Exhibit 4.1A
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No. __________________
Name of Prospective Purchaser: ______________________________
PRIVATE PLACEMENT MEMORANDUM
GINSITE MATERIALS INCORPORATED
(a Florida corporation ) ("Company")
200,000 Shares of Stock at $0.10 per Share with Warrants
for 14 Shares of Stock Purchased
$0.35 Per Warrant Exercise Price
Principal Executive Offices:
1910 N.E. Miami Court
Miami, FL 33132
000-000-0000
The date of this Memorandum is September 10, 1997
PRIVATE PLACEMENT MEMORANDUM Copy No.__________
GINSITE MATERIALS INCORPORATED
200,000 Units $0.10 per Unit
EACH UNIT CONSISTS OF
1 SHARE OF COMMON STOCK
AND 14 STOCK PURCHASE WARRANTS
Ginsite Materials Incorporated (the "Company") hereby offers for sale
200,000 Units (the "Units") at $0.10 per Unit to residents of the States of
Pennsylvania, Florida, Delaware and New York. Each Unit consists of 1 Share of
Common Stock ($0.001 par value) and 14 Stock Purchase Warrants. Each Warrant
entitles the holder to purchase 1 Share of Common Stock of the Company at a
purchase price of $0.35 per share. The Warrants expire September 10, 1998.
THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS."
These securities are offered pursuant to an exemption from registration
with the United States Securities and Exchange Commission ("The Commission")
contained in sections 3(b) and 4(2) of the Securities Act of 1933 and Rule 504
of Regulation D promulgated thereunder. No registration statement or application
to register these securities has been or will be filed with the Commission or
any state securities commission.
These securities are subject to restrictions of 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
the registration or exemption therefrom. Investors should be aware that they may
be required to bear the financial risk of these restrictions.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE
ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INVESTMENT IN SMALL BUSINESS INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS
SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" FOR THE RISK FACTORS THAT MANAGEMENT
BELIEVES PRESENT THE MOST SUBSTANTIAL RISKS TO AN INVESTOR IN THIS OFFERING.
------------------------------------------------------------------------------
Price to Selling Proceeds to Investors Commissions(1) the Company(2)
Per Share $0.10 $0.01 $0.09
Total Offering 200,000 Shares $20,000.00 $2,000.00 $18,000.00
Exercise of Warrants (2,800,000) $980,000.00 $98,000.00 $882,000.00
------------------------------------------------------------------------------
A) The Company is offering the Shares directly and no person is obligated to
purchase any Shares. The Company may, in its discretion, accept
subscriptions for Shares received through broker-dealers that are members
of the National Association of Securities Dealers, Inc. ("NASD") and will,
in connection with such sales, pay a commission of 10% of the price of each
Share sold.
B) Before deducting expenses of this offering which are estimated to be
approximately $10,000, including legal, accounting, printing, escrow and
other 3expenses. See "ESTIMATED USE OF PROCEEDS."
The date of this Memorandum is September 10, 1997
THESE SECURITIES ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL
IMMEDIATE DILUTION. SEE "RISK FACTORS" AND "DILUTION". _________________________
The Units are offered by the Company to residents of the state of Pennsylvania,
Florida, Delaware and new York subject to prior sale, to receipt and acceptance
by the Company, and to certain other conditions. It is expected that delivery of
certificates for the Units will be made within two weeks after payment for the
Units is received by the Company. The Units will be offered during an offering
period of 120 days, which may be extended for no more than an additional 60 days
at the discretion of the Company. --------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
REGULATORY AGENCY OF ANY STATE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
The Shares of Common Stock and the Warrants that compose the Units are separable
from the Units and may be separately transferred. The Warrants, however, may be
transferred only to residents of the State of Pennsylvania, State of Florida,
State of Delaware and State of New York. --------------------------
SPECIAL DISCLOSURES APPLICABLE TO PURCHASERS WHO ARE RESIDENTS OF THE STATE OF
FLORIDA:
The securities are being sold in reliance upon Florida's transactional
exemption from registration pursuant to Section 517.061(12) of the Florida
Securities Act.
I further represent that I understand the SECURITIES BEING OFFERED HAVE NOT
BEEN REGISTERED WITH THE FLORIDA DIVISION OF SECURITIES. Such securities are
being sold either through a registered dealer in the State of Florida, through
an associated person of the issuer meeting the qualification for exclusion from
the definition of a dealer, pursuant to Section 517.021(9) and/or (9)(b),
Florida Statutes, or through the issuer firm which is registered as an
issuer/dealer to sell its own securities.
I also understand that if sales of these securities are made to five or
more persons in Florida, any sale in this State made pursuant to the above
referenced and claimed exemption from registration, is voidable by me either
within three days after the first tender of consideration is made by me to the
issuer or its agent, or its escrow agent, or some other escrow agent, or within
three days after the availability of that privilege is communicated to me,
whichever occurs later.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE FLORIDA SECURITIES ACT IN RELIANCE UPON
EXEMPTION PROVISIONS CONTAINED THEREIN. THEREFORE ANY SALE MADE PURSUANT TO SUCH
EXEMPTION PROVISIONS IS VOIDABLE BY THE PURCHASER. THESE SECURITIES CANNOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS
SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
LAWS OF THIS STATE, IF SUCH REGISTRATION IS REQUIRED.
RESIDENTS OF THE STATE OF FLORIDA WHO SUBSCRIBE FOR UNITS HAVE THE RIGHT,
PURSUANT TO SECTION 517.061(a)(5) OF THE FLORIDA SECURITIES ACT, TO WITHDRAW
THEIR SUBSCRIPTIONS AND RECEIVE A FULL REFUND OF ALL MONIES PAID WITHIN THREE
DAYS AFTER RECEIPT OF THIS PRIVATE PLACEMENT MEMORANDUM OR WITHIN THREE DAYS
AFTER THE FIRST TENDER OF MONEY OR OTHER CONSIDERATION TO THE ISSUER, AN AGENT
OF THE INSURER, OR AN ESCROW AGENT, WHICHEVER OCCURS LATER. SPECIAL DISCLOSURES
APPLICABLE TO PURCHASERS WHO ARE RESIDENTS OF PENNSYLVANIA:
These securities are being sold in reliance upon the Pennsylvania
Transactional exemption {Sec. 203(D)}of the Pennsylvania Securities Act of 1972,
as amended (the "Act").
THE TRANSFERABILITY OF SUCH SECURITIES IS RESTRICTED.
As a purchaser of the above referenced securities, I hereby agree not to
sell said securities within 12 months after the date of purchase unless the
securities are subsequently registered under the Act.
As a purchaser of the above referenced securities, I hereby represent that
I either have a pre-existing personal or business relationship with the offeror
or one of its partners, officers, directors or controlling persons, or have the
n
capacity to protect my own interests in connectio wit this transaction by reason
of my own business or financial experience.
PRIOR TO OFFERING THE UNITS TO ANY PENNSYLVANIA RESIDENTS, THE COMPANY WILL
FILE A NOTICE UNDER SECTION 203(D) OF THE PENNSYLVANIA SECURITIES ACT WHICH
PROVIDES AN EXEMPTION FROM THE PENNSYLVANIA PROVISIONS OF SAID ACT UNDER CERTAIN
CIRCUMSTANCES. EACH OFFEREE WHO IS A PENNSYLVANIA RESIDENT SHALL HAVE THE RIGHT
TO WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE SELLER OR ANY
OTHER PERSON WITHIN TWO BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE COMPANY OF
HIS SUBSCRIPTION AGREEMENT, OR, WITHIN TWO BUSINESS DAYS AFTER HE MAKES THE
INITIAL PAYMENT FOR THE UNITS BEING OFFERED. IN ADDITION, IN ACCORDANCE WITH
SECTION 203(D)(I) OF THE PENNSYLVANIA SECURITIES ACT, PENNSYLVANIA RESIDENTS MAY
NOT RESELL OR TRANSFER OR CONVEY THE UNITS FOR A PERIOD OF TWELVE MONTHS AFTER
THE DATE OF PURCHASE.
EACH PERSON ENTITLED TO EXERCISE THE RIGHT TO WITHDRAW GRANTED BY SECTION
207(M), AND WHO WISHES TO EXERCISE SUCH RIGHT, MUST WITHIN TWO BUSINE3SS DAYS
AFTER HE DELIVERS A SUBSCRIPTION AGREEMENT, OR MAKES ANY PAYMENT FOR THE UNITS
OR THE EXEMPTION BECOMES EFFECTIVE, WHICHEVER IS LATER, CAUSE A WRITTEN NOTICE
OR TELEGRAM TO BE SENT TO THE COMPANY AT THE ADDRESS PROVIDED IN THIS
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM INDICATING HIS INTENTION TO WITHDRAW.
SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED ON OR PRIOR TO SUCH SECOND
BUSINESS DAY. IF A PERSON IS SENDING A LETTER, IT IS PRUDENT TO SEND IT BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO
TO EVIDENCE THE TIME WHEN IT WAS MAILED. SHOULD A PERSON MAKE THIS REQUEST
ORALLY, HE MUST ASK FOR WRITTEN CONFIRMATION THAT HIS REQUEST HAS BEEN RECEIVED.
SPECIAL DISCLOSURES APPLICABLE TO PURCHASERS WHO ARE RESIDENTS OF DELAWARE:
THE UNITS HAVE NOT BEEN REGIST3ERED UNDER THE SECURITIES LAWS OF DELAWARE
AND MAY NOT BE TRANSFERRED OR SOLD EXCEPT IN TRANSACTIONS THAT ARE EXEMPT UNDER
THE DELAWARE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION THEREUNDER.
SPECIAL DISCLOSURES APPLICABLE TO PURCHASERS WHO ARE RESIDENTS OF NEW YORK:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY
THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPORTED TO BE SUMMARIZED HEREIN.
TABLE OF CONTENTS
Page
COVER PAGE........................................................1
OFFERING SUMMARY..................................................2
DISCLAIMERS AND STATE NOTICES.....................................3
BUSINESS AND PROPERTIES...........................................8
RISK FACTORS......................................................9
DILUTION.........................................................11
ESTIMATED USE OF PROCEEDS........................................12
PROPOSED BUSINESS................................................13
MANAGEMENT.......................................................14
PLAN OF OPERATION................................................16
PRINCIPLE SHAREHOLDERS...........................................17
DESCRIPTION OF COMMON STOCK......................................17
DIVIDEND POLICY..................................................18
TERMS OF THE OFFERING............................................19
PLAN OF PLACEMENT................................................19
LITIGATION.......................................................19
LEGAL MATTERS....................................................19
ADDITIONAL INFORMATION...........................................19
EXHIBITS
EXHIBIT A - Subscription Agreement
EXHIBIT B - Common Stock Purchase Warrant
EXHIBIT C - Share Holder List
OFFERING SUMMARY
This summary is qualified in its entirety by the more detailed information
appearing elsewhere in this Memorandum and exhibits attached hereto and
agreements and other documents referenced herein which are available to
prospective investors or their advisors upon request. This Memorandum contains
certain forward-looking statements and the Company intends that such
forward-looking statements be subject to safe harbors for such statements under
the Securities Act of 1933 and the Securities and Exchange Act of 1934, as
amended.
The Company Ginsite Materials Incorporated ("Ginsite") is a development
stage company currently engaged in raising capital for the
manufacturing, marketing, and sales of the Ginsite
formulation, a material formulation that can enhance or
replace wood, concrete and other costly materials in the
construction, plywood, drywall/gypsum, roofing, tile, and
marine industries, in addition to other numerous
undetermined applications. Ginsite was incorporated as a
Florida corporation on August 7, 1997 with 17,250,000
authorized shares, par value $0.001. The Company holds no
properties other than its rented office space at 0000 X.X.
Miami Court, Miami, Florida 33131 and the Patent rights
discussed elsewhere. Xx. Xxxxxxxx is the President and CEO
of the Corporation, Ms. Xxx is the Vice President, Secretary
and Treasurer, Xx. Xxxxxxx is the Vice President of
Structural Design and Xx. Xxxxx is the Vice President of
Marketing.
Units The Company is offering for sale 200,000 Units (the "Units")
at $0.10 per Unit to residents of the States of
Pennsylvania, Florida, Delaware and New York. Each Unit
consists of 1 Share of Common Stock ($0.001 par value) and
14 Stock Purchase Warrants. Each Warrant entitles the holder
to purchase 1 Share of Common Stock of the Company at a
purchase price of $0.35 per share. The Warrants expire
September 10, 1998. See "Description of the Units."
Capital Stock The Company is authorized to issue 17,250,000 shares
of common stock with a par value of $0.001. No preemptive
rights are authorized and the board of directors is
authorized to determine classes, rights and restrictions to
stock to be issued.
Use of Proceeds If only the shares are sold and none of the warrants
exercised proceeds will be used for working capital and for
inventory. Assuming the warrants are exercised, the proceeds
of this offering will be used for the purchase of Production
Equipment, Mixers and Raw Material. Additional funds will be
used for Marketing, Administration, Research and Development
Training and Working Capital. See "USE OF PROCEEDS."
Investor Qualifications The Units are offered to citizens of the
states of Delaware, Pennsylvania, New York and Florida in
reliance on Regulation D, Rule 504 of the Securities Act of
1933 (the "Act"). Each investor who proposes to purchase any
Units offered hereby will be required to deliver to the
Company certain subscription documents (Appendix B) together
with the full purchase price. See "PLAN OF DISTRIBUTION."
Risk Factors Investors should carefully consider the factors
under the heading "RISK FACTORS." The Company is essentially
a development stage company with minimal operating history
and has no proven record.
THE COMPANY
Business and Properties
Ginsite Materials Incorporated ("Ginsite") is a developmental stage company
currently engaged in raising capital for the manufacturing, marketing, and sales
of the Ginsite formulation, a material formulation that can enhance or replace
wood, concrete and other costly materials in the construction, plywood,
drywall/gypsum, roofing, tile, and marine industries, in addition to other
numerous undetermined applications. Ginsite was incorporated as a Florida
corporation on August 7, 1997 with 17,250,000 authorized shares, par value
$0.001. The directors of the Company include Xxxxxx Xxxxxxxx, Xxxxxx Xxx, Xxxxx
Xxxxxxx and Xxxxxx Xxxxx. There are currently no shareholders in the
corporation. The Company holds no properties other than its rented office space
at 0000 X.X. Miami Court, Miami, Florida 33132. Xx. Xxxxxxxx is the President
and CEO of the Corporation, Mr. Xxx is the Vice President, Secretary, Treasurer,
Xx. Xxxxxxx is the Vice President of Structural Design and Xx. Xxxxx is the Vice
President of Marketing. Including the officers listed above, the Company
consists of four full-time employees. Ginsite currently has no employment
contracts in place with any of its employees and has no pension or
profit-sharing arrangements.
Xxxxxxx's accountant is Xxxxxxx & Co., P.A., 000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxxx Xx Xxx Xxx, Xxxxxxx, 00000, and their banker is Great
Western Bank, 0000 X.X. 17th Avenue, Miami, Florida 33125.
The Company is not currently involved in litigation or other legal dispute,
is not the subject of any pending government investigation and is not involved
in any other significant disputes.
Patents
Xx. Xxxxxx Xxxxxxxx filed patent application GINMPA0195 on July 28th, 1995
for Ginsite, a formulation that is four times stronger than concrete and
one-fourth of the weight. Ginsite is also non-porous, Ginsite will adhere to
most anything, repels mildew, can be flexible or rigid and comes in all colors
except pure white and clear due to its components. Ginsite will not shatter and
can be cut or drilled with conventional tools. Ginsite will encapsulate any
bullet from penetration into a minimum of two inches.
On August 7th, 1997, Xx. Xxxxxx Xxxxxxxx formally assigned a certain patent
pending originally dated July 28, 1995 known by its serial number GINMPA0195 to
Ginsite Materials Incorporated (SEE "ASSIGNMENT OF PATENT")
RISK FACTORS
Investment in the Company involves a number of risks. In addition to the
risks and investment considerations discussed elsewhere in the Memorandum, the
following factors should be considered prior to purchasing the Units offered
through this Memorandum:
Absence of Public Market; Illiquidity
The issuance of the Common Stock will not be registered under the
Securities Act, and there is no public market for the Common Stock. It is
unlikely that a market will develop due to the limited number of investors. This
stock is being sold in reliance on Regulation D, Rule 504, which has no
restrictions on the transferability of the stock. This freedom from restrictions
does not guarantee a market will exist. The ability of all shareholders to sell
their stock may be detrimental to an individual investor. The Company does not
contemplate filing a registration statement with the SEC any time in the near
future and may or may not register the shares to be traded on a national market.
This means that while the shares are free from restrictions on the sales, an
investor may not be able to sell them to any third person.
Lack of Operating History
The Company was organized in 1997 and has been continually developing its
products since that time. Since the Company has not proven the essential
elements of profitable operations, investors in the offering will be furnishing
venture capital to the Company and will bear the risk of complete loss of their
investment in the event the Company's business plan is unsuccessful.
Paid in Capital Has funded Operations
All of the operating capital of the company since its inception has come
from cash paid in by Principal Shareholders. The Company has not been
profitable, nor has it generated sufficient capital to cover the on-going
operating expenses. The Company has no current revenues at this time.
Dependence on Key Personnel
The Company is dependent upon the services and effort of its executives and
operating officers. The loss of one of its executives and operating officers
could have a materially adverse effect on the Company.
Market restrictions on Broker-Dealers
The Company's Units, Common Stock, and Warrants are covered by Securities
and Exchange Commission Rule that imposes additional sales practice requirements
on broker-dealers who sell such securities to persons other than established
customers and Accredited Investors (generally institutions with assets in excess
of $5 million or individuals with net worth in excess of $1 million or annual
income exceeding $200,000 or $300,000 jointly with their spouse).
The transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
effect the ability of broker-dealers to sell the Company's securities in the
secondary market. Further, (i) the Company's securities will initially not be
quoted on a NASD inter-dealer system called "the Bulletin Board," but may some
time in the future, (ii) The Company will not have $4 million in assets or $2
million in stockholder's equity, which are both required for it to qualify for
quotation on NASDAQ, and (iii) the Company's securities are not being sold at $5
a share or $5 per warrant are not expected to soon command a market price of $5
per share or a warrant, the price required for a non- NASDAQ quoted security to
escape the trading severity's imposed by the Securities and Exchange Commission
on so-called "Xxxxx Stocks." These trading severity's tend to reduce
broker-dealer and investor interest in "Xxxxx Stocks" and could operate to
inhibit the ability of the Company's securities to reach a $3 per share trading
price that would make them eligible for quotation on NASDAQ even should they
otherwise qualify for quotation on NASDAQ.
Need for Additional Capital
The net proceeds from the sale of the Unites offered herein may be
insufficient to achieve the business plan or attain the economic projections
described herein. To do, the Warrants contained in the Units must be exercised
within the exercise period. No assurance can be given, and none is given, that
the Company's Common Stock will trade at levels high enough to cause the
Warrants to be exercised by that time or, even, at all. Should the Warrants not
be exercised, additional capital will have to be raised to achieve the business
plan.
Dependence Upon Offering Proceeds
There is no assurance that such additional financing will be available when
required in order to proceed with the business plan or that the Company's
ability to respond to competition or changes in the marketplace or to exploit
opportunities will not be limited by lack of available capital financing. If the
Company is unsuccessful in securing the additional capital needed to continue
operations within the time required, the Company will not be in a position to
continue operations and the purchasers of the Units in this offering may lose
their entire investment.
Continued Control by Existing Management
The Company's management currently owns substantially all of the company's
outstanding Common Stock. Even if the maximum number of Units is sold, current
management will control approximately 73.0% of the voting stock which, in either
case, may be sufficient to elect all of the Company's directors and control the
management, policies and operation of the Company. Accordingly, new shareholders
will lack an effective vote with respect to the election of direct and other
corporate matters. See "PRINCIPAL SHAREHOLDERS" and "DESCRIPTION OF COMMON
STOCK."
Best Efforts Offering
The offering made on a "best efforts, no minimum offering" basis. This
provides that all funds are put into an escrow account but are available to the
Company to be used immediately according to the detailed "ESTIMATED USE OF
PROCEEDS". Because the offering is made on a best-efforts basis, there can be no
assurance that all or any of the Units offered hereunder will be sold. If less
than the complete Offering is sold, the Company may experience additional
financial pressures that will involve risks for the Company that will not be
present if all of the Units are sold in the offering. In that event, the Company
will be forced to seek additional capital sooner than would otherwise be the
case in order to proceed with the Company's business plan. No person has
committed to provide the Company with the additional capital needed by the
Company and there can be no assurance that additional funds will be available
when required on terms acceptable to the Company. See "ESTIMATED USE OF
PROCEEDS" and "RISK FACTORS."
Arbitrary Determination of Offering Price
The offering price of the Common Stock was arbitrarily set by the Company.
No independent investment banking firm was retained to assist in determining the
offering price. No market exists for the Common Stock of the Company and there
can be no assurance that a trading market will develop for the Common Stock in
the future. The offering price of the Common Stock may not bear any relation to
the actual value of the Common Stock. Among the factors considered in
determining the price were estimates of the prospects of the Company, the
background and capital contributions of Management and current conditions in the
securities markets and the data processing industry. There is, however, no
relationship between the offering price of the Common Stock and the Company's
assets, earnings, book value or any objective criteria of value.
Regulation of Product
Although the products of the Company are not currently subject to any
regulatory body, there is no guarantee that this will remain the case. It is
determined at a later date that the Company falls under the jurisdiction of a
regulatory authority, this may curtail sales of the product or force
modifications that may affect sales. The future plans of the company do not
include any funds or compliance with any regulations, state or federal.
DILUTION
"Dilution" is normally defined as the difference between the offering price
per share of Common Stock and the net tangible book value per share of Common
Stock immediately after the offering. The following table illustrates the
dilution on a per share basis of the Company's Common Stock, assumes the sale of
all 200,000 Units offered herein, and the exercise of all 2,800,000 Warrants
contained in the Units.
Investors' offering price per share of Common Stock $0.100
Investors' offering price per Warrant $0.350
Investors' contribution considering all stock and warrants are
purchased and exercised (This total is per share.) $0.333
Net tangible book value per share of Common Stock prior to this offering $0.000
PROFORMA net tangible book value after this offering $0.085
Dilution to the investors $0.248
ESTIMATED USE OF PROCEEDS
The net proceeds of the sale of all the Units will be $20,000. The offering
expenses includes fees payable to attorneys, accountants and experts, printing
and escrow expenses and other costs related to the offering and will be paid
from proceeds of the offering.
The Company anticipates that the net proceeds will be used as follows and
in the following order of priority as and to the extent funds are received from
the sale of the Units:
Item Estimated Amount
Working Capital $16,000
Inventory $4,000
Total $20,000
Assuming the exercise of all 2,800,000 Warrants contained in the Units
offered herein, the $980,000 proceeds from such exercise of Warrants shall be
used as follows:
Item Estimated Amount
Production Equipment and Mixers $200,000
Ray Material (Inventory) $100,000
Leases $ 25,000
Marketing $200,000
Administration $100,000
Working Capital $200,000
Research and Development $ 50,000
Training of Specialists $ 50,000
Legal Costs for Patent and Corporate Work $ 55,000
Total $980,000
The net proceeds of this offering, assuming all Units are sold, will be
sufficient to sustain the planned marketing and development activities of the
Company for a period of 12 months, depending upon the number of Units sold in
the offering and other factors. Even if all Units offered hereunder are sold,
the Company will require additional capital in order to fund continued
development activities and capital expenditures that must be made. There can be
no assurances that any securities offerings will take place in the future, or
that funds sufficient to meet any of the foregoing needs or plans will be raised
from operations or any other source. See "PLAN OF OPERATION."
PROPOSED BUSINESS
Ginsite Materials Incorporated, was incorporated in Florida in 1997 for the
purpose of developing, manufacturing and marketing the Ginsite formulation, a
material formulation (Ginsite) that can enhance or replace wood, concrete,
stucco and tile and other costly materials in the construction and marine
industries in addition to other numerous undetermined applications.
Business Strategy
The Company plans to complete development of the system and enter into
agreements with roofing contractors, warehouse developers and owners.
Products
One of the Company's products is the Ginsite formulation. Ginsite is a
resin bound material coating that is four times stronger than concrete and one
forth the weight. Ginsite is also non-porous and is water-proof. Ginsite will
adhere to most anything, can be sprayed, brushed or rolled on. It can repel
mildew, can be flexible or rigid and comes in all colors except pure white and
clear due to its components. Ginsite will not shatter and can be cut or drilled
with conventional tools. Ginsite will encapsulate any bullet from penetration
into a minimum of two inches.
Ginsite Materials Incorporated has patents pending covering all aspects of
these concepts, thus allowing it complete control of these markets.
The Market
Wood
The exploding work population has severely limited wood supply as a prime
resource for building homes and shelter for humans. Most all of the World
Communities now recognize the urgency to address the destruction of the world's
tree supply (rainforest destruction). One consequence is an innovative building
construction element needed as a replacement for wood, concrete and other costly
materials.
The destructive force of nature has been clearly illustrated by devastation
which have completely obliterated communities throughout the United States and
the other world countries. Creating a simple, inexpensive, superior, more
durable construction element that can be inexhaustibly resourced for all
environments plus geared to any skilled level of labor is a giant step forward
in providing permanent housing solutions. The Company will look to build a
strategic alliance with the large modular home building replacing components
with Ginsite.
Concrete
Concrete is the most versatile and widely used building material. It is of
such importance that almost every civil engineering structure uses it. On a
worldwide basis the yearly production of concrete amounts to approximately one
ton per capita. However, concrete is not without its flaws. Concrete is porous,
therefore not completely waterproof. It is subject to shrinkage and expansion.
Pressure caused by expansion of freezing water may be sufficient to cause
deterioration of concrete. Growth of ice crystals under the surface of pavements
causes concrete to scale. (Potholes, cracks)
Ginsite Materials
Ginsite can be used to coat existing concrete products such as septic
tanks, bridges and water pipes to protect and preserve. Ginsite can also be
missed with concrete to increase strength and reduce weight.
None of the flaws that are inherent in using concrete and wood are
applicable to Ginsite blocks. One of the most important materials in the
building construction industry, Concrete Building Block, will be enhanced by
Ginsite. Ginsite is challenging not only the formation of concrete accepted in
building materials but its structural integrity.
Marketing
The Company anticipates using a deliberate path for marketing Ginsite.
Through a series of national and international agreements and/or joint ventures,
a continuing source of revenue can be provided. Ginsite Materials, Inc.
anticipates three (3) distinct sources of revenue:
1. Sales of material formulation
2. Licensing
3. Leasing charges for machinery and equipment
This three stage revenue approach should generate a continuing revenue
stream to cover its operations while developing and expanding a diversified
commercial construction product line and all other Ginsite applications for the
various cited industries.
The Company has decided to concentrate initially to roofing contractors and
warehouse developers. The demand to waterproof existing flat roofs at lower
costs than to replace them will use up the majority of capacity for the first
production plant.
The initial emphasis upon the Construction market will allow the Company to
grow steadily over the next five years. According to US Department of Commerce,
in 1994 total $ volume in Construction was estimated at $460,000,000,000.
This focus will produce a high volume of sales applications such as
exterior wall covering to replace stucco processing, kitchen and bathroom
counters/sinks/shower areas, street/driveway pavers, driveway resurfacing,
tiles/floor/ceiling and various decorative items and uses.
Competition
The Corporation has applied for a patent (application number GINMPA0195, on
August 28, 1995). There is no active competition of the material formulation at
the present time. To the Company's best knowledge, no other entity or person has
an existence, nor has an application been filed, for any similar technology.
Personnel
Xxxxxx Xxxxxxxx, President and CEO, Xx. Xxxxxx Xxxxxxxx has been CEO/President
of the Company since inception. Prior to the formation of the Company, Xxxxxx
Xxxxxxxx has designed and developed numerous laboratory and clinical devices for
various doctors and investigators which has brought in more than $80 million
into the South Florida economy. His list of credentials include: the invention
and design of numerous medical instruments for the University of Miami School of
Medicine Tissue Bank used for medical research at the UM/Xxxxxxx Memorial
Medical Center. He has developed a new head holder and a sterotaxic device for
brain tumors for the Department of Radiation Oncology University School of
Medicine. Prior to joining University of Miami Medical Instrument Laboratories,
Xx. Xxxxxxxx was a former missile systems engineer working for Xxxxxx
Instruments in Whitestone, NY., where he worked on Hawk surface-to-air missiles
and the Atlas missile for the United States Defense Department. Xx. Xxxxxxxx
hold a Masters degree in Mechanical Engineering at the Xxxxx Institute.
Xxxxxx Xxx, Vice President, Secretary, and Treasurer, Ms. Audrey Max graduated
with a Bachelor of Science degree at Boston University and an Associates Degree
for Business. Administration at Miami Dade Community College. For over 15 years,
she has had experience with both college and university administrations. Her
background included expertise in financial management and has been actively
involved in director responsibilities as a staff associate at the University of
Miami School of Medicine Department of Medical Instrumentation. She provides
the company with a sound foundation for financial strategies.
Xxxxx Xxxxxxx, Vice President of Structural Design, Xx. Xxxxx Xxxxxxx served in
the United States Navy as an Electrician. After receiving an honorable discharge
he received his Associate Degree from Miami Dade Junior College and a Bachelor
of Science Degree from the University of Miami. For over 18 years his expertise
has been in home improvements and shell subcontracting. From 1978 to present,
Xx. Xxxxxxx'x was owner of Global Industries and Manufacturing, a home
improvement and shell subcontracting company. Xx. Xxxxxxx will provide his many
years of construction design development to the company.
Xxxxxx X. Xxxxx, Vice President of Marketing, For 14 years, Xx. Xxxxxx Xxxxx has
been actively involved in sales and marketing in the TV & Major Appliance
wholesale distribution & manufacturing industry. He has been Sales Manager &
Production Specialist for Westinghouse Sales & Service Co., New York. He was
also District Sales Manager for the home entertainment division for Sylvania
Home Electronics.
PLAN OF OPERATION
General
Once manufacturing has begun, Company intends to begin operations by
concentrating solely on the Construction, Concrete, Drywall and Plywood Market
in the United States. After 5 years, the Corporation plans to expand slowly into
the International market and other types of markets such as boating and tile.
The Company will also require additional capital in order to be successful.
Marketing Strategy
The Company believes much of its marketing will be to builders, warehouse
developers and owners and roofing contractors. The Company will however, engage
in product demonstrations, attend Trade Shows throughout the US and develop a
video presentation. The product will also be marketed to dealers throughout the
US
Pricing
The Ginsite formula is priced ver competitively. There is a demand to
waterproof existing flat roofs and to use superior, cheaper materials for
building and construction. The structure will be flexible and specific to each
application.
The Future
The Company plans to raise additional capital for its long-term needs by
examining merger or acquisition candidates. Potential candidates will be
compatible with the goals for further taking the patented product to market and
providing for raising funds in the public securities market.
MANAGEMENT
Directors and Executive Officers
Xxxxxx Xxxxxxxx, President & CEO
Xxxxxx Xxx, vice President, Secretary, Treasurer
Xxxxx Xxxxxxx, Vice President of Structural Design
Xxxxxx Xxxxx, Vice President of Marketing
Executive Compensation
Estimated Cash Compensation Table
Name of individual or Capacities in Cash Compensation
Number in group which served Pre-operating Post Operating
--------------- ------------ ------------- --------------
Xxxxxx, Xxxxxxxx President, CEO $0 $40,000
Xxxxxx Xxx VP, Sec, Treas $0 $25,000
Xxxxx Xxxxxxx VP Structural Design $0 $25,000
Xxxxxx Xxxxx VP of Marketing $0 $25,000
All of the foregoing amounts are estimates based upon the Company's
internal forecast and budget. There can be no assurance that the amount of
compensation actually paid, or persons to whom it is paid, will not differ
materially form the above estimates.
Employment and Consulting Agreements
The Company has no current employment contract or consulting agreements in
place.
Stock Options
The Corporation has not authorized, nor does it have in place, any stock
option plans.
PRINCIPAL SHAREHOLDERS
The following tables set forth as of the date of this Memorandum the amount
of the Company's Common Stock beneficially owned by each officer and director of
the Company and by each person owning more than five percent of any class of the
Company's voting securities. As of the date of the Memorandum, there are no
other equity securities of the Company outstanding, other than the Common Stock.
Number of Shares
Name of Before Percentage of Percentage of
Beneficial Owner Offering Outstanding After Offering Outstanding
Xxxxxx Xxxxxxxx 7,917,750 87.5% 7,917,750 65.7%
Xxxxx Xxxxxxx 439,875 4.9% 439,875 3.6%
Xxxxxx Xxx 439,875 4.9% 439,875 3.6%
Other Shareholders 250,000 2.7% 250,000 2.2%
Placement Shares 0 0 3,000,000 24.9%
Total Outstanding 9,047,500 100.0% 12,047,500 100.0%
Officers and Directors
As a Group 8,797,500 97.2% 8,797,500 73.0%
DESCRIPTION OF COMMON STOCK
Common Stock
Holders of the Common Stock are entitled to one vote for each share held by
them on record on the books of the Company in all matters to be voted on by the
stockholders. Holders of Common Stock are entitled to receive such dividends as
may be declared from time to time by the Board of Directors out of funds legally
available, and in the event of liquidation, dissolution or winding up of the
Company, to share ratable of liabilities. Declaration of dividends of Common
Stock is subject to the discretion of the board of directors and will depend
upon a number of factors, including the future earnings, capital requirements
and financial condition of the Company. The Company has not declared dividends
on its Common Stock in the past and the Management currently anticipates that
retained earnings, if any, in the future will be applied to the expansion and
the development of the Company rather than the payment of dividends.
The holders of Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by the company. There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock currently outstanding is, and the Common Stock offered by the Company
hereby will, when issued, be validly issued, fully paid and non-assessable.
Limitations of Directors Liability
The Company's Certificate of Incorporation Eliminates, subject to certain
exceptions, the personal liability of directors tot he Company or its
Stockholders from monetary damages for breaches of fiduciary duty by such
directors. The Certificate of Incorporation does not provide for the elimination
of or any limitation on the personal liability of directors for (i) any breach
of the directors duty of loyalty to the company or its Stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) unlawful corporate distributions, or (iv) any
transaction from which such director derives an improper personal benefit. This
provision of the certificate of incorporation will limit the remedies available
to a Stockholder who is dissatisfied with a decision of the board of directors
protected by this provision; such stockholders only remedy may be to bring a
suit to prevent the action of the board. This remedy may not be effective in
many situations because stockholders are often unaware of a transaction or event
prior to board action in respect of such transaction or event. In these cases,
the Stockholders and the Company could be injured by a boards' decision and have
no effective remedy.
Securities Restrictions
Purchasers of the Units of Common Stock offered hereby must be aware of the
long-term nature of their investment and be able to bear the economic risk of
their investment for an indefinite period of time. There is no public trading
market for the Units of Common stock and there can be no assurance that any such
market will develop in the foreseeable future. The Shares of Common Stock have
not been registered under the Securities Act or the Securities Laws of any
state, except as required in the State of New York. The right of any purchaser
to sell, transfer, pledge or otherwise dispose of such securities is limited by
the Securities Act and state securities laws and the regulations promulgated
thereunder. The shares of stock are not restricted as that term is defined in
Rule 144 of the Act, but no market for the resale of the securities exists at
this time. Rule 504 provides that the shares can be issued with no restrictive
language but no national market exists for the trading of these securities.
Warrants
Each purchaser of the Units will entitle the record owner to purchase
fourteen (14) shares of the Company's Common Stock at a purchase price of $0.35
per share. This warrant must be exercised and fully paid prior to September 01,
1998 as provided under the Warrant Agreement provided to each purchaser of the
Units. The Warrants are also offered for sale in reliance on Rule 504 and are
free trading upon exercise. At this time no market for the resale of those
securities exists and investors may not be able to sell their securities.
DIVIDEND POLICY
The Company's Board of directors presently intends to cause the Company to
follow a policy of retaining earnings, if any, for the purpose of increasing the
net worth and reserves of the Company. Therefore, there can be no assurance that
any holder of Common Stock will receive any cash, stock or other dividends on
his shares of Common Stock. To date, the Company has neither declared nor paid
any dividends on its Common Stock nor does the Company anticipate that dividends
will be paid in the foreseeable future. Rather, the Company intends to apply
earnings to the expansion and development of its business.
TERMS OF PLACEMENT
The Company may extend the offering period beyond December 10, 1997 for an
additional period through January 9, 1998 for the sale of the Offering. All
Units are offered on a "best efforts, no minimum offering" basis. There can be
no assurance that any Units of the Offering will be sold. The warrants must be
exercised by September 10, 1998 or they will lapse. This limitation exists
regardless of when the Units are purchased. Funds will be delivered to the
Company and checks will be made out to Ginsite Materials, Inc. and tendered to
the Company. No escrow account will be set up and all proceeds will be directly
available to the Company.
PLAN OF PLACEMENT
The Units are offered directly by the Company in accordance with the terms
and conditions set forth in this Memorandum. The Company offers the Units on a
"best efforts, no minimum" basis which means that no person or participating
dealers is obligated to purchase any shares. The Company will use its best
efforts to sell the Units to investors. There can be no assurance that all or
any of the Units offered hereunder will be sold. The company will provide no
escrow fund and the proceeds of the offering will be available to the Company
immediately for use as provided for in this offering.
LITIGATION
There are no pending legal proceedings to which the Company is a party.
LEGAL MATTERS
Xxxx X. Xxxxx, Esquire, 00000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx, 00000, will pass upon certain matters for the Company. Xx. Xxxxx is
also a shareholder of the Company, having 50,000 shares of Common Stock. The
Company consents and understands this potential conflict of interest.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this Memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of a material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavor to provide the information to such persons. All
officers are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
EXHIBIT A
GINSITE MATERIALS, INC.
Subscription Document
1. The undersigned hereby subscribes for _______________ units of common stock
(hereinafter "Shares"), as described in the Private Offering Memorandum
dated September 01, 1997 ("Memorandum"), of Ginsite Materials, Inc., a
Florida corporation (the "Company"), being offered by the Company for a
purchase price of $0.10 per share and tenders herewith the sum of
$__________ in payment therefor, together with tender of this Subscription
Agreement.
2. The undersigned represents and warrants that he is a bona fid resident of
the State of ______________________ and the county of
___________________________.
3. The undersigned acknowledges:
1. Receipt of a copy of the Private Offering Memorandum;
2. That this subscription, if accepted by the Company, if legally binding
and irrevocable;
3. That the Company has a very limited financial and operating history;
4. That the Shares have not been registered under the Securities Act of
1933, as amended, in reliance upon exemptions contained in that Act,
and that the Shares have not been registered under the securities acts
of any state in reliance upon exemptions contained in certain state's
securities laws; and
5. That the representations and warranties provided in this Subscription
Document are being relied upon by the Company as the basis for the
exemption from the registration requirements of the Securities Act of
1933 and of the applicable state's securities laws.
4. The undersigned represents and warrants as follows:
1. That the undersigned subscriber is purchasing the Shares as an
investment and the Shares are purchased solely for the undersigned's
own account.
2. That the undersigned subscriber has sufficient knowledge and
experience in financial and business matters to evaluate the merits
and risks of an investment in the Shares;
3. That the undersigned subscriber is able to bear the economic risk of
an investment in the Shares;
4. That the undersigned subscriber has read and is thoroughly familiar
with the Private Offering Memorandum and represents and warrants that
the subscriber is aware of the high degree of risk involved in making
an investment in the Shares;
5. That the undersigned subscriber's decision to purchase the Shares is
based solely on the information contained in the Private Offering
Memorandum and on written answers to such questions as he has raised
concerning the transaction;
6. That the undersigned subscriber is purchasing the Shares directly from
the Company and understands that neither the Company nor the Offering
is associated with; endorsed by nor related in any way with any
investment company, national or local brokerage firm or other broker
dealer. The undersigned subscriber's decision to purchase the Shares
is not based in whole or in part on any assumption or understanding
that an investment company, national or local brokerage firm or other
broker dealer is involved in any way in this Offering or has endorsed
or otherwise recommended an investment in these Shares.
7. That the undersigned subscriber has an investment portfolio of
sufficient value that he could suitably absorb a high risk illiquid
addition such as an investment in the Shares.
8. The undersigned further represents that (INITIAL APPROPRIATE
CATEGORY):
[ ] I am a natural person whose individual net worth, or joint worth
with my spouse at the time of purchase, exceeds $200,000;
[ ] I am a natural person who had an individual income in excess of
$50,000 or joint income with my spouse in excess of $50,000 in
each of the two most recent years and who reasonably expects an
income in excess of those amounts in the current year;
(a) That Regulation D requires the Company to conclude that each investor
has sufficient knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the shares, or to verify that the investor has retained
the services of one or more purchaser representatives for the purpose
of evaluating the risks of investment in the shares, and hereby
represents and warrants that he has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of an investment in the shares and of making an
informed investment decision and will not require a purchaser
representative.
5. The undersigned understands and agrees that this subscription is made
subject to each of the following terms and conditions:
1. The Company shall have the right to accept or reject this
subscription, in whole or part, for any reason. Upon receipt of each
Subscription Document, the Company shall have until December 10, 1997
in which to accept or reject it. If no action is taken by the Company
within said period, the subscription shall be deemed to have been
accepted. In each case where the subscription is rejected, the Company
shall return the entire amount tendered by the subscriber, without
interest;
2. That the undersigned subscriber will, from time to time, execute and
deliver such documents or other instruments as may be requested by the
Company in order to aid the Company in the consummation of the
transactions contemplated by the Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full
power of substitution, as attorney-in-fact for the purpose of executing and
delivering, swearing to and filing, any documents or instruments related to
or required to make any necessary clarifying or conforming changes in the
Subscription Document so that such document is correct in all respects.
7. As used herein, the singular shall include the plural and the masculine
shall include the feminine where necessary to clarify the meaning of this
Subscription Document. All terms not defined herein shall have the same
meanings as in the Memorandum.
IN WITNESS WHEREOF, the undersigned as executed this Subscription Document
this ____________ day of _______________________, 1997.
Number of Shares _____________________
Total amount tendered $____________________
INDIVIDUAL OWNERSHIP: _________________________________________
Name (Please Type or Print)
------------------------------------------
Signature
------------------------------------------
Social Security Number
JOINT OWNERSHIP: __________________________________________
Name (Please Type or Print)
------------------------------------------
Social Security Number
------------------------------------------
Name (Please Type or Print)
OTHER OWNERSHIP: __________________________________________
Name (Please Type or Print)
By:____________________________________
(Signature), Title:___________________
------------------------------------------
Employer Identification Number
ADDRESS:____________________________________________________________________
Street City State Zip
Phone (Residence)_______________________; Phone (Business) ____________________
I, __________________________, do hereby certify that the representations
made herein concerning my financial status are true, and that all other
statements contained herein are true, accurate and complete to the best of my
knowledge.
Date: _______________________, 1997
------------------------------------------
Signature
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription Document
to ________ ____________________ on the ___________ day of
______________________, 1997.
------------------------------------------
Signature
ACCEPTANCE
This Subscription is accepted by Ginsite Materials, Inc. as of the
__________ day of ___________________, 1997.
GINSITE MATERIALS, INC.
By:_____________________________________
Xxxxxx Xxxxxxxx, President
EXHIBIT B
Warrant # W ______________ To Purchase ________ Shares of
Common Stock ($0.001 par value)
WARRANT OF
GINSITE MATERIALS INCORPORATED
INCORPORATED UNDER THE LAWS OF
THE STATE OF FLORIDA
Section 1.1 Basic Terms. This certifies that, for value received, the
registered owner is entitled, subject to the terms and conditions of this
Warrant, until the expiration date, to purchase the number of shares of the
Common Stock, par value $0.001 (the "Common Stock"), of Ginsite Materials
Incorporated (the "Corporation") from the Corporation at the purchase price
shown below, on delivery of this Warrant to the Corporation with the exercise
form duly executed and payment of the purchase price (in cash or by certified or
bank cashier's check payable to the order of the Corporation) for each share
purchased.
Registered Owner: ________________________________
================================
Purchase Price: Zero and 35/100 Dollars ($0.35) per share.
Expiration date: 5:00 p.m. Eastern Standard Time, September 01, 1998, unless
terminated sooner under this Warrant.
Section 1.2 Corporation's Covenants as to Common Stock. Shares deliverable
on the exercise of this Warrant shall, at delivery, be fully paid and
non-assessable, free from taxes, liens, and charges with respect tot their
purchase. The Corporation shall take any necessary steps to assure that the par
value per share of the Common Stock is at all times equal to or less than the
then current Warrant purchase price per share of the Common Stock issuable
pursuant to this Warrant. The Corporation shall at all times reserve and hold
available sufficient shares of Common Stock to satisfy all conversion and
purchase rights of outstanding convertible securities, options and warrants.
Section 1.3 Method of Exercise; Fractional Shares. The purchase rights
represented by this Warrant are exercisable at the option of the registered
owner in whole at any time, or in part, from time to time, within the period
above specified, provided, however, that purchase rights are not exercisable
with respect to a fraction of a share of Common Stock. In lieu of issuing a
fraction of a share remaining after exercise of this Warrant as to all full
shares covered hereby, the Corporation shall either (a) pay therefor cash equal
to the same fraction of the then current Warrant purchase price per share or, at
its option, (b) issue scrip for the fraction, in registered or bearer from
approved by the Board of Directors of the Corporation, which shall entitle the
holder to receive a certificate for a full share of Common Stock on surrender of
scrip aggregating a full share. Scrip may become void after a reasonable period
(but not less than six months after the expiration date of this Warrant)
determined by the Board of Directors and specified in the scrip. IN case of the
exercise of this Warrant for less than all the shares available for purchase,
the Corporation shall cancel the Warrant and execute and deliver a new Warrant
of like tenor and date for the balance of the shares purchasable.
Section 1.4 Adjustment of Shares Available for Purchase. The number of
shares available for purchase hereunder and the purchase price per share are
subject to adjustment from time to time as specified in this Warrant.
Section 1.5 Limited Rights of Owner. This Warrant does not entitle the
owner to any voting rights or other rights as a Stockholder of the Corporation,
or to any other rights whatsoever except the rights herein expressed. No
dividends are payable or will accrue on this Warrant or the shares available for
purchase hereunder until, and except that the extent that, this Warrant is
exercised.
Section 1.6 Exchange for Other Denominations. This Warrant is exchangeable,
on its surrender by the registered owner to the Corporation, for new Warrants of
like tenor and date representing in the aggregate the right to purchase the
number of shares available for purchase hereunder in denominations designated by
the registered owner at the time of surrender.
Section 1.7 Transfer. Except as otherwise above provided, this Warrant is
transferable only on the books of the Corporation by the registered owner in
person or by attorney, on surrender of this Warrant, properly indorsed.
Section 1.8 Recognition of Registered Owner. Prior to due presentment for
registration of transfer of this Warrant, the Corporation may treat the
registered owner as the person exclusively entitled to receive notices and
otherwise to exercise rights hereunder.
Section 1.9 Effect of Stock Split, Etc. If the Corporation, by stock
dividend, split, reverse split, reclassification of shares, or otherwise,
changes as a whole the outstanding Common Stock into a different number or class
of shares, then:
(a) the number and class of shares so changed shall, for the purpose of
this Warrant, replace the shares outstanding immediately prior to the change;
and
(b) the Warrant purchase price in effect, and the number of shares
available for purchase under this War4rant, immediately prior to the date upon
which the change becomes effective, shall be proportionately adjusted (the price
to the nearest cent). Irrespective of any adjustment or change in the Warrant
purchase price or the number of shares purchasable under this or any other
Warrant of like tenor, the Warrants theretofore and thereafter issued may
continue to express the Warrant purchase price per share and the number of
shares available for purchase as the Warrant purchase price per share and the
number of shares available for purchase were expressed in the Warrants when
initially issued.
Section 1.10 Effect of Merger, Etc. If the Corporation consolidates with or
merges into another corporation, the registered owner shall thereafter be
entitled on exercise to purchase, with respect to each share of Common Stock
purchasable hereunder immediately before the consolidation or merger becomes
effective, the securities or other consideration to which a holder of one share
of Common Stock is entitled in the consolidation or merger without any change in
or payment in addition to the Warrant purchase price in effect immediately prior
to the merger or consolidation. The Corporation shall take any necessary steps
in connection with a consolidation or merger to assure that all the provisions
of this Warrant shall thereafter be applicable, as nearly as reasonably may be,
to any securities or other consideration so deliverable on exercise of this
Warrant. The Corporation shall not consolidate or merge unless, prior to
consummation, the successor Corporation (if other than the Corporation) assumes
the obligations of this paragraph by written instrument executed and mailed to
the registered owner at the address of the owner on the books of the
Corporation. A sale or lease of all or substantially all the assets of the
Corporation for a consideration (apart from the assumption of obligations)
consisting primarily of securities is a consolidation or merger for the
foregoing purposes.
Section 1.11 Notice of Adjustment. On the happening of an event requiring
an adjustment of the Warrant purchase price or the shares available for purchase
hereunder, the Corporation shall forthwith give written notice to the registered
owner stating the adjusted Warrant purchase price and the adjusted number and
kind of securities or other property available for purchase hereunder resulting
from the event and setting forth in reasonable detail the method of calculation
and the facts upon which the calculation is based. The Board of Directors of the
Corporation, acting in good faith, shall determine the calculation.
Section 1.12 Notice and Effect of Dissolution, Etc. In case a voluntary or
involuntary dissolution, liquidation, or winding up of the Corporation (other
than in connection with a consolidation or merger covered by paragraph (Section
1.10) above) is at any time proposed, the Corporation shall give at least a 30
day written notice to the registered owner. Such notice shall contain: (a) the
date on which the transaction is to take place; (b) the record date (which shall
be at least 30 days after the giving of the notice) as of which holders of
Common Shares will be entitled to receive distributions as a result of the
transaction; (c) a brief description of the transaction; (d) a brief description
of the distributions to be made to holders of Common Stock as a result of the
transaction; and (e) an estimate of the fair value of the distributions. On the
date of the transaction, if it actually occurs, this Warrant and all rights
hereunder shall terminate.
Section 1.13 Method of Giving Notice; Extent Required. Notices shall be
given by first class mail, postage prepaid, addressed to the registered owner at
the address of the owner appearing in the records of the Corporation. No notice
to warrant holders is required except as specified herein.
Witness the seal of the Corporation and the signatures of its authorized
Officers.
GINSITE MATERIALS, INC.
Dated:_________________ [Seal]
By:__________________________
Signature:
----------------------------
Title:________________________
ASSIGNMENT FORM
[To be executed by the registered owner to transfer the Warrant]
For value received the undersigned hereby sells, assigns, and transfers to:
Name: ____________________________
Address: ___________________________
---------------------------
this Warrant and irrevocably appoints: ______________________ attorney (with
full power of substitution) to transfer this Warrant on the books of the
Corporation.
Date:_________________ _________________________________
(Please sign exactly as name appears on Warrant)
Taxpayer ID No. __________________________
In the presence of: Signature guaranteed by
-------------------------- -------------------------------
