U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STRATEGIC PARTNERS, INC..
(Name of small business issuer in its charter)
Wyoming (state of Incorporation)
-- (Primary Standard Industrial Classification Code Number)
77-0494696 (IRS Employer ID No.)
SEC File No. 333-95485
3525 Sunset Lane
Oxnard, CA 93035
805-984-0821
(Address and telephone number of registrant's principal executive
offices and principal place of business)
Frank J. Weinstock
3525 Sunset Lane
Oxnard, CA 93035
805-984-0821
(Name, address and telephone number of agent for service)
Copies to:
David Lilly
Lance Kerr Law Office
8833 Sunset Blvd. Suite 200
West Hollywood, Calif. 90069
310-289-4947
Approximate date of proposed sale to the public: As soon as
practicable after the 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, check
the following box and list the Securities Act registration
statement number 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 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
the same offering [ ]
If delivery of the prospectus is expected to be made pursuant tp Rule 434,
please check the following box [ ]
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.
Calculation of Registration Fee
Proposed
Proposed Maximum
Title of Each Class Maximum Aggregate Amount of
of Securities to be Amount to be Offering Price Offering Registration
Registered(1) Registered (1) Per Unit(1) Price(2) Fee
- --------------------------------------------------------------------------
Units (1) 300 $ 2,000 $600,000 $167.00
- --------------------------------------------------------------------------
(1) A Unit consists of 1,000 shares of common stock, par value $0.001.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(a) under the Securities Act of 1933.
----------------
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 that 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 such
Section 8(a), may determine.
1
PROSPECTUS
STRATEGIC PARTNERS, INC.
Initial Public Offering\\
300 Units consisting of 1,000 shares of Common Stock each at the rate of
$ 2,000 per unit.
Strategic Partners, Inc. is a recently formed,\\
development-stage company without significant assets or business. It was
formed to engage in the business of providing consulting services to
companies with respect to finance, mergers, acquisitions, raising capital
in the public markets and marketing on the internet. \\The offering is on
a best efforts basis. The offering will be sold by our officers and directors
acting as agents. There is no minimum of amount of
shares that must be sold. There is no market for the shares The
termination date for the offering is ______________ . \\
Securities offered hereby involve a high degree of
risk. These securities have not been approved or disapproved
by the Securities and Exchange Commission nor has the
Commission passed upon the accuracy or adequacy of
this prospectus. Any representation to the contrary is a
criminal offense.
These securities offered hereby involve a high degree
of risk. See "RISK FACTORS" on page 3.
2
Table of Contents
Summary of the Offering . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 4
Determination of Offering Price......................
Dilution .........................................................
Plan of Distribution .......................................
Legal Proceedings .......................................
Directors and Officers . . . . . . . . . . . . . . . . . . . . 5
Principal Stockholders .....................................
Description of Securities ...................................
Transfer Agent
Reports to Stockholders
Interest of Named Experts and Counsel
Disclosure of Commission Position of
Indemnification for Securities Act Liabilities
Organization Within Las Five Years...
Description of Business . . . . . . . . . . . . . . . . . . . . 9
Management's Discussion and Analysis of the
Plan of Operation....
Description of Property . . . . .
Certain Relationships and Related Transactions
Market for Common Equity and Related
Stockholder Matters...
Executive Compensation . . . . . . . . . . . . . . . . . . . . 13
Financial Statements . . . . . . . . . . . . . . . F-1 to F - 11
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ..................................
SUMMARY OF THE OFFERING.
Strategic Partners, Inc. was incorporated in 1998 for the purpose of
engaging in investment banking and providing financial consulting services
to businesses and individuals. Since incorporation our officers\\
and directors have been to engaged in research as to how best to market our
services in the financial services industry and to raise money\\
to open offices and conduct business.
OFFERING OF UNITS
* Units Offered - 300
* Minimum Number to be Sold - No Minimum
* Shares Outstanding Prior to Offering - 569,000
* Shares Outstanding after Offering if all sold - 869,000
* Use Of Proceeds:
* Legal
Administrative Assistant & Secretarial
Marketing & Travel Expense
Facilitate Strategic Alliance Group
Design & Printing
Office Leasehold
Misc. Supplies
Shareholder Releases - Mail
General Mail - Incl. Courier Services
Phones/Fax/Internet
Public/Investor Relations
Office Equipment; lease/purchase
Financial Conferences/Seminars
Advertising & Brochures
Website Design and Hosting
Accounting
3
THE COMPANY
We are organized as a Wyoming corporation named Strategic Partners, Inc.
Our offices are located at 3525 Sunset Lane, Oxnard, California.\\
The telephone is 805- 984-0821.
RISK FACTORS:
Anticipated Losses. We were incorporated in October of 1998. Since that time
we have worked on raising operating funds and developing plans to market our
services using the internet. We have experienced losses to date as funds
available have not been sufficient to operate in a profitable manner. We
believe we have a viable plan of operation and can generate profits if we
have sufficient working capital. The risk to investors is that we will not
be able to generate sufficient working capital from this offering that will
enable us to market our services and obtain clients that will pay for our
services.
Dependence Upon Key Personnel and Affiliates. We are highly dependent
on the services of Frank J. Weinstock, our President and CEO. Mr Weinstock
has signed a five year management contract beginning in
October of 1999. Our ability to pay Mr. Weinstock and
related persons is a risk of investing in the Company.
Possible Conflicts of Interest. We are not aware of any possible
conflicts of interest that may arise from the operation of our business.
Initially Mr. Weinstock and Ms. Francis will be the our only full time
employees. The other directors are engaged in other business
enterprises that do not appear to offer any conflicts of interest.
Need for Additional Financing. We believe that if we sell at least
two thirds of the offering we will not need additional funding
for the next twelve months. If we do not sell at least two thirds of
this offering we will not have sufficient working capital
to fully put into operation its business plan. This lack of funding will
require us to continue in fund raising activities as well as operate the
business on a limited scale.
4
ADDITIONAL INFORMATION
Registration Statement. We have filed with the Securities and
Exchange Commission in Washington, D.C., a Registration Statement under the
Securities Act of 1933, as amended, with respect to the Common Stock offered
by this Prospectus. For further information with respect to the Company and
the Common Stock offered hereby, reference is made to the Registration
Statement and the exhibits listed in the Registration Statement. The
Registration Statement may be examined at the Public Reference Room of the
Securities and Exchange Commission at 450 Fifth Street, N.W. Washington, D.C.
20549, and copies may be obtained upon payment of the prescribed fees.
We are an electronic filer, and the Securities and Exchange Commission\\
maintains a Web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission. The address of the SEC website is http://www.sec.gov. To find
information go to Edgar Archives and search under the Registrant name
(Strategic Partners, Inc.) or CIK number (1100313).
Reports to Shareholders. We will file reports with the Securities
and Exchange Commission and intend to furnish shareholders with annual
reports containing financial statements audited by independent public or
certified accountants and such other periodic reports as it may deem
appropriate or as required by law.
Use of Proceeds.
The use of proceeds will be disbursed for organizational and marketing
efforts. The offering is on a "best efforts" basis. If no funds are received
we will have no proceeds to spend. We reserve the right to expend funds as
received.
The following table sets forth the uses of proceeds if only
10% of the offering is sold. At this level the total funds
available would be equal to $ 60,000
USE OF PROCEEDS EQUAL TO 10% OF OFFERING:
Legal $ 5,000
Administrative Assistant & Secretarial 4,000
Marketing & Travel Expense 6,000
Facilitate Strategic Alliance Group 2,000
Design & Printing 2,000
Office Leasehold 6,000
Misc. Supplies 3,000
Shareholder Releases - Mail 2,000
General Mail - Incl. Courier Services 2,000
Phones/Fax/Internet 3,000
Public/Investor Relations 9,000
Office Equipment; lease/purchase 5,000
Financial Conferences/Seminars 3,000
Advertising & Brochures 2,000
Website Design and Hosting 4,000
Accounting 2,000
__________
$ 60,000
USE OF PROCEEDS EQUAL TO 50% OF OFFERING:
Legal $ 25,000
Administrative Assistant & Secretarial 25,000
Marketing & Travel Expense 33,000
Facilitate Strategic Alliance Group 7,000
Design & Printing 7,000
Office Leasehold 30,000
Misc. Supplies 20,000
Shareholder Releases - Mail 4,000
General Mail - Incl. Courier Services 4,000
Phones/Fax/Internet 15,000
Public/Investor Relations 45,000
Office Equipment; lease/purchase 25,000
Financial Conferences/Seminars 20,000
Advertising & Brochures 13,000
Website Design and Hosting 22,000
Accounting 5,000
__________
$ 300,000
USE OF PROCEEDS IF ALL UNITS ARE SOLD:
Legal $ 55,000
Administrative Assistant & Secretarial 53,000
Marketing & Travel Expense 66,000
Facilitate Strategic Alliance Group 23,000
Design & Printing 14,000
Office Leasehold 60,000
Misc. Supplies 30,000
Shareholder Releases - Mail 8,000
General Mail - Incl. Courier Services 8,000
Phones/Fax/Internet 30,000
Public/Investor Relations 90,000
Office Equipment; lease/purchase 55,000
Financial Conferences/Seminars 30,000
Advertising & Brochures 25,000
Website Design and Hosting 44,000
Accounting 9,000
__________
$ 600,000
Determination of Offering Price.
We have arbitrarily determined the
offering price of the units.
Dilution.
This offering involves a dilution of net tangible book value to
the existing shareholders. Assuming the maximum amount of
units offered are sold the following table shows the dilution
to persons who purchase this offering.
Assumed initial public offering price per share.............. $ 2.00
Pro forma net tangible book value per share
as of Oct.31, 1999....................................... $ 0.04
Pro forma increase attributable to new investors.............. $.0.57
Pro forma net tangible book value per
share after the offering................................. $ 0.61
Pro forma dilution per share to new investors................ $ 1.39
The following table summarizes the total number of shares of common stock
purchased from us, the total consideration paid to us and the average price
per share paid by existing stockholders and by new investors, in each case
based upon the number of shares of common stock outstanding as of October
31, 1999.
Shares Purchased Total Consideration
Number Percent Amount Percent Per Share
Existing stockholders. 569,000 65.5% $ 569,000 40.2% $ 1.00
New investors... 300,000 34.5% $ 600,000 59.8% $ 2.00
------- ----- ------- ------
Total 869,000 100.0% $ 1,169,000 100.0%
======= ===== ======== =====
Plan of Distribution.
We plan to distribute the shares on a "best efforts"
basis utilizing our officers and directors. We plan to
offer the securities on the Company website. If offered
on the website the announcement will be limited to information of a general
nature. The offer will be made via the prospectus which may be transmitted by
email or sent by mail in printed form or by email. No company has been
engaged as an underwriter. We may hire broker/dealers to sell all or a
portion of the offering. In such event we will cease all marketing efforts
by our officers and directors and will file a post-effective amendment
to indicate that this change in the plan of distribution.\\
Legal Proceedings.
There are no legal proceedings pending against us.
6
Directors, Executive Officers, Promoters and Control Persons
The following persons are our officers and directors.:
Frank J. Weinstock, Director, President and Chief Executive Officer
Frank J. Weinstock, age 62, is the founder of Strategic Partners, Inc.
Mr. Weinstock serves as President and Chief Executive Officer of the Company
since founded in Sept.,1998. From 1989 to 1998 Mr. Weinstock worked as an
independent analyst and consultant providing corporate structuring,
reorganizations, mergers/acquisitions and other sophisticated services
including financial development. Mr. Weinstock's forte has been exclusively
centered around fast pace growth companies in corporate America. From 1982
to 1988 he served as Chief Financial Officer of Diversified Technology, Inc.,
an international company in the business of licensing intellectual property
of advanced medical products, consisting of bio-compatible osteogenic
polymers (BOP), exported from the Soviet Union to the western free world.
From 1978 to 1982 he served as Chief Operating Officer of Western Gold'n Gas
Company engaged in the business of developing natural gas fields by drilling
company owned acreage in partnership with major national and international
conglomerates. From 1974 to 1978 he was instrumental and responsible for the
development and promotional activities of Greenwich Pharmaceutical,
a public company, pka, Strategic Medical Research Corp.(SMRC) 1969 to 1990,
President of J.J.Weinstock Agency, Inc. an independent insurance agency and
large brokerage facility.
It was during these formidable years that Mr. Weinstock successfully
created, integrated and combined insurance with securities complimenting
large estate planning services, much before the advent of "Universal
Life". From 1962 to 1969 he specialized in Fire, Property & Casualty
Insurance manuscripting forms for large commercial and industrial
organizations. He also packaged and combined comprehensive personal lines
insurance. During Mr. Weinstock's twenty-nine year tenure, he specialized
in aviation (FBO'S), medical malpractice and tailoring unique disability
coverages for high profile medical practitioners, while designing
sophisticated estate planning techniques. Due to Mr. Weinstock's other
business and financial interests in broadening his corporate horizons the
insurance business was sold.
Gerald Bench, Director and Chief Financial Officer.
Gernald Bench, age 59, from 1996 to Present was the President and\\
Chief Executive Officer of BFT Holding Co., Inc. BFT owns
all the stock of Hadley Fruit Orchard's, Inc.a company engaged in
operating airport and hotel gift shops. March 1995 to November 1996, Chief
Operating Officer, Hadley Fruit Orchard's Inc., Cabazon, California. a
specialty retail/direct mail marketer of food products. November, 1993 -
March, 1995, Partner, InterCap Marine & Aviation Group InterCap Enterprises,
Inc., Spring Lake, NJ. Intercap provided financial services, business
evaluation, and merger and acquisition services.
From June 1990-November 1993 Mr. Bench served as CEO/President of TDG
Aerospace Inc., Pleasanton, California, an aerospace company which specialized
in anti-icing systems for aircraft. From April 1989 to April 1990, Mr. Bench
served as Manager of U.S. operations for Lermer GmbH, Wiesbaden Germany. From
1959 to 1989 Mr. Bench was Chairman and CEO of E&B Marine Inc. of Edison,
New Jersey engaged in selling government and industrial surplus. Mr. Bench
is currently a director of Westerbeke Corp. of Avon, MA. a manufacturer of
7
diesel and gasoline engines; TDG Aerospace, Inc.; Taylor Made Group, Inc.
the largest manufacturer of marine windshields, sanitation systems, air
conditioners and boating accessories in the United States;Tech-Ops
International, Inc. of Half Moon Bay, CA., a privately held aerospace company.
Mr. Bench is also a member of the board of trustees of Allentown College of
St. Francis deSales, located in Allentown, Penn. and a board member of Canyon
Country Club in Palm Springs, Calif. Mr. Bench became a chief financial
officer and a director on October 31, 1999. He will serve as a director until
the next scheduled meeting of shareholders in January, 2001.
GEORGE FENCL, Director
Mr. Fencl, age 58, is currently Secretary and Treasurer, J.T. Granatelli
Lubricants, Inc. He has thirty five years experience as a business owner in
retail stores, restaurant business and manufacturing. Since 1984 he acted as
an investor and consultant for various real estate ventures; high tech;
corporations; and creative talent management companies.
Mr. Fencl owned and operated one of the largest jewelry production
companies on the west coast. He was one of the first owner/operators
in the vending machine business on the west coast and developed an
extremely strong and viable business.
Mr. Fencl owns and manages extensive high end real estate properties,
including vast commercial operations, both abroad and in the United States.
He has extensive experience at the global level relative to franchise
operations and license agreements. He also possesses a vast experience
on Wall Street internationally with ownership of merchant banks, as
well as an invaluable insight; with a blend of knowledge and
experience resulting in tremendous success. A broad background and
experience with major companies in corporate America, many of which are
public entities further strengthening his relationships and accomplishments
on Wall Street.
Mr. Fencl is a long time automotive enthusiast with partners in auto racing
teams; including part owner of Irwindale Raceway. He built custom street
vehicles and has been a consultant to various specialty automotive
manufacturers. Mr. Fencl was on the Board of Directors of Vector Car Company
during the time it was owned directly by Lamborghini and was an advisor to
Lamborghini Automotive. He retains ownership of the Lamborghini name.
Mr. Fencl attended the Institute of Art, Northrop Institute of Technology,
Mount San Antonio College (with emphasis in Business Law) and Azusa Pacific
University (with emphasis in Business Management) and completed a two year
tour in the United States Air Force. Ms. Francis became a director on
on October 31, 1999. He will serve as a director until the next
scheduled meeting of shareholders in January, 2001.
Trish R. Francis, Director and Secretary
Ms. Francis, age 53, has had an extensive business career after
completing two years of college; studying a variety of business disciplines.
Ms. Francis worked for prominent plastic surgeons, where she was responsible
for general office management to include detailed deciphering and
transcription of surgical records, enhancement of patient care and all
financial responsibilities. She managed a construction company coordinating
and implementing all facets, to include restructuring of the entire
organization and operating strategies.
After moving from Oklahoma to California in 1986, Ms. Francis managed
the Claremont Dental Clinic, supervising a group of doctors and employees.
Upon completion of an entire office reorganization, her responsibilities took
on a sophisticated management position.
From 1989 to 1999, Ms. Francis advanced her professional career
and talents in assuming a major role by undertaking vast responsibilities for
Keystone Investment Company, an international financial consulting
organization, to include executive administrative duties and becoming the
liaison between that office and the financial community. Activities
consisted of preparing legal documents for corporate reorganizations and
mergers. Ms. Francis also synchronized activities between the various
management, legal and accounting groups. Ms. Francis became
Secretary/Treasurer April 9, 1999 and became a director on May 27, 1999.
She will serve as a director until the next scheduled meeting of
shareholders in January, 2001.
Security Ownership of Certain Beneficial Owners and Management.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock following the proposed organization,
and as adjusted to reflect the sale of the Units offered hereby, by (i) each
person who is known by the Company to own more than 5% of the Company's
outstanding Common stock; (ii) each of the Company's directors, naming them;
and (iii) officers and directors of the Company as a group.
8
Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Owner Class
Common
Shares Frank J. Weinstock 317,100 Shares(1) 56%
3525 Sunset Lane
Oxnard, CA 93035
Trish R. Francis 22,800 Shares(2) 4%
3525 Sunset Lane
Oxnard, CA 93035
David G. Lilly 55,000 Shares 10%
8833 Sunset Blvd.
Suite 200
West Hollywood,
Calif. 90069
Total number of shares
owned by officers
and directors: 339,900 Shares 60%
Total number of shares
to be owned by officer
and directors when all
units are sold: 339,900 Shares 39%
Total shares to be issued
and outstanding when all
units are sold: 869,000 Shares 100%
(1) Includes 1,600 shares owned by the children of Frank J. Weinstock.
(2) Includes 1,800 shares owned by the children of Trish R. Francis.
Item 12. Description of Securities.
* Each Unit offered consists of 1,000 shares of common stock.
* The Company is authorized to issue 10,000,000 shares of Common Stock,
$.001 par value.
* As of 10/31/1999 569,000 shares were issued and outstanding.
* Each share of Common Stock will be entitled to one vote, either in
person or by proxy, on all matters that may be voted upon by the owners
thereof at meetings of the stockholders.
* The holders of Common Stock
* i) will have equal ratable rights to dividends
from funds legally available thereof, when, as and if declared by
the Board of Directors of the Company;
* (ii) will be entitled to share ratably in all of
the assets of the Company available for distribution to holders
of Common Stock upon liquidation, dissolution or winding up of
the affairs of the Company; and
* (iii) will not have preemptive or redemption provision
applicable thereto.
* All shares of Common Stock which are the subject of this offering, when
issued, will be fully paid and non-assessable, with no personal
liability to the ownership thereof.
* The holders of shares of Common Stock of the Company
do not have cumulative voting rights.
* At the completion of this offering, if all units are sold,
* affiliates, officers and/or directors of the Company
will own approximately 47% of the then outstanding Common stock.
Transfer Agent
The Company will initially act as its own stock transfer agent.
Reports to Stockholders
We intend to furnish its stockholders with annual reports
containing audited financial information.
Interest of Named Experts and Counsel
No counsel or experts have been hired to give opinions on any matters
concerning this offering. The Lance Kerr Law Office has received 50,000
shares of common stock for their work in completing the registration
process relating to these shares. These shares were issued and delivered
prior to the filing of this registration statement. The Lance Kerr Law
Office will render an opinion regarding the shares being registered in
this offering.
Disclosure of Commission Position of Indemnification for
Securities Acts Liabilities.
Section 17-16-851 of the Wyoming Statutes authorizes a corporation's
board of directors to grant indemnification to directors and officers in terms
sufficiently broad to permit such indemnification under some circumstances for
liabilities, including reimbursement for expenses incurred, arising under the
Securities Act of 1933, as amended. To the extent that indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant under the foregoing
provisions, the Company has been advised that in the opinion of the Securities
and Exchange Commission indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. Article V,
Section 1, of the Company bylaws provides for mandatory indemnification of its
directors to the maximum extent permitted by the Wyoming Corporation Act and
permissible indemnification of officers and employees.
Organization Within Last Five Years.
Frank J. Weinstock may be considered a promoter. We have
entered into a five year employment agreement with Mr. Weinstock
at an annual compensation of $ 150,000 beginning November 1, 1999.
Description of Business.
Strategic Partners, Inc. was created to provide wide ranging
financial services to successful private companies who are considering the
public equity market as a means of enhancing their expansion and growth. Our
officers and directors have over 50 years experience in
equity financing and the public stock markets. With the continuing
consolidation of national brokerage organizations and investment banking
institutions access to the equity markets is limited to only the largest
multinational corporations. At the same time the meteoric rise in the
internet as a trading and investment medium has changed the complexion
of trading securities and investments forever.
10
Small successful private companies which could utilize equity capital to
produce and accelerate earnings are excluded from the major firms because of
their size. Their relatively small capital requirements do not qualify them
for traditional entry into the national equity markets. The recent surge in
equity offerings by internet related companies has meant that many
quality private companies are being ignored by the traditional investment
banking organizations because they do not have a thriving business whose name
ends in ".com". This exclusion from the nation's equity markets stifles the
expansion and potential growth of many emerging companies who may have
outstanding internal growth rates and profitability but are being eliminated
because they are not engaged in e-commerce. Strategic Partners, Inc.
intends to show such companies the means by which they can access investment
capital. We will provide professional advice to the principals of
these companies as to the proper procedure for taking advantage of the
potential benefits while avoiding the inherent risks of the equity
marketplace.
Strategic Partners, Inc. will establish a national network of
broker-dealers, market makers, venture capitalists and investors interested
in assisting well managed companies to access the equity markets and attain
greater success. In addition the Company is developing skills in using the
power of the internet as a way of communicating investment opportunities to
millions of potential investors.
This network will consist of representatives from regional
brokerage houses and individual accredited investors who share
the Company's belief that the equity marketplace can provide a significant
benefit to emerging companies which have a successful history of operations
but need additional capital to achieve their true potential. The Company
will provide an interface between this network and the companies seeking
access to the national equity markets. Many companies who could benefit
from access to capital sources have no idea of how to gain acceptance or
be effective once operating in the equity market place.
Many companies are unaware of the new opportunities available every day for
accessing investment capital by use of the internet. We were organized
to provide businesses with competent and professional advice on the
equity market place and assist those companies in benefitting from access to
that resource. We intend to engage in the business of investment
banking. This business will consist of services to clients for fees. We
intend to provide services to clients who are planning on becoming
public companies either through initial public offerings or mergers with
existing public companies.
We will develop relationships with ongoing financial
organizations, in addition to marketing a unique concept on the internet and
will charge fees for other services rendered. We intend to establish
a website that will advertise the existence of the Company and the
services we will provide. We have registered the domain name
"strategic-partners-inc.com" for this purpose. We intend to
solicit business through referrals by existing persons or entities known
personally to our officers and directors.
We will initially be at a competitive disadvantage as it is a
new company and has no track record of providing such services to business
11
clients. Our directors have individually and collectively
extensive years of operating history with an impressive track record of being
success oriented in the financial marketplace. The expertise, skills and
talents of these individuals will help to create a stronger and healthier
Company during it's embryonic development stages. There are many firms engaged
in the same business who are larger, more well established and who have a
base of existing clients and referral sources. We intend to compete
against these other businesses by offering high quality services at
competitive prices.
Client fees earned by us will be predicated upon performance.
Providing capital resources to assist companies in obtaining funds by
which to conduct business operations will be a primary function. In such
cases, until we produce the desired result, it will be required
to pay its operating overhead. The time to achieve such a revenue stream
will vary. We expect to begin generating cash flow between three
to nine months from the conclusion of this offering. We will use
written agreements to contract for its services and will collect a portion
of its fees in advance to alleviate collection problems. Initially, until a
track record is established, it is likely that we will engage in
selective activities involving only a few clients.
We will use the experience of our officers and directors to
screen prospective clients so that management's time will be devoted to those
projects where there is a high likelihood of success. We have
entered into a five year management contract with Frank J. Weinstock the
President. This will help insure that the services of Mr. Weinstock
will be available on a long term basis. We intend to build a strong
and reputable organization employing proven professionals capable of servicing
all components of our business. It will be difficult to obtain the
services of other professionals until we have reached the point of having
sufficient income to offer competitive salaries and benefits to qualified
persons.
There is no governmental regulation of the investment banking industry
and thus no governmental approvals are needed to engage in business. Our
services will initially be limited to advice and analysis of a
client's position relative to its chances of success in the public market. We
know of no plans to regulate the dispensing of business advice to
clients in the area of finance and structure of offerings to the public by
its clients.
During its initial stages we raised money from private
investors for operations. We have engaged in extensive research in the
last 18 months to assemble a business strategy enabling us to stay
abreast of changes occurring in the public markets and assessing the impact
of the internet on the securities business.
There are no environmental laws that directly affect our business and
thus we do not face any cost of compliance.
We presently employ two persons on a full time basis, the
President Frank J. Weinstock and the Secretary, Trish R. Francis.
There are no other current employees.
We plan to file reports with the SEC following the offering on
Form 10-K for annual reports and Form 10-Q for quarterly reports. Copies of
the annual report will be mailed to the shareholders.
12
Management's Discussion and Analysis of the Plan of Operation
If we sell the maximum units that are being registered under
the registration statement we will have sufficient cash to operate
for the next 12 months. If less is sold the scale of operations will be scaled
down accordingly. If additional funds are needed the Company may resort to
soliciting funds from accredited investors. If the maximum units are sold the
Company will lease offices and purchase adequate equipment to facilitate
business operations. The budget for such an operation is set forth in the use
of proceeds section of the prospectus. We will consider hiring
additional professional assistance on an "as needed" basis. We will
hire a speciality firm to design an appropriate website.
Description of Property.
We do not own any material property. It leases its
current office on a month to month basis from Valley N' Shores at the rate of
$ 900 per month. The President, Mr. Weinstock owns office furniture,
telephones, computers and fax and other related equipment which he allows
us to use at no cost.
Certain Relationships and Related Transactions.
Describe any transaction during past fiscal year or any proposed
transaction that exceeds $ 60,000 with any officer, director, holder of 5% or
more of stock, any family member of any of this group.
Since inception the Company has issued 50,000 shares valued at $ 12,500
to the Lance Kerr Law Office for services and 6,000 shares valued at $ 1,500
to Trish R. Francis for services.
Market for Common Equity and Related Stockholder Matters.
There is currently no trading market for our shares. We
plans to apply for trading privileges in the near future.
Executive Compensation.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth the compensation earned by the Executive
Officers which includes only the Chief Executive Officer.
13
SUMMARY COMPENSATION TABLE
Long Term
1999 Annual Compensation
Compensation Awards
Number of
Securities
Underlying
Name and Principal Position(s) Salary Bonus Options
Frank J. Weinstock...................$75,000(1) $ 0 0
President, Chief Executive
Officer and Chairman of
the Board of Directors
(1) Mr. Weinstock's compensation was $ 75,000 for the ten months ended
October 31, 1999. On November 1, 1999 Mr. Weinstock's compensation
increased to $ 150,000 per year starting November 1, 1999 under a
five year management contract.
Stock Options and Stock Appreciation Rights
We have granted no options and has no plans for doing so in the
near future. We have granted no stock appreciation rights has no plans
for doing so in the near future.
Financial Statements.
Audited Financial Statements for the Company are attached as
Pages F-1 to F-11
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
October 31, 1999 and December 31, 1998
F-1
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . F 3
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . F 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . F 5
Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . . F 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . F 8
Notes to the Financial Statements. . . . . . . . . . . . . . . . . . F 9
F-2
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Strategic Partners, Inc.
(A Development Stage Company)
Oxnard, California
We have audited the accompanying balance sheets of Strategic Partners,
Inc. (a development stage company) as of October 31, 1999 and December 31,
1998
and the related statements of operations, stockholders' equity (deficit) and
cash flows for the ten months ended October 31, 1999 and from inception on
September 25, 1998 through December 31, 1998 and October 31, 1999. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Strategic
Partners, Inc. (a development stage company) as of October 31, 1999 and
December 31, 1998 and the results of its operations and its cash flows for
the ten months ended October 31, 1999 and from inception on September 25,
1998 through December 31, 1998 and October 31, 1999 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 3 to the
financial statements, the Company is a development stage company with no
operating capital which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
December 21, 1999
F-3
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Balance Sheets
October 31, December 31,
1999 1998
CURRENT ASSETS
Cash $ 14,024 $ 910
------ -----
Total Current Assets 14,024 910
------ -----
TOTAL ASSETS $ 14,024 $ 910
====== =====
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 38,058 $ -
------ -----
Total Current Liabilities 38,058 -
------ -----
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value;
10,000,000 shares authorized;
569,000 and 266,000 shares issued
and outstanding, respectively 569 266
Additional paid-in capital 559,297 265,200
Deficit accumulated during
the development stage (583,900) (264,556)
--------- ---------
Total Stockholders'
Equity (Deficit) (24,034) 910
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT) $ 14,024 $ 910
======== ========
The accompanying notes are an integral part of these financial statements.
F-4
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Operations
From
For the Inception on
Ten Months September 25,
Ended 1998 Through
October 31, December 31, October 31,
1999 1998 1999
REVENUES $ - $ - $ -
EXPENSES
General and
administrative 319,887 264,556 584,443
---------- --------- ---------
(LOSS) FROM OPERATIONS (319,887) (264,556) (584,443)
OTHER INCOME
Miscellaneous income 543 - 543
---------- -------- --------
Total Other Income 543 - 543
---------- -------- --------
NET (LOSS) $ (319,344) $ (264,556) $ (583,900)
========= ======== =========
BASIC (LOSS)
PER SHARE $ (0.91) $ (1.27)
========= ========
The accompanying notes are an integral part of these financial statements.
F-5
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid-In Development
Shares Amount Shares Amount Capital Stage
At Inception on
September 25, 1998 - $ - $ $ - $ -
Common stock issued
for services at
$1.00 per share,
October 9, 1998 - - 215,000 215 214,785 -
Common stock issued
for cash at $1.00
per share, October
12, 1998 - - 2,000 2 1,998 -
Common stock issued
for cash and services
at $1.00 per share,
October 13, 1998 - - 4,000 4 3,996 -
Common stock issued
for services at
$1.00 per share,
October 19, 1998 - - 5,000 5 4,995 -
Common stock issued
for cash and services
at $1.00 per share,
October 30, 1998 - - 10,000 10 9,990 -
Common stock issued
for cash at $1.00
per share,
November 17, 1998 - - 6,000 6 5,994 -
Common stock issued
for cash at $1.00
per share,
November 24, 1998 - - 3,000 3 2,997 -
Common stock issued
for cash, services
and expenses at
$1.00 per share,
December 8, 1998 - - 21,000 21 20,979 -
Less stock
offering costs - - - - (534) -
Net (loss) for
the period ended
December 31, 1998 - - - - - (264,556)
----- ----- ------- ---- --------- ---------
Balance, December
31, 1998 - - 266,000 266 265,200 (264,556)
Common stock issued
for expenses at
$1.00 per share,
January 5, 1999 - - 300 - 300 -
Common stock issued
for cash and
services at
$1.00 per share,
January 16, 1999 - - 12,50 13 12,487 -
Common stock issued
for cash at $1.00
per share,
January 20, 1999 - - 20,000 20 19,980 -
Common stock issued
for cash at $1.00
per share,
February 3, 1999 - - 1,000 1 999 -
Common stock issued
for cash at
$1.00 per share,
February 15, 1999 - - 2,200 2 2,198 -
--- ---- ----- ---- -------- ----------
Balance Forward - $ 302,000 $ 302 $ 301,164 (264,556)
---- ----- ----- ---- ------- ----------
The accompanying notes are an integral part of these financial statements.
F -6
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid-In Development
Shares Amount Shares Amount Capital Stage
Balance Forward - $ - 302,000 $ 302 $ 301,164 $ (264,556)
Common stock issued
for cash at
$1.00 per share,
February 22, 1999 - - 2,000 2 1,998 -
Common stock issued
for cash at
$1.00 per share,
March 12, 1999 - - 6,400 6 6,394 -
Common stock issued
for cash and
services at
$1.00 per share,
March 26, 1999 - - 27,500 27 27,473 -
Common stock issued
for cash at
$1.00 per share,
May 10, 1999 - - 1,000 1 999 -
Common stock issued
for cash and
services at
$1.00 per share,
May 19, 1999 - - 6,000 6 5,994 -
Common stock issued
for services
at $1.00 per share,
July 12, 1999 - - 2,000 2 1,998 -
Common stock issued
for services
at $1.00 per share,
July 27, 1999 - - 1,600 2 1,598 -
Common stock issued
for cash and services
at $1.00 per share,
August 3, 1999 - - 1,000 1 999 -
Common stock issued
for services
at $1.00 per share,
August 10, 1999 - - 1,500 2 1,498 -
Common stock issued
for cash at
$1.00 per share,
September 17, 1999 - - 12,500 12 12,488 -
Common stock issued
for cash and
services at
$1.00 per share,
October 1, 1999 - - 193,500 194 193,306 -
Common stock issued
for cash and services
at $1.00 per share,
October 26, 1999 - - 11,000 11 10,989 -
Common stock issued
for services at
$1.00 per share,
October 29, 1999 - - 1,000 1 999 -
Less stock
offering costs - - - - (8,600) -
Net (loss) for
the period ended
October 31, 1999 - - - - - (319,344)
---- ---- ----- ----- -------- ---------
Balance,
October 31, 1999 - $ - 569,000 $ 569 $ 559,297 $ (583,900)
===== ==== ======= ======== ========= ============
The accompanying notes are an integral part of these financial statements.
F - 7
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Cash Flows
From
For the Inception on
Ten Months September 25,
Ended 1998 Through
October 31, December 31, October 31,
1999 1998 1999
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss from operations $ (319,344) $ (264,556) $ (583,900)
Adjustments to
reconcile net loss to
net cash (used)
by operating activities:
Common stock issued
for services 193,000 231,450 424,450
Changes in assets
and liabilities:
Increase (decrease)
in accounts payable 38,058 - 38,058
-------- ------- --------
Net Cash (Used)
by Operating Activities (88,286) (33,106) (121,392)
-------- ------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
-------- -------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common
stock for cash 110,000 34,550 144,550
Stock offering costs (8,600) (534) (9,134)
--------- --------- ----------
Net Cash Provided
by Operating Activities 101,400 34,016 135,416
---------- --------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 13,114 910 14,024
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 910 - -
---------- --------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 14,024 $ 910 $ 14,024
========== ========== ==========
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING
ACTIVITIES
Common stock issued
for services $ 193,000 $ 231,450 $ 424,450
The accompanying notes are an integral part of these financial statements.
F - 8
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Notes to the Financial Statements
October 31, 1999 and December 31, 1998
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Strategic Partners, Inc. (a development stage company) (the Company)
was organized under the laws of the State of Wyoming on September 25, 1998.
The purpose of the Company is to engage in the business of investment banking.
The Company has had no active operations from inception. The Company has
selected a December 31 year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
b. Provision for Taxes
No provision for income taxes has been made due to the inactive status
of the Company. The Company has a net operating loss carryover at October 31,
1999 of approximately $584,000 which expires in 2019. The potential tax
benefit of the loss carryover is offset by a valuation allowance of the same
amount.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
e. Revenue Recognition Policy
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
F - 9
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Notes to the Financial Statements
October 31, 1999 and December 31, 1998
NOTE 3 - 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. The Company has not established revenues
sufficient to cover its operating costs and allow it to continue as a going
concern. It is the intent of the Company to earn revenues from investment
banking services. Until sufficient revenues are earned to operate
profitably, management intends to issue additional shares of its common stock
for cash, services, or expenses paid on behalf of the Company.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company pays rent of $900 per month on a month-to-month basis for
office space in the personal residence of a related party. Rent expense for
the period ended October 31, 1999 and December 31, 1998 was $9,900 and $3,600,
respectively.
During October 1999, the Company signed an employment agreement with
its Chief Executive Officer, whereby, the Company agreed to pay him $150,000
per year for five years.
The Company agreed to pay its Secretary $2,500 per month as
compensation.
NOTE 5 - BASIC LOSS PER SHARE
The following is an illustration of the reconciliation of the
numerators and denominators of the basic loss per share calculation:
From
For the Inception on
Ten Months September 25,
Ended 1998 Through
October 31, December 31,
1999 1998
Net loss (numerator) $ (319,344) $ (264,556)
--------- ---------
Weighted average shares outstanding
(denominator) 352,798 207,876
--------- ---------
Basic loss per share $ (0.91) $ (1.27)
========= =========
F - 10
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Notes to the Financial Statements
October 31, 1999 and December 31, 1998
NOTE 6 - COMMITMENTS AND CONTINGENCIES
During October 1999, the board of directors authorized the
officers of the Company to execute a five year employment contract
with the Chief Executive officer (CEO) of the Company whereby the CEO
will be paid $150,000 per annum.
F - 11
14
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
There are no changes in or disagreements with any prior accountant. The
current accountant was hired in 1999 to audit the Company's books and records
from inception.
Until --------- (90 days after the effective date of the registrations
statement) all U.S. Dealers effecting transactions in the registered
securities may be required to deliver a prospectus.
END PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Section 145 of the Wyoming Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under some circumstances for liabilities, including
reimbursement for expenses incurred, arising under the Securities Act of 1933,
as amended. To the extent that indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant under the foregoing provisions, the Company has
been advised that in the opinion of the Securities and Exchange Commission
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. Article V, Section 1, of the Company
bylaws provides for mandatory indemnification of its directors to the
maximum extent permitted by the Wyoming Corporation Law and permissible
indemnification of officers and employees.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than
underwriting discounts, payable by the Registrant in connection with the offer
and sale of the common stock being registered. All amounts are estimates
except the registration fee.
Registration fee........................................... $ 167
NASD filing fee............................................ 100
Blue Sky/NASD fees and expenses (including legal fees)..... 15,000
Accounting fees and expenses............................... 5,000
Other legal fees and expenses.............................. 10,000
Printing and engraving..................................... 12,500
Miscellaneous.............................................. 5,000
Public Relations and Distribution.......................... 20,000
----------
Total.................................................. $ 67,767
===========
Item 26. Recent Sales of Unregistered Securities.
The Company issued and sold 569,000 shares of our common stock to
founders and private investors for cash consideration of and services
valued at $ 569,000. The Company paid 9,100 shares as commissions to
finders for referring investors to the Company. Other than the finders
fees none of the foregoing transactions involved any underwriters,
underwriting discounts or commissions, or any public offering. The
15
Company has been advised that each transaction was exempt from the
registration requirements of the Securities Act by virtue of Section
4(2) thereof and Regulation D promulgated thereunder. The recipients in
such transaction represented their intention to acquire the securities
for investment only and not with a view to or for sale in connection
with any distribution thereof. Appropriate legends were affixed to
the share certificates issued in such transactions. All recipients
had adequate access, through their relationships with the Company, to
obtain information about the Company.
Details of the private sale of securities is set forth in the
Financial Statements at pages F6-F7.
Item 27. Exhibits.
Exhibit
No. Exhibit Name
3.1 Articles of Incorporation
3.2 By-laws
4.2 Specimen Common Stock Certificate
5.1 Opinion of Lance N. Kerr Law Office
10.1 Management Contract - Frank J. Weinstock
23.1 Consent of Jones, Jensen & Company, independent auditors
23.2 Consent of Lance. N. Kerr Law Office (included in Exhibit 5.1)
27.1 Financial Data Schedule