424A: Prospectus filed pursuant to Rule 424(a)
Published on February 13, 2004
As Filed Pursuant to Rule 424(a)
Registration No. 333-104815
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 $1.00. 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 August 12, 2005 [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 involve 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.
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 May 12, 2004 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 FEBRUARY 12, 2004
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TABLE OF CONTENTS
Prospectus Summary............................................................1
The Offering..................................................................3
Summary Financial Data........................................................3
Risk Factors..................................................................5
Use of Proceeds...............................................................9
Determination of Offering Price..............................................11
Dilution.....................................................................11
Capitalization...............................................................13
Dividend Policy..............................................................14
Management's Discussion and Analysis and Results of Operations...............14
Description of Business......................................................17
Management...................................................................27
Code of Ethics...............................................................30
Certain Relationships and Related Transactions...............................30
Disclosure of Commission Position of Indemnification
for Securities Act Liabilities...............................................31
Security Ownership of Certain Beneficial Owners and Management...............32
Selling Shareholder..........................................................33
Description of Securities....................................................33
Plan of Distribution.........................................................35
Legal Matters................................................................37
Experts......................................................................38
Where You Can Find More Information..........................................38
Financial Statements........................................................F-1
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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 the worldwide web via our
website www.corporateroadshow.com. Our website serves as a distribution center
for companies seeking to showcase their products and market their goods and
services to the investment community and general public at large. 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 hosting over the Internet. The client then has access to
the video on the Internet and can email that video to any data base (i.e.
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: Second Quarter of 2004. 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 December 31, 2003, we had one employee.
OUR OFFICES
Our executive offices are located at 80 Orville Drive - Suite 100, Bohemia, New
York 11716. Our telephone number is (631) 244-1555.
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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.
3
BALANCE SHEET DATA
September 30, 2003 December 31, 2002
Working Capital (Deficit) $ (13,161) $ 224,110
Total Assets $ 113,991 $ 293,917
Total Liabilities $ 36,801 $ 10,424
Stockholders' Equity $ 77,190 $ 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.
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 March 1, 2004. 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.
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
direct the corporation in ways which may not ultimately be in the shareholders
best interest. For example a control person in Mr. Ferraro's position could
enter into business arrangements with third parties affiliated with Mr. Ferraro,
which may not be on equal terms with such arrangements with independent third
parties.
WE HAVE BEEN INCURRING LOSSES FROM OPERATIONS SINCE OUR INCEPTION IN 1999 AND AT
SEPTEMBER 30, 2003 HAD AN ACCUMULATED DEFICIT OF $382,414.
Stockholders' equity and working capital deficit was $77,190 and $13,161,
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.
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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 ($382,414). 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 ONE EMPLOYEE AND AS A RESULT WE ARE DEPENDENT ON HIS SERVICES THE
LOSS OF WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT UPON US.
Frank Ferraro is our sole employee as well as our Founder, Chairman and
President. 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
Mr. Ferraro as an employee our business operations would cease.
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 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.
6
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 web-based videos. 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 may cause us to cease operations.
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. If we are unable to sell some or all of the shares being issued we may
run out of money and cease operations as a result.
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.
FROM INCEPTION THROUGH NOVEMBER 2003, MOST OF OUR REVENUES RESULTED FROM THE
RECEIPT AND OR SALE OF SECURITIES RECEIVED BY US AS CONSIDERATION FOR SERVICES
RENDERED. SUCH MAY LOSE ALL VALUE WE ASCRIBE TO THEM.
7
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. Further, there have been occasions and
may be in the future where the securities we have received, are relatively
illiquid as a result of a thinly traded market. In such a circumstance, we may
have difficulty selling such security after all restrictions have been lifted.
From inception though November of 2003, the majority of our revenues were
generated as a result of our receipt of such shares. We have sold approximately
$40,000 of the shares we have received to date and have booked the remaining
shares at a significantly reduced valuation in comparison to the same company's
unrestricted shares. Therefore, there is a risk that during any period in which
we must hold a particular security, the securities may be become worthless. If
any securities become worth less than our "booked value" we will suffer a loss
of revenue as a result of such devaluation.
In addition to allowing certain clients to pay for all of our services with
their securities, we allow certain clients to pay for our services with a
combination of cash and restricted securities of theirs. As a result of both
situations, we are dependent to varying extents on such companies' ability to
succeed in the marketplace. Any restricted securities we have received require
that a significant period of time elapse 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.
PURCHASERS OF THE SHARES OFFERED HEREBY WILL INCUR IMMEDIATE SUBSTANTIAL
DILUTION IN THE NET TANGIBLE BOOK VALUE OF APPROXIMATELY $.75 OR 75% 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 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 cannot assure that any of these expectations will be
realized or that any of the forward-looking statements contained herein will
prove to be accurate.
ALTHOUGH WE ARE CONSIDERED AN INVESTMENT ADVISER BY THE SECURITIES AND EXCHANGE
COMMISSION WE HAVE NOT REGISTERED EITHER FEDERALLY OR IN A PARTICULAR STATE
Although, the Securities and Exchange Commission has informed us that it
considers us an "investment adviser", we do not have to register as such with
the Commission as we have no assets under management. We have further been
advised by the Commission that visitors to our website who are looking for
assistance in making an investment decision are our clients for the purposes of
the Investment Advisers Act of 1940. As a result of the Commission's position,
we have a heightened fiduciary obligation to our clients. It is unclear whether
we would be deemed to be an investment adviser under the laws of any particular
state, however, as our internet presence plays a significant role in our present
and future business models, we must monitor whether we have clients in
jurisdictions other than New York and whether we are subject to the laws of
other states as a result.
We have no intent to register as an investment adviser with any particular state
but will continue to monitor our business and any applicable state laws. Until
such time that we are so registered, we are relying on exemptions from federal
and state registration, making us exempt from a variety of regulatory filing and
recordkeeping requirements. However, the aforementioned fiduciary obligations
require us to take a variety of measures to protect our clients' interests and
we may be liable for investment advisory services provided to our clients. Any
failure to satisfy our fiduciary and other applicable obligations may result in
us being liable for significant penalties and sanctions and may impair our
ability to conduct our business.
8
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 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.
USE OF PROCEEDS
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
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 (as detailed above) we would realize from the sale of the related
numbers of shares.
(1)Mr. Ferraro has an employment agreement with CRS whereby he will receive an
annual salary of $90,000 as a result of his services to CRS. Mr. Ferraro has
orally agreed to refrain from taking more than $45,000 in salary in 2003, until
CRS raises a minimum of $400,000 in this offering, at which time he will receive
$25,000 to reduce the dollar figure owed to him by CRS to $20,000. If CRS sells
50% of the offering, Mr. Ferraro will receive the $45,000 owed to him for
services rendered in 2003 and $55,000 of his 2004 salary. If more than 50% of
the offering is sold, Mr. Ferraro will receive a prorate amount based upon the
line item found in the above table entitled "Frank Ferraro Salary" up to a
maximum of $135,000 which is the aggregate of the $45,000 owed to him for 2003
and his $90,000 salary for the 2004 calendar year.
9
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. However, such expansion does not
include the merging with or acquisition of any business as we have no plans to
do either at this time.
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.
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. The above tables reflect the use of proceeds if such fees
are paid. To the extent that we do not use the services of a broker/dealer to
sell our securities, we will increase each of the categories in the above table
on a proportionate basis.
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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 September 30, 2003, was
$16,070, or approximately $.00 per share. Thus, as of September 30, 2003, the
net tangible book value per share of common stock owned by our current
stockholders would have increased by $1,961,000 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 $.75 per
share from the offering price. The following table illustrates this per share
dilution and reflects the receipt of varying amounts of proceeds:
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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
ASSUMING 75% OF OFFERING (1,500,000 SHARES) SOLD
ASSUMING 50% OF OFFERING (1,000,000 SHARES) SOLD
ASSUMING 25% OF OFFERING (500,000 SHARES) SOLD
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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 September 30, 2003. This
table should be read in conjunction with the financial statements and related
notes included elsewhere in this prospectus.
SEPTEMBER 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) (382,414)
Accumulated other comprehensive
loss (26,416)
---------
Total Stockholders' Equity 77,190
---------
Total Capitalization $ 77,190
=========
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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 have received equity securities in certain entities as payments
for services provided for these entities. Some of these entities are privately
owned, newly formed and have no operating history. Since there is no assurance
that these securities are marketable and collectibility is not assured, we do
not recognize any revenue upon receipt. Revenue will be recorded at the time the
securities are determined to have a monetary value. We also receive restricted
securities in publicly traded entities. In such instances, revenue is recorded
with a discount of 75% from the market value at the time of receipt since (i)
the securities are restricted and (ii) there is no assurance that the value of
these securities will be realized. At the time that such securities are able to
be sold, we will recognize any resulting gain and/or loss. 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
availability of our services becoming more known to the corporate world. The
production costs also increased accordingly. Revenues earned in 2002 include
$13,450 in proceeds resulting from the sale of securities received for services
rendered. We also received restricted securities in 2002 and recorded such
securities using a 75% discount from the market value at the time of receipt in
the amount of $11,739.
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 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. as a result of its introduction of various potential clients to the
Company. Five Flags, Inc. is not affiliated to CRS or any employee, officer or
director of CRS. However, we did not procure any new clients as a result of
introductions by Five Flags, Inc. Further, Five Flags, Inc. also received
$100,000 as a result of its introduction of the Company to Mr. Eli Weinstein,
the selling shareholder. Such amount represented 20% of the gross proceeds of
Mr. Weinstein's investment, as agreed, as was reflected as a cost of raising
capital and charged against additional paid-in capital. Five Flags merely
introduced us to Mr. Weinstein and the consulting and fund raising transactions
disclosed in this paragraph were the sole transactions in which we engaged Five
Flags or Mr. Weinstein. Mr. Weinstein invested a total of $500,000 in the
Company during 2002.
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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 per
share for the year ended December 31, 2001.
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002:
Revenues for the nine month period ended September 30, 2003 was $55,041 as
compared to $28,056 for the same period of the previous year. This increase of
$26,985 or 96% is a direct result of our improved marketing efforts. Revenues
earned in the September 2003 nine-month period include $32,000 received in cash
for services rendered and approximately $20,000 in cash proceeds from the sale
of investments received in earlier periods for services rendered. We also
received restricted securities in the same nine-month period and recorded such
securities using a 75% discount from the market value at the time of receipt in
the amount of $2,698.
Operating expenses increased by $124,014 from $107,822 for the nine months ended
September 30, 2002 to $231,836 for the 2003 period. Payroll accounted for
$67,220 of this increase (an increase from $43,500 in 2002 to $110,720 in 2003)
as a result of new hires in 2003. We incurred $37,220 in professional fees
during the nine month period ended September 30, 2003 compared to $53,000 for
the same period in 2002. The 2003 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
$27,332 compared to minimal expense in 2002. Other expense increased from $3,729
for the nine-month period ended September 30, 2002 to $52,711 for the comparable
period in 2003. This increase of $48,982 includes (i) rent in the amount of
$16,050; (ii) payroll taxes amounting to $9,685 and (iii) insurance amounting to
$12,994.
As a result of the above, the net loss for the nine months ended September 30,
2003 was $176,795 or $0.03 per share, compared to a net loss of $79,766 or $0.02
for the similar period in 2002.
LIQUIDITY AND CAPITAL RESOURCES:
As of September 30, 2003, we reflected negative working capital of $13,161
compared to a positive working capital of $224,110 at December 31, 2002. Our
current ratio at September 30, 2003 and December 31, 2002 was .64:1 and 22.5:1,
respectively.
During 2002, we utilized $121,924 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 $21,991 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.
In June 2002 we issued 250,000 shares of common stock to Eli Weinstein, the
selling shareholder, for consideration of $250,000. We paid Five Flags, Inc.
$50,000 (20%) as a fee for having Mr. Weinstein invest in our Private Placement.
In October 2002 we further issued 250,000 shares of common stock to Mr.
Weinstein for $250,000. We again paid Five Flags, Inc. a fee of $50,000 (20%)
for having Mr. Weinstein invest in our Private Placement for a total
consideration of $100,000 for the raising of capital. Five Flags, Inc. 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.
For the nine month period ended September 30, 2003, we utilized $149,031 for
operations, primarily as a result of our net loss of $176,795, compared to
$54,675 in cash utilized for operations during the similar period in the
previous year. Cash utilized for investing activities for the 2003 period
aggregated $17,669 and includes the purchase of office furniture and equipment,
$20,343 in proceeds realized upon the sale of shares received from our customers
as payment for services rendered. During the nine-month period ended September
30, 2003, we also received shares from our clients which we recorded at a value
of $30,144. During the nine month period ended September 30, 2002, we sold
common shares in a private placement and realized net proceeds of $193,800.
During 2003, we continued to incur costs ($46,120) associated with the proposed
public offering of our common shares. As a result, our cash balance at September
30, 2003 was $21,029.
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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. Of the public companies which issue securities
to us, we initially record the receipt of such securities at a significant (75%)
discount due to the restrictions and since the values of these securities
fluctuate and are not readily convertible to cash. Based on the 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, using the same benchmark of a 75% discount, 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.
As of September 30, 2003, the unrealized loss of all securities received as
compensation and held for sale aggregated $26,416 which amount is reflected on
the balance sheet as accumulated other comprehensive loss. 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 investing activities on the statement of cash flows.
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.
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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.
ONLINE STRATEGY
Our online strategy is to be a leading Web portal for both financial
professionals, the business decision makers and the general public as a
worldwide provider of multimedia production services to corporations. The key
components of our growth strategy include:
Grow Our Customer Base. During the initial stages of our operation, we have
focused on selling our streaming video interviews to public companies with
securities trading on the Nasdaq SmallCap Market and the electronic
over-the-counter bulletin board. We believe there is an opportunity for
streaming video and audio, public relations services and IT consulting services
in small-cap and micro-cap markets. Furthermore, we believe that these companies
have a need for exposure to investing community as well as the public at large
that is as significant as that of larger companies. We also attempt to market
our services to private companies, but have found that for the moment, there is
considerably less interest from the private companies.
Clients are charged a fee for the production of streaming video presentations
and other services. The services may include:
o links to the client's Web site and to a page or pages of our Web site
dedicated to providing information about the client; and
o preparing and making available to our clients periodic interviews per year
with representatives of the client and, at the option of our management,
additional videos providing current newsworthy information about the client.
Grow Our Audience. We believe that increasing our brand awareness and our
exposure within the business community will contribute to our future success. To
date, we have successfully built a brand name but plan on continuing to grow our
audience by focusing on expansion of our content on our website as well as the
introduction of our show concept.
Increase Usage By Our Audience. To increase usage, we plan to expand our content
offering in the area of additional companies, industries, people and products
during the upcoming fiscal year.
Maximize Revenues From Users of our Website. We plan to expand the e-commerce
opportunities to our Web site in an effort to generate revenues from user of our
Web site. More e-commerce partners will provide more buying opportunities on the
site. We are also attempting to increase the advertising revenue per user
through customer-targeting capabilities on the site.
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Technology Advancement. We plan to continuously advance and develop new
technologies that will enhance the user experience. We intend to expand our
technology services through ongoing investment and integration of new
technologies.
CURRENT SERVICES OFFERED BY CRS AND OUR FEE STRUCTURE
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 video and produce a corporate presentation for
dissemination on our website. Over 90% of our revenues are generated through our
video hosting and production business. The remaining 10% consists of
advertisements by third parties on our website. We hope to increase the
percentage of advertising revenue as the number of "hits" our website receives
continues to increase.
The market for these services is 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 targeted audience for these
productions consists of both the investment community and the public at large.
Although the companies we produce videos for must confirm to us that they are
not undertaking a public offering while their video is available for viewing on
our website, many of those companies have an interest in increasing the public's
awareness as a public entity. For our visitors who are looking for such
companies, we attempt to serve that purpose in a traditional public relations
context. However, our clients are also interested in increasing sales of their
products and exposure of their business plans. Our television productions will
blend the investment and marketing concept even further by using an anticipated
"news" format.
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 both the investment community and the general public at
large 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 video, 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.,
Juniper Group, Inc. , Neil Kaufman, Esq. And Humana Trans Services Holding Corp.
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.
VIDEO PRODUCTION
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.
The fees can vary on each production. 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 location, scripting, editing, talent and other factors.
In order to arrive at a fee for a particular project we must analyze the time,
equipment and bandwidth required to place that particular video on the web.
HOSTING A VIDEO WITHOUT PRODUCTION
Unless requested otherwise, when we host a video we do not "produce" it. The
first step is the receipt of the video from the client. Generally, productions
provided to us by a company are either in an MPEG, AVI or VHS format. We must
convert such into a Real Media format for web-based applications. Once
converted, the video is "streamed" at various speeds for viewing on our website.
For example, a 3 minute video requires approximately 8-10 hours of Frank
Ferraro's time to convert and digitize. We prefer to offer
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two or three different streaming speeds for each video so that a wide variety of
visitors can access a particular video (ie. some visitors may have cable,
dial-up, or T-1 connections each of which require different streaming speeds).
The faster the speed, the more bandwidth the video needs. Bandwidth costs us one
dollar per megabyte per month. Thus, a 3 minute video which uses 50 megabytes of
our available server space costs us $600 per year. Lastly, we charge a hosting
and marketing fee equal to an additional 50% of the cost to the customer. Thus,
our fees for merely hosting videos generally range from $2,500 to $5,000.
BASIC VIDEO PRODUCTION
Any video we produce is also hosted by us, so in addition to the hosting
expenses incurred and fees charged a basic production involves additional fees
such as:
(i) Equipment - Depending on what is required, we may have to rent lighting,
cameras, microphones, mixing boards.
(ii) Personnel - If called for, we may have to outsource our production needs to
a consultant who charges us a fee which varies for each production. We also may
have to hire an interviewer or production assistant if necessary.
(iii) Location - If we use an outside location, we have to budget for travel
time for any personnel involved as well as that of Frank Ferraro.
(iv) Frank Ferraro's Time - Mr. Ferraro generally accounts for his time at $125
per hour. Many of our productions require Mr. Ferraro to write scripts for and
direct the production process.
(v) Post -Production - Depending on the length of the video Mr. Ferraro and any
production consultants may have significant editing responsibilities in order to
convert the video from a rough to final format for hosting.
For a basic 7 to 9 minute interview in a location of our choice without any
music or eye-catching graphics (including basic editing and hosting), we would
charge between $5,000 and $7,500
ADVANCED VIDEO PRODUCTION
An advanced video production integrates multiple cameras, lighting, video with
eye-catching graphics such as pictures or charts in coordination with a specific
presentation with music and advanced editing and up to 30 minutes of video
presentation. Thus, an advanced video production would not only encapsulate the
costs and expenses associated with the hosting of a video and a basic video
production, but would also add more involved production techniques and
equipment. Presently, we charge between $10,000 and $20,000 to do a 10 to 30
minute video.
VIDEOS WE HAVE MADE TO DATE
To date we have produced the following videos:
o In June of 2001 we created a video for the Asconi corp. which was on our web
site for about three months. The video focused on introducing a viewer to
Asconi's presence as a small cap public company as well as to its business which
is the production and distribution of wines from the country of Moldova. Some of
the topics covered were: Moldovan culture: (a wine producing region for over
five thousand years and the average worker makes about $30 per month); Moldovan
location: sought by many different countries over the centuries; discussion of a
1991 court ruling for the privatization process of the former communist country
and how the country would welcome foreign investments in (which was the first
step towards becoming a capitalistic society); the Company's history (a water
shipment to Germany the proceeds of which were invested in wine); expansion of
their present markets; their product line (including products in development);
and some of the many prestigious awards they have received. We were paid a fee
of $5,000 for services rendered. The message sought by this video was to
introduce the wines of Asconi to
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America as well as introduce the company as a publicly listed entity and
potential investment opportunity to a group of financial professionals.
o In July of 2002 we created two separate "about us" videos representing and
describing the content and services that CRS is capable of providing to our
clients. There were no fees paid or charged for either of these two videos. The
topics covered were: what roadshows are; the video hosting and video production
services we offer; the different interactive platforms at our disposal; and how
we can assist a company in their marketing efforts by employing a professionally
produced video by CRS. The message sought to be delivered by this video was to
give the general public visiting our website a sense of the services we can
provide. This video is no longer on our website.
o Also in July of 2002 we developed a video for the Polymer Research Group which
was available on our website for about one year. This video was an interview
format as opposed to a presentation format and our interviewer asked the
following questions: "Can you tell us about Polymer research and how the company
has progressed thought the years? Ho many fortune 500 companies have you done
business with? Can you tell us about the chemical grafting technique?" And
"Where do you think Polymer Research is going in the next five years?" The topic
of the video focused on Polymer's business, specifically the different
applications the company uses, from the manufacturing of fire retardant
materials to chemical grafting which is the company's most well known service.
We were not paid a fee or charged for this client. The video's intent was to
increase Polymer's customer base.
o In November of 2002 we created a video for Genesis Bioventure group. This
video was in an interview format and we asked the following questions: "Can you
discuss your core product and why it is so special? Does your technology detect
the non-existence of the mammastatin protein? Can you discuss the technology to
detect mammastatin? Do you have patents on this technology? Are any other
companies doing something similar to this? How do you see the company going
forward in the next five years? Where are you at right now with the product?"
The "topic" of the Genesis video focused on Genesis' ability to detect early
stage breast cancer using Mammastatin Serum Assay technology. Dr. Woods explains
that healthy cells have the mammastatin protein and that breast cancer cells
have no mammastatin protein. The company is focusing on a blood test to see the
level of mammastatin in women. If the levels decrease over time the studies say
that this patient might be a candidate for breast cancer. They claim that this
test might be more effective than the current "self diagnosis" or mammograms,
because once a mammogram or a self examination shows a tumor the cancer has
already developed or perhaps spread. Whereas, if women started taking the
mammastatin protein test early on in life and continue with regular check ups
the tests will detect the deterioration of mammastatin levels throughout time
and can signal a warning sign that a patient might be on there way to developing
cancerous cells. The message this video portrays is that of the company's
product and services and is geared to the general public as a tool to promote
awareness of Genesis' product in development as well as an introduction to the
financial community of its existence as a developing public company. Our
agreement with Genesis is that we will receive the following payment in
quarterly increments every 3 months as the Genesis video will be on our website
for one year. Upon completion of the one year period we will have been paid
100,000 shares of restricted stock and 150,000 warrants to purchase Genesis'
common stock which are exercisable at $1.50 per share. In January 2003, we were
paid 25,000 shares of restricted Genesis common stock and 37,500 warrants to
purchase Genesis common stock and in June we received 50,000 shares of
restricted Genesis common stock and 75,000 warrants to purchase Genesis common
stock.
o In June of 2003 we created a video for Vintage Filings Inc. which is currently
on our website and will be available indefinitely. This was an interview format
and we asked the following questions. Can you give us a quick synopsis of what
Vintage Filings is and what you folks do? What separates Vintage Filings from
your competition? The Vintage video focused on the services Vintage could
provide to some of the visitors to our website as well as our clients. We were
not paid nor did we charge a fee for this client.
o In July of 2003 we developed a video for Skybridge Wireless, Inc. which will
be available on our web site for 6 months. The Skybridge video focused on
Skybridge's business and was intended to introduce the audience to its business
plan , products and services as well as Skybridge's plan to penetrate the Las
Vegas market. The Company covered many "topics" including their products (256K
to 1MB of services speeds)strategies, objectives (including increased sales,
expansion into other areas, cost effectiveness for businesses, and quality
control for customer satisfaction, and
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24/7 live support for its customers)This video was shot in front of a live
audience and the "questions" at the end of the presentation from the audience
were as follows: "Who is your major competitor? How many subscribers do you have
now? How do you market to them? How did you get to be a public company? How many
shares are outstanding? What is your market cap? How much is in the float? What
is the current volume of trading? Can we get access to pro forma's? How did you
raise money for the current structure?" The "message" of this video was not only
to introduce the products and services of Skybridge Wireless but to address a
group of business professional as to Skybridge Wireless' existence as a young
public entity. We were paid 38,500 free trading shares of Skybridge common stock
for this service.
o In August of 2003, we created a video for the Juniper Group Inc. where they
discussed their broadband services as well as the recent recapitalizations of
their shares. Juniper also wanted to address the fact that they are a small
business struggling to stay listed on the NASDAQ stock market. In August of 2003
we created a video for The Juniper Group. The "topic" was generally about
Juniper Internet Communications a division of The Juniper Group and how they
work with cable companies installing high speed broadband connections to homes
and businesses. The "questions" we asked were as follows: "Al give us a quick
synopsis of what Juniper Internet Communications does and what your business
model is? Where do you see the company going in terms of the Juniper Internet
portion of it? Is there room for growth in the field for Juniper Internet
Communications? Vlado, in recent history you've had to reverses, can you please
address this? Al, where do you see the future of broadband and how does it
relate to Juniper Internet Communications?" This video is general in nature but
one can view it as a way to address shareholders or investors because of the
discussion about the parent company's recent reverse splits.
o In September 2003, we created a video with Neil Kaufman, Esq. which is
currently on our website and will be available indefinitely. We used an
interview format and the topic of this video was a discussion of the
Sarbanes-Oxley Act of 2003. Mr. Kaufman discusses the new rule and how it
relates to small public companies. The questions asked were as follows: "How
does Sarbanes-Oxley affect publicly traded firms? Is this a topic small firms
will have to grapple with? If companies would like more information on this
topic how can they contact you?" We were not paid nor did we charge a fee for
this client.
o In October of 2003, we created a video for Humana Trans Services Holding Corp.
which is currently on our website. The video topic focused on the services the
company provides to its clients Such services include background checks, lower
workman comp. rates and the full outsourcing of new drivers to large and small
carriers. The "topic" also focused on why a new director has joined the
company's board of directors. This video was an interview format and we asked
the following "questions": "Ron can you tell us a little about Humana Trans
Services and what they do? Do you pay the drivers benefits or does the company
pay? Ron, what about your experience, can you tell us about that and what
brought you to Humana Trans Services? Where do you see the company going in the
next three to five years?" The message of this video appears to be general in
nature. For the production and hosting of the video for a three month period we
received $6,500 and 20,000 free trading shares of Humana common stock.
Our plans for future videos will follow similar patterns to those produced to
date. As you can see with the different "formats" the "message sought" can
change as well. We have found that companies that are putting on a presentation
in front of business professionals tend to focus on the investment community,
similar to Asconi and Skybridge. However, the interview format lends itself more
towards the products and services such as Genesis, Polymer, Vintage, and Humana.
Future videos for our expansion into the television concept will be more general
in nature focusing on new and interesting products services and stories.
21
In an effort to get new or interesting content or to expand our network and
marketing capabilities we sometimes put videos up for little or no
consideration. For example, Polymer Research Group was a NASDAQ company which,
at the time, we believed gave us a higher profile than previous clients and
allowed us to market ourselves more effectively. We were not compensated nor
have any other relationship with Polymer except for producing and hosting the
video clip. As for Vintage filings and Neil Kaufman, both companies allow us to
provide links to services that visitors to our site may be able to utilize.
Vintage filings offers EDGAR filings for publicly traded companies, including
our own. We view them as a potential source of leads for companies wishing to
use our services. Neil Kaufman, as the managing partner in the law firm of
Kaufman & Associates and a member of the board of directors of the Long Island
Venture Group is another important potential contact in our networking efforts.
We have no agreement with Mr. Kaufman. Other than the fact that we use Vintage's
services to file our public documents with the Commission, neither the Company
nor any of our affiliates have any relationship with Polymer, Vintage or Mr.
Kaufman. We anticipate providing additional free content to select clients or
service providers in the future.
As an additional service, we will host videos not created or produced by us for
clients desiring exposure on our website. Currently, we host a video by The
BioBalance Corporation which we were paid $2,500 for this hosting service. This
video focuses on the product Probatrix , a food which BioBalance claims helps
offset the effects of certain types of Irritable Bowel Syndrome.
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.
SAMPLE SHOW TIME-LINE AND EXPENSES
As the funding for the development of the show concept is wholly dependent on
the sale of our common stock, we are unable to commit to a certain date upon
which production will begin. In the event that we raise enough dollars to
produce a minimum of one program, the costs of which we estimate to be $50,000,
we would anticipate starting production within 30 days of receiving the funding.
WEEK ONE: Selection of companies. Scripting, casting and/or creating a theme,
for example a bio tech, high tech or entertainment theme. Set up the video
location and reserve shoot times. Assuming we have agreed to terms with four
companies, we would anticipate to start shooting on days 4 and 5.
WEEK TWO: Continue filming each company with the goal of completing all filming
and "B roles" by the end of the second week. "B" roles are backup video footage
for background or special effects graphics used in connection with the
production of a video.
22
WEEK THREE: Begin the "content" editing process as well as produce and edit all
disclaimers, introductions with the goal of creating a 28-30 min. segment
(depending on the amount, if any, of commercial time sold for such production).
This process shall also include any voiceovers, on screen graphics and
background music. By the end of the week 3 we would expect to have an audio
video interleave ("AVI") file. An AVI file is the most common format for
audio/video data used in the world today.
WEEK FOUR: In the fourth week we anticipate digitizing the production and
converting such digital file into the various mediums we will use. The first
step of the digitization process will begin by converting the AVI files into the
different media files at various "streamable" speeds. As visitors connect to our
site connect at various data speeds (ie. 56k, 256k, LAN, Cable Modem and ISDN)
we need to be able to present our videos in each of the various formats. In
addition to internet access, once we complete the digitizing process we will
convert the file to both VHS and CD-ROM broadcast mediums and will be in a
position to broadcast the video upon the completion of this stage.
POST--PRODUCTION: During the production period (first four weeks) we will be
analyzing the various potential air-times available to us. The costs of the
media varies greatly depending on the time of day, the particular network or
subscriber channel. Our preliminary analysis has shown that a 1/2 hour time slot
on CBS New York at 10:30 am Sunday morning would cost us approximately $30,000.
The same 1/2 hour spot on CBS at 6:00am would cost about $6,000. Cable and the
Dish Network are less expensive with similar spots ranging from $1,500 to
$3,500. We would not expect this part of the show development process to delay
us in anyway as we intend on purchasing our initial media time during the
production process.
Although we anticipate offering more competitive rates than the industry
standard, the approximate costs associated with a half-hour television program,
exclusive of on-air talent and marketing fees, are as follows:
o Creative and pre-production - $15,000
o Production Crew - $25,000
o Camera and Equipment Rental - $5,000
o Miscellaneous Production Expenses - $2,500
o Airtime Expenses between $1,500 and $30,000 depending on network and
time slot
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.
23
REVENUE BREAKDOWN
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 privately owned, newly formed and have no operating history. 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. To the extent that we
receive equity securities in a company which has no trading market at the time
of receipt, we do not recognize any revenue until such securities are sold by
the Company, if ever. The Company also receives restricted securities in
publicly traded entities in which a market exists. In such instances, revenue is
recorded with a discount of 75% from the market value at the time of receipt. At
the time that such securities are sold in the public market, the Company
recognizes any resulting gain and/or loss.
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. Our average monthly costs have ranged from a high of $1,500 to a low
of $200. Such range is a result of the number of "hits" we receive as a result
of an Overture "term" that we have bid on and won.
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. To date, no business has been generated from this relationship.
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.
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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
In order to avoid and potential securities law matters, all visitors to our
website are required to view 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 and acknowledge that they have read such section by clicking the
button opting in. We further disclose all equity holdings that we have in such
companies.
In order to ensure that our clients are not presently offering securities and
will not contemplate the offering of securities at any time the video is
available for viewing on our website, we require each client to acknowledge in
writing that: (i) they are not presently offering securities and will not
contemplate offering securities while their video is available for viewing on
our website; and (ii) they will not distribute a hardcopy of their video to any
potential investor at any time during which they are engaged in an offering of
securities. We will not take any further steps to verify whether our clients are
in conducting an offering concurrent with their video's availability on our
website. In order to protect ourselves against the restrictions on
communications by Section 5 of the Securities Act, we will further require any
client to covenant to us in writing, that prior to commencing any offering, we
will be instructed to remove their video and other materials from our website.
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
nor do we primarily engage in the business of investing, reinvesting or trading
in securities. 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.
We have been advised by the Securities and Exchange Commission that it considers
us an "Investment Adviser" as such term is defined in Section 202(a)(11) of the
Investment Adviser's Act of 1940. We are exempt from registration as such with
the Securities and Exchange Commission as we do not have assets under management
of more than $25,000,000 nor are we an adviser to an investment company
registered with the Securities and Exchange Commission. In light of the fact
that we are a New York corporation, our only place of business is in New York,
all of our videos are made in New York and any television production will occur
in New York, we have concluded that New York would be the proper jurisdiction in
the event that we decide to register as an investment adviser. Our review of the
New York General Business Law reveals that any entity providing investment
advisory services to less than 6 persons in New York in the past 12 months is
exempt from the registration requirements of the State of New York. However, we
have been advised by New York State that visitors to our website are not
considered clients to whom we are selling our services as they are not
compensating us for their access to the content of our website. We have further
been advised by New York State that it is unclear whether we are providing
investment advisory services at all. Although New York will not give us a
definitive opinion on the matter, as a result of the aforementioned discussions,
we do not intend on filing a registration statement as an investment adviser
with the State of New York. However, we will continue to monitor our business as
it develops as well as communicate with the State of New York to ensure that we
are in compliance with all New York State laws. At this time we do not intend on
registering as an investment adviser with any other states.
However, mindful of the Securities and Exchange Commission's position that we
are performing investment advisory services and that certain visitors to our
website are "clients", we concede that we may have a fiduciary obligation to
such visitors and will continue to make an effort to perform due diligence on
the companies for which we are producing videos in an attempt to ensure that the
statements they make in their videos are accurate and not misleading. Such due
diligence efforts are generally limited to confirming that the featured company
is a legitimate operating business. We do not review financial statements or
other material documents of our featured companies and are therefore not
expressly providing any guidance as to whether such companies might be suitable
investments.
Our sole employee, Mr. Frank Ferraro will be responsible for ensuring that we
comply with all state and federal laws. In the event that we ever register as an
investment adviser with the State of New York or other jurisdiction, Mr. Ferraro
will continue to be the person responsible for such filings and subsequent
compliance matters.
25
EMPLOYEES
Currently, we have one full-time employee and he is not represented by a labor
union. We consider our relationship with our sole employee to be satisfactory.
On December 31, 2003, we terminated our relationship with Vincent Epifanio who
was an employee of CRS until that date. There are no recorded liabilities as a
result of Mr. Epifanio's termination.
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.
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 December 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
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.
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.
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EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth certain information
regarding the compensation of sole employee, our Chief Executive Officer.
SUMMARY COMPENSATION TABLE
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.
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.
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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 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 one employee, 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.
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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.
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.
29
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 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 December 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.
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 December 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 December 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.
30
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 December
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 December 31, 2003 we have five shareholders.
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.
31
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.
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. Mr. Ferraro
will be the person responsible for the sales of securities on behalf of CRS and
that he will rely on the safe harbor from broker dealer registration set out in
Rule 3a4-1 under the Securities Exchange Act of 1934. Mr. Ferraro meets each of
the qualifications set forth in such rule as follows: (i) he is not subject to
any statutory disqualification; (ii) he is not compensated in connection with
his participation by the payment of commissions or other remuneration based
either directly or indirectly on transactions in securities; (iii) he is not at
the time of his participation an associated person of a broker or dealer; and
(iv) he will restrict his participation with respect to such sales to the
following activities: (A) preparing any written communication or delivering such
communication through the mails or other means that does not involve oral
solicitation by the associated person of a potential purchaser; provided,
however, that the content of such communication is approved by a partner,
officer or director of the issuer; (B) responding to inquiries of a potential
purchaser in a communication initiated by the potential purchaser; provided,
however, that the content of such responses are limited to information contained
in a registration statement filed under the Securities Act of 1933 or other
offering document; or (C) Performing ministerial and clerical work involved in
effecting any transaction.
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.
32
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.
In addition to the possibility of procuring broker/dealers to sell our
securities, we will deliver prospectuses to any friends, relatives, business
contacts, colleagues and referrals. We may also place a tombstone(s)
advertisement in one or more financial journals such as Barrons, Equities
Magazine and Long Island Business News.
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 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.
33
LEGAL MATTERS
The validity of the shares has been passed upon for us by our counsel, Rubin,
Bailin, Ortoli, Mayer & Baker LLP.
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.
34
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
See accompanying notes.
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
See accompanying notes.
F - 2.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
See accompanying notes.
F - 3.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
See accompanying notes.
F - 4.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
See accompanying notes.
F - 5.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
PAGE 1 OF 2
See accompanying notes.
F - 6.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:
For the nine month period ended September 30, 2003, the Company
recorded an unrealized loss on its investments of $49,508
See accompanying notes.
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 NINE MONTHS ENDED SEPTEMBER 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 $382,414 through September 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 - 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 NINE MONTHS ENDED SEPTEMBER 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 privately owned,
newly formed and have no operating history. 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. The Company also receives restricted securities in publicly
traded entities. In such instances, revenue is recorded with a
discount of 75% from the market value at the time of receipt. At
the time that such securities are sold in the public market, the
Company recognizes any resulting gain and/or loss.
(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 - 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 NINE MONTHS ENDED SEPTEMBER 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.
As of September 30, 2003, the Company was indebted to this officer
in the amount of $30,000, which represents unpaid payroll. This
amount is included in accounts payable and accrued expenses.
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:
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 $300,000 at September 30, 2003). The
Company has provided a 100% valuation allowance on the deferred
tax assets at December 31, 2002 (and September 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 - 10.
CORPORATE ROAD SHOW.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(INFORMATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 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 - 11.