AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 2003
REGISTRATION STATEMENT NO. 333-104815
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
AMENDMENT NO. 3 TO
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CORPORATE ROAD SHOW.COM INC.
----------------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEW YORK 7812 11-3516358
-------- ---- ----------
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
---------------------------
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
80 ORVILLE DRIVE
SUITE 100
BOHEMIA, NEW YORK 11716
TEL: (631) 244-1555
FAX: (631) 244-1554
(AGENT FOR SERVICE OF PROCESS)
MR. FRANK FERRARO
80 ORVILLE DRIVE
SUITE 100
BOHEMIA, NEW YORK 11716
TEL: (631) 244-1555
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
80 ORVILLE DRIVE
SUITE 100
BOHEMIA, NEW YORK 11716
TEL: (631) 244-1555
FAX: (631) 244-1554
---------------------------
COPIES TO:
WILLIAM S. ROSENSTADT, ESQ.
SPITZER & FELDMAN P.C.
405 PARK AVENUE,
NEW YORK, NEW YORK 10022-4405
TEL: (212) 888 6680
FAX: (212) 838 7472
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Registration
Securities to be Registered Registered Security Price(1) Fee
Common Stock, $0.0001 par
value, to be registered by Issuer 2,000,000 $1.00 $2,000,000 $184
Common Stock, $0.0001 par value,
to be registered by Selling
Shareholder 500,000 $1.00 $ 500,000 $46
==========================================================================================================
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended (the
"Securities Act").
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE HAVE FILED A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
(2)
The information in this Prospectus is not complete and is subject to change.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities in any state where the offer of sale is not prohibited.
SUBJECT TO COMPLETION, DATED AUGUST 19, 2003
PRELIMINARY PROSPECTUS
2,500,000 Shares
CORPORATE ROAD SHOW.COM INC.
Common Stock
Corporate Road Show.com Inc. is offering 2,000,000 shares of common stock,
$.0001 par value, which as of this date have not been issued. Subject to certain
restrictions one of our shareholders, the selling shareholder, is offering to
sell 500,000 shares of our common stock held by him. We will not receive any
proceeds from the sale of the shares of common stock being offered by the
selling shareholder
The shares of our common stock which will be offered and sold by us on a
self-underwritten basis will be sold by using our officers, directors, or, at
our discretion, by participating broker-dealers licensed by the National
Association of Securities Dealers, Inc. at a price per share of $1. At this time
we have not identified any one entity to purchase our shares of common stock. We
are not required to sell a minimum amount in this offering and funds received by
us from this offering will not be placed into an escrow account. Although the
selling shareholder paid $1.00 per share, it should be noted that there is no
restriction requiring him to sell his shares at a price above $1.00 per share.
However, until our securities are quoted on the OTC Bulletin Board, the selling
shareholder has agreed to sell his shares at a price of $1.00. Therefore, the
risk exists that shares offered by such individual may be sold to the public at
prices below our offering price.
Prior to this offering, there has been no public market for the common
stock. Our offering will commence on the date of this prospectus and will
continue until the earlier of _______________ [18 months after effectiveness],
all of the shares offered are sold, or we otherwise terminate the offering.
--------------------------
The shares of common stock being offered by this prospectus involves a high
degree of risk. You should read the "Risk Factors" section beginning on Page 5
before you decide to purchase any of the common stock.
--------------------------
Price Per Share Aggregate Price Proceeds to Us
--------------- --------------- --------------
Common Stock Offered by the $1.00 $2,000,000.00 $1,900,000.00
Registrant
Common Stock Offered by the $1.00 $500,000.00 0
Selling Shareholder
In the event that we engage a broker-dealer to sell some or all of our
shares, we anticipate paying a commission of no more than ten (10%) percent
which would reduce our proceeds by $200,000 if all 2,000,000 shares were sold
subject to such commission.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. NOR HAVE THEY MADE, NOR WILL THEY MAKE, ANY
DETERMINATION AS TO WHETHER ANYONE SHOULD BUY THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
Until________________, [90 days after effectiveness] 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 any
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to any unsold allotments or subscriptions.
THE DATE OF THIS PROSPECTUS IS [August 19, 2003]
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TABLE OF CONTENTS
Prospectus Summary.............................................................1
The Offering...................................................................3
Summary Financial Data.........................................................3
Risk Factors...................................................................5
Use of Proceeds...............................................................10
Determination of Offering Price...............................................12
Dilution......................................................................12
Capitalization................................................................14
Dividend Policy...............................................................15
Management's Discussion and Analysis and Results of Operations................15
Description of Business.......................................................18
Management....................................................................22
Code of Ethics................................................................25
Certain Relationships and Related Transactions................................25
Disclosure of Commission Position of Indemnification
for Securities Act Liabilities................................................26
Security Ownership of Certain Beneficial Owners and Management................27
Selling Shareholder...........................................................28
Description of Securities.....................................................28
Plan of Distribution..........................................................30
Legal Matters.................................................................31
Experts.......................................................................32
Where You Can Find More Information...........................................32
Financial Statements.........................................................F-1
iii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information that you should consider
before investing in the securities. You should read the entire prospectus
carefully, especially the risks of investing in the securities discussed under
"Risk Factors" beginning on page 5.
About Us
Corporate Road show.com Inc. was initially incorporated on November 1, 1999
in the State of New York (hereinafter "CRS", "we" or "us").
Our Business
Presently, we are an internet based marketing company which produces and
hosts corporate videos. Currently our main service is videotaping corporate
interviews or events and making the presentations available on both the
worldwide web via our website www.corporateroadshow.com or in a hardcopy format.
Our website serves as a distribution center for companies seeking to showcase
their products and market their goods and services to the global internet
community. We have the capabilities to produce high quality but reasonably
priced custom-made "live" and "on demand" video and audio productions as we
contract a local studio to perform the original video production work and that
any interviews that we produce are filmed by an independent video crew that we
retain.
Our fees are scaled depending on the extent of services rendered by us.
Fees can vary depending on different needs the client might have for video
production. Although we have yet to produce a video with a celebrity
interviewer, a client may desire such. In that event, we would anticipate having
to charge more based on the hiring of the actor. We also charge extra for
traveling out of state or to different locations. In determining our fees for
hosting several factors are: the length of the production; number of mega bytes
it converts into; the level of streaming (56K,DSL,T-1); and the term of the
hosting agreement. Our ISP charges us a monthly fee of $1.00 per mega byte per
month. Thus, if a 15minute production translates into 60MB, our hosting cost
would be $60 for that month for that video. We have to incorporate these charges
in our fees as well.
Our content can vary depending on the company. Our content in our past,
whether it be an interview or presentation has been limited to corporate
executives discussing their company and its respective services. In all of our
productions we put a general disclaimer on the front page of our website which
discloses the number of shares of our clients we have been paid for our
services. Only companies that have not paid us for our services are not found in
the disclaimer. Regarding our disclaimer, we now have a click thru button to
make sure visitors have acknowledged reading the disclaimer before viewing the
videos. This same disclaimer is also annexed to the video files.
In addition to the continued development of our core internet business, we
are now poised to begin the second phase of our corporate growth: television
production. We believe that by producing a weekly half-hour "investment format"
program featuring small to mid-sized companies, we can offer a value added
service previously unavailable to that targeted capital market. Initially, we
intend to televise such a program in the New York metropolitan region.
Typical Internet Production
Once a client has retained us for a video production, we will set up and
perform an interview with such client. Such interview will be filmed by an
independent video crew that we retain. Generally, the interviewer will be an
actor hired by us. After the filming process is complete, the video goes to the
edit room for editing, music, title page credits and other production aspects.
We then digitize the video for
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hosting over the Internet. The client then has access to the video on the
Internet and can email that video to any data base (ie. shareholders, employees,
customers).
Show Concept
Corporate Roadshow Presents is anticipated to be a 1/2 hour infomercial
designed to appear as a regular television program showcasing various companies
profiling their goods and services. Shot in the field and our studio, Corporate
Roadshow Presents will showcase and highlight each participating company. We
anticipate that our host, who is undetermined at the moment, will serve to
introduce and moderate discussions regarding a particular company, its
executives and sales people.
Corporate Roadshow Presents will appear as a traditional business program.
We intend to provide a sophisticated presentation integrating top quality
editing, graphics and a fast-paced assortment of segments and commercials, all
seamlessly blended together which will provide both entertainment and
information for the viewers.
Sponsor Participation
Corporate Roadshow Presents will allot each sponsoring company or client a
minimum of four minutes of programming focused on their company and its product
or service in addition to two 30 second commercials or any combination of the 5
minute timeslot as negotiated between CRS and the sponsor. Each sponsors'
segment can appear in a variety of formats. We will allow the sponsor to choose
a structure most effective for it from a segment spanning the continuous 4 min.
time slot to a number of smaller segments profiling the sponsor.
New York Broadcast
Targeted airdate: Fourth Quarter of 2003. Although we have not yet entered
into any formal agreements, we intend to air Corporate Roadshow Presents on
major New York television stations. With over 12,000,000 possible viewers and as
a world financial center, we believe that penetrating the metropolitan New York
marketplace is our most important initial goal. We intend to air the program on
weekends, envisioning a Sunday late morning timeslot.
Promotion
Although the exact formula has yet to be determined, in an attempt to cross
promote and drive viewers to our programs, we intend to advertise the broadcast
of the show with either 15 or 30 second commercials as available on regional or
local cable and broadcast stations preceding the broadcast.
Production Schedule
We anticipate producing a program over a period of three to four weeks
either in the studio or from time to time in the field, or a combination of
both. This period of time is necessary so that each project can be viewed from
start to finish.
Employees
As of July 31, 2003, we had 2 employees which includes managerial and sales
positions.
Our Offices
Our executive offices are located at 80 Orville Drive - Suite 100, Bohemia,
New York 11716. Our telephone number is (631) 244-1555.
2
THE OFFERING
Securities Offered by US
Shares.....................................................2,000,000
Price Per Share................................................$1.00
Securities Offering by Selling Shareholder
Shares.......................................................500,000
Price Per Share................................................$1.00
Shares of Common Stock Outstanding After Offering
assuming maximum number of shares sold................7,730,000
We will bear all the costs and expenses associated with the preparation and
filing of this registration statement.
Estimated Use of Proceeds
We intend to use substantially all of the net proceeds from our sale of our
shares of common stock for general corporate purposes, including working
capital, expansion of sales and marketing activities which include the planned
expansion into the television production business. We will not receive any of
the proceeds from the sale of those shares being offered by the selling
shareholder.
Risk Factors
For a discussion of the risks you should consider before investing in our
shares, read the "Risk Factors" section.
SUMMARY FINANCIAL DATA
The summary financial information set forth below is derived from the financial
statements appearing elsewhere in this Prospectus. Such information should be
read in conjunction with such financial statements, including the notes thereto.
Statement of Operations Data
(Dollar amounts and share data)
Six Months Ended Year Ended
June 30 December 31
------------------- ------------------
2003 2002 2002 2001
---- ---- ---- ----
Revenues $ 28,495 $ 13,556 $ 25,189 $ 10,575
Net Income (Loss) $ (138,983) $ (19,632) $ (162,951) $ (28,031)
Income (Loss) Per
Common Share $ (.02) $ - $ (.03) $ (.01)
Weighted Average Number of
Common Shares Outstanding 5,726,667 5,200,000 5,336,989 5,200,000
3
Balance Sheet Data
June 30, 2003 December 31, 2002
Working Capital $ 35,130 $ 224,110
Total Assets $ 130,687 $ 293,917
Total Liabilities $ 7,269 $ 10,424
Stockholders' Equity $ 123,418 $ 283,493
See Financial Statements
4
RISK FACTORS
An Investment In Our Common Stock Involves A High Degree Of Risk.
Investors could lose their entire investment. Prospective investors should
carefully consider the following factors, along with the other information set
forth in this prospectus, in evaluating CRS, its business and prospects before
purchasing the common stock.
Concentrated Ownership Of Our Common Stock May Allow Certain Security Holders To
Exert Significant Influence In Corporate Matters Which May Be Adverse To The
Public Investor.
Prior to the offering, Mr. Ferraro, our Chairman and President, owns
ninety-one (91%) of our outstanding common stock. If we sell all of the
2,000,000 shares being offered by us, Mr. Ferraro will own approximately 67% of
our outstanding shares of common stock. Such concentrated control allows Mr.
Ferraro to exert significant influence in matters requiring approval of our
stockholders. As Mr. Ferraro holds a majority of the outstanding common stock,
he is in a position to influence significantly the election of some or all of
the members of our Board of Directors and the outcome of all corporate actions
requiring stockholder approval.
The Timing And Amount Of Capital Requirements Are Not Entirely Within Our
Control And Cannot Accurately Be Predicted And As A Result, We May Not Be Able
To Raise Capital In Time To Satisfy Our Needs.
If we do not increase our revenue significantly we will need to procure
additional financing by December 31, 2003. If capital is required, we may
require financing sooner than anticipated. We have no commitments for financing,
and we cannot be sure that any financing would be available in a timely manner,
on terms acceptable to us, or at all. Further, any equity financing could reduce
ownership of existing stockholders and any borrowed money could involve
restrictions on future capital raising activities and other financial and
operational matters. If we were unable to obtain financing as needed, we could
be bankrupt.
We Have Been Incurring Losses From Operations Since Our Inception In 1999 And At
June 30, 2003 Had An Accumulated Deficit Of $344,602.
Stockholders' equity and working capital was $123,418 and $35,130,
respectively. Although we believe that our business expansion will be successful
and that we will become profitable, no assurance can be given in this regard.
We Compete With Investor Relations And Public Relations Firms, Many Of Which Are
Better Financed And Have A Stronger Presence In The Industry Than Ourselves.
As many of our clients have limited resources to apply to public relations
or investor relations efforts, we may find ourselves competing with firms
offering traditional PR and IR services which may be able to offer services at
more competitive prices.
As many of these firms have significantly stronger name recognition than
ourselves, they are in a position to quickly attract public companies which are
in need of strong marketing and information campaigns thus adversely impacting
our potential pool of clients. Our sales and marketing structure is not
proprietary and it would not be difficult for a media company, whether it be on
the Internet or traditional medium to offer similar services. Further, entry
into the marketplace by new competitors is relatively easy especially
considering their existing presences and their greater resources for financing,
advertising and marketing. We intend to compete based on our ability to market
and sell our services to small and mid-sized public companies on a reasonably
priced and personalized basis.
5
We Have A Limited Operating History And Have Losses Which We Expect To Continue
In The Future. As A Result, We May Have To Suspend Or Cease Operations.
Although we were incorporated in November 1999, we began operations in
earnest in January of 2002. Thus, we have little operating history upon which an
evaluation of our future success or failure can be made. Our net loss since
inception is ($344,602). Our ability to achieve and maintain profitability and
positive cash flow is dependent upon our ability to procure new business and
generate revenues.
Based upon current plans, we expect to incur operating losses in future
periods. This will happen because our minimum operating expenses continue to
exceed our projected revenues significantly. Our failure to generate sufficient
revenues in the future will cause us to suspend or cease operations.
We Only Have Two Employees And As A Result We Are Dependent On Their Services
And A Loss Of Either Could Have A Material Adverse Effect Upon Us.
Frank Ferraro is our Founder, Chairman and President and Vincent Epifanio
is our Senior Vice President and Director of Marketing. Although Mr. Ferraro has
an exclusive employment contract with us and is our largest shareholder, there
can be no assurance that he will remain with us during the term of his
respective contract. In the event that we were to lose either employee, there
can be no assurances that we would be able to retain qualified executive staff.
Further, we do not maintain any key man life insurance policies on either Mr.
Ferraro or Mr. Epifanio any of our employees. Therefore, the loss of the service
of either of our employees could have a material adverse effect upon us.
We May Not Be Able To Adequately Protect Our Intellectual Property Rights Which
May Result In A Substantial Loss Of Revenue If Such Rights Are Challenged.
Although we recently filed a service mark application with the United
States Patent and Trademark Office, we have certain intellectual property rights
which are not protected including, among others:
o Subscriber lists and related information;
o Content and information provider lists and related information;
o Proprietary web site content; and
o Content on our news programs.
To protect our rights to our intellectual property, we will rely on a
combination of trademark and copyright law, trade secret protection,
confidentiality agreements and other contractual arrangements with our
employees, affiliates, clients, strategic partners and others. The protective
steps we have taken may be inadequate to deter misappropriation of our
proprietary information. We may be unable to detect the unauthorized use of, or
take appropriate steps to enforce, our intellectual property rights. Effective
trademark, copyright and trade secret protection may not be available as many of
our productions are and will be available on the Internet. Failure to adequately
protect our intellectual property could harm our brand, devalue our proprietary
content and affect our ability to compete effectively. Further, defending our
intellectual property rights could result in the expenditure of significant
financial and managerial resources, which could materially adversely affect our
business, results of operations and financial condition.
System Slowdowns Or Failures Could Hurt Our Business.
In order for our business to be successful, we must provide consistently
fast and reliable access to our web site. Unfortunately, slowdowns, breakdowns
or failures in our computer and communication systems, or of the Internet
generally, are often beyond our control and could jeopardize access to our site
at any time. In addition, heavy traffic on our site or on the Internet generally
could severely slow access to, and the performance of, our site. Repeated system
slowdowns will likely impair our ability to service and
6
maintain the public's access to our clients. Failures of or damage to our
computer or communications systems could render us unable to operate our site or
even our business for extended periods of time.
As We May Not Be Able To Adequately Protect Ourselves Against Security Risks,
Our Services May Be Disrupted Or Our Customer Proprietary Information May Be
Available By Unauthorized Third Parties.
All Internet businesses are subject to electronic and computer security
risks. We have taken steps to protect ourselves from unauthorized access to our
systems and use of our site, but we cannot guarantee that these measures will be
effective. If our security measures are ineffective, unauthorized parties could
alter, misappropriate, or otherwise disrupt our service or information. If such
unauthorized parties were able to access certain of our or our customers'
proprietary information, we would face significant unexpected costs and a risk
of material loss, either of which could adversely affect our business.
The Selling Shareholder May Compete With Us In Selling Common Stock And
Therefore Drive The Market Price Lower.
Our ability to raise additional capital through the sale of our common
stock may be harmed by competing re-sales of common stock by the selling
shareholder. The selling shareholder may only sell at a price other than the
fixed price of $1.00 after we have been listed on the OTC-BB. Sales by the
selling shareholder may make it more difficult for us to sell equity or
equity-related securities in this offering or in the future at a time and price
that we deem appropriate because the selling shareholder may offer to sell his
shares of common stock to potential investors for less than we do. Moreover,
potential investors may not be interested in purchasing shares of our common
stock if the selling shareholder is selling (or even has the ability to sell)
his shares of common stock.
To A Significant Extent The Growth Of Our Business Is Dependent On An Increase
In The Public's Interest In The Stock Market.
The recent depressed stock market has decreased the public's interest in
investment and financial information. If this were to happen, it is likely that
we would lose a significant percentage of our then current and potential
subscriber base.
Before This Offering, There Has Been No Public Market For Our Common Stock And
If No Market Develops, Investors Would Be Unable To Sell Their Securities.
We are not sure that a public trading market for our common stock will
develop after this offering, or that the public offering price will correspond
to the price at which our common stock will trade subsequent to this offering.
The stock market has experienced price and volume fluctuations which have
resulted in changes in the market prices of stocks of many companies that may
not have been directly related to the operating performance of those companies.
Such broad market fluctuations may adversely affect the market price of our
common stock following this offering. In addition, the market price of our
common stock following this offering may be highly volatile. Factors such as
variations in our interim financial results, comments by securities analysts,
announcements of technological innovations or new products by us or our
competitors, changing market conditions in the industry, changing government
regulations, developments concerning our proprietary rights or litigation, many
of which are beyond our control, may have an adverse effect on the market price
of the common stock.
Under certain conditions, we may receive securities as partial payment for our
services rendered and such securities may lose all value we ascribe to them.
In certain circumstances, we may accept a client's securities as partial
payment. Often the securities we receive are unregistered and as a result
restricted. As a general rule we must hold restricted securities for one year
until we have the ability to sell them. Although we book any restricted
securities we
7
receive at a significantly reduced valuation in comparison to the same company's
unrestricted shares, there is a risk that during such holding period the
securities may be become worthless. We would suffer a loss of revenue as a
result of such devaluation.
Purchasers Of The Shares Offered Hereby Will Incur Immediate Substantial
Dilution In The Net Tangible Book Value Of Approximately $.74 Or 74% Per Share.
Our present shareholders have acquired their respective equity interests at
a cost substantially below the offering price. Accordingly, the public investors
will bear a disproportionate risk of loss per share.
We allow certain clients to pay for our services with a combination of cash
and restricted securities of theirs and as a result we are somewhat dependent on
such companies ability to succeed in the marketplace. In the past any securities
we have received have been restricted. Thus, there is usually a significant
period of time between when such securities are received and when they may be
sold into the market. In the event that any securities we receive as partial
payment decline in value from the time we receive them and we find ourselves in
the unfortunate position of needing to raise capital for operations by selling
some or all of such securities we may suffer irreparable harm.
We make estimates of our future in forward-looking statements.
The statements contained in this prospectus that are not historical fact
are "forward-looking statements," which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "should," or
"anticipates," the negatives thereof or other variations thereon or comparable
terminology, and include statements as to the intent, belief or current our
expectations with respect to the future operations, performance or position.
These forward-looking statements are predictions. We cannot assure you that the
future results indicated, whether expressed or implied, will be achieved. While
sometimes presented with numerical specificity, these forward-looking statements
are based upon a variety of assumptions relating to our business, which,
although currently considered reasonable by us, may not be realized. Because of
the number and range of the assumptions underlying our forward-looking
statements, many of which are subject to significant uncertainties and
contingencies beyond our reasonable control, some of the assumptions inevitably
will not materialize and unanticipated events and circumstances may occur
subsequent to the date of this prospectus. These forward-looking statements are
based on current information and expectation, and we assume no obligation to
update them at any stage. Therefore, our actual experience and results achieved
during the period covered by any particular forward-looking statement may differ
substantially from those anticipated. Consequently, the inclusion of
forward-looking statements should not be regarded as a representation by us or
any other person that these estimates will be realized, and actual results may
vary materially. We can not assure that any of these expectations will be
realized or that any of the forward-looking statements contained herein will
prove to be accurate.
The penny stock rules.
Because we may be subject to the "penny stock" rules, the level of trading
activity in our stock may be reduced. Broker-dealer practices in connection with
transactions in "penny stocks" are regulated by certain penny stock rules
adopted by the Securities and Exchange Commission. Penny stocks, like shares of
our common stock, generally are equity securities with a price of less than
$5.00, other than securities registered on certain national securities exchanges
or quoted on NASDAQ. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and, if the broker-dealer is the sole market
maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
broker-dealers who sell these securities to persons other than established
customers and "accredited investors" must make a special
8
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and investors in our common stock may find it difficult to
sell their shares.
9
USE OF PROCEEDS
We do not have a firm commitment from any party to purchase any of the
shares being offered by us. We intend to sell the shares ourselves or through
broker/dealers. The following table discloses the gross proceeds less offering
expenses we would realize from the sale of the related numbers of shares.
However, such proceeds do not take into account any commissions paid to any
broker-dealer if we engage such.
The estimated expenses of the distribution, all of which are to be borne by
us, are as follows. All amounts are estimates except the Securities and Exchange
Commission registration fee:
Registration Fee.............................. $ 230
Printing and Engraving Expenses............... $ 5,000
Accounting Fees and Expenses.................. $ 25,000
Legal Fees and Expenses....................... $ 60,000
Transfer Agent's Fees and Expenses............ $ 1,500
Miscellaneous................................. $ 8,270
Total $ 100,000
Percentage of Offering Sold
Classification of Use 100% 75% 50% 25%
--------------------- ---- --- --- ---
Sales and Marketing $ 300,000 $ 224,000 $ 150,000 $ 64,000
Plant and Equipment 150,000 112,000 75,000 32,000
Television Show (with airtime)
500,000 364,000 250,000 104,000
Web Development 200,000 154,000 100,000 44,000
Legal and Accounting 150,000 112,000 75,000 32,000
General and Administrative 150,000 112,000 75,000 32,000
Working Capital 450,000 322,000 175,000 92,000
---------- ---------- ---------- ----------
Total $1,900,000 $1,400,000 $ 900,000 $ 400,000
These proceeds are intended to be utilized substantially for working
capital and general corporate purposes as well as the costs and expenses
associated with our expansion into the network broadcasting arena. As management
retains sole discretion as to the use of proceeds, such use of proceeds will not
vary unless management (i) determines that the proceeds would better serve the
company's interests by acquiring a complementary production business in lieu of
developing one itself; and (ii) management is presented with the opportunity to
acquire such a business, it reserves the right to use them for such purpose. In
the event that management alters its use of proceeds as a result of the
aforementioned, we would reduce the proceeds for each category in the above
table on a pro-rata basis. A complementary production business would be a
web-based video of investor relations operation. We have not entered into any
negotiations, preliminary or otherwise, to acquire a complementary business and
thus have no indication as to the form or structure such transaction would
entail. If we sell less than 25% of the shares being offered we will apply any
proceeds in the same percentage breakdown as indicated in the above table giving
no priority to any one particular category.
Regardless of whether we sell any shares of our Common Stock, we have
incurred approximately $100,000 in costs and expenses in regards to the
preparation of the Registration Statement of which this Prospectus forms a part.
10
If we sell the maximum number of shares offered by this Prospectus, the net
proceeds to us from this offering are expected to be adequate to fund our
working capital needs for at least the next twelve (12) months. Pending maximum
use of the proceeds from this offering as set forth above, we may invest all or
a portion of such proceeds in sort-term, interest-bearing securities, U.S.
Government securities, money market investments and short-term, interest-bearing
deposits in major banks. If we sell less than 25% of the securities offered
hereby, we will need additional capital to maintain our working capital needs
for the next twelve (12) months.
In the event that we engage a broker-dealer to sell shares in this
offering, we would anticipate paying a fee no more than ten (10%) percent of any
shares sold by such broker/dealer. Thus, our use of proceeds would be reduced by
that amount.
11
DETERMINATION OF OFFERING PRICE
The offering price has no relationship to any established criteria of
value, such as book value or earnings per share. No valuation or appraisal has
been prepared for our business and potential business expansion. The offering
price was determined arbitrarily.
DILUTION
The issuance of the 2,000,000 shares will dilute our common stock and may
ultimately lower the price of our common stock. If you invest in our common
stock, your interest will be diluted to the extent of the difference between the
price per share you pay for the common stock and the pro forma as adjusted net
tangible book value per share by calculating the total assets less intangible
assets and total liabilities, and dividing it by 7,730,000, the number of
outstanding shares of common stock assuming the maximum number of shares being
offered by us are sold.
The net tangible book value of our common stock as of June 30, 2003, was
$68,298, or approximately $.01 per share. Thus, as of June 30, 2003, the net
tangible book value per share of common stock owned by our current stockholders
would have increased by $1,955,000 or $.25 per share after giving effect to this
offering (assuming the maximum number of shares being offered are sold) without
any additional investment on their part and the purchasers of the shares offered
hereby would have incurred an immediate dilution of $.74 per share from the
offering price. The following table illustrates this per share dilution and
reflects the receipt of varying amounts of proceeds:
100% 75% 50% 25%
---- --- --- ---
Public offering price per share of
common stock offered hereby $1.00 $1.00 $1.00 $1.00
----- ----- ----- -----
Net tangible book value per share
before offering 0.01 0.01 0.01 0.01
Increase per share attributable to
new investors 0.25 0.20 0.14 0.07
---- ---- ---- ----
Adjusted net tangible book value per
share after this offering $0.26 $0.21 $0.15 $0.08
----- ----- ----- -----
Dilution to new investors $0.74 $0.79 $0.85 $0.92
===== ===== ===== =====
12
The following tables summarize the relative investments of investors
pursuant to this offering and the current shareholders of CRS:
ASSUMING 100% OF OFFERING (2,000,000 SHARES) SOLD
Current Public
Stockholders Investors Total
------------ ------------ ------------
Number of shares of common stock purchased 5,730,000 2,000,000 7,730,000
Percentage of outstanding common stock after offering
74% 26% 100%
Gross consideration paid $500,520 $2,000,000 $2,500,520
Percentage of consideration paid 20% 80% 100%
Average consideration paid $.09 $1.00 $.32
ASSUMING 75% OF OFFERING (1,500,000 SHARES) SOLD
Current Public
Stockholders Investors Total
------------ ------------ ------------
Number of shares of common stock purchased 5,730,000 1,500,000 7,230,000
Percentage of outstanding common stock after offering
79% 21% 100%
Gross consideration paid $500,520 $1,500,000 $2,000,520
Percentage of consideration paid 25% 75% 100%
Average consideration paid $.09 $1.00 $.28
ASSUMING 50% OF OFFERING (1,000,000 SHARES) SOLD
Current Public
Stockholders Investors Total
------------ ------------ ------------
Number of shares of common stock purchased 5,730,000 1,000,000 6,730,000
Percentage of outstanding common stock after
offering 85% 15% 100%
Gross consideration paid $500,520 $1,000,000 $1,500,520
Percentage of consideration paid 33% 67% 100%
Average consideration paid $.09 $1.00 $.22
ASSUMING 25% OF OFFERING (500,000 SHARES) SOLD
Current Public
Stockholders Investors Total
------------ ------------ ------------
Number of shares of common stock purchased 5,730,000 500,000 6,230,000
Percentage of outstanding common stock after offering
92% 18% 100%
Gross consideration paid $500,520 $500,000 $1,000,520
Percentage of consideration paid 50% 50% 100%
Average consideration paid $.09 $1.00 $.16
13
In the future, we may issue additional shares, options and warrants, and we
may grant stock options to our employees, officers, directors and consultants
under our stock option plan, all of which may further dilute our net tangible
book value.
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2003. This
table should be read in conjunction with the financial statements and related
notes included elsewhere in this prospectus.
June 30, 2003
Actual
------
Stockholders' Equity:
Common Stock, $0.0001 par value,
20,000,000 shares authorized;
5,730,000 issued and outstanding $ 573
Additional Paid-In Capital 485,447
Retained Earnings (deficit) (344,602)
Accumulated other comprehensive
loss (18,000)
----------
Total Stockholders' Equity 123,418
----------
Total Capitalization $ 123,418
==========
14
DIVIDEND POLICY
Holders of the common stock our entitled to dividends when, as and if declared
by our Board of Directors out of funds legally available therefore. We have
never declared or paid any cash dividends and currently do not intend to pay
cash dividends in the foreseeable future on our shares of common stock. We
intend to retain earnings, if any, to finance the development and expansion of
our business. Payment of future dividends on our common stock will be subject to
the discretion of our Board of Directors and will be contingent on future
earnings, if any, our financial condition, capital requirements, general
business conditions and other factors. Therefore, there can be no assurance that
any dividends on our common stock will ever be paid.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
We commenced operations on July 1, 2000 through the launching of our
website, which serves as our platform for our internet based "live and on
demand" audio and video productions of financial road shows, conferences and
presentations.
The following discussion should be read in conjunction with our financial
statements and notes thereto contained elsewhere in this prospectus. This
discussion may contain forward-looking statements that could involve risks and
uncertainties. For additional information see "Risk Factors".
CRITICAL ACCOUNTING POLICIES:
Our financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements, the disclosure
of contingent assets and liabilities, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The critical accounting policies that affect our more significant
estimates and assumptions used in the preparation of our financial statements
are reviewed and any required adjustments are recorded on a monthly basis.
RESULTS OF OPERATIONS:
Substantial positive and negative fluctuations can occur in our business
due to a variety of factors, including variations in the economy, and the
abilities to raise capital. As a result, net income and revenues in a particular
period may not be representative of full year results and may vary significantly
in this early stage of our operations. In addition results of operations, which
have fluctuated in the past and may vary in the future, continue to be
materially affected by many factors of a national and international nature,
including economic and market conditions, currency values, inflation, the
availability of capital, the level of volatility of interest rates, the
valuation of security positions and investments and legislative and regulatory
developments. Our results of operations also may be materially affected by
competitive factors and our ability to attract and retain highly skilled
individuals.
Year Ended December 31, 2002 and 2001:
We recognize revenues at the time that all services have been substantially
completed. We may receive restricted equity securities in certain entities as
payments for services provided for these entities. Some of these entities are
newly formed, have no operating history, and the market for such securities is
very limited. In the event that there is a public market for the securities, we
record the securities at a 75% discount from the market price, since (i) the
securities are restricted and (ii) there is no assurance that the value of these
securities will be realized. The amount of shares we will accept in lieu of a
portion of a client's cash payment is situation specific. Such amount is never
contingent on the success or failure of our efforts.
We realize revenues from net sales generated by the production of video
presentations and increased such revenues by $14,614 to $25,189 in 2002 from
$10,575 in 2001. This increase is a result of our marketing efforts and the
15
availability of our services becoming more known to the corporate world. The
production costs also increased accordingly.
Costs and expenses were $188,140 and $38,606 for the years ended December
31, 2002 and 2001, respectively, an increase of $149,534. This increase is
reflective of the following: (i) increased executive compensation of $36,000;
(ii) an increase of $13,352 in advertising which increase generated more
revenues; (iii) an increase of $78,275 in fees paid to consultants in connection
with the raising of capital and (iv) an increase of $19,216 in other expenses
including insurance and other office expenses. With respect to the fees paid to
consultants, we paid a $65,000 fee to Five Flags, Inc., an unaffiliated entity,
as a result of its introduction to various potential clients of the company.
Further, Five Flags, Inc. also received a fee of $100,000 as a result of its
introduction of the company to Mr. Eli Weinstein representing 20% of the gross
proceeds of Mr. Weinstein's investment.
As a result of the above, the net loss for the year ended December 31, 2002
was $162,951, or $0.03 per share, compared to a net loss of $28,031 or $0.01 for
the year ended December 31, 2001.
Six Months Ended June 30, 2003 and 2002:
Revenues for the six month period ended June 30, 2003 was $28,495 as
compared to $13,556 for the same period of the previous year. This increase of
$14,939 or 110% is a direct result of our improved marketing efforts.
Operating expenses increased by $134,290 from $33,188 for the six months
ended June 30, 2002 to $167,478 for the 2003 period. Payroll accounted for
$45,720 of this increase (an increase from $30,000 in 2002 to $75,720 in 2003)
as a result of new hires in 2003. We incurred $31,120 in professional fees
during the six month period ended June 30, 2003 compared to zero for the same
period in 2002. Such fees include the value of 20,000 shares of our common stock
(valued at $20,000 based upon the price of shares sold in our private placement
of securities) issued to Mr. Benjamin Lapin. Mr. Lapin introduced us to Dynamic
Distribution Corp., a potential client, although no revenue was ultimately
realized from such introduction. In 2003, we produced a marketing brochure and
incurred advertising expenses in the aggregate amount of $25,509 compared to
minimal expense in 2003. Other expense increased from $361 for the six-month
period ended June 30, 2002 to $33,578 for the comparable period in 2003. This
increase of $33,217 includes (i) rent in the amount of $10,640; (ii) payroll
taxes amounting to $7,007 and (iii) insurance amounting to $7,964.
As a result of the above, the net loss for the six months ended June 30,
2003 was $138,983 or $0.02 per share, compared to a net loss of $19,632 or $0.00
for the similar period in 2002.
LIQUIDITY AND CAPITAL RESOURCES:
As of June 30, 2003, working capital amounted to $35,130 compared to
$224,110 at December 31, 2002. Our current ratio at June 30, 2003 and December
31, 2002 was 5.8:1 and 22.5:1, respectively.
During 2002, we utilized $133,557 for operations primarily as a result of
our net loss of $162,951. For the 2001 year we generated $2,207 in cash from
operations. During 2002, we used $10,358 for investing activities, primarily for
the acquisition of office equipment, including a computer, with no comparable
amount used in 2001. During 2002, we sold our common shares in a private
placement and realized net proceeds of $377,500. As a result of this, we ended
2002 with cash of $234,044.
For the six month period ended June 30, 2003, we utilized $144,198 for
operations, primarily as a result of our net loss of $138,983, compared to
$16,233 in cash generated from operations for the similar period in the previous
year. Cash utilized for investing activities for the 2003 period aggregated
$7,868 and was used for the purchase of office furniture and equipment. During
the six month period ended June 30, 2002, we sold common shares in a private
placement and realized net proceeds of $193,800. During 2003, we continued to
incur costs ($40,120) associated with the proposed public offering of our common
shares. As a result, our cash balance at June 30, 2003 was $41,663.
We have a limited operating history. Some of our clients to date are also
in the early stages of their operations with not much available cash on hand. As
a result, as previously discussed, we occasionally receive restricted equity
securities issued by our clients. Due to the restrictions and since the values
of these securities fluctuate and are not readily convertible to cash we
initially record the receipt of such securities at a significant (75%) discount.
Based on the
16
above, the securities are reflected as investments available for sale on our
balance sheet. At the balance sheet date, we compare the then market price or
fair value of such securities to the amount initially recorded and any resulting
unrealized gain or loss is recorded as other comprehensive income or loss in the
equity section of our balance sheet. At the time the restriction is lifted
(usually within one year of receipt) and we are able to sell the securities, the
resulting gain or loss realized will be recognized in our statement of
operations. The increase or decrease in these investment securities is shown in
operating activities on the statement of cash flows since the receipt of said
securities is in payment of accounts receivable from operating revenues.
We are currently operating with insufficient working capital, which, among
other things has constrained our ability to market our services. As a result,
management is dependent on the proceeds of the proposed public offering of
securities to maintain and increase the level of its operations. There can,
however, be no assurance that we will be successful.
IMPACT OF INFLATION
To date inflationary factors have not had a significant effect on our
operations. We are not aware of any material trend, event or capital commitment,
which would potentially adversely affect liquidity.
OTHER:
Except for historical information contained herein, the matters set forth
above are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ from those in the
forward-looking statements. Potential risks and uncertainties include such
factors as the level of business and consumer spending, the amount of sales of
our products, the competitive environment within our industry, the ability to
continue to expand our operations, the level of costs incurred in connection
with our expansion efforts, economic conditions and the financial strength of
our customers and suppliers.
17
DESCRIPTION OF BUSINESS
History and Development
We were incorporated pursuant to the laws of the State of New York on
November 1, 1999 under the name Corporate Road Show.Com Inc. On July 1, 2000 we
launched our website on the Internet and began a limited marketing campaign for
our Internet based presentations.
Our basic business model is to help the corporate executive get their story
out to a vast but targeted audience over the internet or television, as well as
compliment their current marketing plans.
We are a business to business service firm. Our basic service is to host
and digitize corporate videos already produced by our clients. We offer an
upgraded service where we actually videotape and produce a corporate
presentation for dissemination on our website. The fees can vary on each. For
example, for web hosting we have to determine the length of the video in
digitized megabytes and the time period such video will be hosted by us. The fee
for producing a corporate video can fluctuate depending on the location,
scripting, the amount of editing, talent and other factors. The market for these
services are vast. Our target market is a company offering a new product or
service and which has the desire to market itself to the public in a possibly
untried format or medium. Our audiences for these productions are aimed at the
public at large. We broadcast in over 35 countries, however we measure success
by the amount of video views or "hits" a client's video receives. The goal for
clients is to get the message across to the general public via our website. Each
featured video has different content as a result of varying product lines and
offered services, however, our format may change. For example, Polymer Research
and Genesis Bioventures used an interview format. For these clients, we
interviewed the companies and then we disseminated the interview on the website.
The other type of setting is the Power Point visual video where we produce a
presentation that we videotape, digitize and host. The video productions we have
produced to date are "About Us" 1&2, Asconi Corp, Polymer Research Group,
Genesis Bioventures and Skybridge Wireless, Inc. All of the aforementioned
productions were disseminated on our website.
We consider ourselves a vehicle for the promotion of our clients' products
and services via the internet and our intent in the future is via television.
Typical Revenue Producing Transaction
A client's first experience with us results from the following scenarios:
(i) in response to our advertising campaign; (ii) as a recipient of a marketing
campaign on behalf of a client; or (iii) after production of our planned
financial television programs, in response to such. After the initial
discussion, we then determine which format is preferred (i.e. interview, Power
Point presentation). We then film the interview, edit it with sound and digitize
it in either Real Player or the Microsoft Media platform. Lastly, we will
broadcast the presentation on the Internet where interested parties can log on
and watch the show.
To date we have produced the following videotapes:
o In June of 2001 we created a videotape for the Asconi corp. which was
on our web site for about three months. We were paid a fee of $5,000
for services rendered.
o In July of 2002 we created two separate "about us" videos representing
and describing the content and services of CRS. There were no fees
paid or charged for either of these two videos.
o Also in July of 2002 we developed a videotape for the Polymer Research
Group which was available on our website for about one year. We were
not paid a fee or charged for this client.
o In November of 2002 we created a videotape for Genesis Bioventure
group. Genesis will be on our website for one year. We were paid
100,000 shares of restricted stock and 150,000 warrants to purchase
Genesis' common stock which are exercisable at $1.50 per share.
o In June of 2003 we created a video for Vintage Filings Inc. which is
currently on our website and will be available indefinitely. We were
not paid nor did we charge a fee for this client.
o In July of 2003 we developed a videotape for Skybridge Wireles Inc.
which will be available on
18
our web site for 6 months. We were paid 38,500 free trading shares of
Skybridge for this service.
As an additional service, we will host videotapes not created or produced
by us for clients desiring exposure on our website. Currently, we host a video
by TheBioBalance Corp. We were paid $2,500 for this hosting service.
As we evaluate the material terms of each project on a project by project
basis, we do not have a set fee for our services and do not foresee changing
that at any time in the near future. We determine our fees by using a two-step
approach. First, we analyze a prospective client's needs. Second, if we conclude
that we can help that party achieve its goals, we then attempt to develop and
agree upon, with that party, the types of services we will provide.
Show Concept
As we believe our experience in video production for internet dissemination
is transferable to a great extent to the production of television shows, we are
planning on expanding our operations into such area. The Show Concept starts
with identification of the client. Once the client has been identified we
anticipate initially subcontracting the actual production needs to available
production studios. We will undertake to obtain the airtime through our own
efforts. Although we have no formal agreement, we have used Pro Image Studios
and Real Tyme Productions in the past and would consider them for future
productions. At this time we are not dependent on any one particular company.
With respect to the broadcast of the program, we anticipate the timeframe
necessary to obtain clients will vary from company to company. We expect that it
will take approximately 30 days from the date we actually begin marketing our
show concept to the public to identify and agree to terms with our first client.
The timeframe for the actual production will vary depending on the client's
needs, however, our goal is to reach a 30 day turnaround from pre-production to
post-editing. The costs associated with identifying clients are marketing
related. Although the production cost can vary due to the clients needs, an
initial production cost for our first show is expected to be approximately
$50,000. The cost for broadcasting will depend on the amount of airtime we
purchase. We intend to use the proceeds of this offering to fund the initial
programs, but in the future expect to have companies pay as well as sell
commercial airtime within the 30 minute episode.
We plan to distribute our television shows on network and or cable
television. There is a high level of competition in our anticipated field. Some
of this competition arises from very large companies in the broadcasting
business with substantially greater market recognition and financial resources
than us. Our plan to compete with these entities starts with bringing our
production to market. Once the production is brought to market we hope to secure
the same advertising dollars as our competition.
Videoconferencing Services
We have also expanded our scope of business to include videoconferencing
services. We can now produce an internet video by conducting an interview from
our corporate office and have interviewees at a number of different locations
throughout the U.S. We use the services and equipment of our lessor, HQ Global
Workplaces. Presently there is a global market place for these services. We plan
to disseminate the interviews on our website. There is a high level of
competition in the videoconferencing field. Some of this competition arises from
very large companies in the field with substantially greater market recognition
and financial resources than us. We do not plan to compete with other
videoconference service providers. The principal supplier of the
videoconferencing services is HQ Global Workforces. We are not contractually
bound to use them and can therefore move quickly to take advantage of any
marketplace developments that occur which result in more competitive terms. To
date, we have generated no revenue as a result of these services.
Revenue Breakdown
We recognize revenue at the time that all services have been substantially
completed. We may receive equity securities in certain entities as payments for
services provided for these entities. Some of these entities are newly formed,
have no operating history, and the market for such securities is very limited.
Since there is no assurance that these securities are marketable, we have not
recognized any revenue upon receipt. Revenue will be
19
recorded at the time we sell any of these securities. The amount of shares we
will accept in lieu of a portion of a client's cash payment is situation
specific. Such amount is never contingent on the success or failure of our
efforts.
Marketing Approach
Our current marketing plan includes "key word" marketing on major Internet
search engines like Lycos, Alta Vista, MSN and Yahoo! We have an agreement with
Overture, a commercial paid search service on the Internet, which will provide
CRS with access to the "Overture Distribution Network" -- a network of Web
properties that have integrated Overture's search service into their Websites or
direct user traffic to Overture's Website. CRS submits bids to Overture
Services, Inc., with respect to certain key words they have the rights to, such
as "corporate presentations." The higher our bid is in relation to other
potential bidders the higher priority we receive with respect to a search
engine. For example, a potential client searching the term "Corporate
Presentations" on the Internet may see our name at the top of a particular
search engine list, enabling us to target a spectrum of the public presently in
the market for services offered by us. CRS pays for the bid price for "clicks"
on the search listings in both Overture's Website, as well as third party
products
We also have a contract, expiring February 11, 2004, with Dynamic
Distribution Corp. whereby we will pay Dynamic a five (5%) percent fee for any
new business introduced to us as a result of Dynamic's efforts. For example, if
Dynamic introduces us to potential clients who ultimately generate $10,000 of
new business we would be obligated to pay Dynamic five-percent of that $10,000
or $500.
Strategic Relationships
On June 18, 2001 CRS was accepted as a member of the American Express
Affiliate Program- part of the Linkshare Network (TM). As an American Express
Affiliate, CRS can earn anywhere from $25 to $45 for each new customer the CRS
site generates for American Express. The commission structure is based on the
product that is sold. The following is the commission breakdown: Consumer cards
$30, Small Business Corporate cards $45, Membership Banking $35 and Merchant
Services $25. To date, we have generated less than $50 in revenue as a result of
this relationship.
Competition
We believe that as a provider of promotional and marketing services to
small and mid-capitalized public companies we have few direct competitors and
those that do exist are left to share a potentially significant market. Some of
our biggest competitors are MoneyTV, BATV and Yahoo! Net Roadshow. MoneyTV and
BATV are restricted solely to producing television programs focused on their
clients, while Yahoo! Net Roadshow also appears to have been involved in
web-based production in the recent past. Although most of the online financial
providers do not yet offer similar services to our own, as the barriers to entry
are reasonably low, any of such companies (such as The Street.Com,
MarketWatch.Com, and the Motley Fool) could quickly build in such services and
become direct competitors to CRS.
Trademarks and Patents
On February 19, 2003 we filed a service mark application with the United
States Patent and Trademark Office.
Current Position in the Industry
As we are relatively new to the industry we have limited resources from
which to draw. However, as stated earlier, we believe that the industry is
young, the present competition is minimal and the potential size of the industry
should more than mitigate that fact. The greatest risk to our business is not
our competition, but that we will be unable to convince prospective clients that
our services are worth the fees we charge.
Governmental Regulations
20
We are not aware of any existing or probable governmental regulations which
will have a material effect on our business nor do we need any governmental
approval to produce our half-hour television show.
In order to avoid and potential securities law matters, we clearly direct
all visitors to our website to our General Disclaimer section where we state
that we are not soliciting to purchase or sell securities and that any
interested party should perform its own independent research into the companies
featured on our website. We further disclose all equity holdings that we have in
such companies.
Currently, we do not meet the classification as an "Investment Company" as
that term is defined in the Investment Company Act of 1940 because the
securities we hold in our featured companies do not comprise 40 percent of our
total assets. We will continue to monitor that "securities component" level of
forty (40%) percent very carefully to ensure that we never fall under that
classification. Some of the securities we have received as partial payment for
our services are restricted and therefore must be held for a period of time. Our
intent is not to hold such securities for the long term but rather sell any
available securities as soon as we are no longer restricted pursuant to the
securities laws and such securities have a value equal to or exceeding the value
of services rendered by us at the time they were received. In the event that we
ever approach the "Investment Company" threshold, we will re-evaluate our policy
of accepting securities as partial payment for services rendered.
The Investment Advisers Act of 1940 does not apply to our activities as we
are not providing to the public any type of investment advice or analysis with
respect to our clients.
Employees
Currently, we have 2 full-time employees. None of our employees are
represented by a labor union. We consider our relationship with our employees to
be satisfactory.
Properties
On November 13, 2002 we entered into a Lease Agreement for one office for a
period of twelve months with HQ Global Workplaces for an aggregate rent of
$15,000. There is no affiliation between any of our officers or directors with
HQ.
Seasonality
We have not found our business to be seasonal in nature.
Legal Proceedings
We are not a party to any pending legal proceeding nor are any legal
actions contemplated by us at this time.
21
MANAGEMENT
Directors
Presently, Mr. Frank Ferraro is the only member of our Board of Directors
and was appointed to the Board in 1999. Mr. Ferraro has served consecutive
three-year terms of which the current term expires in November of 2005.
The following table sets forth the name and, as of July 31, 2003, age and
position of each director and executive officer of our company.
Name Age Position
---- --- --------
Frank Ferraro 39 Chairman, President, Secretary and Treasurer
Vincent Epifanio 39 Senior Vice President
Background of Executive Officers, Directors and Significant Employees
Frank Ferraro has been the Chief Executive Officer and President since
inception. Mr. Ferraro has spent the last sixteen years in the financial field.
Since April of 1996 Mr. Ferraro has been dually licensed with both Castle and
Citadel Securities, respectively as a registered representative. Both Castle and
Citadel are registered broker-dealers. With both Castle and Citadel, Mr. Ferraro
helped develop and manage an electronic internet based proprietary trading
system as well as a manager of a trading desk. Mr. Ferraro graduated from
Hofstra University with a B.B.A. in Accounting in 1986. On April 28, 2003, Mr.
Ferraro resigned from Castle Securities and Citadel Securities Corp.,
respectively.
Vincent Epifanio joined us as our Vice President of Sales and Marketing in
January 2003. Mr. Epifanio has been a sales specialist for over 15 years. Most
recently prior to CRS from September 1994 to December 2002, Mr. Epifanio was an
Account/Sales Manager for Starpoint Solutions, a full service
consulting/software firm with revenues over $80 million annually specializing in
the Banking and Brokerage industry. During his tenure with Starpoint, Mr.
Epifanio, built his personal sales base to over $4 million annually. Mr.
Epifanio graduated from Binghamton University in 1987 with a dual B.S. degree in
Computer Science and Industrial Engineering.
Compensation of Directors
We do not pay our Director any fee in connection with his role as member of
our Board. Our Director is reimbursed for travel and out-of-pocket expenses in
connection with his attendance at Board meetings.
Employment Agreements
On January 1, 2003 we entered into an employment agreement with Mr. Frank
Ferraro, our Chief Executive Officer and Chairman of the Board, for a term of
two (2) years commencing on such date, providing for an annual salary of
$90,000. In addition to his annual salary, Mr. Ferraro has the right to
participate in any share option plan, share purchase plan, retirement plan or
similar plan offer by our company, to the extent authorized by our Board. Mr.
Ferraro also has the right to have CRS pay for a car of its choosing including
all expenses associated therewith.
We have not entered into an employment agreement with our other employee,
Mr. Epifanio. Through June 30, 2003, Mr. Epifanio received a salary of $1,250
per week. However, subsequent to that date, Mr. Epifanio has agreed to be
compensated strictly on a commission basis, the terms of which have not been
finalized as of the date hereof.
22
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth certain information
regarding the compensation of our Chief Executive Officer and our other
executive employee as of July 31, 2003.
Summary Compensation Table
--------------------------
Long-Term
Compensation
Annual Compensation Awards
------------------- ------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options (#) Compensation
--------------------------- ---- ------ ----- ----------- ------------
Frank Ferraro 2003 90,000 None None None
Chairman, President and Chief
Executive Officer 2002 45,000 None None None
2001 $ 0 None None None
Vincent Epifanio 2002 $ 45,000(1)
Vice President of Sales and Marketing
Option Grants During Last Fiscal Year
Although we adopted a Stock Option Plan in February of 2003, we have yet to
award any options under such plan.
Summary of 2003 Stock Option Plan
Qualified directors, officers, employees, consultants and advisors of ours
and our subsidiaries are eligible to be granted (a) stock options ("Options"),
which may be designated as nonqualified stock options ("NQSOs") or incentive
stock options ("ISOs"), (b) stock appreciation rights ("SARs"), (c) restricted
stock awards ("Restricted Stock"), (d) performance awards ("Performance Awards")
or (e) other forms of stock-based incentive awards (collectively, the "Awards").
A director, officer, employee, consultant or advisor who has been granted an
Option is referred to herein as an "Optionee" and a director, officer, employee,
consultant or advisor who has been granted any other type of Award is referred
to herein as a "Participant."
The Omnibus Committee administers the Stock Option Plan and has full
discretion and exclusive power to (a) select the directors, officers, employees,
consultants and advisors who will participate in the Stock Option Plan and grant
Awards to such directors, officers, employees, consultants and advisors, (b)
determine the time at which such Awards shall be granted and any terms and
conditions with respect to such Awards as shall not be inconsistent with the
provisions of the Stock Option Plan, and (c) resolve all questions relating to
the administration of the Stock Option Plan. Members of the Omnibus Committee
receive no additional compensation for their services in connection with the
administration of the Stock Option Plan.
----------
(1) Based on a salary of $1,250 per week. However, as of July 1, 2003 Mr.
Epifanio will be compensated purely on a commission basis.
23
The Omnibus Committee may grant NQSOs or ISOs that are evidenced by stock
option agreements. A NQSO is a right to purchase a specific number of shares of
common stock during such time as the Omnibus Committee may determine, not to
exceed ten (10) years, at a price determined by the Omnibus Committee that,
unless deemed otherwise by the Omnibus Committee, is not less than the fair
market value of the common stock on the date the NQSO is granted. An ISO is an
Option that meets the requirements of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). No ISOs may be granted under the Stock Option
Plan to an employee who owns more than 10% of our outstanding voting stock ("Ten
Percent Stockholder") unless the option price is at least 110% of the fair
market value of the common stock at the date of grant and the ISO is not
exercisable more than five (5) years after it is granted. In the case of an
employee who is not a Ten Percent Stockholder, no ISO may be exercisable more
than ten (10) years after the date the ISO is granted and the exercise price of
the ISO shall not be less than the fair market value of the common stock on the
date the ISO is granted. Further, no employee may be granted ISOs that first
become exercisable during a calendar year for the purchase of common stock with
an aggregate fair market value (determined as of the date of grant of each ISO)
in excess of $100,000USD. An ISO (or any installment thereof) counts against the
annual limitation only in the year it first becomes exercisable.
The exercise price of the common stock subject to a NQSO or ISO may be paid
in cash or, at the discretion of the Omnibus Committee, by a promissory note or
by the tender of common stock owned by the Option holder or through a
combination thereof. The Omnibus Committee may provide for the exercise of
Options in installments and upon such terms, conditions and restrictions as it
may determine.
A SAR is a right granted to a Participant to receive, upon surrender of the
right, but without payment, an amount payable in cash. The amount payable with
respect to each SAR shall be based on the excess, if any, of the fair market
value of a share of common stock on the exercise date over the exercise price of
the SAR, which will not be less than the fair market value of the common stock
on the date the SAR is granted. In the case of an SAR granted in tandem with an
ISO to an employee who is a Ten Percent Stockholder, the exercise price shall
not be less than 110% of the fair market value of a share of common stock on the
date the SAR is granted.
Restricted Stock is common stock that is issued to a Participant at a price
determined by the Omnibus Committee, which price per share may not be less than
the par value of the common stock, and is subject to restrictions on transfer
and/or such other restrictions on incidents of ownership as the Omnibus
Committee may determine.
A Performance Award granted under the Stock Option Plan (a) may be
denominated or payable to the Participant in cash, common stock (including,
without limitation, Restricted Stock), other securities or other Awards and (b)
shall confer on the Participant the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Omnibus Committee shall establish. Subject to the terms of the
Stock Option Plan and any applicable Award agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted and the amount of any payment or
transfer to be made pursuant to any Performance Award shall be determined by the
Omnibus Committee.
The Omnibus Committee may grant Awards under the Stock Option Plan that
provide the Participants with the right to purchase common stock or that are
valued by reference to the fair market value of the common stock (including, but
not limited to, phantom securities or dividend equivalents). Such Awards shall
be in a form determined by the Omnibus Committee (and may include terms
contingent upon a change of control of CRS); provided that such Awards shall not
be inconsistent with the terms and purposes of the Stock Option Plan.
The Omnibus Committee determines the price of any such Award and may accept
any lawful consideration.
The Omnibus Committee may at any time amend, suspend or terminate the Stock
Option Plan; provided, however, that (a) no change in any Awards previously
granted may be made without the consent of the holder thereof and (b) no
amendment (other than an amendment authorized to reflect any merger,
consolidation, reorganization or the like to which we are a party or any
reclassification, stock split, combination of shares or the like) may be made
increasing the aggregate number of shares of the common stock with respect to
which Awards may be granted or
24
changing the class of persons eligible to receive Awards, without the approval
of the holders of a majority of our outstanding voting shares.
In the event a Change in Control (as defined in the Stock Option Plan)
occurs, then, notwithstanding any provision of the Stock Option Plan or of any
provisions of any Award agreements entered into between any Optionee or
Participant and us to the contrary, all Awards that have not expired and which
are then held by any Optionee or Participant (or the person or persons to whom
any deceased Optionee's or Participant's rights have been transferred) shall, as
of such Change of Control, become fully and immediately vested and exercisable
and may be exercised for the remaining term of such Awards.
Although we have no intentions of merging, consolidating or otherwise
reorganizing, if we are a party to any merger, consolidation, reorganization or
the like, the Omnibus Committee has the power to substitute new Awards or have
the Awards be assumed by another corporation. In the event of a
reclassification, stock split, combination of shares or the like, the Omnibus
Committee shall conclusively determine the appropriate adjustments.
No Award granted under the Stock Option Plan may be sold, pledged, assigned
or transferred other than by will or the laws of descent and distribution, and
except in the case of the death or disability of an Optionee or a Participant,
Awards shall be exercisable during the lifetime of the Optionee or Participant
only by that individual.
No Awards may be granted under the Stock Option Plan on or after February
14, 2013, but Awards granted prior to such date may be exercised in accordance
with their terms.
The Stock Option Plan and all Award agreements shall be construed and
enforced in accordance with and governed by the laws of New York.
As of December 31, 2003, of the 1,000,000 shares of common stock reserved
for issuance under the Stock Option Plan, we have not issued any options to
acquire no shares of common stock were granted under the Stock Option Plan.
Other
No director or executive officer is involved in any material legal
proceeding in which he is suing us or in which he will receive a benefit from
the legal proceedings.
CODE OF ETHICS
As we presently have only two employees, we have not yet found the need to
adopt a code of ethics. However, it is our intent to adopt such a code with
respect to our executive officers once we have a minimum of 5 full-time
employees.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a description of employment contracts with executive officers, please
refer to the section entitled Executive Compensation - Employment Contracts.
Frank Ferraro, our founder, holds approximately ninety-one (91%) percent of
our outstanding common stock prior to the issuance of any shares related to this
Prospectus. Mr. Ferraro is our Chairman, President and Chief Executive Officer.
25
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our articles of Incorporation and By-Laws provide that our directors and
officers will not be personally liable to us or our stockholders for monetary
damages due to the breach of a fiduciary duty as a director or officer. New York
Business Corporation Law Section 722, provides that we may indemnify any
officer, director, employee or agent who is party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, provided he was acting in good faith and in a manner which he
reasonably believed to be in, or not opposed to, our best interests, and, with
respect to any criminal action or proceeding, he had no reasonable cause to
believe that his conduct was unlawful. The indemnification includes all actual
and reasonable expenses, including attorney's fees, judgments, fines and
settlement amounts. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, does not of itself prevent
indemnification so long as the officer or director acted in good faith and in a
manner which he reasonably believed to be in, or not opposed to, our best
interests, or, with respect to any criminal action or proceeding, he had no
reasonable cause to believe that his conduct was unlawful.
In addition, New York Business Corporation Law Section 722 provides that we
may indemnify any officer, director, employee or agent who is party to any
threatened, pending or completed action or suit brought by us or by our
stockholders on our behalf, provided he was acting in good faith and in a manner
which he reasonably believed to be in, or not opposed to, our best interests.
The indemnification includes all actual and reasonable expenses, including
attorney's fees, judgments, fines and settlement amounts. However,
indemnification is prohibited as to any suit brought in our right in which the
director or officer is adjudged by a court to be liable to us.
To the extent that the officer or director is successful on the merits in
any proceeding pursuant to which such person is to be indemnified, we must
indemnify him against all actual and reasonable expenses incurred, including
attorney's fees.
The foregoing indemnity provisions will limit your ability as shareholders
to hold officers and directors liable and collect monetary damages for breaches
of fiduciary duty, and require us to indemnify officers and directors to the
fullest extent permitted by law.
To the extent that indemnification may be available to our directors and
officers for liabilities arising under the Securities Act, we have been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy and therefore unenforceable.
26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 31, 2003, information regarding
the beneficial ownership of our common stock by each person we know to own five
percent or more of the outstanding shares, by each of the directors and
officers. As of July 31, 2003, there were 5,730,000 shares of our common stock
outstanding.
Beneficial ownership has been determined in accordance with Rule 13d-3 of
the Exchange Act. Generally, a person is deemed to be the beneficial owner of a
security if he has the right to acquire voting or investment power within 60
days. Subject to community property laws, where applicable, the persons or
entities named in the table above have sole voting and investment power with
respect to all shares of our common stock indicated as beneficially owned by
them.
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
--------------------- AFTER THE OFFERING
NAME AND ADDRESS OF NUMBER OF SHARES BEFORE ASSUMING ALL
BENEFICIAL OWNER BENEFICIALLY OWNED THE OFFERING SHARES ARE SOLD
---------------------------- ------------------ --------------------- ------------------
Frank Ferraro 5,200,000(1) 91% 64%
80 Orville Drive, Suite 100
Bohemia, NY 11716
Vincent Epifanio 0 0% 0%
80 Orville Drive, Suite 100
Bohemia, NY 11716
All Officer and Directors as a 5,000,000 91% 64%
group
The following table sets forth information concerning the beneficial
ownership of shares of our Common Stock with respect to stockholders who were
known by us to be beneficial owners of more than 5% of our Common Stock as of
July 31, 2003. Unless otherwise indicated, the beneficial owner has sole voting
and investment power with respect to such shares of Common Stock.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with the Securities and Exchange
Commission rules, shares of our Common Stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within sixty (60) days of the date of the table are deemed
beneficially owned by the optionees. Subject to community property laws, where
applicable, the persons or entities named in the table above have sole voting
and investment power with respect to all shares of our Common Stock indicated as
beneficially owned by them. Percentage ownership is based on 5,730,000 shares of
Common Stock outstanding as of July 31, 2003 and 2,000,000 additional shares of
Common Stock to be issued in this offering.
There is no public trading market for our shares of common stock. In
addition to Mr. Frank Ferraro our President, we have one other shareholder as
found below. For a discussion regarding our dividend policy as related to our
common stock please see "Description of Securities."
----------
(1) Includes 200,000 shares of common stock held by Mr. Ferraro's wife.
27
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
--------------------- AFTER THE OFFERING
NAME AND ADDRESS OF NUMBER OF SHARES BEFORE ASSUMING ALL
BENEFICIAL OWNER BENEFICIALLY OWNED THE OFFERING SHARES ARE SOLD
---------------------------- ------------------ --------------------- ------------------
Frank Ferraro 5,000,000 91% 64.0%
80 Orville Drive, Suite 100
Bohemia, NY 11716
Eli Weinstein 500,000 9% 6%
596 Setun Circle
Lakewood, New Jersey 08701
SELLING SHAREHOLDER
This Prospectus will also be used for the offering of additional shares of
our Common Stock owned by Eli Weinstein. Mr. Weinstein may offer for sale up to
100% (500,000 shares) of his holdings in our Common Stock. Mr. Weinstein may
offer for sale such shares of our Common Stock from time to time in the open
market, in privately negotiated transactions or otherwise. We will not receive
any proceeds from such sales. The resale of the securities by Mr. Weinstein is
subject to the prospectus delivery and other requirements of the Securities Act.
DESCRIPTION OF SECURITIES
General
The following description of our capital stock does not purport to be
complete and is subject to and qualified in its entirety by our Articles of
Incorporation, as amended, and By-laws, which are included as exhibits to the
registration statement of which this prospectus forms a part, and by the
applicable provisions of New York law.
We are authorized to issue 20,000,000 shares of common stock, $0.0001 par
value per share, of which 5,730,000 shares were issued and outstanding as of
July 31, 2003.
Common Stock
Holders of shares of our common stock are entitled to share equally on a
per share basis in such dividends as may be declared by our Board of Directors
out of funds legally available therefor. There are presently no plans to pay
dividends with respect to the shares of our common stock. Upon our liquidation,
dissolution or winding up, after payment of creditors and the holders of any of
our senior securities, if any, our assets will be divided pro rata on a per
share basis among the holders of the shares of our common stock. The common
stock is not subject to any liability for further assessments. There are no
conversion or redemption privileges or any sinking fund provisions with respect
to the common stock. The holders of common stock do not have any pre-emptive or
other subscription rights.
Holders of shares of common stock are entitled to cast one vote for each
share held at all stockholders' meetings for all purposes, including the
election of directors. The common stock does not have cumulative voting rights.
As of July 31, 2003 we have five shareholders.
28
Dividend
We have never declared or paid any cash dividends on our common stock. We
anticipate that any earnings will be retained for development and expansion of
our business and we do not anticipate paying any cash dividends in the near
future. Our Board of Directors has sole discretion to pay cash dividends with
respect to our common stock based on our financial condition, results of
operations, capital requirements, contractual obligations and other relevant
factors.
Shares Eligible for Future Sale
Upon completion of this offering and assuming the maximum number of shares
are sold, we will have 7,730,000 shares of common stock outstanding. Of these
shares, 2,500,000 shares of common stock will be freely tradeable without
further restriction or further registration under the Securities Act, as
amended, accept for those shares purchased by an "affiliate" of CRS (in general,
a person who has a control relationship with CRS) which will be subject to the
limitation of Rule 144 adopted under the Securities Act. The remaining shares
(5,230,000) are deemed to be "restricted securities," as that term is defined
under Rule 144 promulgated under the Securities Act.
Preferred Stock
We are not authorized to issue any shares of preferred stock.
Transfer Agent and Registrar
Our transfer agent is Olde Monmouth Stock Transfer Co., Inc., 200 Memorial
Pkwy, Atlantic Highlands , N.J. 07716. Their phone number is 732/872-2727.
Resale Restrictions
All of our shares of common stock issued prior to this offering are
"restricted securities" as this term is defined under Rule 144, in that such
shares were issued in private transactions not involving a public offering and
may not be sold in the U.S. in the absence of registration other than in
accordance with Rule 144 under the Securities Act of 1933, as amended, or
another exemption from registration. In general, under Rule 144 as currently in
effect, any of our affiliates or any person (or persons whose shares are
aggregated in accordance with Rule 144) who has beneficially owned our common
shares which are treated as restricted securities for at least one (1) year
would be entitled to sell within any three-month period a number of shares that
does not exceed the greater of 1% of our outstanding common shares
(approximately 75,000 shares based upon the number of common shares expected to
be outstanding after the offering) or the reported average weekly trading volume
in our common shares during the four weeks preceding the date on which notice of
such sale was filed under Rule 144. Sales under Rule 144 are also subject to
manner of sale restrictions and notice requirements and to the availability of
current public information concerning our company. In addition, affiliates of
our company must comply with the restrictions and requirements of Rule 144
(other than the one (1) year holding period requirements) in order to sell
common shares that are not restricted securities (such as common shares acquired
by affiliates in market transactions). Furthermore, if a period of at least two
(2) years has elapsed from the date restricted securities were acquired from us
or from one of our affiliates, a holder of these restricted securities who is
not an affiliate at the time of the sale and who has not been an affiliate for
at least three (3) months prior to such sale would be entitled to sell the
shares immediately without regard to the volume, manner of sale, notice and
public information requirements of Rule 144.
Upon closing of this offering, we intend to file a registration statement
for the resale of the common shares that are authorized for issuance under our
existing and new stock option plans. We expect this registration statement to
become effective immediately upon filing. Shares issued pursuant to our stock
option plans to U.S. residents after the effective date of that registration
statement (other than shares issued to our affiliates and the employees
described below) generally will be freely tradable without restriction or
further registration under the Securities Act of 1933.
29
Private Placement
From June through October 2002, we issued an aggregate of 500,000 shares of
common stock to one individual for a total of $500,000. The proceeds from the
sale were used to pay for the expenses associated with the development and
introduction of our website as well as general operating expenses.
Penny Stock Considerations
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than US$ 5.00. Penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares may be subject to such penny stock rules and our
shareholders will, in all likelihood, find it difficult to sell their
securities.
PLAN OF DISTRIBUTION
Shares being registered on the company's behalf
We are registering 2,000,000 shares of our common stock which shall be
offered and sold on a self-underwritten basis by Mr. Frank Ferraro our Chief
Executive Officer and President, or, at our discretion, by participating
broker-dealers licensed by the National Association of Securities Dealers, Inc.
Although we anticipate being listed on the OTC-Bulletin Board concurrently with
the effectiveness of this Prospectus, we may not be. Regardless, we will offer
the shares to the public at a price of $1.00 per share. There is no minimum
investment requirement and funds received by us from this offering will not be
placed into an escrow account. The offering price of the shares was arbitrarily
determined by us. The offering price of the shares does not have any
relationship to our assets, book value, or earnings. We reserve the right to
reject any subscription in whole or in part, for any reason or for no reason.
There can be no assurance that we will sell any or all of the offered shares.
As our offering is "self-underwritten" in nature and at a fixed price of
$1.00 per share, we are unsure whether we will sell any shares of common stock.
As a result, we are unable at this time to determine what State, if any, offers
or sales will be made. We may also seek out broker-dealers to assist us in
placing our stock. Regardless of whether we place our stock ourselves or through
agents, we will comply with all applicable blue sky requirements of each
jurisdiction in which we ultimately offer and sell our shares. We intend to
register the shares of common stock in both New York and New Jersey. We will not
use the services of either Castle or Citadel Securities in offering these
securities. Neither will we solicit the clients of those entities.
Under the Securities Exchange Act of 1934 and the regulations thereunder,
any person engaged in a distribution of the shares of our common stock offered
by this prospectus may not simultaneously engage in market making activities
with respect to our common stock during the applicable "cooling off" periods
prior to the commencement of such distribution.
Shares being registered on the selling shareholder's behalf
We are also registering 500,000 shares of our common stock held by Mr. Eli
Weinstein, the selling shareholder, on his behalf. Prior to the listing of our
securities on the OTC Bulletin Board, Mr. Weinstein has agreed to sell his
shares at a price of $1.00. Once our securities are listed on the OTC Bulletin
Board the selling
30
shareholder may sell some or all of such shares at any price. The shares will
not be sold in an underwritten public offering.
Broker-dealers engaged by the selling shareholder may arrange for other
broker-dealers to participate. Broker-dealers may receive commissions or
discounts from the selling shareholder (or, if any such broker-dealer acts as
agent for the purchaser of such shares, from such purchaser) in amounts to be
negotiated. Broker-dealers may agree with the selling shareholder to sell a
specified number of such shares at a stipulated price per share.
The selling shareholder and any broker-dealers participating in the
distributions of the shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act. Any profit on the sale of shares
by the selling shareholder and any commissions or discounts given to any such
broker-dealer may be deemed to be underwriting commissions or discounts. The
shares may also be sold pursuant to Rule 144 under the Securities Act of 1933,
as amended, beginning one (1) year after the shares were issued.
Under the Securities Exchange Act of 1934 and the regulations thereunder,
any person engaged in a distribution of the shares of our Common Stock offered
by this prospectus may not simultaneously engage in market making activities
with respect to our Common Stock during the applicable "cooling off" periods
prior to the commencement of such distribution. Also, the selling shareholder is
subject to applicable provisions that limit the timing of purchases and sales of
our Common Stock by the selling shareholder.
We have informed the selling shareholder that, during such time as he may
be engaged in a distribution of any of the shares we are registering by this
prospectus, he is required to comply with Regulation M. In general, Regulation M
precludes the selling shareholder, any affiliated purchasers and any
broker-dealer or other person who participates in a 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 defines a "distribution" as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a "distribution participant" as an
underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution.
Regulation M prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security, except
as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of our Common Stock to be less volatile than it
would otherwise be in the absence of these transactions. We have informed the
selling shareholder that stabilizing transactions permitted by Regulation M
allow bids to purchase our Common Stock if the stabilizing bids do not exceed a
specified maximum. Regulation M specifically prohibits stabilizing that is the
result of fraudulent, manipulative, or deceptive practices. The selling
shareholder and distribution participants are required to consult with their own
legal counsel to ensure compliance with Regulation M.
LEGAL MATTERS
The validity of the shares has been passed upon for us by our counsel,
Spitzer & Feldman P.C.
31
EXPERTS
The financial statements of Corporate Road Show.com Inc. at December 31,
2002 and December 31, 2001 appearing in this registration statement have been
audited by Lazar Levine & Felix LLP our independent auditor.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN GIVEN ANY INFORMATION OR HAS
BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS OTHER THAN THE INFORMATION CONTAINED
OR INCORPORATED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US, BY THE
SELLING STOCKHOLDER OR BY ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SHARES DESCRIBED IN THIS PROSPECTUS
OR AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY SUCH SHARES IN ANY
CIRCUMSTANCES IN, WHICH SUCH OFFER, OR SOLICITATION IS UNLAWFUL.
WHERE YOU CAN FIND MORE INFORMATION
The effectiveness of this registration statement will render us subject to
the informational requirements of the Exchange Act, and, we will file reports,
proxy statements and other information with the Securities and Exchange
Commission as required by federal law. These reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Securities Exchange Commission Investors may read and copy any
of these reports, statements, and other information at the SEC's public
reference room located at 450 5th Street, N.W., Washington, D.C., 20549, or any
of the SEC's other public reference rooms. Investors should call the SEC at
1-800-SEC-0330 for further information on these public reference rooms upon
payment of the fees prescribed by the Securities Exchange Commission. These SEC
filings are also available free at the SEC's web site at www.sec.gov.
This prospectus does not contain all of the information set forth in the
registration statement, parts of which are omitted to comply with the rules and
regulations of the Securities Exchange Commission. For further information,
please see the registration statement in its entirety.
32
CORPORATE ROAD SHOW.COM, INC.
(A Development Stage Company)
INDEX
Page(s)
Independent Auditors' Report F - 2.
Financial Statements:
Balance Sheets as of June 30, 2003 (Unaudited) and December 31, 2002 F - 3.
Statements of Operations for the Cumulative Period from Inception, November 1, 1999 to
June 30, 2003 (Unaudited), the six months ended June 30, 2003 and 2002 (Unaudited)
and the Years Ended December 31, 2002 and 2001 F - 4.
Statement of Shareholders' Equity for the Cumulative Period from Inception,
November 1, 1999 to December 31, 2002 and the Unaudited Period from January 1, 2003
to June 30, 2003 F - 5.
Statements of Cash Flows for the Cumulative Period from Inception, November 1, 1999 to
June 30, 2003 (Unaudited), the six months ended June 30, 2003 and 2002 (Unaudited) and
the Years Ended December 31, 2002 and 2001 F - 6.
Notes to Financial Statements F - 7.
F-1
INDEPENDENT AUDITORS' REPORT
To the Shareholders
Corporate Road Show.com, Inc.
Bohemia, New York
We have audited the accompanying balance sheets of Corporate Road Show.com, Inc.
(a development stage company), as of December 31, 2002 and 2001, and the related
statements of operations, shareholders' equity (deficit) and cash flows for the
years ended December 31, 2002 and 2001 and the cumulative period from inception,
November 1, 1999 through December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of Corporate Road Show.com, Inc.
(a development stage company) and the results of its operations and its cash
flows for the periods mentioned in conformity with accounting principles
generally accepted in the United States of America.
----------------------------
LAZAR LEVINE & FELIX LLP
New York, New York
January 29, 2003
F-2
Corporate Road Show.com, Inc.
(A Development Stage Company)
Balance Sheets
June 30, December 31,
2003 2002
----------- -----------
(Unaudited)
- ASSETS -
CURRENT ASSETS:
Cash $ 41,663 $ 234,044
Prepaid expenses 736 490
----------- -----------
TOTAL CURRENT ASSETS 42,399 234,534
----------- -----------
EQUIPMENT, at cost less accumulated depreciation of $2,186 and $700 for 2003
and 2002, respectively 14,240 7,858
----------- -----------
OTHER ASSETS:
Deferred offering costs 55,120 15,000
Other assets 1,800 1,800
Investments - long-term 17,128 34,725
----------- -----------
74,048 51,525
----------- -----------
$ 130,687 $ 293,917
=========== ===========
- LIABILITIES AND SHAREHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 2,197 $ 6,580
Payroll taxes withheld 5,072 3,649
Due to officer - 195
----------- -----------
TOTAL CURRENT LIABILITIES 7,269 10,424
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.0001 par value; 20,000,000 shares authorized, 5,730,000 and
5,710,000 shares issued and outstanding in 2003 and 2002, respectively 573 571
Additional paid-in capital 485,447 465,449
Deficit accumulated during the development stage (344,602) (205,619)
Accumulated other comprehensive income (loss) (18,000) 23,092
----------- -----------
123,418 283,493
----------- -----------
$ 130,687 $ 293,917
=========== ===========
See accompanying notes.
F-3
Corporate Road Show.com, Inc.
(A Development Stage Company)
Statements of Operations
Cumulative
During the
Development
Stage
(November 1, 1999 Six Months Ended June 30, Year Ended December 31,
to June 30, -------------------------- --------------------------
2003) 2003 2002 2002 2001
----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
REVENUES $ 64,259 $ 28,495 $ 13,556 $ 25,189 $ 10,575
----------- ----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Production costs 11,550 1,100 2,550 6,900 3,550
Computer expenses 3,268 451 - 569 1,228
Compensation expense 183,720 75,720 30,000 66,000 30,000
Advertising and promotion 40,957 25,509 277 14,400 1,048
Professional fees 110,398 31,120 - 78,450 175
Other expenses 58,968 33,578 361 21,821 2,605
----------- ----------- ----------- ----------- -----------
408,861 167,478 33,188 188,140 38,606
----------- ----------- ----------- ----------- -----------
NET (LOSS) $ (344,602) $ (138,983) $ (19,632) $ (162,951) $ (28,031)
=========== =========== =========== =========== ===========
(LOSS) PER SHARE:
Basic and diluted $ (.07) $ (.02) $ - $ (.03) $ (.01)
=========== =========== =========== =========== ===========
Weighted average number of common
shares outstanding 5,320,340 5,726,667 5,200,000 5,336,989 5,200,000
=========== =========== =========== =========== ===========
See accompanying notes.
F-4
Corporate Road Show.com, Inc.
(A Development Stage Company)
Statement of Shareholders' Equity
Deficit
Accumulated Accumulated
Additional During the Other
Common Stock Paid-In Development Comprehensive Shareholders'
Number Amount Capital Stage Income Equity
--------- --------- ---------- ----------- ------------- -------------
At inception, November 1, 1999 - $ - $ - $ - $ - $ -
Issuance of common units 5,200,000 520 - - - 520
Net loss for period ended
December 31, 1999 - - - (623) - (623)
--------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 1999 5,200,000 520 - (623) - (103)
Officers' compensation - - 12,000 - - 12,000
Net loss for year ended December
31, 2000 - - - (14,014) - (14,014)
--------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 2000 5,200,000 520 12,000 (14,637) - (2,117)
Officers' compensation - - 30,000 - - 30,000
Net loss for year ended December
31, 2001 - - - (28,031) - (28,031)
--------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 2001 5,200,000 520 42,000 (42,668) - (148)
Officers' compensation - - 21,000 - - 21,000
Compensatory shares 10,000 1 9,999 - - 10,000
Unrealized gain on equity
securities - - - - 23,092 23,092
Sale of common shares 500,000 50 392,450 - - 392,500
Net loss for year ended December
31, 2002 - - - (162,951) - (162,951)
--------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 2002 5,710,000 571 465,449 (205,619) 23,092 283,493
Compensatory shares 20,000 2 19,998 - - 20,000
Unrealized loss on equity
securities - - - - (41,092) (41,092)
Net loss for the six months ended
June 30, 2003 (Unaudited) - - - (138,983) - (138,983)
--------- --------- --------- --------- --------- ---------
BALANCE AT JUNE 30, 2003
(Unaudited) 5,730,000 $ 573 $ 485,447 $(344,602) $ (18,000) $ 123,418
========= ========= ========= ========= ========= =========
See accompanying notes.
F-5
Corporate Road Show.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
Cumulative During
the Development Year Ended
Stage ------------------------
(November 1, 1999 Six Months Ended June 30, December 31,
to June 30, ------------------------ ------------------------
2003) 2003 2002 2002 2001
---------- ---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (344,602) $ (138,983) $ (19,632) $ (162,951) $ (28,031)
Adjustments to reconcile net (loss) to
net cash provided (used) by operating
activities:
Depreciation 2,186 1,486 - 700 -
Officer's compensation 63,000 - 30,000 21,000 30,000
Compensatory shares 30,000 20,000 - 10,000 -
Changes in assets and liabilities:
Prepaid expenses (736) (246) - (490) -
Accrued expenses 2,197 (4,383) 5,865 6,168 238
Payroll taxes payable 5,072 1,423 - 3,649 -
---------- ---------- ---------- ---------- ----------
Net cash provided (used) by operating
activities (242,883) (120,703) 16,233 (121,924) 2,207
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (16,426) (7,868) - (8,558) -
Investments held for sale (35,128) (23,495) - (11,633) -
Security deposits (1,800) - - (1,800) -
---------- ---------- ---------- ---------- ----------
Net cash (used) by investing
activities (53,354) (31,363) - (21,991) -
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayment of officer's loans - (195) - - (2,073)
Offering costs (55,120) (40,120) - (15,000) -
Sale of equity units 393,020 - 193,800 392,500 -
---------- ---------- ---------- ---------- ----------
Net cash provided (used) by financing
activities 337,900 (40,315) 193,800 377,500 (2,073)
---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 41,663 (192,381) 210,033 233,585 134
Cash and cash equivalents - beginning of
period - 234,044 459 459 325
---------- ---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 41,663 $ 41,663 $ 210,492 $ 234,044 $ 459
========== ========== ========== ========== ==========
See accompanying notes.
F-6
Corporate Road Show.com, Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2002 and 2001
(Information as of and for the Six Months Ended June 30, 2003
and 2002 is unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
Corporate Road Show.Com Inc. (the "Company") was organized in the
state of New York on November 1, 1999. The Company is presently an
internet-based marketing operation which produces corporate videos
available on both the worldwide web via its website or in a hardcopy
format. The website serves as a portal for companies to showcase their
products and market their goods and services to the business and
financial communities. The Company has the capabilities to offer
clients custom made "live" and "on demand" video and audio productions
as well as compact disk and DVD copies by writing, shooting, editing
and prepping in-house as well as hosting such presentations on its
website.
The Company is considered as being in the development stage, since its
inception, in accordance with Statement of Financial Accounting
Standards No. 7 ("SFAS 7"), and its fiscal year end is December 31. As
shown in the accompanying financial statements, the Company has
generated minimal revenues to date, and incurred cumulative losses of
$344,602 through June 30, 2003.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's accounting policies are in accordance with accounting
principles generally accepted in the United States of America.
Outlined below are those policies considered particularly significant.
(a) Use of Estimates:
In preparing financial statements in accordance with accounting
principles generally accepted in the United States of America,
management makes certain estimates and assumptions, where applicable,
that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. While actual results could
differ from those estimates, management does not expect such
variances, if any, to have a material effect on the financial
statements.
(b) Statements of Cash Flows:
For purposes of the statements of cash flows the Company considers all
highly liquid investments purchased with a remaining maturity of three
months or less to be cash equivalents.
(c) Fair value:
The Company's financial instruments currently consists of cash and
cash equivalents, accounts payable and debt obligations. The recorded
values of cash and cash equivalents and accounts payable approximate
their fair values based on their short-term nature. The recorded
values of debt obligations approximate their fair values, as interest
approximates market rates.
(d) Fixed Assets:
Fixed assets are recorded at cost. Depreciation and amortization are
provided on a straight-line basis over 5 years.
F-7
Corporate Road Show.com, Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2002 and 2001
(Information as of and for the Six Months Ended June 30, 2003
and 2002 is unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
(e) Deferred Offering Costs:
The Company, in connection with a proposed offering ("the Offering")
of its securities, has incurred certain costs which have been deferred
and which will be charged against the proceeds upon completion of the
Offering or charged to expense in the event the Offering is not
completed.
(f) Revenue Recognition:
The Company recognizes revenue at the time that all services have been
substantially completed. The Company has received equity securities in
certain entities as payments for services provided for these entities.
Some of these entities are newly formed, have no operating history,
and the market for such securities is very limited. Since there is no
assurance that these securities are marketable, the Company has not
recognized any revenue upon receipt. Revenue will be recorded at the
time the securities are determined to have a monetary value.
(g) Income Taxes:
The asset and liability method is used in accounting for income taxes.
Under this method, deferred tax assets and liabilities are recognized
for operating loss and tax credit carry forwards and for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the results of
operations in the period that includes the enactment date. A valuation
allowance is recorded to reduce the carrying amounts of deferred tax
assets unless it is more likely than not that such assets will be
realized.
(h) Loss Per Common Share:
Loss per common share was calculated by dividing the net loss by the
weighted average number of shares outstanding for each period
presented.
(i) Investments/Statement of Comprehensive Income:
Investments in debt and equity securities are classified as
available-for-sale, held-to-maturity or as part of a trading portfolio
in accordance with the provisions of SFAS 115. As of December 31, 2002
and 2001, the Company had no significant investments in securities
classified as either held-to-maturity or trading. Securities
classified as available-for-sale are carried at fair value and their
unrealized gains and losses, net of tax, are reported as accumulated
other comprehensive income (loss) as a separate component of
shareholders' equity until realized.
Other comprehensive income items under SFAS 130 are transactions
recorded in shareholders' equity during the year, excluding net income
and transactions with shareholders.
F-8
Corporate Road Show.com, Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2002 and 2001
(Information as of and for the Six Months Ended June 30, 2003
and 2002 is unaudited)
NOTE 3 - DUE TO OFFICER:
The Company had received non-interest bearing advances from its
officer/major shareholder in order to fund its operations. As of
December 31, 2002 and 2001, such advances aggregated $195. The Company
repaid this advance in 2003.
NOTE 4 - SHAREHOLDERS' EQUITY:
In 1999, subsequent to inception, the Company issued 5,200,000 shares
of its common stock for $520.
During 2002, the Company issued 500,000 shares of common stock at a
per share price of $1.00, receiving $392,500 in net cash proceeds. The
Company also issued 10,000 shares of common stock in lieu of payment
of professional fees aggregating $10,000.
In 2003 the Company issued 20,000 shares of common stock in lieu of
payment of consulting fees aggregating $20,000.
NOTE 5 - INCOME TAXES:
June 30, 2003 December 31, 2002
------------- -----------------
(unaudited)
Deferred tax assets and liabilities consist of the following:
Deferred tax assets:
Net operating loss carry forwards $ 95,700 $ 47,745
Less valuation allowance (95,700) (47,745)
---------- ----------
$ - $ -
========== ==========
No provision for Federal and state income taxes has been recorded
since the Company has incurred losses since inception. Deferred tax
assets at December 31, 2002 consist primarily of the tax effect of the
net operating losses that expire in years beginning in 2011 and which
amounts to approximately $133,000 at December 31, 2002 (approximately
$282,000 at June 30, 2003). The Company has provided a 100% valuation
allowance on the deferred tax assets at December 31, 2002 (and June
30, 2003) to reduce such asset to zero, since there is no assurance
that the Company will generate future taxable income to utilize such
asset. Management will review this valuation allowance periodically
and make adjustments as warranted.
NOTE 6 - COMMITMENTS:
Lease:
Effective December 1, 2002 the Company entered into a lease for office
space and ancillary services. This lease requires monthly payments of
$1,250 and has an initial term of 12 months.
F-9
Corporate Road Show.com, Inc.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2002 and 2001
(Information as of and for the Six Months Ended June 30, 2003
and 2002 is unaudited)
NOTE 6 - COMMITMENTS (Continued):
Employment Agreements:
On January 1, 2003 the Company entered into an Employment Agreement
with its Chief Executive Officer and Chairman of the Board, for a term
of two (2) years commencing on such date, providing for an annual
salary of $90,000. In addition to his annual salary, this officer has
the right to participate in any share option plan, share purchase
plan, retirement plan or similar plan offer by the Company, to the
extent authorized by the Board.
NOTE 7 - PROPOSED PUBLIC OFFERING:
The Company is currently preparing a registration statement for an
initial public offering of its common stock. The Company intends to
offer 2,500,000 shares of common stock, at $1.00 per share, which
includes 500,000 shares of common stock offered by a selling
stockholder. The Company will not receive any proceeds from the sale
of the shares of common stock being offered by the selling
shareholder.
The shares of Company common stock will be offered and sold on a
self-underwritten basis by using Company officers, directors,
participating licensed broker-dealers or in private transactions.
F-10
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors.
CRS's Certificate of Incorporation permits indemnification to the fullest
extent permitted by New York law. CRS's by-laws require CRS to indemnify any
person who was or is an authorized representative of CRS, and who was or is a
party or is threatened to be made a party to any corporate proceeding, by reason
of the fact that such person was or is an authorized representative of CRS,
against expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such third
party proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of CRS and,
with respect to any criminal third party proceeding (including any action or
investigation which could or does lead to a criminal third party proceeding) had
no reasonable cause to believe such conduct was unlawful. CRS shall also
indemnify any person who was or is an authorized representative of CRS and who
was or is a party or is threatened to be made a party to any corporate
proceeding by reason of the fact that such person was or is an authorized
representative of CRS, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such corporate action if
such person acted in good faith and in a manner reasonably believed to be in, or
not opposed to, the best interests of CRS, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to CRS unless and only to the extent that the
court in which such corporate proceeding was pending shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such authorized representative is fairly and
reasonably entitled to indemnity for such expenses which any court shall deem
proper. Such indemnification is mandatory under CRS's by-laws as to expenses
actually and reasonably incurred to the extent that an authorized representative
of CRS has been successful on the merits or otherwise in defense of any third
party or corporate proceeding or in defense of any claim, issue or matter
therein. The determination of whether an individual is entitled to
indemnification may be made by a majority of disinterested directors,
independent legal counsel in a written legal opinion or the shareholders. CRS
currently does not maintain a directors and officers liability insurance policy.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling CRS
pursuant to the foregoing provisions, CRS has been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in that Act and is therefore unenforceable.
Item 25. Other Expenses of Issuance and Distribution.
The estimated expenses of the distribution, all of which are to be borne by
us, are as follows. All amounts are estimates except the Securities and Exchange
Commission registration fee:
Registration Fee.............................. $ 230
Printing and Engraving Expenses............... $ 5,000
Accounting Fees and Expenses.................. $ 25,000
Legal Fees and Expenses....................... $ 60,000
Transfer Agent's Fees and Expenses............ $ 1,500
Miscellaneous................................. $ 8,270
Total........................ $ 100,000
II-1
Item 26. Recent Sale of Unregistered Securities.
Set forth below is information regarding the issuance and sales of CRS'
common stock without registration during the last three (3) years. No such sales
involved the use of an underwriter.
1. On November 1, 1999, we were incorporated pursuant to the New York Business
Corporation Law. Upon our incorporation 5,000,000 shares were issued to our
founding shareholder for consideration of $500 and 200,000 shares were
issued to his wife for consideration of $20. This transaction by us did not
involve any public offering and was exempt from the registration
requirements under the Securities Act pursuant to Section 4(2) thereof.
2. In June 2002 we issued 250,000 shares of common stock to Eli Weinstein, an
accredited investor, for consideration of $250,000. In October 2002 we
issued 250,000 shares of common stock to Mr. Weinstein for $250,000. We
paid a finder's fee to Five Flags, Inc. of $100,000. Five Flags, Inc., a
consultant to CRS, is not a registered broker-dealer. These issuances of
shares of common stock to Mr. Weinstein by us did not involve any public
offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof.
3 In November 2002 we issued 10,000 shares of common stock to David Kagel as
consideration for services rendered. Mr. Kagel assisted us in the
preparation of the June 1, 2002 private placement memorandum. We valued his
services at $10,000. Such offering was exempt from the registration
requirement under the Securities Act pursuant to Section 4(2) thereof. Mr.
Kagel is an accredited investor. This transaction did not involve any
public offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof.
4. In February of 2003 we issued 20,000 shares, valued at $20,000 to Benjamin
Lapin as part of a finder's fee arrangement we had with Mr. Lapin, a
non-accredited individual. Mr. Lapin introduced us to Dynamic Distribution
Corp. which resulted in an agreement with Dynamic but no realization of
revenue to date. Dynamic Distribution Corp. is not a registered
broker-dealer. Mr. Lapin, in addition to having access to the books and
records of CRS as well as ample access to our management, was considered
sophisticated enough pursuant to Registration D of the Securities Act to
understand the risks of an investment in our company. As he had such
knowledge and experience in financial and business matters that he was in a
position to evaluate such risks. This transaction did not involve any
public offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof.
ITEM 26. EXHIBITS
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of the Registrant
3.2 By-laws of the Registrant
4.1 Specimen Common Stock Certificate*
5.1 Opinion of Spitzer & Feldman P.C. with respect to the validity
of the shares*
10.1 American Express Agreement
10.2 HQ Lease
10.3 2003 Omnibus Stock Option Agreement, dated February 14, 2003
10.4 Form of Subscription Agreement
10.5 Ferraro Employment Agreement
10.6 Overture Services, Inc. Agreement
10.7 Dynamic Distribution Corp. Agreement, dated February 11, 2003
23.1 Consent of Lazar, Levine & Felix LLP
23.2 Consent of Spitzer & Feldman P.C. (included in Exhibit 5.1)*
* Previously filed.
II-2
Item 27. Undertakings.
A. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and 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. In the event that a claim for indemnification against
such liabilities, other than the payment by us of expenses incurred or paid by
our director, officer or controlling person 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 it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
B. We hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To specify in the prospectus any facts or events arising after
the effective date of the Registration Statement or most
recent post-effective amendment thereof which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered, if the total dollar value of
securities offered would not exceed that which was registered,
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b), Section 230.424(b) of Regulation S-B,
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and has duly caused
this amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of New York, State of New
York, on August 19, 2003.
CORPORATE ROAD SHOW.COM INC.
New York, New York
August 19, 2003
By: /s/ Frank Ferraro
------------------------------
Frank Ferraro
Chairman, Principal Financial Officer,
Chief Accounting Officer and Chief
Executive Officer
II-4