UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
RIDGEFIELD INDUSTRIES CORP.
--------------------------------------------
(Name of Small Business Issuer in its charter)
Delaware 04-3616486
------------------------------- -------------------------------
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number
524 Westgate Drive, Edison, New Jersey 08820
--------------------------------------------------------
(Address of principal executive offices including Zip Code)
(908) 412-9273
--------------------------
(Issuer's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.0001 Par Value
-------------------------------
(Title of Class)
TABLE OF CONTENTS
Page No.
--------
PART I
ITEM 1. Description of Business....................................... 3
ITEM 2. Plan of Operation............................................. 11
ITEM 3. Description of Property....................................... 18
ITEM 4. Security Ownership of Certain Beneficial Owners and
Management.................................................... 18
ITEM 5. Directors, Executive Officers, Promoters and Control
Persons....................................................... 18
ITEM 6. Executive Compensation........................................ 23
ITEM 7. Certain Relationship and Related Transactions................. 23
ITEM 8. Description of Securities..................................... 24
PART II
ITEM 1. Market Price of And Dividends on the Registrant's
Common Equity and Related Stockholder Matters................. 26
ITEM 2. Legal Proceedings............................................. 27
ITEM 3. Changes in and Disagreements with Accountants................. 28
ITEM 4. Recent Sales of Unregistered Securities....................... 28
ITEM 5. Indemnification of Directors and Officers..................... 28
PART F/S
ITEM 1. Financial Statements and Exhibits............................. 29
SIGNATURE
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Since its inception on March 8, 2002, Ridgefield Industries Corp., a Delaware
corporation (the "Company") has not engaged in any operations other than
organizational matters. It was formed specifically to be a "blank check"
or "clean public shell" corporation, for the purpose of either merging with
or acquiring an operating company with operating history and assets. The
Company is a "clean public shell" because it has no operations to date and
has no debt liabilities. The Company has not been involved in any litigation
nor has it had any prior regulatory problems or business failures. We believe
that an attraction of the Company as a merger partner or acquisition vehicle
will be its status as a reporting company under the Securities Exchange Act
of 1934 without any history of prior business failures, litigation or prior
regulatory problems.
The executive offices of the Company are located at 524 Westgate Drive,
Edison, New Jersey 08820. Its telephone number is (908)412-9273. The Company's
sole officer and the sole director is Mr. Jianjun Zhang. Mr. Zhang was not
the original incorporator of the Company. The original director of the
Company retained the services of a third party to incorporate the Company in
the State of Delaware. Subsequent to incorporation, the original director
resigned as director and Mr. Zhang was appointed as President, Treasurer,
Secretary and Director of the Company. Mr. Zhang continues as President,
Treasurer, Secretary and Director. Mr. Zhang is the sole shareholder of
Waywood Investment Limited, which is the sole shareholder of the Company.
As to date Mr. Zhang has not commenced implementation of the Company's
principal business purpose, which is to locate and negotiate with a business
entity for the combination of that target company with the Company. The
combination will normally take the form of a merger, stock-for-stock exchange
or stock-for-assets exchange. In most instances the target company will wish
to structure the business combination to be within the definition of a
tax-free Reorganization under Section 351 or Section 368 of the Interna
Revenue Code of 1986, as amended. Mr. Zhang, the sole officer and director
of the Company, in any capacity, including as the principal of Waywood
Investment Ltd., has not had any preliminary contact or discussions with, and
there are no present plans, proposals, arrangements or understandings with,
any representatives of the owners of any business or company regarding the
possibility of a acquisition or merger transaction contemplated in this
registration statement. The Company cannot give any assurance that it will
be successful in locating or negotiating with any target company.
The Company's plans are in the conceptual stage only. There is no
relationship between the particular name of the Company and the Company's
intended business plan. If successful in completing a merger or acquisition,
the Company expects that it would change its name to reflect the marketing
goals of the business combination.
ASPECTS OF A REPORTING COMPANY
There are certain perceived benefits to being a reporting company.
These are commonly thought to include the following:
* increased visibility in the financial community;
* compliance with a requirement for admission to quotation on the OTC
Bulletin Board maintained by the NASD;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising of capital;
* compensation of key employees through stock options for which there
may be a market valuation;
* enhanced corporate image.
There are also certain perceived disadvantages to being a reporting
company. These are commonly thought to include the following:
* requirement for audited financial statements;
* required publication of corporate information;
* required filings of periodic and episodic reports with the Securities
and Exchange Commission;
* increased rules and regulations governing management, corporate
activities and shareholder relations.
COMPARISON WITH INITIAL PUBLIC OFFERING
Certain private companies may find a business combination more attractive
than an initial public offering of their securities. Reasons for this ma
include the following:
* inability to obtain underwriter;
* possible higher costs, fees and expenses;
* possible delays in the public offering process;
* greater dilution of their outstanding securities.
Certain private companies may find a business combination less attractive
than an initial public offering of their securities. Reasons for this may
include the following:
* no investment capital raised through a business combination;
* no underwriter support of after-market trading.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
* a company for which a primary purpose of becoming public is the use of
its securities for the acquisition of assets or businesses;
* a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to it;
* a company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
* a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
* a foreign company which may wish an initial entry into the United
States securities market;
* a special situation company, such as a company seeking a public
market to satisfy redemption requirements under a qualified Employee Stock
Option Plan;
* a company seeking one or more of the other perceived benefits of
becoming a public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of
its own management and board of directors. No assurances can be given that
the Company will be able to enter into a business combination, as to the
terms of a business combination, or as to the nature of the target company.
The proposed business activities described herein classify the Company
as a "blank check" company. The Securities and Exchange Commission and
certain states have enacted statutes, rules and regulations limiting the
sale of securities of blank check companies. The Company will not issue or
sell additional shares or take any efforts to cause a market to develop in
the Company's securities until such time as the Company has successfully
implemented its business plan and it is no longer classified as a blank check
company. Neither the Company nor any of its affiliated companies, promoters,
or associates own or control any websites.
The sole shareholder of the Company has executed and delivered an
agreement affirming that it will not sell or otherwise transfer its shares
except in connection with or following a business combination resulting in
the Company no longer being classified as a blank check company.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under
the Securities Exchange Act of 1934. The Company will continue to file all
reports required of it under the Exchange Act until a business combination
has occurred. A business combination will normally result in a change in
control and management of the Company. Since a benefit of a business
combination with the Company would normally be considered its status as a
reporting company, it is anticipated that the Company will continue to file
reports under the Exchange Act following a business combination. No assurance
can be given that this will occur or, if it does, for how long.
Mr. Jianjun Zhang is the sole officer and director of the Company and the
sole shareholder of the Company's sole shareholder, Waywood Investment Limited,
a British Virgin Islands corporation. The Company has no full time employees
nor are there any other persons than Mr. Zhang who devote any of their time
to its affairs. All references herein to management of the Company are to
Mr. Zhang. The inability at any time of Mr. Zhang to devote sufficient
attention to the Company could have a material adverse impact on its operations.
GLOSSARY
"Blank Check" Company
- ---------------------
As used herein, a "blank check" company is a development stage company that
has no specific business plan or purpose or has indicated that its business
plan is to engage in a merger or acquisition with an unidentified company
or companies.
Business Combination
- --------------------
Normally a merger, stock-for-stock exchange or stock-for-assets exchange
between the Registrant and a target company.
The Company or the Registrant
- -----------------------------
The corporation whose common stock is the subject of this Registration
Statement.
Exchange Act
- ------------
The Securities Exchange Act of 1934, as amended.
Penny Stock
- -----------
Security as defined in Rule 3a51-1 of the Exchange Act, a "penny stock"
security is any equity security other than a security (i) that is a reported
security (ii) that is issued by an investment company (iii) that is a put
or call issued by the Option Clearing Corporation (iv) that has a price of
$5.00 or more (except for purposes of Rule 419 of the Securities Act) (v)
that is registered on a national securities exchange (vi) that is authorized
for quotation on the Nasdaq Stock Market, unless other provisions of
Rule 3a51-1 are not satisfied, or (vii) that is issued by an issuer with
(a) net tangible assets in excess of $2,000,000, if in continuous
operation for more than three years or 5,000,000 if in operation for less
than three years or (b) average revenue of at least $6,000,000 for the last
three years.
Securities Act
- --------------
The Securities Act of 1933, as amended.
RISK FACTORS
The Company's business is subject to numerous risk factors, including
the following:
THE COMPANY HAS NO OPERATING HISTORY AND HAS NO REVENUE AND NO ASSETS.
The Company has had no operating history nor any revenues or earnings from
operations. The Company has neither assets or nor financial resources. The
Company has operated at a loss to date and will, in all likelihood, continue
to sustain operating expenses without corresponding revenues, at least until
the consummation of a business combination. See PART F/S: "FINANCIAL
STATEMENTS". Waywood Investment Ltd. has agreed to pay all expenses incurred
by the Company until a business combination without repayment by the Company.
Waywood is the sole shareholder of the Company. There is no assurance that
the Company will ever be profitable.
THE COMPANY HAS ONLY ONE DIRECTOR AND ONE OFFICER. The Company's president,
its sole officer, is Mr. Jianjun Zhang who is also its sole director and the
controlling shareholder of its sole shareholder. Because management consists
of only one person, the Company does not benefit from multiple judgments that
a greater number of directors or officers would provide and the Company will
rely completely on the judgment of its sole officer and director when
selecting a target company. The decision to enter into a business combination
will likely be made without detailed feasibility studies, independent
analysis, market surveys or similar information which, if the Company ha
more funds available to it, would be desirable. Mr. Zhang anticipates
devoting only a limited amount of time per month to the business of the
Company. Mr. Zhang has not entered into a written employment agreement with
the Company and he is not expected to do so. The Company has not obtained
key man life insurance on Mr. Zhang. The loss of the services of Mr. Zhang
would adversely affect development of the Company's business and its likelihood
of continuing operations.
CONFLICTS OF INTEREST. Mr. Zhang, the Company's president, participates
in other business ventures which may compete directly with the Company.
Additional conflicts of interest and non-arms length transactions may also
arise in the future. The Company has adopted a policy that it will not enter
into a business combination with any entity in which any member of management
serves as an officer, director or partner, or in which such person or such
person's affiliates or associates hold any ownership interest. The terms of
business combination may include such terms as Mr. Zhang remaining a director
or officer of the Company. The terms of a business combination may provide
for a payment by cash or otherwise to Mr. Zhang for the purchase or
retirement of all or part of its common stock of the Company by a target
company or for services rendered incident to or following a business
combination. Mr. Zhang would directly benefit from such employment or
payment. Such benefits may influence Mr. Zhang's choice of a target company.
The Certificate of Incorporation of the Company provides that the Company
may indemnify officers and/or directors of the Company for liabilities,
which can include liabilities arising under the securities laws. Therefore,
assets of the Company could be used or attached to satisfy any liabilities
subject to such indemnification. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS--Conflicts of Interest."
THE PROPOSED OPERATIONS OF THE COMPANY ARE SPECULATIVE. The success of
the Company's proposed plan of operation will depend to a great extent on
the operations, financial condition and management of the identified target
company. While business combinations with entities having established
operating histories are preferred, there can be no assurance that the Company
will be successful in locating candidates meeting such criteria. In the
event the Company completes a business combination the success of the
Company's operations will be dependent upon management of the target
company and numerous other factors beyond the Company's control. There is
no assurance that the Company can identify a target company and consummate
a business combination.
PURCHASE OF PENNY STOCKS CAN BE RISKY. The Company's securities meet
the definition of Penny Stock as found in Rule 3a51-1 of the Securities
Exchange Act of 1934. The Commission has adopted Rule 15g-9 which
established sales practice requirements for certain low price securities.
Unless the transaction is exempt, it shall be unlawful for a broker or
dealer to sell a Penny Stock to, or to effect the purchase of a Penny Stock
by, any person unless prior to the transaction: (i) The broker or dealer has
approved the person's account for transactions in Penny Stock pursuant to
this rule and (ii) the broker or dealer has received from the person a
written agreement to the transaction setting forth the identity and quantity
of the Penny Stock to be purchased. In order to approve a person's account
for transactions in Penny Stock, the broker or dealer must: (a) obtain from
the person information concerning the person's financial situation,
investment experience, and investment objectives; (b) reasonably determine
that transactions in Penny Stock are suitable for that person, and that the
person has sufficient knowledge and experience in financial matters that the
person reasonably may be expected to be capable of evaluating the risks of
transactions in Penny Stock; (c) deliver to the person a written statement
setting forth the basis on which the broker or dealer made the determination
(i) stating in a highlighted format that it is unlawful for the broker or
dealer to affect a transaction in Penny Stock unless the broker or dealer
has received, prior to the transaction, a written agreement to the transaction
from the person; and (ii) stating in a highlighted format immediately
preceding the customer signature line that the broker or dealer is
required to provide the person with the written statement; and (iii) the
person should not sign and return the written statement to the broker or
dealer if it does not accurately reflect the person's financial situation,
investment experience, and investment objectives; and (d) receive from the
person a manually signed and dated copy of the written statement. It is also
required that disclosure be made as to the risks of investing in Penny Stock
and the commissions payable to the broker-dealer, as well as current price
quotations and the remedies and rights available in cases of fraud in Penny
Stock transactions. Statements, on a monthly basis, must be sent to the
investor listing recent prices for the Penny Stock and information on the
limited market.
THERE IS A SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES
AND COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of
business entities. A large number of established and well-financed entities,
including venture capital firms, are active in mergers and acquisitions of
companies which may be merger or acquisition target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company
and, consequently, the Company will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete with numerous
other small public companies in seeking merger or acquisition candidates.
THERE IS NO AGREEMENT FOR A BUSINESS COMBINATION AND NO MINIMUM
REQUIREMENTS FOR BUSINESS COMBINATION. The Company has no current
arrangement, agreement or understanding with respect to engaging in a
business combination with a specific entity. There can be no assurance that
the Company will be successful in identifying and evaluating suitable
business opportunities or in concluding a business combination. No
particular industry or specific business within an industry has been
selected for a target company. The Company has not established a specific
length of operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target company to have
achieved, or without which the Company would not consider a business
combination with such business entity. Accordingly, the Company may enter into
a business combination with a business entity having no significant operating
history, losses, limited or no potential for immediate earnings, limited
assets, negative net worth or other negative characteristics. There is no
assurance that the Company will be able to negotiate a business combination
on terms favorable to the Company.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Pursuant to the
requirements of Section 13 of the Exchange Act, the Company is required to
provide certain information about significant acquisitions including audited
financial statements of the acquired company. These audited financial
statements must be furnished within 75 days following the effective date of
a business combination. Obtaining audited financial statements are the
economic responsibility of the target company. The additional time and costs
that may be incurred by some potential target companies to prepare such
financial statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company. Acquisition
prospects that do not have or are unable to obtain the required audited
statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable. Notwithstanding a
target company's agreement to obtain audited financial statements within the
required time frame, such audited financials may not be available to the
Company at the time of effecting a business combination. In cases where
audited financials are unavailable, the Company will have to rely upon
unaudited information that has not been verified by outside auditors in
making its decision to engage in a transaction with the business entity. This
risk increases the prospect that a business combination with such a business
entity might prove to be an unfavorable one for the Company.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the
Company. Even in the event demand exists for a transaction of the type
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
REGULATION UNDER INVESTMENT COMPANY ACT. In the event the Company
engages in business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be subject
to regulation under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company and could be
expected to incur significant registration and compliance costs. The
Company has obtained no formal determination from the Securities and
Exchange Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act could
subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a target company obtaining a controlling interest in
the Company. As a condition of the business combination agreement, Waywood
Investment Ltd., the sole shareholder of the Company, may agree to sell or
transfer all or a portion of its Company's common stock so to provide the
target company with all or majority control. The resulting change in control
of the Company will likely result in removal of the present officer and
director of the Company and a corresponding reduction in or elimination of
his participation in the future affairs of the Company.
POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS COMBINATION. A
business combination normally will involve the issuance of a significant
number of additional shares. Depending upon the value of the assets acquired
in such business combination, the per share value of the Company's common
stock may increase or decrease, perhaps significantly.
ADDITIONAL RISKS RELATING TO DOING BUSINESS IN A FOREIGN COUNTRY.
The Company may effectuate a business combination with a merger target whose
business operations or even headquarters, place of formation or primary place
of business are located outside the United States. In such event, the Company
may face the significant additional risks associated with doing business in
that country. In addition to the language barriers, different presentations
of financial information, different business practices, and other cultural
differences and barriers that may make it difficult to evaluate such a merger
target, ongoing business risks result from the international political
situation, uncertain legal systems and applications of law, prejudice against
foreigners, corrupt practices, uncertain economic policies and potential
political and economic instability that may be exacerbated in various foreign
countries.
TAXATION. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the Company may
undertake. Currently, such transactions may be structured so as to result
in tax-free treatment to both companies, pursuant to various federal and
state tax provisions. The Company intends to structure any business
combination so as to minimize the federal and state tax consequences to
both the Company and the target company. However, there can be no
assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain
the intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal
and state taxes which may have an adverse effect on both parties to the
transaction.
ITEM 2. PLAN OF OPERATION
MANAGEMENT OF THE COMPANY
The Company has no full time employees. Mr. Jianjun Zhang is the
Company's sole officer and sole director. Mr. Zhang is also the controlling
shareholder of Waywood Investment Ltd., which is the sole shareholder of
the Company. Mr. Zhang, as president of the Company, has agreed to allocate
a limited portion of his time to the activities of the Company after the
effective date of the registration statement without compensation. Potential
conflicts may arise with respect to the limited time commitment by Mr. Zhang
and the potential demands of the Company's activities.
The amount of time spent by Mr. Zhang on the activities of the Company
is not predictable. Such time may vary widely from an extensive amount when
reviewing a target company and effecting a business combination to an
essentially quiet time when activities of management focus elsewhere, or
some amount in between. It is impossible to predict with any precision the
exact amount of time Mr. Zhang will actually be required to spend to locate
a suitable target company. Mr. Zhang estimates that the business plan of the
Company can be implemented by devoting approximately 10 to 25 hours per month
over the course of several months but such figure cannot be stated with
precision.
SEARCH FOR TARGET COMPANY
The Company was organized for the purpose of creating a corporate vehicle
to seek, investigate and, if such investigation warrants, acquire an interest
in one or more business opportunities presented to it by persons or firms
who or which desire to seek the perceived benefits of a reporting corporation.
As to date neither the Company's officer and director nor any promoter and
affiliate has engaged in any negotiations with any representatives of the
owners of any business or company regarding the possibility of a merger or
stock exchange between the Company and such other company.
The Company has entered into an agreement with Waywood Investment Ltd.,
the controlling shareholder of the Company, to supervise the search for
target companies as potential candidates for a business combination. The
agreement will continue until such time as the Company has effected a
business combination. Waywood Investment Ltd. has agreed to pay all
expenses of the Company without repayment until such time as a business
combination is effected. Mr. Jianjun Zhang, who is the sole officer and
director of the Company, is the sole officer and director and controlling
shareholder of Waywood Investment Ltd.
Waywood Investment Ltd. owns 5,000,000 shares of the Company's
common stock for which it paid a total of $500 in services, or $.0001,
par value, per share.
Waywood Investment Ltd. may only locate potential target companies
for the Company and is not authorized to enter into any agreement with a
potential target company binding the Company. The Company's agreement with
Waywood Investment Ltd. is not exclusive and Waywood Investment Ltd. has
entered into agreements with its other affiliated companies similar to the
Company on identical terms. Waywood Investment Ltd. may provide assistance
to target companies incident to and following a business combination, and
receive payment for such assistance from target companies.
The Company will not restrict its search to any specific business,
industry or geographical location, and the Company may participate in a
business venture of virtually any kind or nature. Management anticipates
that it will be able to participate in only one potential business venture
because the Company has no assets and no financial resources. This lack of
diversification should be considered a substantial risk to the shareholders
of the Company because it will not permit the Company to offset potential
losses from one venture against gains from another.
The Company will not restrict its search to any specific kind of
business entities, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially any stage
of its business life. It is impossible to predict at this time the status
of any business in which the Company may become engaged, in that such
business may need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which the Company
may offer.
SOURCES OF OPPORTUNITIES
Upon successful regulatory clearance of this registration statement on
Form 10-SB/12g, the Company anticipates that business opportunities will be
referred to it or to Waywood Investment Ltd. by various sources, including
Mr. Zhang, consultants, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company will
seek a potential business opportunity from all known sources, but will
rely principally on personal contacts of Mr. Zhang as well as indirect
associations between him and other business and professional people. We
cannot predict the number of individuals or companies who may approach
Mr. Zhang about the Company.
Waywood Investment Ltd., the sole shareholder of the Company, may enter
agreements with one or more third party consultants to assist it in locating
a target company. As is customary in the industry, Waywood Investment Ltd.
may pay a finder's fee for persons locating and introducing an acquisition
prospect. In the event the Company consummates a transaction with an entity
introduced by a finder, Waywood Investment Ltd. may compensate the finder
for the referral in the form of a finder's fee. If a finder's fee is paid,
it is anticipated that the finder's fee will be either in the form of the
restricted stock received by Waywood Investment Ltd. as part of the terms
of the proposed transaction, or in the form of cash paid by Waywood
Investment Ltd. The amount of any finder's fee (stock or cash, or any
combination thereof) will be subject to negotiation on an individual basis
and cannot be estimated at this time. But it will be in accordance with the
industry standards. Such fees are customarily between 1% and 5% of the size
of the transaction, based upon a sliding scale of the dollar amount involved.
These fees are typically in the range of 5% on a $1,000,000 transaction
ratably down to 1% in a $4,000,000 transaction. Waywood Investment Ltd. is
solely responsible for the costs and expenses of its activities in seeking a
potential target company, including any agreements with consultants, and the
Company has no obligation to pay any costs incurred or negotiated by Waywood
Investment Ltd.
As to date the Company has no plan and is not anticipated that any
finders' fees or other acquisition related compensation will be paid to
officers, directors or their affiliates or associates from revenues or other
funds of an acquisition or merger candidate, or by the issuance of debt or
equity of such an entity.
The Company does not currently plan to engage consultants or outside
advisors to locate potential merger or acquisition candidates. As to date
the Company's officers, directors, promoters, affiliates, or associates have
not had any preliminarily contact, agreements or understandings with any
consultant to provide services or with companies that are searching for
blank check companies with which to merge. Neither the Company nor Waywood
Investment Ltd. intends to have any such contact or relationship until after
the effective date of this registration statement and completion of the
comment period with the Securities and Exchange Commission. There are no
contracts or agreements between a consultant and any companies that are
searching for blank check companies with which to merge.
As to date no policy has been formulated regarding use of consultants
or outside advisors, the criteria to be used in selecting such consultants or
advisors, the services to be provided, the term of service, or regarding the
total amount of fees that may be paid. Although there are no current plans
or policy regarding the use of consultants, if Waywood Investment Ltd. did
determine to utilize the services of a consultant in the selection of a target
company, such consultant would likely be used to supplement the business
experience of management, such as accountants, technical experts, appraisers,
attorneys, or others. The consultant would be selected based on the type of
target company sought, the form and amount of compensation required by the
consultant, the years such consultant had been in business and rate of
success in matching target companies with acquiring companies. If a
consultant were used, Waywood Investment Ltd. would expect that any such
consultant would provide the Company with a selection of target companies,
would provide due diligence assistance for study of the target company,
would assist in negotiating the terms of a business combination, and would
serve to facilitate the negotiation process.
Mr. Zhang has not used any particular consultants or advisors on a
regular basis. He is not anticipated to recommend the consultants or
advisors he has used in the past to be hired by the Company. There are no
agreements that have been entered into by Mr. Zhang, Waywood Investment Ltd.
or any promoters or affiliates and target companies.
EVALUATION OF OPPORTUNITIES
The selection of a business opportunity in which to participate will be
complex and extremely risky. Management believes (but has not conducted any
research to confirm) that there are business entities seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and
complex. There is no assurance that the Company will be able to identify
and acquire any business opportunity which will ultimately prove to be
beneficial to the Company and its stockholders. If a merger or acquisition
prove unsuccessful, it is possible management of the Company may decide not
to pursue further acquisition activities and management may abandon its
activities and the Company may become dormant or be dissolved.
The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. What
the Company anticipates it will provide to owners of acquisition candidates,
however, is a controlling ownership interest in a reporting company without
incurring the cost and time required to conduct an initial public offering.
The Company has not conducted market research and is not aware of
statistical data to support the perceived benefits of a business
combination for the owners of a target company.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, Mr. Zhang. Mr. Zhang will be the key person in the search,
review and negotiation with potential acquisition or merger candidates. While
Mr. Zhang likely has no quantifiable experience in the businesses of any
particular target companies that may be reviewed, he has experience in
managing development stage companies, Mr. Zhang will rely primarily upon
his own efforts in accomplishing the business purposes of the Company.
In analyzing prospective business opportunities, Mr. Zhang will consider
the following matters:
(i) The available technical, financial and managerial resources;
(ii) Working capital and other financial requirements of the target;
(iii) The target's history of operations, if any;
(iv) The target's prospects for the future;
(v) The present and expected competition in the target's industry;
(vi) The quality and experience of management services which may be
available and the depth of that management within the target;
(vii) The potential for further research, development or exploration in
the target's industry;
(viii) Specific risk factors which may be anticipated to impact the
proposed activities of the Company;
(ix) The potential for growth or expansion and profit;
(x) The perceived public recognition or acceptance of products,
services or trades of the target and the industry and brand or
name identification; and
(xi) All other relevant factors.
This discussion of the proposed criteria is not meant to be restrictive
of the Company's virtually unlimited discretion to search for and enter into
potential business opportunities.
The Company will not acquire or merge with any entity which cannot provide
audited financial statements at the time of the closing of the proposed
transaction or with the time frame as required to be provided pursuant to
the requirements of SEction 13 of the Exchange Act. The audited financial
statements of the aaquired company must be furnished with 75 days following
the effective date of a business combination.
Upon acceptance of this Form 10-SB, the Company will be subject to the
reporting requirements of the Exchange Act, and under the Exchange Act, any
merger or acquisition candidate is required to comply with all applicable
reporting requirements, including filing reports of material events, periodic
reports and annual reports with accompanying audited financial statements.
In the event the Company merges or acquires a business opportunity, the
successor company will be subject to the same reporting obligations as the
Company under the Exchange Act. When a non-reporting company becomes the
successor of a reporting company by merger, consolidation, exchange of
securities, acquisition of assets or otherwise, the successor company is
required to provide in a Form 8-K current report the same kind of information
that would appear in a registration statement, including audited and pro forma
financial statements for at least the two most recent fiscal years or, in the
event that the combined operating business has been in business less than two
years, audited financial statements will be required from the period of
inception of the target acquisition or merger candidate. The Securities and
Exchange Commission (the "Commission") treats these Form 8-K filings in the
same way it treats the registration statements on Form 10-SB filings. The
Commission subjects them to its standards of review selection, and the
Commission may issue substantive comments on the sufficiency of the disclosures
represented. If the Company enters into a business combination with a non-
reporting company, such non-reporting company will not receive reporting status
until the Commission has determined that it will not review the 8-K filing or
all of the comments have been cleared by the staff.
The Board of Directors has passed a resolution which contains a policy
that the Company will not seek a business combination with any entity in
which the Company's officer, director, shareholders or any affiliate or
associate serves as an officer or director or holds any ownership interest.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued
after any business combination. Additionally, a target company may be
presented to the Company only on the condition that the services of a
consultant or advisor be continued after a merger or acquisition. Such
preexisting agreements of target companies for the continuation of the
services of attorneys, accountants, advisors or consultants could be a
factor in the selection of a target company.
TERMS OF A BUSINESS COMBINATION
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation, reorganization,
joint venture, franchise or licensing agreement with the target company.
On the consummation of a transaction, it is likely that the present
management and shareholder of the Company will not be in control of the
Company. Mr. Zhang may, as part of the terms of the acquisition
transaction, resign and be replaced by new officers and directors without
a vote of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under
applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of its transaction, the Company may agree
to register all or a part of such securities immediately after the
transaction is consummated or at specified times thereafter. If such
registration occurs, it will be undertaken by the surviving entity after
the Company has entered into an agreement for a business combination or
has consummated a business combination and the Company is no longer
considered a blank check company. The issuance of additional securities and
their potential sale into any trading market which may develop in the
Company's securities may depress the market value of the Company's securities
in the future if such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, we expect that the parties to the
business combination will want to avoid the creation of a taxable event
and structure the acquisition in a so called "tax free" reorganization
under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended. In order to obtain tax-free treatment, it may be necessary
for the owners of the surviving entity to own 80% or more of the voting
stock of the surviving entity. In this event, the shareholders of the
Company would retain less than 20% of the issued and outstanding shares
of the surviving entity, which could result in significant dilution in
the equity of such shareholders. However, treatment as a tax free
reorganization will not be a condition of any future business combination
and if it is not the case, the Company will not obtain an opinion of
counsel that the reorganization will be tax free.
Management believes that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial time, attention and costs for accountants, attorneys and
others. If the Company and/or the target business decide not to participate
in a specific business opportunity, the costs incurred in the related
investigation would not be recoverable. In addition, following the merger
the target company will incur additional expenses of complying with the
annual and periodic reporting requirements included in the Exchange Act.
These will include legal, accounting, printing, filing and related costs.
With respect to negotiations with a target company, management
expects to focus on the percentage of the Company which target company
shareholders would acquire in exchange for their shareholdings in the
target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood
hold a substantially lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage of ownership may be
subject to significant reduction in the event the Company acquires a
target company with substantial assets. Any merger or acquisition
effected by the Company can be expected to have a significant dilutive
effect on the percentage of shares held by the Company's shareholders at
such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will
require certain representations and warranties of the parties thereto,
will specify certain events of default, will detail the terms of closing
and the conditions which must be satisfied by the parties prior to and
after such closing and will include miscellaneous other terms.
UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES
As part of a business combination agreement, the Company intends to
obtain certain representations and warranties from a target company as to
its conduct following the business combination. Such representations and
warranties may include (i) the agreement of the target company to make all
necessary filings and to take all other steps necessary to remain a
reporting company under the Exchange Act (ii) imposing certain restrictions
on the timing and amount of the issuance of additional free-trading stock,
including stock registered on Form S-8 or issued pursuant to Regulation S
and (iii) giving assurances of ongoing compliance with the Securities Act,
the Exchange Act, the General Rules and Regulations of the Securities and
Exchange Commission, and other applicable laws, rules and regulations.
A prospective target company should be aware that the market price
and volume of its securities, when and if listed for secondary trading, may
depend in great measure upon the willingness and efforts of successor
management to encourage interest in the Company within the United States
financial community. The Company does not have the market support of an
underwriter that would normally follow a public offering of its securities.
Initial market makers are likely to simply post bid and asked prices and
are unlikely to take positions in the Company's securities for their own
account or customers without active encouragement and a basis for doing so.
In addition, certain market makers may take short positions in the Company's
securities, which may result in a significant pressure on their market price.
The Company may consider the ability and commitment of a target company to
actively encourage interest in its securities following a business
combination in deciding whether to enter into a transaction with such
company.
A business combination with the Company separates the process of
becoming a public company from the raising of investment capital. As a result,
a business combination with the Company normally will not be a beneficial
transaction for a target company whose primary reason for becoming a public
company is the immediate infusion of capital. The Company may require
assurances from the target company that it has or that it has a reasonable
belief that it will have sufficient sources of capital to continue
operations following the business combination. However, it is possible that
a target company may give such assurances in error, or that the basis for
such belief may change as a result of circumstances beyond the control of the
target company.
Prior to completion of a business combination, the Company will
generally require that it be provided with written materials regarding the
target company containing such items as a description of products, services
and company history; management resumes; financial information; available
projections, with related assumptions upon which they are based; an
explanation of proprietary products and services; evidence of existing
patents, trademarks, or service marks, or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated capital
requirements; audited financial statements, or if they are not available,
unaudited financial statements, together with reasonable assurances that
audited financial statements would be able to be produced within a reasonable
period of time not to exceed 75 days following completion of a business
combination; and other information deemed relevant.
COMPETITION
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue
to be at a significant competitive disadvantage compared to the Company's
competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently uses the offices of Waywood
Investment Ltd., the sole shareholder of the Company, at no cost to the
Company. Waywood Investment Ltd. has agreed to continue this arrangement
until the Company completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth each person known by the Company to be
the beneficial owner of five percent or more of the Company's Common Stock,
all directors individually and all directors and officers of the Company
as a group. Except as noted, each person has sole voting and investment
power with respect to the shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
- ------------------- -------------------- -----------
Waywood Investment Ltd.(1) 5,000,000 100%
524 Westgate Drive
Edison, New Jersey 08820
Mr. Jianjun Zhang (2) 5,000,000 100%
524 Westgate Drive
Edison, New Jersey 08820
All Executive Officers and
Directors as a Group (1 Person) 5,000,000 100%
- -----------------------------------------------
(1) Mr. Zhang is the controlling shareholder and sole director and
officer of Waywood Investment Ltd. Waywood Investment Ltd. has agreed to
provide certain assistance to the Company in locating potential target
companies, and to pay all costs of the Company until a business combination,
without reimbursement. See "PLAN OF OPERATION -- Search for Target
Company".
(2) As the controlling shareholder, the sole director and officer of
Waywood Investment Ltd., Mr. Zhang is deemed to be the beneficial owner of
the common stock of the Company owned by Waywood Investment Ltd.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
------------ -------- -------------------------------
Jianjun Zhang 33 President, Treasurer, Secretary,
and Director
There are no agreements or understandings for the officer or director
to resign at the request of another person and the above-named officer and
director is neither acting on behalf of nor will act at the direction of
any other person.
Set forth below is the name of the director and officer of the Company,
all positions and offices with the Company held, the period during which he
has served as such, and the business experience during at least the last
five years:
Mr. Jianjun Zhang has served as President, Treasurer, Secretary and the
sole member of the Board of Directors of the Company since March 8, 2002
(inception). From February 1994 to January 2000, Mr. Zhang served as a
product manager of Shanghai Xiehe Daily-Use Healthy Products Limited, a
manufacturer and seller of health and beauty products in Shanghai, China.
From January 2000 to January 2002, Mr. Zhang was a self-employed small
business consultant. From January 2002 to present, he is president,
treasurer, secretary and the sole director of Waywood Investment Ltd., a
business consulting firm incorporated in the British Virgin Islands. Waywood
Investment Ltd. is the sole shareholder of the Company. In addition to
the Company, Mr. Zhang is President, Treasurer, Secretary and the sole
director for the following four blank check companies since their
inception, which are in parenthesis after the company names: Easton
Technologies Corp. (March 2002), Oxford Technologies Inc. (March 2002),
Norton Industries Corp. (March 2002), and Weston Technologies Corp.
(March 2002). None of these companies currently conduct any business other
than filing a registration statement with the Securities and Exchange
Commission on Form 10-SB/12g at the same time this registration statement
is filed.
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer
of the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated.
PREVIOUS BLANK CHECK COMPANIES
No member of management or any promoter of the Company, or an affiliate
of either, have been involved in any previous blank check offerings.
CURRENT AND FUTURE BLANK CHECK COMPANIES
In addition to the Company, Mr. Jianjun Zhang, the president of the
Company, is currently involved with other four blank check companies filings
under the Exchange Act as set forth below in the table, and may involve in
creating additional companies similar to this one. The initial business
purpose of each of these companies was or is to engage in a business
combination with an unidentified company or companies and each were or will
be classified as a blank check company until completion of a business
combination.
Target companies will be located for the Company and other identical blank
check companies in chronological order of the date of formation of such blank
check companies or, in the case of blank check companies formed on the same
date, alphabetically. However, certain blank check companies may differ from
the Company in certain items such as place of incorporation, number of shares
and shareholders, working capital, types of authorized securities, preference
of a certain blank check company name by management of the target company, or
other items. It may be that a target company may be more suitable for or may
prefer a certain blank check company formed after the Company. In such case,
a business combination might be negotiated on behalf of the more suitable or
preferred blank check company regardless of date of formation.
company name (1) Registration Form Filing Date File Number Status (2)
- ------------------------- -------------------- ----------------- ------------- ---------
<s> <c> <c> <c> <c>
Weston Technologies Corp. Form 10SB/12g June 10, 2002 0-49856 n/a
Easton Technologies Corp. Form 10SB/12g June 10, 2002 0-49853 n/a
Ridgefield Industries Corp. Form 10SB/12g June 10, 2002 0-49855 n/a
Oxford Technologies Inc. Form 10SB/12g June 10, 2002 0-49854 n/a
Norton Industries Corp. Form 10SB/12g June 10, 2002 0-49852 n/a
- -------------------------------------------------------------------------------------------
Notes:
(1) The companies set forth above are all registered in the State of Delaware
on March 8, 2002. Mr. Jian Jun Zhang is their sole promoter, officer, director
and the sole beneficial shareholder.
(2) The term "n/a" indicates that the companies referenced above has not entered
into an agreement for a business combination.
Other than as described herein, Mr. Zhang and management of the Company
and their promoters are not affiliated with any other blank check companies.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
None.
CONFLICTS OF INTEREST
Mr. Jianjun Zhang, the Company's sole officer and director, has involved
and expects to organize other companies of a similar nature and with a
similar purpose as the Company. Consequently, there are potential inherent
conflicts of interest in acting as an officer and director of the Company.
In addition, insofar as Mr. Zhang is engaged in other business activities, he
may devote only a portion of his time to the Company's affairs.
A conflict may arise in the event that another blank check company with
which Mr. Zhang is affiliated also actively seeks a target company. It is
anticipated that target companies will be located for the Company and other
blank check companies in chronological order of the date of formation of such
blank check companies or, in the case of blank check companies formed on the
same date, alphabetically. However, other blank check companies may differ
from the Company in certain items such as place of incorporation, number of
shares and shareholders, working capital, types of authorized securities, or
other items. It may be that a target company may be more suitable for or may
prefer a certain blank check company formed after the Company. In such case,
a business combination might be negotiated on behalf of the more suitable or
preferred blank check company regardless of date of formation.
Mr. Zhang intends to devote as much time to the activities of the
Company as required. However, should such a conflict arise, there is no
assurance that Mr. Zhang would not attend to other matters prior to those of
the Company. Mr. Zhang estimates that the business plan of the Company can
be implemented in theory by devoting approximately 10 to 25 hours per month
over the course of several months but such figure cannot be stated with
precision.
The terms of business combination may include such terms as Mr. Zhang
remaining a director or officer of the Company. The terms of a business
combination may provide for a payment by cash or otherwise to Waywood
Investment Ltd. for the purchase or retirement of all or part of its common
stock of the Company by a target company or for services rendered to a
target company incident to or following a business combination. Mr. Zhang
would directly benefit from such employment or payment. Such benefits
may influence Mr. Zhang's choice of a target company. However, Mr. Zhang's
beneficial and economic interest in all blank check companies with which he
is currently involved is identical.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management of the Company or
any affiliates or associates have any interest, direct or indirect. There are
no binding guidelines or procedures for resolving potential conflicts of
interest. Failure by management to resolve conflicts of interest in favor of
the Company could result in liability of management to the Company.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities
Act and the Exchange Act, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940 insofar as
the Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940. Any
violation of such Act would subject the Company to material adverse
consequences.
Waywood Investment Ltd. is the sole shareholder of the Company. As the
sole shareholder of the Company, Waywood Investment Ltd. may participate in
a business opportunity by purchasing, holding or selling the securities of
such business. Waywood Investment Ltd. does not, however, intend to engage
primarily in such activities. Section 3(a) of the Investment Company Act of
1940 contains the definition of an "investment company," which excludes any
entity that does not engage primarily in the business of investing,
reinvesting or trading in securities, or that does not engage in the
business of investing, owning, holding or trading "investment securities"
(defined as "all securities other than government securities or securities
of majority-owned subsidiaries"). Furthermore, Waywood Investment Ltd. has
fewer than 100 shareholders (of which there are currently only one), and is
not making and does not intend to make a public offering of its
securities. Management of Waywood Investment Ltd. believes that Waywood
Investment Ltd. is not deemed to be an investment company by virtue of one
of exemptions provided under the Investment Company Act of 1940, as amended.
BLUE SKY REGULATIONS
Virtually all 50 states have enacted statutes or rules that restrict or
prohibit the sale of securities of "blank check" companies to residents so
long as they remain without specific business plans. The Company has no
current plan to register its shares in any state, and has no intention to
issue or sell additional shares in a private offering to anyone, and does
not anticipate doing so until after the consummation of a merger or
acquisition, after which it will no longer be classified as a blank check
company. Waywood Investment Limited, the sole shareholder of the Company, has
also expressed its intention that it will not sell any of the Company's common
stock shares it owns except in connection with or following completion of a
merger, acquisition or other transaction of or by the Company meeting the
definition of a business combination as defined in this registration statement
or otherwise complying with the purposes of the Company as set out in this
registration statement.
In the event of a violation of state laws regarding resale of "blank
check" company shares, the Company could be liable for civil and criminal
penalties which would be a substantial impairment to the Company.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole officer and director does not receive any compensation
for his services rendered to the Company, has not received such compensation
in the past, and is not accruing any compensation pursuant to any agreement
with the Company. However, the officer and director of the Company anticipates
receiving benefits as a beneficial shareholder of the Company, as the officer
and director and sole shareholder of Waywood Investment Ltd. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - Conflicts of
Interest".
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 5,000,000 shares of Common Stock to
Waywood Investment Ltd. for incorporating the Company in the State of
Delaware and clerical and administrative services valued at $500:
Number of Total
Name Shares Consideration
- ------------------ --------------- ----------------
Waywood Investment Ltd. 5,000,000 $500
As the sole promoter of the Company, Mr. Jianjun Zhang is the sole director,
controlling shareholder and the president of Waywood Investment Ltd. All such
shares (5,000,000 shares of common stock valued at $500) were issued to Waywood
Investment Ltd. in exchange for incorporating the Company in the State of
Delaware and clerical and administrative services rendered to the Company, in
lieu of cash. The Company relied upon Section 4(2) of the Securities Act of
1933, as amended. As the sole shareholder of Waywood Investment Ltd.,
Mr. Zhang is deemed to have been the beneficial owner of the common stock of
the Company owned by Waywood Investment Ltd.
Other than disclosed herein, the Company has no transactions with its sole
promoter, Mr. Jianjun Zhang, within the past five years as defined in Item
404(d) of Regulation S-B: (1) Nothing of value (including money, property,
contracts, options or rights of any kind) has been or will be received,
directly or indirectly, by Mr. Jianjun Zhang from the Company; (2) No assets,
services, or other consideration therefor, has been or will be received by
the Company from Jianjun Zhang; (3) No assets has been or will be acquired
from Mr. Jianjun Zhang; (4) No assets, services, or other consideration
therefor, has been or will be received by the Company; and (5) No assets
has been or will be acquired or to be acquired by Mr. Jianjun Zhang.
The Company currently uses the offices of Waywood Investment Ltd., the
sole shareholder of the Company, at no cost to the Company. See ITEM 3,
"DESCRIPTION OF PROPERTY"
On March 12, 2002, the Company signed an agreement with Waywood
Investment Ltd., the sole shareholder of the Company. Pursuant to the
Agreement, Waywood Investment Ltd. will provide the following services to
the Company, without reimbursement, until the Company enters into a business
combination, (i) Preparation and filing of required documents with the
Securities and Exchange Commission, (ii) Locating and review of potential
target companies, and (iii) Payment of all corporate, organizational, and
other costs incurred by the Company.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 80,000,000 shares
of common stock, par value $.0001 per share, of which there are 5,000,000
issued and outstanding and 20,000,000 shares of preferred stock, par value
$.0001 per share, of which none have been designated or issued. The following
statements relating to the capital stock set forth the material terms of the
Company's securities; however, reference is made to the more detailed
provisions of, and such statements are qualified in their entirety by reference
to, the Certificate of Incorporation and the By-laws, copies of which are filed
as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by
the Board of Directors in its discretion from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the Company, the
holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. All of the outstanding shares of
common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Board of Directors is authorized to provide for the issuance of
shares of preferred stock in series and, by filing a certificate pursuant
to the applicable law of Delaware, to establish from time to time the number
of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof without any further
vote or action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control of the
Company without further action by the shareholders and may adversely affect
the voting and other rights of the holders of common stock. At present,
the Company has no plans to issue any preferred stock nor adopt any series,
preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required
percentage vote of the stockholders. In addition, under certain
circumstances, the issuance of preferred stock could adversely affect the
voting power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such stock based
on its judgment as to the best interests of the stockholders of the Company,
the Board of Directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority, of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then market
price of such stock. The Board of Directors does not at present intend to
seek stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or stock exchange rules. The
Company has no present plans to issue any preferred stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment
of dividends, if any, will be within the discretion of the Company's Board
of Directors. The Company presently intends to retain all earnings, if any,
for use in its business operations and accordingly, the Board of Directors
does not anticipate declaring any dividends prior to a business
combination.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of companies
which file reports under Sections 13 or 15(d) of the Exchange Act. Upon
effectiveness of this registration statement, the Company will be required
to, and will, file reports under Section 13 of the Exchange Act. As a
result, sales of the Company's common stock in the secondary market by
the holders thereof may then be made pursuant to Section 4(1) of the
Securities Act (sales other than by an issuer, underwriter or broker)
without qualification under state securities acts.
The Company presently has 5,000,000 shares of Common Stock outstanding,
all of which are "restricted securities", as that term is defined under
Rule 144 promulgated under the Securities Act, in that such shares were
issued in private transactions not involving a public offering. On January
21, 2000, Richard K. Wulff, Chief of Office of Small Business Operations
at the Securities and Exchange Commission issued an interpretive letter
to the NASD Regulation, Inc., in which he opinioned as follows:
"It is our view that, both before and after the business combination
or transaction with an operating entity or other person, the promoters
or affiliates of blank check companies, as well as their transferees,
are "underwriters" of the securities issued. Accordingly, we are
also of the view that the securities involved can only be resold
through registration under the Securities Act. Similarly, Rule 144
would not be available for resale transactions in this situation,
regardless of technical compliance with that rule, because these
resale transactions appear to be designed to distribute or
redistribute securities to the public without compliance with the
registration requirements of the Securities Act."
This interpretation also states that securities held by officers,
directors, promoters, and affiliates can only be resold through
registration under the Securities Act.
Following a business combination, the Company may apply for quotation
of its securities on the OTC Bulletin Board. In certain cases the Company
may elect to have its securities initially quoted in the "pink sheets"
published by the National Quotation Bureau, Inc. To have its securities
quoted on the OTC Bulletin Board a company must:
(1) be a company that reports its current financial information to the
Securities and Exchange Commission, banking regulators or insurance
regulators;
(2) have at least one market maker who completes and files a Form 211
with NASD Regulation, Inc.
The OTC Bulletin Board is a dealer-driven quotation service. Unlike the
NASDAQ Stock Market, companies cannot directly apply to be quoted on the
OTC Bulletin Board, only market makers can initiate quotes, and quoted
companies do not have to meet any quantitative financial requirements. Any
equity security of a reporting company not listed on the NASDAQ Stock
Market or on a national securities exchange is eligible.
TRANSFER AGENT
It is anticipated that the Company will act as its own transfer agent
for the common stock of the Company.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET PRICE. There is no trading market for the Company's Common
Stock at present and there has been no trading market to date. There is no
assurance that a trading market will ever develop or, if such a market does
develop, that it will continue.
The Securities and Exchange Commission has adopted a number of rules to
regulate "penny stocks." Such rules include Rule 3a51-1 and Rules 15g-1
through 15g-9 under the Securities Exchange Act of 1934, as amended. Because
the securities of the Company may constitute "penny stocks" within the meaning
of the rules (as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share), the
rules would apply to the Company and to its securities.
The Securities and Exchange Commission has adopted Rule 15g-9 which
established sales practice requirements for certain low price securities.
Unless the transaction is exempt, it shall be unlawful for a broker or dealer
to sell a Penny Stock to, or to effect the purchase of a Penny Stock by, any
person unless prior to the transaction: (i) The broker or dealer has approved
the person's account for transactions in Penny Stock pursuant to this
rule and (ii) the broker or dealer has received from the person a written
agreement to the transaction setting forth the identity and quantity of the
Penny Stock to be purchased. In order to approve a person's account for
transactions in Penny Stock, the broker or dealer must: (a) obtain from the
person information concerning the person's financial situation, investment
experience, and investment objectives; (b) reasonably determine that
transactions in Penny Stock are suitable for that person, and that the
person has sufficient knowledge and experience in financial matters that
the person reasonably may be expected to be capable of evaluating the risks
of transactions in Penny Stock; (c) deliver to the person a written statement
setting forth the basis on which the broker or dealer made the determination
(i) stating in a highlighted format that it is unlawful for the broker
or dealer to affect a transaction in Penny Stock unless the broker or
dealer has received, prior to the transaction, a written agreement to the
transaction from the person; and (ii) stating in a highlighted format
immediately preceding the customer signature line that (iii) the broker or
dealer is required to provide the person with the written statement; and
(iv) the person should not sign and return the written statement to the
broker or dealer if it does not accurately reflect the person's financial
situation, investment experience, and investment objectives; and (d) receive
from the person a manually signed and dated copy of the written statement.
It is also required that disclosure be made as to the risks of investing in
Penny Stock and the commissions payable to the broker- dealer, as well as
current price quotations and the remedies and rights available in cases of
fraud in Penny Stock transactions. Statements, on a monthly basis, must be
sent to the investor listing recent prices for the Penny Stock and
information on the limited market.
(B) HOLDERS. There is one holder of the Company's Common Stock. The issued
and outstanding shares of the Company's Common Stock were issued in accordance
with the exemptions from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended.
(C) DIVIDENDS. The Company has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has not changed accountants since its formation and
there are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In connection with organizing the Company, on March 8, 2002, the
Company issued a total of 5,000,000 unregistered shares of common stock at
a value of $.0001 per share to Waywood Investment Ltd. for services rendered.
Mr. Jianjun Zhang, the Company's sole officer and director is the sole
director, controlling shareholder and president of Waywood Investment Ltd.
The aforementioned securities were issued under the exemption from
registration provided by Section 4(2) of the Securities Act, as amended.
We believed this exemption is available because these issuances were
transactions not involving a public offering. There was no general
solicitation or advertising used to offer our shares; the sole beneficial
investor had the knowledge and experience in financial and business matters
to evaluate the merits and risks of this prospective investment and
therefore was either accredited or sufficiently sophisticated to undertake
such an investment. Further, securities were not offered or sold to more
than thirty-five (35) unaccredited investors.
We have never utilized an underwriter for an offering of our securities.
Other than the securities mentioned above, we have not issued or sold any
securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision
eliminating the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital
stock) of the General Corporation Law of the State of Delaware, or (iv)
for any transaction from which the director derived an improper personal
benefit. The Company's Certificate of Incorporation contains such a
provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS
OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT
IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
PART F/S
FINANCIAL STATEMENTS.
Set forth below are the audited financial statements for the Company for
the period ended June 30, 2002. The following financial statements are
attached to this report and filed as a part thereof.
Ridgefield Industries Corporation
(a Development Stage Company)
Audited Financial Statements
as of June 30, 2002 and for the
Period from March 8, 2002 (Inception) to June 30, 2002
TABLE OF CONTENTS
Page No.
-------
Independent Auditor's Report .......................................... 3
Balance Sheet as of June 30, 2002 ..................................... 4
Statement of Operations for the period
from March 8, 2002 (Inception) to June 30, 2002 .................... 5
Statement of Changes in Stockholder's Equity for the period
from March 8, 2002 (Inception) to June 30, 2002 .................... 6
Statement of Cash Flows for the Period
from March 8, 2002 (Inception) to June 30, 2002 .................... 7
Notes to Financial Statements ........................................ 8
Stan J. H. Lee, CPA
A member firm of DMHD Hamilton Clark & Co. Tel: (201) 681-7475
2182 Lemoine Ave., Suite 200 Fax: (815) 846-7550
Fort Lee, NJ 07024 E-mail: sierra5533@aol.com
INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
The Board of Directors
Ridgefield Industries Corporation
(A Development Stage Company)
Edison, NJ
I have audited the accompanying balance sheet of Ridgefield Industries
Corporation (a development stage company) as of June 30, 2002, and the
related statements of operations, shareholders' equity and cash flows for
the period from March 8, 2002 (inception) to June 30, 2002. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on our audits.
I conducted my audits in accordance with generally accepted auditing
standards in the United States. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes, on a test basis,
examination of evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ridgefield Industries
Corporation (a Development Stage Company) as of June 30, 2002, and the results
of its operations and cash flows for the period from March 8, 2002 (inception)
to June 30, 2002 in conformity with generally accepted accounting principles
in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company was only recently formed, has no revenues
and has not yet commenced any formal business operations. This factor raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Stan J.H. Lee /s/
- ----------------------
Stan J. H. Lee, CPA
License # CC 23007
July 26, 2002
Fort Lee, New Jersey
Ridgefield INDUSTRIES CORPORATION
(A Development Stage Company)
BALANCE SHEET
As of June 30, 2002
ASSETS
<s> <c>
CURRENT ASSETS ................................................ $ 0
--------
TOTAL CURRENT ASSETS ....................................... 0
--------
OTHER ASSETS .................................................. 0
--------
TOTAL OTHER ASSETS .......................................... 0
--------
TOTAL ASSETS .................................................. $ 0
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES ........................................... $ 0
---------
TOTAL CURRENT LIABILITIES ................................... 0
---------
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 20,000,000 shares
authorized, none share issued and outstanding .............. 0
Common stock, $.0001 par value, 80,000,000 shares
authorized, 5,000,000 shares issued and outstanding ........ 500
Contributed capital by controlling shareholder................. 3,200
Deficit accumulated during development stage .................. (3,700)
-------
TOTAL STOCKHOLDERS' EQUITY ................................. 0
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................... $ 0
=======
The accompanying notes are an integral part of these
financial statements
Ridgefield INDUSTRIES CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the Period from March 8, 2002 (Inception) to June 30, 2002
<s> <c>
REVENUE ........................................................ $ 0
-------
EXPENSES
Administrative and Professional Expenses .................... 3,200
Organizational costs ........................................ 500
-------
TOTAL EXPENSES ................................................. 3,700
-------
NET LOSS ....................................................... $(3,700)
=======
Net Loss Per Share
- Basic .................................................... $( .0007)
=========
Weighted Average Number of Common Shares Outstanding ........... 5,000,000
=========
The accompanying notes are an integral part of these
financial statements
Ridgefield INDUSTRIES CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
for the Period from March 8, 2002 (Inception) to June 30, 2002
Common Stock Contributed Capital Deficit Accumulated
Shares Amount by controlling shareholder During Development Stage Total
-------------- --------- ------------------------- ------------------------ -------
<s> <c> <c> <c> <c> <c>
March 8, 2002
Issuance of
common stock for service 5,000,000 $ 500 --- --- $ 500
Contributed capital
by controlling shareholder --- --- 3,200 --- 3,200
Net loss for the period
From March 8, 2002
(Inception) to June 30, 2002 --- --- --- $ (3,700) (3,700)
Balance at
June 30, 2002 5,000,000 $ 500 $ 3,200 $ (3,700) $ 0
========= ===== ======== ======= ========
The accompanying notes are an integral part of these financial statements
Ridgefield INDUSTRIES CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the Period from March 8, 2002 (Inception) to June 30, 2002
<s> <c>
Cash Flows from Operating Activities
Net Loss .......................................................... $ (3,700)
Adjustment to reconcile net loss to
Net cash provided by operational activities
Issuance of common stock for service ............................ 500
Expense paid and incurred by the controlling shareholder ......... 3,200
-------
Net cash used in operating activities ............................... 0
Cash Flows from Investing Activities ................................ 0
-------
Cash Flows from Financing Activities ................................ 0
-------
Cash, Beginning of period ........................................... $ 0
=======
Cash, End of period ................................................. $ 0
========
The accompanying notes are an integral part of these
financial statements
Ridgefield INDUSTRIES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
Going Concern
- --------------
The accompanying financial statements have been prepared in conformity
with the U.S. generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company was
only recently formed, has incurred losses since its inception and has not
yet been successful in establishing profitable operations. These factors
raise substantial doubt about the ability of the Company to continue as
a going concern.
In this regard, management is proposing to raise any necessary
additional funds not provided by operations through additional sales of
its common stock. There is no assurance that the Company will be
successful in raising this additional capital or achieving profitable
operations. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
The sole shareholder of the Company, Waywood Investment Limited, agreed
to provide services without reimbursements from the Company and pay for
all corporate, organizational, and other costs incurred by the
Company without repayment until such time as a business combination is
effected(see Note 3 - "Related Party Transactions - Agreement") and have
successfully met such financial obligations under the agreement to this
date.
Development Stage Company
- -------------------------
Ridgefield Industries Corporation has been in the development stage since
its formation on March 8, 2002. Planned principal operations have not
commenced since then and the company has not generated any revenue
Basis of Presentation
- ---------------------
This summary of significant accounting policies of the Company is
presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management who is responsible for their integrity and objectivity. These
accounting policies conform to the U.S. generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements, which are stated in U.S. Dollars.
Organization
- ------------
Ridgefield Industries Corporation (a development stage company) ("the
Company") was incorporated in the State of Delaware on March 8, 2002 to
serve as a vehicle to effect a merger, exchange of capital stock, asset
acquisition or other business combination with a domestic or foreign private
business. At June 30, 2002, the Company had not yet commenced any formal
business operations, and all activity to date relates to the Company's
formation and preparation of filling of a registration statement on Form
10-SB with the Securities and Exchange Commission. The Company's fiscal year
end is December 31.
The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business and raise the capital it will
require through contributions by its shareholders, the issuance of equity
securities, debt securities, loan from officers and directors, bank
borrowings or a combination thereof.
Cash and cash equivalents
- -------------------------
The Company considers all liquid investments with a maturity of three
months or less from the date of purchase that are readily convertible into
cash to be cash equivalents.
Use of estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Start-up expenses
- -----------------
The Company is expensing all start up expenses in accordance with AICPA
Statements of Position 98-5.
Income taxes
- ------------
The Company records its income tax provision in accordance with SFAS 109,
which requires the use of the liability method of accounting for deferred
income taxes. As the Company has not generated taxable income since its
inception, no provision for income taxes has been made. At June 30, 2002,
the Company did not have any significant net operating loss carryforwards.
At June 30, 2002, the Company did not have any significant deferred tax
liabilities or deferred tax assets.
Basic and diluted net loss per share
- ------------------------------------
Net loss per share is calculated in accordance with Statement of Financial
Accounting Standards 128, Earnings Per Share ("SFAS 128"), which superseded
Accounting Principles Board Opinion 15 ("APB 15"). Basic net loss per share
is based upon the weighted average number of common shares outstanding.
Diluted net loss per share is based on the assumption that all dilutive
convertible shares, stock options and warrants were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this
method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds
obtained thereby were used to purchase common stock at the average market
price during the period. At June 30, 2002 there were no dilutive convertible
shares, stock options or warrants.
Recent issued accounting standards
- ----------------------------------
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141 "Business
Combinations" and No. 142 "Goodwill and Other Intangible Assets". SFAS No.
141 requires all business combinations initiated after June 30, 2001 to
be accounted for under the purchase method. For all business combinations
for which the date of acquisition is after June 30, 2001, SFAS No. 141
also establishes specific criteria for the recognition of intangible
assets separately from goodwill and requires unallocated negative
goodwill to be written off immediately as an extraordinary gain, rather
than deferred and amortized. SFAS No. 142 changes the accounting for
goodwill and other intangible assets after an acquisition. The most
significant changes made by SFAS No. 142 are:(1) goodwill and intangible
assets with indefinite lives will no longer be amortized; (2) goodwill
and intangible assets with indefinite lives must be tested for impairment
at least annually; and (3) the amortization period for intangible assets
with finite lives will no longer be limited to forty years. At this time,
the Company does not believe that the adoption of either of these
statements will have a material effect on its financial position, results
of operations, or cash flows.
In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations". SFAS No. 143 establishes accounting requirements
for retirement obligations associated with tangible long-lived assets,
including (1) the timing of the liability recognition, (2) initial
measurement of the liability, (3) allocation of asset retirement cost
to expense, (4) subsequent measurement of the liability and (5) financial
statement disclosures. SFAS No. 143 requires that an asset retirement
cost should be capitalized as part of the cost of the related long-
lived asset and subsequently allocated to expense using a systematic and
rational method. The adoption of SFAS No. 143 is not expected to have a
material effect on the Company's financial position, results of
operations, or cash flows.
In August 2001, the FASB also approved SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 replaces
SFAS No. 121. The new accounting model for long-lived assets to be
disposed of by sale applies to all long-lived assets, including
discontinued operations, and replaces the provisions of Accounting
Principles Board (APB) Opinion No. 30, "Reporting Results of Operations
- Reporting the Effects of Disposal of a Segment of a Business", for the
disposal of segments of a business. SFAS No. 144 requires that those
long-lived assets be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations will no
longer be measured at net realizable value or include amounts for operating
losses that have not yet occurred. SFAS No. 144 also broadens the reporting
of discontinued operations to include all components of an entity with
operations that can be distinguished from the rest of the entity and that
will be eliminated from the ongoing operations of the entity in a disposal
transaction. The provisions of SFAS No. 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001 and,
generally, are to be applied prospectively. At this time, the Company does
not believe that the adoption of SFAS No. 144 will have a material effect
on its financial position, results of operations, or cash flows.
2. SHAREHOLDERS' EQUITY
---------------------
Preferred Stock
---------------
The Company is authorized to issue 20,000,000 shares of preferred stock
at $.0001 par value, with such designation voting and other rights
and preferences as may be determined from time to time by the Board of
Directors. As of June 30, 2002, no preferred stock has been issued.
Common Stock and Contributed Capital
------------------------------------
The Company is authorized to issue 80,000,000 shares of common stock at
$.0001 par value. On March 8, 2002, the Company issued 5,000,000 shares
of its common stock to Waywood Investment Limited, the sole shareholder of
the Company, pursuant to Section 4(2) of the Securities Act of 1933 for
services valued at $500. As to date all expenses incurred or paid by the
controlling shareholder on behalf of the Company are recorded as contributed
capital by the Company's controlling shareholder.
3. RELATED PARTY TRANSACTIONS
--------------------------
Management Compensation - Since its inception , the Company has not paid
any compensation to any officer or director of the Company and no
significant time and efforts have either incurred on the part of
management.
Office Space - The Company neither owns nor leases any real property.
Office spaces are provided at nominal charge by the sole director and
officer of the Company at $100 per month.
Agreement - On March 12, 2002, the Company signed an agreement with Waywood
Investment Limited. ("Waywood"), the sole shareholder of the Company. The
Agreement calls for Waywood to provide the following services, without
reimbursement from the Company, until the Company enters into a business
combination as described in Note 1: (1) Preparation and filing of all
required documents with the Securities and Exchange Commission; (2)
Location and review of potential target companies, and (3) Payment of all
corporate, organizational, and other costs incurred by the Company.
All expenses incurred or paid by the controlling shareholder on behalf of
the Company to the date have been recorded in the Company's statement of
operations with a related credit to contributed capital and this include
the costs of consulting agreements and finders' fee by the controlling
shareholder for locating a target company.
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
-------------- --------------------------------------
3.1* Certificate of Incorporation
3.2* By-Laws
4.1 Specimen Stock Certificate
10.1* Agreement with Waywood Investment Ltd.
10.2* Shareholder agreement
23.1 Consent of Independent Certified Public Accountants
* Previously filed on Form 10SB/12g dated June 10, 2002.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Ridgefield Industries Corp.
By: /s/ Jianjun Zhang
- -------------------------------------
Jianjun Zhang, Director and President
Date: July 29, 2002