EXHIBIT 4.2
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OFFERING MEMORANDUM
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Platinum and Gold, Inc.
(A Nevada Corporation)
Offering Memorandum Dated January 1, 1999
984,000 Shares
Platinum and Gold, Inc., a Nevada corporation (the "Company"), is
offering on a "best efforts, no minimum basis" up to a maximum of 984,000 shares
of common stock ("Shares"), $.001 par value, at $1.00 per share. Since there is
no minimum, no proceeds will be held in an escrow account and all funds will be
immediately available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company intends to apply for inclusion of the Common Stock on the
Over the Counter Electronic Bulletin Board. There can be no assurances that an
active trading market will develop, even if the securities are accepted for
quotation.
Prior to this offering, there has been no public market for the
common stock of the Company. The price of the Shares offered hereby was
arbitrarily determined by the Company and does not bear any relationship to the
Company's assets, book value, net worth, results of operations or any other
recognized criteria of value. For additional information regarding the factors
considered in determining the offering price of the Shares, see "Risk Factors -
Arbitrary Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR
SALE, ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL,
CANCELLATION OR MODIFICATION OF THE OFFER, WITHOUT NOTICE. THE
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COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE
PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see
"Risk Factors"). Investors should carefully review the entire Memorandum and
should not invest any funds in this Offering unless they can afford to lose
their entire investment. In making an investment decision, investors must rely
on their own examination of the issuer and the terms of the Offering, including
the merit and risks involved.
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY
SECTIONS 4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION
PROVISION. PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO
ANY LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE
COMMISSION DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR
DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT
OF AN ALABAMA PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MAY NOT
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EXCEED TWENTY (20%) PERCENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF
PRINCIPAL RESIDENCE, FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT
ACT OR EXEMPTION THEREFROM.
NOTICE TO ARIZONA RESIDENTS
SUBJECT TO THE PROVISIONS OF ARIZONA ADMINISTRATIVE CODE R14-4-140,
THESE SECURITIES MAY BE OFFERED AND SOLD BY THE ISSUER ONLY TO ACCREDITED
INVESTORS AS DEFINED IN ARIZONA ADMINISTRATIVE CODE R14-4-126 AND MAY BE
RE-OFFERED AND SOLD WITHIN ARIZONA FOR A THREE YEAR PERIOD ONLY TO ACCREDITED
INVESTORS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR THE ARIZONA CORPORATION COMMISSION, NOR
HAVE THEY PASSED UPON THE MERITS OF OR OTHERWISE APPROVED THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT
IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THE OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE
HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES
ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA.
IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE
PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE
BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR
WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED
TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA
SECURITIES ACT OF 1973, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION SET FORTH IN SECTION 9(m) OF SUCH ACT AND THE SECURITIES CANNOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A
TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY AN NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES) EQUAL TO AT
LEAST THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN NO EVENT LESS THAN
SEVENTY-FIVE THOUSAND ($75,000) DOLLARS OR (ii) A NET
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WORTH (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES OF TWO (2) TIMES HIS
INVESTMENT BUT IN NO EVENT LESS THAN THIRTY THOUSAND ($30,000) DOLLARS AND A
GROSS INCOME OF THIRTY THOUSAND ($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTY
THOUSAND ($40,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND AUTOMOBILES]
AND A MINIMUM ANNUAL GROSS INCOME OF FORTY THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY AN NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PERCENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT),
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
10520(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUTES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND
SECURITIES ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN
SECTION 11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY
NOT BE REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A
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SECURITY, OR IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH
OF AT LEAST FIFTY THOUSAND ($50,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS
AND AUTOMOBILES] AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAX YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS [AS COMPUTED ABOVE].
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER
THAT ACT OR EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENTS
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION, NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NOR HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
THERE IS NO ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
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THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(B), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI. UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($30,000) DOLLARS AND A NET WORTH OF AT
LEAST THIRTY THOUSAND ($30,000) DOLLARS (EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES) OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTORS NET
WORTH.
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
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EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE
HAS EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF
HOME, FURNISHING AND AUTOMOBILES) OF ONE HUNDRED TWENTY FIVE THOUSAND ($125,000)
DOLLARS AND FIFTY THOUSAND ($50,000) DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES NOT CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT YET BEEN REVIEWED BY THE ATTORNEY
GENERAL PRIOR TO ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
HAS NOT PASSED OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THAT WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATION
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES CT. THE SECURITIES
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A HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-
ACCREDITED INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTORS NET
WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE DIRECTOR OF
THE STATE OF OREGON UNDER THE PROVISIONS OF OAR 000-00-000. THE INVESTOR IS
ADVISED THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION
STATEMENT AND HAS NOT REVIEWED THIS DOCUMENT SINCE THIS DOCUMENT IS NOT REQUIRED
TO BE FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE
COMPANY CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE
MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (2) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE OF
THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY PERSON
WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVE NOTICE BY
LETTER OR TELEGRAM SENT AND POSTMARKED BEFORE THE END OF THE SECOND BUSINESS DAY
AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED ORALLY, WRITTEN
CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS WHO IS A
PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF TWELVE (12)
MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST HAVE EITHER
(i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS [EXCLUDING HOME,
HOME FURNISHINGS AND AUTOMOBILES] AND A MINIMUM ANNUAL GROSS INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST SEVENTY-FIVE
THOUSAND ($75,000) DOLLARS [AS COMPUTED ABOVE], AND MAY NOT INVEST MORE THAN TEN
(10%) PERCENT OF THEIR NET WORTH [EXCLUSIVE OF THE SUBSCRIBER'S HOME, HOME
FURNISHINGS AND AUTOMOBILES].
NOTICE TO SOUTH CAROLINA RESIDENTS
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THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
ONE OR MORE SECURITIES ACTS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSIONER OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47-31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DEPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY-FIVE THOUSAND ($225,000) DOLLARS
[AS COMPUTED ABOVE].
NOTICE TO TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE
AND MAY NOT BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS
MAY PLACE SUCH INVESTOR AND THE ISSUER IN VIOLATION OF THE TEXAS
SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO UTAH RESIDENTS
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON
SECURITIES ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON
HAS NOT REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT
BE SOLD WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
The Company, a Nevada corporation, is a business that centers around
the discovery development, recording and marketing of new talent in the
entertainment industry. Its principal executive offices are located at 00000
X.X. 00xx Xxxxx, Xxxxxxx, XX 00000.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD
PURCHASE THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT
DECISION, SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER
MATTERS REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
11
No Assurance of Profitability To date, the Company has not generated
substantial revenues from operations. The Company's ability to successfully
implement its business plan is dependent upon the completion of this Offering.
There can be no assurance that the Company will be able to develop into a
successful or profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund
its operations and other capital needs for the next 12 months substantially from
the proceeds of this Offering and from the anticipated income from its new and
existing products, but there can be no assurance that such funds will be
sufficient for these purposes. The Company may require additional amounts of
capital for its future expansion, operating costs and working capital. The
Company has made no formal arrangements to obtain future additional financing,
and if required, there can be no assurance that such financing will be
available, or that such financing will be available on acceptable terms.
Dependence on Management The Company's success is principally
dependent on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof.
Arbitrary Offering Price. There has been no prior public market for
the Company's securities. The price to the public of the Shares offered hereby
has been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Lack of Prior Market for Securities of the Company. No prior market
has existed for the securities being offered hereby and no assurance can be
given that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
Forward-Looking Statements. This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including
12
such things as capital expenditures (including the amount and nature thereof),
expected sales revenues, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate under the circumstances. However, whether actual results and
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, including the risk factors
discussed in this Memorandum, general economic, market or business conditions,
the business opportunities (or lack thereof) that may be presented to and
pursued by the Company, changes in laws or regulations, and other factors, some
of which are beyond the control of the Company. Consequently, all of the
forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forward-looking statements.
USE OF PROCEEDS
The initial proceeds of this Offering will be used by the Company to
fund its efforts to become a publicly traded company. Expenses in connection
with this effort will include legal fees, transfer agent fees, accounting fees,
state Blue Sky filing fees, Standard & Poor's application fees and other
miscellaneous fees. The remainder of the proceeds will be utilized by the
Company as working capital.
THE COMPANY
Platinum and Gold, Inc., a Nevada corporation, of which Platinum and
Gold Recording & Publishing Company is a wholly owned subsidiary (hereinafter
collectively referred to as the "Company" and/or "Platinum and Gold") is a
business that centers around the discovery development, recording and marketing
of new talent in the entertainment industry.
Description of Business - Overview
Platinum and Gold Recording and Publishing Company is an
entertainment company involved in the music and film business. The principal
activity of Platinum and Gold is to discover gifted new artists, to work with
them to develop their abilities and ultimately to record them using exceptional
original material. Single compact discs and cassettes will be used to market
them on national and international TV networks through 800 numbers, home
shopping networks, QVC and direct response TV modes. This will generate profits
for Platinum and Gold and should create a pre-sold market for major labels.
Artists contract directly with Platinum and Gold. The Company then records them
with original top 100 pop material, manufactures the recorded material into
compact disc singles and cassette singles and then distributes to the public via
satellite, cable and national TV networks through 1-800 buy-direct response
telephone numbers.
The Company's strategy for marketing growth revolves around multiple
autonomous major labels with central financial controls and support functions.
By joint-venturing these activities for manufacturing, distribution and finance
of albums, Platinum and Gold will be able to launch new artists quickly and thus
capture a greater market share with limited delay. Artists will record original
material for launch by the Company through worldwide TV direct response 800
numbers.
13
Platinum and Gold knows that the development of new talent with
international mass-market appeal is the key to obtaining market share and
profitability. The Company considers the main sources of international popular
repertoire to be the United Kingdom, Italy, Germany, Switzerland, Brazil,
Israel, Russia, Poland, Spain, Australia and the United States. The Thai music
market bought pop music to the tune of billions of dollars in 1997. The Company
has done extensive research and has established numerous contacts worldwide. The
Company plans to further develop these relationships by forwarding literature
about the Company to these individuals and organizations. The Company expects
that several will become international talent scouts for Platinum and Gold.
The Company's first single is slated to be launched in January 1999.
The single, containing songs titled "If Only" and "Touch Me", will be released
for sale on national and international TV 800 numbers, and is expected to
strengthen ties between the Company and an undisclosed major record label upon
recording of the full album. The Company also plans to eventually profit from
re-releases, greatest hits and compilation albums.
Executive Summary
In the next full year the Company intends to develop two new
full-length compact discs containing all original music.
The Company's keys to success and critical factors for the next year are:
o Product development.
o Retail sales through Direct Response Toll Free Shopping
o Sales to dealers in volume.
o Financial control and cash flow planning.
Through its independent research, Platinum and Gold estimates that by
presenting the public with entertainment suited for all age groups through
infomercials, the Home Shopping Network (QVC), toll-free numbers and
mass-marketing, it has the ability to sell hundreds of thousands of records in a
short period of time.
Objectives
3. To give Platinum and Gold the market presence needed to support
marketing and sales and to attract potential suppliers who can
provide new sources of products and services for the Company to offer
its customers.
To produce 10 new compact discs and to initiate contracts with 10 new
artists by the end of calendar year 1999.
5. To control expenditures to maximize net income.
14
Mission
Platinum and Gold intends to provide a new innovative musical,
theatrical and publishing concept to the public. Platinum and Gold will provide
a new approach to the music theater and publishing community by utilizing
contemporary sounds and by introducing up and coming international stars. The
Company will target not only mature listeners, but also hopes to spark interest
in a younger and hipper crowd.
Keys to Success
The keys to success in the entertainment industry are:
o Marketing; dealing with promotional channels on cable TV, finding the right
networks to sell product to the public --- creating a pre-sold market for major
label joint ventures.
o Product quality; creating product with state-of-the-art technology, dynamic
new talent and backing them with top name musicians.
o Management; key personnel experienced in product research and development and
marketing in the music industry.
o Create a pre-sold, pre-tested market for major labels.
Company Summary
Singles:
The "If Only" and "Touch Me" single was recorded in Nashville, TN,
with the help of Xxxx Xxxxxxx who has worked with such groups as Alabama, Xxxxxx
Xxxxx, and the Righteous Brothers. He has arranged and produced for Dirty
Dancing, Xxxxxxx Xxxxxxx, Xxxxxx Xxx, Xxxx Xxxxx, and Xxxx XxXxxxxx. Xxxx Xxxxx
plays electric guitar and has also played for Xxxx XxXxxxxx. Xxxx Xxxxxx plays
bass and has played for Xxxx Xxxxxx and Xxxxxx Xxxx. Xxxx Xxxxx plays drums and
has played with Bellami Brothers. Xxxx Xxxxx is a back-up singer on the single
and has performed with Xxxxxxxxx Xxxxxxxxxx. Xxxxx Xxxxxx plays acoustic guitar
and has played for both Alabama and Righteous Brothers. Xxxxx Xxxxxx who works
with percussion and engineering has worked closely with Xxxxxxxx Xxxxxxxx and DJ
Jazzy Xxxx, arranging, writing and performing original music.
Television Station
Platinum and Gold also plans to explore the possibility of a talk
show based in Florida. In 1980 the 3 commercial networks' combined broadcast was
less than 100 hours of programming a week. Today there are 6 commercial
broadcast networks and over 150 cable channels plus satellite needing to fill up
24 hours of every day with programs. This adds up to over 20,000 hours of
content per week. A half-hour prime time series can cost over $1 mm per episode
and news magazines and talk shows with talent are high on the networks' wish
lists. However, variety shows containing new talent no longer exist although
they have remained comparatively inexpensive to produce. The Company feels that
by introducing its talent in this medium, it can boost both record and concert
ticket sales.
Broadcast Quality Films and Videos
15
The Company plans to explore the feasibility of producing high value,
production broadcast quality, full-length feature films for global distribution.
The Company plans to test the market with its first film currently in production
phase. "Betrayal Times Two" is a drama which embraces the same murder spanning
two lifetimes. The Company seeks distribution agreements with Blockbuster as
well as entertainment companies such as: Time Warner (HBO), Triborough
entertainment, MTV networks, Selkirk Communications and Xxxxxxx Xxxxxxxxxxxxx,
as well as over fifty distributors throughout the world.
The Company prides itself on the fact that it maintains a friendly
and fair work environment, which respects diversity, new ideas, and hard work.
Management believes that this environment will be conducive to creativity and
success.
The Company's strategy consists of:
o A commitment to producing top-quality entertainment for the family --- plus
individuals in growing markets
o A focus on creating original material and programming, for which Platinum
and Gold plans to retain all copyrights and distribution rights
o An emphasis on exploiting new video movie and music outlets and overseas
talent
o A commitment to minimizing financial risk by pre-financing a minimum of 80%
of production costs through pre-sales and co-productions
The Company will carefully select projects with universal appeal
which meet the standards of worldwide markets, which will enhance international
sales. The Company's distribution and marketing division plans to sell original
movies to the television and home video market in approximately 102 countries.
Platinum and Gold plans to exhibit at trade shows including MIP-TV (France),
NATPE (United States), Monte Carlo, and MIP ASIA (Hong Kong)
Film Production and Distribution
An integral part of Platinum and Gold's business will be
specialization in the production of movies strictly for the home video,
pay-per-view and cable television and satellite audiences. The Company will also
specialize in the acquisition and worldwide license, sale or distribution of
distribution rights to independently produced feature films in a wide variety of
genres including top-notch action, comedy, drama, foreign language, science
fiction and thrillers. The Company's goal is to become increasingly active in
acquiring distribution rights (both domestic and foreign), booking motion
pictures with theatrical exhibitors, arranging for the manufacturer of release
prints from the film negative, and promoting such motion pictures with
advertising and publicity campaigns through the efforts of the entire Company.
Platinum and Gold has already begun to act as a foreign sales agent,
licensing distribution rights in markets outside the United States to
independently produced films which are fully financed and owned by others, in
exchange for a sales agency fee. In addition to the production of motion
16
pictures and distribution in the United States, substantial revenues are
possible from international exploitation of the Company's motion pictures.
International revenues of motion picture distributors from filmed entertainment
grew from $4.7 billion in 1989 to $8.7 billion in 1996. The growth has been
attributed to worldwide acceptance of and the demand for motion pictures
produced in the US, the privatization of foreign television industries, growth
in the number of foreign households with video cassette players and growth in
the number of foreign television screens.
In a number of foreign countries, as in the United States, the film
(and in some cases the entertainment) industry is dominated by a small number of
companies, often large, diversified companies with production and distribution
operations. However, like in the United States, in most of such countries there
are also smaller, independent, motion picture production and distribution
companies. Foreign distribution companies not only distribute motion pictures
produced in their countries or regions but also films licensed or sub-licensed
from United States production companies and distributors. Additionally, film
companies in many foreign countries produce films not only for local
distribution, but also for export to other countries, including the United
States.
While some foreign language films, such as Like Water For Chocolate,
Il Postino (The Postman) and Antonia's Line, and foreign English-language films,
such as Wings of the Dove, The English Patient, Shine, Four Weddings and a
Funderal, The Crying Game and Crocodile Dundee appeal to a wide U.S. audience,
most foreign language films distributed in the United States are released on a
limited basis as such films draw a specialized audience for which the appeal of
such films has decreased recently.
Home Video
Home Video distribution consists of the promotion and sale of
videocassettes to local, regional and national video retailers which rent or
sell videocassettes to consumers for home viewing. Most films are initially made
available in videocassette format at a wholesale price of approximately $50 to
$75 per videocassette and are sold at that price primarily to wholesalers who
then sell to video rental stores at a price of approximately $75 to $105 per
videocassette for rental of the cassettes to consumers. Following the initial
marketing period, selected films may be remarketed at a wholesale price of $ 10
to $15 or less for sale to consumers. These "sell-through" arrangements are used
most often with films that will appeal to a broad marketplace or to children. A
few major releases with broad appeal may be initially offered by a film company
at a price designed for sell-through rather than rental when it is believed that
the ownership demand by consumers will result in a sufficient level of sales to
justify the reduced margin on each cassette sold. Typically, owners of films do
not share in rental income, however, video distributors are beginning to enter
into revenue sharing arrangements with certain retail stores in some
circumstances. Under such arrangements, videocassettes are sold at a reduced
price to video rental stores (usually $8 to $10 per videocassette) and a
percentage of the rental revenue is then shared with the owners (or licensors)
of the films.
Home video arrangements in international territories are similar to
those in domestic territories except that the wholesale prices may differ
significantly. Television rights for films initially released theatrically are,
if such films have broad appeal, generally licensed first to
17
pay-per-view for an exhibition period within six to nine months following
initial domestic theatrical release, then to pay television approximately 12 to
15 months after initial domestic theatrical release, thereafter in certain cases
to network television for an exhibition period, and then to pay television
again. These films are then syndicated to either independent stations or basic
cable outlets.
Pay-per-view allows subscribers to pay for individual programs.
Pay television allows cable television subscribers to view such
services as HBO/Cinemax, Showtime/The Movie Channel, Encore Media Services or
others offered by their cable system operators for a monthly subscription fee.
Pay-per-view and pay television is now delivered not only by cable,
but also by satellite transmission and films are generally licensed in both such
media. Certain films which are not initially released in the domestic theatrical
market may "premiere" instead on pay television followed in some limited
circumstances by theatrical release.
Groups of motion pictures are often packaged and licensed as a group
for exhibition on television over a period that extends beyond five years from
the initial domestic theatrical release of a particular film. Motion pictures
are also licensed and "packaged" by producers and distributors for television
broadcast in international markets by government owned or privately owned
television studios and networks. Pay television is less developed outside the
U.S., but is experiencing significant international growth. The prominent
foreign pay television services include channel Premiere, STAR TV, British Sky
Broadcasting and the international operations of several U.S. cable services
including HBO, the Disney Channel and Xxxxxx Broadcasting.
Motion Picture Distribution By The Company - International Distribution
The Company generally participates annually with a sales office at
all three major film markets (the American Film Market, the Cannes Film Festival
and MIFED), as well as the major television (NATPE, MIP, MIPCOM) and video
(VSDA) markets. The Company may also, from time to time, engage independent
representatives to assist the Company in acquiring and/or licensing motion
picture rights.
With respect to international territories, the Company licenses
distribution rights in various mediums (such as theatrical, video, pay
television, free television, satellite and other rights) to foreign
sub-distributors on either an individual rights basis or grouped in various
combinations of rights (which sometimes includes rights in all media). These
rights are licensed by the Company to numerous sub-distributors in international
territories or regions either on a picture-by-picture basis or, in certain
circumstances, with respect to a number of motion pictures pursuant to output
arrangements. Currently, the most appealing international territories for the
Company are Australia, the Benelux countries, Brazil, Canada, France, Germany,
Italy, Japan, Scandinavia, Spain and the United Kingdom.
The terms of the Company's license agreements with foreign
sub-distributors vary depending upon the territory and media involved and
whether the agreement relates to a single motion picture or multiple motion
pictures. Most of the Company's license agreements will provide that the Company
will receive a minimum guarantee from the foreign sub-distributor with all or a
majority of such minimum guarantee paid prior to, or upon delivery of the film
to the distributor for release in the particular territory. The remainder of any
unpaid minimum guarantee is generally payable at specified intervals after
delivery of the film to the sub-distributor. The minimum guarantee is
18
recouped by the sub-distributor out of the revenues generated from exploitation
of the picture in such territory. The foreign sub-distributor retains a
negotiated distribution fee (generally measured as a percentage of the gross
revenues generated from its distribution of the motion picture), recoups its
distribution expenses and the minimum guarantee and ultimately (after recoupment
by the distribution expenses) remits to the Company the remainder of any
receipts in excess of the distributor's ongoing distribution fee.
The Company must rely on the foreign sub-distributor's ability to
successfully exploit the film in order to receive any proceeds in excess of the
minimum guarantee. In certain situations, the Company does not receive a minimum
guarantee from the foreign sub-distributor and instead negotiates terms which
usually result, in effect, in an allocation of gross revenues between the sub-
distributor and the Company. Typically the terms of such an arrangement provide
for the sub- distributor to retain an ongoing distribution fee (calculated as a
percentage of gross receipts of the sub-distributor in the territory), recoup
its expenses and pay remaining receipts in excess of the ongoing distribution
fee to the Company. Alternatively, such as often with respect to video rights,
the terms may provide for a royalty to be paid to the Company calculated as a
percentage of the gross receipts of the sub-distributor from exploitation of the
video rights (without deduction for the sub-distributor's distribution
expenses).
Music Publishing
Michela's debut single in the USA "If Only" and "Touch Me" was
test-marketed in Nashville in 1998, and did extremely well. The "I wanna buy"
margin was a high 95%. These first two singles are expected to draw other
international artists to the Company. Platinum and Gold strives to achieve a
balance between short-term achievements and long-term objectives.
Unlike many industries where assets decline in value and products
have a definable shelf life, the Company's assets, through careful management of
artistic talent, have the ability to grow indefinitely. The potential earning
power of a music catalogue of artists and top 20 compact disks and tapes far
exceeds even initial box office receipts. The Company plans to utilize a portion
of the proceeds of these assets as a base from which the Company will fund and
develop new ventures to ensure that Platinum and Gold's repertoire is constantly
rejuvenated.
The Company expects international success for the Italian diva
"Michela". She has already achieved star status reaching out to audiences across
Europe. Platinum And Gold's rich repertoire of local, regional, international,
and breakthrough artists will strive to deliver several international hits
during 1999. The combination of a diverse talent base will create an expanding
catalogue enabling the Company's music division to gain recognition within the
industry.
Recorded Music
The operating results of a record company, especially in the pop
market, are affected by changing audience tastes and particularly by the record
company's ability to identify, attract and retain new talent that will gain
acceptance in the marketplace quickly. Platinum and Gold believes that its
management has the creative ability to sign and retain artists who will appeal
to popular taste over an extended period of time. Each Platinum and Gold
division has its own artist and repertoire (ALR) staff whose task it is to
identify and sign new artists with potential international appeal and who are
not necessarily known in the US.
19
Contract Terms
Platinum and Gold seeks to contract with its' artists on an exclusive
basis for the marketing of their recordings (both audio and audio-visual) in
return for a percentage royalty on the wholesale or retail selling price of the
recording. The Company will seek to obtain rights on a worldwide basis. The
Company seeks to obtain rights to exploit products delivered by the artists for
the life of the product's copyright.
Distribution on the Internet
The Company has established a board level task force to develop a
global strategy for distribution services on the Internet and is monitoring all
developments in internet distribution very closely, in particular the on-line
delivery of music. The Company will have a number of websites which may be used
for marketing purposes.
New Technology
Platinum and Gold has Digital Versatile Disc (DVD) capability. DVD
provides for digital encoding and reproduction of video and audio signals on
disc.
Trademarks
Platinum and Gold registers its major trademarks and trade names in
all instances where the Company believes it is necessary for the protection of
its rights.
Competition
The success of Platinum and Gold's music business depends on, among
other things, the skill and creativity of the Company's staff and on its
relationship with its artists. While Platinum and Gold promotes an environment
of creative freedom, it also structures goals and time schedules with its
artists to ensure efficiency. It is anticipated that test marketing will be done
pre-recording in most cases. This will ensure an efficient use of the Company's
resources. The ability of Platinum and Gold to attract talent depends upon the
Company's success on its first few endeavors. For this reason, the Company is
making every effort to put its best foot forward.
Industry Sales
Pop music grew 18% over 1996 in 1997. Sales in North America improved
25% in 1997. Sales in the rest of the world increased 19% in 1997 due to the
success of several international artists, most notably in Brazil, Mexico and
Australia.
Letters of Intent Activities
The Company has already entered into letters of Intent with the
following new recording artists:
Xxxxxxx Xxxxx Xxxxx Italian recording artist
20
Xxxxx Xxxxxx USA recording artist
Xxxxxxx Xxxxx USA recording artist
Xxxx Xxxxxx USA recording artist
Xxxxx Xxxx (piano) USA recording artist
These artists have already made an indelible impression on small
audiences around the globe. Platinum and Gold has contacts with songwriters and
arrangers that have been an inspiration to Alabama, Xxxxxx Xxxxxxx, Xxxxxx
Xxxxx, Xxxx XxXxxxxx and others. The Company's first joint venture with a major
label is expected in February 1999. The joint-venture will most likely be based
on a single - 2 song advance CD that sells up to 1 million units on national and
international TV for each artist the Company represents. This will provide a
heavy retail test market focus for record labels. Record labels can then begin
to build an album through performances at various conventions and "first act"
concerts.
MANAGEMENT
The following sets forth the names of the company's officers and directors:
Xxxxx Xxxx President/Treasurer
Xxxxx Xxxx is a leading musician who knows the value of working her
audience - and they love it! Xxxxx gives new meaning to the "club entertainment"
industry. She brings warmth and a personal touch to her audiences. The results
are unsurpassable. She fills a room because of the way she brings her following
everywhere she performs; audience involvement, sincere concern for talent and an
innate knowledge of what people need to hear and feel. Xxxxx is gracious. She is
versatile from country to top 30's, 40's, 50's, 60's, 70's, and 80's to
classical. Xxxxx has studied music therapy and has recorded an album which sold
in the thousands through media. Xx Xxxx has worked on a Nashville single in
producing and publishing.
1962 - 1964 Overseas
0000 - 0000 Xxx Xxxx Xxxxx and the New England states
1975 - 1980 Florida during the xxxxxxx, Provincetown & Cape Cod during
the xxxxxxx
1975 to 1976 Bridge Restaurant & Lounge Ft. Lauderdale FL
1978 to 1979 Helm Restaurant & Lounge Ft. Lauderdale FL
1978 to 1980 Americos Restaurant Ft. Lauderdale FL
1980 to 0000 Xxxxxxxxxx Xxxxxxx Xx. Xxxxxxxxxx XX
1981 to 1982 Xxxxx Januarys Restaurant Ft. Lauderdale FL
1982 to 1983 Marandolas Restaurant Ft. Lauderdale FL
Tivoli Gardens (entertainment dir.) Ft. Lauderdale FL
0000 Xxxxx Xxxxx Xx. Xxxxxxxxxx XX
Bridge Hotel Boca Raton FL
1985 to 1986 The Toast of the Town North Miami FL
1986 to 0000 X.X. Xxxxx Xxxxx Xxxxx Xxxxx XX
Inn on the Bay North Miami FL
Upstairs Lounge at Xxx Xxxxxxx Shops Bal Harbour FL
Breakers Hotel, W. Palm Beach FL
21
J J's Otherside Wilton Manors FL
Fireside Restaurant Ft. Lauderdale FL
Shang-ri-la Ft. Lauderdale FL
Channel 4 TV Montage Miami FL
1989 Toast Restaurant North Miami FL
Upper Deck Cafe Boca Raton FL
Xxxxxxx'x W. Palm Beach FL
With the reputation and relationships Xxxxx has established within
the industry, she will attract talent to the Company as well as add legitimacy
to the Company in its development stage. She is mature, responsible and
knowledgeable concerning royalties, licensing and foreign sales. She is
wellacquainted with several writers of original material. She will work closely
with music lawyers concerning agreements, policy documents, copyright statues
and related contracts.
Xxxxxxx Xxxxxx Vice President
Val has extensive experience in the sales and research and
development fields with years of retail experience with mass merchandisers all
over the U. S. She will oversee day to day operations, network new talent to all
levels of the entertainment industry and help manage Platinum & Gold's artists.
She will also establish relationships with radio and television networks
nationally and internationally. She has had experience as an executive officer
for a non-profit entertainment organization. A substantial portion of the
Company's revenues were derived from talent shows she, as part of a team,
negotiated and developed. She also coordinated all fund-raising to develop
successful productions.
1981- 1998 Val was owner and manager of Sunglass Haven. There she developed and
implemented marketing and communication strategies for trade shows, wholesaled
and managed internet traffic. She managed employees, administered local
joint-ventures, partnerships and trade show events. She personally invented
internet campaigns to create awareness of products and conducted situational
demographics analysis for larger distribution of products and services.
1975 -1981 Xx. Xxxxxx was a restaurant entrepreneur achieving a growth rate of
five percent per year. Her field of expertise also includes banking and
accounting and management of the office.
Xxxxxx X. Xxxxxx Secretary
Xxxxxx has an extensive background in new business development. She
has supervised international transactions from the letter of intent stage to
contract signing and has helped establish joint-ventures with other companies
and distributors. She is has negotiated contracts relating to advertising
campaigns and plays an active role in overall office and staff management as
well as research and development.
1987-1988 Xxxxxx was Vice President of Sunglass Haven where she owned and
operated a chain of retail concessions at boat shows and trade shows throughout
the country. She developed programs and entertainment to help stimulate sales
for top name sunglasses, such as Rayban, Serengeti, Oceanware, Hobie and others.
22
The level of consumer buying activity was quite susceptible to area
activity including the intensity and quality of local retail competition. A
great deal of research and development was done by Xx Xxxxxx for successful
consumer behavior patterns in each geographical area.
1981- 1987 Xxxxxx became President and Owner of LoLo's Pub and Restaurant. She
designed entertaining, imaginative concepts with theme franchising in mind. The
first pub located in South Florida had three distinctive proprietary concepts
that encompassed made to order specialty drinks, country music entertainers and
sports bar. The model facility began to develop an excellent track record for
combining artistic innovation with practical knowledge to produce restaurant
food, beverage and entertainment that were functional, timeless, and exciting.
Xxxxxx Xxxxxxxx-Xxxxxx Director
Xxxxxx Xxxxxxxx-Xxxxxx was co-producer and administrator for
Xxxxxx-Xxxxx Enterprises from 1972 until 1994, with over 22 years of production
experience. Her creative ideas and administrative expertise helped her company
to produce numerous award winning Spectaculars, which toured cities throughout
Europe, North and South America and the Carribean.
Xx. Xxxxxxxx-Xxxxxx is a talented singer/actress, who has appeared on
major television network shows such as "The Tonight Show" with Xxxxxx Xxxxxx and
the "Xxxx Xxxxxxx Show."
She is currently helping to produce musical shows for attraction such as
Xxxx Disney World (Orlando), Sun City (South Africa), Fountainebleau Hilton
Resort & Towers (Miami Beach) and artists such as Xxxxx Xxxx and Xxxxx Xxxxxxx,
Jr. She provides financial, booking, sales and service consulting for many
artists and venues.
Xxxxx Xxxxxxx Director
Xx. Xxxxxxx was voted one of the top ten unsigned guitarists by JAZZIZ
magazine. He has been in the music industry for 30 years. At age 23, he toured
with Blood, Sweat and Tears. He has since played an active role in the
international music scene and has continued to produce, compose and tour,
offering audiences around the world a unique musical experience.
Xx. Xxxxxxx has traveled extensively and has performed in many European
cities. He toured with world famous pianist Xxx Xxxxxxx for 2 years. He has
recently settled in Japan and has established himself there as a
producer/performer/talent scout.
Xx. Xxxxxxx owns and operates a digital studio, where he has composed
and edited music for clients such as Raddison and Motorola.
Xxxxxxxx Xxx Xxxxxxx Director
Xx. Xxxxxxx was the Southeast Regional Promotion Director for Motown
Records for 13 years. Her creative genius has shined through the voices and
talent of recording artists from the 1970's to the 1990's. She has worked as
National Top 40's Promotion Director for Arista Records for the last 7 years.
She has helped to promote artists such as Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxx X, Xxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxx and more.
23
PRINCIPAL SHAREHOLDERS
As of January 1, 1999, the Company had 11,630,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of January 1,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Before Offering After Offering
Offering
Xxxxx Xxxx 6,000,000 51.6% 47.6%
Xxxxxxx Xxxxxx 2,000,000 17.2% 15.9%
Xxxxxx Xxxxxx 2,000,000 17.2% 15.9%
Xxxxxx Xxxxxxxx-Xxxxxx 10,000 00.1% 00.1%
Xxxxx Xxxxxxx 10,000 00.1% 00.1%
Xxxxxxxx Xxx Xxxxxxx 10,000 00.1% 00.1%
-------------------------------------------------------------------------------
All Officers and 10,030,000 86.2% 79.5%
Directors as a Group
DESCRIPTION OF SECURITIES
Shares
The Company is hereby offering a "best efforts, no minimum basis" up to
984,000 shares of Common Stock at $1.00 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid
24
and nonassessable, and all shares to be sold and issued as contemplated hereby,
will be validly authorized and issued, fully paid and nonassessable. The Board
of Directors is authorized to issue additional shares of Common Stock, not to
exceed the amount authorized by the Company's Certificate of Incorporation, on
such terms and conditions and for such consideration as the Board may deem
appropriate without further stockholder action. The above description concerning
the Common Stock of the Company does not purport to be complete. Reference is
made to the Company's Certificate of Incorporation and Bylaws which are
available for inspection upon proper notice at the Company's offices, as well as
to the applicable statutes of the State of Florida for a more complete
description concerning the rights and liabilities of stockholders.
Prior to this offering, there has been no market for the Common Stock of
the Company, and no predictions can be made of the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Stock of the Company in the public market may adversely affect
prevailing market prices, and may impair the Company's ability to raise capital
at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self- underwriting. The Shares will be offered by the Company at the
offering price of $1.00 per share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is
no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
25
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS
AND PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS
COULD MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR
SHOULD RELY ON SUCH INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
26
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
27
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited investors
(as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in securities either alone or with its Purchaser Representative, if
any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3) The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE
IF A POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
28
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of the
offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution or
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
29
Platinum and Gold, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):___________________________________________________________________
Address of Residence
(if natural
person):_____________________________________________________________________
Address of
Business:___________________________________________________________________
Subscriber's
Telephone
No.:________________________________________________________________________
Subscriber's Social
Security No. or
Tax I.D.
No.:_______________________________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any:
----------------------------------------------------------------------------
Date of
Subscription:_______________________________________________________________
Amount of
Subscription:
$--------------------------------------------------------------------------
30
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
Platinum and Gold, Inc.
00000 X.X. 00xx Xx.
Xxxxxxx, XX 00000
Phone: (000) 000-0000 Fax: (000) 000-0000
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Regulation D, Section 504 common
stock of Platinum and Gold, Inc., a Nevada corporation (the Company), for a
total consideration of $_________, the receipt and sufficiency of which is
hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of these criteria:
(i) the undersigned is a natural person whose individual net worth or
joint net worth with his spouse, at the time of his purchase,
exceeds $1,000,000 (ONE MILLION DOLLARS); or
(ii) the undersigned is a natural person and had an individual income
in excess of $200,000 (TWO-HUNDRED THOUSAND DOLLARS) in each of
the two most recent years, or jointly with his spouse in excess
of $300,000 (THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least the same
income level in the current year; or
(iii)qualifies as an accredited investor under Regulation D of the
Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
31
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is not anticipated that there
will be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares may bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
32
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
---------------------------- -------------------------------
Print Name of Individual Signature of Individual
----------------------------- -------------------------------
State of Residence Date of Subscription
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
33
