File Numbers:
333-63416
811-10493
UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 5 X
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Pre-Effective Amendment No. 5 X
The NorthQuest Capital Fund, Inc. (Exact Name of Registrant as Specified in
Charter)
16 Rimwood Lane, Colts Neck, NJ 07722 (Address of Principal Executive Offices)
732-892-1057 (Registrants Telephone Number)
|
Peter J. Lencki 16 Rimwood Lane Colts Neck, NJ 07722
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration.
The Registrant hereby amends this Registration Statement on such date or dates that 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 this Registration Statement shall become effective on such date as the Commission acting to Section 8(A) may determine.
P R O S P E C T U S
January 09, 2002
NORTHQUEST CAPITAL FUND, INC.
The Fund is best suited for investors seeking long-term capital appreciation.
The Securities and Exchange Commission has not approv- ed or disapproved of these securities, nor has the Commission determined that this Prospectus is complete or accurate. Any representation to the contrary is a criminal offense.
NorthQuest Capital Fund, Inc. 16 Rimwood Lane Colts Neck, NJ 07722
TABLE OF CONTENTS
THE FUND'S INVESTMENT OBJECTIVE/GOA ..................................... 3 PRINCIPAL INVESTMENT STRATEGIES OF THE FUND ............................. 3 PRINCIPAL RISKS OF INVESTING IN THE FUND Who should invest ..................................................... 4 Who should not invest ................................................. 4 Temporary Defensive Position .......................................... 4 Non-diversification Policy ............................................ 5 RISK/RETURN SUMMARY: FEE TABLE .......................................... 5 INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS Security Selection Criteria ........................................... 6 Portfolio Turnover .................................................... 6 MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE Investment Adviser .................................................... 6 Contract Terms ........................................................ 7 Portfolio Manager ..................................................... 7 CAPITAL STOCK Description of Common Stock ........................................... 8 Voting Rights ......................................................... 8 PRICING OF FUND SHARES Market Value of Securities ............................................ 8 PURCHASE OF FUND SHARES Initial Investments ................................................... 8 Subsequent Purchases .................................................. 8 REDEMPTION OF FUND SHARES Endorsement Requirements .............................................. 9 Redemption Price ...................................................... 9 DIVIDENDS AND DISTRIBUTIONS Reinvestments ......................................................... 9 TAX CONSEQUENCES Tax Distribution ...................................................... 10 PRIVACY POLICY .......................................................... 10 WHERE TO GO FOR MORE INFORMATION ........................................ 11 |
ACCOUNT APPLICATION FORMS included separately with prospectus.
Account Application
THE NORTHQUEST CAPITAL FUND, INC.
16 Rimwood Lane
Colts Neck, NJ 07722
732-892-1057 800-698-5261
PROSPECTUS January 09, 2002
FUND INVESTMENT OBJECTIVE/GOAL
The NorthQuest Capital Fund, Inc.(The Fund) is a new Fund and has no history of operation. The Fund's investment objective is to seek long-term capital appre- ciation by investing exclusively in common stock securities of U.S. issuers ex- cept for those situations discussed in section "Temporary Defensive Positions".
PRINCIPAL INVESTMENT STRATEGIES OF THE FUND
The Fund will attempt to achieve its goals by searching for companies that:
a) have earnings and revenues growing sequentially, year to year, and are
undervalued.
b) are in the process of turning around after a period of declining earnings
and/or sales.
c) are under new management, who have a reputation for cutting costs and
increasing profitability.
Once these investment strategies have been identified, the six step methodology stated below will be used to select those securities the Investment Adviser (Emerald Research Corporation) will use in recommendation decision making.
1. To determine the value of an individual company the Investment Adviser will calculate the five-year discounted free cash flow. Free cash flow is net income after taxes plus depreciation and amortization minus capital spending and any other expenditures needed by the company to maintain its current position. The discount rate used is the current rate of the 30 year bond. When the discounted Free Cash Flow calculates that an equity is undervalued by 25% or more, the com- pany remains in the selection process.
2. Next, the efficient use of capital is measured by using "Economic Value Added" (EVA). EVA is a mathematical equation which calculates whether or not a company is earning more than its cost of capital. EVA is after-tax operating profit minus cost of capital, which is total capital times the weighted average cost of the company's debt and equity capital. A positive EVA number indicates management is making money for its shareholders.
3. The Investment Adviser will analyse the financial data of an individual com-
pany if item 1 shows undervaluation and item 2 is a positve number. Debt, profit
margins, return on shareholder equity, consistent growth in revenues and earn-
ings, type and viability of business/es, and whether management is competent and
credible represent some of the financial information which are examined in de-
tail.
4. The last step in this selection process includes a review of current social,
political, environmental, and economic trends in the U.S. and abroad. This exam-
ination is to determine if any of these trends will have a positive or negative
effect on the company. Some of these trends include interest rates, inflation,
governmental regulations and policies, judicial decisions, consumer spending,
military intervention, capital spending and tax rates. If there are no negative
long-term implications associated with these trends, the company is added to
the Fund's portfolio.
5. Each common stock security in the Fund's portfolio is reviewed every 3 months near release of company's quarterly earnings in accordance with steps 1 through 3. A significant deviation that could indicate a negative effect on the long-term future price of a company in the Fund's portfolio or the subsitution of another security offering greater long-term upside potential may lead to the selling of a security in the Fund's portfolio.
6. The Fund may deviate without limitation from five step investment methodology
when evaluating companies under new management and/or in the process of turning
around their operations. If step 1 is affirmative it will override the conclu-
sions of steps 2, 3 and 4. Accordingly, any security purchased by the Fund must
meet step 1.
SECONDARY GOAL OF FUND
Earning dividend income from common stock securities is a secondary goal.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Narrative Risk Disclosure: An investor could lose money in this Fund. The principal risks of investing in this Fund are:
a) changing stock market and economic conditions may cause the Fund's total re-
turns to go down as well as up over the short-term and even over long periods
of time.
b) the Fund's investment strategies may not prove to be effective.
c) the Fund's Investment Adviser's lack of experience may result in recommenda-
tions of securities that cause the Fund to under perform or lose money.
d) there are no assurances that dividend income will be earned from the Fund's
investments.
e) large cash positions, that may be used defensively as discussed in the sec-
tion 'Temporary Defensive Positions', could prevent the Fund from achieving
its stated investment objective of long-term capital appreciation.
f) our 'Non-diversification Policy' that carries the larger risk associated with
any one bad security choice or group of securities representing one sector of
the economy as compared to the risk if we were more diversified by holding
more securities.
g) periods of declining stock market prices may cause investing in common stock
securities by the public to fall out of favor, thereby causing the Fund to
under perform or lose money.
h) no history of operations.
Who should invest: This Fund is best suited for disciplined long-term investors who want to invest in a concentrated portfolio of companies that will hopefully exceed the S&P 500 average annual rate of return over a five year period. The Fund's portfolio will benefit those investors who desire low portfolio turnover and tax efficiency.
Who should not invest: This Fund is not recommended for investors who are short- term oriented and not tolerant to the Fund's daily price fluctuations. The Fund is not suited for investors seeking more diversification of the Fund's assets. Those looking for current income will find earning dividend income is a second- ary consideration.
Temporary Defensive Position: The Fund may increase its cash position by in- vesting in short-term debt securities (BBB or better), high-grade commercial paper (AA or better), and/or obligations of the U.S. government and its agencies to preserve capital during such times that periods of falling common stock prices are expected. These defensive decisions made by the Adviser to pro- tect capital may prevent the Fund from achieving its stated investment objective of long-term capital appreciation.
Risk/Return Bar Chart and Table: The Fund has not provided a risk/return chart or table because it has been in existence for less than a year, but after it
has been in existence for a calendar year it will provide the chart and table. It should be noted that any past performance of the Fund that will be shown will not be an indication of future results.
Non-diversification Policy: The Fund is non-diversified which means that it may invest a relatively high percentage of its assets in a limited number of secur- ities in any industry or group of industries. As a result, the Fund's perform- ance may be more susceptible to an individual company in its portfolio. The Fund seeks only enough diversification in its security selections to maintain its federal non-taxable status under Sub-chapter M of the Internal Revenue Code. See section "TAX CONSEQUENCES" on page 9 of the prospectus for information about what level of Sub-chapter M is required of the Fund.
RISK/RETURN SUMMARY: FEE TABLE
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment):
Maximum Sales charge(Load) Imposed on Purchases None
Maximum Deferred Sales Charge(Load): None
Maximum Sales Charge(Load) on Reinvested Dividends: None
Redemption Fees: None
Exchange Fees: None
|
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets):
Management Fees: 1.00%
Distribution <and/or Service> (12b-1) Fees: None
Other Expenses: * 1.75% Gross Expenses: 2.75% Investment Adviser Fee Reimbursement: -.75% Net Annual Fund Operating Expenses: 2.00% |
* The Other Expenses of the Fund are based on estimated amounts for the cur- rent fiscal year. Any expenses that exceed 2% per year of the averaged total net assets of the Fund will be paid by the Investment Adviser. The Investment Adviser Fee Reimbursement is in the Investment Advisory Contract made by and between the Fund and Investment Adviser. The Investment Adviser Fee Reimbursement, which will remain in effect in perpetuity, can only be terminated by the Fund and the Fund will not reimburse the Adviser for start up expenses.
Example: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000. in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating ex- penses remain the same. Although your actual costs may be lower, based on these assumptions your costs would be:
One Year Three Years $203 $627
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
Investment Objectives:
The Fund seeks long-term capital appreciation by investing exclusively in common stock securities of U.S. issuers except for those situations discussed in section "Temporary Defensive Positions". The strategy is explained in detail in the section " Principle Investment Strategies of the Fund " in this propsectus.
Principal Investment Strategies Security Selection Criteria: As stated in the section "Principal Investment Strategies of the Fund' on page 3, common stock security selections recommended by our Investment Adviser include companies with earnings and revenues growing sequentially, year to year, and are undervalued. The Fund may also invest in companies which are in the process of turning around after a period of declining earnings and/or sales. In this regard, the Investment Adviser may recommend companies under new management, which have a reputation for cutting costs and increasing profitability.
Portfolio Turnover Policy: The Fund's turnover rate is expected to be about 20% or less wherein turnover is computed by dividing the lesser of the Fund's total purchases or sales of securities within the period by the average monthly port- folio value of the Fund during such period. We desire low turnover rates because we can reduce brokerage expenses and shareholder capital gains taxes. However, as stated in the " Principal Risks of Investing in the Fund " section, it would only be in exceptional circumstances or an unanticipated portfolio holdings' situation beyond the Fund's control that this turnover rate would be exceeded.
Risks See section " Narrative Risk Disclosure " on page 4 as to the risks that may cause an investor to lose money in the Fund.
MANAGEMENT, ORGANIZATION AND CAPITAL
STRUCTURE
Management
Investment Adviser: The Emerald Research Corp. (ERC) is a New Jersey corporation and will act as the Investment Adviser to the Fund. ERC has no prior experience in advising a registered investment company, such as the Fund. The address of ERC is: 2160 Hwy. 88, Brick, NJ, 08724. Peter J. Lencki is the President, direc- tor and officer of the Investment Adviser and is also President of the Fund. ERC is owned by Peter J. Lencki (85%) and Walter A. Lencki (15%). Both men are also officers and owners of Emerald Auto Parts and Supply, Inc., a 33 year old pri- vate automotive parts aftermarket company and trustees of the Emerald Auto Parts and Supply Profits Sharing Plan.
ERC has furnished investment advice for the past five years to the NorthPoint Capital LLP, a private Investment Partnership with 75 partners and $850,000 in net assets. ERC provided a continuous review of the portfolio and would recom- mend to the Partnership when and to what extent securities should be purchased or sold.
The Investment Adviser will provide the following services to the Fund:
1. Continuous review of the Fund's portfolio.
2. Recommend to the Fund when and to what extent which securities the Fund
should purchase or sell according to the Fund's investment methodology.
3. Pay the salaries of those of the Fund's employees who may be officers or
directors or employees of the Investment Adviser.
4. Pay the initial organizational costs of the Fund and reimburse the Fund
for any and all losses incurred because of purchase reneges (That is, when a
shareholder or prospective shareholder fails to make payment for purchase of
Fund shares).
5. Act as the Fund's transfer agent by handling all share purchases and
redemptions.
On August 10, 2001 the Directors of the Fund approved a management and advi- sory contract with ERC. This Agreement will continue on a year to year basis provided that approval is voted on at least annually by specific approval of the Board of Directors of the Fund or by vote of the holders of a majority of the outstanding voting securities of the Fund. In either event, it must also be approved by a majority of Directors of the Fund who are neither parties to the agreement or interested persons as defined in the Investment Company Act of 1940
at a meeting called for the purpose of voting on such approval.
Contract Terms: Under the Agreement, the EMC will furnish investment direction on the basis of an ongoing review using the appropriate methodology to determine when and what securities will be purchased or disposed by designated Fund per- sonnel. The Agreement may be terminated at any time, without payment of penalty, by the Board of Directors or by vote of a majority of the outstanding voting securities of the Fund on not more than 60 days written notice to the EMC. In the event of its assignment, the Agreement will terminate automatically. Ulti- mate decisions as to the investment policy and as to individual purchases and sales of securities are made by the Fund's officers and directors. For these services, the Fund has agreed to pay a fee of 1% per year on the net assets of the Fund. This fee is computed on the average daily closing net asset value of the Fund and is payable monthly. ERC will absorb sufficient expenses to hold the total expenses of the Fund to equal to or less than 2% per year of the averaged total net assets.
ERC has a contract with the Fund wherein it is required to follow the investment strategy of the Fund in managing the portfolio and to pay salaries of those Fund employees who may be officers or directors or employees of the Investment Advis- er. All custodial, registrar or transfer fees, if any, will be borne by the In- vestment Adviser except printing and postage. The Fund pays all other expenses, including fees and expenses of directors not affiliated with the advisor; legal and accounting fees, interest, taxes, brokerage commissions, record keeping and the expenses of operating its offices. ERC has paid the initial organizational costs of the Fund and will reimburse the Fund for any and all losses incurred because of purchase reneges such as a shareholder not forwarding a check to buy shares or a shareholder's check that fails to clear. ERC will pro- vide transfer agent services to the Fund as described in the SAI.
Portfolio Manager: Peter J. Lencki is the portfolio manager of The NorthQuest Capital Fund. He has over 5 years of day-to-day operational experience in run- ning a private investment Partnership, NorthPoint Capital LLP. The Partnership consists of 75 partners and $850,000 in net assets. The strategy used by Mr. Lencki to run the Partnership is identical to the Fund's strategy, detailed in the section "Principle Investment Strategies of the Fund" in this prospectus Mr. Lencki intends to devote at least 50% of his 6 day work week time to man- agement of the Fund's portfolio. His contribution of effort will gradually in- crease to full time if and when the Fund's total net assets rise to over 5 mil- lion dollars. Mr. Lencki holds a Bachelor of Arts degree in Political Science from Seton Hall University in New Jersey.
Custody of Investments: The Fund will operate under rule 17f(2) of the Investment Company Act of 1940. Therefore, the securities and similar invest- ments of the Fund will be maintained in the custody of the Fund. The Fund's securities and similar investments will be in the Fund's corporate name held in a safe-deposit at Fleet Bank, 501 Arnold Avenue, Point Pleasant Beach, NJ 08742. A Board Resolution by the Board of Directors gives Fleet Bank the authority to hold the Fund's securities. The Resolution also designates three officers of the Fund, Peter J. Lencki, Walter A. Lencki and Mary E. Lencki to have access to the Fund's certificates. A log containing date, time, withdrawal or deposit, the title and amount of securities and transaction number will be maintained of all security certificate and similar investment certificate move- ments. All transactions will be documented on forms that will be placed in the safe-deposit, held on file at the corporate office and sent to a "non-interest- ed" director for review. One signature is required to deposit securities into the safe-deposit and two for withdrawal. Such securities and similar invest- ments shall be examined by an independent accountant at least three times dur- ing each fiscal year. The Fund's officers have no prior custody arrangement experience. However, the Fund has purchased Fidelity Bond coverage in an amount sufficient to insure the custodial activites of the Fund's officers.
Legal Proceedings: As of the date of this Prospectus, there was no pending or threatened litigation involving the Fund or Investment Adviser in any capacity whatsoever.
CAPITAL STOCK
Description of Common Stock: The authorized capitalization of the Fund consists of 500,000,000 shares of NorthQuest Capital common stock of $0.001 par value per share. Each share has equal dividend, distribution and liquidation rights. There are no conversion or preemptive rights applicable to any shares of the Fund. All shares are issued in book format (no certificates) and are fully paid and non-assessable.
Voting Rights: Each holder of the Fund's shares has voting rights equal to the number of shares held. Voting rights are non-cumulative. Therefore the holders of a majority of shares of common stock can elect all directors of the Fund if they so choose, although holders of remaining shares are still able to cast their votes.
PRICING OF FUND SHARES
When and How do We Price: The net asset value of the Fund's shares is determined as of the close each business day the New York Stock Exchange is open (presently 4:00p.m.) Monday through Friday exclusive of President's Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving, Christmas & New Years Day. The net asset value is the price of each share and is determined by dividing the value of the Fund's securities, plus any cash and other assets less all liabili- ties, excluding capital surplus, by the number of shares outstanding.
Market Value of Securities: The market value of securities held by the Fund that are listed on a national exchange and/or over the counter markets is determined to be the last recent sale price on such exchange or market. Securities that have not recently traded are valued at the last bid price in such market. The fair value of securities for which current market quotations are not readily available will be evaluated as determined in good faith by the Fund's Board of Directors. Zero Coupon Bonds and U.S. Government Treasury Notes are priced at the current bid price at 3 p.m. Eastern time as quoted by our current brokerage firm, Charles Schwab & Co., Inc.
PURCHASE OF FUND SHARES
The offering price of shares offered by the Fund is at the net asset value per share next determined after receipt of the purchase order by the Fund and is computed in the manner described in the above section "Pricing of Fund Share ". The Fund reserves the right at its sole discretion to terminate the offering of its shares made by this Prospectus at any time and to reject purchase applica- tions when, in the judgement of managment such termination or rejection is in the best interest of the Fund.
Initial Investments: Initial purchase of shares of the Fund may be made only by application submitted to the Fund. For the convenience of investors, an Account Application, is included in every request for a Prospectus. To receive this information call 1-800-698-5261 or write to:
NorthQuest Capital Fund, Inc.
16 Rimwood Lane
Colts Neck, NJ 07722
To open an account send a signed, completed application and check or money order to the above address. The minimum initial purchase of shares is $1,000 which is due and payable 3 business days after the purchase date. Less may be accepted under special circumstances such as custodian accounts and those investors making regular additional investments.
Subsequent Purchases: Subsequent purchases may be made by mail or phone and are due and payable three business days after the purchase date. Telephone privi-
leges to purchase or sell Fund shares are given to those shareholders that indicate the selection of "Telephoned Instructions" on the Fund's application form. The minimum is $100. but less may be accepted under special circumstances.
Fractional Shares: Fractional shares to five decimal places are offered by the Fund.
REDEMPTION OF FUND SHARES
Endorsement Requirements: The Fund will only issue book entry shares and will redeem all or any part of the shares of any shareholder that tenders a request for redemption. Proper guaranteed endorsement, also known as a signature guaran- tee, either by a national bank or a member firm of the New York Stock Exchange will be required unless the shareholder is known to management such as a rela- tive, friend or long-term acquaintance. A signature guarantee is an assurance by the above mentioned financial institutions that a signature and person who signed the signature are the same individual. To sell Fund shares send written instructions, signed by shareholder(s) with the proper signature guarantee to:
NorthQuest Capital Fund, Inc.
16 Rimwood Lane
Colts Neck, NJ 07722
Redemption Price: The redemption price is the net asset value per share next de- termined after notice is received by the Fund for redemption of shares. The proceeds received by the shareholder may be more or less than his/her cost of such shares, depending upon the net asset value per share at the time of redemp- tion and the difference should be treated by the shareholder as a capital gain or loss for federal and state income tax purposes.
Redemption Payment: Payment by the Fund will be made no later than 7 business days after tender. However, the Fund may suspend the right of redemption or postpone the date of payment if: The New York Stock Exchange is closed for other than customary weekend or holiday closings, or when trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Com- mission or when the Securities and Exchange Commission has determined that an emergency exists, making disposal of fund securities or valuation of net assets not reasonably practicable. The Fund intends to make payments in cash, however, the Fund reserves the right to make payments in kind. It should be noted that shareholders will incur brokerage costs when selling the securities received as part of an in kind distribution. Shareholders would also have continuing market risk by holding these securities. The Fund does not intend to issue in kind re- demptions using illiquid securities.
DIVIDENDS AND DISTRIBUTIONS
Reinvestments: The Fund will automatically use the taxable dividend and capital gains distributions for purchase of additional shares for the shareholders at net asset value as of the close of business on the distribution date.
Cash Payouts: A shareholder may, at any time, by letter or forms supplied by the Fund direct the Fund to pay dividend and/or capital gains distribution, if any to such shareholder in cash.
TAX CONSEQUENCES
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as amend- ed, the Fund, by paying out substantially all of its investment income and real- ized capital gains, intends to be relieved of federal income tax on the amounts distributed to shareholders. In order to qualify as a " regulated investment company " under Sub-Chapter M, at least 90% of the Fund's income must be de- rived from dividends, interest and gains from securities transactions, and no more than 50% of the Fund's total assets may be in two or more securities that exceed 5% of the total assets of the Fund at the time of each security's purchase. Not qualifying under Subchapter M of the Internal Revenue Code would
cause the Fund to be considered a personal holding compamy subject to normal corporate income taxes. This would reduce the value of shareholder holdings by the amount of taxes paid. Any subsequent dividend distribution of the Fund's earnings after taxes would still be taxable as received by shareholders.
Tax Distribution: The Fund's distributions (capital gains & dividend income), whether received by shareholders in cash or reinvested in additional shares of the Fund, may be subject to federal income tax payable by shareholders. Distri- bution of any long-term capital gains realized by the Fund in 2001 will be taxa- ble to the shareholder as long-term capital gains, regardless of the length of time Fund shares have been held by the investor. All income realized by the Fund including short-term capital gains, will be taxable to the shareholder as ordin- ary income. Dividends from net income will be made annually or more frequently at the discretion of the Fund's Board of Directors. Dividends received shortly after purchase of Fund shares by an investor will have the effect of reducing the per share net asset value of his/her shares by the amount of such dividends or distributions. This may be considered a return of capital, but the dividend is still subject to federal income and state taxes.
Federal Withholding: The Fund is required by federal law to withhold 31% of reportable payments (which may include dividends, capital gains, distributions and redemptions) paid to shareholders who have not complied with IRS regulation. In order to avoid this withholding requirement, you must certify on a W-9 tax form supplied by the Fund that your Social Security or Taxpayer Identification Number Provided is correct and that you are not currently subject to back-up withholding.
DISTRIBUTION ARRANGEMENTS
The Fund is a truly no-load Fund in that investors in the Fund pay no purchase or sales fees and no 12b-1 fees.
PRIVACY POLICY
Regulation S-P: The U.S. Securities and Exchange Commission has adopted a reg- ulation regarding the "Privacy of Consumer Financial Information" known as Regulation S-P. This regulation states that financial institutions such as the Fund must provide the shareholder with this notice of the Fund's privacy poli- cies and practices on an annual basis. The following items (A & B) detail the Fund's policies and practices:
A. Information We Collect - Information we receive from you on application or forms include; your name, address, social security number or tax ID number, W9 status, phone number and citizenship status. Information about your transactions with us include; your account number, account balances and transaction histories.
B. The Fund's Disclosure Statement - We only disclose personal information about any current or former shareholder of the Fund as required by law. And, since we handle regular transactions internally the number of employees that even see your information is limited. We also require all of the Fund's brokers, and our Investment Adviser that acts as the Fund's transfer agent to adopt the regulations of Regulation S-P, as specified above by the Fund.
WHERE TO GO FOR MORE INFORMATION
You will find more information about The NORTHQUEST CAPITAL FUND, INC. in the following documents:
Statement of Additional Information (SAI) - The Statement of Additional Infor- mation contains additional and more information about the Fund.
Annual and Semi-annual Reports - The Find will issue to its shareholders semi- annual and audited annual reports. The Fund's fiscal year ends December 31st.
In addition, a discussion of the Fund strategies and market conditions that significantly affected the Fund's performance during its last fiscal year will be in the annual report.
THERE ARE TWO WAYS TO GET A COPY OF ONE OR MORE OF THE DOCUMENTS DESCRIBED ABOVE
1. Call or write for one, and a copy will be sent without charge within three business days of receipt of the request.
THE NORTHQUEST CAPITAL FUND, INC.
16 Rimwood Lane
Colts Neck, NJ 07722
1-800-698-5261
2. You may also obtain information about the Fund (including the Statement of Additional Information and other reports) from the Securities and Exchange Commission on their Internet site at http://www.sec.gov or at their Public Reference Room in Washington, D.C. Call the Securities and Exchange Commission at 1-800-SEC-0330 for room hours and operation. You may also obtain Fund in- formation by sending a written request and duplicating fee to the Public Reference Section of the SEC, Washington, D.C. 20549-6609.
Please contact the Fund at the above address or by its toll free number if you wish to request other information and/or make shareholder inquiries.
WHY YOU SHOULD READ THIS PROSPECTUS
In this prospectus we present the objectives, risks and strategy of the Fund. The Prospectus is designed to aid you in deciding whether this is one of the right investments for you. We suggest that you keep it for future reference.
NORTHQUEST CAPITAL FUND, INC. SEC file number 811-10493
The NORTHQUEST CAPITAL FUND, INC.
16 Rimwood Lane
Colts Neck, NJ 07722
732-892-1057
800-698-5261
Part B
STATEMENT OF ADDITIONAL INFORMATION
January 09, 2002
This Statement is not a prospectus, but should be read in conjunction with the Fund's current prospectus dated January 09, 2002. To obtain the Prospectus, you may write the Fund or call either of the telephone numbers that are shown above.
TABLE OF CONTENTS
THE FUND HISTORY................................................. 2
DESCRIPTION OF FUND AND ITS INVESTMENTS AND RISKS
Classification ............................................. 2
Investment Strategies and Risks ............................ 2
Fund Policies .............................................. 2
Temporary Defensive Position & Portfolio Turnover .......... 3
MANAGEMENT OF THE FUND
Board of Directors ......................................... 3
Management Information ..................................... 3
Compensation and Sales Load ................................ 4
CODE OF ETHICS .................................................. 4
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Control Persons ............................................ 4
Principal Holders .......................................... 4
Management Ownership ........... ........................... 4
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Adviser ......................................... 4
Services Provided by, and Fees Paid to,
the Investment Adviser ................................. 4
Principal Underwriter ...................................... 5
Third Party Payments & Service Agreements .................. 5
Other Investment Advice .................................... 5
Dealer Reallowances and Other Services ..................... 5
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
Brokerage Transactions ..................................... 5
Commissions ................................................ 5
Brokerage Selection ........................................ 5
Directed Brokerage and Regular Broker-Dealers .............. 5
CAPITAL STOCK AND OTHER SECURITIES .............................. 6
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Purchase of Shares ......................................... 6
Offering Price and Redemption in Kind ...................... 6
TAXATION OF THE FUND ............................................ 6
UNDERWRITERS OF THE FUND ........................................ 6
FINANCIAL STATEMENTS
Independent Auditor's Report ............................... 7
Statement of Assets & Liabilities .......................... 8
Notes to Financial Statements .............................. 9
|
FUND HISTORY
The NorthQuest Capital Fund, Inc. (also referred to as the "Fund") was incor- porated in New Jersey on January 3, 2001. The Fund's registered office is in Colts Neck, NJ. Mail may be addressed to 16 Rimwood Lane, Colts Neck, NJ 07722.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
Classification
The Fund is an open-end, non-diversified management investment company.
Investment Strategies and Risks All investment strategies and risks are discussed in the prospectus. No addi- tional strategies and risks exist to be discussed here. Accordingly, all of the Fund's investment strategies are principal investment strategies.
Fund Polices
Investment Restrictions: Investment restrictions were selected to aid in main-
taining the conservative nature of the Fund. These investment restrictions are
the Fund's fundamental investment policies and therefore may not be changed ex-
cept by the approval of a majority of the outstanding shares; i.e. A) 67% or
more of the voting securities present at a duly called meeting, if the holders
of more than 50% of the outstanding voting securities, are present or represent-
ed by proxy, or B) of more than 50% of the outstanding voting securities, which-
ever is less.
Under the Fund's fundamental investment policies the Fund may not:
a) Change Fund's Investment Objectives.
b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
c) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
d) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
e) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
f) Invest in companies for the purpose of acquiring control.
g) Purchase or retain securities of any issuer if those officers and directors
of the Fund or its Investment Adviser owning individually more than 1/2 of
1% of any class of security or collectively own more than 5% of such class
of securities of such issuer.
h) Pledge, mortgage or hypothecate any of its assets.
i) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
j) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
k) Issue senior securities.
l) Underwrite securities of other issuers.
m) Invest over 35% of its assets at the time of purchase in any one industry.
Temporary Defensive Position & Portfolio Turnover
The Fund follows the portfolio management methodolgy with no exceptions other than those considered to be minor that are discussed in the section "Principal Investment Strategies of the Fund" on page 3 of the Prospectus.
MANAGEMENT OF THE FUND
Board of Directors
Shareholders meet annually to elect all members of the Board of Directors, se- lect an independent auditor, and vote on any other items deemed pertinent by the incumbent Board. The Directors holds ultimate responsibility for running the Fund, including the valuation of the Fund's portfolio securities and the pricing of Fund shares. The Board appoints officers to run the Fund and select an In- vestment Advisor to provide investment advice ( See Investment Adviser, pg. 6 of the Prospectus ). It plans to meet four times a year to review Fund progress and status.
Management Information Officers and Directors of the Fund: Their addresses and principal occupations during the past five years are:
Name and Address Position Principal Occupation Past 5 Yrs.
Peter J. Lencki * President Portfolio Manager/Gen. Partner
16 Rimwood Lane NorthPoint Capital LLP
Colts Neck, NJ Age 46 Colts Neck, NJ
Walter A. Lencki * Treasurer President/Owner
6 Mystic Court Emerald Auto Parts
Bayville, NJ Age 70 & Supply, Inc, Brick, NJ
Father of Peter J. Lencki
Mary E. Lencki * Secretary Treasurer/Owner
16 Rimwood Lane Wife of Peter J. Lencki Emerald Auto Parts
Colts Neck, NJ Age 43 & Supply, Inc, Brick, NJ
Robert S. Keesser Non-Interested Asst. Regional Manager
11 Woodmere Court Director NGK Spark Plug Company
Barnegat, NJ Age 39 Irvine, CA
John G. Padovano Non-Interested Sole proprietor/Consultant to:
34 Horseshoe Court Director Production Services LLC
Colts Neck, NJ Age 52 Packaging Industry
Hillside, NJ
Robert R. Thompson Non-Interested Vice-President/Owner
81 Galloping Hill Rd. Director Thompson & Co.
Colts Neck, NJ Age 46 Automotive Parts Warehouse
Union, NJ
|
Footnote:
* Directors of the Fund are considered "Interested persons", as defined in the
Investment Company Act of 1940, because these individuals are affiliated with
the Investment Adviser.
Compensation and Sales Load: No compensation, pension or retirement benefits will be paid to directors and/or officers of the Fund at present time and none are presently contemplated. But this may be changed in the future by the Board of Directors at their discretion. The Fund does not compensate officers and directors that are affiliated with the Investment Adviser except as they benefit through payment of the Advisory fee. There are no sales loads whatsoever.
CODE OF ETHICS
Pursuant to the requirements of rule 17j-1 code of ethics under the Investment Company Act of 1940 and in order to protect against certain unlawful acts, prac- tices and courses of business by certain individuals or entities related to the NorthQuest Capital Fund, Inc. (the "Fund"), the Fund and ERC have adopted a Code of Ethics and procedures for implementing the provisions of the code. The per- sonnel of the Fund and Investment Adviser are subject to the code of ethics when investing in securities that may be purchased, sold or held by the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Control Persons
As of the start up of this Fund, Mr. Bernard B. Klawans is the person who con- trols the Fund. Peter and Walter Lencki may be deemed contol persons.
Principal Holders Major Shareholders: Bernard Klawans, an independent investor, has purchased $100,000 worth of the Fund's shares for start up and investment. At this time, Mr. Klawans owns 100% of the Fund.
Management Ownership The percentage of the Fund's equity securities owned by all officers and dir- ectors of the Fund as a group is less then 1% of the Class. But once the Fund goes public all officers and directors will each be required to own a minimum of 100 Fund shares.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Adviser
Emerald Research Corporation has been selected by the Board of Directors at a meeting on August 10, 2001 to be the Investment Adviser to the Fund. It was formed on 3/08/96 and is currently owned and controlled by Messrs Peter and Walter Lencki, officers and directors, and affiliates of the Fund, to offer in- vestment advice to NorthPoint Capital LLP, a private investment partnership with 75 accounts and $850,000 in assets. Peter Lencki, President of ERC, owns 85% of the Investment Adviser. Walter Lencki, an investor in ERC, owns 15% of ERC shares. Mary Lencki, the Fund's Secretary, is affiliated with the Investment Adviser because she is the spouse of Peter Lencki.
Services Provided by, and Fees Paid to, the Investment Adviser The Investment Adviser is responsible for furnishing investment direction advice to Directors of the Fund on the basis of a continuous review of the portfolio and recommend to the Fund when and to what extent securities should be purchased or disposed. See section "Investment Adviser" in prospectus. The Investment Adviser will act as the dividend paying agent but tax forms, checks and postage are supplied by the Fund. ERC has an agreement with the Fund to pay the Fund's start up expenses and to absorb sufficient expenses to hold the total expenses of the Fund to equal to or less than 2% per year of the averaged total net as- sets of the Fund. The advisory fee paid by the Fund is 1% per year of the aver- aged total net assets of the Fund. This fee is computed daily and is payable monthly.
Principal Underwriter Please see the section " UNDERWRITERS OF THE FUND " on page 6 of this Part B Statement of Additional Information.
Other Service Providers ERC will act as the Fund's transfer agent and dividend-paying agent. ERC will not receive compensation from the Fund for these services. The principal address of ERC is 2160 Hwy. 88, Brick, NJ, 08724.
The Fund is self-custodian of the Fund's investments and does its own accounting subject to Sanville & Company for all audit procedures. The principal address of Sanville & Company is 1514 Old York Road, Abington, PA, 19001.
Third-Party Payments & Service Agreements There are no third-party payments of any kind or service agreements with any or- ganization or individual other than the Investment Adviser as described in the previous paragraph.
Other Investment Advice There is no individual or organization that receives remuneration from the Investment Adviser or the Fund for providing investment advice except brokers that receive competitive commissions on the purchase and sale of securities for the Fund's portfolio.
Dealer Reallowances and Other Services There are no dealer reallowances, Rule 12b-1 plans, paid advertising, compensa- tion to underwriters or broker-dealers, sales personnel or interest, carrying or other finance charges. The Fund does send Prospectuses when it receives unsolic- ited requests.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Brokerage Transactions
The Fund requires all brokers to affect transactions in portfolio securities in such a manner as to get prompt execution of the orders at the most favorable price.
Commissions The Fund has no fixed policy, formula, method, or criteria which it uses in al- locating brokerage business based on commission charges. The Board of Directors will evaluate and review the reasonableness of brokerage commissions paid semi- annually.
Brokerage Selection The Board of Directors has approved permission for the President of the Fund to place buy and sell orders for the Fund securities based on recommendations from the Portfolio Manager. The President may select brokers who, in addition to meeting primary requirements of execution and price, may furnish statistical or other factual information and services, which in the opinion of management, are helpful or necessary to the Fund's normal operations. Information or services may include economic studies, industry studies, statistical analyses, corporate reports, or other forms of assistance to the Fund or its Adviser. No effort is made to determine the value of these services or the amount they might have re- duced expenses of the Adviser. The Fund will not pay higher brokerage commis- sions for soft dollar credits.
Directed Brokerage and Regular Broker-Dealers The Fund and Investment Adviser receives unsolicited solicitations and litera- ture from many brokers. The Fund selects brokers based on competitive commission rates and transaction services rendered. At this time the Fund will not be mak- ing principal transactions with broker-dealers.
CAPITAL STOCK AND OTHER SECURITIES
Description of Common Stock: The authorized capitalization of the Fund consists of 500,000,000 shares of NorthQuest Capital common stock of .001 par value per share. Each share has equal dividend, distribution and liquidation rights. There are no conversion or preemptive rights applicable to any shares of the Fund. All shares once issued in book format are fully paid and non-assessible.
Voting Rights: Each holder of the Fund's shares has voting rights equal to the number of shares held. Voting rights are non-cumulative. Therefore the holders of a majority of shares of common stock can elect all directors of the Fund if they so choose, although holders of remaining shares are still able to cast their votes.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Purchase of Shares
Offers or sales of Fund shares may not occur until a prospectus is delivered to prospective offerees or purchasers. Investors may only purchase Fund shares after receipt of a current prospectus and by filling out and submitting an ap- plication supplied by the Fund. See section " Purchase of Fund Shares " in the prospectus for more information.
Offering Price and Redemption in Kind The Fund always trades at the net asset value. That means that the offering and redemption prices always are the same. Details about the offering price are given in the section " Pricing of Fund Shares " on page 8 of our Prospectus. Redemption in kind is discussed in the section " Redemption of Fund Shares " on page 9 of Fund's Prospectus. The following price-make-up sheet, as of November 13, 2001, shows how the Fund calculates the daily total offering price per unit.
NORTHQUEST CAPITAL FUND PRICING FOR 11/13/01 *
# of Sec Price Value Accru Accru Accru Tot Value Accum Day Mo
shares Sec Sec Div Int Exp of Sec Fund Value Ct
--------------------------------------------------------------------------------
100000. Fleet 0.0 100,000. .00 2.73 .00 100,002.73 100,002.73 1 11
0. MgmFee 0.0 .00 .00 .00 .00 .00 100,002.73 1 11
10000. Fund 10.0003 .00 .00 .00 .00 .00 100,002.73 0 11
|
THE NET ASSET VALUE PER SHARE
... 10.0003
TOTAL NUMBER OF SHAREHOLDERS
NUMBER OF ITEMS= 1
* At this time there are no common stock securities in the Fund's investment portfolio.
Abbreviations and names provided in the price-make-up sheet:
Sec=Security; Accru=Accrual; Div=Dividend; Int=Interest; Exp=Expense; Tot=Total;
Accum=Accumulated; Day Ct=Day Count; Mo=Month; Fleet=Fleet Bank savings account;
MgmFee=Management Fee of Investment Adviser; Fund=NorthQuest Capital Fund, Inc.
TAXATION OF THE FUND
Taxation of the Fund is discussed in the section " Tax Consequences " on page 9 of the Fund's Prospectus.
UNDERWRITERS OF THE FUND
The Fund has no underwriter because the Fund sells its shares directly to the public.
TRANSFER AGENT
The Fund's Investment Adviser, ERC, acts as the Fund's transfer agent which re- cords all Fund share purchases and redemptions on Fund premises. There are no
employee charges for these services, but the Fund is charged for supplies and postage. Stock certificates will not be issued because of the chance of loss and the accompaning costs of reissue indemnification. All shareholder holdings are maintained in book form. The Fund has computer hardware and software, which are provided and managed by ERC, to run the Fund's daily operations. All data is backed up and stored in secure locations. ERC has no prior experience acting as a transfer agent, including providing computerized accounting services to a registered investment company, such as the Fund.
FINANCIAL STATEMENTS
Independent Auditor's Report
Initial Audit
SANVILLE & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
1514 Old York Road
Abington, PA 19001
(215) 884-8460
Fax (215) 884-8686
INDEPENDENT AUDITOR'S REPORT
To the Shareholder and Board of Directors of the NorthQuest Capital Fund, Inc.
We have audited the accompanying statement of assets and liabilities of NorthQuest Capital Fund, Inc. (the "Fund") as of November 13, 2001. This statement of assets and liabilities is the responsibility of the Fund's manage- ment. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the state- ment of assets and liabilities is free of material misstatement. An audit in- cludes examining, on a test basis, evidence supporting the amounts and dis- closures in the financial statement. An audit also includes assessing the ac- counting 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 statement of assets and liabilities referred to above presents fairly, in all material respects, the net assets of NorthQuest Capital Fund, Inc. as of November 13, 2001, in conformity with accounting prin- ciples generally accepted in the United States of America.
Abington, Pennsylvania /s/ Sanville & Company November 19, 2001, except Note 4 Certified Public Accountants as to which date is, December 21,2001 |
NORTHQUEST CAPITAL FUND, INC.
Statement of Assets and Liabilities
November 13, 2001
ASSETS
Cash $ 100,000
LIABILITIES -
_________
Net Assets $ 100,000
=========
Capital stock, $0.001 par value: 500,000,000
shares authorized; 10,000 shares issued and outstanding $ 100,000
=========
Net asset value per share (based on 10,000 shares of
capital stock issued and outstanding) $ 10.00
=========
|
The accompanying notes are an integral part of this financial statement.
NORTHQUEST CAPITAL FUND, INC.
Notes to Financial Statement
November 13, 2001
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: NorthQuest Capital Fund, Inc. (the "Fund") is a non-diversi- fied regulated investment company and was incorporated in the State of New Jersey on January 3, 2001. The Fund is authorized to issue 500,000,000 shares of common capital stock. The Fund's investment objective is to seek long-term capital appreciation by investing primarily in U.S. issuers of common stock securities. The Fund has had no operations to date other than matters relating to its organizational matters and the sale of 10,000 shares of its common stock to its original shareholder, Bernard Klawans on November 13, 2001.
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expen- ses during the year. Actual results could differ from these estimates.
2. INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with Emerald Research Corporation ("the Advisor"), with whom certain officers and directors of the Fund are affiliated, to furnish investment advisory services to the Fund. The Advisor will also serve as transfer agent to the Fund. Under the terms of the agreement, the Fund will pay the Advisor a monthly fee based on the Fund's average daily net assets at the annual rate of 1.00%.
Under the terms of the agreement if the aggregate expenses of the Fund are equal to or greater than 2% of the Fund's net assets the Advisor will re- imburse the Fund for these expenses.
3. ORGANIZATIONAL EXPENSES
The Advisor has agreed to absorb all initial organizational expenses of the Fund.
4. FEDERAL INCOME TAXES
The Fund intends to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distri- bute all of its taxable income to its shareholders. The distributions to shareholders will be recorded on the ex-dividend date.
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
1. Financial Statements and Exhibit Index 1
2. Persons Controlled by or Under Common Control with the Fund 1
3. Indemnification 1
4. Business and other Connections of the Investment Adviser 1
5. Principal Underwriters 2
6. Location of Accounts & Records 2
7. Management Services 2
8. Undertakings 2
9. Consent of Independent Public Accountants 2
10. Signatures 3
11. Exhibit Index 4
|
1. a. Financial Statements - Condensed financial information on a per share ba- sis will be presented in Part A as required by applicable laws, rules or regulations. All other financial statements will be presented in Part B at the appropriate time specified as required by applicable laws, rules or regulations. These include:
Statement of Assets & Liabilities November 13, 2001 Notes to Statement of Assets and Liabilities November 13, 2001 b. Exhibit Index a - Articles of Incorporation b - By-Laws |
c - Instruments Defining Rights of Security Holders - Not applicable
d - Investment Advisory Contracts
e - Underwriting Contracts - Not applicable
f - Bonus or Profit Sharing Contracts - Not applicable
g - Custodial Agreements - Not applicable
h - Other Material Contracts (Fin. Inst. Bond & Reimbursement Agreements)
i - Legal Opinion
j - Other Opinions - Not applicable
k - Omitted Financial Statements - Not applicable
l - Initial Capital Agreements
m - Rule 12b-1 Plan - Not applicable
n - Rule 18f-3 Plan - Not applicable
p - Code of Ethics
2. Persons Controlled by or Under Common Control with the Fund - Mr. Bernard B. Klawans. Peter and Walter Lencki may also be deemed to be control persons.
3. Indemnification - Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such in- demnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of ex- penses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceed- ing) is asserted by such director, officer or controlling person in con- nection 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 whe- ther such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Article XII, Section 3 of the Fund's By-laws states that each director and officer of the corporation shall be indemnified by the corporation against reasonable costs and expenses incurred by him/her in connection with any action, suit or proceeding to which he/she may be made a party by reason of his/her being or having been a director or officer of the corporation, except in relation to any action, suits or proceedings in which he/she has been adjudged liable because of misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the con- duct of his/her office.
4. Business and other Connections of the Investment Adviser - The Emerald Research Corporation's activity at the present time is performance on its Investment Advisory Contract currently effective with the NorthQuest Capital Fund, Inc. Mr. Peter J. Lencki - owner, officer and director of
the Emerald Research Corporation is also Vice-President and owner of Emerald Auto Parts & Supply, Inc., trustee for the Emerald Auto Parts Profit Sharing Plan, Portfolio Manager and General Partner of NorthPoint Capital LLP, a private investment partnership. Mr. Walter A. Lencki is a shareholder in Emerald Research Corporation.
5. Principal Underwriters - See the section "Underwriters of the Fund" on page 6 of Part B Statement of Additional Information.
6. Location of Accounts & Records - All Fund records are held at corporate headquarters - 16 Rimwood Lane, Colts Neck, N.J. 07722 - with the excep- tion of security certifications, which will be placed in a safe deposit box at Fleet Bank, 501 Arnold Avenue, Point Pleasant Beach, NJ 08742. Peter Lencki, of 16 Rimwood Lane, Colts Neck, N.J. 07722, will maintain physical possession of each account, book or other document required to be maintained by laws, rules or regulations.
7. Management services - Not applicable
8. Undertakings - Not applicable
10. Consent of Independent Public Accountants
SANVILLE & COMPANY
Certified Public Accountants
1514 Old York Road
Abington, PA 19001
(215) 884-8460
Fax (215) 884-8686
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use of our report, dated November 19, 2001, and December 21, 2001, on the statement of assets and liabilities of NorthQuest Capital Fund, Inc., which is included in Parts A and B in Pre-Effective Amendments to the Registration Statement under the Securities Act of 1933 and Pre-Effective Amendments under the Investment Company Act of 1940 and included in the Pro- spectus and Statement of Additional Information, as specified, and to the ref- erence made to us under the caption "Independent Auditors" in the Statement of Additional Information.
Abington, Pennsylvania /s/ Sanville & Company
December 21, 2001 ----------------------
Certified Public Accountants
|
12. Signatures -
Pursuant to the requirements of the Securities Act of 1933 and the Invest- ment Company Act of 1940, NorthQuest Capital Fund, Inc. certifies that it meets all of the requirements for effectiveness of this Registration State- ment and has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Colts Neck and State of New Jersey on the 9th day of January, 2002.
The NorthQuest Capital Fund, Inc. By: /s/ Peter J. Lencki
-------------------------
Peter J. Lencki, President
|
Pursuant to the requirements of the Securities Act of 1933, this amend- ment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signatures Title Date
By: /s/ Peter J. Lencki President, CEO and Director
------------------- (Principal Executive Officer) 01/09/02
Peter J. Lencki
By: /s/ Walter A. Lencki Treasurer and Director
-------------------- (Principal Financial & 01/09/02
Walter A. Lencki Accounting Officer)
By: /s/ Mary E. Lencki Secretary
-------------------- 01/09/02
Mary E. Lencki
By: /s/ Robert S. Keesser Director
--------------------- 01/09/02
Robert S. Keesser
By: /s/ John G. Padovano Director
-------------------- 01/09/02
John G. Padovano
By: /s/ Robert R. Thompson Director
--------------------- 01/09/02
Robert R. Thompson
|
Exhibit Index -
Articles of Incorporation ............................................. a By-Laws ............................................................... b Investment Advisory Contracts ......................................... d Other Material Contracts (Fin. Inst. Bond & Reimbursement Agreements).. h Legal Opinion ......................................................... i Initial Capital Agreements ............................................ l Code of Ethics ........................................................ p |
EXHIBIT - a
Filed with the State of New Jersey, Division of Revenue on Jan. 3,2001
ARTICLES OF INCORPORATION-FOR PROFIT
OF
THE NORTHQUEST CAPITAL FUND, Inc.
A Business-stock Corporation (NJ-REG)
NJ Corporation Number 0100838067
In compliance with the requirements of the applicable provisions of NJ-REG (relating to corporations and unincorporated associations) the undersigned, desiring to incorporate a corporation for profit hereby, state(s) that:
1. The name of the corporation is: The NorthQuest Capital Fund, Inc.
2. Type of Business Entity: Domestic Profit (DP) under Statutory Authority NJSA Title 14A For-Profit Corporation.
3. Business Purpose: "The purpose for which this corporation is organized is to engage in any activity within the purposes for which corporations may be organized under NJSA 14A:1-1 et seq."
4. The address of this corporation initial registered office in this Commonwealth is:
16 Rimwood Lane Colts Neck,NJ 07722 Monmouth County
5. The aggregate number of shares authorized is: 500,000,000.
6. The name and address of the incorporator is:
Peter J. Lencki 16 Rimwood Lane Colts Neck,NJ 07722
7. The specified effective date is: January 3, 2001.
8. The corporation is an " open-end " investment company which will offer for sale or redeem its securities to the public.
IN TESTIMONY WHEREOF the incorporator has signed these Articles of Incorpora- tion this 2nd day of January, 2001.
By: /s/ Peter J. Lencki
-------------------
Peter J. Lencki
|
EXHIBIT - b
The NORTHQUEST CAPITAL FUND, INC. BY-LAWS
ARTICLE I - OFFICES
Section I. The principal office of the Corporation shall be in the City of Colts Neck, County of Monmouth, State of New Jersey. The Corporation shall also have offices at such other places as the Board of Directors may from time to time determine and the business of the Corporation may require.
ARTICLE II - STOCKHOLDERS AND STOCK CERTIFICATES
Section 1. Every stockholder of record shall have their holdings maintained in book form by the Fund. Stock certificates will not be issued.
Section 2. Shares of the capital stock of the Corporation shall be transferable only on the books of the Corporation by the person in whose name such shares are registered, or by his/her duly authorized transfer agent. In case of transfers by executors, administrators, guardians or other legal representatives, duly au- thenticated evidence of their authority shall be produced, and may be required to be deposited and remain with the corporation or its duly authorized transfer agent.
Section 3. The Corporation shall be entitled to treat the holder of record any share or shares of its capital stock as the owner thereof, & accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not the Corporation shall have express or other notice thereof, except as otherwise provided by the laws of the State of New Jersey.
ARTICLE III - MEETING OF STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of general business shall be held at the principal office of the Corporation, or at such other place within or without the State of New Jersey as the Board of Directors may from time to time prescribe, on the First Tuesday in June at 8:00PM in each year, unless that day shall be duly designated as a legal holiday, in which event the annual meeting of the stockholders shall be held on the first day following which is not a hol- iday. A notice of any change in the place of the annual meeting shall be given to each stockholder twenty days before the election is held.
Section 2. Special meetings of the stockholders may be called at any time by the President, and shall be called at any time by the President, or by the Sec- retary, upon the written request of a majority of the members of the Board of Directors, or upon the written request of the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and en- titled to vote at such meeting. Upon receipt of a written request from any per- son or persons entitled to call a special meeting, which shall state the object
of the meeting, it shall be the duty of the President; or, in his absence, the Secretary, to call such meeting to be held not less than ten days nor more than sixty days after the receipt of such request. Special meetings of the stock- holders shall be held at the principal office of the Corporation, or at such other place within or without the State of New Jersey as the Board of Direct- ors may from time to time direct, or at such place within or without the State of New Jersey as shall be specified in the notice of such meeting.
Section 3. Notice of the time and place of the annual or any special meeting of the stockholders shall be given to each stockholder entitled to notice of such meeting at least ten days prior to the date of such meeting. In the case of special meetings of the stockholders, the notice shall specify the object or ob- jects of such meeting, and no business shall be transacted at such meeting other than that mentioned in the call.
Section 4. The Board of Directors may close the stock transfer books of the corporation for a period not exceeding sixty days preceding the date of any meeting of stockholders, or the date for payment of any dividends, or the date for the allotment of rights, or the date when any change or conversion or ex- change of capital stock shall go into effect, or for a period of not exceeding sixty days in connection with the obtaining of the consent of stockholders for any purpose; provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not ex- ceeding sixty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights of the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date as aforesaid.
Section 5. At least ten days before every election of directors of the Corpor- ation, the Secretary shall prepare and file in the office where the election is to be held a complete list of the stockholders entitled to vote at the ensuing election, arranged in alphabetical order, with the residence of each stockholder and the number of voting shares held by him/her, and such list shall at all times, during the usual hours for business and during the whole time of said election, be open to the examination of any stockholder.
Section 6. At all meetings of the stockholders, a quorum shall consist of the persons representing a majority of the outstanding shares of the capital stock of the Corporation entitled to vote at such meeting. In the absence of a quorum no business shall be transacted except that the stockholders present in person or by proxy and entitled to vote at such meeting shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall be present. At any such adjourned meeting at which a quor- um shall be present, any business may be transacted which might have been trans- acted at the meeting on the date specified in the original notice. If a quorum is present at any meeting the holders of the majority of the shares of the Corp- oration issued and outstanding and entitled to vote at the meeting who shall be present in person or by proxy at the meeting shall have power to act upon all matters properly before the meeting, and shall also have power to adjourn the meeting to any specific time or times, and no notice of any such adjourned meet- ing need be given to stockholders absent or otherwise.
Section 7. At all meetings of the stockholders the following order of business shall be substantially observed, as far as it is consistent with the purpose of
the meeting:
Election of Directors
Ratification of Elections of Auditors
New Business
Section 8. At any meeting of the stockholders of the Corporation every stock holder having the right to vote shall be entitled in person or by proxy appoint- ed by an instrument in writing subscribed by such stockholder and bearing a date not more than three years prior to said meeting unless such instrument provides for a longer period, to one vote for each share of stock having voting power re- gistered in his name on the books of the corporation.
ARTICLE IV - DIRECTORS
Section 1. The Board of Directors shall consist of not less than three nor more than twelve members, who may be any persons, who hold shares of the capital stock of the corporation.
Section 2. The directors shall be elected annually by the stockholders of the Corporation at their annual meeting, and shall hold office for the term of one year and until their successors shall be duly elected and shall qualify.
Section 3. The Board of Directors shall have the control and management of the business of the Corporation, and in addition to the powers and authority by these by-laws expressly conferred upon them, may, subject to the provisions of the laws of the State of New Jersey and of the Certificate of Incorporation, exercise all such powers of the Corporation and do all such acts and things as are not required by law or by the Certificate of Incorporation to be exercised or done by the stockholders.
Section 4. If the office of any director becomes or is vacant by reason of death, resignation, removal, disqualification or otherwise, the remaining di- rectors may by vote of a majority of said directors choose a successor or suc- cessors who shall hold office for the unexpired term; provided that vacancies on the Board of Directors may be so filled only if, after the filling of the same, at least two-thirds of the directors then holding office would be directors elected to such office by the stockholders at a meeting or meetings called for the purpose. In the event that at any time less than a majority of the direct- ors were so elected promptly as possible and in any event within sixty days for the purpose of electing directors to fill any vacancy which has not been filled by the directors in office. Any other vacancies in the Board of Directors not filled by the directors may also be filled for an unexpired term by the stock- holders at a meeting called for that purpose.
Section 5. The Board of Directors shall have power to appoint, and at its dis- cretion to remove or suspend, any officer, officers, managers, superintendents, subordinates, assistants, clerks, agents & employees, permanently or temporari- ly, as the Board may think fit, and to determine their duties and to fix, & from time to time change, their salaries or emoluments, & to require security in such instances and in such amounts as it may deem proper. No contract of employment for services to be rendered to the Corporation shall be of longer duration than two weeks, unless such contract of employment shall be in writing, signed by the officers of the Corporation and approved by the Board of Directors.
Section 6. In case of the absence of an officer of the Corporation, or for any other reason which may seem sufficient to the Board of Directors, the Board may delegate his/her powers and duties for the time being to any other officer of the Corporation or to any director.
Section 7. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Corporation, which to the extent provided in such resolution or resolutions, shall have and may exercise the pow- ers of the Board of Directors in the management of the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolu- tion adopted by the Board of Directors. Any such committee shall keep regular minutes of its proceedings, and shall report the same to the Board when required.
Section 8. The Board of Directors may hold their meetings and keep the books of the Corporation, except the original or duplicate stock ledger, outside of the State of New Jersey at such place or places as they may from time to time de- termine.
Section 9. The Board of Directors shall have power to fix, and from time to time to change the compensation, if any, of the directors of the Corporation.
Section 10. The Board of Directors shall present at each annual meeting of the shareholders, and, when called for by vote of the stockholders, at any special meeting of the stockholders, a full and clear statement of the business and con- condition of the Corporation.
ARTICLE V - DIRECTORS MEETINGS
Section 1. Regular meetings of the Board of Directors shall be held without no- tice at such times and places as may be free from time to time prescribed by the Board.
Section 2. Special meetings of the Board of Directors may be called at any time by the President, and shall be called by the President upon the written request of a majority of the members of the Board of Directors. Unless notice is waived by all the members of the Board of Directors, notice of any special meeting shall be sent to each director at least twenty-four hours prior to the date of such meeting, and such notice shall state the time, place and object or objects of such special meeting.
Section 3. Three members of the Board of Directors shall constitute a quorum for the transaction of business at any meeting. The act of a majority of the directors present at any meeting where there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statue or by the Certificate of Incorporation or by these by-laws.
Section 4. The order of business at meetings of the Board of Directors shall be described from time to time by the Board.
ARTICLE VI - OFFICERS AND AGENTS
Section 1. At the first meeting of the Board of Directors after the election of directors in each year, the Board shall elect a President, a Secretary and a Treasurer, and may elect or appoint one or more Vice Presidents, Assistant Sec- retaries, Assistant Treasurers, and such other officers and agents as the Board may deem necessary and as the business of the Corporation may require.
Section 2. The President and the Chairman of the Board shall be elected from the membership of the Board of Directors, but other officers need not be members of the Board of Directors. Any two or more offices may be held by the same per-
son. All officers of the Corporation shall serve for one year and until their successors shall have been duly elected and shall have qualified; provided, how- ever, that any officer may be removed at any time, either with or without cause, by action of the Board of Directors.
Section 3. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors.
ARTICLE VII - DUTIES OF OFFICERS
PRESIDENT
Section 1. The President shall be the Chief Executive Officer and head of the Corporation, and in the recess of the Board of Directors shall have the general control and management of its business and affairs, subject, however, to the re- gulations of the Board of Directors. He shall preside at all meetings of the stockholders and shall be a member exofficio of all standing committees.
Section 2. The President shall call all special or other meetings of the stock- holders and Board of Directors. In case the President shall at any time neglect or refuse to call a special meeting of the stockholders when requested so to do by a majority of the directors, or by the stockholder representing a majority of the stock of the Corporation, as is elsewhere in these by-laws provided, then and in such case, such special meeting shall be called by the Secretary, or in the event of his/her neglect or refusal to call such meeting, may be called by a majority of the directors or by the stockholders representing a majority of the stock of the Corporation, who desire such special meeting, as the case may be, upon notice as hereinbefore provided. In case the President shall at any time neglect or refuse to call a special meeting of the Board of Directors when re- quested to do so by a majority of the Directors, as is elsewhere in these by-laws provided, then and in such case, such special meeting may be called by the majority of the directors desiring such special meeting, upon notice as hereinbefore provided.
VICE PRESIDENTS
Section 3. In case of the absence of the President, the Vice President, or, if there be more than one Vice President, then the Vice Presidents, according to their seniority, shall preside at the meetings of the stockholders of the Corp- oration. In the event of the absence, resignation, disability or death of the President, such Vice President shall exercise all the powers and perform all the duties of the President until the return of the President or until such disabil- ity shall have been removed or until a new President shall have been elected.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 4. The Secretary shall attend all meetings of the stockholders and shall record all the proceedings thereof in a book to be kept for that purpose and he/she shall record all the proceedings thereof in a book to be kept for that purpose and he shall be the custodian of the corporate seal of the Corpora- tion. In the absence of the Secretary, an Assistant Secretary or any other per- son appointed or elected by the Board of Directors, as is elsewhere in these by- laws provided, may exercise the rights and perform the duties of the Secretary.
Section 5. The Assistant Secretary, or, if there be more than one Assistant Secretary, then the Assistant Secretaries in the order of their seniority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. Any Assistant Secretary elected by the Board shall also perform such other duties and exercise such other powers as the Board of
Directors shall from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 6. The Treasurer shall keep full and correct accounts of the receipts and expenditures of the Corporation in books belonging to the Corporation, and shall deposit all moneies and valuable effects in the name and to the credit of the Corporation and in such depositories as may be designated by the Board of Directors, and shall, if the Board shall so direct, give bond with sufficient security and in such amount as may be required by the Board of Directors for the faithful performance of his duties. He shall disburse funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and Board of Directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as the chief fiscal officer of the corporation, and of the financial condition of the Corporation.
Section 7. The Assistant Treasurer, or if there be more than one Assistant Treasurer, then the Assistant Treasurers in the order of their seniority, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. Any Assistant Treasurer elected by the Board shall also perform such duties and exercise such powers as the Board of Directors shall from time to time prescribe.
ARTICLE VIII - CHECKS, DRAFTS, NOTES, ETC.
Section 1. All checks shall bear the signature of such person or persons as the Board of Directors may from time to time direct.
Section 2. All notes and other similar obligations and acceptances of drafts by the Corporation shall be signed by such person or persons as the Board of Di- rectors may from time to time direct.
Section 3. Any officer of the Corporation or any other employee, as the Board of Directors may from time to time direct, shall have full power to endorse for deposit all checks and all negotiable paper drawn payable to his/her or their order or to the order of the Corporation.
ARTICLE IX - CORPORATE SEAL
Section 1. The corporate seal of the Corporation shall have inscribed thereon the name of the Corporation, the year of its organization, and the words Corpor- ate Seal, New Jersey. Such seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE X - DIVIDENDS
Section 1. Dividends upon the shares of the capital stock of the Corporation may, subject to the provisions of the Certificate of Incorporation, if any, be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock of the Corporation.
Section 2. Before payment of any dividend there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors may, from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for re-
pairing or maintaining any property of the Corporation, or for such other pur- pose as the Board of Directors shall deem to be for the best interests of the Corporation, and the Board of Directors may abolish any such reserve in the man- ner in which it was created.
ARTICLE XI - FISCAL YEAR
Section 1. The fiscal year of the Corporation shall begin on January 1 of each year, and end on December 31 of each year.
ARTICLE XII - NOTICES
Section 1. Whenever under the provisions of these by-laws notice is required to be given to any director or stockholder, it shall not be construed to mean per- sonal notice, and such notice may be given in writing, by mail, by depositing the same in the post office or letter box, in a postpaid sealed wrapper, add- ressed to such director or stockholder at such address as shall appear on the books of the Corporation, or, if the address of such director or stockholder does not appear on the books of the Corporation, to such director or stockholder at the General Post Office in the City of Brick, New Jersey and such notice shall be deemed to be given at the time it shall be so deposited in the post office or letter box. In the case of directors, such notice may also be given by telephone, telegraph or cable.
Section 2. Any notice required to be given under these by-laws may be waived in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein.
Section 3. Each director and officer (and his heirs, executors, and adminis- trators) shall be indemnified by the Corporation against reasonable costs and expenses incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director or officer of the Corporation, except in relation to any action, suits or proceed- ings in which he has been adjudged liable because of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the con- duct of his office. In the absence of any adjudication which expressly finds that the director or officer is so liable or which expressly absolves him/her of liability for willful misfeasance, bad faith, gross negligence or reckless dis- regard of the duties involved in the conduct of his office, or in the event of a settlement, each director and officer (and his heirs, executors and administrat- ors) shall be indemnified by the Corporation against payments made, including reasonable costs determination by a written opinion of independent counsel. Amounts paid in settlement shall not exceed costs, fees and expenses which would have been reasonably incurred if the action, suit or proceeding had been liti- gated to a conclusion. Such a determination by independent counsel, and the payments of amounts by the Corporation on the basis thereof shall not prevent a stockholder from challenging such indemnification by appropriate legal proceed- ings on the grounds that the person indemnified was liable to the Corporation or its security holders by reason of the conduct as used herein. The foregoing provisions shall be exclusive of any other rights of indemnification to which the officers and directors might otherwise be entitled.
ARTICLE XIII - AMENDEMENTS
Section 1. These by-laws may be amended, altered, repealed or added to at the annual meeting of the stockholders of the Corporation or of the Board of Direct- ors, or at any special meeting of the stockholders or of the Board of Directors
called for that purpose, by the affirmative vote of the holders of a majority of the shares of capital stock of the Corporation then issued and outstanding and entitled to vote, or by a majority of the whole Board of Directors, as the case may be.
ARTICLE XIV - INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
These investment restrictions are the Fund's fundamental investment policies and
therefore may not be changed except by the approval of a majority of the out-
standing shares; i.e. a) 67% or more of the voting securities present at a duly
called meeting, if the holders of more than 50% of the outstanding voting secur-
ities, are present or represented by proxy, or b) of more than 50% of the out-
standing voting securities, whichever is less:
Under the Fund's fundamental investment policies the Fund may not:
(a) Change Fund's Investment Objective.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
(d) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures, or other debt securities will not be
considered the making of a loan.
(e) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(f) Invest in companies for the purpose of acquiring control.
(g) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
(h) Pledge, mortgage or hypothecate any of its assets.
(i) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
(j) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(k) Issue senior securities.
(l) Underwrite securities of other securities.
(m) Invest over 35% of its assets at the time of purchase in any one industry.
EXHIBIT - d
INVESTMENT ADVISORY CONTRACT
AGREEMENT, made by and between The NorthQuest Capital Fund, Inc., a New Jersey corporation, (hereinafter called "Fund") and Emerald Research Corporation, a New Jersey corporation (hereinafter called "Investment Adviser")
WITNESSETH: WHEREAS, Fund engages in the business of investing and reinvesting its assets and property in various stocks and securities and Investment Adviser engages in the business of providing investment advisory services.
1. The Fund hereby employs the Investment Adviser, for the period set forth in Paragraph 6 hereof, and on the terms set forth herein, to act as the Fund's transfer agent, dividend paying agent and render investment advisory services to the Fund. The Investment Adviser hereby accepts such employment and agrees, during such period, to render the services and assume the obli- gations herein set forth, for the compensation provided. The Investment Adviser shall, for all purposes herein, be deemed to be an independent con- tractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or represent the Fund in any way, or in any way be deemed an agent of the Fund.
2. As a compensation for the services to be rendered to the Fund by the Invest- ment Adviser under the provisions of this Agreement, the Fund shall pay to the Investment Adviser monthly a fee equal to one-twelfth of 1.00 percent per month (the equivalent of 1% per annum) of the daily average net assets of the Fund during the month. The first payment of fee hereunder shall be prorated on a daily basis from the date this Agreement takes effect but may be waived by the Investment Adviser under special circumstances.
2a. The Investment Adviser will pay the start up expenses of the Fund and absorb sufficient expenses to hold the total expenses of the Fund to equal to or less than 2% per year of the averaged total net assets of the Fund. This agreement shall begin when the Fund's registration becomes effective and remain in effect in perpetuity. The Investment Adviser Fee Reimbursement can only be terminated by the Fund and the Fund will not reimburse the Adviser for start up expenses.
3. It is expressly understood and agreed that the services to be rendered by the Investment Adviser to the Fund under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to render different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby.
4. It is understood and agreed that directors, officers, employees, agents and shareholders of the Fund may be interested in the Investment Adviser as directors, officers, employees, agents and shareholders, and that directors, officers, employees, agents and shareholders of the Investment Adviser may be interested in the Fund, as directors, officers, employees, agents and shareholders or otherwise, and that the Investment Adviser, itself, may be interested in the Fund as a shareholder or otherwise, specifically, it is understood and agreed that directors, officers, employees, agents and share- holders of the Investment Adviser may continue as directors, officers, em- ployees, agents and shareholders of the Fund; that the Investment Adviser,
its directors, officers, employees, agents and shareholders may engage in other business, may render investment advisory services to other investment companies, or to any other corporation, association, firm or individual, may render underwriting services to the Fund, or to any other investment compa- ny, corporation, association, form or individual. The Fund shall bear ex- penses and salaries necessary and incidental to the conduct of its business, including but not in limitation of the foregoing, the costs incurred in the maintenance of its own books, records, and procedures; dealing with its own shareholders; the payment of dividends; transfers of stock (including issu- ance & redemption of shares); reports and notices to shareholders; expenses of annual stockholders meetings; miscellaneous office expenses; brokerage commissions; taxes; and custodian, legal, accounting and registration fees. Employees, officers and agents of the Investment Adviser who are, or may in the future be, directors and/or senior officers of the Fund shall receive no remuneration from the Fund or acting in such capacities for the Fund. In the conduct of the respective businesses of the parties hereto and in the performance of this agreement, the Fund & Investment Adviser may share com- mon facilities and personnel common to each, with appropriate proration of expenses.
5. Investment Adviser shall give the Fund the benefit of its best judgment and efforts in rendering these services, and Fund agrees as an inducement to the undertaking of these services that Investment Adviser shall not be liable hereunder for any mistake of judgment or any event whatsoever, provided that nothing herein shall be deemed to protect, or purport to protect, Investment Adviser against any liability to Fund or to its security holders to which Investment Adviser would otherwise be subject by reason of willful misfeas- ance, bad faith or gross negligence in the performance of duties hereunder, or by reason of reckless disregard of obligations and duties hereunder.
6. This agreement shall become effective August 10, 2001 and continue in ef- fect until Aug. 10, 2002 and, thereafter, only so long as such continuance is approved at least annually by votes of the Fund's Board of Directors cast in person at a meeting called for the purpose of voting on such approval, including votes of a majority of the Directors who are not parties to such agreement or interested persons of any such party. This agreement may be terminated at any time upon 60 days prior written notice, without payment of any penalty, by the Fund's Board of Directors or by vote of a majority of the outstanding voting securities of the Fund. The contract will automati- cally terminate in the event of its assignment by the Investment Adviser (within the meaning of the Investment Company Act of 1940), which shall be deemed to include transfer of control of the Investment Adviser. Upon ter- mination of this agreement, the obligations of all parties hereunder shall cease and terminate as of the date of such termination, except for any obli- gation to respond for a breach of this Agreement committed prior to such termination and except for the obligation of the Fund to pay to the Invest- ment Adviser the fee provided in Paragraph 2 hereof, prorated to the date of termination.
7. This Agreement shall not be assigned by the Fund without prior written con- sent thereto of the Investment Adviser. This Agreement shall terminate au- tomatically in the event of its assignment by the Investment Adviser unless an exemption from such automatic termination is granted by order or rule of the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to be affixed and duly attested and their presence to be signed by their duly authorized officers this 10th day of August, 2001.
The NorthQuest Capital Fund, Inc. By: /s/ Peter J. Lencki, Pres.
--------------------------
Peter J. Lencki, President
Attest: /s/ Robert S. Keesser
---------------------
Robert S. Keesser
Emerald Research Corporation By: /s/ Peter J. Lencki, Pres.
--------------------------
Peter J. Lencki, President
Attest: /s/ Robert S. Keesser
---------------------
Robert S. Keesser
|
Exhibit - h
FINANCIAL INSTITUTION BOND
Standard Form No. 14, Revised to October, 1987
HartFord Fire Insurance Company
HartFord, CT 06115 BOND NO. 13BBFBM1400
(Herein called Underwriter)
DECLARATIONS
Item 1. Name of Insured(herein called insured):NORTHQUEST CAPITAL FUND,
INC. Principal Address: 16 RIMWOOD LANE, COLTS NECK, NJ 07722
Item 2. Bond Period: from 12:01 a.m. on December 28, 2001
standard time. to 12:01 a.m. on December 28, 2002
Item 3. The aggregate liability of the Underwriter during the Bond shall be
$75,000.00.
Item 4. Subject to sections 4 and 11 hereof, the Single Loss Limit of Liability is $75,000.00 and the Single Loss Deductible is $NIL
Provided, however, that if any amounts are inserted below opposite specified Insuring Agreements or Coverage, those amounts shall be controlling. Any amount set forth below shall be part of and not in addition to amounts set forth above. (If an Insuring Agreement or Coverage is to be deleted, insert "Not Covered".)
Amount applicable to: Single Loss Single Loss
Limit of Liability Deductible
Insuring Agreement (D) -
FORGERY OR ALTERATION $ Not Covered $ Not
Covered
Insuring Agreement (E) -
SECURITIES $ Not Covered $ Not
Covered
Coverage on Partners $ Not Covered $ Not
Covered
|
Optional Insuring Agreements & Coverages:
NONE $ $
$ $
$ $
If "Not Covered" is inserted above opposite any specific insuring Agreement or Coverage, such Insuring Agreement or Coverage any other reference thereto in this bond shall be deemed to be deleted therefrom.
Item 5 The liability of the Underwriter is subject to the terms of the
following riders attached hereto:
F-4009-1, F-4017-1, RIDER 34, F-4095-0
Item 6 The Insured by the acceptance of this bond gives notice to the
Underwriter terminating or canceling prior
bond(s) or policy(ies) No.(s)
such termination or cancellation to be effective as of the time
this bond becomes effective.
Signed, sealed and dated this 3rd day of January, 2002
Attest:____________________________________ By: /s/ Jennifer A. Bramley
Attorney-in-Fact -----------------------
Attorney-in-Fact
|
August 10,2001
Reimbursement Agreements
At present The NorthQuest Capital Fund has no plans for compensating officers and directors of the corporation. As the Fund grows in total assets, the Board of Directors may pay directors' travel expenses and compensate officers and dir- ectors of the corporation commensurate with their duties but nothing retroac- tively may be compensated.
EXHIBIT - i
VICTOR M. LAMPASSO
Attorneys at Law
152 Greenwood Avenue - P.O. Box 135
Bethel, Connecticut 06801
January 10, 2002
The NorthQuest Capital Fund, Inc.
16 Rimwood Lane
Colts Neck, NJ 07722
To SEC Representative:
We have been asked to provide this opinion in connection with the registration under the Securities Act of 1933 ("Securities Act") of an indefinite amount of common stock (par value $.001 per share) of the NorthQuest Capital Fund, Inc. ("Fund").
We have examined the Articles of Incorporation: the By-laws, as amended, of the Fund: various pertinent corporate proceedings: and such other items considered to be material to determine the legality of the sale of the authorized but unis- sued shares of the Fund's common capital stock. With respect to the good stand- ing of the Fund, we are advised that the Fund is in good standing with the Com- monwealth of New Jersey, its state of incorporation, and that all taxes due have been paid.
In addition, under the heading, "Capital Stock" of N-1A, a statement was made incorrectly. The sentence, "All shares issued are fully paid non-accessible" has been deleted and replaced with "All shares once issued in book format are fully paid and non-assessable".
We consent to the inclusion of this corrected statement as an exhibit to the Securities Act Registration Statement of the Fund.
Based upon the foregoing, it is our opinion that upon effectiveness of the Securities Act Registration Statement of the Fund filed pursuant to the provi- sions of Section 24(e) of the Investment Company Act of 1940 to register an indefinite amount of the Fund's common capital stock ($.001 per share par value) and during such time as such Registration Statement is in effect, the Fund will be authorized to solicit and cause to be solicited share purchase orders and to issue its shares for a cash consideration, as described in the Fund's currently effective Prospectus and Statement of Additional Information, which shares so issued will be validly issued, fully paid and non-assessable shares.
January 10, 2002
NorthQuest Capital Fund, Inc.
We offer no opinion with respect to the offer and sale of the Fund's securities under the securities laws of the several states, the District of Columbia, any territory of the United States or any foreign country.
We consent to the inclusion of this opinion as an exhibit to the Securities Act Registration Statement of the Fund and to the reference in the Fund's Prospectus and/or Statement of Additional Information to the fact that this opinion con- serning the legality of the issue on behalf of the Fund, as issuer, has been rendered by us.
Very truly yours,
/s/ Victor M. Lampasso ---------------------- Victor M. Lampasso |
VML:jml
EXHIBIT - l
SUBSCRIPTION AGREEMENT
November 13, 2001
AGREEMENT, Made by and between the NorthQuest Capital Fund, Inc., a New Jersey corporation (hereinafter called "Fund") and Mr. Bernard B. Klawans, an independent investor.
WITNESSETH: WHEREAS, Fund engages in the business of investing and reinvesting its assets and property in various stocks and securities and Mr. Bernard B. Klawans is an individual who invests as an independent investor.
Mr. Bernard B. Klawans hereby agrees to invest $100,000 in cash in the Fund as an investment. Mr. Klawans' investment will remain in the Fund for a minimum of one year from the date of purchase, November 13, 2001.
IN WITNESS WHEREOF, the parties have duly attested and their presence to be signed by the Fund's authorized officer and Mr. Bernard B. Klawans.
The NorthQuest Capital Fund, Inc. By: /s/ Peter J. Lencki, Pres.
--------------------------
Attest: /s/ Mary E. Lencki Peter J. Lencki, President
------------------
Mary E. Lencki
Mr. Bernard B. Klawans By: /s/ Bernard B. Klawans
--------------------------
Bernard B. Klawans
Attest: /s/ Mary E. Lencki
------------------
Mary E. Lencki
|
Exhibit - p
CODE OF ETHICS
THE NORTHQUEST CAPITAL FUND, INC.
Pursuant to the requirements of rule 17j-1 code of ethics under the Investment Company Act of 1940 and in order to protect against certain unlawful acts, prac- tices and courses of business by certain individuals or entities related to the NorthQuest Capital Fund, Inc.(the "Fund"), the Fund hereby adopts the following Code of Ethics and procedures for implementing the provisions of the Code:
1. As used in this Code of Ethics:
(i) "Access Person" means a director, officer or advisory person (as
defined below) of the Fund;
(ii) "Advisory person" means any employee of the Fund who, in connection
with his/her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of a security by
the Fund, or whose functions or duties relate to the making of any
such recommendation, and any natural person in a control relation-
ship to the Fund who obtained information concerning recommendations
made to the Fund with regard to the purchase or sale of any security.
(iii) "Affiliated person" has the meaning set forth in Section 2(a)(3) of
the Investment Company Act of 1940;
(iv) "Purchase or sale of a security" includes the writing of an option to
purchase or sell a security;
(v) "Security" has the meaning set forth in Section 3(a)(10) of the
Securities Exchange act of 1934, as amended;
(vi) "Portfolio Security" means any security which is being or during the
past 30 days has been purchased or sold by the Fund or considered by
the Fund for purchase or sale by the Fund; and
(vii) "Person" means a natural person, partnership, corporation, trust,
estate, joint venture, business trust, association, cooperative,
government (or any subdivision, branch or agency thereof) govern-
mental entity, foundation, or other entity.
2. No director, officer, employee or other affiliated person or access per-
son ("covered person"), or any "member of the immediate family" (as de-
fined in Section 2(a)(19) of the Investment Company Act of 1940) of any
covered person, shall purchase or sell any security which is a portfolio
security, any security convertible into a portfolio security or an option
to purchase before or sell after such security, or any security into
which a portfolio security is convertible or with respect to which a
portfolio security gives its owner an option to purchase or sell such
security.
3. (A) On the 3rd Tuesday of each even month the Fund shall provide each
covered person with:
(i) all securities held as of the end of the previous 3rd Tuesday
of even months ("Held securities"}; and
(ii) all portfolio securities.
(B) On the same day, each covered person shall provide the Fund with a
list of the names and amounts of all securities owned or held by the
Fund and also held by such person and/or members of his/her immediate
family as of the end of the previous 3rd Tuesday of even months.
4. No covered person shall disclose, divulge or communicate to any person
(other than another covered person), directly or indirectly, any "inside"
information regarding the Fund and relating to held securities, portfolio
securities or any completed or proposed transactions involving held se-
curities and/or portfolio securities.
5. The Fund shall require that its investment adviser and principal broker
adopt Codes of Ethics substantially identical to this Code with respect
to the Fund's portfolio securities.
CODE OF ETHICS
THE EMERALD RESEARCH CORPORATION
Pursuant to the requirements of rule 17j-1 code of ethics under the Investment
Company Act of 1940 and in order to protect against certain unlawful acts, prac-
tices and courses of business by certain individuals or entities related to the
Emerald Research Corporation, Inc.(the "Adviser"), the Adviser hereby adopts the
following Code of Ethics and procedures for implementing the provisions of the
Code:
1. As used in this Code of Ethics:
(i) "Access Person" means a director, officer or advisory person (as
defined below) of the Adviser;
(ii) "Advisory person" means any employee of the Adviser who, in connec-
tion with his/her regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of a secur-
ity by the Adviser, or whose functions or duties relate to the making
of any such recommendation, and any natural person in a control rela-
tionship to the Adviser who obtained information concerning recommen-
dations made to the Adviser with regard to the purchase or sale of
any security.
(iii) "Affiliated person" has the meaning set forth in Section 2(a)(3) of
the Investment Company Act of 1940;
(iv) "Purchase or sale of a security" includes the writing of an option to
purchase or sell a security;
(v) "Security" has the meaning set forth in Section 3(a)(10) of the
Securities Exchange act of 1934, as amended;
(vi) "Portfolio Security" means any security which is being or during the
past 30 days has been purchased or sold by the Adviser or considered
by the Adviser for purchase or sale by the Adviser; and
(vii) "Person" means a natural person, partnership, corporation, trust,
estate, joint venture, business trust, association, cooperative,
government (or any subdivision, branch or agency thereof) govern-
mental entity, foundation, or other entity.
2. No director, officer, employee or other affiliated person or access per-
son ("covered person"), or any "member of the immediate family" (as de-
fined in Section 2(a)(19) of the Investment Company Act of 1940) of any
covered person, shall purchase or sell any security which is a portfolio
security, any security convertible into a portfolio security or an option
to purchase before or sell after such security, or any security into
which a portfolio security is convertible or with respect to which a
portfolio security gives its owner an option to purchase or sell such
security.
3. (A) On the 3rd Tuesday of each even month the Adviser shall provide each
covered person with:
(i) all securities held as of the end of the previous 3rd Tuesday
of even months ("Held securities"}; and
(ii) all portfolio securities.
(B) On the same day, each covered person shall provide the Adviser with a
list of the names and amounts of all securities owned or held by the
Adviser and also held by such person and/or members of his/her immed-
iate family as of the end of the previous 3rd Tuesday of even months.
4. No covered person shall disclose, divulge or communicate to any person
(other than another covered person), directly or indirectly, any "inside"
information regarding the Adviser and relating to held securities, port-
folio securities or any completed or proposed transactions involving held
securities and/or portfolio securities.
5. The Adviser shall require that its mutual fund and principal broker
adopt Codes of Ethics substantially identical to this Code with respect
to the Adviser's portfolio securities.