stream has no arrangement, agreement or understanding with
respect to engaging in a merger with, joint venture with or acquisition
of, a private entity. Silver Stream may not be successful in
identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified any
particular industry or specific business within an industry for
evaluations. Silver Stream has been in the developmental stage since
inception and has no operations to date. Other than issuing shares to
its original shareholders, Silver Stream never commenced any
operational activities. Silver Stream may not be able to negotiate a
business combination on terms favorable to Silver Stream.
Silver Stream has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other
criteria which it will require a target business opportunity to have
achieved, and without which Silver Stream would not consider a business
combination in any form with such business opportunity. Accordingly,
Silver Stream may enter into a business combination with a business
opportunity having no significant operating history, losses, limited or
no potential for earnings, limited assets, negative net worth or other
negative characteristics.
Silver Stream's management lack certain business skills and will be
devoting only part-time work hours.
While seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of Silver Stream. Silver
Stream's two officers have not entered into written employment
agreements with Silver Stream and are not expected to do so in the
foreseeable future. Silver Stream has not obtained key man life
insurance on either of its officers or directors. Notwithstanding the
combined limited experience and time commitment of management, loss of
the services of any of these individuals would adversely affect
development of Silver Stream's business and its likelihood of
continuing operations.
Furthermore, Silver Stream's officers and directors are not
professional business analysts. Lack of experience will be a detriment
to Silver Stream's efforts.
Silver Stream may, on occasion, enter into business agreements that
have a conflict of interest.
Currently, Silver Stream's officers and directors have no conflict of
interest. However, changes in officers and directors or business
agreements entered into could potentially show conflicts of interest.
In such instance that Silver Stream's officers or directors are
involved in the management of any firm with which Silver Stream
transacts business. Silver Stream's board of directors will adopt a
resolution which prohibits Silver Stream from completing a merger with, or
acquisition of, any entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold any
ownership interest. Management is not aware of any circumstances under
which this policy could be changed while current management is in
control of Silver Stream.
Potential merger or acquisition candidates must meet SEC requirements
that may delay or preclude Silver Stream's business plan.
Section 13 of the Securities Exchange Act of 1934, requires companies
falling under Section 13 of the Securities Exchange Act of 1934 to
provide certain information about significant acquisitions, including
certified financial statements for Silver Stream acquired, covering one
or two years, depending on the relative size of the acquisition. The
time and additional costs that may be incurred by some target entities
to prepare such statements may significantly delay or essentially
preclude consummation of an otherwise desirable acquisition by Silver
Stream. Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for acquisition
so long as the reporting requirements of the 1934 Act are applicable.
Silver Stream is at a competitive disadvantage because it lacks any
market research or marketing organization.
Silver Stream has neither conducted, nor have others made available to
it, results of market research indicating that market demand exists for
the transactions contemplated by Silver Stream. Moreover, Silver
Stream does not have, and does not plan to establish, a marketing
organization. Even in the event demand is identified for a merger or
acquisition contemplated by Silver Stream, there is no assurance Silver
Stream will be successful in completing any such business combination.
Silver Stream will limited to the business opportunities of any company
Silver Stream's proposed operations, even if successful, will in all
likelihood result in Silver Stream engaging in a business combination
with only one business opportunity. Consequently, Silver Stream's
activities will be limited to those engaged in by the business
opportunity which Silver Stream merges with or acquires. Silver
Stream's ability to diversify its activities into a number of areas may
subject Silver Stream to economic fluctuations within a particular
business or industry and therefore increase the risks associated with
Silver Stream's operations.
Potential determination by the SEC that Silver Stream is an investment
company could cause material adverse consequences.
Although Silver Stream will be regulated under the Securities Exchange
Act of 1933, management believes Silver Stream will not be regulated
under the Investment Company Act of 1940, insofar as Silver Stream will
not be engaged in the business of investing or trading in securities.
In the event Silver Stream engages in business combinations which
result in Silver Stream holding passive investment interests in a
number of entities, the Silver Stream could be under regulation of the
Investment Company Act of 1940. In such event, Silver Stream would be
required to register as an investment company and could be expected to
incur significant registration and compliance costs Silver Stream has
obtained no formal determination from the Securities and Exchange
Commission as to the status of Silver Stream under the Investment
Company Act of 1940 and, consequently, any violation of such Act would
subject Silver Stream to material adverse consequences.
Any business combination will probably result loss of management and
control by Silver Stream shareholders.
A business combination involving the issuance of Silver Stream's common
stock will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in Silver Stream. Any such
business combination may require management of Silver Stream to sell or
transfer all or a portion of Silver Stream's common stock held by them,
or resign as members of the board of directors of Silver Stream. The
resulting change in control Silver Stream could result in removal of
one or more present officers and directors of Silver Stream and a
corresponding reduction in or elimination of their participation in the
future affairs of Silver Stream.
Should Silver Stream meet its business plan of merging, shareholders in
Silver Stream will most likely suffer a reduction in percentage share
ownership of the newly formed company.
Silver Stream's primary plan of operation is based upon a business
combination with a private concern which, in all likelihood, would
result in Silver Stream issuing securities to shareholders of such
private company. The issuance of previously authorized and unissued
common stock of Silver Stream would result in reduction in percentage
of shares owned by present and prospective shareholders of Silver
Stream and would most likely result in a change in control or
management of Silver Stream.
Potential acquisition or merger candidates may wish to avoid potential
adverse consequences of merging with Silver Stream.
Silver Stream may enter into a business combination with an entity that
desires to establish a public trading market for its shares. A
business opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with Silver Stream.
Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders and the
ability or unwillingness to comply with various federal and state
securities laws enacted for the protection of investors. These
securities laws primarily relate to provisions regarding the
registration of securities which require full disclosure of Silver
Stream's business, management and financial statements.
Many business decisions made by Silver Stream can have major tax
consequences and many associated risks.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination Silver Stream may undertake.
Currently, such transactions may be structured so as to result in tax-
free treatment to both companies, pursuant to various federal and state
tax provisions. Silver Stream intends to structure any business
combination so as to minimize the federal and state tax consequences to
both Silver Stream and the target entity; however, there can be no
assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes which may have an adverse effect on
both parties to the transaction.
The requirement of audited financial statements of potential merging
entities may cause some potential merger candidates to forego merging
with Silver Stream.
Management of Silver Stream believes that any potential business
opportunity must provide audited financial statements for review, and
for the protection of all parties to the business combination. One or
more attractive business opportunities may choose to forego the
possibility of a business combination with Silver Stream, rather than
incur the expenses associated with preparing audited financial
statements.
Silver Stream securities may be limited to only a few markets because
of blue sky laws.
Because the securities registered hereunder have not been registered
for resale under the blue sky laws of any state, and Silver Stream has
no current plans to register or qualify its shares in any state, the
holders of such shares and persons who desire to purchase them in any
trading market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the Silver
Stream of new investors to purchase the securities which could reduce
the size of the potential market. As a result of recent changes in
federal law, non-issuer trading or resale of Silver Stream's securities
is exempt from state registration or qualification requirements in most
states. However, some states may continue to attempt to restrict the
trading or resale of blind-pool or blank-check securities.
Accordingly, investors should consider any potential secondary market
for Silver Stream's securities to be a limited one.
Certain officers, directors, principal shareholders or affiliates may
purchase shares, thereby increasing their percentage share.
Certain officers, directors, principal shareholders and affiliates may
purchase, for investment purposes, a portion of the shares offered
hereby, which could, upon conversion, increase the percentage of the
shares owned by such persons. The purchases by these control persons
may make it possible for the offering to meet the escrow amount.
Silver Stream may not be able to sale enough shares to follow through
with the business plan.
The 2,000,000 common shares are to be offered directly by Silver
Stream, and no individual, firm, or corporation has agreed to purchase
or take down any of the shares. It is not know whether Silver Stream
will be able to sell any shares.
Silver Stream's offering price is arbitrary and the value of Silver
Stream securities may never actually reach the offering price.
The offering price of the shares bears no relation to book value,
assets, earnings, or any other objective criteria of value. They have
been arbitrarily determined by Silver Stream. There can be no assurance
that, even if a public trading market develops for Silver Stream's
securities, the shares will attain market values commensurate with the
offering price.
Silver Stream shares are to be offered based on a direct participation
offering basis.
The shares are offered by Silver Stream on a direct participation
offering basis, and no individual, firm or corporation has agreed to
purchase or take down any of the offered shares. Silver Stream cannot
and does not make any statement guaranteeing that shares will be sold.
Provisions have been made to deposit in escrow the funds received from
the purchase of shares sold by Silver Stream.
Silver Stream's shares may never actually be traded and therefore
purchasers may never be able to resale.
Prior to the offering, there has been no public market for the shares
being offered. An active trading market may not develop.
Consequently, purchasers of the shares may not be able to resell their
securities at prices equal to or greater than the respective initial
public offering prices. The market price of the shares may be affected
significantly by factors such as announcements by Silver Stream or its
competitors, variations in Silver Stream's results of operations, and
market conditions in the retail, electron commerce, and internet
industries in general. Movements in prices of stock may also affect the
market price in general. As a result of these factors, purchasers of
the shares offered hereby may not be able to liquidate an investment in
the shares readily or at all.
Shares sold in the future may have to comply with Rule 144.
All of the 3,000,000 shares, which are held by management, have been
issued in reliance on the private placement exemption under the amended
Securities Act of 1933. Such shares will not be available for sale in
the open market without separate registration except in reliance upon
Rule 144 under the Act.
In general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be deemed
affiliates of Silver Stream (as that term is defined under the Act)
would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of 1% of the then outstanding
shares of common stock, or the average weekly reported trading volume
on all national securities exchanges and through NASDAQ during the four
calendar weeks preceding such sale, provided that certain current
public information is then available. If a substantial number of the
shares owned by management were sold pursuant to Rule 144 or a
registered offering, the market price of the common stock could be
adversely affected.
Silver Stream faces uncertainty with regard to the Y2K issue.
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may
recognise the year 2000 as 1900 or some other date, resulting in errors
when information using the year 2000 date is processed. The effects of
the Year 2000 issue may be experienced before, on, or after January 1,
2000, and if not addressed, the impact on operations and financial
reporting may range from minor errors to significant system failure
which could affect Silver Stream's ability to conduct normal business
operations. This creates potential risk for all companies, even if
their own computer systems are Year 2000 compliant. It is not possible
to be certain that all aspects of the Year 2000 issue affecting Silver
Stream, including those related to the efforts of customers, suppliers,
or other third parties, will be fully resolved.
Silver Stream's Year 2000 plans are based on management's best
estimates. Based on currently available information, management does
not believe that the Year 2000 issues will have a material adverse
impact on Silver Stream's financial condition or results of operations;
however, because of the uncertainties in this area, assurance cannot be
given in this regard.
Investors' rights and substantive protection under rule 419.
Deposit of offering proceeds and securities.
Rule 419 requires that the net offering proceeds, after
deduction for underwriting compensation and offering costs, and all
securities to be 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 Silver Stream and to investors, respectively,
only after the
Company has met the following three conditions:
First, Silver Stream must execute an agreement for an acquisition(s)
meeting certain prescribed criteria; second, Silver Stream must successfully
complete a reconfirmation offering which includes certain prescribed terms and
conditions; and third, the acquisition(s) meeting the prescribed criteria
must be consummated.
Prescribed acquisition criteria.
Rule 419 requires that before the Deposited Funds and the
Deposited Securities can be released, Silver Stream must first execute
an agreement(s) to acquire an acquisition candidate(s) meeting certain
specified criteria. The agreement must provide for the acquisition of a
business(es) or assets valued at not less than 80% of the maximum offering
proceeds, but excluding underwriting commissions, underwriting expenses and
dealer allowances payable to non-affiliates. Once the acquisition agreements
meeting the above criteria have been executed, Silver Stream must successfully
complete the mandated reconfirmation offering and consummate the
acquisitions(s).
Post-effective amendment.
Once the agreement(s) governing the acquisition(s) of a business(es)
meeting the above criteria has (have) been executed, Rule 419 requires
Silver Stream to update the registration statement of which this
prospectus is a part with a post-effective amendment. The post-effective
amendment must contain information about: the proposed acquisition
candidate(s) and its business(es), including audited financial statements;
the results of this offering; and the use of the funds disbursed from the
escrow account.
The post-effective amendment must also include the terms of the
reconfirmation offer mandated by Rule 419. The offer must include certain
prescribed conditions which must be satisfied before the Deposited Funds and
Deposited Securities can be released from escrow.
Reconfirmation offering.
The reconfirmation offer must commence within five business
days after the effective date of the post-effective amendment. Pursuant
to Rule 419, the terms of the reconfirmation offer must include the
following conditions:
(1) The prospectus contained in the post-effective amendment will be
sent to each investor whose securities are held in the escrow account within
five business days after the effective date of the post-effective amendment;
2) 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
the Company in writing that the investor elects to remain an investor;
(3) If Silver Stream does not receive written notification from any
investor within 45 business days following the effective date, the pro rata
portion of the Deposited Funds (and any related interest or dividends) held
in the escrow account on such investor's behalf will be returned to the
investor within five business days by first class mail or other equally
prompt means;
(4) The acquisition(s) will be consummated only if investors having
contributed 80% of the maximum offering proceeds elect to
reconfirm their investments; and
(5) If a consummated acquisition(s) has not occurred within 18
months from the date of this prospectus, the Deposited Funds
held in the escrow account shall be returned to all investors on a pro
rata basis within five business days by first class mail or other equally
prompt means.
Release of deposited securities and deposited funds.
The Deposited Funds and Deposited Securities may be released to Silver
Stream and the investors, respectively, after:
(1) The Escrow Agent has received written certification from Silver
Stream and any other evidence acceptable by the Escrow Agent that Silver
Stream has executed an agreement for the acquisition(s) of a business(es) the
value of which represents at least 80% of the maximum offering proceeds and has
filed the required post-effective amendment, the post-effective amendment has
been declared effective, the mandated reconfirmation offer having the
conditions prescribed by Rule 419 has been completed, and Silver Stream has
satisfied all of the prescribed conditions of the reconfirmation offer; and
(2) The acquisition(s) of the business(es) the value of which
represents at least 80% of the maximum offering proceeds is (are) consummated.
Escrowed funds not to be used for salaries or reimbursable expenses.
No funds (including any interest earned thereon) will be
disbursed from the escrow account for the payment of salaries or
reimbursement of expenses incurred on Silver Stream's behalf by Silver Stream's
officers and directors. Other than the foregoing, there is no limit on the
amount of such reimbursable expenses, and there will be no review of the
reasonableness of such expenses by anyone other than Silver Stream's board of
directors, both of whom are officers. In no event will the escrowed funds
(including any interest earned thereon) be used for any purpose other than
implementation of a business combination.
See "Risk Factors," "Use Of Proceeds" and "Certain Transactions."
Use of Proceeds.
Following the sale of the 2,000,000 Shares Offered by
Silver Stream, there will be net proceeds of $100,000. The net
proceeds are calculated as $100,000 minus sales commission costs, which
are zero. Net proceeds do not include any legal or accounting fees.
These proceeds will be used to provide start-up and working capital for
the Company.
The following table sets forth the use of proceeds from
this offering (based on the minimum and maximum offering
amounts):
Use of Proceeds Minimum Offering Maximum Offering
Amount Percent Amount Percent
Working Capital $ 20,000 100 % $100,000 100 %
Total $ 20,000 100 % $100,000 100 %
Management anticipates expending these funds for the
purposes indicated above. To the extent that expenditures
are less than projected, the resulting balances will be
retained and used for general working capital purposes or
allocated according to the discretion of the Board of
Directors. Conversely, to the extent that such expenditures
require the utilization of funds in excess of the amounts
anticipated, supplemental amounts may be drawn from other
sources, including, but not limited to, general working
capital and/or external financing. The net proceeds of this
offering that are not expended immediately may be deposited
in interest or non-interest bearing accounts, or invested in
government obligations, certificates of deposit, commercial paper,
money market mutual funds, or similar investments.
Management may advance money to the Company or on behalf of the
Company.
There are no set limits to the maximum amount that management will
advance or loan to the Company. However, the amount is obviously
limited by the resources of the officers and directors. Management
anticipates that repayment would come from the acquisition of a target
company. The advances would be expected to be in an amount well below
the minimum expected from any viable operating business target.
Determination of offering price.
The offering price is not based upon Silver Stream's net
worth, total asset value, or any other objective measure of
value based upon accounting measurements. The offering
price is determined by the Board of Directors of Silver Stream
and was determined arbitrarily based upon the amount of
funds needed by Silver Stream to start-up the business, and
the number of shares that the initial shareholders were
willing to allow to be sold.
Dilution.
"Net tangible book value" is the amount that results
from subtracting the total liabilities and intangible assets
of an entity from its total assets. "Dilution" is the
difference between the public offering price of a security
and its net tangible book value per Share immediately after
the Offering, giving effect to the receipt of net proceeds
in the Offering. As of January 28, 2000, the net tangible
book value of Silver Stream was $3000 or $.001 per Share.
Giving effect to the sale by Silver Stream of all offered
Shares at the public offering price, the pro forma net
tangible book value of Silver Stream would be $100,000 or $.02
per Share, which would represent an immediate increase of
$.02 in net tangible book value per Share and $.03 per Share
dilution per share to new investors. Dilution of the book
value of the Shares may result from future share offerings
by Silver Stream.
The following table illustrates the pro forma per Share
dilution:
Assuming Maximum
Shares Sold
Offering Price (1) $.05
Net tangible book value per
share before Offering (2) $.001
Increase Attributable to purchase
of stock by new investors (3) $.02
Net tangible book value per
Share after offering (4) $.02
Dilution to new investors (5) $.03
Percent Dilution to new investors (6,7) 60%
(1) Offering price before deduction of offering expenses,
calculated on a "Common Share Equivalent" basis.
(2) The net tangible book value per share before the
offering ($0.001) is determined by dividing the number of
Shares outstanding prior to this offering into the net
tangible book value of Silver Stream.
(3) The net tangible book value after the offering is
determined by adding the net tangible book value before the
offering to the estimated proceeds to the Corporation from
the current offering (assuming all the Shares are
subscribed), and dividing by the number of common shares
outstanding.
(4) The net tangible book value per share after the
offering ($103,000) is determined by dividing the number of
Shares that will be outstanding, assuming sale of all the
Shares offered, after the offering into the net tangible
book value after the offering as determined in note 3 above.
(5) The Increase Attributable to purchase of stock by new
investors is derived by taking the net tangible book value
per share after the offering ($.02) and subtracting from it
the net tangible book value per share before the offering
($.001) for an increase of $.02.
(6) The dilution to new investors is determined by
subtracting the net tangible book value per share after the
offering ($.02) from the offering price of the Shares in
this offering ($.05), giving a dilution value of ($.03).
(7) The Percent Dilution to new investors is determined by
dividing the Dilution to new investors ($.03) by the
offering price per Share ($.05) giving a dilution to new
investors of 60%.
Plan of distribution.
Silver Stream will sell a maximum of 2,000,000 shares of its
common stock, par value $.001 per Share to the public on a
"best efforts" basis. The minimum purchase required of an
investor is $250.00. There can be no assurance that any of
these shares will be sold.
The net proceeds to Silver Stream will be $100,000, minus associated
costs, if all the shares offered are sold. No commissions or other
fees will be paid, directly or indirectly, by Silver Stream, or any of
its principals, to any person or firm in connection with solicitation
of sales of the shares, certain costs are to be paid in connection with
the offering (see "Use of Proceeds").
The public offering price of the shares will be modified, from time to
time, by amendment to this prospectus, in accordance with changes in
the market price of Silver Stream's common stock. These
securities are offered by Silver Stream subject to prior sale
and to approval of certain legal matters by counsel.
The officers and directors of Silver Stream will be offering and
selling shares on behalf of Silver Stream. President and director John
E. Dhonau and secretary and director Shawn F. Hackman will be offering
and selling shares on behalf of Silver Stream.
Those officers and directors offering the securities on behalf of
Silver Stream will be relying on the safe harbor from broker-dealer
registration rule set out in Rule 3a4-1.
We have been informed by these officers and directors that:
they are not subject to statutory disqualification as
defined in Section 3(a)(39) of the Securities Exchange Act of
1934,
these officers and directors are not compensated in connection
with their participation by the payment of commissions or other
remuneration based either directly or indirectly on transactions
in securities,
and,
these officers and directors are not an associated person of a
broker or dealer.
Additionally, the officers and directors offering and selling
securities in Silver Stream meet the conditions of part (a)(4)(iii)
where participation will be restricted to:
(A) Preparing any written communication or delivering such
communication through the mails or other means that does
not involve oral solicitation by the associated person of a
potential purchaser; provided, however, that the content of
such communication is approved by a partner, officer or
director of the issuer;
(B) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser;
provided, however, that the content of such responses are
limited to information contained in a registration
statement filed under the Securities Act of 1933 or other
offering document; or
(C) Performing ministerial and clerical work involved in
effecting any transaction.
Limited State Registration.
Silver Stream anticipates that there will be no State registration of
its securities. Any sale of its securities will depend on exemptions
under the Blue Sky laws of states in which the securities are sold.
Opportunity To Make Inquires.
Silver Stream will make available to each Offeree, prior to
any sale of the Shares, the opportunity to ask questions and
receive answers from Silver Stream concerning any aspect of
the investment and to obtain any additional information
contained in this Memorandum, to the extent that Silver Stream
possesses such information or can acquire it without
unreasonable effort or expense.
Execution of Documents.
Each person desiring to subscribe to the Shares must
complete, execute, acknowledge, and delivered to Silver Stream
a Subscription Agreement, which will contain, among other
provisions, representations as to the investor's
qualifications to purchase the common stock and his ability
to evaluate and bear the risk of an investment in the
Company.
By executing the subscription agreement, the
subscriber is agreeing that if the Subscription Agreement it
is excepted by Silver Stream, such a subscriber will be, a
shareholder in Silver Stream and will be otherwise bound by
the articles of incorporation and the bylaws of Silver Stream
in the form attached to this Prospectus.
Promptly, upon receipt of subscription documents by the
Company, it will make a determination as to whether a
prospective investor will be accepted as a shareholder in
Silver Stream. Silver Stream may reject a subscriber's
Subscription Agreement for any reason. Subscriptions will be
rejected for failure to conform to the requirements of this
Prospectus (such as failure to follow the proper
subscription procedure), insufficient documentation, over
subscription to Silver Stream, or such other reasons other as
Silver Stream determines to be in the best interest of the
Company.
If a subscription is rejected, in whole or in
part, the subscription funds, or portion thereof, will be
promptly returned to the prospective investor without
interest by depositing a check (payable to said investor) in
the amount of said funds in the United States mail,
certified returned-receipt requested. Subscriptions may not
be revoked, cancelled, or terminated by the subscriber,
except as provided herein.
Legal Proceedings
Silver Stream is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such
action by or against Silver Stream has been threatened.
Directors, Executive Officers, Promoters,
and Control Persons
The names, ages, and respective positions of the
directors, officers, and significant employees of the
Company are set forth below. All these persons have held
their positions since January, 2000. Each director and officer shall
serve for a term ending on the date of the third Annual Meeting. There
are no other persons which can be classified as a promoter or controlling
person of Silver Stream.
John E. Dhonau. President. Mr. Dhonau has over twenty years of
experience in marketing and business. Mr. Dhonau has held positions as
president, national marketing director, and regional marketing director
in several national marketing organizations. Mr.
Dhonau has had experience in the multi-level marketing industry, having
held positions in A.L. Williams, Primerica, World Marketing Alliance, World
Class Network and VisionQuest International. Mr. Dhonau also served as
president of World Class Network, which developed tour packages for World Class
Network.
In October 1995, Mr. Dhonau also founded a cold-rendering manufacturing
firm servicing the agricultural organic fertilizer and feed industry,
raising $2.5 million. This business allows the conversion of blood and animal
parts to be converted to feed cattle and chicken.
In October 1998, Mr. Dhonau was appointed President of a creative
Internet e-commerce solution leading the way into the development and
marketing of retail products over the World Wide Web.
Mr. Dhonau has attended the University of Cincinnati with an emphasis
in accounting and marketing. In 1984, Mr. Dhonau received the Charlie
Hustle Award from Ashland Oil Company for the largest contribution to the
growth of the company.
Shawn F. Hackman. Secretary
Mr. Hackman, an attorney , is admitted to practice law in Iowa and
Nevada State Courts. Mr. Hackman is also admitted to practice law in the U.S.
District Court of Nevada. He practices primarily in Corporate and Securities
Law. Mr. Hackman holds a B.A in Finance and a J.D from the University of Iowa.
None of the Officers and Directors have been involved in legal
proceedings that impair their ability to perform their duties as
Officers and Directors.
There is no family relationship between any of the officers or
directors.
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth, as of the date of this
Prospectus, the outstanding Shares of common stock of the
Company owned of record or beneficially by each person who
owned of record, or was known by Silver Stream to own
beneficially, more than 5% of Silver Stream's Common Stock,
and the name and share holdings of each officer and director
and all officers and directors as a group.
Title of Class Name of Beneficial Amount and Nature Percent
Owner (1) of Beneficial Of Class
Owner(2)
Common Stock John E. Dhonau 1,500,000 50%
Common Stock Shawn F. Hackman 1,500,000 50%
None of the Officers, Directors or existing shareholders have
the right to acquire any amount of the Shares
within sixty days from options, warrants, rights, conversion
privilege, or similar obligations.
Principal Shareholder(s).
The addresses for the principal shareholders are as follows:
President John E. Dhonau, 2980 S. Rainbow Blvd., Suite 200C, Las Vegas,
NV, 89146.
Secretary Shawn F. Hackman: 3360 W. Sahara, Suite 200, Las Vegas,
Nevada, 89102.
Both shareholders have sole voting and investment power.
Description of securities.
General description.
The securities being offered are shares of common stock.
The Articles of Incorporation authorize the issuance of
25,000,000 shares of common stock, with a par value of
$.001. The holders of the Shares: (a) have equal ratable
rights to dividends from funds legally available therefore,
when, as, and if declared by the Board of Directors of the
Company; (b) are entitled to share ratably in all of the
assets of Silver Stream available for distribution upon
winding up of the affairs of Silver Stream; (c) do not have
preemptive subscription or conversion rights and there are
no redemption or sinking fund applicable thereto; and (d)
are entitled to one non-cumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders. These securities do not have any of the
following rights: (a) cumulative or special voting rights;
(b) preemptive rights to purchase in new issues of Shares;
(c) preference as to dividends or interest; (d) preference
upon liquidation; or (e) any other special rights or
preferences. In addition, the Shares are not convertible
into any other security. There are no restrictions on
dividends under any loan other financing arrangements or
otherwise. See a copy of the Articles of Incorporation, and
amendments thereto, and Bylaws of Silver Stream, attached as
Exhibit 3.1 and Exhibit 3.2, respectively, to this Form SB-
2. As of the date of this Form SB-2, Silver Stream has
3,000,000 Shares of common stock outstanding.
Non-cumulative voting.
The holders of Shares of Common Stock of Silver Stream do not
have cumulative voting rights, which means that the holders
of more than 50% of such outstanding Shares, voting for the
election of directors, can elect all of the directors to be
elected, if they so choose. In such event, the holders of
the remaining Shares will not be able to elect any of the
Company's directors.
Dividends.
Silver Stream does not currently intend to pay cash dividends.
Silver Stream's proposed dividend policy is to make
distributions of its revenues to its stockholders when the
Company's Board of Directors deems such distributions
appropriate. Because Silver Stream does not intend to make
cash distributions, potential shareholders would need to
sell their shares to realize a return on their investment.
There can be no assurances of the projected values of the
shares, nor can there be any guarantees of the success of
Silver Stream.
A distribution of revenues will be made only when, in the
judgment of Silver Stream's Board of Directors, it is in the
best interest of Silver Stream's stockholders to do so. The
Board of Directors will review, among other things, the
investment quality and marketability of the securities
considered for distribution; the impact of a distribution of
the investee's securities on its customers, joint venture
associates, management contracts, other investors, financial
institutions, and Silver Stream's internal management, plus
the tax consequences and the market effects of an initial or
broader distribution of such securities.
Possible anti-takeover effects of authorized but unissued stock.
Upon the completion of this Offering, Silver Stream's
authorized but unissued capital stock will consist of
20,000,000 shares (assuming the entire offering is sold) of
common stock. One effect of the existence of authorized but
unissued capital stock may be to enable the Board of
Directors to render more difficult or to discourage an
attempt to obtain control of Silver Stream by means of a
merger, tender offer, proxy contest, or otherwise, and
thereby to protect the continuity of Silver Stream's
management.
If, in the due exercise of its fiduciary obligations, for example,
the Board of Directors were to determine that a takeover
proposal was not in Silver Stream's best interests, such shares could
be issued by the Board of Directors without stockholder approval in one or more
private placements or other transactions that might prevent,
or render more difficult or costly, completion of the
takeover transaction by diluting the voting or other rights
of the proposed acquirer or insurgent stockholder or
stockholder group, by creating a substantial voting block in
institutional or other hands that might undertake to support
the position of the incumbent Board of Directors, by
effecting an acquisition that might complicate or preclude
the takeover, or otherwise.
Transfer Agent
Silver Stream intends to engage the services of Pacific Stock
Transfer Company, P.O. Box 93385 Las Vegas, Nevada 89193
(702) 361-3033 Fax (702) 732-7890.
Interest of named experts and counsel.
Shawn F. Hackman, Secretary and Director of the Corporation, also
provides legal services for the Corporation. Mr. Hackman's office also
created and prepared this registration statement.
Disclosure of commission position on indemnification for securities act
liabilities.
No director of Silver Stream will have personal liability to
Silver Stream or any of its stockholders for monetary damages
for breach of fiduciary duty as a director involving any act
or omission of any such director since provisions have been
made in the Articles of Incorporation limiting such
liability.
The foregoing provisions shall not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to Silver Stream or its
stockholders, (ii) for acts or omissions not in good faith
or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the
Nevada Revised Statutes, (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes
or, (v) for any transaction from which the director derived
an improper personal benefit.
The By-laws provide for indemnification of the directors,
officers, and employees of Silver Stream in most cases for any
liability suffered by them or arising out of their
activities as directors, officers, and employees of the
Company if they were not engaged in willful misfeasance or
malfeasance in the performance of his or her duties;
provided that in the event of a settlement the
indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the
best interests of the Corporation. The Bylaws, therefore,
limit the liability of directors to the maximum extent
permitted by Nevada law (Section 78.751).
The officers and directors of Silver Stream are accountable to
Silver Stream as fiduciaries, which means they are required to
exercise good faith and fairness in all dealings affecting
Silver Stream. In the event that a shareholder believes the
officers and/or directors have violated their fiduciary
duties to Silver Stream, the shareholder may, subject to
applicable rules of civil procedure, be able to bring a
class action or derivative suit to enforce the shareholder's
rights, including rights under certain federal and state
securities laws and regulations to recover damages from and
require an accounting by management..
Shareholders who have suffered losses in connection
with the purchase or sale of their interest in
Silver Stream in connection with such sale
or purchase, including the misapplication by any such
officer or director of the proceeds from the sale of these
securities, may be able to recover such losses from the
Company.
The registrant undertakes the following:
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.
Organization within last five years.
The names of the promoters of the registrant are the
officers and directors as disclosed elsewhere in this Form
SB-2/A. None of the promoters have received anything of value
from the registrant.
Description of Business.
1. Company/Business Summary.
Silver Stream , Inc.. was incorporated on
January 28, 2000, under the laws of the State of Nevada, to
engage in any lawful corporate undertaking, including, but
not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations date. Other than issuing shares to
its original shareholders, Silver Stream never commenced any
operational activities.
Silver Stream was formed by Shawn F. Hackman, the initial
director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr.
Hackman serves as Secretary and Director. Mr. John E. Dhonau
serves as President and Director. Mr. Dhonau determined next to
proceed with filing a Form SB-2.
Mr. Dhonau, the President and Director, elected to
commence implementation of Silver Stream's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, Silver Stream can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify Silver Stream as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as Silver Stream has
successfully implemented its business plan described herein.
Accordingly, each shareholder of Silver Stream has executed
and delivered a "lock-up" letter agreement, affirming that
he/she will not sell his/her respective shares of the
Company's common stock until such time as Silver Stream has
successfully consummated a merger or acquisition and the
Company is no longer classified as a "blank check" company.
In order to provide further assurances that no trading will
occur in Silver Stream's securities until a merger or
acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with
Silver Stream's legal counsel, who will not release these
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated.
However, while management believes that the procedures
established to preclude any sale of Silver Stream's securities prior
to closing of a merger or acquisition will be sufficient, there can be
no assurances that the procedures established herein will unequivocally
limit any shareholder's ability to sell their respective securities before
such closing.
Item 2. Plan of Operation.
The Registrant intends to seek to acquire assets or
shares of an entity actively engaged in business which
generates revenues, in exchange for its securities. The
Registrant has no particular acquisitions in mind and has
not entered into any negotiations regarding such an
acquisition. None of Silver Stream's officers, directors,
promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other
company regarding the possibility of an acquisition or
merger between Silver Stream and such other company as of the
date of this registration statement.
While Silver Stream will attempt to obtain audited
financial statements of a target entity, there is no
assurance that such audited financial statements will be
available. The Board of Directors does intend to obtain
certain assurances of value of the target entity's assets
prior to consummating such a transaction, with further
assurances that an audited statement would be
provided within seventy-five days after closing of such a
transaction. Closing documents relative thereto will
include representations that the value of the assets
conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing
documents.
The Registrant has no full time employees. The
Registrant's two officers have agreed to allocate a portion
of their time to the activities of the Registrant, without
compensation. Management anticipates that the business plan
of Silver Stream can be implemented by each officer devoting
approximately 10 hours per month to the business affairs of
Silver Stream and, consequently, conflicts of interest may
arise with respect to the limited time commitment by
such officers. See "Item 5. Directors, Executive Officers, Promoters,
and Control Persons."
Silver Stream is filing this registration statement on a
voluntary basis because the primary attraction of the
Registrant as a merger partner or acquisition vehicle will
be its status as an SEC reporting company. Any business
combination or transaction will likely result in a
significant issuance of shares and substantial dilution to
present stockholders of the Registrant.
The Articles of Incorporation of Silver Stream
provides that Silver Stream may indemnify officers and/or
directors of Silver Stream for liabilities, which can include
liabilities arising under the securities laws. Therefore,
assets of Silver Stream could be used or attached to satisfy
any liabilities subject to such indemnification. See "Item 12,
Indemnification of directors and officers."
General Business Plan.
Silver Stream's purpose is to seek, investigate and,
if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms
who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. Silver Stream will not
restrict its search to any specific business, industry, or
geographical location and Silver Stream may participate in a business
venture of virtually any kind or nature.
This discussion of the proposed business is purposefully
general and is not meant to be restrictive of
Silver Stream's virtually unlimited discretion to search for
and enter into potential business opportunities. Management
anticipates that it will be able to participate in only one
potential business venture because Silver Stream has nominal assets and
limited financial resources. See Item F/S, "Financial Statements." This lack
of diversification should be considered a substantial risk
to shareholders of Silver Stream because it will not permit
Silver Stream to offset potential losses from one venture
against gains from another.
Silver Stream may seek a business opportunity with
entities which have recently commenced operations, or which
wish to utilize the public marketplace in order to raise
additional capital in order to expand into new products or
markets, to develop a new product or service, or for other
corporate purposes. Silver Stream may acquire assets and
establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The primary method Silver Stream will use to find
potential merger or acquisition candidates will be to run
classified ads in the Wall Street Journal periodically
seeking companies which are looking to merge with a public
shell.
Silver Stream anticipates that the selection of a
business opportunity in which to participate will be complex
and extremely risky. Due to general economic conditions,
rapid technological advances being made in some industries
and shortages of available capital, management believes that
there are numerous firms seeking the perceived benefits of a
publicly registered corporation. Such perceived benefits may
include facilitating or improving the terms on which
additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to
key employees, providing liquidity (subject to restrictions
of applicable statutes) for all shareholders and other
factors. Business opportunities may be available in many
different industries and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex.
Silver Stream has, and will continue to have, no capital with
which to provide the owners of business opportunities with
any significant cash or other assets. However, management
believes Silver Stream 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.
The owners of the business opportunities will, however,
incur significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs
of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and
related reports and documents. The Securities Exchange Act
of 1934 (the "34 Act"), specifically requires that any
merger or acquisition candidate comply with all
applicable reporting requirements, which include providing
audited financial statements to be included within the
numerous filings relevant to complying with the 34 Act.
Nevertheless, the officers and directors of Silver Stream have
not conducted market research and are not aware of
statistical data which would support the perceived benefits
of a merger or acquisition transaction
for the owners of a business opportunity.
The analysis of new business opportunities will be
undertaken by, or under the supervision of, the officers and
directors of Silver Stream, none of whom is a professional
business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities
which may be brought to its attention through present
associations of Silver Stream's two officers, or by the
Company's shareholders.
In analyzing prospective business opportunities, management
will consider such matters as:
- - 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 which may be
available and the depth of that management,
- - the potential for further research, development, or
exploration,
- - specific risk factors not now foreseeable but which may be
anticipated to impact the proposed activities of Silver Stream;
- - the potential for growth or expansion; the potential for
profit;
- - the perceived public, recognition or acceptance of products,
services, or trades;
- - name identification; and other relevant factors.
Management will meet personally with management and key
personnel of the business opportunity as part of their investigation.
To the extent possible, Silver Stream intends to utilize written
reports and personal investigation to evaluate the above
factors. Silver Stream will not acquire or merger with any
company for which audited financial statements cannot be
obtained within a reasonable period of time after closing of
the proposed transaction.
Management of Silver Stream, while not especially
experienced in matters relating to the new business of the
Company, will rely upon their own efforts and, to a much
lesser extent, the efforts of Silver Stream's shareholders, in
accomplishing the business purposes of Silver Stream. It is
not anticipated that any outside consultants or advisors will be
utilized by Silver Stream to effectuate its business purposes described
herein.
However, if Silver Stream does retain such an outside consultant or
advisor, any cash fee earned by such party will need to be paid by the
prospective merger/acquisition candidate, as Silver Stream has no cash
assets with which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside consultants
and none are anticipated in the future. In the past, the
Company's management has never used outside consultants or
advisors in connection with a merger or acquisition.
Silver Stream will not restrict its search for any
specific kind of firms, but may acquire a venture which is
in its preliminary or development stage, which is already in
operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status
of any business in which Silver Stream may become engaged, in
that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived
advantages which Silver Stream may offer.
However, Silver Stream does not intend to
obtain funds in one or more private placements to finance
the operation of any acquired business opportunity until
such time as Silver Stream has successfully consummated such a
merger or acquisition. Silver Stream also has no plans to
conduct any offerings under Regulation S.
Acquisition of opportunities.
In implementing a structure for a particular
business acquisition, Silver Stream may become a party to a
merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It
may also acquire stock or assets of an existing business.
On the consummation of a transaction, it is probable that
the present management and shareholders of Silver Stream will
no longer be in control of Silver Stream. In addition, the
Company's directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new
directors without a vote of Silver Stream's shareholders.
It is anticipated that Silver Stream's principal
shareholders may actively negotiate or otherwise consent to
the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or
acquisition transaction. Any terms of sale of the shares
presently held by officers and/or directors of Silver Stream
will be also afforded to all other shareholders of the
Company on similar terms and conditions.
The policy set forth in the preceding sentence is based on an
Understanding between the two members of management, and these
two persons are not aware of any circumstances under which this policy
would change while they are still officers and directors of
Silver Stream. Any and all such sales will only be made in
compliance with the securities laws of the United States and
any applicable state.
It is anticipated that any securities issued in
any such reorganization would be issued in reliance upon
exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a
negotiated element of its transaction, Silver Stream may agree
to register all or a part of such securities immediately
after the transaction is consummated or at specified times thereafter.
If such registration occurs, of which there can be no assurance, it
will be undertaken by the surviving entity after Silver Stream has
successfully consummated a merger or acquisition and the
Company is no longer considered a "shell" company. Until
such time as this occurs, Silver Stream will not attempt to
register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading
market which may develop in Silver Stream's securities may have a
depressive effect on the value of Silver Stream's securities in the future, if
such a market develops, of which there is no assurance.
While the actual terms of a transaction to which
Silver Stream may be a party cannot be predicted, it may be
expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so-called "tax-
free" reorganization under Sections 368a or 351 of the
Internal Revenue Code (the "Code").
With respect to any merger or acquisition,
negotiations with target company management is expected to
focus on the percentage of Silver Stream which target company
shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities,
Silver Stream's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the
Company following any merger or acquisition.
The percentage ownership may be subject to significant reduction in the
event Silver Stream acquires a target company with substantial
assets. Any merger or acquisition effected by Silver Stream
can be expected to have a significant dilutive effect on the
percentage of shares held by Silver Stream's then shareholders.
Silver Stream will participate in a business
opportunity only after the negotiation and execution of
appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements
will require some specific representations and warranties by
all of the parties thereto, will specify certain events of
default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to and
after such closing, will outline the manner of bearing
costs, including costs associated with Silver Stream's
attorneys and accountants, will set forth remedies on
default and will include miscellaneous other terms.
As stated here-in-above, Silver Stream will not
acquire or merge with any entity which cannot provide
independent audited financial statements within a reasonable
period of time after closing of the proposed transaction.
Silver Stream is subject to all of the reporting requirements
included in the 34 Act. Included in these requirements is
the affirmative duty of Silver Stream to file independent audited
financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as Silver Stream's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable).
If such audited financial statements are not available at closing, or
within time parameters necessary to insure Silver Stream's compliance with
the requirements of the 34 Act, or if the audited financial
statements provided do not conform to the representations
made by the candidate to be acquired in the closing
documents, the closing documents may provide that the
proposed transaction will be voidable, at the discretion of
the present management of Silver Stream.
Silver Stream's officers and shareholders have
verbally agreed that they will advance to Silver Stream any
additional funds which Silver Stream needs for operating
capital and for costs in connection with searching for or
completing an acquisition or merger. These persons have
further agreed that such advances will be made in proportion
to each person's percentage ownership of Silver Stream. These
persons have also agreed that such advances will be made
interest free without expectation of repayment unless the
owners of the business which Silver Stream acquires or merges
with agree to repay all or a portion of such advances.
There is no dollar cap on the amount of money which such
persons will advance to Silver Stream. Silver Stream will not
borrow any funds from anyone other than its current
shareholders for the purpose of repaying advances made by
the shareholders, and Silver Stream will not borrow
any funds to make any payments to Silver Stream's promoters,
management or their affiliates or associates.
The Board of Directors has passed a resolution
which prohibits Silver Stream from completing an acquisition
or merger with any entity in which any of Silver Stream's
Officers, Directors, principal shareholders or their
affiliates or associates serve as officer or director or
hold any ownership interest. Management is not aware of any
circumstances under which this policy, through their own initiative may
be changed.
There are no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management management of the
Company's affairs. There is no agreement that non-
management shareholders will exercise their voting rights to
continue to re-elect the current directors, however, it is
expected that they will do so based on the existing friendship among
such persons.
Management's Plan With Respect To Other Blank Check Entities.
Currently, President John E. Dhonau and Secretary Shawn F. Hackman are
officers and directors for 3 other blank check companies. These three
companies are Horizon Prime, Inc., Western Sky, Inc., and Silver Stream
Corp. Currently, these three companies have not been cleared by the
SEC. Therefore, there has been no public offering as of yet.
It is the intent of management to consummate a merger or acquisition
with each of these companies. However, there is an inherent conflict of
interest with respect to all four companies Mr. Dhonau and Mr. Hackman are
affiliated with. Management, therefore, has agreed that the companies will be
given priority based upon the time of clearance of the SB-2 registration
statements. The first SB-2 cleared will be given priority and so on. If, by
happenstance, one or more of the company's registration statements
clear at the same time, the company will give priority to the company
whose name is first in alphabetical order.
Additionally, Shawn F. Hackman does provide as address as resident
agent for the following blank check companies: Blimah, Inc., Kesser,
Inc., Harbor Group.Net, Inc., Y2Komp.com, Modern.com, Ability.com,
and Computech.com. However, Shawn F. Hackman is neither an officer nor
director of these blank check companies and has no connection with the
day to day activities of them.
Competition.
Silver Stream will remain an insignificant participant among
the firms which engage in the acquisition
of business opportunities. There are many established
venture capital and financial concerns which have
significantly greater financial and personnel resources and
technical expertise than Silver Stream. In view of the
Company's combined extremely limited financial resources and
limited management availability, Silver Stream will continue
to be at a significant competitive disadvantage compared to the
Company's competitors.
Year 2000 compliance.
Silver Stream is aware of the issues associated with
the programming code in existing computer systems through the
year 2000. Silver Stream has assessed these issues
as they relate to Silver Stream, and since Silver Stream
currently has no operating business and does not use any
computers, and since it has no customers, suppliers or other
constituents, it does not believe that there are any
material year 2000 issues to disclose in this Form 10-SB.
Description of property.
Silver Stream has retained Shawn F. Hackman, a P.C., as a resident
agent. The address is 3360 W. Sahara, Suite 200 Las Vegas, NV 89102.
A copy of the resident agent agreement is attached.
Silver Stream currently owns no property. President John E. Dhonau
shall provide the space for the Company's meetings at 2980 S. Rainbow
Blvd., Suite 200C, Las Vegas, NV, 89146.
Certain relationships and related transactions.
There are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a
party, in which any of the named persons set forth in Item
404 of Regulation SB had or is to have a direct or indirect
material interest.
Shawn F. Hackman, Esq., the Company's resident agent, incorporated the
Company in an administrative capacity. Additionally, Mr. Hackman
currently holds position in the Silver Stream as Secretary and
Director.
Market for common equity and related stockholder matters.
The Shares have not previously been traded on any
securities exchange. At the present time, there are no
assets available for the payment of dividends on the Shares.
Executive compensation.
(a) No officer or director of Silver Stream is receiving any
remuneration at this time.
(b) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of
the corporation in the event of retirement at normal
retirement date pursuant to any presently existing plan
provided or contributed to by the corporation or any of its
subsidiaries.
(c) No remuneration is proposed to be in the future
directly or indirectly by the corporation to any officer or
director under any plan which is presently existing.
Financial statements.
Silver Stream, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
February 11, 2000
TABLE OF CONTENTS PAGE #
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-9
INDEPENDENT AUDITORS' REPORT
Board of Directors February 14, 2000
SILVER STREAM, INC.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of SILVER STREAM,
INC. (A Development Stage Company), as of February 11, 2000 and the
related statements of operations, stockholders' equity and cash flows
for the period January 28, 2000 (inception) to February 11, 2000. These
financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of SILVER
STREAM, INC. (A Development Stage Company), as of February 11, 2000,
and the results of its operations and cash flows for the period January
28, 2000 (inception) to February 11, 2000, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note #5
to the financial statements, the Company has suffered recurring losses
from operations and has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is described in Note #5.
These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
___________________________
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
SILVER STREAM, INC.
(A Development Stage Company)
February 11, 2000
BALANCE SHEET
ASSETS
CURRENT ASSETS
Cash $0
TOTAL CURRENT ASSETS $0
OTHER ASSETS $0
TOTAL OTHER ASSETS $0
TOTAL ASSETS $0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES 0
TOTAL CURRENT LIABILITIES 0
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.001
Authorized 25,000,000 shares
Issued and outstanding at
February 11, 2000 -
3,000,000 shares 3,000
Additional Paid-In Capital 0
Deficit accumulated during
The Development stage -3,000
TOTAL STOCKHOLDERS' EQUITY $ 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
The accompanying notes are an integral part of these financial statements
- - 2 -
SILVER STREAM, INC.
(A Development Stage Company)
January 28, 2000 (inception), to February 11, 2000
STATEMENT OF OPERATIONS
INCOME
Revenue $ 0
EXPENSES
General and
Administrative $3,000
TOTAL EXPENSES $3,000
NET PROFIT/LOSS (-) $-3,000
Net Profit/Loss(-)
per weighted share
(Note #1) $-.001
Weighted average
Number of common
shares outstanding 3,000,000
The accompanying notes are an integral part of these financial statements
- - 3
SILVER STREAM, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
January 28, 2000
Issued for Services 3,000,000 $3,000 $0
Net loss January 28,
2000 (inception) to
February 11, 2000 -3,000
Balance,
February 11, 2000 3,000,000 $3,000 $0 $-3,000
The accompanying notes are an integral part of these financial statements
- - 4
SILVER STREAM, INC.
(A Development Stage Company)
January 28, 2000 (inception), to February 11, 2000
STATEMENT OF CASH FLOWS
Cash Flows from
Operating Activities
Net Loss $-3,000
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services +3,000
Changes in assets and
Liabilities 0
Net cash used in
Operating activities $0
Cash Flows from
Investing Activities 0
Cash Flows from
Financing Activities 0
Net Increase (decrease) $0
Cash,
Beginning of period 0
Cash, End of Period $0
The accompanying notes are an integral part of these financial statements
- - 5 -
SILVER STREAM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 11, 2000
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 28, 2000, under the laws of the
State of Nevada as SILVER STREAM, INC. The Company currently has
no operations and in accordance with SFAS #7, is considered a
development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual
method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-
bearing bank that currently does not exceed federally
insured limits. For the purpose of the statements of cash
flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents.
There are no cash equivalents as of February 11, 2000.
- - 6
SILVER STREAM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 11, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting 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 difference between financial and
tax reporting. Deferred tax expense (benefit) results from
the net change during the year of deferred tax assets and
liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities" which provides guidance on
the financial reporting of start-up costs and organization
costs. It requires most costs of start-up activities and
organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15,
1998. With the adoption of SOP 98-5, there has been little
or no effect on the company's financial statements.
Loss Per Share
Net loss per share is provided in accordance with Statement
of Financial Accounting Standards No. 128 (SFAS #128)
"Earnings Per Share". Basic loss per share is computed by
dividing losses available to common stockholders by the
weighted average number of common shares outstanding during
the period. Diluted loss per share reflects per share
amounts that would have resulted if dilative common stock
equivalents had been converted to common stock. As of
February 11, 2000, the Company had no dilative common stock
equivalents such as stock options.
Year End
The Company has selected December 31st as its fiscal year-
end.
- - 7 -
SILVER STREAM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 11, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Policy in Regards to Issuance of Common Stock in a Non-Cash
Transaction
The Company's accounting policy for issuing shares in a
non-cash transaction is to issue the equivalent amount of
stock equal to the fair market value of the assets or
services received.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
February 11, 2000, due to the net loss and no state income tax in
Nevada, the state of the Company's domicile and operations. The
Company's total deferred tax asset as of February 11, 2000 is as
follows:
Net operation loss carry forward $0
Valuation allowance $0
Net deferred tax asset $0
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
25,000,000 shares with a par value $.001 per share.
Preferred Stock
The corporation has no preferred stock.
On January 28, 2000, the Company issued 3,000,000 shares of its
$0.001 par value common stock to its directors for services of
$3,000.00.
- - 8 -
SILVER STREAM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 11, 2000
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using 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 does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. The stockholders/officers and or directors have
committed to advancing the operating costs of the Company
interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal
property. An officer of the corporation provides office services
without charge. Such costs are immaterial to the financial
statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other
business activities and may in the future, become involved in
other business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional shares of common stock.
- - 9 -
To Whom It May Concern: February 14, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of February 14, 2000, on the
Financial Statements of SILVER STREAM, INC., as of February 11, 2000,
in any filings that are necessary now or in the near future with the
U.S. Securities and Exchange Commission.
Very truly yours,
___________________________
Barry L. Friedman
Certified Public Accountant
Part II. Information not required in prospectus.
Indemnification of officers and directors.
Information on this item is set forth in Prospectus under
the heading "Disclosure of Commission Position on
Indemnification for Securities Act Liabilities."
Other expenses of issuance and distribution.
Information on this item is set forth in the Prospectus
under the heading "Use of Proceeds."
Recent sales of unregistered securities.
On January 28, 2000, 1,500,000 shares were issued to
John E. Dhonau and 1,500,000 to Shawn F. Hackman under Rule
4(2).
Exhibits.
The Exhibits required by Item 601 of Regulation S-B, and an
index thereto, are attached.
Undertakings.
The undersigned registrant hereby undertakes to:
(a) (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; and
Notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end of
the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to Rule
424.
(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(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 initial 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.
Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations
and registered in such names as required by the underwriter
to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the pursuant to the
foregoing provisions, or otherwise, the small business
issuer has been advised "Act") may be permitted to
directors, officers and controlling persons of the small
business issuer 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. In the event that a claim for
indemnification against such liabilities (other than the
payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the
small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
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/A and authorized
this registration statement to be signed on its behalf by the undersigned
,thereunto duly authorize, in the City of Las Vegas,
Silver Stream Corp.
By: Shawn F. Hackman
Secretary
EXHIBIT LIST
3.1 Articles of Incorporation
3.2 By-Laws
24.1 Power of Attorney
99.1 Acceptance of Resident Agent
99.2 Lock-up agreement