As filed with the Securities and Exchange Commission
on _____________________, 1999
Registration No.: _______
FORM S-4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MERCURY CAPITAL CORP.
(Name of small business issuer in its charter)
3360 W. Sahara Ave., Las Vegas, Nevada (702) 732-2253
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Shawn F. Hackman, Esq. 3360 W. Sahara Ave., LasVegas, Nevada
(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.
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registratio
of registered offering aggregate n fee
securities (1) price per offering
to be unit (12) price
registered
Common 10,440,000 $ 0.10 $1,000,000 $100.00
shares
(1) This Registration Statement relates to the securities of the
Registrant to be issued to the shareholders of Mercury Capital,
pursuant to an Agreement and plan of Merger. This Registration
Statement covers such additional indeterminate number of shares
of Common Stock as may be issued by reason of adjustments
pursuant to the Merger Agreement. Because those additional shares
will be issued for no additional consideration, no additional
registration fee is required.
(2) Estimated solely for purposes of calculating the
registration fee.
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.
MERCURY CAPITAL CORP.
CROSS REFERENCE SHEET
(Showing Location in the Prospectus/Proxy of Information
Required by Items 1 through 19, Part I, of Form S-4)
Item in Form S-4 Prospectus/Proxy Caption
1. Front of Registration Facing Page of Registration
Statement and Outside Front Statement; Outside Front Page
Cover of Prospectus of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page of
Cover Pages of Prospectus Prospectus; Outside Back Page
of Prospectus
3. Summary Information and Risk Prospectus Summary; Risk
Factors Factors
4. Terms of Transaction Prospectus Summary - The
Merger; The Transaction; Tax
Consequences
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with Management; Certain
Company Being Acquired Transaction
7. Reoffering by Persons deemed Shares Eligible for Future
Underwriters Sale
8. Interest of Named Experts and Experts; Legal Matters
Counsel
9. Disclosure of Commission Indemnification of Directors
Position on Indemnification and Officers
for Securities Act
Liabilities
14. A. Description of Business Mercury - Business
B. Description of Property Properties
C. Legal Proceedings Legal Proceedings
17. Information regarding Gain The Companies; Certain
Master Transactions Gain Master
18. Information if Proxies, Proxy Information
Consents or Authorizations
are to be Solicited
SUBJECT TO COMPLETION, DATED ____________, 1999
PROSPECTUS/PROXY STATEMENT
MERCURY CAPITAL CORP.
A Colorado Corporation
This Prospectus/Proxy relates to the proposed merger between
Mercury Capital Corp. with Gain Master, pursuant to an Agreement
and Plan of Merger.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK
VALUE OF THE COMMON STOCK AND SHOULD BE CONSIDERED ONLY BY
PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"DILUTION" and "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS/PROXY. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus/proxy 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.
Prior to this registration, there has been no public market for
the shares of Common Stock other than trading on the "Over-the
Counter Bulletin Board". See "RISK FACTORS" and "DESCRIPTION OF
SECURITIES".
Mercury Capital intends to apply for inclusion of the Common
Stock on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or listing on the American Stock
Exchange ("AMEX"), although there can be no assurances that an
active trading market will develop even if the securities are
accepted for quotation or listing. Additionally, even if the
Company's securities are accepted for quotation or listing and
active trading develops, Mercury is still required to maintain
certain minimum criteria, of which there can be no assurance (See
"RISK FACTORS").
The date of this Prospectus/Proxy Statement is ___________, 1999.
AVAILABLE INFORMATION
Mercury Capital filed a Form 10-12G with the Securities and
Exchange Commission (the "Commission") on March 9, 1999, and is
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and in accordance
therewith will file reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission").
Reports and other information filed by Mercury Capital can be
inspected and copied at the public reference facilities
maintained at the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can be
obtained upon written request addressed to the Commission, Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company has filed with the
Commission a registration statement on Form S-4 (herein together
with all amendments and exhibits referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the
"Act") of which this Prospectus forms a part. This Prospectus
does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted
in accordance with the rules and regulations of the Commission.
For further information reference is made to the Registration
Statement.
Mercury Capital's Form 10-12G is hereby incorporated herein by
reference. This includes the following Exhibits:
2.1 Agreement of Merger
3.1 Articles of Incorporation
3.2 By-Laws -
3.3 Financial Statements
Mercury Capital will provide copies of its Form 10-12G and any
exhibit upon request made to Mercury Capital's offices, as
identified herein.
ITEM 3. PROSPECTUS/PROXY SUMMARY AND RISK FACTORS
The following summary is qualified in its entirety by reference
to the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere in this
Prospectus/Proxy. Each prospective investor is urged to read this
Prospectus/Proxy in its entirety.
THE COMPANIES
Mercury Capital Corp. (the "Company"), was incorporated on
December 9, 1996, under the laws of the State of Colorado, 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, the Company never commenced any operational
activities. The Company was formed by Timothy J. Brasel, the
initial director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr. Brasel
asked Joseph J. Peirce, a close friend who has been an investor
in a number of other companies managed by Mr. Brasel, to serve as
President and a director, and these two persons invited Mr.
Brasel's sister to participate as a founding shareholder. No
further action was taken in connection with the organization of
the Company until February 1999 when the management determined to
proceed with filing a Form 10-SB. Management then raised $12,000
from three business acquaintances to pay the expense of preparing
the Form 10-SB. The Board of Directors of the Company has elected
to commence implementation of the Company's principal business
purpose.
GAIN MASTER, LTD. The market responses from the United States
and Europe regarding our innovative electronic and digital
databanks and desktop organizers were exceptionally encouraging
and impressive. During the 5 months ended 30 November 1998, the
division created over 20 new models of databanks and desktop
organizers launched to the markets. The management believes that
over 30 new models will be added to our lines of high quality
products by the end of year 1999. In view of the fast growing and
earning potential of the division, we have decided to allocate
double the resources to further develop and explore the markets
of databanks and desktop organizers. For future development, we
have already made a series of business plans.
Thanks to our state-of-the-art new factory complex in Dongguan,
China, together with sophisticated machinery and highly
experienced R&D team, we believe that our new products can be
more than satisfactory to our customers' appetites. However, in
order to fulfil the increasing demands for high technology and
high quality products from customers, we have planned to invest
several millions of US dollars in more advanced production
facilities. We plan to build a completely new factory complex in
China in three years. The new high technology factory complex
will be equipped with automatic production lines and advanced
telecommunication networks. On completion of the complex, the
management believes that the production capacity for the
electronic and digital databanks and desktop organizers can
triple existing current capacity. Further with the more the more
advanced production facilities, we can increase the product
quality and decrease the defect level significantly. For example,
we target to reduce the level of defect from the present 5% to
less than 1.5%.
In order to enjoy the advantages of electronic connectivity, we
started to do business by means of Internet about two years ago.
Since the establishment of our frequently visited web sites, we
have received a number of business opportunities and inquiries
about our products. The results of the usage of Internet are
unexpectedly good. In view of the effectiveness and efficiencies
of electronic connectivity and Internet, we have planned to
implement a comprehensive trade management system that can
integrate our order processing, sourcing, manufacturing and EDI
capabilities to link each step in the production and trading
process. The new system can make the workflow more efficient
improve productivity, reduce errors, and save time and money. The
EDI capabilities allow for electronic order processing and
documentation between our suppliers and trading partners
worldwide especially those in the United States and Europe. Since
our traditional distribution channels are both costly and time
consuming, we are also planning to utilize Internet connection to
centralize orders, and together with the sales and marketing
network to better distribute our products and better serve our
clients. We will deploy the E-commerce strategy for our product
lines and will utilize it to broaden the distribution and
marketing channels. We are studying the establishment of such
channels together with certain US partners, and hope that they
can be established in one year. These new channels are expected
to double our revenue level.
Since both the size and technology level of our existing R&D team
may not be able to support future's fast growing technology
demands, we plan to provide double or even more resources and
supports to the R&D and engineering department. For example, the
number of R&D team members is expected to increase from 30 to
more than 100 people in two years. More professionals with Ph.D.
qualification will be invited to join us as well. Highly
qualified professionals will total about 70% of the team. At
present, a number of researches have been conducting. For
example, we are doing a research on a special project called
"Personal Digital Assistants." This innovative product can be
equipped with the link-up capability with personal computer, fax
modem, touch panel and printing functions. The research is
expected to be completed in year 2000. Moreover, we are
developing the new product series named "Smart Doctor". This
"Smart Doctor" has a number of strong functions including large
memory and educational games playing. Again, we will deploy the E-
commerce strategy for these 2 new product lines and will utilize
the distribution and marketing channel. These 2 new product
lines are expected to generate US $10 million in revenue.
To diversify our existing business and ensure a stable
contribution of long-term income, we plan to further explore the
business opportunities of OEM and ODM. We our negotiating with
certain large and well-known multi-national electronic product
manufacturers from Japan and the United States in establishing
OEM and ODM partnerships. Due to our outstanding production
facilities and strong R&D team, we recently obtained the contract
from one of the world largest electronic product manufacturers
from Japan, in addition to several signed letter of intents
("LOIs"). We expect this contract and the LOIs will contribute
additional US$ 15 million to our current revenue level, and
provide a platform for us to share our advanced technologies with
these global providers of electronic products.
THE MERGER - SUMMARY
Mercury Capital has entered into a Definitive Agreement and Plan
of Merger with Gain Master. At some time after the effective date
of this Registration Statement, the two companies will be joined.
Mercury Capital will be the surviving corporation of that merger.
The Shareholders of Mercy Capital and Gain Master will vote on
this merger at a special meeting.
Securities Outstanding:
Prior to the Offering: 4,000,000
Common Stock Shares
Subsequent to the Offering: 12,000,000
Common Stock Shares
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND SHOULD
BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT IN THE COMPANY. EACH PROSPECTIVE INVESTOR SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS ALL
OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS.
Dependence Upon Management. The Company is substantially
dependent upon the personal efforts and ability of its President,
Chief Executive Officers and Directors. The loss or inability of
them to perform their duties may have a serious adverse effect
upon the Company's activities and could significantly delay the
achievements of the Company's goals. (See "MANAGEMENT").
Requirement of Audited Financial Information for Businesses That
May Be Acquired. The Company is subject to the periodic reporting
requirements of the Exchange Act. Current reports will be
required each time a reportable event occurs relating to the
affairs of the Company. Should the Company contemplate the
acquisition of a significant amount of assets of another company
or of the other company itself, it will be required to provide
the Securities and Exchange Commission with certified financial
statements of the company or companies to be acquired. No
assurances can be given that such certified financial statements
of a contemplated acquisition will be available to the Company.
The Company may, therefore, be precluded from making such
acquisition or acquisitions if the requisite financial
information is unavailable or can only be obtained at excessive
cost to the Company.
No Assurance of NASD or American Stock Exchange Listing. Prior to
this Offering, no public trading market existed for the Common
Stock of Mercury. There can be no assurances that a public
trading market for the Units or Common Stock will develop or that
a public trading market, if developed, will be sustained.
Although the Company anticipates that the will be eligible for
inclusion on the National Association of Securities Dealers
Automated Quotation System Small-Cap Market ("NASDAQ") or
American Stock Exchange ("AMEX"), no assurance can be given that
the Company's securities will be listed on NASDAQ or AMEX as of
the Effective Date. Consequently, there can be no assurance that
a regular trading market, other than existing OTC trading, for
the Company's securities, will develop after the completion of
the Merger. If a trading market does in fact develop for the
securities offered hereby, there can be no assurance that it will
be maintained. If for any reason such securities are not listed
on NASDAQ or AMEX, the listing is not maintained, or a public
trading market does not develop, holders of such securities may
have difficulty in selling their securities should they desire to
do so.
No Dividends. The Company has paid no dividends on its Common
Stock since its inception and does not intend to pay dividends on
its Common Stock in the foreseeable future. Any earnings which
the Company may realize in the foreseeable future will be
retained to finance the growth of the Company (See "DESCRIPTION
OF SECURITIES").
Loss of Control of Company by Present Shareholders After
Offering. After completion of the merger, the present
shareholders of the Company will own 13.5% of the shares then
outstanding. Accordingly, as a practical matter, the present
shareholders will no longer be in a position to elect all of the
directors of the Company and control its policies. (See
"DILUTION," and "PRINCIPAL SHAREHOLDERS").
Shares Available for Resale. The 4,000,000 shares of the
Company's Common Stock may be deemed "restricted securities" and,
in the future, may be sold in compliance with Rule 144 adopted
under the Securities Act, as amended. Possible or actual sales of
the Company's Common Stock by present shareholders under Rule 144
may have a depressive effect on the price of the Company's Common
Stock in any market which may develop (See "DILUTION" and
"CERTAIN TRANSACTIONS").
ITEM 4. TERMS OF TRANSACTION
THE SPECIAL MEETING
A special meeting of the shareholders of Mercury Capital and Gain
Master will be held at the executive offices of Shawn F. Hackman,
Esq. 3600 W. Sahara Ave. Las Vegas, Nevada.
At the special meeting, holders of Mercury Capital and Gain
Master shares will consider and vote upon (i) a proposal to adopt
the Agreement and Plan of Merger.
The affirmative vote of the holders of a majority of the
outstanding shares of Mercury Capital and Gain Master Common
Stock entitled to vote thereon is required to adopt the Merger
Agreement.
All shares of Mercury Capital and Gain Master Common Stock
represented at the special meeting by properly executed proxies
received prior to or at the special meeting, and not revoked,
will be voted in accordance with the instructions indicated on
such proxies. If no instructions are indicated, such proxies will
be voted for the adoption of the Merger Agreement.
Any proxy given may be revoked by the person giving it at any
time, without affecting any vote previously taken, by (i) giving
notice to the Secretary of Gain Master in writing or in open
meeting or (ii) duly executing a later dated proxy relating to
the same shares and delivering it to the Secretary of Gain Master
before the taking of the vote at the special meeting. Any written
notice of revocation or subsequent proxy should be sent and
delivered to Mercury Capital or Gain Master as the case may be,
3360 W. Sahara Ave. Suite 200, Las Vegas, Nevada, Attention:
Secretary, or hand delivered to the same address or before the
taking of the vote at the special meeting.
THE TRANSACTION
On the effective date of the merger, each share of Gain Master
common stock shall be exchanged for and converted shares of
Mercury Capital common stock as further detailed in stock
purchase agreement attached hereto.
TAX CONSEQUENCES
The merger contemplated by this Agreement is intended to qualify
as a tax-free reorganization, as contemplated by Section 368(A)
of the Internal Revenue Code of 1986, as amended. Mercury Capital
intends to obtain new auditors, from whom an opinion as to tax
consequences will be obtained.
ITEM 5. PRO-FORMA FINANCIAL INFORMATION-
See attached Financials Exhibit 13.1
ITEM 6. MATERIAL CONTRACTS WITH COMPANY BEING ACQUIRED
None
ITEM 7. REOFFERING BY PERSONS DEEMED UNDERWRITERS
Upon the consummation of this Merger, Mercury Capital will have
12,000,000 shares of Common Stock outstanding (not including
options). Of these shares, the 10,440,000 shares issued in the
Merger will be freely tradeable without restriction or further
registration under the Securities Act of 1933, as amended, except
for any shares purchased by an "affiliate" of the Company (in
general, a person who has a control relationship with the
Company) which will be subject to the limitations of Rule 144
adopted under the Act. All of these shares are being issued by
the company and thus are not being re-offered by any person
deemed to be underwriters.
ITEM 8. INTEREST OF NAMED EXPERTS AND COUNSEL
Mercury Capital has been represented in connection with the
Merger by Shawn F. Hackman, Esq. 3360 W. Sahara Ave. #200, Las
Vegas, NV. This does not include the tax consequences of this
transaction.
Certain of the financial statements of Mercury Capital included
in this Prospectus and elsewhere in the Registration Statement,
to the extent and for the periods indicated in their reports,
have been audited by independent certified public accountants,
whose reports thereon appear elsewhere herein and in the
Registration Statement.
ITEM 9. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The bylaws of Mercury Capital do not provide for the
indemnification of any director, officer, employee or agent of
the issuer, or any person serving in such capacity for any other
entity or enterprise at the request of the issuer against any and
all legal expenses (including attorneys fees), claims and
liabilities arising out of any action, suit or proceeding, except
an action by or in the right of the issuer. The bylaws of
Mercury Capital do provide for such indemnification, and
management intends that the bylaws of the surviving post-merger
entity shall provide for indemnification of officers and
directors to the extent permitted by Colorado law.
Colorado law provides liberal indemnification of officers and
directors of corporations. Section 78.7502 of the Colorado
Revised Statutes permits a corporation to indemnify any officer,
director, employee, or agent, who is, was, or is threatened to be
made a party to any action, whether civil, criminal,
administrative, or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was
an officer, director, employee, or agent, if he acted in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, in the
case of a criminal action, he had no reasonable cause to believe
that his conduct was unlawful. In the case in which a director,
officer, employee, or agent of a corporation has been successful
on the merits or otherwise in defense of such action, the
corporation must indemnify him for expenses, including attorneys'
fees, actually and reasonably incurred by him.
Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors and
controlling persons of the issuer, the issuer has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
law and is, therefor, unenforceable. In the event a demand for
indemnification is made, the 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 law and will be governed by the final
adjudication of such issue.
ITEM 10. INFORMATION WITH RESPECT TO REGISTRANT
MERCURY CAPITAL BUSINESS
Mercury Capital Corp. (the "Company"), was incorporated on
December 9, 1996, under the laws of the State of Colorado, 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, the Company never commenced any operational
activities. The Company was formed by Timothy J. Brasel, the
initial director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr. Brasel
asked Joseph J. Peirce, a close friend who has been an investor
in a number of other companies managed by Mr. Brasel, to serve as
President and a director, and these two persons invited Mr.
Brasel's sister to participate as a founding shareholder. No
further action was taken in connection with the organization of
the Company until February 1999 when the management determined to
proceed with filing a Form 10-SB. Management then raised $12,000
from three business acquaintances to pay the expense of preparing
the Form 10-SB. The Board of Directors of the Company has elected
to commence implementation of the Company's principal business
purpose.". As such, the Company 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 the
Company 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 cause a market to develop in the
Company's securities until such time as the Company has completed
an acquisition or merger.
SELECTED FINANCIAL INFORMATION
The following summary financial information has been summarized
from the Company's Financial Statements included elsewhere in
this Prospectus/Proxy. The information should be read in
conjunction with the Financial Statements and the related Notes
thereto. See "FINANCIAL STATEMENTS".
MERCURY CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
YEAR ENDED DECEMBER 31
Assets
Current Assets $0
Organizational costs, Net of $30.00
accumulated amortization
Liabilities and Stockholders Equity
Current Liabilities $0
Total Liabilities $0
Stockholder's Equity:
Preferred stock, no par value
5,000,000 shares authorized, none
issued and outstanding
Common stock, no par value $50
100,000,000 authorized 3,600,000
issued and outstanding
Additional Paid In Capital $7,200
Accumulated (Deficit) $(7,200)
Total Stockholders' Equity $30
Total Liabilities and Stockholders' $30
Equity
MANAGEMENT
Name / Title Age
John E. Dhonau 42
President and
Director/Sec./Treasurer
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the
ownership of the Company's Common Stock (1) before the Merger as
of the date of this Prospectus, and (ii) as adjusted to reflect
the shares issued in the Merger, by each person who is known by
the Company to own more than 5% of the Company's outstanding
Common Stock; each of the Company's directors; and directors of
the Company as a group:
Security ownership of certain beneficial owners - Mercury Capital Corp.
Title of Name/Address of Owner Shares Percent
Class Beneficially of Class
Owned
Common Timothy J. Brasel 1,365,000 34.1%
5770 South Beech Court
Greenwood Village, CO
80121
Common Joseph J. Peirce 1,4,15,000 35.4%
5125 West Lake Ave.
Littleton, CO 80123
Common Brasel Family Partners 645,000 16.1%
5770 S. Beech Court
Greenwood Village, CO
80121
Common La Mirage Trust 720,000 18.0%
5770 S. Beech Court
Greenwood Village, CO
80121
Common Nasus Lesarb, Ltd. 720,000 18.0%
16198 East Prentice
Place
Aurora, CO 80015
Common Kurt Turekl IRA 200,000 5.0%
8101 E. Dartmounth
No. 1
Denver, CO 80231
Common All Executive Officers 0 0.0%
Directors as a Group
(2 Persons)
MARKET PRICE AND DIVIDEND POLICY
Registrant's common stock is not traded. The following are
available high and low bids.
Mercury Capital HIGH LOW
$0 $0
The Registrant has never paid a cash dividend and has no present
intention of so doing.
DESCRIPTION OF SECURITIES
Common Stock. The holders of Common Stock are entitled to one
vote for each share held of record on all matters to be voted on
by the shareholders. There is no cumulative voting with respect
to the election of directors, with the result that the holders of
more than 50 percent of the shares have the ability to elect the
directors. The holders of Common Stock are entitled to receive
dividends when, as, and if declared by the Board of Directors out
of funds legally available therefor. In the event of liquidation,
dissolution or winding up of the Company the holders of Common
Stock are entitled to share ratably in all assets remaining
available for distribution to them after payment of liabilities
and after provision has been made for each class of stock, if
any, having preference the Common Stock. Holders of shares of
Common Stock, as such, have no conversion, preemptive or other
subscription rights, and there are no redemption provisions
applicable to the Common Stock. All of the outstanding shares of
Common Stock are, and the shares of Common Stock offered hereby
when issued against the consideration set forth in this
Prospectus, will be, fully paid and nonassessable. The Company's
Certificate of Incorporation, as amended, authorizes 100,000,000
shares of no par value Common Stock, of which 4,000,000 shares
were issued and outstanding as of October 1, 1999. All of the
issued and outstanding shares of Common Stock are fully paid,
validly issued and non-assessable.
Transfer Agent. The Transfer Agent and Registrar for the Common
Stock is Corporate Stock Transfer.
LITIGATION
No material legal proceedings are pending to which Mercury or any
of its property is subject and to the knowledge of Mercury, there
are no other proceedings threatened.
ITEM 17. INFORMATION WITH RESPECT TO GAIN MASTER
GAIN MASTER BUSINESS
GAIN MASTER, LTD. The market responses from the United States
and Europe regarding our innovative electronic and digital
databanks and desktop organizers were exceptionally encouraging
and impressive. During the 5 months ended 30 November 1998, the
division created over 20 new models of databanks and desktop
organizers launched to the markets. The management believes that
over 30 new models will be added to our lines of high quality
products by the end of year 1999. In view of the fast growing and
earning potential of the division, we have decided to allocate
double the resources to further develop and explore the markets
of databanks and desktop organizers. For future development, we
have already made a series of business plans.
Thanks to our state-of-the-art new factory complex in Dongguan,
China, together with sophisticated machinery and highly
experienced R&D team, we believe that our new products can be
more than satisfactory to our customers' appetites. However, in
order to fulfil the increasing demands for high technology and
high quality products from customers, we have planned to invest
several millions of US dollars in more advanced production
facilities. We plan to build a completely new factory complex in
China in three years. The new high technology factory complex
will be equipped with automatic production lines and advanced
telecommunication networks. On completion of the complex, the
management believes that the production capacity for the
electronic and digital databanks and desktop organizers can
triple existing current capacity. Further with the more the more
advanced production facilities, we can increase the product
quality and decrease the defect level significantly. For example,
we target to reduce the level of defect from the present 5% to
less than 1.5%.
In order to enjoy the advantages of electronic connectivity, we
started to do business by means of Internet about two years ago.
Since the establishment of our frequently visited web sites, we
have received a number of business opportunities and inquiries
about our products. The results of the usage of Internet are
unexpectedly good. In view of the effectiveness and efficiencies
of electronic connectivity and Internet, we have planned to
implement a comprehensive trade management system that can
integrate our order processing, sourcing, manufacturing and EDI
capabilities to link each step in the production and trading
process. The new system can make the workflow more efficient
improve productivity, reduce errors, and save time and money. The
EDI capabilities allow for electronic order processing and
documentation between our suppliers and trading partners
worldwide especially those in the United States and Europe. Since
our traditional distribution channels are both costly and time
consuming, we are also planning to utilize Internet connection to
centralize orders, and together with the sales and marketing
network to better distribute our products and better serve our
clients. We will deploy the E-commerce strategy for our product
lines and will utilize it to broaden the distribution and
marketing channels. We are studying the establishment of such
channels together with certain US partners, and hope that they
can be established in one year. These new channels are expected
to double our revenue level.
Since both the size and technology level of our existing R&D team
may not be able to support future's fast growing technology
demands, we plan to provide double or even more resources and
supports to the R&D and engineering department. For example, the
number of R&D team members is expected to increase from 30 to
more than 100 people in two years. More professionals with Ph.D.
qualification will be invited to join us as well. Highly
qualified professionals will total about 70% of the team. At
present, a number of researches have been conducting. For
example, we are doing a research on a special project called
"Personal Digital Assistants." This innovative product can be
equipped with the link-up capability with personal computer, fax
modem, touch panel and printing functions. The research is
expected to be completed in year 2000. Moreover, we are
developing the new product series named "Smart Doctor". This
"Smart Doctor" has a number of strong functions including large
memory and educational games playing. Again, we will deploy the E-
commerce strategy for these 2 new product lines and will utilize
the distribution and marketing channel. These 2 new product
lines are expected to generate US $10 million in revenue.
To diversify our existing business and ensure a stable
contribution of long-term income, we plan to further explore the
business opportunities of OEM and ODM. We our negotiating with
certain large and well-known multi-national electronic product
manufacturers from Japan and the United States in establishing
OEM and ODM partnerships. Due to our outstanding production
facilities and strong R&D team, we recently obtained the contract
from one of the world largest electronic product manufacturers
from Japan, in addition to several signed letter of intents
("LOIs"). We expect this contract and the LOIs will contribute
additional US$ 15 million to our current revenue level, and
provide a platform for us to share our advanced technologies with
these global providers of electronic products.
Security Ownership of Certain Beneficial Owners, Gain Master -
Pre-merger:
Title of Name/Address of Owner Shares Percent of Percent
Class Beneficially Class of Class
Owned Diluted
Ordinary Yue Fong International 9 94.25% N/A
Group Holding Limited
Ordinary LI Wing Kei 575 5.75% N/A
INFORMATION REGARDING MERCURY CAPITAL, CORP. SECURITIES
Mercury stock is not traded.
Gain Master has never paid a cash dividend and has no present
intention of so doing.
MANAGEMENT
LI Wing Bun is the President and Chairman of the Board of
Directors of Gain master.
ITEM 18. PROXY INFORMATION
FINANCIAL STATEMENTS
Financial Statements - Mercury Capital
No dealer, salesman or other person has been authorized to give
any information or to make any representations not contained in
this Prospectus and if given or made, such information or
representations must not be relied upon as having been authorized
by the Company. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any
person to make such offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
Available Information Inside Front Cover
Prospectus/Proxy Summary
The Companies
The Merger - Summary
Risk Factors
Terms of Transaction
Special Meeting
The Transaction
Tax Consequences
Pro Forma Financial Information
Material Contacts with Company Being Acquired
Reoffering by Persons Deemed Underwriters
Interest of Named Experts and Counsel
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
Information with Respect to Registrant
Mercury Capital- Business
Dilution
Capitalization
Selected Financial Information
Management
Principal Stockholders
Market Price and Dividend Policy
Description of Securities
Litigation
Information with Respect to Gain Master
Gain Master - Business
Information Regarding Gain Master Securities
Management
Proxy Information
PART II
ITEM 20. INDEMNIFICATIONS OF OFFICERS AND DIRECTORS
The bylaws of Gain Master do not provide for the indemnification
of any director, officer, employee or agent of the issuer, or any
person serving in such capacity for any other entity or
enterprise at the request of the issuer against any and all legal
expenses (including attorneys fees), claims and liabilities
arising out of any action, suit or proceeding, except an action
by or in the right of the issuer. The bylaws of Gain Master do
provide for such indemnification, and management intends that the
bylaws of the surviving post-merger entity shall provide for
indemnification of officers and directors to the extent permitted
by Colorado law.
Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors and
controlling persons of the issuer, the issuer has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
law and is, therefor, unenforceable. In the event a demand for
indemnification is made, the 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 law and will be governed by the final
adjudication of such issue.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Registration Statement incorporates Mercury's Form 10SB and the
following Exhibits thereto:
EXHIBITS
3.1 Articles of Incorporation - Mercury Capital
3.2 By-Laws - Mercury Capital
The following financial statements are also incorporated by
reference to the Form 10-SB:
FINANCIAL STATEMENTS - Mercury Capital
Report of Independent Auditor
Reports of Independent Auditor
Balance Sheets
Statement of Operation
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
EXHIBITS
3.1 Articles of Incorporation Gain Master
3.2 By-Laws - Gain Master
10.1 Stock Purchase Agreement - Gain Master
ITEM 22. UNDERTAKINGS
(a) 1. The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual
report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not
set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of any employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by person who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.
4. The registrant undertakes that every prospectus (i) that is
filed pursuant to paragraph (1) that is filed pursuant to
paragraph (i) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used
in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(c) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on
November 19, 1999
MERCURY CAPITAL
By:/s/John E. Dhonau
John E. Dhonau, President, Secretary and Treasurer