U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
AMENDMENT NO. 5
Nevada 9995 88-0460457
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
41919 Skywood Drive, Temecula, California 92591 (909) 506-3435
(Address of principal executive offices) Telephone Number
Approximate date of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the securities Act registration statement number of the earlier effective registration statement for the same offering [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [x]
CALCULATION OF REGISTRATION FEE |
| Title of each class of securities to be registered | Proposed maximum offering price per unit | Proposed maximum aggregate offering price | Dollar amount to be registered | Amount of registration Fee |
| 1,000,000 preferred shares 3,756,000 common shares [2] 1,040,000 common shares [3] |
$6.30 .0001 |
$6,300,000 $104 |
$6,300,000 $104 |
$1,663.20 [1] $5 [1] |
[1]
Estimated solely for purposes of calculating the registration fee under Rule
457(c).
[2] To be offered with conversion of our Preferred Stock and accrued
dividends to our common stock.
[3]
Common shares of selling securityholders. There is no current market for the
securities and the price at which the shares held by the selling securityholders
will be sold is unknown. Pursuant to Rule 457(f)(2) the registration fee is
based upon the par value, $.0001 per share, of the registrant’s common
stock.
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH OFFERS, SOLICITATIONS OR SALES WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY THE STATES.
TABLE OF CONTENTS
Part I.................................................................................1
ITEM 1. Prospectus.................................................................1
Item 2. AVAILABLE INFORMATION......................................................2
Item 3. Summary Information and Risk Factors.......................................3
Our Business.....................................................................3
The Offering.....................................................................3
Risk Factors........................................................................5
I. Risks Related to the Hotel Industry..........................................5
II. Risks Related to the Company................................................5
III. Risks Related to This Offering.............................................7
Disclosure Regarding Forward Looking Statements..................................7
Item 4. USE OF PROCEEDS............................................................7
Item 5. Determination of Offering Price............................................8
Item 6. Dilution...................................................................8
Item 7. Selling Security Holders...................................................8
Item 8. Plan of Distribution......................................................14
Item 9. Legal Proceedings.........................................................16
Item 10. Directors, Executive Officers, Promoters and Control Persons.............16
Item 11. Security Ownership of Certain Beneficial Owners and Management...........17
Item 12. Description of Securities................................................17
Common Stock....................................................................17
Non-cumulative Voting...........................................................17
Cash Dividends..................................................................18
Reports.........................................................................18
Preferred Stock.................................................................18
LIQUIDATION PREFERENCE..........................................................18
VOTING RIGHTS...................................................................18
CONVERSION RIGHTS...............................................................18
LITIGATION......................................................................18
Penny Stock Regulation..........................................................18
NEVADA LAW NRS 78.195...........................................................19
Item 13. Interest of Named Experts and Counsel.....................................19
Item 14. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities................................................19
Item 15. Organization Within Last Five Years.......................................19
Item 16. Description of Business...................................................20
Item 17. Management's Discussion and Analysis and plan of Operations..............22
Item 18. Description of Property..................................................22
Demographics.......................................................................23
Item 19. Certain Relationships and Related Transactions...........................25
Item 20. Market for Common Equity and Related Stockholder Matters.................25
Item 21 Executive Compensation....................................................25
Item 22 Financial Statements......................................................26
Item 23. Changes in and Disagreements with Accountants............................26
Part II...............................................................................26
Item 24. Indemnification of Directors and Officers.................................26
Item 25. Other Expenses of Issuance and Distribution...............................26
Item 26. Recent Sales of Unregistered Securities...................................27
Item 27.Exhibits Schedule..........................................................27
Item 28. Undertakings..............................................................27
INDEPENDENT AUDITORS' REPORT..........................................................29
CONSOLIDATED BALANCE SHEET............................................................30
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY.........................................31
CONSOLIDATED STATEMENT OF OPERATIONS..................................................32
CONSOLIDATED STATEMENT OF CASH FLOWS..................................................33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................................34
Exhibit 5.1 Opinion re: Legality...................................................41
Exhibit 23.1 Consent...............................................................42
Exhibit 99.2 MINUTES OF SPECIAL MEETING OF BOARD OF DIRECTORS......................43
Exhibit 99.3 Subscription Agreement................................................45
Exhibit 99.4 Meeting of Board of Directors.........................................48
Exhibit 99.5 Employment Contract for Chief Executive...............................49
Exhibit 99.6 Option Agreement......................................................55
ITEM 1. PROSPECTUS
Supreme Hospitality
Shares of Preferred Stock
No Minimum $6,300,000 Maximum
1,040,000 shares of common stock to be sold by selling securityholders
There is no public market for the preferred stock.
We are offering up to a total of 1,000,000 shares of preferred stock on a best efforts, no minimum, 1,000,000 shares maximum. The offering price is $6.30 per share. There is no minimum number of shares that we have to sell. There will be no escrow account.All money received from the offering will be immediately used by us and there will be no refunds. The offering will be for a period of 24 months from the effective date. The minimum number of shares that you can purchase is 1,000.
This prospectus also covers 3,000,000 shares of our common stock reserved for issuance upon exercise of the right to convert the preferred shares at any time after twelve months, to common shares. It also covers 756,000 shares of our common stock to be used to pay interest to holders of the preferred shares.
This prospectus relates to the offer and sale of 1,040,000 shares of common stock of Supreme Hospitality, par value $.0001 per share, by 341 securityholders.
THE SHARES WILL BECOME TRADABLE ON THE EFFECTIVE DATE OF THIS PROSPECTUS. THE SELLING SECURITYHOLDERS WILL RECEIVE THE PROCEEDS FROM THE SALE OF THEIR SHARES AND SUPREME WILL NOT RECEIVE ANY OF THE PROCEEDS FROM SUCH SALES. THE SELLING SECURITYHOLDERS, DIRECTLY OR THROUGH AGENTS, DEALERS OR REPRESENTATIVES TO BE DESIGNATED FROM TIME TO TIME, MAY SELL THEIR SHARES ON TERMS TO BE DETERMINED AT THE TIME OF SALE. SEE “PLAN OF DISTRIBUTION.” THE SELLING SECURITYHOLDERS RESERVE THE SOLE RIGHT TO ACCEPT OR REJECT, IN WHOLE OR IN PART, ANY PROPOSED PURCHASE OF THE SHARES BEING OFFERED FOR SALE.
THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
| Number of Preferred Shares | Price per Share to Public | Offering Expenses | Broker Commission | Net proceeds after Expenses and Commissions To Us |
| No minimum preferred shares | $6.30 | |||
| Maximum 1,000,000 preferred | $6.30 | $132,335 | $630,000 | $5,537,665 |
| 1,040,000 common selling securityholders | UNKNOWN | UNKNOWN | UNKNOWN | NONE |
We currently have no arrangements with underwriters or broker-dealers to sell our shares.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is ____________________.
ITEM 2. AVAILABLE INFORMATION
Supreme Hospitality has filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form 10-SB (“Registration Statement”) under the Securities Act of 1933, as amended (“Securities Act”), with respect to the Securities. This Prospectus, which constitutes part of the Registration Statement, omits certain of the information contained in the Registration Statement and the exhibits thereto on file with the SEC pursuant to the Securities Act and the rules and regulations of the SEC hereunder. The Registration Statement, including exhibits thereto, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, NW, Room 1024, Washington, DC. 20549. Copies may be obtained at the prescribed rates from the public reference Section of the SEC at its principal office in Washington, DC. Statements contained in this Prospectus as to the contents of any contract or any document referred to are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference.
Supreme Hospitality is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and in accordance therewith will file reports and other information with the SEC. Such reports and other information can be inspected and copied at the location described above. Copies of such materials can be obtained by mail from the Public Reference Section of the SEC at 450 Fifth Street, NW, Room 1024, Washington, DC. 20549, at prescribed rates.
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS.
This summary highlights important information about our business and about this offering. Because it is a summary, it doesn’t contain all the information you should consider before investing in the common stock. So please read the entire prospectus.
Our Business
Our administrative office is located 41919 Skywood Drive, Temecula, California 92591, phone numbers voice (909) 506-3435 our registered statutory office is located at Nevada Legal Forms & Books, Inc. 3020 W. Charleston Blvd., Las Vegas, NV 89102. Our fiscal year end is December 31. We are a Nevada C-corporation.
Supreme Hospitality (“The Company”) is in the hospitality (hotel) business catering to the business, leisure and vacation traveler. On April 30, 2000, the Company acquired Temecula Valley Inn (“TVI”) as a wholly owned subsidiary. TVI is a 90-room hotel built in 1998 located in the Temecula Valley in Southern California between Los Angeles and San Diego. It is one of the premier hotel properties in the valley. Though cyclical in nature, TVI’s occupancy rates have continued to grow. TVI has developed its own website to take advantage of the growing Internet market.
The Company currently serves the traveler who requires perceived value for the nightly rate he/she pays. Through active marketing to various corporations, the company has been successful during its first year of operations of attracting a reasonable volume of corporate business. On weekends, the company attracts customers who are typically in town to attend various community functions including, but not limited to, the “Balloon and Wine Festival” and the “Rod Run”. During the summer months there are activities in the area almost every weekend. Occupancy rates during these weekends approached 100% on average during approximately the two years of operation.
The Offering
Following is a brief summary of this offering:
| PREFERRED SHARES |
| Securities being offered Convertible |
Up to 1,000 shares of convertible preferred stock, par value $0.00001. The preferred shares are convertible one (1) preferred share for three (3) common shares any time after twelve months of purchase and automatically on its thirty-six month anniversary. |
| Offering price per share | $6.30 |
| Offering period | The shares are being offered for a period not to exceed two years. |
| Use of proceeds | We will use the proceeds to fund the Company's plan of operation. |
| Number of preferred shares outstanding before the offering |
0 |
| Number of preferred shares after the offering |
1,000,000 |
| Selling Securityholders | This prospectus relates to the registration of 1,040,000 common shares for sale of the securities held by 341 securityholders of Supreme Hospitality. These securityholders will be able to sell their shares on terms to be determined at the time of sale, directly or through agents or through agents, dealers or representatives to be designated from time to time. Supreme Hospitality will not receive any proceeds from the sale of the securities by the selling securityholders. |
BROKER DEALER COMMISSION
We will be required to retain broker-dealers to sell our shares in certain states. We anticipate that we will be required to pay broker-dealers sales commissions averaging 8%, although we reserve the right to pay sales commissions up to 10%. In no event will our sales commission expenses combined with other offering expenses exceed 20% of the gross proceeds of this offering. The chart used on the prospectus cover page assumes that all shares are sold by broker-dealers at a maximum commission of 10%. It is anticipated that not all of the shares will be sold by a broker-dealer. Accordingly, the net proceeds to us may be higher than indicated in this chart.
FORWARD-LOOKING STATEMENTSSome of the statements in this prospectus discuss further expectations or state other forward-looking information. Those statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contemplated by the statements. Factors that might cause a difference include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this prospectus.
UNLESS OTHERWISE INDICATED OR THE CONTEXT OTHERWISE REQUIRES, WE REFER TO SUPREME HOSPITALITY AS “WE”, “US”, “OUR” OR “SUPREME”.
THE UNITS BEING OFFERED HEREIN ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. BEFORE MAKING AN INVESTMENT IN THE COMPANY, PROSPECTIVE INVESTORS SHOULD GIVE CAREFUL ATTENTION TO THE FOLLOWING RISK FACTORS INHERENT IN AND AFFECTING THE BUSINESS OF THE COMPANY.
1. The Company's Hotels are Subject to all Operating Risks Common to the Hotel Industry:
These risks include, among other things, intense competition from other hotels; over-building in the hotel industry which has adversely affected occupancy, average daily rate (“ADR”) and revenue per available room (“REVPAR”) in the past; increases in operating costs due to inflation and other factors, which increases have not always been, and may not necessarily in the future be, offset by increased room rates; dependence an business and commercial travelers and tourism; increases in energy costs and other expenses of travel; and adverse effects of general and local economic conditions. Such factors could adversely affect the Company’s ability to make any required payments of principal and interest on indebtedness and to make future dividends to shareholders. Further, annual adjustments to the base rent and the thresholds for computation of percentage rent, based on a formula taking into account changes in the U.S. Consumer Price Index (“CPI”), would (in the absence of offsetting increases in room revenue and in the event of any decrease in room revenues) result in decreased revenues to the Company available for required payments of principal and interest on indebtedness and to make future dividends to shareholders.
2. Hotels Built in the Future could have an Adverse Effect on the Revenues of the Company's hotels:
Competition for Guests; Operations. The hotel industry is highly competitive and hotels experience competition primarily from other upscale hotels in its immediate vicinity, but also competes with other hotel properties in its geographic market. Some of the competitors of the Company’s hotel may have substantially greater marketing and financial resources than the Company. A new hotel is in development, and additional Hotels room may be developed in the future. Such additional hotel rooms could have an adverse effect on the revenues of the Company’s hotels in such markets.
3. Competition may Reduce the Number of Suitable Investment Opportunities Offered to the Company:
The Company may be competing for investment opportunities with entities that have substantially greater financial resources than the Company. These entities may be able to accept more risk than the Company prudently can manage. Competition may generally reduce the number of suitable investment opportunities offered to the Company and increase the bargaining power of property owners seeking to sell.
4. Seasonality of the Hotel Business may cause Quarterly Fluctuations in the Company's Revenues:
The hotel industry is seasonal in nature. Generally, hotel revenues are greater in the second and third quarters than in the first and fourth quarters. Through diversity in the geographic location and in the primary customer base of the company’s hotels, the Company may be able to lessen, but not eliminate, the effects of seasonality. Accordingly, seasonality can be expected to cause significant quarterly fluctuations in the Company’s revenues.
1. Temecula Valley Inn has a Limited Operating History:
The Company was formed on October 30, 1997 and acquired Temecula Valley Inn as its first operating hotel on April 30,2000. Prior to its acquisition by the company, Temecula Valley Inn was constructed and opened for business in 1998.
2. The Company has Incurred Operating Losses:
The Company has incurred net losses and experienced negative cash flow during its two year operating history. (See financial information).
3. The Company is Subject to Risks Inherent in Concentrating Investments in a Single Industry:
The Company’s current strategy is to acquire interests in hotel properties. The Company will not seek to invest in assets selected to reduce the risks associated with investments in the hotel industry, and will be subject to risks inherent in concentrating investments in a single industry.
4. The Company may not have Access to Sufficient Equity of Debt Capital to Pursue its Acquisition Strategies:
The Company intends to continue to pursue its current growth strategy, which includes building or acquiring and improving hotel properties. There is a risk that the Company will not have access to sufficient equity of debt capital to pursue its acquisition Strategies indefinitely. The Company’s ability to continue to make hotel acquisitions will depend primarily on its ability to obtain additional private or public equity or debt financing. There can be no assurance that such financing will be available to make future investments.
5. Effect of Market Interests Rates On Price of Capital Stock could Adversely Affect the Market Price of the Company's Stock:
One of the factors that may influence the Company’s Common Stock and any Preferred Stock in public trading markets is the annual yield as compared to yields on other financial instruments. Thus, an increase in market interest rates will result in higher yields on other financial instruments, which could adversely affect the market price of the shares of Common Stock and any Preferred Stock.
6. The Loss of Key Personnel and Board of Directors may have a Material Adverse Effect on the Company:
Shareholders have no right or power to take part in the management of the Company except through the exercise of voting rights on certain specified matters. The Board of Directors is responsible for managing the Company. The Company’s future success, including particularly the implementation of the Company’s acquisition growth strategy, is substantially dependent on the active participation of Mr. Lang. The loss of services for this individual could have a material adverse effect on the Company.
7. The Company's Real Estate Investment is Subject to Varying Degrees of Risk:
The Company’s investments are subject to varying degrees of risk generally incident to the ownership of real property, including, in addition to the risks discussed below, adverse changes in general or local economic conditions, zoning laws, traffic patterns and neighbor characteristics, tax rates, governmental rules and fiscal policies, and by civil unrest, acts of war, and other adverse factors which are beyond the control of the Company.
8. The Liquidity of Real Estate makes it Difficult for the Company to vary its Portfolio in Response to Economic Conditions:
Real estate investments are relatively illiquid. The ability of the Company to vary its portfolio in response to changes in economic and other conditions will be limited. Also, no assurances can be given that the market value of any of the Hotels will not decrease in the future. There can be no assurance that the Company will be able to dispose of an investment when it finds disposition advantageous or necessary or that the sale price realized in any disposition will recoup or exceed the amount of the Company’s investment therein.
9. The Company may be Uninsured and/or Underinsured in the Event of a Substantial Loss:
The Company’s hotel is covered by comprehensive policies of insurance, including liability, fire and extended coverage. Management believes such specified coverage is of the type and amount customarily obtained by owners of real property assets. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that may be uninsurable or not economically insurable. Although the hotel was constructed under the more recent and stringent 1984 building codes that were intended to reduce the likelihood or extent of damage from seismic activity, no assurance can be given that an earthquake would not cause substantial damage and losses. The Company presently maintains and intends to continue to maintain earthquake insurance on the current Hotel located in California to the extent practicable. The Company’s Board of Directors may exercise discretion in determining amounts, coverage limits and the deductibility provisions of insurance, with a view to maintaining appropriate on the company’s investments as a reasonable cost and on suitable terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of the Company’s lost investment. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical to use insurance proceeds to replace the property after such property has been damaged or destroyed. Under such circumstances the insurance proceeds received by the Company might not be adequate to restore its economic position with respect to such property.
1. Because There Is No Public Trading Market For Our Preferred Stock, You May Not Be Able To Resell Your Shares.
There is currently no public trading market for our preferred stock or our common stock, and there is no guarantee that a market will ever develop. Therefore there is no central place, like a stock exchange or electronic trading system, to resell your shares. If you do want to resell your shares, you will have to locate a buyer and negotiate your own sale. Therefore, you may not be able to resell your shares.
We believe there is an anticipated public market for our common and preferred shares and we plan on registering the shares with an exchange as soon as practicable after the effective date of this Registration Statement.
2. You May Be Investing In A Company That Does Not Have Adequate Funds To Conduct Its Operations And Suffer The Loss Of Your Investment.
There is no minimum number of shares that must be sold, there is no escrow fund and we will not refund any funds to you. It is possible that we may not raise enough funds for the acquisition of new products and to conduct our on going operations. If that happens, you will suffer a loss in the amount of your investment.
3. Selling Securityholder May Sell Securities At Any Price Causing An Adverse Effect On Our Stock.
After effectiveness of this registration statement, the non-affiliated selling securityholders may offer and sell their shares at a price and time determined by them without subject to Rule 144. The timing of sales and the price at which the shares are sold by the selling securityholders could have an adverse effect upon the public market for the common stock, should one develop. See “Plan of Distribution-Sales by Selling Securityholders”.
4. Penny Stock Regulation May Impair Shareholders' Ability To Sell Supreme's Stock.
If trading in our stock begins, its common stock may be deemed a penny stock. Penny stocks generally are equity securities with a price of less than $5.00 per share, other than securities registered on certain national securities exchanges. Penny stocks are subject to “penny stock rules” that impose additional sales practice requirements on broker-dealers who sell the securities to persons other than established customers and accredited investors and these additional requirements may restrict the ability of broker-dealers to sell a penny stock. See “Description of Securities-Penny Stock Regulation”.
Disclosure Regarding Forward-Looking Statements
This Prospectus includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 12E of the Securities Exchange Act of 1934, as amended. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.
ITEM 4. USE OF PROCEEDS
This is a “best efforts” offering and the Company may receive no or a very small amount of the proceeds. The net proceeds to be received by the Company from the sale of 1,000,000 preferred shares offered by the Company is approximately $5,537,665 after deducting $762,335 in offering expenses payable by the Company. Approximately $3,000,000 will be applied to debt retirement and $2,000,000 used for acquisition of land and subsequent development.
The company believes the net proceeds of this offering will be sufficient to fund its plan of operation. From time to time in the ordinary course of business, the company evaluates the acquisition of products, businesses, and technologies that complement the Company’s business, for which a portion of the net proceeds may be used. Currently, the Company is involved in discussions with respect to developing another hotel. Pending the use of the net proceeds for the above purpose, the Company intends to invest such funds in short-term interest-bearing securities or other instruments, as the Company deems appropriate.
ITEM 5.DETERMINATION OF OFFERING PRICE
On June 14, 2000, the registration statement for 10,000,000 shares of common stock and 1,000,000 shares of preferred stock was filed with the U.S. Securities and Exchange Commission on Form 10-SB of the 1934 Securities Act, (File # 000-30803). Prior to June 2000, none of the securities have been publicly traded as no public market has existed. The Board of Directors and the key management personnel determined the public offering price of the preferred stock by adding the debt to be retired plus the offering fees and operating capital and dividing by the shares offered.
Retire Debt $ 3,000,000
Acquisition of land and subsequent development $ 2,000,000
Operating capital $ 500,000
Offering Fees $ 800,000
Total $ 6,300,000
-------------
Shares offered 1,000,000 $6.30 per share
ITEM 6. DILUTION.
Does not apply
ITEM 7. SELLING SECURITY HOLDERS
Supreme is registering for offer and sale by the holders of 1,040,000 shares of common stock held by 341 Supreme securityholders. Supreme is paying for all the expenses of the registration. We will receive no proceeds of this offering. The selling securityholders may offer all or part of their shares for sale on a continuous basis pursuant to Rule 415 under the 1933 Act. See “Risk Factors”.
All of the selling securityholders' shares registered in this prospectus will become tradable on the effective date of the registration statement of which this prospectus is a part.
The following table sets forth the shares held by each person who is a selling securityholders as of the date of this prospectus.
The following table is derived from our books and records, as well as from those of our transfer agent. No selling securityholder is affiliated with us. The table lists the name, address, amount of common stock owned and percentage of class of the beneficial ownership of the securities of Supreme as of the date of this prospectus.
Amount of
common Percent
Name of Securityholder Address of beneficial owner hares owned of class
1 Jon Ruco, Ltd. 18026 Cerca Azul Dr.
San Antonio, TX 78259 181,400 2%
2 First Dominion Financial
Group, Inc. 1800 E. Sahara, Suite 107
Las Vegas NV 89101 181,600 2%
3 Anthony Tomasso 2240 Woolbright Rd, Suite 354
Boynton Beach, FL 33426 1,667 0%
4 Hayden Financial Corp 21560 Toledo Rd.,
Boca Raton, FL 33433 51,700 1%
5 Wayne Gronquist 1104 Nueces Street
Austin, TX 78701 667 0%
6 Terence J. &
Synda M. Kollman 106 Rockwell Street
Harrison, NY 10528 200 0%
7 Lev-Ari Communications,
Inc. 147-17 Newport Ave.
Neponsit, NY 11694 100 0%
8 John C. &
Chestine Vester 3241 Sapphire ST.
Bedford, TX 76021 100 0%
9 Jernan Corp. 810 S. E. 4th Ave.
Pompano Beach, FL 33060 100 0%
10 Kim A. Whittaker 53 Emerson Road,
Winchester, MA 01890 100 0%
11 Myrna Cedrone 20 Clark St.
Randolpy, MA 02368 100 0%
12 Brian Wherry 21553 Toledo Road
Boca Raton, FL 33433 100 0%
13 Greg Papazian 53 Emerson Road,
Winchester, MA 01890 100 0%
14 Carol Jambura 2100 West 100th Ave
#240, Thornton, CO 80221 100 0%
15 Yaakov Friedman 619 North Lake Drive
Lakewood NJ 08701 100 0%
16 Margaret M. De La Garza 2915 Aftonshire Way
#2308, Austin, TX 78748 200 0%
17 Kathy Tomasso 2240 Woolbright Rd, Suite 354
Boynton Beach, FL 33426 100 0%
18 Steve Lohman 303 E. Main St.
Kent, OH 44240 200 0%
19 The Curtis Family Trust,
Dated Nov 9, 1999
John R. Curtis &
Charlotte H. Curtis,
Trustee(s) 1000 Winderley Pl, Apt 147
Maitland, FL 32751-4171 200 0%
20 Dean E. McCall 5234 95th St.
Lubbock, TX 79424 100 0%
21 Michael J. De La Garza 115 S. Cortez Ave.
Winter Springs, FL 32708-2947 100 0%
22 John M. Hubinger 825 Falconhead Dr.
Falconhead CC
Burneyville, OK 73430 100 0%
23 Martha H. Blue 1200 Barlow, Southlake
TX 76092 100 0%
24 Gretchen M. Hubinger 5500 Crestwood
Kansas City, MO 64110 100 0%
25 Carolyn Hubinger Kane 435 E. St., Colma, CA 94014 100 0%
26 Barbara H. Jones P. O. Box 1163
St. Francisville, LA 70775 100 0%
27 Joseph P. Wilkins 7322 Oak Manor, #23
San Antonio, TX 78229 200 0%
28 Kevin D. Wiley 2030 Grove Ave.
Quincy, IL 62301 100 0%
29 N.V. One Partnership 147-2C South Main St.
Stowe, VT 05672 50,800 1%
30 Hayden Gartzman 21560 Toledo Rd.
Boca Raton, FL 33433 200 0%
31 Gary Tashjian 12 Homer Rd.
Arlington, MA 02116 100 0%
32 Max Ades 115 Marlborough St
Boston, MA 02116 100 0%
33 Gerard Pomert 93 Third St. Newport
RI 02840 100 0%
34 Pat Prendergast 2929 Greenbriar, 7212
Houston, TX 77098 100 0%
35 Kelly Dath 8167 Sands Point Dr.
Houston, TX 77036 100 0%
36 Patricia Dath 10910 West Rd., #402
Houston, TX 77064 100 0%
37 Stephen Grabowiecki 37 Wallace Row
Wallingford, CT 06492 100 0%
38 Richard E. Grabowiecki 37 Wallace Row
Wallingford, CT 06492 100 0%
39 Anna M. Delehant 54 Allen Rd.
Horth Haven, CT 06473 100 0%
40 Ellen &
Richard A. Grabowiecki 37 Wallace Row
Wallingford, CT 06492 100 0%
41 Dawn Mongeon 54 Park St.
Wallingford, CT 06492 100 0%
42 John Delehant, Jr. 2052 Middletown Ave
Northford, CT 06472 100 0%
43 Thomas Delehant 142 Jail Hill Rd.
Hadd, CT 06438 100 0%
44 Ernest Marrette 34 Gale Ave.
Meriden, CT 06450 100 0%
45 Adriana S. Tomasso 2240 Woolbright Rd, Suite 354,
Boynton Beach, FL 33426 100 0%
46 Regina T. Tomasso 2240 Woolbright Rd, Suite 354,
Boynton Beach, FL 33426 100 0%
47 Krista K. Tomasso 2240 Woolbright Rd, Suite 354,
Boynton Beach, FL 33426 100 0%
48 Anthony Tomasi 1 Simos Lane
West Haven, CT 06516 100 0%
49 Leatrica M. Jackson 16503 Quail Briar
Missouri City, TX 77489 100 0%
50 Anthony D. L. Jackson 16503 Quail Briar,
Missouri City, TX 77489 100 0%
51 Randie M. Jackson 2204 Tangerine Dr.
Haines City, FL 33844 100 0%
52 Randie Ty Jackson 16503 Quail Briar,
Missouri City, TX 77489 100 0%
53 Randle M. Jackson, IV 16503 Quail Briar,
Missouri City, TX 77489 100 0%
54 Gary E. Matthews 3734 Boulevard Hills
Atlanta, GA 30339 100 0%
55 Diana Lacey-Matthews 3734 Boulevard Hills
Atlanta, GA 30339 100 0%
56 Ruth DeCarlo 238 Ilex Court
Villa Rica, GA 30180 100 0%
57 Martin E. Hull 4851 Coranada Ave.
San Diego, CA 92107 200 0%
58 Lyman A. Matthews 2305 Hayes Rd., #8812
Houston, TX 77077 100 0%
59 John C. Graper 32 Balboa Way,
Hot Spring Village, AR 71909 100 0%
60 Olethia H. Matthews 32 Balboa Way,
Hot Spring Village, AR 71909 100 0%
61 Carol A. Cummins 7115 Silver Star Drive
Houston, TX 77086 100 0%
62 Janice Peterson 5111 Barton Creek
Pasadena, TX 77505 100 0%
63 Gary E. Parks Cust for
Matthew E. Parks TUGMA 5858 Westheimer
Suite 702, Houston, TX 77057 100 0%
64 Howard A. Covens 1810 Potomac Dr, Apt 6
Houston, TX 77057-2952 100 0%
65 Donald Fitzpatrick 111 Eustis Ave
Newport, RI 02840 100 0%
66 Marc Jablon 2232 E. Senoron Blvd.
Spopka, FL 32703 100 0%
67 Karl Soderstrom 536 Sabal Lake Dr.
Apt 100, Longwood, FL 32779 100 0%
68 Warren White 3346 Ronald St.
Deltona, FL 32738 100 0%
69 Megan Beebe 601 N. Goodrich Dr.
Deltona, FL 32725 100 0%
70 Jeanne Whitehead 601 N. Goodrich Dr.
Deltona, FL 32725 100 0%
71 Carolyn White 3346 Ronald ST.
Deltona, FL 32738 100 0%
72 Peter Pappas Rev. Trust
UA DTD 5/18/95 432 NW 111 Ave.
Coral Springs, FL 33071 100 0%
73 Kim Braunin 1861 W. Oakland Park Blvd.
Ft. Lauderdale, FL 33311 100 0%
74 Joyce R. Ward 16405 Shagbark Pl.
Tampa, FL 33618-1213 100 0%
75 Randall W. Rice 19823 Wyndham Lakes Dr.
Odessa, FL 33556 100 0%
76 Leigh Rice 3702 Thornwood Dr.
Tampa, FL 33618 100 0%
77 Timeca Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
78 Timon Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
79 Timala Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
80 Ajanee Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
81 Ajanti Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
82 Cuwani Cade Willingham 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
83 Brian Schottcoffel 16214 New Field Dr.
Houston, TX 77082 100 0%
84 Malachi Meredith 16214 New Field Dr.
Houston, TX 77082 100 0%
85 Cheryl Meredith 16214 New Field Dr.
Houston, TX 77082 100 0%
86 Timothy Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
87 Sandra L. Cade 7 Birch Tree Rd.
Colonie, NY 12205 100 0%
88 Velton Cade 424 Sandcreek Rd.
Apt 424, Albany
NY 12205 100 0%
89 Terri Cade 60 Daytona Avenue
Albany, NY 12203 100 0%
90 Timothy Damon Cade 60 Daytona Avenue
Albany, NY 12203 100 0%
91 Mark France 16039 Highlander Dr.
Houston, TX 77082 100 0%
92 Daphne L. Simmons 16622 Quail Briar
Missouri City, TX 77489 100 0%
93 Jerod T. Higgins 16622 Quail Briar
Missouri City, TX 77489 100 0%
94 Mark Freeman 142 Habitat Cir.
Decatur, GA 30034 100 0%
95 Donald R. Yu 6363 Christie Ave.
#411, Emeryville, CA 94608 100 0%
96 Kimberly Crenshaw 1710 Alee, Mobile, AL 36605 100 0%
97 Sandra Crenshaw 1710 Alee, Mobile, AL 36605 100 0%
98 Lerin Crenshaw 1710 Alee, Mobile, AL 36605 100 0%
99 Rebel Rozmen 5234 95th St.
Lubbock, TX 79424 100 0%
100 Neal Diamond P. O. Box 542013
Houston, TX 77254 100 0%
101 Gary E. Parks 5858 Westheimer
Sutie 702, Houston,
TX 77057 100 0%
102 Gary E. Parks
Cust Amy M. Parks, TUGMA 5858 Westheimer
Suite 702, Houston, TX 77057 100 0%
103 Andrew Ackeman 16 Sherman St.
Newport, RI 02840 100 0%
104 Richard R. Blakeman 5355 Town Center Rd.
Boca Raton, FL 33486 100 0%
105 Nicholas &
Kathleen Bompignano 34 Avenue A.
Port Washington, NY 11050 100 0%
106 John R. Maginnis 4281 N. E. 18th Ave.
Pompano Beach, FL 33064 100 0%
107 Christopher L. Atkins 2 Tudor City PL
New York, NY 10017 100 0%
108 Tim Kulhanek 4197 County Road W.
Rhinelander, WI 54501 100 0%
109 Thomas G. Laros, Jr. 6441 Lavendale
Dallas, TX 75230 100 0%
110 Abbey Gartzman 989 Sierra Vista Lane
Valley Cottage, NY 10989 100 0%
111 Rae Gartzman 21560 Toledo Road
Boca Raton, FL 33433 100 0%
112 Dan Austin P. O. Box 81025
Billings, MT 59108 100 0%
113 Shauna Spieler 3146 Canyon Dr.
Billings, MT 59102 100 0%
114 Carol Austin 4424 Harvest Lane
Billings, MT 58106 100 0%
115 Scott Johannes HC 33, Box 3034-J
Wasilla, AK 99654 100 0%
116 Merilyn E. Lewis 136 Verona Rd.
DeBary, FL 32713 100 0%
117 Big Apple Consulting, Inc. 2232 E. Senoron Blvd.
Spopka, FL 32703 100 0%
118 Carolyn Montgomery 13255 CR 727
Webster, FL 33591 100 0%
119 Kenneth Blake 400 Summit Ridge
#202, Longwood, FL 32779 100 0%
120 Janet Williams 1283 Chessington Circle
Heathrow, FL 32746 100 0%
121 Donald R. Mitchell 525 Melrose Ave.
Winter Park, FL 32769-5047 100 0%
122 Steven C. Montgomery 13255 CR 727
Webster, FL 33591 100 0%
123 Daniel Baldridge 447 BlueBird St.
Apopka, FL 32703 100 0%
124 Scott B. Gnatt 162 River Bend Dr.
#E, Altamonte Springs,
FL 32714 100 0%
125 Matt Maguire 484 Autumn Oaks Place
Lake Mary, FL 32746 100 0%
126 John Costello 11508 N. Grady Ave.
Tampa, FL 3324 100 0%
127 Maureen Sperling 7500 NW 17th St.
Apt 304, Plantation,
FL 33313 100 0%
128 Alison Goldberg 7500 NW 17th St.
Apt 304, Plantation,
FL 33313 100 0%
129 Cara Bompignano 1638 E. 54th St.
Brooklyn, NY 11234 50,100 1%
130 OBriens Main Street
Investment Club 3410 Valencia Rd.
Tampa, FL 33618 100 0%
131 Michael T. Husum 11744 N. De La Mabry Hwy.
Tampa, FL 33618 100 0%
132 Bernie O'Brian 11744 N. Dale Mabry Hwy.
Tampa, FL 33624 100 0%
133 Arthor Richards 3410 Valencia Rd.
Tampa, FL 33618 100 0%
134 Gina M. Bompignano 3410 Valencia Rd.
Tampa, FL 33618 100 0%
135 Lany Sengsouriya 320 Grant St.
#212, Alameda, CA 94501 100 0%
136 Jennifer K. Yu 6363 Christie Ave. #324
Emeryville, CA 94608 100 0%
137 Jean K. Yu 6363 Christie Ave. #324
Emeryville, CA 94608 100 0%
138 Kathryn Beavers P. O. Box 373
Bandera, TX 78003 100 0%
139 Carmen Bush 9607 Hidden Mist Cir.
San Antonio, TX 78250 100 0%
140 Herbert M. Garvin APDO 724, Zaragoza Pte.
#35 45920 Ajijic
Jalisco, Mexico 100 0%
141 Charles F. Ickes, Jr. 1868 Harbor Ln.
Naples, FL 34104 100 0%
142 Nancy J. Eddleblute 1868 Harbor Ln.
Naples, FL 34104 100 0%
143 Heidi Ickes 5665 Whitaker Rd.#201A,
Naples, FL 34112 100 0%
144 Brandi L. Ickes 2766 Chaddsford Cir.
Apt 100, Oviedo, FL 32763-7243 100 0%
145 Missi L. Ickes 1219 Solana Rd., #16
Naples, FL 34103 100 0%
146 Joseph B. De La Garza 10855 Terra Vista Pkwy., #13
Rancho Cucamonga, CA 91730 100 0%
147 Ellen Samuel 810 SE 4th Ave.
Pompano Beach, FL 33060 100 0%
148 Nan Samuel 810 S. E. 4th Ave.
Pompano Beach, FL 33060 100 0%
149 Cecilia E. De La Garza 10855 Terra Vista Pkwy, #13
Rancho Cucamonga, CA 91730 100 0%
150 Theresa Saenz 6214 Ben Milam Cir.
San Antonio, TX 78238 100 0%
151 Reynaldo Saenz 6214 Ben Milam Cir.
San Antonio, TX 78238 100 0%
152 Sharon T. Montgomery 3106 Brazos, #4
Houston, TX 77006 200 0%
153 Joseph De La Garza 1235 E Sunshine Dr.
San Antonio, TX 78228-2945 100 0%
154 Henry Coons 500 Old Farms Road
Avon, CT 06001 100 0%
155 Mary Anne Luppino 2050 NE 27 Ave.
Pompano, FL 33062 100 0%
156 Philana D. Yu 31 Soaring Hawk
Irvine, CA 92614 100 0%
157 David R. Yu 31 Soaring Hawk
Irvine, CA 92614 100 0%
158 Gordon McMeen 138 Armiijo Ct.
Corrales, NM 87048 100 0%
159 Jane Butel 138 Armiijo Ct.
Corrales, NM 87048 100 0%
160 Lee Barron Wernick 19 Condor Road
Sharon, MA 02067 100 0%
161 Lislie P. Lagoni 21345 Las Pilas Road
Woodland Hills, CA 91364 100 0%
162 Debra Sanders P O Box 3419
Livermore, CA 94551 100 0%
163 Amy Senkowicz 915 Greenbriar Dr.
Boynton Beach, FL 33435 100 0%
164 Gerald L Schweigert 303 E. Main St.
Kent, OH 44240 100 0%
165 Leslie Goldstein 21536 Toledo Rd.
Boca Raton, FL 33433 100 0%
166 Goeffrey M. Strauch 303 E. Main St.
Kent, OH 44240 100 0%
167 Theresa Gattey 21560 Toledo Rd.
Boca Raton, FL 33433 100 0%
168 Robert Gartzman 21560 Toledo Road
Boca Raton, FL 33433 100 0%
169 Pamela Langlois 1107-C S. 1st St.
Jacksonville Beach, FL 32250 100 0%
170 Michael Patterson 1107-C S. 1st St.
Jacksonville Beach, FL 32250 100 0%
171 Michael Ysais 2915 Aftonshire Way, #2308
Austin, TX 78748 100 0%
172 Kathryn M. Gaudiosi 34 Elisabeth Lane,
Collegeville, PA 19426-3908 100 0%
173 Mary C. De La Garza 2100 West 100th Ave.,#240
Thornton, CO 80221 100 0%
174 David W. Subry 8020 Holland Ct, Apt A
Arvada, CO 80005-2288 200 0%
175 Marie Larizza 640 Camellia Terrace Ct N
Neptune Beach, FL 32266-3244 100 0%
176 Robert Russakoff 640 N. Camellia Terr. Ct.
Neptune Beach, FL 32266 100 0%
177 Charlotte M. Sciubba 10 Buckeye Ct
Homosassa, FL 34446 100 0%
178 Chestine Vester 3241 Sapphire Street
Bedford, TX 76021 100 0%
179 Carmine J. Ferraro 11 Weather Hill Rd
Hamburg, NJ 07419 100 0%
180 Frank Fortunat III 11 Weather HIll Rd.
Hamburg, NJ 07419 100 0%
181 Vincent C DeRico Trst for
Charles DeRico III minr 34 Elisabeth Lane
Collegeville, PA 19426-3908 100 0%
182 Vincent C DeRico trust for
Dominic De Rico minor 34 Elisabeth Lane
Collegeville, PA 19426-3908 100 0%
183 Vincent C. De Rico,
general partner
N. V. One Partnership 147-2C South Main Street
Stowe, VT 05672 100 0%
184 Vincent C. De Rico,
general partner
AIFS Associates: I 39 Clarke Street
Newport, RI 02840 100 0%
185 Vincent C. De Rico 147-2C South Main Street
Stowe, VT 05672 100 0%
186 George Johns 533 Laurel Ave., #A
St. Paul, MN 55102 100 0%
187 William C. Minix 16335 Paiter St.
Houston, TX 77053 100 0%
188 Susan Kubitz 4107 Foxbrush Ln.
Sugar Land, TX 77479 100 0%
189 David Kubitz 4107 Foxbrush Ln.
Sugar Land, TX 77479 100 0%
190 Brandi Kubitz 4107 Foxbrush Ln.
Sugar Land, TX 77479 100 0%
191 Ashley Kubitz 4107 Foxbrush Ln.
Sugar Land, TX 77479 100 0%
192 Daniel Contreras 16235 Espinosa Dr.
Houston, TX 77083 100 0%
193 Bounty Films 101 Gillespie Dr.
Suite 9106, Franklin, TN 37067 100 0%
194 Curt Dewitz 101 Gillespie Dr. Suite # 9106
Franklin, TN 37067 100 0%
195 Natasha Dewitz 101 Gillespie Dr., #9106
Franklin, TN 37067 100 0%
196 Janny Grein P. O. Box 351
Eureka Springs, AR 72632 100 0%
197 Bill Grein P. O. Box 351
Eureka Springs, AR 72632 100 0%
198 Kathleen McCabe 665 Balsam, Lakewood, CO 80215 100 0%
199 Richard Cedrone 4849 N. W. 29th Ct., #412
Lauderdale Lakes, FL 33313 100 0%
200 Eric Reish 1768 S. Humbolot St.
Denver, CO 80210 100 0%
201 Tara Redmond 5056 Wateka Dr.
Dallas, TX 75209 100 0%
202 Jon Sanger 18081 Midway Rd.,#2622
Dallas, TX 75287 100 0%
203 Jamie E. Moring 4100 Gallant Ct.
Flower Mound, TX 75028 100 0%
204 Jacqueline Small 1723 Creekview Dr.,
Glenn Heights, TX 75154 100 0%
205 Charlotte Reeves 3710 Chinook St.
Irving, TX 75062 100 0%
206 Cynthia Anstett 10521 Channel
Dallas, TX 75229 100 0%
207 Michelle Wolfe 18081 Midway Rd.
#2622, Dallas, TX 75287 100 0%
208 Lynn Vester 3241 Sapphire St.
Bedford, TX 76021 100 0%
209 Lisa Trojacek 3241 Sapphire St.
Bedford, TX 76021 100 0%
210 Gary Vester 3241 Sapphire ST.
Bedford, TX 76021 100 0%
211 Kenneth Vester 3241 Sapphire ST.
Bedford, TX 76021 100 0%
212 Michelle Martin 21567 Toledo Rd.
Boca Raton, FL 33433 100 0%
213 Grant Edmondson 16 Bellevue Ave.
Newport, RI 02840 100 0%
214 Dennis J. Blair 16 Bellevue Ave.
Newport, RI 02840 100 0%
215 Mark Burrage 1414 Spring
Davenport, IA 52806 100 0%
216 Ann Burrage 1414 Spring
Davenport, IA 52806 100 0%
217 Kim L. Botthof 21 Arlington Rd.
Melrose, MA 02176 100 0%
218 Peggy M. Botthof 932 Judson 3 East
Evanston, IL 60202 100 0%
219 Michael B. Botthof 21 Arlington Rd.
Melrose, MA 02176 100 0%
220 James T. Koo 26982 Beaver Ln.
Los Altos Hills, CA 94022 100 0%
221 Nancy Seren-Doris 9132-C S.W. 20th St.
Boca Raton, FL 33428 100 0%
222 Thomas Doris 9132-C S. W. 20th St.
Boca Raton, FL 33428 100 0%
223 Michael aka
Jame M. Wnynot Seren 9132-C S. W. 20th St.
Boca Raton, FL 33428 100 0%
224 Nicolas Eran Gronquist 1611 Sylvan Dr
Austin, TX 78741 100 0%
225 Wayne Gronquist Trst for
Justin Myles Gronquist 1104 Nueces Street
Austin, TX 78701 100 0%
226 Sophie M. Gronquist 681 Springhill Dr.
Hurst, TX 76053 100 0%
227 Mark A. Gronquist 4905 West Frances Place
Austin, TX 78731 100 0%
228 Stanley E. Weber 5702 Penick Dr.
Austin, Tx 78741 200 0%
229 Stanley E. Weber 5702 Penick Dr.
Austin, Tx 78741 100 0%
230 Julie A. Sass 1331 Falls Ave.
Cuyahoga Falls, OH 44223 100 0%
231 Beveril Mormile 556 N. W. 15th Court
Boca Raton, FL 33486 100 0%
232 Anthony Mormile 556 N. W. 15th Ct.
Boca Raton, FL 33486 100 0%
233 John A. Gattey 21560 Toledo Rd.
Boca Raton, FL 33433 100 0%
234 Julie Yetter 7605 Creston Ln.
Austin, TX 78752 100 0%
235 Rebecca DeGraw 8005 Isaac Pryor Dr.
Austin, TX 78749-1660 100 0%
236 Robert C. Hart 9 Runnymede Lane
Madison, CT 06443 100 0%
237 Peter Ling 451 W. Longden Ave.
Arcadia, CA 91007 100 0%
238 Deanna Pasley 551 Central Park Place
Brentwood, CA 94513 100 0%
239 Patricia Reilly 2803 Ostrom Ave.
Long Beach, CA 90815 100 0%
240 Henry S. Hall 2 Main Street
Liberty, ME 04949 100 0%
241 Susannah Homer 5 Main Street
Liberty, ME 04949 100 0%
242 Steven E. Bryant 2649 NE 13th Ave.
Pompano Beach, FL 33064 100 0%
243 Adrianne Reese 306 Fallview Dr.
McDonough, GA 30253 100 0%
244 LaRaymond Smith 356 Randall Drive
Clarksville, TN 37042 100 0%
245 Johnny Kindle 356 Randall St.
Clarkville, TN 37042 100 0%
246 Deborah R. Kindle 356 Randall St.
Clarkville, TN 37042 100 0%
247 Joyce E. Reese P. O. Box 16716
Atlanta, GA 30321 100 0%
248 Darren M. McLeod 1940 Fisher Rd. Apt 41-D
Atlanta, GA 30315 100 0%
249 Tina Y. Garmon 2408 Wales Drive
Austell, GA 30106 100 0%
250 Almeida Jones 2850 The Meadows Way
College PK, GA 30349 100 0%
251 Alicia Cook 2850 The Meadows Way
College PK, GA 30349 100 0%
252 Anita Thomas 201 Ravine Ave.
3-M, Yonkers, NY 10701 100 0%
253 Amy Miller 12660 Medfield, #316
Houston, TX 77082 100 0%
254 Mathias Follis 12660 Medfield, #316
Houston, TX 77082 100 0%
255 Brandon Miller 12660 Medfield, #316
Houston, TX 77082 100 0%
256 Tzan Parker 2305 Hayes Rd.
Houston, TX 77077 100 0%
257 Roland B. Clark 2220 Marina Way, #115
Kemah, TX 77565 100 0%
258 Alberta M. Cade P. O. Box 16716
Atlanta, GA 30321 100 0%
259 Todd Z. Crenshaw 1710 Alee
Mobile, AL 36605 100 0%
260 Shannon Crenshaw 1710 Alee
Mobile, AL 36605 100 0%
261 Crenshaw Zelmen 1710 Alee
Mobile, AL 36605 100 0%
262 Katherine Lynn Johnson 2006 Brown
Missouri City, TX 77489 100 0%
263 Robert P. Theroux 424 Thames St.
Newport, RI 02840 100 0%
264 Blair B. Jones 501 N.W. 15th Ct.
Boca Raton, FL 33486 100 0%
265 Alan C. Bennett 10655 NW 12th Manor
Plantation, FL 33322 100 0%
266 Lillian M. Peeples 424 16th St.
Silvis, IL 61282 100 0%
267 Steve Priddy 2379 Briarwest, #108
Houston, TX 77077 100 0%
268 Shannon C. Supak 9800 Pagewood Ln., #2505
Houston, TX 77042 100 0%
269 Steven W. McCoy 9800 Pagewood Ln., #2505
Houston, TX 77042 100 0%
270 Tom McClure 1631 Poinsettia Dr.,
Ft. Lauderdale, FL 33305 100 0%
271 Corey P. Larder 6454 S. Gibraltar Cir.
Aurora, CO 80016 100 0%
272 Jolie M. Larder 6454 S. Gibraltar Cir.
Aurora, CO 80016 100 0%
273 Joallan M. Larder 6454 S. Gibraltar Cir.
Aurora, CO 80016 100 0%
274 Stinson D. Haas 19285 Indian Summer Lane
Monument, CO 80132 100 0%
275 Carol S. Haas 19285 Indian Summer Lane
Monument, CO 80132 100 0%
276 Hy Ochberg 502 Park Avenue, #6D
New York, NY 10022 100 0%
277 Philippe Neimetz,
C/O WPH Consultants LTD. 80 Broad St., 35th Floor
New York, NY 10004-2209 100 0%
278 Joseph V. Ossoria 111 Havemeyer Place
Greenwich, CT 06830 100 0%
279 Walter De Canio 80 Broad St. Penthouse
New York, NY 10004 100 0%
280 Heather Stanfield 959 Grove Place
Costa Mesa, CA 92627 100 0%
281 Robert G. Reese 24502 Moonfire Dr.
Dana Point, CA 92629 100 0%
282 Peter D. Finch P. O. Box 17119
Irvine, CA 92623 100 0%
283 Andy Bregman 226 Doshers Dr.
Fort Mill, SC 29708 100 0%
284 Jeffrey Malken 10320 N. W. 16th Ct.
Coral Springs, FL 33071 100 0%
285 David E. Harrington, Jr. 33 Towering Pines Dr.
Spring, TX 77381-2593 200 0%
286 Richard S.Fleischner 7904 N. W. 72 Ave.
Tamarac, FL 33321 100 0%
287 Sirena M. King 10901 Village Bend, #1104
Houston, TX 77072 100 0%
288 Paul Stafford 348 Appian Way
Union City, CA 94587 100 0%
289 Sonny Garaza 1395-C McQuesten Dr.
San Jose, CA 95122 100 0%
290 Guy D. Weathers 1648 Milroy Place
San Jose, CA 95124 100 0%
291 Dennis F. Gabel 548 N. Lincoln Ave.
Manteca, CA 95336 200 0%
292 Brian L. Hassig,
C/O Bob Gartzman 21560 Toledo Road
Boca Raton, FL 33433 100 0%
293 Anselmo V. Lau 1507 Roosevelt Ave.
Redwood City, CA 94061 100 0%
294 David E. Castro 643 Connie Ave.
San Mateo, CA 94402 100 0%
295 Johnnie De La Garza,
trustee for
Leah S. Moet 18026 Cerca Azul Dr.
San Antonio TX 78259 100 0%
296 Joseph L. Escobar 7554 Magnolia
Houston, TX 77023 100 0%
297 Mireya Villanueva 2623 Ivy St.
Houston, TX 77026 100 0%
298 Katherine Roy 5 Main St.
Liberty, ME 04949 100 0%
299 William G. Stoute 1205 Hillside Ave, #D
Austin, TX 78704 100 0%
300 James C. &
Patricia Davis 10220 Pack Saddle Ct.
Ft. Worth, TX 78108 1,000 0%
301 Howard &
Florence Hungerford 1744 Bechelli Lane,
Redding, CA 96002 25,000 0%
302 James C. Davis 10220 Pack Saddle Ct.
Ft. Worth, TX 78108 2,000 0%
303 Jerry D. Morris 689 Johnson Lane
Red Oak, TX 75154 2,000 0%
304 Douglas and/or
LaVonne Lang 14320 Miracle Court
Grabill, IN 46741 12,500 0%
305 Daniel D. Sierras 3847 Paris Street
Hemet, CA 92545 1,000 0%
306 Robert E. or
Ann M. Schneider 39569 Kucera Ct.
Murrieta, CA 92563-5400 100 0%
307 AJ & CT Robles
Revocable Trust 1210 Crestlake Ave.
Ventura, CA 93004 500 0%
308 Kenneth W. and
Linda Faust Rt 1, Box 241 A
Grapeland, TX 75844 1,000 0%
309 Nancy K. Stuckey Rt 3, Box 8-S
Grapeland, TX 75844 1,500 0%
310 Holly R. Stuckey Rt 3, Box 8-S
Grapeland, TX 75844 25 0%
311 Jacob W. Buford 402 Oak Forrest
Angleton, TX 77515 100 0%
312 Johnnie S. Brock Route 4, Box 73-A
Grapeland, TX 75844 500 0%
313 J. D. Holt Route 4, Box 73-A
Grapeland, TX 75844 1,000 0%
314 William P. or
Hope E. Burrows 41909 Skywood Drive
Temecula, CA 92591 500 0%
315 Pr Mark R. or
Sharon R. McLagan 824 Brisa Del Mar
El Paso, TX 79912 500 0%
316 Mary B. Patterson 3626 Oakwood Drive
Dension, TX 75020 200 0%
317 Charles S. or
Charlene L. Hilliard 920 Edmondson
Lewisville, TX 75077 500 0%
318 Russ or Michelle Melcher 153 14th Ave South
Columbus, NE 68601 1,750 0%
319 Daniel J. and
Laura L. Cadena 29663 Squaw Valley Dr.
Sun City, CA 92586-3479 150 0%
320 Laura L. Cadena 29663 Squaw Valley Dr.
Sun City, CA 92586-3479 150 0%
321 Adelina Rivera 42200 Main Street-C58
Temecula, CA 92590 1,000 0%
322 First Dominion
Financial, Ltd. 1800 E. Sahara, Suite 107
Las Vegas, NV 89101 356,363 4%
323 Eugene R. Holtz 30596 Milano Road
Temecula, CA 92591-1933 1,000 0%
324 Harry G. or
Elena J. McComas 31400 Britton Circle
Temecula, CA 92591 250 0%
325 Roy G. or
Ilene M. Hackman 200 Ford Rd - Space 115
San Jose, CA 95138 500 0%
326 Rebecca Hackman 200 Ford Rd - Space 115
San Jose, CA 95138 500 0%
327 Cheyenne Hackman 200 Ford Rd - Space 115
San Jose, CA 95138 100 0%
328 Fawn Hackman 200 Ford Rd - Space 115
San Jose, CA 95138 100 0%
329 Ariana Hackman 200 Ford Rd - Space
115 San Jose, CA 95138 100 0%
330 John or Leanne Litaway 24036 Colmar Lane
Murrieta, CA 92562 100 0%
331 Dustin and
Sherri Lijeham 19610 Clubhouse Dr., #10-222 2,500 0%
332 Joel or Sandra Baier RR1, Box 179,
Delmont, SD 57330-9789 200 0%
333 Joshua Michael Elmore 749 Forest Drive
Wilkesboro, NC 28697 2,128 0%
334 Lisa Lang 14827 SW Millikan Way #1312,
Beaverton, OR 97006 100 0%
335 Sandra K. Chavanu 1718 27th Street
Columbus, NE 68601 250 0%
336 Patricia J. Beckner P. O. Box 1185
Columbus, NE 68602 500 0%
337 Ryan and/or Jenna Melcher 1908 16th Ave.
Central City, NE 68626 1,500 0%
338 Harrel Davis 40596 Via Jalapa
Murrieta, CA 92562 40,000 0%
339 Arthur Lang &
Dorothy Lang J/T P. O. Box 624
Grapeland, TX 75844-0624 2,500 0%
340 Ann Elmore 749 Forest Drive
Wilkesboro, NC 28697 5,000 0%
341 Susan Hungerford 14308 44th Street, S.E.
Snohomish, WA 98290 25,000 0%
Total 1,040,000 10%
0% Represents less than 1% of Supreme's outstanding shares of common stock.
Securityholders First Dominion Financial, LTD and Jon Ruco, LTD (together representing 5% of its class), are controlled by its major shareholder Rudy W. De La Garza. There is no affiliate or shareholder relationship with either First Dominion Financial, LTD and/or Jon Ruco, LTD and First Dominion Financial Group, Inc.
Securityholders, Douglas and/or La Vonne Lang, Lisa Lang and Authur Lang & Dorothy Lang J/T are related to the CEO Larry W. Lang.
Supreme will not receive any proceeds from the sale of any shares by the selling securityholders. Supreme is bearing all expenses in connection with the registration of the selling securityholders’ shares.
The shares owned by the selling securityholders are being registered pursuant to Rule 415 of the General Rules and Regulations of the Securities and Exchange Commission which Rules pertain to delayed and continuous offerings and sales of securities. In regard to the selling securityholders’ shares offered under Rule 415, Supreme has made certain undertakings in Part II of the registration statement of which this prospectus is a part pursuant to which, in general, Supreme has committed to keep this prospectus current during any period in which offers or sales are made pursuant to Rule 415.
ITEM 8. PLAN OF DISTRIBUTION
We are offering up to a total of 1,000,000 shares of convertible preferred stock on a best efforts, no minimum, 1,000,000 shares maximum. The shares may be converted one (1) preferred share for three (3) common shares at any time after twelve months of purchase and automatically on its thirty- six month anniversary. The offering price is $6.30 per share. There is no minimum number of shares that we have to sell. There will be no escrow account. We will immediately use all money received from the offering and there will be no refunds. The offering will be for a period of two years from the effective date.
The Company will effect offers and sales of shares through printed copies of this Memorandum delivered personally or by mail or electronically by the Company
Any money we receive will be immediately appropriated by us for the uses set forth in the Use of Proceeds section of this prospectus. No funds will be placed in an escrow account during the offering period and no money will be returned once we have accepted the subscription.
We will sell the shares in this offering through Larry W. Lang, one of our officers and director. Mr. Lang will receive no commission from the sale of any shares. Mr. Lang will not register as a broker-dealer under Section 15 of the Securities Exchange Act of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer’s securities and not be deemed to be a broker-dealer. The conditions are that:
1. The person is not subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
2. The person is not compensated in connection with his participation
by the payment of commissions or other remuneration based either directly
or indirectly on transactions in securities; and,
3. The person is not at the time of their participation, an associated
person of a broker-dealer; and,
4. The person meets the conditions of Paragraph (a)(4)(ii) of Rule
3a4-1 of the Exchange Act, in that he (A) primarily performs, or is
intended primarily to perform at the end of the offering, substantial
duties for or on behalf of the Issuer otherwise than in connection with
transactions in securities; and (B) is not a broker or dealer, or an
associated person of a broker or dealer, within the preceding twelve (12)
months; and (C) do not participate in selling and offering of securities
for any Issuer more than once every twelve (12) months other than in
reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Mr. Lang is not subject to disqualification, is not being compensated, and is not associated with a broker-dealer. Mr. Lang is and will continue to be one of our officers and directors at the end of the offering and has not been during the last twelve months and is currently not a broker/dealer or associated with a broker/dealer. Mr. Lang has not during the last twelve months and will not in the next twelve months offer or sell securities for another corporation.
Only after the SEC declares our registration statement effective, we intend to advertise, through tombstones, and hold investment meetings in various states where the offering will be registered. We will not utilize the Internet to advertise our offering. We will also distribute the prospectus to potential investors at the meetings and to our friends and relatives who are interested in us and a possible investment in the offering.
In order to comply with the securities laws of certain states, if applicable, the Securities offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states Securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and complied with.
Offering Period and Expiration Date
This offering will start on the date of this prospectus and continue for a period of two years.
Procedures for Subscribing
If you decide to subscribe for any shares in this offering, you must
1. Execute and deliver a subscription agreement
2. Deliver a check or certified funds to us for acceptance or
rejection.
All checks for subscriptions must be made payable to "Supreme Hospitality."
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 48 hours after we receive them.
We will pay all costs and expenses in connection with this offering, including but not limited to all expenses related to the costs of preparing, reproducing or printing this memorandum, legal expenses, and other expenses incurred in qualifying or registering the offering for sale under state laws as may be necessary, as well as the fees and expenses of our attorneys and accountants. It is anticipated that the total of all costs and expenses in connection with this offering will be approximately $132,335.00. This includes:
Attorney fees $10,000.00
CPA fees 62,037.00
Consultant fees 55,000.00
SEC filing fee 1,668.00
NASD filing fee 1,130.00
Transfer agent 500.00
Material fees (postage, copies) 2,000.00
Total $132,335.00
=====================================================================
Sales by Non-Affiliated Selling SECURITYHOLDERS
After effectiveness of this prospectus, the non-affiliated selling securityholders may offer and sell their shares at a price and time determined by them without regard to Rule 144. The 2,000,000 shares registered in this prospectus for the selling securityholders are held by non-affiliates of Supreme Hospitality.
Section 4(3) of the Securities Act provides an exemption from the registration provisions of the Securities Act for transactions by a dealer for transactions occurring within 40 days of the effective date of a registration statement for the securities or prior to the expiration of 40 days after the first date upon which the security was offered to the public.
ITEM 9. LEGAL PROCEEDINGS
There are no legal proceedings currently pending.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
| Name | Age | Position |
| Larry W. Lang | 54 | Chairman, Sole Director, President And Secetary/Treasurer (Principal Financial and Accounting Officer) |
Mr. Larry Lang is a registered Professional engineer in 17 states. Mr. Lang through his company Mexam, Inc., provided structural engineering consulting to a number of companies. He has over 30 years experience. He was responsible for the joist design for the Ontario Mill Mall in Ontario California as well as the casino, New York, New York, in Las Vegas, Nevada. Mr Lang obtained his general Contractor's License in California in April 1998 and through his construction company Lang Construction & Dev., Inc. was the general contractor responsible for the building of Temecula Valley Inn. Mr. Lang has been involved in the hospitality industry for the last four years. Mr. Lang acquired the land designed and constructed Temecula Valley Inn.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information relating to the beneficial ownership of Company common stock by those persons beneficially holding more than 5% of the Company capital stock, by the Company’s directors and executive officers, and by all of the Company’s directors as a group, as of December, 2000.
Security ownership of certain beneficial owners:
| Class | Name & Address | No. of Shares | Percent |
| Common Stock | Louise Davis 40596 Via Jalapa Murrieta, CA 92562 |
3,000,000 | 30% |
Security ownership of Management
| Class | Name & Address | No. Of Shares | Percent |
| Common Stock | Larry W. & Diana Lang 41919 Skywood Drive Temecula, CA 92591 |
2,960,000 | 30% |
| Common Stock | Floyd & Glenda Janeway 25060 Hancock Avenue Suite # 179 Murrieta, CA 92562 |
3,000,000 | 30% |
| Common Stock | Rudy W. De La Garza Major shareholder of Jonruco LTD and First Domiinion Financial, LTD |
181,400 and 356,363 respectively 537,763 collectively |
(1.81%) (3.56%) 5.34% |
Common Stock
Our authorized capital common stock consists of 50,000,000 shares of common stock, $.0001 par value per share. As of the date of this prospectus, there are 10,000,000 shares of common stock issued and outstanding, which are held of record by approximately 341 holders.
Holders of our common stock are entitled to one vote for each share on all matters submitted to a shareholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up, each outstanding share entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.
Holders of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock, when and if any preferred stock is authorized and issued. All outstanding shares of common stock are, and the shares underlying all option and warrants will be, duly authorized, validly issued, fully paid and non-assessable upon our issuance of these shares.
All shares of common stock now outstanding are fully paid for and non-assessable and all shares of common stock which are the subject of this offering, when issued, will be fully paid for and non-assessable. We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our securities.
Non-cumulative Voting
Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors. After this offering is completed, the present stockholders will still own approximately 90% of our outstanding shares. After preferred share in this offering are converted for common shares of the company, the present stockholders will own approximately 80% of our outstanding shares.
Cash Dividends
As of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends on our common stock in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
Reports
After we complete this offering, we will not be required to furnish you with an annual report. Further, we will not voluntarily send you an annual report. We will be required to file reports with the SEC under section 15(d) of the Securities Act. The reports will be filed electronically. The reports we will be required to file are Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain copies of the reports we file electronically. The address for the Internet site is www.sec.gov.
Preferred Stock
Our authorized preferred stock consists of 1,000,000 shares of stock, $.0001 par value per share. As of the date of this prospectus, there are no shares of preferred stock outstanding. Our preferred stock ranks senior to all of our other equity securities, including common stock. Dividends, when, as and if declared by the board of directors, shall be paid out of funds at the time legally available for such purpose. The preferred stock will bear simple interest at an annual rate of 10% and the interest will be paid in common stock at market price upon conversion.
LIQUIDATION PREFERENCE
In the event of a liquidation, dissolution or winding up of our business, whether voluntary or involuntary, the holders of shares of the preferred stock shall be entitled to receive out of our assets available for distribution to our stockholders, an amount equal to $1.00 per share, plus any accrued dividends and unpaid thereon to the date of liquidation, before any payment shall be made or any assets distributed to the holders of our common stock or any class or series of our capital stock ranking junior as to liquidation rights to the preferred stock.
VOTING RIGHTS
The shares of 10% series A preferred stock carry no voting rights except as required by law.
CONVERSION RIGHTS
The preferred stock shall, at the option of the holder, be convertible, at any time later than one year after the share is purchased, in whole or in part, into two fully paid and non-assessable shares of common stock. If, three years after the date of purchase, the holder of the preferred share has not exercised his, her, or its right of conversion, the share shall automatically convert into three fully paid and non-assessable shares of common stock.
LITIGATION
We are not a party to any pending litigation and none is contemplated or threatened.
Penny Stock Regulation
Penny stocks generally are equity securities with a price of less than $5 per share other than securities registered on certain national securities exchanges or listed on the Nasdaq Stock Market, provided that current price and volume information with respect to transactions in such securities are provided by the exchange or system. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Because of these penny stock rules, broker-dealers may be restricted in their ability to sell Supreme’s common stock. The foregoing required penny stock restrictions will not apply to Supreme’s common stock if such stock reaches and maintains a market price of $5 or greater.
NEVADA LAW NRS 78.195
Issuance of more than one class or series of stock; rights of stockholders.
If a corporation desires to
have more than one class or series of stock, the articles of incorporation must
prescribe, or vest authority in the board of directors to prescribe, the
classes, series and the number of each class or series of stock and the voting
powers, designations, preferences, limitations, restrictions and relative rights
of each class or series of stock. If more than one class or series of stock is
authorized, the articles of incorporation or the resolution of the board of
directors passed pursuant to a provision of the articles must prescribe a
distinguishing designation for each class and series. The voting powers,
designations, preferences, limitations, restrictions, relative rights and
distinguishing designation of each class or series of stock must be described in
the articles of incorporation or the resolution of the board of directors before
the issuance of shares of that class or series.
1. All shares of a series must have voting powers, designations,
preferences, limitations, restrictions and relative rights identical
with those of other shares of the same series and, except to the
extent otherwise provided in the description of the series, with those
of other series of the same class.
2. Unless otherwise provided in the articles of incorporation, no stock
issued as fully paid up may ever be assessed and the articles of
incorporation must not be amended in this particular.
3. Any rate, condition or time for payment of distributions on any class
or series of stock may be made dependent upon any fact or event which
may be ascertained outside the articles of incorporation or the
resolution providing for the distributions adopted by the board of
directors if the manner in which a fact or event may operate upon the
rate, condition or time of payment for the distributions is stated in
the articles of incorporation or the resolution.
4. If the corporation is authorized to issue more than one class of stock
or more than one series of any class, the voting powers, designations,
preferences, limitations, restrictions and relative rights of the
various classes of stock or series thereof and the qualifications,
limitations or restrictions of such rights must be set forth in full
or summarized on the face or back of each certificate which the
corporation issues to represent the stock, or on the informational
statement sent pursuant to NRS 78.235, except that, in lieu thereof,
the certificate or informational statement may contain a statement
setting forth the office or agency of the corporation from which a
stockholder may obtain a copy of a statement setting forth in full or
summarizing the voting powers, designations, preferences, limitations,
restrictions and relative rights of the various classes of stock or
series thereof. The corporation shall furnish to its stockholders,
upon request and without charge, a copy of any such statement or
summary.
5. The provisions of this section do not restrict the directors of a
corporation from taking action to protect the interests of the
corporation and its stockholders, including, but not limited to,
adopting or executing plans, arrangements or instruments that deny
rights, privileges, power or authority to a holder of a specified
number of shares or percentage of share ownership or voting power.
ITEM 13.
INTEREST OF NAMED EXPERTS AND COUNSEL.
None
Item 14. Disclosure of Commission Position on Indemnification for Securities Act Liabilities.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS
The Company was organized November 10, 1997, under the laws of the State of Nevada as GRUBSTAKE, INC. The Company currently has no operations and in accordance with SFAS #7, is considered a development company. On December 1, 1998, the Company changed its name to RICHWOOD, INC. On April 17, 2000, the Company changed its name to SUPREME HOSPITALITY. Supreme Hospitality’s principal executive office is located at, 41919 Skywood Drive, Temecula, California 92591 and the telephone number is (909) 506-3435.
ITEM 16. DESCRIPTION OF BUSINESS
You should read this prospectus summary together with the entire prospectus, including the more detailed information in our financial statements and accompanying notes appearing elsewhere in this prospectus. Unless otherwise indicated, all information contained in this prospectus relating to our shares of common and preferred stock is based upon information as of April 17, 2000.
Company Description
The Company was organized November 10, 1997, under the laws of the State of Nevada as GRUBSTAKE, INC. The Company currently has no operations and in accordance with SFAS #7, is considered a development company. On December 1, 1998, the Company changed its name to RICHWOOD, INC. On April 17, 2000, the Company changed its name to SUPREME HOSPITALITY. Supreme Hospitality’s principal executive office is located at, 41919 Skywood Drive, Temecula, California 92591 and the telephone number is (909) 506-3435.
Supreme Hospitality (“The Company”) is in the hospitality (hotel) business catering to the business, leisure and vacation traveler. On April 30, 2000, the Company acquired Temecula Valley Inn (“TVI”) as a wholly owned subsidiary. TVI is a 90-room hotel built in 1998 located in the Temecula Valley in Southern California between Los Angeles and San Diego. It is one of the premier hotel properties in the valley. Though cyclical in nature, TVI’s occupancy rates have continued to grow. TVI has developed its own website to take advantage of the growing Internet market. The hotel’s web address is www.temeculavalley.com.
The Company currently serves the traveler who requires perceived value for the nightly rate he/she pays. Through active marketing to various corporations, the company has been successful during its first year of operations of attracting a reasonable volume of corporate business. On weekends, the company attracts customers who are typically in town to attend various community functions including, but not limited to, the “Balloon and Wine Festival” and the “Rod Run”. During the summer months there are activities in the area almost every weekend. Occupancy rates during these weekends approached 100% on average during approximately the two years of operation.
There are 11 hotels and motels, with 810 rooms, in the community area including Temecula Valley Inn. The property has excellent visibility and easy access from Interstate 15. There are numerous restaurants within walking distance of the hotel. The Company utilizes the services of Resolutions to assist in the booking of rooms. This firm charges 12% for reservations they make. The website generates approximately 15% of business, whereas walk-ins average 20%, corporate business averages 40%, AARP & AAA combined provide 25%.
The Company's acquisition growth strategy is to increase cash flow and enhance shareholder value by building or acquiring additional hotels that meet the Company's investment criteria.
The Company has identified other properties in the Temecula Valley of Southern California to acquire, develop and build hotels. This will be done through the raising of additional funds. An additional property in the Temecula Valley is included in the financial projections commencing operations in the third quarter of 2002. Development cost for a 120-room hotel is estimated at $7,800,000 for the development, building and improvements. The management of the company believes that the Temecula Valley area will continue to see unprecedented growth not seen since the mid 1980‘s. The Company is poised to take advantage of that growth, given it can meet its financing requirements.
The Company believes that through the acquisition of land and subsequent development of these properties that shareholder value will be increased. The management team has the expertise to identify prime properties and negotiate a fair price for the land and develop it and build a quality facility, which will increase in value.
The Company, on July 1, 2000 entered into a franchise agreement with Days Inn of America. The franchise fee is 8 ½% of gross room revenues payable monthly. The first two months were charged at a reduced rate of 2%. The Company expects increased room revenues due to Days Inn of America national and international marketing programs. The company does not have the need for any government approval of its services. There is no government regulation on the business. There was no research and development activity. The company does not have any products or services, which are affected by environmental laws.
Number of total employees are 18 and the number of full-time employees are 14. A 90-room 3-story hotel, Temecula Valley Inn (TVI) in Temecula, California, was constructed and opened for business on December 5, 1998. The address is 27660 Jefferson Avenue, Temecula, CA 92590. Redding Property
The Company plans to develop and construct a hotel in the future in Redding, California. It has an option to purchase approximately 2.61 acres of approved hotel property for $1,300,000 including a complete package, which consists of a business plan, construction costs, drawings, etc. (See Exhibit 99.6, Option Agreement). This property is located adjacent to Interstate 5 and Hilltop Drive in Redding, California. This parcel is the last available hotel property in this immediate area. The cost is estimated to be $5,800,000 for land, building and improvements. The company has not paid any money for the option. The option price is $1,300,000. The contract to purchase the land was signed in May 2000 and is effective for 12 months. The current owner of the land is Larry Lang, a major stockholder of Supreme Hospitality. The current plan is to exercise the purchase option on the Redding property and develop and build a 90-room hotel on this property. This development is anticipated to be the next development the Company will undertake.
The small business does not own the above-described property and therefore, has no interest, mortgages, liens or encumbrances against such properties. The monies will be obtained through the raising of additional equity funds. At this time the company does not have the appropriate funds for this option and has not investigated any other means for acquiring these funds. In the event the company should be unable to raise the funds from the offering herein, the company may have to relinquish this offering.
The company has not paid any money for the option. The option price is $1,300,000. The contract to purchase the land was signed in May 2000 and is effective for 12 months. The current owner of the land is Larry Lang, a major stockholder of Supreme Hospitality.
Competitive Conditions
The majority of hotels in Redding are old and outdated and are located out of sight of the interstate. The property the Company plans to acquire and build will be a modern hotel with a location visible from north and south-bound interstate traffic.
Temecula Valley Inn
The management of the Company believes that the Temecula Valley area will continue to see unprecedented growth not seen since the mid 1980‘s. The Company is poised to take advantage of that growth, given it can meet its financial requirements.
In management’s opinion, The Temecula Valley Inn and personal property are adequately covered by insurance.
Depreciation is provided on the financial statements on the straight-line method. For tax purposes, MACRS is used. For both, the following estimated useful lives are:
Building and Improvements 40 years
Land Improvements 15-40 years
Furniture and Equipment 7-10 years
On the Temecula hotel, the realty tax rate on the building and land is 1.12925% plus fixed charges of $5,904. The annual taxes are $82,820. There are no proposed improvements on this property. On the proposed acquisition and building of the Redding property, the tax rate is 1.0814% and the estimated annual taxes would be $63,262.
On the proposed acquisition and building of the second Temecula property, the tax rate is estimated to be 1.12925% with annual taxes of $88,012.
Currently, the executive, Larry Lang, is not taking any compensation
Item 17. Management's Discussion and Analysis and plan of Operations
The Company was organized for the purpose of creating a corporate vehicle to seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek perceived advantages of a publicity held corporation. On April 30, 2000 the Company (SUPREME HOSPITALITY) acquired Temecula Valley Inn, (a Nevada Corporation) as a wholly owned subsidiary of Supreme Hospitality in an exchange of Common Stock, Sub Curia. The primary activity of the Company is the hospitality business for both the business and leisure traveler, and a 90-room hotel was built and opened in 1998. The executive offices of the company are located at 41919 Skywood Drive, Temecula, California 92591. Its telephone number is (909) 506-3435.
The Company may obtain funds for additional hotel construction or acquisition by private placement, equity or debt issues. Persons purchasing securities in these placements and other shareholders will likely not have the opportunity to participate in the decision relating to any acquisition. Investors will entrust their investment monies to the Company’s management before they have a chance to analyze any ultimate success which is heavily dependent on the company’s management, which will have virtually unlimited discretion in new construction or acquisition.
The Company plans to develop and construct additional properties in the future and has as option to purchase for $1,300,000 approximately 2.61 acres of approved hotel property, including a complete package which consists of business plan, construction costs, drawings, etc. This property is located adjacent to Interstate 5 and Hilltop Drive in Redding, California. This parcel is the last available hotel property in the immediate area. The current plan is to exercise the purchase option and develop and build a 90-room hotel on this property. This development is anticipated to be the next development the Company will undertake. The cost is estimated to be $5,8000,000 for land, building and improvements.
The Company has identified other properties in the Temecula valley of Southern California to acquire, develop and build hotels. This will be done through the raising of additional funding. An additional property in the Temecula Valley is included on the financial projections commencing operations in the third quarter of 2002. Development cost for a 120-room hotel is estimated at $7,800,000 for land development, building and improvements.
The management of the Company believes that the Temecula Valley will continue to see unprecedented growth not seen since the mid 1980‘s. The Company is poised to take advantage of that growth, given it can meet its financial requirements.
The Company believes that through the acquisition of the land and subsequent development of these properties, shareholder value will be increased. The management team has the expertise to identify prime properties and negotiate a fair price for the land and develop it and build a quality facility, which will increase in value.
As is customary in the industry, the company may pay a finder’s fee for locating an acquisition prospect. If any such is paid, it will be approved by the Company’s Board of Directors and will be in accordance with the industry standards. Such fees are customarily between 1% and 5% of the size of the transaction, based upon a sliding scale of the amount involved. Such fees are typically in the range of 5% of a $1,000,000 transaction ratably down to 1% in a $4,000,000 transaction. Management has adopted a policy that such a finder’s fee or real estate brokerage fee could, in certain circumstances, be paid to any employee, officer, director or 5% shareholder of the Company, if such person plays a material role in bringing in a transaction to the Company.
ITEM 18. DESCRIPTION OF PROPERTY
Temecula Valley Inn (TVI) in Temecula, California, is a ninety room three story hotel. TVI was constructed and opened for business on December 5, 1998. The address is 27660 Jefferson Avenue, Temecula, CA 92590.
The mortgages on the property are as follows:
The Company’s president and his wife are the only persons obligated to repay the following long-term debt. They quitclaimed their interests in the real estate to the Company, which was a violation of the banks’ loan covenants. The banks anticipate that they will eventually require loan assumptions by the Company however no action has been taken to date. For financial presentation purposes, all of the following loans are presented as debt of the Company since the majority of them are collateralized by real and personal property of the Company.
Note payable to a bank, payable in monthly installments of $21,961 including interest at prime plus 1%, final payment due April, 2006 of $2,744,836, collateralized by first position on substantially all of the assets owned by the Company or hereinafter acquired $2,744,836
The interest rate at December 31, 2000 was 10.50%. Because the bank has not requested an increase in the total monthly amount since inception of the loan as a result of the increasing prime rate, there has been no reduction in loan principal since May 2000. As of December 31, 2000, total accrued interest on the loan exceeded the monthly payments required by a total of $16,185, which has been included in accrued liabilities.
Note payable to a bank, guaranteed by the Small Business Administration, payable in monthly installments of $9,444, including interest based on 8.5 % prime plus 2%, plus or minus adjustments quarterly for interest rate changes, final amortized balance due February 2023, collateralized by a second position on substantially all of the assets owned by the Company or hereinafter acquired. The prime rate at December 31, 2000 was 9.50%. $978,972
Note payable to an individual, payable in monthly installments of $4,825, including interest at 10%, final payment due February 2003, collateralized by a third position on the Company’s real property. $484,173
DEMOGRAPHICS
Temecula’s demographic profile shows it to be a very rapidly growing, ethnically diverse place, where relatively young, well-educated families are raising children, and succeeding economically.
Since 1990-1997, the city has grown from 27,099 to 43,100 people. The 59.0% growth rate is the fastest of any Inland Empire community with over 40,000 residents.
Temecula’s expanding economy has given it the wherewithal to devote an increasing amount of community resources to education, parks and law enforcement. The city has 23 parks covering 199 acres, one of the premier varietal wine growing areas of California including twelve wineries that have a wide range of grapes and is one of the safest cities in California having a crime rate 50% below that of the next safest Inland Empire city as represented by 1996 studies.
Location:
Temecula is located 85 miles southeast of Los Angeles, 487 miles south of San Francisco, and 55 miles north of San Diego.
Economic Growth & Trends:
1970 1980 1990 1998
Population-County 459,074 663,116 1,170,413 1,441,036
Taxable sales-County $828,578 $3,274,017 $9,522,631 $11,972,371
Population-City 2,773 8,234 27,099 46,558
Taxable Sales-City N/A N/A $119,900 $831,094
Housing Units-City N/A N/A 9,130 13,947
Median Household
Income-City N/A N/A $44,270 $63,248
School Enrollment (K-12) N/A N/A 7,595 14,614
Ethnic Distribution:
White 80.8%
Hispanics 14.2%
Black 1.5%
Asian/pacific Islander 2.4%
American Indian 0.5%
Other Race 0.5%
TOTAL 100.0%
Climate:
AVERAGE TEMPERATURE RAIN HUMIDITY
Period Min Mean Max Inches 4a.m. Noon 4p.m.
--------------------------------------------------------------------------------
January 46.0 61.0 69.9 1.35 55 40 55
April 51.7 62.0 72.2 0.75 60 30 50
July 62.5 73.4 84.2 0.05 45 40 35
October 52.4 64.3 76.2 0.46 50 30 45
--------------------------------------------------------------------------------
Year 57.2 64.7 73.4 10.44 52 40 45
Transportation:
Rail: None
Truck: Two (2) carriers are located in Temecula
Over night delivery To: Los Angeles, San Francisco, San Diego and Phoenix.
Air: French Valley Airport, owned by Riverside County, is a general aviation facility. Approximately one hour
drive to San Diego, Ontario, John Wayne and Palm Springs Airports.
Bus: Greyhound to Riverside, San Diego, Los Angeles, Riverside Transit Agency local and intercity bus service.
Ports: Nearest ports at Los Angeles-Long Beach, 85 miles northeast, and San Diego, 55 miles south.
Highways: I-215 north to Riverside I-15 north to Corona, Orange County and Los Angeles I-15 south to San Diego County
State Route 79 east to Palm Springs
Community Facilities:
Health: 72 physicians/surgeons
46 dentists
10 optometrists
20 chiropractors
2 major hospitals are found just north of the city - Inland Valley Regional Medical Center - Rancho Springs
Medical Center
Education: 10 elementary schools
3 middle schools
2 high schools
1 continuation high school
1 independent study high school
9 private schools
Cultural: 36 churches 10 banks
1 library 2 savings and loans
7 newspapers 1 museum
1 cable network (TCI) 3 theaters with 9 screens
Recreation: 15 wineries
3 public golf courses
1 private golf course
Vail Lake (12 miles east)
Skinner Lake (12 miles northeast)
150 miles of equestrian trails
Hotels/motels: 11 hotels and motels, with 810 room, in the community area
Item 19. Certain Relationships and Related Transactions
The Company neither owns nor leases any real or personal property. An officer of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The company's common or preferred stock is not presently quoted on any public market.
Common Stock
At inception, the Company originally had authorized and issued 25,000 shares of no par value common stock. On April 17, 2000 the articles of incorporation were amended to provide for 50,000,000 authorized shares at $.0001 par value and a forward stock split of 40 to 1, resulting in 1,000,000 issued and outstanding shares as of the merger date. An additional 9,000,000 common shares were then issued to the TVI shareholders in a re-capitalization of the Company.
In connection with the employment contract of the Company’s president, as more fully described in executive compensation, the Board of Directors approved an annual, non-qualified option for him to acquire, at fair market value at the date of grant, a minimum of 1 percent of the Company’s outstanding shares during the term of his employment contract. The number of shares to be granted shall be determined by the Board of Directors. All shares granted shall have an exercise period of 36 months following the date of grant. No options were granted as of December 31, 2000.
Dividend Policy:
To date, Supreme Hospitality has not paid any cash dividends on their common stock. Supreme currently intends to retain all of their future earnings for use in their business and, therefore, does not expect to pay dividends in the near future.
Preferred Stock
There are 1,000,000 shares of Preferred Stock issued with a par value of $0.0001 per share. No other series of Preferred Stock has been authorized or issued. The Preferred Stock will rank senior to the Common Stock with respect to the payment of dividends and amounts upon liquidation, dissolution or winding up of the Company without the consent of any holder of Preferred Stock. The Preferred Shareholders shall have no voting rights. No other series of Preferred Stock has been authorized or issued.
One Preferred share is convertible into three shares of the Company’s common stock at any time after the first twelve months of purchase during the three year period at the option of the shareholder. The conversion is automatic on the third year record date if not converted earlier by the shareholder. Dividend Policy:
The Preferred shares yield a 10% per annum dividend, which is paid in common shares at the market price upon conversion. The 10% annual common stock dividend is determined by multiplying the preferred share offering price and dividing it by the market price per share. This will determine the number of common shares to the shareholder upon conversion.
ITEM 21 EXECUTIVE COMPENSATION
Commencing October 1, 2000, and expiring on December 31, 2010, the Board of Directors approved an employment contract for its president, that provides for, among other benefits, annual compensation of $120,000 through December 31, 2001, and thereafter, a minimum of a 10 percent increase per annum. In addition, the president is to receive annually, 10 percent of pre-tax income of the Company and stock options as more fully described above. There are a number of fringe benefits provided in the contract during the contract term, including the use of an automobile, disability compensation based on annual compensation, and a $500,000 life insurance policy payable to beneficiaries designated by the president.
Prior to the above employment contract, the President received $3,000 per month as a consultant for the period from April 1999 through April of 2000, pursuant to a written agreement.
ITEM 22 FINANCIAL STATEMENTS
The required financial statements can be found on the following pages:
Independent Auditor's Report Page 29
Balance Sheet Page 30
Stockholder's Equity Page 31
Statement of Operations Page 32
Statement of Cash Flow Page 33
Notes to Financial Statements Page 34
ITEM 23.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has not changed accountants and no disagreements on accounting or financial disclosure practices has occurred.
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. No officer or director may be indemnified, however, where the officer or director committed intentional misconduct, fraud, or an intentional violation of the law.
We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
Item 25. Other Expenses of Issuance and Distribution.
We will pay all costs and expenses in connection with this offering, including but not limited to all expenses related to the costs of preparing, reproducing or printing this memorandum, legal expenses, and other expenses incurred in qualifying or registering the offering for sale under state laws as may be necessary, as well as the fees and expenses of our attorneys and accountants. It is anticipated that the total of all costs and expenses in connection with this offering will be approximately $132,335.00. This includes:
Attorney fees $10,000.00
CPA fees 62,037.00
Consultant fees 55,000.00
SEC filing fee 1,668.00
NASD filing fee 1,130.00
Transfer agent 500.00
Material fees (postage, copies) 2,000.00
Total $132,335.00
==========================================================================
Item 26. Recent Sales of Unregistered Securities.
None
Item 27.Exhibits Schedule
The exhibits marked with an "*" have already been filed on the 10-sb. The remaining exhibits are filled with this registration statement.
Exhibit Description Page *3.1 Articles of Incorporation *3.2 By-Laws: Exhibit 3.2 5.1 Opinion Re: Legality Page 41 23.1 Consent Page 42 *99.1 Special Meeting Board of Directors 99.2 Special Meeting Board of Directors Page 43 99.3 Subscription Agreement Page 45 99.4 Meeting of Board of Directors Page 48 99.5 Employment Contract of Chief Executive Page 49 99.6 Option Agreement Page 55ITEM 28. UNDERTAKINGS.
UNDERTAKINGS
The undersigned Registrant undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or preceding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of _________ , State of ___________. on March 2001.
Supreme Hospitality
By: /s/ Larry W. Lang
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders
Supreme Hospitality
Temecula, California
We have audited the accompanying balance sheet of Supreme Hospitality as of December 31, 2000, and the related statements of operations, changes in stockholders’ equity, and cash flows for the two years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Supreme Hospitality as of December 31, 2000, and the results of its operations and its cash flows for the two years then ended in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is dependent upon its ability to develop additional sources of capital, and/or achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
/S/ Braverman & Company, P.C.
SUPREME HOSPITALITY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
(SUBSTANTIALLY ALL ASSETS ARE PLEDGED AS COLLATERAL)
ASSETS
CURRENT ASSETS:
Cash $ 2,677
Trade accounts receivable 53,116
Other 4,615
-----------
Total current assets 60,408
-----------
PROPERTY AND EQUIPMENT, AT COST,
less accumulated depreciation of $556,108 5,000,886
-----------
OTHER ASSETS:
Deferred Offering Costs 81,000
Loan fees, less accumulated amortization of $6,576 21,034
Initial franchise fee, less accumulated amortization of $667 24,333
Other assets 10,200
-----------
Total other assets 136,567
-----------
$ 5,197,861
===========
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Trade accounts payable $ 234,159
Related party loans 492,123
Accrued liabilities 126,368
Current maturities of long-term debt 287,309
-----------
Total current liabilities 1,139,959
LONG-TERM DEBT, LESS CURRENT MATURITIES 4,936,555
-----------
Total liabilities 6,076,514
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY ( DEFICIT)
Preferred stock, $.0001 par value; authorized 1,000,000
shares; none outstanding
Common stock; $.0001 par value; authorized 50,000,000
shares; 10,000,000 outstanding 1,000
Paid-in capital 1,500
Pre-merger capital (deficit) (691,927)
Post-merger accumulated (deficit) (189,226)
-----------
Total stockholders' equity (deficit) (878,653)
-----------
$ 5,197,861
===========
SUPREME HOSPITALITY AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY(DEFICIT)
FOR THE TWO YEARS ENDED DECEMBER 31, 2000
COMMON STOCK PAID-IN ACCUMULATED TOTAL
---------------------
SHARES AMOUNT CAPITAL (DEFICIT)
------ ------
Balances, December 31, 1998 25,000 $2,500 $- $(2,670) $(170)
Net (loss) for the year (85) (85)
Balances, December 31, 1999 25,000 2,500 - (2,755) (255)
Forward stock split, change
from no par value to par
value of $.0001 per share 975,000 (2,400) 2,400 -
Recapitalization 9,000,000 900 (900) -
Pre-merger capital (deficit) (689,172) (689,172)
Net (loss) for the period
April 30 to December 31, 2000 (189,226) (189,226)
Balances, December 31, 2000 10,000,000 $1,000 $1,500 $(881,153) $(878,653)
========== ====== ====== ========== ==========
SUPREME HOSPITALITY AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
---- ----
REVENUES $ 1,410,429 $ 1,257,463
------------ ------------
OPERATING EXPENSES
Selling, general and administrative 885,726 868,604
Depreciation and amortization 273,580 270,045
Interest 619,007 540,176
------------ ------------
Total operating expenses 1,778,313 1,678,825
------------ ------------
(LOSS) FROM OPERATIONS $ (367,884) $ (421,362)
------------ ------------
NET (LOSS) PER SHARE $ (0.04) $ (0.04)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING-BASIC 10,000,000 10,000,000
============ ============
SUPREME HOSPITALITY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(367,884) $(421,362)
Adjustments to reconcile net (loss) to net cash provide:
Depreciation and amortization 273,580 270,045
Gain on disposition of vehicle (2,418)
(Increase) decrease in assets
Trade accounts receivable (27,314) (11,698)
Other current assets 464 (5,079)
Increase(decrease) in liabilities
Trade accounts payable 126,712 26,786
Accrued liabilities 65,277 (63,325)
--------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 68,417 (204,633)
CASH FLOWS FROM INVESTING ACTIVITIES
Deferred offering costs (81,000)
Purchase of Days Inn franchise (25,000)
Loan fees (27,610)
Other (3,000) (1,800)
--------- ---------
NET CASH ( USED BY) INVESTING ACTIVITIES (109,000) (29,410)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of equipment (11,238)
Loan proceeds 123,664 445,991
Related party loans 168,387 (82,547)
Proceeds from sale of common, stock 3,000
Loan repayments (254,052) (128,261)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 29,761 235,183
NET INCREASE (DECREASE) IN CASH (10,822) 1,140
--------- ---------
CASH, AT BEGINNING OF YEAR 13,499 12,359
--------- ---------
CASH, AT END OF YEAR $ 2,677 $ 13,499
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 608,763 $ 466,280
========= =========
SUPREME HOSPITALITY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
The Company
Supreme Hospitality (the
Company or Supreme), formerly Grubstake, Inc. and Richwood, Inc. were
incorporated in Nevada on November 10, 1997. Until it acquired all of the
outstanding common stock of Temecula Valley Inn, Inc. (TVI) in a
recapitalization (reverse merger), the Company had no operations and was a
development stage company as defined in FASB No.7. On April 17, 2000, pursuant
to the pending recapitalization, the Company changed its name to Supreme
Hospitality, and on April 30, 2000, TVI became a wholly owned subsidiary of
Supreme in a qualifying reorganization under Section 368 (a)(1)(B) of the
Internal Revenue Code of 1986.
TVI’s activities were
the construction and subsequent operation of a ninety-room, 3-story hotel
located in Temecula, California, which was opened to the public in December 1998
under the name of Temecula Valley Inn. In July of 2000, the hotel, pursuant to a
franchise agreement, operated under the name of Days Inn.
Principles of Consolidation
The Company’s
consolidated financial statements include the financial statements of Supreme
and TVI for all periods presented. All significant intercompany accounts and
transactions have been eliminated.
Financial Statement Presentation
The historical cost basis
of all assets and liabilities of TVI have been carried forward, similar to the
accounting treatment given in a “pooling of interests”. TVI is
considered the accounting acquirer because it became the owner of substantially
all of the outstanding common stock of the acquired “shell” company.
Pre-merger losses of TVI, net of $3,000 of common stock, have been classified as
“pre-merger capital (deficit)” in the accompanying financial
statements, since such losses have been passed through and utilized by the
former owners of TVI when it was initially a proprietorship through December 31,
1999, and an S corporation in 2000, until the date of merger. Unless otherwise
indicated, all references to the Company include Supreme and TVI. The
corporation’s year-end is December 31.
Use of Estimates and Assumptions
The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect
the reported amounts and the disclosure of contingent amounts in the
Company’s financial statements and the accompanying notes. Actual results
could differ from those estimates. Certain prior year amounts have been
reclassified to conform to the current year presentations.
Incorporation and Taxable Status of TVI
TVI had been a sole
proprietorship for the period from its inception in 1997 through December 31,
1999. On January 1, 2000, all of the assets and liabilities relating to the
hotel operation were transferred to a newly formed “S” corporation
under the provision of Section 351 of the Internal Revenue Code of 1986.
Therefore, no income tax provision is provided or applicable for the operating
results of TVI prior to April 30, 2000, since those operations were included in
the personal tax returns of the former owners of TVI and taxed based on their
personal tax strategies.
As of and subsequent to the
merger date, an income tax provision is applicable for the tax effects of
transactions reported in the financial statements for taxes currently due, plus
deferred taxes related to the difference between the basis of the property and
equipment for financial and income tax reporting.
SUPREME HOSPITALITY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
(continued)
Revenue Recognition
Room and other revenues are recognized when earned.
Concentrations
Less than a majority of the
customers of the hotel are corporate customers. There is no concentration of
corporate customers in any one industry segment, and no one customer or
corporation constitutes 10% or more of total revenues.
Cash Equivalents
The Company considers all
highly liquid investments with the original maturities of three months or less
to be cash equivalents.
Loan Fees
Loan fees relating to
permanent financing incurred in 1999 were capitalized and are being amortized
ratably over the remaining life of the related loan. Loan fee amortization for
2000 and 1999 was $3,944 and $2,632, respectively.
Fair Value of Financial Instruments
Statement of Financial
Accounting Standards No. 107, disclosures about fair value of financial
instruments, defines the fair value of a financial instrument as the amount at
which the instrument could be exchanged in a current transaction between willing
parties. The carrying values of the Company’s financial instruments, which
include cash, accounts receivable, accounts payable and accruals, approximate
fair values due to the short-term maturities of such instruments. The fair value
of the Company’s long-term debt, which approximates carrying value, is
estimated based on the current rates offered to the Company for debt of the same
remaining maturities.
Income Taxes
Income taxes are provided
for using the liability method of accounting in accordance with Statement of
Financial Accounting Standards No. 109 “Accounting for Income Taxes”.
A deferred tax asset or liability is recorded for all temporary difference
between financial and tax reporting of which depreciation is the most
significant. Deferred tax expense (benefit) results from the net change during
the year of deferred tax assets and liabilities. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to more likely than not realized in future tax returns. Tax law and
rate changes are reflected in income in the period such changes are enacted.
Since merger, the Company
has continued to sustain operating losses. For income tax purposes the post
merger operating loss was approximately $158,000 resulting in a deferred tax
asset of $60,000, which has been completely offset by a valuation allowance of
$60,000. Therefore as of December 31, 2000, no tax benefit or deferred tax asset
has been provided in the accompanying consolidated financial statements since
management cannot determine, at the present time, that it is more likely than
not that such benefit will be utilized in future periods. The operating loss is
available for a period of 20 years to offset future taxable income.
Loss Per Share
Net loss per share is
provided in accordance with Statement of Financial Accounting Standards No. 128
(SFAS No.128) “Earnings Per Share”. Basic loss per share is computed
by dividing net loss available to common stockholders by the weighted average
number of common shares outstanding during the period. For presentation
purposes, all shares outstanding have been considered outstanding since
inception.
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES (continued)
Going Concern
The Company’s
financial statements have been presented on the basis that it is a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company’s ability to
continue in existence is dependent on its ability to develop additional sources
of capital, and/or achieve profitable operations. The accompanying financial
statements do not include any adjustments that might result from the outcome of
these uncertainties. Management’s plan is to sell additional equity and
eliminate its debt, thereby providing positive cash flow through its existing
operations.
Composition of Certain Financial Captions
Property and Equipment
Property and equipment are stated at historical cost and are depreciated
using the straight-line method over the useful lives indicated:
Land and land improvements $2,120,916
Building 2,376,918
Furniture and equipment 1,059,160
----------
Total Cost $5,556,994
Less accumulated depreciation 556,108
----------
Property and Equipment, net $5,000,886
----------
Useful lives in years
---------------------
Building 40
Land improvements 15-20
Furniture, fixtures and equipment 3-10
Depreciation expense for the
years ended December 31, 2000 and 1999 was $268,969 and $267,413, respectively.
Other Assets
Included in other assets is
the cost of the Days Inn initial franchise fee of $25,000, which is being
amortized ratably over the 15-year period of the franchise agreement, commencing
in 2000. Amortization expense for 2000 was $667. Franchise royalties and
reservation system user fees totaling 8.8 percent of gross room revenues are
expensed as incurred.
Deferred Offering Costs
Supreme entered into an
agreement with a consulting firm in March 2000 which provides, among other
things, that the firm will arrange for the acquisition of a shell company,
obtain a trading symbol and market maker for the sale of the Company’s
stock, and arrange for the filing and successful completion of a registration
statement with the Securities and Exchange Commission for the sale of the
Company’s common stock.
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred Offering Costs (continued)
As of December 31, 2000,
Supreme paid in full all consulting fees of $73,500, which were capitalized as a
deferred offering cost along with other related registration costs incurred,
pending the successful completion of a proposed public offering. If the offering
is successful, all deferred costs incurred will be charged against the net
proceeds of the offering. If unsuccessful, deferred offering costs will be
written off.
NOTE 2 –LONG –TERM DEBT
The Company’s
president and his wife are the only persons obligated to repay the following
long-term debt. They quitclaimed their interests in the real estate to the
Company, which was a violation of the banks’ loan covenants. The banks
anticipate that they will eventually require loan assumptions by the Company,
however, no action has been taken to date. For financial presentation purposes,
all of the following loans are presented as debt of the Company since the
majority of them are collateralized by real and personal property of the
Company.
Note payable to a bank,
payable in monthly installments of $21,961 including interest at prime plus 1%,
final payment due April, 2006 of $2,744,836, collateralized by first position on
substantially all of the assets owned by the Company or hereinafter acquired $
2,744,836.
The interest rate at
December 31, 2000 was 10.50%. Because the bank has not requested an increase in
the total monthly amount since inception of the loan as a result of the
increasing prime rate, there has been no reduction in loan principal since May
2000. As of December 31, 2000, total accrued interest on the loan exceeded the
monthly payments required by a total of $16,185, which has been included in
accrued liabilities.
Note payable to a bank,
guaranteed by the Small Business Administration, payable in monthly installments
of $9,444, including interest based on 8.5 % prime plus 2%, plus or minus
adjustments quarterly for interest rate changes, final amortized balance due
February 2023, collateralized by a second position on substantially all of the
assets owned by the Company or hereinafter acquired. The prime rate at December 31, 2000 was 9.50%. 978,972
Note payable to an
individual, payable in monthly installments of $4,825, including interest at
10%, final payment due February 2003, collateralized by a third position on the
Company’s real property. 484,173
Capitalized lease
obligation, payable in monthly installments of $28,854, including interest
ranging from 12.4% to 14.4% and sales taxes, final payment due February 2004,
collateralized by leased assets of the hotel 893,845
Unsecured installment notes payable to two finance companies, $3,236 payable monthly,
including interest at 12.34% to 16.52% per annum, due 2005. 122,038
Total long-term debt 5,223,864
Less current maturities 287,309
----------
Long-term debt, net of current maturities $4,936,555
==========
NOTE 2–LONG–TERM DEBT (continued)
Maturities of long-term debt for the five years following December 31, 2000 are as follows:
2001 $ 287,309
2002 325,253
2003 820,070
2004 95,698
2005 41,847
Thereafter 3,653,687
==========
$5,223,864
NOTE 3 - CAPITAL LEASE
The Company leases
furniture and equipment, building and land improvements under a capital lease.
The economic substance of the lease is that the Company is financing the
acquisition of the assets through the lease, and accordingly, these assets are
capitalized as follows:
Land improvements $ 137,715
Building improvements 114,247
Furniture and equipment 1,041,858
----------
1,293,820
Less accumulated depreciation 370,025
----------
$ 923,795
==========
The following is a schedule
of future annual minimum lease payments required under the lease together with
their net present value as of December 31, 2000:
December 31, Amount
2001 $ 346,245
2002 346,245
2003 346,245
2004 52,789
Total minimum lease payments 1,091,524
Amount representing interest (197,679)
Present value of net minimum lease payments 893,845
Current portion (246,442)
Long-term capital lease obligation $ 647,403
===========
NOTE 4 –RELATED PARTIES
A construction company
owned by Supreme’s president was the general contractor for the hotel,
which was completed in late1998 at a cost of approximately $2,400,000.
Approximately $110,000 was paid to his construction company for supervision and
reimbursement of costs incurred of which less than 50 percent was compensation.
The project manager for the hotel’s construction was a company owned by one
of three shareholders of TVI which was paid approximately $58,000 for
supervision services.
Since inception the
president of the Company has provided financing to maintain the positive cash
flow of the Company, substantially through personal and related party corporate
loans, the majority of which were interest bearing from 8 to 10 percent per
annum. As of December 31, 2000, these related party loans totaled $492,123 the
majority of which are considered due within one year. During the year 2000 net
loans from related parties totaled $168,387.
Included in the loans
payable to related parties at December 31, 2000 are two loans that were obtained
from a water district and the city prior to 2000. The latter of these loans is
collateralized by an interest in the Company’s real estate, whereas the
other loan provides for termination of the water supply to the hotel in the
event the loan becomes delinquent. Although the Company was delinquent in the
monthly payments to the city, the city agreed to take no action provided the
loan, which was due September 1, 2000, is paid off at the rate of $10,000 a
month, commencing April, 2001. The balance of that loan at December 31, 2000 was
$55,637.
The president and his wife are also the obligated on all long-term debt, as more fully explained in Note 2 of the notes to financial
statements.
NOTE 5–COMMON STOCK
At inception, the Company originally
had authorized and issued 25,000 shares of no par value common stock. On April
17, 2000 the articles of incorporation were amended to provide for 50,000,000
authorized shares at $.0001 par value and a forward stock split of 40 to 1,
resulting in 1,000,000 issued and outstanding shares as of the merger date. An
additional 9,000,000 common shares were then issued to the TVI shareholders in a
recapitalization of the Company.
In connection with the
employment contract of the Company’s president, as more fully described
below, the Board of Directors approved an annual, non-qualified option for him
to acquire, at fair market value at the date of grant, a minimum of 1 percent of
the Company’s outstanding shares during the term of his employment
contract. The number of shares to be granted shall be determined by the Board of
Directors. All shares granted shall have an exercise period of 36 months
following the date of grant. No options were granted as of December 31, 2000.
NOTE 6 –EMPLOYMENT CONTRACT
Commencing October 1, 2000,
and expiring on December 31, 2010, the Board of Directors approved an employment
contract for its president, that provides for, among other benefits, annual
compensation of $120,000 through December 31, 2001, and thereafter, a minimum of
a 10 percent increase per annum. In addition, the president is to receive
annually, 10 percent of pre-tax income of the Company and stock options as more
fully described above. There are a number of fringe benefits provided in the
contract during the contract term, including the use of an automobile,
disability compensation based on annual compensation, and a $500,000 life
insurance policy payable to beneficiaries designated by the president.
Prior to the above employment contract, the President received $3,000 per month as a consultant for the period from April 1999
through April of 2000, pursuant to a written agreement.
NOTE 7–OPTION AGREEMENT
In May 2000 the Company
received an option from its president to acquire 2.61 acres of approved hotel
property owned by him and located in Redding, California for $1,300,000,
including predevelopment, use permit and building drawings. If acquired, a
larger 3-story hotel would be constructed. The option expires in May 2001. The
entire project is estimated to cost $5,850,000.
NOTE 8–PAST DUE STATUS AND LOAN VIOLATIONS
Substantially all of the
accounts payable at December 31, 2000, totaling $234,159 were past due based on
their payment terms of which $104,000 consisted of real estate taxes, interest
and penalties for the period from December, 1999 through May, 2000. The past due
status and penalties added to real estate taxes are technical violations of both
bank loans, however, the Company has verbal assurances that as long as the loan
payments are currently maintained, and the Company timely and fully explains its
reasons for any technical violations, the banks will not call the loan.
NOTE 9–SUBSEQUENT EVENTS
The Company incurred substantial additional stock offering costs, principally auditing fees, subsequent to December 31, 2000, to
enable it to comply with the filing requirements, on Form SB-2, of the Securities and Exchange Commission for the proposed offering
of its securities.