Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
MEDALLION CREST MANAGEMENT, INC.
(Name of Small Business Issuer in its Charter)
FLORIDA 5313 06-1686744
-------------------- ----------------- ---------------
(State of Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Code Number) Identification No.)
3675 North Country Club Drive, Suite 1907
Aventura, FL 33180
(305) 933-6737
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(Address and telephone number of principal executive offices
and principal place of business)
Sean Miller, Vice President
3675 North Country Club Drive, Suite 1907
Aventura, FL 33180
(305) 933-6737
(Name, address and telephone number of agent for service)
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Approximate date of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
----------------------
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following box. (X)
If this Form is filed to register additional securities for
an offering pursuant to Rule 462 (b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of earlier effective registration statement for
the same offering. ( )
If this Form is a post-effective amendment filed pursuant
to Rule 462 (c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ( ).
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If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. ( ).
CALCULATION OF REGISTRATION FEE
PROPOSED PRPOSED
TITLE OF EACH CLASS MAXIMUM MAXIMUM
OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF
SHARES TO BE BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE <F1> PRICE FEE
______________________ __________ _________ _________ ____________
Common Stock,
$.0001 par value to be
sold by selling 5,165,500 $0.25 $1,291,375 $104.48
shareholders
Common Stock,
$.0001 par value to be 4,000,000 $0.25 $1,000,000 $ 80.90
sold
by the company
TOTAL 9,165,500 $2,291,375 $185.38
<FN>
<F1>
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457.
</FN>
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Information contained herein is subject to completion or
amendment. A registration statement relating to these
securities has been filed with the Securities and Exchange
Commission. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy
these securities in any state in which the offer or sale is
not permitted.
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PROPECTUS
SUBJECT TO COMPLETION, DATED June 3, 2003
9,165,500 Shares of Common Stock
MEDALLION CREST MANAGMENT, INC.
(A Florida Corporation)
This is our initial public offering. We are registering a
total of 9,165,500 shares of our common stock. All of the shares
being registered by us will be sold at a price per share of
$0.25. The selling shareholders will sell their shares at a
price per share of $0.25 until our shares are traded on the OTC
Bulletin Board and thereafter at prevailing market prices or
privately negotiated prices. Of the shares being registered:
1) 5,165,500 are being registered for sale by selling shareholders and
2) 4,000,000 are being registered for sale by us
We will not receive any proceeds from the sale of any of
the shares by selling shareholders. We will be selling all of
the 4,000,000 shares of common stock we are offering on a "best
efforts basis" and will not use an underwriter or pay a
commission for the sale of the shares. No arrangements have been
made to place funds in escrow, trust or any similar account.
There is no minimum amount we are required to raise in this
offering and any funds received will be immediately available to
us. This offering will terminate on the earlier of the sale of
all of the shares or 90 days after effectiveness of this
registration statement.
There is no established public market for our common stock
and we have arbitrarily determined the offering price. Although
we hope to be quoted on the OTC Bulletin Board, our Common Stock
is not currently listed or quoted on any quotation service. There
can be no assurance that our common stock will ever be quoted on
any quotation service or that any market for our stock will ever
develop.
Proposed Trading Symbol: OTC Bulletin Board - "MCMI"
_________________________________
INVESTING IN OUR STOCK INVOLVES RISKS. YOU SHOULD CAREFULLY CONSIDER
THE RISK FACTORS BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The information in this prospectus is not complete and may
be changed. None of these securities may be sold until a
registration statement filed with the Securities and Exchange
Commission is effective. The prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this Prospectus is June 3, 2003
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TABLE OF CONTENTS
Page
----
Prospectus Summary 3
The Offering 4
Summary Financial Information 6
Risk Factors 7
Use of Proceeds 16
Determination of Offering Price 18
Dividend Policy 18
Dilution 19
Management's Plan of Operations 20
Business 23
Management 26
Principal Shareholders 29
Selling Shareholders 30
Description of Securities 31
Indemnification 33
Plan of Distribution 34
Legal Matters 36
Experts 36
Where You Can Find More Information 37
Index to Financial Statements
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PROSPECTUS SUMMARY
Because this is a summary, it does not contain all of the
information that may be important to you. You should read the
entire prospectus. You should consider the information set forth
under "Risk Factors" and our financial statements and
accompanying notes that appear elsewhere in this prospectus.
We are a development stage company and were incorporated in
Florida on April 4, 2003. We were formed in order to create and
realize value by identifying and making opportunistic real estate
investments by the direct acquisition, rehabilitation, financing
and management of real properties. Management is concentrating
its efforts on defining and building focused operating businesses
with recurring sources of income. Our executive offices are
located at 3675 North Country Club Drive, Suite 1907, Aventura,
FL 33180. Our telephone number is (305) 933-6737. As of April
30, 2003 we had operating capital of $46,137 and stockholders'
equity of $46,137. Please be aware that our independent auditor
has expressed substantial doubt about our ability to continue as
a going concern and believes that our ability to continue as such
is dependent on our ability to implement our business plan, raise
capital and generate revenues.
We are led by, Thomas Fastiggi, who serves as our Chief
Executive Officer and Chief Financial Officer. Mr. Fastiggi has
over thirty years of experience in real estate sales, property
management, including operations, long range planning and
insurance risk management.
We have achieved no revenues to date and our loss from
inception to April 30, 2003 totaled $163.
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The Offering
Securities Offered 9,165,500 shares of common
stock, 4,000,000 of which we are
offering and 5,165,500 of which
are being offered by the selling
shareholders; See "Description of
Securities"
Common Stock Outstanding, before offering 5,165,500
Common Stock Outstanding, after offering 4,000,000
Proposed OTC Bulletin Board Symbol MCMI
Use of Proceeds We will not receive any
proceeds from the sale of
common stock by our
selling shareholders. If
we sell all 4,000,000
shares we are offering,
we will receive gross
proceeds of $1,000,000.
Any and all funds raised
from our sale of common
stock will be used for
purchase and renovation
of property and for
marketing purposes and
working capital purposes.
See "Use of Proceeds."
Dividend Policy We do not intend to pay
dividends on our common
stock. We plan to retain
any earnings for use in
the operation of our
business and to fund
future growth.
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Risk Factors
The securities offered by this prospectus are highly
speculative and very risky. We have described the material risks
that we face below. Before you buy, consider the risk factors
described and the rest of this prospectus. This prospectus also
contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result
of certain factors, including the risks faced by us described
below and elsewhere in this prospectus. Please refer to "Risks
Associated with Forward-looking Statements" on page 15.
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Summary Financial Information
The following is a summary of our Financial Statements, which are
included elsewhere in this prospectus. You should read the
following data together with the "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
section of this prospectus as well as with our Financial
Statements and the notes therewith.
Period
ended
March 30,
2003
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Statement of Operations Data:
Total Revenue $ 0
========
Gross Profit $ 0
========
Net Income (loss) $(163)
========
As of
March 30,
2003
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Balance Sheet Data
Cash $46,137
Total current assets $46,137
Total assets $46,137
Total current liabilities $0
Total stockholders' equity $46,137
Total liabilities and stockholders' equity $46,137
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RISK FACTORS
The securities offered are highly speculative. You should
purchase them only if you can afford to lose your entire
investment in us. You should carefully consider the following
risk factors, as well as all other information in this
prospectus.
Certain important factors may affect our actual results and
could cause those results to differ significantly from any
forward-looking statements made in this prospectus or otherwise
made by us or on our behalf. For this purpose, any statements
contained in this prospectus that are not statements of
historical fact should be considered to be forward-looking
statements. Words such as "may," "expect," "believe,"
"anticipate," "intend," "could," "estimate," or "continue" or the
negatives of those words, identify forward-looking statements.
These statements appear in a number of places in this prospectus
and include statements as to our intent, belief or expectations.
These forward-looking statements are subject to the risks
detailed below or elsewhere in this prospectus, or detailed from
time to time in our filings with the Securities and Exchange
Commission. See "Risks Associated With Forward-Looking
Statements" on page 15.
Investors should assume that if any of the following risks
actually materialize, our business, financial condition or results
of future operations could be materially and adversely affected.
In that case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
Risks related to our business:
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We have very little operating capital and may be forced to file bankruptcy.
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The growth of our business will require significant
additional investment. We do not presently have adequate cash
from operations or financing activities to meet our long-term
needs. As of April 30, 2003 we had a total of $46,137 in capital
to use in executing our business plan. We are able to operate
going forward solely because our executive officers, all of whom
are shareholders of the company have agreed to defer receipt of
compensation until we have raised a minimum of $500,000 in gross
proceeds or achieved $500,000 in revenue. We anticipate that
unless we are able to raise net proceeds of at least $500,000
within the next twelve months that we will not be able to execute
our business plan in a meaningful way. However, even if all
shares offered through this prospectus are sold, and we raise net
proceeds of $1,000,000 there can be no assurance that we will be
successful in executing our plan or achieving profitability. Due
to our early stage of development, regardless of the amount of
funds we raise, there is a substantial risk that all investors
may lose all of their investment. Even if we sell all shares
offered through this registration statement, we expect that we
will seek additional financing in the future. However, we may
not be able to obtain additional capital or generate sufficient
revenues to fund our operations. If we are unsuccessful at
raising sufficient funds, for whatever reason, to fund our
operations, we may be forced to seek a buyer for our business or
another entity with which we could create a joint venture. If
all of these alternatives fail, we expect that we will be
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required to seek protection from creditors under applicable
bankruptcy laws. Our independent auditor has expressed
substantial doubt about our ability to continue as a going
concern and believes that our ability is dependent on our ability
to implement our business plan, raise capital and generate
revenues. See Note 1 of our financial statements.
We have not commenced full operations and we may not be able to
achieve or maintain profitability.
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We are a relatively young company and our proposed
operations are subject to all of the risks inherent in such a
business enterprise. The likelihood of our success must be
considered in light of the problems, expenses, difficulties,
complications, and delays frequently encountered in connection
with the development of a business in a competitive industry. As
with an investment in any emerging growth company, ownership of
common shares may involve a high degree of risk, and is not
recommended if you cannot reasonably bear the risk of a total
loss of your investment.
If we are unsuccessful in raising at least $500,000 we
expect to continue to incur operating losses in fiscal 2004,
which ends April 30, 2004. If we do not achieve revenue growth
sufficient to absorb our planned expenditures, we could
experience additional losses in future periods. These losses or
fluctuations in our operating results could cause the market
value of our common stock to decline.
We anticipate that in the future we will make significant
investments in our operations, particularly to support our
acquisitions and marketing activities and, that as a result,
operating expenses are expected to continue to increase. We
intend to make such investments on an ongoing basis, primarily
from cash generated from operations and, to the extent necessary,
funds available from financing activities, as we develop and
introduce new products and expand into new markets. If net sales
do not increase with capital or other investments, we are likely
to continue to incur net losses and our financial condition could
be materially adversely affected. There can be no assurance that
we will achieve or sustain profitability on a quarterly or annual
basis.
We have a history of operating losses and limited funds.
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We have a history of operating losses. If our business
plan is not fully executed as planned, we may continue to
experience losses as we continue to invest in our core
businesses. Our current financial resources are limited and are
insufficient for execution and expansion of our business plan.
Our ability to execute our business model will depend on our
ability to obtain additional financing and achieve a profitable
level of operations. There can be no assurance that such
financing will be obtained. Nor can we give any assurance that we
will generate substantial revenues or that our business
operations will prove to be profitable.
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Our independent auditor has expressed doubts about our ability to
continue as a going concern.
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We are a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. We are devoting
substantially all of our present efforts in establishing a new
business and we have not achieved any revenues. These factors
raise substantial doubt about our ability to continue as a going
concern. Management's plans regarding our ability to continue as
a going concern are disclosed in Note 1 to the financial
statements. The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
The success of our properties depends on the economy in Florida.
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All of our anticipated rental revenues are planned to come
from properties located in Florida. Events and conditions
applicable to owners and operators of real property that are
beyond our control may decrease the value of our properties.
These events include: local oversupply or reduction in demand for
office or other commercial space; inability to collect rent from
tenants; vacancies or inability to rent spaces on favorable
terms; inability to finance property development on favorable
terms; increased operating costs, including insurance premiums,
utilities, and real estate taxes; costs of complying with changes
in governmental regulations; the relative illiquidity of real
estate investments; changing sub-market demographics and property
damage resulting from seismic activity. The anticipated
geographical concentration of our properties may expose us to
greater economic risks than if we owned properties in several
geographic regions. Any adverse economic or real estate
developments in Florida could adversely impact our financial
condition, results from operations, cash flows, quoted per share
trading price of our common stock and ability to satisfy our debt
service obligations. Obtaining new tenants for our properties
generally will require taking tenants from competitor properties.
We may have difficulty locating suitable investments due to the
competitiveness of our market and the capital requirements.
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Identifying, completing and realizing on real estate
investments has from time to time been highly competitive, and
involves a high degree of uncertainty. We plan to compete for
investments with many public and private real estate investment
vehicles, including financial institutions (such as mortgage
banks, pension funds and REITs) and other institutional
investors, as well as individuals. There can be no assurance that
we will be able to locate and complete investments that satisfy
our desired rate of return objective or realize upon their value.
Many of those with whom we compete for investments and our
services are far larger than we are, may have greater financial
resources than we have and may have management personnel with
more experience than our officers.
The success of our business strategy is dependent upon
being able to obtain significant amounts of equity capital and
proceeds from borrowings on terms financially advantageous to us.
Our inability to obtain such equity capital and debt proceeds on
such terms may have a material adverse effect on the results of
our operations.
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We will face various risks associated with the acquisition,
development, construction and renovation of properties.
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Acquisition. We intend to acquire existing properties to
the extent that they can be acquired on advantageous terms and
meet our investment criteria. Acquisitions of properties entail
general investment risks associated with any real estate
investment, including the risk that investments will fail to
perform as expected, that estimates of the cost of improvements
to bring an acquired property up to standards established for the
intended market position may prove inaccurate and the occupancy
rates and rents achieved may be less than anticipated.
Development, Construction and Renovation. We also intend
to pursue the selective development, construction and renovation
of commercial and residential properties for our own account or
the account of, or through, entities in which we own an equity
interest as opportunities arise. Risks associated with our
development, construction and renovation activities include the
risks that: we may abandon development opportunities after
expending resources to determine feasibility; construction and
renovation costs of a project may exceed original estimates;
occupancy rates and rents at a newly completed property may not
be sufficient to make the property profitable; and development,
construction, renovation and lease-up may not be completed on
schedule (including risks beyond our control, such as weather or
labor conditions or material shortages) resulting in increased
debt service expense and construction costs. Development,
construction and renovation activities are also subject to risks
relating to the inability to obtain, or delays in obtaining, all
necessary zoning, land-use, building, occupancy and other
required governmental permits and authorizations. These risks
could result in substantial unanticipated delays or expenses and,
under certain circumstances, could prevent completion of
development, construction and renovation activities once
undertaken, any of which could adversely affect our financial
condition and results of operations. Properties acquired for
development may generate little or no cash flow from the date of
acquisition through the date of completion of development and may
experience operating deficits after the date of completion. In
addition, new development and renovation activities, regardless
of whether or not they are ultimately successful, typically will
require a substantial portion of management's time and attention.
We will be dependent on the receipt of rental income from real property.
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In the future, we may acquire properties that are vacant or
not fully leased. We expect to incur significant costs,
including those relating to leasing commissions and tenant
improvements, in connection with the leasing of these properties
and may be required to offer tenant concessions, including free
rental periods. Our failure to lease these properties in a
timely manner and on economically favorable terms may have a
material adverse effect on the results of our operations.
Our cash flow, results of operations and value of our
assets would be adversely affected if a significant number of
future tenants of our future failed to meet their lease
obligations or if we or the owner of a property were unable to
lease a significant amount of space on economically favorable
terms. In the event of a default by a lessee, the owner may
experience delays in enforcing its rights as lessor and may incur
substantial costs in protecting its investment. The bankruptcy
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or insolvency of a major tenant may have an adverse effect on a
property. At any time, a tenant may also seek protection under
the bankruptcy laws, which could result in rejection and
termination of such tenant's lease and thereby cause a reduction
in the cash flow of the property. If a tenant rejects its lease,
the owner's claim for breach of the lease would (absent
collateral securing the claim) be treated as a general unsecured
claim. Generally, the amount of the claim would be capped at the
amount owed for unpaid pre-petition lease payments unrelated to
the rejection, plus the greater of one year's lease payments or
15% of the remaining lease payments payable under the lease (but
not to exceed the amount of three years' lease payments). No
assurance can be given that any of our future properties will not
experience significant tenant defaults.
There are risks associated with operating various properties.
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Any properties we operate will be subject to operating
risks common to the particular property type, any and all of
which may adversely affect occupancy or rental rates. Such
properties will be subject to increases in operating expenses
such as cleaning; electricity; heating, ventilation and air-
conditioning; elevator repair and maintenance; insurance and
administrative costs; and other general costs associated with
security, landscaping, repairs and maintenance. While commercial
tenants are often obligated to pay a portion of these escalating
costs, there can be no assurance that they will agree to pay such
costs or that the portion that they agree to pay will fully cover
such costs. If operating expenses increase, local rental markets
could limit the extent to which rents may be increased to meet
increased expenses without decreasing occupancy rates. To the
extent rents cannot be increased or costs controlled, our cash
flow and financial condition may be adversely affected.
We may experience adverse consequences as a result of undertaking debt
financing.
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Leverage. Some of our real estate equity investments may
utilize a leveraged capital structure, in which case a third
party lender would be entitled to cash flow generated by such
investments prior to our receiving a return. As a result of such
leverage, we would be subject to the risks normally associated
with debt financing, including the risk that cash flow from
operations and investments will be insufficient to meet required
payments of principal and interest, the risk that existing debt
(which in most cases will not have been fully amortized at
maturity) will not be able to be refinanced or that the terms of
such refinancings will not be as favorable to us and the risk
that necessary capital expenditures for such purposes as
renovations and other improvements will not be able to be
financed on favorable terms or at all. While such leverage may
increase returns or the funds available for investment by us, it
also will increase the risk of loss on a leveraged investment. If
we default on secured indebtedness, the lender may foreclose and
we could lose our entire investment in the security for such
loan. Because we may engage in portfolio financings where
several investments are cross-collateralized, multiple
investments may be subject to the risk of loss. As a result, we
could lose our interests in performing investments in the event
such investments are cross-collateralized with poorly performing
or nonperforming investments. In addition, recourse debt, which
we reserve the right to obtain, may subject other assets of ours
to risk of loss.
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Existing Debt Maturities; Foreclosures. We anticipate that
only a portion of the principal of our indebtedness outstanding
from time to time will be repaid prior to maturity. However, we
may not have sufficient funds to repay such indebtedness at
maturity; and it may therefore be necessary for us to refinance
debt through additional debt financing or equity offerings. If
we are unable to refinance this indebtedness on acceptable terms,
we may be forced to dispose of properties or other assets upon
disadvantageous terms, which could result in losses to us and
adversely affect the amount of cash available for further
investment.
Risk of Rising Interest Rates. We may incur indebtedness
in the future that also bears interest at a variable rate or may
be required to refinance its debt at higher rates. Increases in
interest rates could increase our interest expense and adversely
effect our financial condition and results of operations.
Covenants. Various credit facilities or other debt
obligations may require that we comply with a number of financial
and other covenants on an ongoing basis. Failure to comply with
such covenants may limit our ability to borrow funds or may cause
a default under any then-existing indebtedness.
No Limitation on Debt. Our Articles of Incorporation and
Bylaws do not contain any limitation on the amount of
indebtedness we may incur. We also have the ability to use a
more highly leveraged business strategy than typically used by
REITs. Accordingly, we could become highly leveraged, resulting
in an increase in debt service that could increase the risk of
default on our indebtedness.
The nature of investments made by us may involve high risk due to
the illiquidity of real estate investments
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We may make investments in real estate-related assets and
businesses that have experienced severe financial difficulties,
which difficulties may never be overcome. Since we may only make
a limited number of investments and since many of the investments
may involve a high degree of risk, poor performance by one of the
investments could severely affect our financial condition and
results of operations.
Equity and debt investments in real estate may be
relatively illiquid. Such illiquidity limits our ability to
modify our portfolio in response to changes in economic or other
conditions. Illiquidity may result from the absence of an
established market for the investments as well as legal or
contractual restrictions on their resale by us.
Our officers and directors are not required to continue as
shareholders and may not maintain an equity interest in the company.
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There is no requirement that our current or any of our
future officers and/or directors retain any of their shares of
our common stock. Accordingly, there is no assurance that all or
any of our officers and/or directors will continue to maintain an
equity interest in the company.
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We have arbitrarily determined the offering price. Accordingly
the price you pay may not accurately reflect the value of our
common stock.
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We have arbitrarily determined the offering price of the
common stock because there is no market for any of our
securities. There can be no assurance that the offering price
accurately reflects the value of our common stock or that
investors will be able to sell the common stock for at least the
offering price or at any price at any time.
We are dependent on the services of our Chief Executive Officer
and the loss of those services would have a material adverse
effect on our business.
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We are highly dependent on the services of Thomas
Fastiggi, our Chairman of the Board, Chief Executive Officer and
Chief Financial Officer. Mr. Fastiggi maintains responsibility
for our overall corporate strategy. Mr. Fastiggi has over thirty
years of experience in real estate sales, property management,
including operations, long range planning and insurance risk
management. The loss of the services of Mr. Fastiggi would have
a material adverse effect upon our business and prospects.
Our executive officers along with our largest shareholder hold
the voting power to greatly influence our affairs and may make
decisions that do not necessarily benefit all shareholders
equally.
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As of the date of this prospectus, our executive officers
and our largest shareholder together own approximately 53% of our
outstanding Common Stock. Consequently, they are in a position
to greatly influence matters submitted for shareholder votes,
including the ability to elect a majority of our Board of
Directors and to exercise control over our affairs, generally.
You may not be able to buy or sell our stock at will and may lose
your entire investment.
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We are not listed on any stock exchange at this time. We
hope to become a bulletin board traded company. These are often
known as "penny stocks" and are subject to various regulations
involving certain disclosures to be given to you prior to the
purchase of any penny stocks. These disclosures require you to
acknowledge you understand the risk associated with buying penny
stocks and that you can absorb the entire loss of your
investment. Penny stocks are low priced securities that do not
have a very high trading volume. Consequently, the price of the
stock is volatile and you may not be able to buy or sell the
stock when you want.
Our management will have broad discretion to use any proceeds
from sales of the common stock and their uses may not yield a
favorable return.
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While we intend to use the net proceeds from any common
stock we are able to sell principally for working capital needs
and general corporate purposes, our management will have broad
discretion to spend the proceeds from this offering in ways with
which stockholders may not agree. The failure of our management
to use these funds effectively could result in unfavorable
returns. This could have significant adverse effects on our
financial condition and could cause the price of our common stock
to decline.
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Future sales of our common stock may have a depressive effect
upon its price.
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All of the currently outstanding shares of common stock
were issued at prices lower than the price of the shares of
common stock in this offering. In the future, sales of these
securities may have an adverse effect on the market price of our
common stock should a public trading market develop for such
shares.
Risks related to this offering:
- -------------------------------
Our shares are "Penny Stocks" which are subject to certain
restrictions that could adversely affect the liquidity of an
investment in us.
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Our shares are "penny stocks" within the definition of that
term contained in Rules 15g-1 through 15g-9 promulgated under the
Securities Exchange Act of 1934, as amended, which imposes sales
practices and disclosure requirements on certain broker-dealers
who engage in certain transactions involving penny stocks. These
additional sales practices and disclosure requirements could
impede the sale of our securities, including securities purchased
herein, in the secondary market. In addition, the liquidity for
our securities may be adversely affected, with related adverse
effects on the price of our securities.
Under the penny stock regulations, a broker-dealer selling
penny stocks to anyone other than an established customer or
"accredited investor" (generally, an individual with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale,
unless the broker-dealer is otherwise exempt. In addition,
unless the broker-dealer or the transaction is otherwise exempt,
the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure
schedule prepared by the Securities and Exchange Commission
relating to the penny stock. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the
Registered Representative and current quotations for the
securities. A broker-dealer is additionally required to send
monthly statements disclosing recent price information with
respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.
There has never been a market for our common stock and one may never develop.
- -----------------------------------------------------------------------------
Prior to this offering, there has been no public trading
market for our common stock and there can be no assurances that a
public trading market for the common stock will develop or, if
developed, will be sustained. Although we hope to be accepted
for quotations on the Over the Counter Bulletin Board, there can
be no assurance that a regular trading market will develop for
the common stock offered through this prospectus, or, if
developed, that it will be maintained.
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There is no assurance of future dividends being paid.
- ----------------------------------------------------
At this time we do not anticipate paying dividends in the
future, but instead plan to retain any earnings for use in the
operation of our business and to fund future growth. We are
under no legal or contractual obligation to declare or to pay
dividends, and the timing and amount of any future cash dividends
and distributions is at the discretion of our Board of Directors
and will depend, among other things, on our future after-tax
earnings, operations, capital requirements, borrowing capacity,
financial condition and general business conditions.
Risks associated with forward-looking statements.
- ------------------------------------------------
This prospectus contains certain forward-looking statements
regarding management's plans and objectives for future operations,
including plans and objectives relating to our planned marketing
efforts and future economic performance. The forward-looking
statements and associated risks set forth in this prospectus
includes or relate to:
(1) Our ability to identify desirable properties now and in
the future and to negotiate favorable terms for our investments
into such properties,
(2) Our ability to market our properties at competitive
prices now and in the future,
(3) Our ability to maintain an effective sales network,
(4) Our success in forecasting demand for our properties
now and in the future, and
(5) Our ability to maintain pricing and thereby maintain
adequate profit margins.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of
securities being offered by our selling shareholders.
Our proceeds from this offering will vary depending on how
many shares of our common stock we are able to sell. If we sell
all shares of common stock being registered in this offering, we
will receive proceeds of $1,000,000. A majority of any proceeds
received will be used for purchase and renovation of property and
for marketing purposes. Any funds not used for such purposes
will be used for working capital and general corporate purposes.
Working capital expenses include expenses for travel,
communications, office supplies, rent and utilities, and other
ongoing selling, general and administrative expenses and we
consider general corporate purposes to be expenses such as those
legal and accounting expenses typically incurred in connection
with being a publicly traded company.
We expect to incur expenses of approximately $60,000 in
connection with the registration of the shares.
The table below shows how proceeds from this offering would
be used for scenarios where we sell various amounts of the shares
and the priority of the use of net proceeds in the event actual
proceeds are not sufficient to accomplish the uses set forth.
While management has developed the following estimates to the
best of its ability, there can be no assurance that we will use
the proceeds exactly as laid out in the table.
Total shares offered 4,000,000 4,000,000 4,000,000 4,000,000
Percent of total shares offered 25% 50% 75% 100%
Shares sold 1,000,000 2,000,000 3,000,000 4,000,000
Gross proceeds from offering 250,000 500,000 750,000 1,000,000
Less: offering expenses 60,000 60,000 60,000 60,000
---------- --------- --------- ---------
Net proceeds from offering 190,000 440,000 690,000 940,000
Use of net proceeds
Accounting & legal fees 20,000 30,000 35,000 40,000
Marketing 19,000 44,000 69,000 94,000
Purchase of Property 80,000 200,000 330,000 450,000
Renovation of Property 40,000 100,000 165,000 225,000
Operating expenses & working capital 31,000 66,000 91,000 131,000
It is possible that no proceeds may be raised from this
offering. It is also possible that some, but not all, of the
4,000,000 shares offered will be sold. If fewer than all of the
shares are sold, we may ultimately need to modify or delay full
implementation of our business plan. There can be no assurance
that any delay or modification will not adversely affect our
development and ultimately our chance of success. If we require
additional funds to develop our plan, such funds may not be
available on terms acceptable to us, or at all.
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The amounts set forth above are estimates developed by our
management for allocation of net proceeds of this offering based
upon our current plans and prevailing economic and industry
conditions and assumes that we are able to sell the numbers of
the shares set forth in each column above. Although we do not
currently contemplate material changes in the proposed use of
proceeds set forth above, to the extent that our management finds
that adjustments are required, the amounts shown may be adjusted
among the uses indicated above. Our proposed use of proceeds is
subject to changes in general, economic and competitive
conditions, timing and management discretion, each of which may
change the amount of proceeds expended for the purposes intended.
The proposed application of proceeds is also subject to changes
in market conditions and our financial condition in general.
Changes in general, economic, competitive and market conditions
and our financial condition would include, without limitation,
the occurrence of a national economic slowdown or recession, a
significant change in the real estate market and the environment
in which we operate, and/or regulatory changes in general. While
our management is not currently aware of the existence or pending
threat of any of the foregoing reasons, we provide you no
assurance that one or more of such events will not occur.
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DETERMINATION OF OFFERING PRICE
Prior to this offering, there has been no market for our
common stock. The offering price of the shares was arbitrarily
determined and bears no relationship to assets, book value, net
worth, earnings, actual results of operations, or any other
established investment criteria. Among the factors considered in
determining the price were our historical sales levels, estimates
of our prospects, the background and capital contributions of
management, the degree of control which the current shareholders
desired to retain, current conditions of the securities markets
and other information.
DIVIDEND POLICY
It is our present policy not to pay cash dividends and to
retain future earnings for use in the operations of the business
and to fund future growth. Any payment of cash dividends in the
future will be dependent upon the amount of funds legally
available, our earnings, financial condition, capital
requirements and other factors that the Board of Directors may
think are relevant.
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DILUTION
Net tangible book value per share represents the amount of
our total tangible assets less total liabilities, divided by the
total number of shares of common stock outstanding. Our net
tangible book value at April 30, 2003 was $.01 or a de minimus
amount per share of common stock. Dilution per share represents
the difference between the offering price of $0.75 per share and
the net tangible book value per share of common stock, as
adjusted, immediately after this offering.
After giving effect to the completion of the offering and
after deducting offering expenses estimated to be $60,000, our
pro forma net tangible book value will be$986,137 or $0.11 per
share. This represents an immediate increase in pro forma net
tangible book value of $0.10 per share to existing stockholders
and an immediate dilution of $0.14 per share, or approximately
56% of the offering price, to investors purchasing shares of
common stock in the offering.
Public offering Price per share $ 0.25
Net Tangible Book Value per share before offering $ 0.01
Increase Per Share attributable to sale of these shares $ 0.10
Pro-Forma Net Tangible Book Value after offering $ 0.11
Dilution per share to Public Investors $ 0.14
The following table summarizes as of April 30, 2003, the
number of shares purchased as a percentage of our total
outstanding shares, the aggregate amount paid for such shares,
the aggregate amount paid figured as a percentage of the total
amount paid, and the average amount paid per share for such
shares. For purposes of this table, the sale to the public of
these shares is assumed to have taken place on April 30, 2003.
Shares Purchased Total Consideration Paid Average Price
Number Percent Amount Percent per Share
------ ------- ------ ------- ---------
Existing Shareholders 5,165,500 56.36% $ 46,137 5% $0.01
New Investors 4,000,000 43.64% $ 940,000 95% $0.25
--------- ------- --------- ------- ---------
Total 9,165,500 100.0% $ 986,137 100.0% $0.11
The following table sets forth the estimated net tangible
book value ("NTBV") per share after the offering and the dilution
to persons purchasing shares based upon various levels of sales
of the shares being achieved:
CAPTION>
Shares outstanding prior to offering 5,165,000
Total shares offered 4,000,000 4,000,000 4,000,000 4,000,000
Shares sold 1,000,000 2,000,000 3,000,000 4,000,000
Public offering price $0.25 $0.25 $0.25 $0.25
Per share increase attributable to
new investors $ 0.03 $ 0.06 $ 0.08 $ 0.10
NTBV per share prior to offering $ 0.01 $ 0.01 $ 0.01 $ 0.01
------------ ------------ ----------- -----------
Post offering pro forma NTBV per share $ 0.04 $ 0.07 $ 0.09 $ 0.11
Dilution to new investors $ 0.21 $ 0.18 $ 0.16 $ 0.14
Percent of dilution of the offering price 84% 72% 64% 56%
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MANAGEMENT'S PLAN OF OPERATIONS
Results and Plan of Operations
- ---------------------------------
For the period from inception through April 30, 2003 no
revenue was generated or anticipated by management's forecast.
We incurred expenses from inception to April 30, 2003 of
$163, which also equaled our loss during that period. This
amount was financed primarily through $46,300 of receipts from
equity subscriptions. Our loss per share through this date was
de minimus. Our officers have agreed to defer all salaries
until we raise a minimum of $500,000. Our principal executive
and administrative offices are currently located in space owned
by an officer who has agreed to contribute the value of the rent
we would anticipate paying for such a space. Accordingly, we are
not presently incurring any rent expenses associated with this
space. We anticipate relocating from this space to a leased
space, within 90 days of our completion of raising financing in a
minimum amount of at least $250,000.
Management believes that, even though our auditors have
expressed substantial doubt about our ability to continue as a
going concern, due to our low cash requirements and the
cooperation of our management in deferring salaries, even if we
are unsuccessful in selling any of the shares of common stock
offered by this prospectus, assuming that we do not commence our
anticipated operations, we will be able to satisfy our cash
requirements for at least the next 12 months. We will not,
however, be able to commence substantial operations, unless and
until we have raised additional funding. Fully executing our
business plan will significantly change our cash needs and we
will not be able to begin such execution until we have raised
substantial additional resources.
We do not anticipate that there will be any significant
changes in the number of employees or expenditures from what is
discussed in this prospectus. There can be no assurance,
however, that conditions will not change forcing us to make
changes to any of our plan of operations or business strategies.
Liquidity and Capital Resources
- -------------------------------
While at this time we do not have any significant current
liabilities, our business expansion will require significant
capital resources that may be funded through the issuance of
notes payable or other debt arrangements that may affect our debt
structure.
To date we have spent a total of $163 in general operating
expenses. We raised the amounts used in these activities from a
Regulation D offering in which we raised $46,300.
To date, we have managed to keep our monthly cash
requirements low for two reasons. First, our officers, who are
all founders and significant shareholders have agreed not to draw
a salary until a minimum of $500,000 in funding is obtained or we
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have generated $500,000 in revenues. Second, we have been able
to keep our operating expenses to a minimum by operating in space
owned by an officer.
Given our low monthly cash requirements and the agreement
of our officers, management believes that, even though our
auditors have expressed substantial doubt about our ability to
continue as a going concern, and assuming that we do not commence
our anticipated operations it has sufficient financial resources
to meet its obligations for at least the next twelve months.
In the early stages of our business plan, we will need cash
for refinancing mortgages, financing acquisitions and
development, and financing capital improvements as well as for
marketing. We anticipate that during the first year, in order to
execute our business plan to any meaningful degree, we would need
to spend a minimum of $500,000 on such endeavors. We hope to
raise these funds through this offering. If we are unable to
raise the funds through this offering we will seek alternative
financing through means such as borrowings from institutions or
private individuals. There can be no assurance that we will be
able to keep costs from being more than these estimated amounts
or that we will be able to raise such funds. Even if we sell all
shares offered through this registration statement, we may need
to seek additional financing in the future. However, we may not
be able to obtain additional capital or generate sufficient
revenues to fund our operations. If we are unsuccessful at
raising sufficient funds, for whatever reason, to fund our
operations, we may be forced to seek a buyer for our business or
another entity with which we could create a joint venture. If
all of these alternatives fail, we expect that we will be
required to seek protection from creditors under applicable
bankruptcy laws. Our independent auditor has expressed
substantial doubt about our ability to continue as a going
concern and believes that our ability is dependent on our ability
to implement our business plan, raise capital and generate
revenues. See Note 1 of our financial statements.
Uncertainties
- -------------
There is intense competition in the real estate investment
market with other companies that are much larger and both
national and international in scope and which have greater
financial resources than we have. At present, we require
additional capital to make our full entrance into this industry.
Forward Looking Statements
Certain statements in this report are forward-looking
statements within the meaning of the federal securities laws.
Although the Company believes that the expectations reflected in
its forward-looking statements are based on reasonable
assumptions, there are risks and uncertainties that may cause
actual results to differ materially from expectations. These
risks and uncertainties include, but are not limited to,
identifying desirable properties, negotiating desirable
investment terms, changes in the real estate market, changing
interest rates, and a general downturn in the economy.
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Recent Accounting Pronouncements
Statement No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets" supercedes Statement No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121"). Though it retains
the basic requirements of SFAS 121 regarding when and how to
measure an impairment loss, SFAS 144 provides additional
implementation guidance. SFAS 144 excludes goodwill and
intangibles not being amortized among other exclusions. SFAS 144
also supercedes the provisions of APB 30, "Reporting the Results
of Operations," pertaining to discontinued operations. Separate
reporting of a discontinued operation is still required, but SFAS
144 expands the presentation to include a component of an entity,
rather than strictly a business segment as defined in SFAS 131,
Disclosures about Segments of an Enterprise and Related
Information. SFAS 144 also eliminates the current exemption to
consolidation when control over a subsidiary is likely to be
temporary. This statement is effective for all fiscal years
beginning after December 15, 2001. The Company believes that the
future implementation of SFAS 144 on January 1, 2002 will not
have a material effect on the Company's financial position,
results of operations or liquidity.
In December 2002, the Financial Accounting Standards Board
issued Statement of Financial Account Standards No. 148,
Accounting for Stock-Based Compensation - Transition and
Disclosure. This Statement amends Statements No. 123 to provide
three alternative methods of transition for Statement No. 123's
fair value method of accounting for stock-based employee
compensation for companies that elect to adopt the provision of
Statement No. 123. Statement No. 148 does not require the
transition to the fair value accounting method of Statement No.
123. The Company has elected to use the intrinsic value method
of accounting for stock compensation in accordance with APB No.
25 and related interpretations. Statement No. 148 also amends
the disclosure provisions of Statement No. 123 to require
disclosure in the summary of significant accounting policies of
the effects of an entity's accounting policy with respect to
stock-based compensation on reported net income and earnings per
share in annual and interim financial statements. The disclosure
provision of Statement No. 148 are required to be adopted by all
companies with stock-based employee compensation, regardless of
whether they account for that compensation using the fair value
method of Statement No. 123 or the intrinsic value method of APB
No. 25. The Company does not anticipate any material effect on
the financial statements.
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BUSINESS
GENERAL AND COMPANY HISTORY
Medallion Crest Management, Inc. was incorporated in the
state of Florida on April 4, 2003 as a C corporation. As of the
date of this prospectus we have not generated any revenues.
We were organized to create and realize value by
identifying and making opportunistic real estate investments by
the direct acquisition, rehabilitation, development, financing
and management of real properties and/or participation in these
activities through the purchase of debt instruments or equity
interests of entities engaged in such real estate businesses.
Management is concentrating its efforts on defining and building
focused operating businesses with recurring sources of income.
We intend to acquire under-performing office and other
commercial or residential properties below replacement cost,
renovating and/or repositioning them, and owning, operating
and/or reselling such properties. We believe that appropriate
well-located commercial properties that are currently under-
performing can be acquired on advantageous terms and repositioned
with the expectation of achieving enhanced returns which are
greater than returns which could be achieved by acquiring a
stabilized property. As opportunities emerge, we may in the
future expand our real estate-related businesses and activities.
We currently do not intend to qualify as a real estate
investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code"). Consequently, we have the
flexibility to respond quickly to opportunities without the
structural limitations inherent in REITs and to operate, when
deemed advantageous by management, on a more highly leveraged
basis than most REITs. We may elect REIT status for certain of
our planned future subsidiaries or affiliates when management
deems it beneficial to our shareholders. By not qualifying as
a REIT under the Code (which would require us to distribute each
year at least 95% of our net taxable income, excluding capital
gains), we have the ability and currently intend to retain for
reinvestment our cash flow generated from operations and to sell
properties without the substantial income tax penalties which may
be imposed on REITs in such transactions. In addition, we differ
from opportunity funds that are typically structured as private
partnerships. In that regard, our business is conducted without
the payment of acquisition, disposition or advisory fees to
general partners that should result in additional cash flow being
available for reinvestment as well as mitigate the potential for
conflicts of interest. In addition, unlike investors in
opportunity funds, our shareholders are expected to have enhanced
liquidity through their ability to sell or margin their stock.
We also hope to attract a broader range of investors because
there is no stipulated investment minimum. However, unlike REITs
and opportunity funds, we are subject to corporate level
taxation.
We are led by Thomas Fastiggi, who serves as our CEO and
CFO. Mr. Fastiggi has over thirty years experience in real
estate sales and property management, including serving for the
past nine years as the General Manager of a $60 million rental
community. We believe that the combined experience of our
management in real estate, capital markets and corporate and real
estate community operations and their demonstrated track record
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of recognizing and profiting from emerging real estate trends
should help the Company accomplish its business objectives. In
analyzing potential investments and market trends and
inefficiencies, management has reviewed, and will continue to
review, current economic and market information.
Business Strategy
In furtherance of our business strategy, we plan to
organize into two strategic business units, each covering a
separate line of business. As opportunities emerge and in
response to changes in market, real estate and general economic
conditions, we may in the future retract from, discontinue or
expand our real estate related business and activities.
Commercial Properties. We seek to acquire commercial
properties below replacement cost and operate and/or resell such
properties after renovation, redevelopment and/or repositioning.
We believe that appropriate well-located commercial properties
which are currently under-performing can be acquired on
advantageous terms and repositioned with the expectation of
achieving enhanced returns which are greater than returns which
could be achieved by acquiring a stabilized property.
We are currently seeking to apply our business strategy to
office properties. As opportunities arise, the Company may seek
to acquire other types of commercial properties, including
industrial properties.
Property Development. We plan to engage in selective
development activities as opportunities arise and when justified
by expected returns. We believe that by pursuing selective
development activities we can achieve returns which are greater
than returns which could be achieved by acquiring stabilized
properties. We may also acquire land for speculation, future
development or subdivision. Certain development activities may
be conducted in joint ventures with local developers who may bear
the substantial portion of the economic risks associated with the
construction, development and initial rent-up of properties. As
part of our strategy, we may seek to obtain bond financing from
local governmental authorities which generally bears interest at
rates substantially below rates available from conventional
financing.
We may in the future make equity investments in entities
owned by third parties and which engage in real estate-related
businesses and activities or businesses that service the real
estate industry. Some of the entities in which we may invest may
be start-up companies or companies in need of additional capital.
We may also in the future invest in retail, residential, hotel
and other types of properties and may also manage and lease
properties owned by us or in which we have an equity or debt
investment.
In analyzing potential investments and market trends and
inefficiencies, management has reviewed, and will continue to
review, current economic and market information.
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COMPETITION
Many of those with whom we compete for investments and our
services are far larger than us, have substantially greater
financial resources than we have and may have management
personnel with more experience than our officers.
LEGAL PROCEEDINGS
We are not party to any legal proceedings as of the date of
this prospectus.
EMPLOYEES
As of the date of this prospectus we have 4 employees all
of whom are serving the company in executive capacities.
DESCRIPTION OF PROPERTY
Our principal office facility is presently located in space
owned by an officer. We are not presently incurring any rent
expenses associated with this space.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND/FINANCIAL DISCLOSURE.
We have had no disagreements with our accountants on
accounting and financial disclosure.
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MANAGEMENT
Directors and Executive Officers
Our sole directors and executive officers are:
Name Age Position Director
- ---- --- -------- Since
--------
Thomas Fastiggi 46 Chairman, Chief Executive 2003
Officer and Chief Financial
Officer
Lisa Beach 42 President
Sean Miller 28 Vice President and Director 2003
Rose Cabasso 48 Vice President, Secretary 2003
and Director
Thomas Fastiggi, CEO and CFO
- ----------------------------
Mr. Fastiggi, who has served as our CEO and CFO since inception,
has over thirty years of experience in real estate
sales, property management, including operations, long range
planning and insurance risk management. This experience includes
preparation of annual budgets, office and facility administration
and database management as well as overall profit and loss
responsibility. He has managed properties in Florida and Hilton
Head, South Carolina with amenities such as beach, tennis clubs,
130 + slip marina facilities and on site restaurants. This
includes supervision of all property management, rental and sales
staff for condominiums, hotel and time shared resorts.
As a licensed Real Estate Broker, his expertise includes real
estate marketing, as well as feasibility studies having worked
for a major resort marketing company with duties such as project
profiling and positioning, competitive property analysis, buyer
profile demographics, marketing, media selection, lead generation
and sales training.
For the past nine years, Mr. Fastiggi serves as General Manager
of a $60 million gulf front community in Sarasota Florida. His
responsibilities include operations, rental program and sales
management, having initiated the sales program at this location.
During the last three years, he directed a $2 million staged
upgrade of the facility including structural repairs with
concrete restoration, renovation of on-site amenities, elevators,
fire alarm and safety upgrades as well as landscape and road
renovation.
He is a graduate of Seton Hall University with a degree in
Business Administration, and is licensed by the state of Florida
as a Real Estate Broker and Community Association Manager. He is
a member of Community Associations Institute (CAI). having
earned the "Certified Manager of Community Associations" ("CMCA")
designation from the National Board of Certification for
Community Association Managers, a CAI sister organization. He
has earned the designated of Association Management Specialist
("AMS") by CAI, one of less than 1200 such professionals
nationwide. He is a member of the Institute of Real Estate
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Management and is a candidate for the Accredited Residential
Manager ("ARM") designation. He has participated as a guest
speaker and panelist for the American Resort and Recreation
Development Association ("ARRDA") southeastern region
conventions.
Lisa Beach, President
- ---------------------
Mrs. Beach, who has served as our President since inception,
is a successful real estate professional with over
20 years in the industry. A longstanding member of the
National Association of Realtors she is a consistent multi-
million dollar sales professional.
In her present position as onsite Sales and Rental Coordinator,
she is responsible for marketing a 362 unit gulf front
condominium. At this community she has been the top sales award
winner, having won awards for Sales Associate of the Year for
each of the last 7 years. She consistently sells over 95% of her
own listings
Her rental program experience includes marketing properties via
tenant inquiries by mail, telephone, World Wide Website, as well
as walk in traffic and existing resident referrals. She has also
been responsible for the selection of advertising media in market
specific locations based on demographically defined seasonal
rental demand.
As Coordinator of the rental program Mrs. Beach introduces new
clients of the firm to the rental program, by explaining the
responsibilities of the firm, the owner and a prospective tenant.
Reservations are handled by Mrs. Beach through computer as well
as backup systems. She is responsible for the escrow of rental
payments for payment of taxes, utilities, insurance and other
obligations of the unit owner, as well as distribution of rental
proceeds to the unit owner.
Mrs. Beach has responsibility for rental unit conditions,
including purchase and replacement of interior furnishings,
kitchen and bath packages, electronics, as well as other items
typically found in a resort rental condominium. She coordinates
the cleaning and unit preparation from tenant to tenant as well
as scheduling use by owners or business or personal associates of
a unit owner.
Sean Miller, Vice President
- ---------------------------
Mr. Miller has served as a Vice President since inception.
With a background in accounting, finance and economics, Mr.
Miller has served as Managing Director for Asset Management
Group, LLC, a privately managed hedge fund since May 2001. Prior
to joining Asset Management Group, Mr. Miller provided consulting
services to the money management firm of Greystone International
Asset Management in the capacity of Assistant Portfolio Manager.
Mr. Miller also served as District Manager for Automatic Data
Processing Inc., a Fortune 500 company. During his tenure at
ADP, Mr. Miller's marketing efforts averaged 165% above his
district's quota.
Rose Cabasso, Vice President and Secretary
- ------------------------------------------
Ms. Cabasso, who has served as a Vice President and our Secretary
since iception, is a graduate of Brooklyn College with a
degree in Psychology and Business Administration. Ms. Cabasso
brings to the Company extensive experience in advertising and
marketing as well as general managerial skills.
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Ms. Cabasso is regarded as an expert in fashion merchandising.
During her career, she has been associated with many of the
premier fashion houses in various managerial positions. Her
employment includes firms such as Kaiser Roth, Bali and Lilly of
France. Her responsibilities were centered in advertising,
marketing, and product promotion through an aggressive media
campaign in the greater New York metropolitan area. Ms. Cabasso
developed unique point-of-purchase displays for the retailer.
She was responsible for the introduction of multiple lines of
clothing in the fashion industry whose names enjoy widespread
brand recognition.
Since starting a family, she left the industry but maintains
extensive contacts within the fashion industry and continues to
serve as a consultant with various firms in the New York
metropolitan area.
Directors' Remuneration
Our directors are presently not compensated for serving on the
board of directors.
Executive Compensation
Employment Agreements
We have not entered into any employment agreements.
Summary Compensation Table
The following table sets forth the total compensation paid
to or accrued for the period from inception through April 30,
2003 to our CEO and our President.
Annual Compensation
Name and Other Restricted Securities All
Principal Position Annual Stock Underlying LTIP Other
Year Salary Bonus Compensation Awards Options Payouts Compensation
- --------------------------------------------------------------------------------------------------------------
Thomas Fastiggi, 2003 $0 0 0 0 0 0 0
CEO and CFO
Lisa Beach, 2003 $0 0 0 0 0 0 0
President
Stock Option Grants in the past fiscal year
We have not issued any grants of stock options in the past fiscal year.
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PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding
beneficial ownership of our common stock as of the date of this
prospectus and as adjusted to reflect the sale of all shares
which may potentially be sold in connection with this
registration statement, by (i) those shareholders known to be the
beneficial owners of more than five percent of the voting power
of our outstanding capital stock, (ii) each director, and (iii)
all executive officers and directors as a group:
Number of Percent Number of
Shares Owned Owned Shares Owned Percent
Name and Address of Before Before After After
Beneficial Owner<F1> Offering Offering Offering Offering <F2>
- ------------------- ------------- ---------- ----------- ------------
Ansbacher (Bahamas) Limited 1,540,000 29.8% 1,540,000 16.8%
Ansbacher House 2nd Floor
East Shirley Street
PO Box N4244
Nassau, Bahamas
Thomas Fastiggi 350,000 6.8% 350,000 3.8%
Lisa Beach 25,000 * 25,000 *
Sean Miller 400,000 7.7% 400,000 4.4%
Rose Cabasso 425,000 8.2% 425,000 4.6%
Andrea Osman 400,000 7.7% 400,000 4.4%
7745 Trieste Place
Delray Beach, FL 33446
Joseph Colonna 400,000 7.7% 400,000 4.4%
2068 Arlington Street
Apartment A
Sarasota, FL 34239
Ronald Colonna 430,000 8.3% 430,000 4.7%
6056 Midnight Pass Road
Sarasota, FL 34248
John Thristino 430,000 8.3% 430,000 4.7%
7745 Trieste Place
Delray Beach, FL 33446
All Directors and Officers as
A Group (4 persons) 1,200,000 23.2% 1,200,000 13.1%
- --------------------
<FN>
<F1>
(1) Unless otherwise indicated, the address of record for the
owner is 3675 North Country Club Drive, Suite 1907, Aventura,
FL 33180.
</FN>
<FN>
<F2>
(2) Assumes the sale of all
shares offered hereunder by the Company and that the
beneficial owners listed above retain all shares held by
such owner.
</FN>
29
31
SELLING SHAREHOLDERS
The following table sets forth certain information with respect
to the ownership of our common stock by selling shareholders as
of May 27, 2003. Unless otherwise indicated, none of the selling
shareholders has or had a position, office or other material
relationship with us within the past three years.
Ownership of Ownership of
Common Stock Number of Common Stock
Prior to Offering Shares offered After Offering
Selling Shareholder Shares Percent Hereby Shares Percent<F1>
- --------------------------------------------------------------------------------------------------
Ansbacher (Bahamas) Limited 1,540,000 29.8% 1,540,000 0 *
Andrea Osman 400,000 7.7% 400,000 0 *
Thomas Fastiggi <F2> 350,000 6.8% 350,000 0 *
Lisa Beach <F3> 25,000 * 25,000 0 *
Sean Miller <F4> 430,000 8.3% 430,000 0 *
Rose Cabasso <F5> 425,000 8.2% 425,000 0 *
Jim Dodrill <F6> 100,000 1.9% 100,000 0 *
Joseph Colonna 400,000 7.7% 400,000 0 *
Ronald Colonna 430,000 8.3% 430,000 0 *
John Thristino 430,000 8.3% 430,000 0 *
Frank Sapienza 100,000 1.9% 100,000 0 *
James Fenmore 100,000 1.9% 100,000 0 *
Tom Milana 25,000 * 25,000 0 *
Peter Puelo 25,000 * 25,000 0 *
Joy Miller 2,500 * 2,500 0 *
Bryan Miller 2,500 * 2,500 0 *
Willy Casanas 5,000 * 5,000 0 *
Lindsay Latino 1,500 * 1,500 0 *
Michael Latino 1,500 * 1,500 0 *
John McClain 20,000 * 20,000 0 *
Ivan Katz 10,000 * 10,000 0 *
Wesley Sheperd 10,000 * 10,000 0 *
Michael Rossi 50,000 * 50,000 0 *
Evan Prizer 80,000 1.55% 80,000 0 *
Robyn Prizer 50,000 * 50,000 0 *
Richard Crowder 50,000 * 50,000 0 *
Richard Crowder, Inc. 50,000 * 50,000 0 *
Health Medical, Inc. 5,000 * 5,000 0 *
Melvin Negron 1,250 * 1,250 0 *
Marina Negron 1,250 * 1,250 0 *
Shawn Bartlett 1,000 * 1,000 0 *
Gabriela Bartlett 1,000 * 1,000 0 *
John Cairo 20,000 * 20,000 0 *
Jean Waldron 5,000 * 5,000 0 *
Hildegard Karounos 1,000 * 1,000 0 *
Janet Comuzzi 5,000 * 5,000 0 *
Hope Corson 5,000 * 5,000 0 *
S.G. Huneryager 5,000 * 5,000 0 *
Roberta Huneryager 5,000 * 5,000 0 *
Vincent Kohen 5,000 * 5,000 0 *
William Rosenberg 10,000 * 10,000 0 *
Don McGinnis 1,000 * 1,000 0 *
Kathy Shoemaker 1,000 * 1,000 0 *
Robert Collazo 5,000 * 5,000 0 *
Toma Sheperd 5,000 * 5,000 0 *
Total 5,165,000 5,165,000
* Indicates less than 1%
<FN>
<F1>
1) Assumes that all shares are sold pursuant to this offering and
that no other shares of common stock are acquired or disposed
of by the selling shareholders prior to the termination of
this offering. Because the selling shareholders may sell all,
some or none of their shares or may acquire or dispose of
other shares of common stock, no reliable estimate can be made
of the aggregate number of shares that will be sold pursuant
to this offering or the number or percentage of shares of
common stock that each shareholder will own upon completion of
this offering.
</FN>
<FN>
<F2>
2) Mr. Fastiggi is our principal executive officer, principal
financial officer and Chairman of our Board of Directors.
</FN>
<FN>
<F3>
3) Ms. Beach is our President.
</FN>
<FN>
<F4>
4) Mr. Miller is a Vice President and a Director.
</FN>
<FN>
<F5>
5) Ms. Cabasso is a Vice President and a Director.
</FN>
<FN>
<F6>
6) Mr. Dodrill is the principal of The Law Office of James G.
Dodrill II, PA, our law firm.
</FN>
30
32
DESCRIPTION OF SECURITIES
-------------------------
General
Our authorized capital stock consists of 100,000,000 shares of
common stock, par value $0.0001 per share, and 20,000,000 shares of
preferred stock, par value $.0001 per share. As of the date of this
prospectus, 5,165,000 shares of common stock and no shares of
preferred stock were outstanding. We presently act as the transfer
agent for our common stock but, prior to an active trading market
developing, will hire a professional transfer agent service to serve
as our transfer agent.
Common Stock
We are authorized to issue 100,000,000 shares of our common
stock, $0.0001 par value, of which 5,165,000 shares are issued and
outstanding as of the date of this prospectus. The issued and
outstanding shares of common stock are fully paid and non-assessable.
Except as provided by law or our certificate of incorporation with
respect to voting by class or series, holders of common stock are
entitled to one vote on each matter submitted to a vote at a meeting
of shareholders.
Subject to any prior rights to receive dividends to which the
holders of shares of any series of the preferred stock may be
entitled, the holders of shares of common stock will be entitled to
receive dividends, if and when declared payable from time to time by
the board of directors, from funds legally available for payment of
dividends. Upon our liquidation or dissolution, holders of shares of
common stock will be entitled to share proportionally in all assets
available for distribution to such holders.
Preferred Stock
The board of directors has the authority, without further action
by our shareholders, to issue up to 20,000,000 shares of preferred
stock, par value $.0001 per share, in one or more series and to fix
the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and the number of shares
constituting any series or the designation of such series. No shares
of preferred stock are currently issued and outstanding. The issuance
of preferred stock could adversely affect the voting power of holders
of common stock and could have the effect of delaying, deferring or
preventing a change of our control.
Market for Common Equity and Related Stockholder Matters
There is no established public market for our common stock and we
have arbitrarily determined the offering price. Although we hope to
be quoted on the OTC Bulletin Board, our common stock is not currently
listed or quoted on any quotation service. There can be no assurance
that our common stock will ever be quoted on any quotation service or
that any market for our stock will ever develop or, if developed, will
be sustained.
31
33
As of May 15, 2003, there were 45 shareholders of record of our
common stock and a total of 5,165,000 shares outstanding. Of the
5,165,000 shares of common stock outstanding, 2,740,000 shares of
common stock are beneficially held by "affiliates" of the company.
All shares of common stock registered pursuant to this Registration
Statement will be freely transferable without restriction or
registration under the Securities Act, except to the extent purchased
or owned by our "affiliates" as defined for purposes of the Securities
Act.
Under certain circumstances, restricted shares may be sold
without registration, pursuant to the provisions of rule 144. In
general, under rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under
certain circumstances, sell within any three-month period a number of
restricted securities which does not exceed the greater of one percent
of the shares outstanding or the average weekly trading volume during
the four calendar weeks preceding the notice of sale required by rule
144. In addition, rule 144 permits, under certain circumstances, the
sale of restricted securities without any quantity limitations by a
person who is not an affiliate of ours and has satisfied a two-year
holding period. Any sales of shares by shareholders pursuant to rule
144 may have a depressive effect on the price of our common stock.
32
34
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
-------------------------------------------------
Our Articles of Incorporation, as well as our By-Laws provide for
the indemnification of directors, officers, employees and agents of the
corporation to the fullest extent provided by the Corporate Law of the
State of Florida, as well as is described in the Articles of
Incorporation and the By-Laws. These sections generally provide that
the Company may indemnify any person who was or is a party to any
threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative or investigative except for an action by
or in right of the corporation by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation.
Generally, no indemnification may be made where the person has been
determined to be negligent or guilty of misconduct in the performance of
his or her duties to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers or
controlling persons, pursuant to the foregoing provisions, or
otherwise, we have been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy
as expressed in the Securities Act of 1933, and is, therefore,
unenforceable.
33
35
PLAN OF DISTRIBUTION
--------------------
Upon effectiveness of this registration statement, we will
conduct the sale of the shares we are offering on a self-underwritten,
best-efforts basis. This means that we do not have an underwriter and
that we will sell the shares directly to investors. Participating on
our behalf in the distribution is Thomas Fastiggi, our Principal
Executive Officer, who is exempt from registration as a broker dealer
under Rule 3a4-1 of the Securities Exchange Act. All shares of our
common stock that we are registering for sale by the company that we
are able to sell will be sold at a price per share of $0.25. There
can be no assurance that we will sell all or any of the shares
offered. We have no arrangement or guarantee that we will sell any
shares. All subscription checks shall be made to the order of
Medallion Crest Management, Inc.
While we do not anticipate utilizing any registered securities
broker-dealers in connection with any sales of the shares and have no
arrangements to use any broker-dealers, we may, in our discretion,
accept subscriptions for shares through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and
are willing to, in connection with such sales, pay a commission of up
to 10% of the price of each share sold. No officers or directors
shall receive any commissions or compensation for their sale of the
shares pursuant to the terms hereof.
The selling shareholders will sell their shares at a price per
share of $0.25 until our shares are quoted on the Over The Counter
Bulletin Board and thereafter at prevailing market prices or in
privately negotiated transactions. The selling shareholders may sell
or distribute their common stock from time to time themselves, or by
donees or transferees of, or other successors in interests to, the
selling shareholders, directly to one or more purchasers or through
brokers, dealers or underwriters who may act solely as agents or may
acquire such common stock as principals, at market prices prevailing
at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be
changed. Accordingly, the prices at which the selling shareholder's
shares are sold may be different than the price of shares that we
sell. These sales by Selling Shareholders may occur contemporaneously
with sales by us. The sale of the common stock offered by the selling
shareholders through this prospectus may be affected in one or more of
the following:
- - Ordinary brokers' transactions;
- - Transactions involving cross or block trades or otherwise
- - Purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to this
prospectus;
- - "at the market" to or through market makers or into any market for
the common stock which may develop;
- - in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
- - in privately negotiated transactions; or
- - any combination of the foregoing.
34
36
Brokers, dealers, underwriters or agents participating in the
distribution of the shares as agents may receive compensation in the
form of commissions, discounts or concessions from the selling
shareholders and/or purchasers of the common stock for whom such
broker-dealers may act as agent, or to whom they may sell as
principal, or both. The compensation paid to a particular
broker-dealer may be less than or in excess of customary commissions.
Neither we nor any selling shareholder can presently estimate the
amount of compensation that any agent will receive. We know of no
existing arrangements between any selling shareholder, any other
shareholder, broker, dealer, underwriter or agent relating to the sale
or distribution of the shares. In the event that we use an
underwriter or a broker-dealer to consummate the sale of the shares we
are registering for sale by the company, we will file a post-effective
amendment to this registration statement setting forth the name of
such entity and the terms under which such entity is participating in
this offering.
We will pay all of the expenses incident to the registration,
offering and sale of the shares to the public, but will not pay
commissions and discounts, if any, of underwriters, broker-dealers or
agents, or counsel fees or other expenses of the selling shareholders.
We have also agreed to indemnify the selling shareholders and related
persons against specified liabilities, including liabilities under the
Securities Act.
We have advised the selling shareholders that while they are
engaged in a distribution of the shares included in this prospectus
they are required to comply with Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes the selling shareholders, any affiliated
purchasers, and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to
induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases make in order to
stabilize the price of a security in connection with the distribution
of that security. All of the foregoing may affect the marketability
of the shares offered hereby in this prospectus.
35
37
LEGAL MATTERS
-------------
The Law Office of James G. Dodrill II, PA of Boca Raton, Florida
will give an opinion for us regarding the validity of the common stock
offered in this prospectus.
EXPERTS
-------
The financial statements as of April 30, 2003 and for the period
from April 4, 2003 (inception) to April 30, 2003 included in this
prospectus have been so included in reliance on the report of Daszkal
Bolton LLP, independent certified public accountants, given on the
authority of said firm as experts in auditing and accounting.
36
38
WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------
We have filed a registration statement under the Securities Act
with respect to the securities offered hereby with the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549. This prospectus, which
is a part of the registration statement, does not contain all of the
information contained in the registration statement and the exhibits
and schedules thereto, certain items of which are omitted in
accordance with the rules and regulations of the Commission. For
further information with respect to Medallion Crest Management, Inc.
and the securities offered hereby, reference is made to the
registration statement, including all exhibits and schedules thereto,
which may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N. W., Room 1024,
Washington, D. C. 20549, and at its Regional Office located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 at prescribed rates during regular business hours. You
may obtain information on the operation of the public reference
facilities by calling the Commission at 1-800-SEC-0330. Also, the SEC
maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that
file electronically with the Commission at http://www.sec.gov.
Statements contained in this prospectus as to the contents of any
contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or document
filed as an exhibit to the registration statement, each such statement
being qualified in its entirety by such reference. We will provide,
without charge upon oral or written request of any person, a copy of
any information incorporated by reference herein. Such request should
be directed to us at Medallion Crest Management, Inc., 3675 North
Country Club Drive, Suite 1907, Aventura, Florida 33180 Attention:
Thomas Fastiggi, CEO.
Following the effectiveness of this registration statement, we
will file reports and other information with the Commission. All of
such reports and other information may be inspected and copied at the
Commission's public reference facilities described above. The
Commission maintains a web site that contains reports, proxy and
information statements and other information regarding issuers that
file electronically with the Commission. The address of such site is
http://www.sec.gov. In addition, we intend to make available to our
shareholders annual reports, including audited financial statements,
unaudited quarterly reports and such other reports as we may determine.
37
39
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
PERIOD FROM APRIL 4, 2003 (INCEPTION)
THROUGH APRIL 30, 2003
40
TABLE OF CONTENTS
Independent Auditor's Report 1
Financial Statements:
Balance Sheet as of April 30, 2003 2
Statement of Operations for the period from April
4, 2003 (inception) through April 30, 2003 3
Statement of Changes in Stockholders' Equity for
the period from April 4, 2003 (inception)
through April 30, 2003 4
Statement of Cash Flows for the period from April
4, 2003 (inception) through April 30, 2003 5
Notes to Financial Statements 6
41
Michael I. Daszkal, CPA, P.A. 2401 N.W. Boca Raton Boulevard
Jeffrey A. Bolton, CPA, P.A. Boca Raton, FL 33431
Timothy R. Devlin, CPA, P.A. t: 561.367.1040
Michael S. Kridel, CPA, P.A. f: 561.750.3236
Marjorie A. Horwin, CPA, P.A. www.daszkalbolton.com
DASZKALBOLTON LLP
-----------------
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors and Stockholders
Medallion Crest Management, Inc.
We have audited the accompanying balance sheet of Medallion Crest
Management, Inc., (a development stage company) as of April 30, 2003,
and the related statements of operations, changes in stockholders'
equity and cash flows for the period from April 4, 2003 (inception)
through April 30, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Medallion
Crest Management, Inc. as of April 30, 2003, and the results of its
operations and its cash flows for the period from April 4, 2003
(inception) through April 30, 2003, in conformity with accounting
principles generally accepted in the United States of America.
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 has experienced losses in
the development stage. This raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in the Note 1. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ DASZKAL BOLTON LLP
Boca Raton, Florida
May 15, 2003
Member of American Institute of Certified Public Accountants - SEC and
Private Companies Practice Sections Member Affiliated Offices Worldwide
1
42
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 2003
- ----------------------------------------------------------------
ASSETS
------
2003
----------
Current assets:
Cash $ 46,137
----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Total liabilities $ -
----------
Stockholders' equity:
Preferred stock, 20,000,000
authorized, par value
$.0001; none issued and
outstanding -
Common stock, 100,000,000
authorized, $.0001 par value;
5,165,000 issued and outstanding $ 517
Additional paid in capital 45,783
Deficit accumulated during the
development stage (163)
----------
Total stockholders' equity 46,137
----------
Total liabilities and stockholders' equity $ 46,137
==========
See accompanying notes to financial statements.
2
43
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 4, 2003 (INCEPTION) THROUGH APRIL 30, 2003
- --------------------------------------------------------------------
April 4, 2003
(inception)
through
April 30, 2003
--------------
Revenue $ -
Selling, general and administrative expenses 163
-----------
Loss from operations (163)
-----------
Provision (benefit) for income taxes -
-----------
Net loss $ (163)
===========
Basic and diluted loss per share $ -
===========
Basic and diluted weighted average shares outstanding 2,127,712
===========
See accompanying notes to financial statements.
3
44
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM APRIL 4, 2003 (INCEPTION) THROUGH APRIL 30, 2003
- --------------------------------------------------------------------
Accumulated
Common Stock Deficit
------------------- Additional Development
Shares Amount Paid-In Capital Stage Total
--------- -------- --------------- ----------- --------
Balance, April 4, 2003 (inception) - $ - $ - $ - $ -
Initial capital contributions 4,750,000 475 4,275 - 4,750
Common stock issued for cash 415,500 42 41,508 - 41,550
Net loss - April 30, 2003 - - - (163) (163)
--------- ------- -------- -------- --------
Balance, April 30, 2003 5,165,500 $ 517 $ 45,783 $ 163 $ 46,137
========= ======= ======== ======== ========
See accompanying notes to financial statements.
4
45
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 4, 2003 (INCEPTION) THROUGH APRIL 30, 2003
- --------------------------------------------------------------------
April 4, 2003
(inception)
through
April 30, 2003
--------------
Cash flows from operating activities:
Net loss $ (163)
---------
Net cash used in operating activities (163)
---------
Cash flows from financing activities
Common stock issued for cash 41,550
Initial capital contribution 4,750
---------
Net cash provided by financing activities 46,200
---------
Net increase in cash 46,137
Cash at beginning of period -
---------
Cash at end of period $ 46,137
=========
Supplementary information:
--------------------------
Cash paid for:
Interest $ -
=========
Income taxes $ -
=========
See accompanying notes to financial statements.
5
46
MEDALLION CREST MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK
Medallion Crest Management, Inc was incorporated on April 4, 2003 in
order to create and realize value by identifying and making
opportunistic real estate investments by the direct acquisition,
rehabilitation, financing and management of real properties.
The Company has no revenues to date. Since its inception, the Company
has been dependent upon the receipt of capital investment to fund its
continuing activities. In addition to the normal risks associated
with a new business venture, there can be no assurance that the
Company's business plan will be successfully executed. Our ability to
execute our business model will depend on our ability to obtain
additional financing and achieve a profitable level of operations.
There can be no assurance that sufficient financing will be obtained.
Nor can we give any assurance that we will generate substantial
revenues or that our business operations will prove to be profitable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Equivalents
The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with general
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.
Basic and Diluted Earnings Per Share
Basic income per common share is computed by dividing the net income
by the weighted average number of shares of common stock outstanding
during the year. Diluted income per common share is determined using
the weighted-average number of common shares outstanding during the
year, adjusted for the dilutive effect of common stock equivalents,
consisting of shares that might be issued upon exercise of common
stock options. In periods where losses are reported, the weighted-
average number of common shares outstanding excludes common stock
equivalents, because their inclusion would be anti-dilutive.
NOTE 3 - EQUITY TRANSACTIONS
Common Stock Issued for Cash
During the period ended April 30, 2003, the Company issued 4,750,000
of common stock to initial investors for cash. The Company valued the
shares at $.001 per share, for a total of $4,750.
Also during the period ended April 30, 2003, the Company issued
415,500 of common stock at $.10 per share, for a total of $41,550.
NOTE 4 - INCOME TAXES
For income tax purposes, the Company has elected to capitalize start-
up costs incurred during 2003 and totaling $163. The start-up costs
will be amortized over sixty months beginning in the year of initial
operations.
6
47
No dealer, salesman or other
person is authorized to give any
information or to make any
representations not contained in
this prospectus in connection with
the offer made hereby, and, if
given or made, such information or
representations must not be relied
upon as having been authorized by
Medallion Crest Management, Inc.
This prospectus does not constitute
an offer to sell or a solicitation
to an offer to buy the securities
offered hereby to any person in any
state or other jurisdiction in
which such offer or solicitation
would be unlawful. Neither the
delivery of this prospectus nor any
sale made hereunder shall, under
any circumstances, create any
implication that the information
contained herein is correct as of
any time subsequent to the date
hereof.
Until _________ __, 2003 (90 days
after the date of this prospectus)
all dealers that effect
transactions in these securities,
whether or not participating in
this offering, may be required to
deliver a prospectus. This is in
addition to the dealer's obligation
to deliver a prospectus when acting
as underwriters and with respect to
their unsold allotments or
subscriptions.
TABLE OF CONTENTS
Page
Prospectus Summary 3 Medallion Crest Management, Inc.
The Offering 4
Summary Financial Data 6
Risk Factors 7
Use of Proceeds 16
Determination of Offering Price 18
Dividend Policy 18
Dilution 19 9,165,500 SHARES
Management's Plan of Operation 20
Business 23
Management 26
Principal Shareholders 29
Selling Shareholders 30
Description of Securities 32
Indemnification 33 PROSPECTUS
Plan of Distribution 34
Legal Matters 36
Experts 36
Where You Can Find More
Information 37
Financial Statements
June 3, 2003
48
PART II
-------
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation, as well as our By-Laws provide
for the indemnification of directors, officers, employees and
agents of the corporation to the fullest extent provided by the
Corporate Law of the State of Florida, as well as is described in
the Articles of Incorporation and the By-Laws. These sections
generally provide that the Company may indemnify any person who
was or is a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or
investigative except for an action by or in right of the
corporation by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation.
Generally, no indemnification may be made where the person has
been determined to be negligent or guilty of misconduct in the
performance of his or her duties to the Company.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to our directors, officers or
controlling persons, pursuant to the foregoing provisions, or
otherwise, we have been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933,
and is, therefore, unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate that expenses in connection with this
registration statement will be as follows:
SEC registration fee* $ 186
Accounting fees and expenses $ 4,000
Legal $ 50,000
Miscellaneous* $ 5,814
=========
Total $ 60,000
* estimates
49
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following information is furnished with regard to all
securities sold by us within the past three years that were not
registered under the Securities Act. The issuances described
hereunder were made in reliance upon the exemptions from
registration set forth in Section 4(2) of the Securities Act or
Regulation D, Rule 504 of the Securities Act. None of the
foregoing transactions involved a distribution or public offering.
Date Name # of Shares Total Price
- -------------------------------------------------------------------
4/7/03 Joy Miller 2,500 $250
4/7/03 Bryan Miller 2,500 $250
4/8/03 Willy Casanas 5,000 $500
4/9/03 Lindsay Latino 1,500 $150
4/9/03 Michael Latino 1,500 $150
4/10/03 John McClain 20,000 $2,000
4/11/03 Ivan Katz 10,000 $1,000
4/12/03 Wesley Sheperd 10,000 $1,000
4/14/03 Ansbacher
(Bahamas) Limited 1,540,000 $1,540
4/14/03 Andrea Osman 400,000 $400
4/14/03 Michael Rossi 50,000 $5,000
4/14/03 Evan Prizer 80,000 $8,000
4/14/03 Robyn Prizer 50,000 $5,000
4/14/03 Sean Miller 430,000 $430
4/14/03 Jim Dodrill 100,000 $100
4/14/03 John Thristino 430,000 $430
4/15/03 Richard Crowder 50,000 $5,000
4/15/03 Richard Crowder,
Inc. 50,000 $5,000
4/21/03 Health Medical,
Inc. 5,000 $5,000
4/21/03 Melvin Negron 1,250 $1,250
4/21/03 Marina Negron 1,250 $1,250
4/21/03 Jean Waldron 5,000 $500
4/21/03 Hildegard Karounos 1,000 $100
4/22/03 Janet Comuzzi 5,000 $500
4/23/03 Hope Corson 5,000 $500
4/21/03 Jean Waldron 5,000 $500
4/21/03 Hildegard Karounos 1,000 $100
4/22/03 Janet Comuzzi 5,000 $500
4/23/03 Hope Corson 5,000 $500
4/23/03 Shawn Bartlett 1,000 $1,000
4/23/03 Gabriela Bartlett 1,000 $1,000
4/24/03 John Cairo 20,000 $2,000
4/24/03 S.G. Huneryager 5,000 $500
4/25/03 Roberta Huneryager 5,000 $500
4/25/03 Vincent Kohen 5,000 $500
4/28/03 William Rosenberg 10,000 $1,000
4/24/03 Don McGinnis 1,000 $100
4/24/03 Kathy Shoemaker 1,000 $100
4/28/03 Thomas Fastiggi 350,000 $350
4/28/03 Lisa Beach 25,000 $25
4/28/03 Rose Cabasso 425,000 $425
4/28/03 Joseph Colonna 400,000 $400
4/28/03 Ronald Colonna 430,000 $430
4/29/03 Robert Collazo 5,000 $500
4/29/03 Frank Sapienza 100,000 $100
4/29/03 James Fenmore 100,000 $100
4/29/03 Tom Milana 25,000 $25
4/29/03 Peter Puelo 25,000 $25
4/29/03 Toma Sheperd 5,000 $500
50
ITEM 27. EXHIBITS
Exhibit Number Description
3.1 Articles of Incorporation of Medallion
Crest Management, Inc.
3.2 Bylaws of Medallion Crest Management, Inc.
3.3 Specimen certificate of the Common Stock of
Medallion Crest Management, Inc.
5.1 Opinion of Law Office of James G. Dodrill
II, PA as to legality of securities being
registered
23.1 Consent of Daszkal Bolton LLP
23.2 Consent of Law Office of James G. Dodrill
II, PA (included in Exhibit 5.1)
51
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy and as expressed in
the Act and is, therefore, unenforceable.
The Company hereby undertakes to:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
i. Include any prospectus required by Section
10(a)(3) of the Securities Act;
ii. Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
registration statement.
iii. Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
(4) For determining any liability under the Securities
Act, treat the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the Company under Rule 424(b)(1) or (4)
or 497(h) under the Securities Act as part of this
registration statement as of the time the Commission
declared it effective.
(5) For determining any liability under the Securities
Act, treat each post-effective amendment that contains a
form of prospectus as a new registration statement for the
securities offered in the registration statement, and that
offering of the securities at that time as the initial bona
fide offering of those securities.
(6) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act") may be
permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise,
we have been advised by the Securities and Exchange
Commission that such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or
paid by one of our directors, officers or controlling persons in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless
in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
52
Signatures
In accordance with the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable ground to believe
that it meets all of the requirements for filing on Form SB-2 and
authorized this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of
Aventura state of Florida, on June 3, 2003.
MEDALLION CREST MANAGMENT, INC.
By: /s/ Thomas Fastiggi
-----------------------------------
Thomas Fastiggi
Principal Executive Officer,
Principal Financial Officer
and Chairman
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the following
person in the capacities indicated on June 3, 2003.
/s/ Thomas Fastiggi Principal Executive Officer, Principal Financial
------------------- Officer and Chairman
Thomas Fastiggi
/s/ Lisa Beach President
-------------------
Lisa Beach
/s/ Sean Miller Vice President and Director
-------------------
Sean Miller
/s/ Rose Cabasso Vice President, Secretary and Director
-------------------
Rose Cabasso
53