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Registration No. _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEW GENERATION PLASTIC, INC.
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 7389 13-4056896
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(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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245 Park Avenue
New York, New York 10167
(212) 792-4104
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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Thomas R. Marshall, Esq.
New Generation Plastic, Inc.
245 Park Avenue
New York, New York 10167
(212) 792-4104
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(Name, Address Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
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Copies of all communications, including all communications sent to
the agent for service, should be sent to:
ALAN C. EDERER, ESQ.
Westerman Shapiro Pollack Draghi & Miller, LLP
600 Old Country Rd., Suite 502
Garden City, New York 11530
Tel: (516) 622-9200
Fax: (516) 622-9212
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Approximate date of proposed sale to the public: At such time or times after the
effective date of this Registration Statement that the selling stockholders
shall determine.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box X
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering ___________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering _____
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering ___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box ___________
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[GRAPHIC OMITTED]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities Amount Proposed Proposed Amount of
to be Registered to be Maximum Maximum Registration
Registered Offering Aggregate Fee
Price Per Offering Price
Security(2)
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Common Stock, par value $0.001 per share(1) 7,709,426 $7.50 $57,820,695 $15,265
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(1) Represents 4,688,720 shares of outstanding Common Stock, which may be
sold by selling stockholders and 3,020,706 shares of Common Stock
issuable upon exercise of outstanding warrants held by the
stockholders.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, as amended. Represents the average of the high and the low bids
of the Common Stock as quoted on the OTC Bulletin Board on March 6,
2000.
Pursuant to Rule 416 of the Securities Act of 1933, this Registration
Statement also relates to such additional indeterminate number of shares of
Common Stock as may become issuable pursuant to the anti-dilution provisions of
the warrants held by certain of the selling stockholders.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN
ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH __, 2000
NEW GENERATION PLASTIC, INC.
[_________] Shares
Common Stock, par value $.001 per share
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This prospectus relates to [________] shares of our common stock, which
may be offered and sold, from time to time, by the selling stockholders named in
this prospectus and an additional 3,020,706 shares of our common stock issuable
upon the exercise of outstanding warrants. We will not receive any proceeds from
the sale of the shares by the selling stockholders.
Our common stock currently is quoted on the OTC Bulletin Board under
the symbol "NGPX." On [______], 2000, the last reported sale price of our common
stock on the OTC Bulletin Board was $[____] per share.
See "Risk Factors" commencing on page 7 to read about the risks you
should consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
We will bear all costs and expenses of the registration of the shares
under the Securities Act and certain state securities laws, other than discounts
or commissions, if any, payable with respect to sales of the shares.
The date of this prospectus is ________ , 2000
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TABLE OF CONTENTS
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Page
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Prospectus Summary................................................. 5
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Risk Factors....................................................... 7
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Dividend Policy.................................................... 16
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Price Range of Common Stock........................................ 16
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The Company........................................................ 18
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Business........................................................... 19
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Management's Plan of Operation..................................... 28
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Management......................................................... 31
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Principal Stockholders............................................. 34
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Selling Stockholders and Plan of Distribution...................... 35
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Certain Transactions............................................... 38
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Description of Securities.......................................... 39
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Shares Eligible for Future Sale.................................... 40
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Legal Matters...................................................... 41
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Experts............................................................ 41
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Where You Can Find More Information................................ 41
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Index to Financial Statements...................................... F-1
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PROSPECTUS SUMMARY
The following summary highlights selected information contained
elsewhere in this prospectus. This summary does not contain all of the
information that you should consider before investing in our common stock. You
should read the entire prospectus carefully, including "Risk Factors" and the
financial statements, before making an investment decision.
Our Company
Plastic Business
We own the rights to a plastic technology that is capable of blending
immiscible plastic mixtures. We believe our technology is capable of turning
mixed plastic recycling into high quality uniform thermoplastic resins and end
products. To date, we have focused on developing our plastic technology to a
commercial stage. We believe that there are commercially viable applications for
our plastic technology available now and that these applications can best be
exploited by an entity with more established operations and expertise in the
recycling and plastic industry. Accordingly, we anticipate that within the next
six (6) months, our newly formed plastic subsidiary will enter into an exclusive
Master License agreement with an entity or venture, the partners of which are
currently involved in the recycling and/or equipment manufacturing industries.
We expect that the master licensee will assume all responsibility for the costs
and control over the commercialization of our plastic technology. We expect that
it will identify the specific applications that will be pursued and perform any
necessary research and development to commercialize the selected applications.
We anticipate that our plastic subsidiary will receive royalty income based on
kilograms processed using our plastic technology. However, at the present time,
we do not have any agreements with a prospective master licensee, we have not
fully developed a commercially viable product and we have not generated any
revenues.
Internet Business
Our Board recently announced our intention to enter a new business
involving the incubation of Internet companies located primarily in Europe (See
"Business - Internet Business"). In order to implement our additional business
focus, our Board has proposed a reorganization of our existing corporate
structure (See "The Company - Proposed Restructuring"). Through our recently
formed Internet subsidiary, we expect to develop and physically host a number of
Internet companies primarily in Europe. We anticipate that specific areas of
focus will include business-to-business ("B2B") e-commerce and ventures oriented
towards new emerging Internet infrastructure and wireless Internet applications.
About Us
We were incorporated in the State of Delaware in April of 1999. We are
the surviving entity of a merger with SW Ventures, Inc., a Nevada corporation,
which took place on June 10, 1999. Our principal executive offices are located
at 245 Park Avenue, New York, New York 10167. Our phone number is 212-792-4104.
Our website address is www.ngpx.com. The information in our website is not a
part of this prospectus.
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The Offering
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Common Stock offered by the selling stockholders........................ [________] shares(1)
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Common Stock outstanding prior to the offering.......................... [________] shares
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Common Stock outstanding after the offering............................. [________] shares
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OTC Bulletin Board Symbol............................................... NGPX
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(1) Includes 3,020,706 shares of common stock issuable upon the exercise
of outstanding warrants.
Risk Factors
An investment in our common stock involves a high degree of risk. You
should carefully review and consider the risks discussed under "Risk Factors" as
well as the other information set forth in this prospectus before buying our
common stock.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully review and consider the risks and uncertainties described below
as well as the other information set forth in this prospectus before investing
in our common stock. If any of the following risks actually occur, our business,
financial condition, or operating results could be materially adversely
affected. In such case, the trading price of our common stock could decline and
you may lose all or part of your investment.
General Risks Associated With Investment In Our Common Stock
There is a limited public market for our common stock
Our common stock is quoted on the OTC Bulletin Board with relatively
limited trading activity to date. We cannot assure you that an active trading
market will develop for our common stock, or that if one develops, it will be
sustained.
Our stock price may be volatile
The market prices of many publicly traded companies, particularly
development stage companies, have been and can be expected to be highly
volatile. The future market price of our common stock could be significantly
impacted by
o future sales of our common stock,
o announcements of technological innovations for new commercial
products by our present or potential competitors,
o developments concerning proprietary rights,
o failure to enter into strategic alliances,
o adverse litigation,
o variations in quarterly operating results,
o general trends in the plastic recycling and Internet industries,
and
o other factors outside of our control.
We do not anticipate paying dividends
To date, we have not declared or paid dividends on our common stock. We
presently intend to retain earnings, if any, to finance our operations and do
not expect to pay cash dividends on our common stock in the foreseeable future.
The payment of dividends will depend, among other things, upon our earnings,
assets, general financial condition, and upon other relevant factors.
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Our right to issue preferred stock could adversely affect common stockholders
Our certificate of incorporation authorizes the issuance of preferred
stock with such designations, rights, and preferences as may be determined from
time to time by our Board of Directors, without any further vote or action by
our stockholders. Therefore, our Board of Directors is empowered, without
stockholder approval, to issue a class of stock with dividend, liquidation,
conversion, voting, or other rights, which could adversely affect the voting
power or other rights of the holders of our common stock.
Anti-takeover provisions may discourage takeover attempts
Provisions of the Delaware General Corporation Law and our certificate
of incorporation may discourage potential acquisition proposals or delay or
prevent a change of control. See "Description of Capital Stock."
Shares eligible for future sale may adversely affect our stock price
A substantial number of our shares are available for future sale. If
these shares are sold in the public market, it may adversely affect prevailing
market prices for our common stock and could impair our ability to raise capital
through future sales of equity securities. See "Shares Eligible for Future
Sale."
Should our common stock fall below $5 per share, it will be classified as a
"penny stock"
The Securities and Exchange Commission has adopted regulations which
define a "penny stock" to be any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions, including an exception for
securities authorized for quotation on certain stock exchanges and on the Nasdaq
Small Cap Market. For any transaction involving a penny stock, the rules require
the delivery, prior to the transaction, of a disclosure schedule prepared by the
SEC relating to the penny stock market. Disclosure also must be made about
commissions payable to both the broker-dealer and the registered representative
and about current quotations for the security. Finally, monthly statements must
be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. Our common stock
currently does not fall within the definition of a "penny stock." If our common
stock were to trade below $5.00 per share, the trading market for our common
stock would be materially adversely affected unless an exemption from the penny
stock rules is available.
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Risks Associated With Our Plastic Business
We have a limited operating history and a history of losses, we expect to incur
losses in the future.
We incurred net losses of approximately $3,547,326 for the period April
15, 1999 through December 31, 1999. As of December 31, 1999, we had an
accumulated deficit of $3,547,326, which has since increased. We have not
generated any operating revenues to date. The development and commercialization
of applications using our technology will require substantial expenditures for
the establishment of manufacturing, marketing, and sales capabilities. As a
result, we intend to enter into an exclusive agreement with a master licensee
that has an established reputation in the plastic recycling and/or equipment
manufacturing industry. We anticipate that the master licensee will assume all
responsibilities for the cash and control over the commercialization of our
plastic technology. If we are unable to find such a master licensee, we may be
required to cease operations.
Our business is subject to factors outside our control
Our business may be affected by a variety of factors, many of which are
outside our control. Factors that may affect our business include:
o the ability to find a suitable master licensee, venture partner
or partners to commercialize our technology;
o competition;
o our ability to attract qualified personnel;
o the amount and timing of operating costs and capital expenditures
necessary to establish our business, operations, and
infrastructure; and
o general economic conditions as well as economic conditions
specific to the recycling industry.
Products using our plastic technology, which have not yet been developed, may
not be readily accepted by the market
Although we believe that our patented plastic blending technology will
have commercial applications in the plastic recycling industry, we can not
assure you that the market will recognize the benefits or the potential of our
technology. Even if the master licensee is able to successfully demonstrate to
potential customers the benefits, safety, efficacy, and cost-effectiveness of
thermoplastic resins and end products using our technology, we cannot assure you
that there will be sufficient market acceptance and demand of such products to
allow us to generate sufficient royalty income to operate profitably in the
plastic business.
We must maintain and establish strategic alliances and other third party
relationships to implement our business strategy
Our strategy for developing, manufacturing, marketing, and distributing
products using our plastic blending technology is dependent upon entering into a
master license with a master licensee that has an established reputation in the
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plastic recycling and/or equipment manufacturing industries, strategic alliances
and relationships with joint venture partners, contract manufacturers, or other
third parties, and upon the subsequent success of these parties in performing
their responsibilities. We have no such existing relationships and cannot assure
you that those which we may establish in the future will be successful. Failure
to secure a master license agreement will have a material adverse effect on our
business and our financial condition.
We face competition
The domestic and international recycling markets are highly competitive.
Products using our technology will compete with existing products using a
variety of plastic blending technologies. Many of the manufacturers of competing
products
o are well established in their industry,
o have substantially greater experience than us in research and
development, manufacturing, sales and marketing, and
o have significantly greater financial, research, manufacturing,
and marketing resources than us.
Furthermore, future technologies developed by others may render
products using our technology obsolete or non-competitive.
We will be exposed to numerous risks associated with international operations
We intend to market our products in international markets.
International operations entail various risks, including
o political instability;
o economic instability and recessions;
o exposure to currency fluctuations;
o difficulties of administering foreign operations generally;
o reduced protection for intellectual property rights;
o potentially adverse tax consequences; and
o obligations to comply with a wide variety of foreign laws and
other regulatory requirements.
We have extremely limited manufacturing, marketing and sales capabilities
We have extremely limited manufacturing, marketing and sales resources.
While we anticipate that we will enter into an exclusive agreement with a master
licensee that will assume these responsibilities, we can provide no assurances
that such an alliance will be formed.
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Our technology may become obsolete
Many companies in the recycling industry invest large sums in research
and development. The development by others of new or improved products,
processes, or technologies may make products using our technology obsolete or
non-competitive.
We depend on patents and proprietary rights
Our success will depend, in part, on our ability to obtain and maintain
patent rights to preserve our trade secrets and to operate without infringing on
the proprietary rights of third parties. We cannot assure you that
o any additional patents will be issued to us,
o the scope of any existing or future patents will exclude
competitors or provide us with competitive advantages,
o any of our patents will be held valid and enforceable if
challenged, or
o others will not claim rights in or ownership to the patents and
other proprietary rights held by us.
Furthermore, others may have developed or could develop similar
products or patent rights, may duplicate our products, or design around our
current or future patents. Others may independently develop or otherwise acquire
substantially equivalent know-how, or gain access to and disclose our
proprietary technology. We cannot assure you that we can ultimately protect
meaningful rights to our proprietary technology.
We may not be able to protect our intellectual property rights
Solvay, S.A has opposed our European patent covering our plastic
technology. We have retained counsel in Munich, Germany to defend our patent
rights. While we believe our patent will be upheld in substantially the form it
was issued, we can provide no assurances that we will be successful in our
patent defense. An adverse determination with respect to the enforceability of
our European patent could have a material adverse effect on our business and our
financial condition.
There could be additional litigation concerning our intellectual
property rights in the future. Such litigation, if it occurs, could result in
substantial expense to us and diversion of our efforts, but may be necessary to
o enforce our patents,
o protect our trade secrets and know-how,
o defend us against claimed infringement of the rights of others,
or
o determine the enforceability, scope, and validity of the
proprietary rights of others.
An adverse determination in any such litigation could subject us to significant
liability to third parties or require us to seek licenses from third parties.
Accordingly, an adverse determination in such litigation could have a material
adverse effect on our business and financial condition.
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Risks Associated With Our Proposed Internet Business
We have no operating history upon which you may evaluate us
Our Internet subsidiary was formed in February of 2000. To date our
Internet subsidiary has not made any investments or conducted any meaningful
business. Accordingly, we have no operating history upon which you may evaluate
our business and prospects. We anticipate that many of the companies that our
Internet subsidiary develops will be in the early stages of their development.
Our business and prospects must be considered in light of the risk, expense and
difficulties frequently encountered by companies in early stages of development,
particularly companies in new and rapidly evolving markets such as business to
business e-commerce and other Internet related companies. If we are unable to
effectively allocate our resources and help grow the companies our Internet
subsidiary develops, our stock price may be adversely affected and we may be
unable to execute our strategy of developing a collaborative network of Internet
related companies through our Internet subsidiary.
Our business will depend upon the performance of companies whose business is
uncertain
Economic, governmental, industry and internal company factors outside
our control affect each of the companies our Internet subsidiary will invest in.
If these companies do not succeed, the value of our assets and the price of our
common stock could decline. The material risks relating these companies include:
o lack of the widespread commercial use of the Internet, which may
prevent these companies from succeeding; and
o intensifying competition for the products and services these
companies offer, which could lead to the failure of some of these
companies.
Our business model is unproven
Our strategy is based on an unproven business model. Our business model
depends on the willingness of companies to join the collaborative network of our
Internet subsidiary and the ability of the collaborative network to assist our
Internet subsidiary's network of companies. Our business model depends on our
Internet subsidiary's ability to share information within its network of
companies. If competition develops among companies in its network, our Internet
subsidiary may be unable to fully benefit from the sharing of the information
within its network. If we cannot convince companies of the value of our business
model, our ability to attract new companies will be adversely affected and our
strategy of building a collaborative network may not succeed.
Fluctuations in our quarterly results may adversely affect our stock price
We expect that our quarterly results will fluctuate significantly due
to many factors, including
o the operating results of companies that our Internet subsidiary
develops;
o changes in equity losses or income and amortization of goodwill
related to the acquisition or divestiture of interests in
companies that our Internet subsidiary develops;
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o changes in our methods of accounting for our interests in other
companies, which may result from changes in our Internet
subsidiary's ownership percentages of these companies;
o sales of equity securities by companies owned by our Internet
subsidiary, which could cause us to recognize gains or losses
under applicable accounting rules;
o the pace of development or a decline in growth of the B2B
e-commerce market and the Internet as a whole;
o intense competition from other potential acquirers of Internet
related companies, which could increase our Internet subsidiary's
cost of acquiring interests in companies, and competition for the
goods and services offered by companies they own; and
o our Internet subsidiary's ability to effectively manage its
growth and the growth of companies they own during the
anticipated rapid growth of the global Internet market.
Companies that our Internet subsidiary develops may grow rapidly and our
Internet subsidiary may have difficulty assisting them in managing their growth
We expect the companies that our Internet subsidiary develops to grow
rapidly, by adding new products and services and hiring new employees. This
growth is likely to place significant strain on their resources and on the
resources our Internet subsidiary allocates to assist these companies. In
addition, management of our Internet subsidiary may be unable to convince
companies it invests in to adopt their ideas for effectively and successfully
managing growth.
We face competition from other potential acquirers of Internet related companies
We face competition from other capital providers including
publicly-traded Internet companies, venture capital companies and large
corporations. Many of these competitors have greater financial resources and
brand name recognition than we do. These competitors may limit our Internet
subsidiary's opportunity to acquire interests in companies. If our Internet
subsidiary cannot acquire interests in attractive companies on reasonable terms,
our strategy to build a collaborative network of companies may not succeed.
Our European focus exposes us to less developed markets, currency fluctuations
and political instability
We are pursuing opportunities outside the United States. This
international focus exposes us to several risks, including the following:
o political instability;
o economic instability and recessions;
o exposure to currency fluctuations;
o difficulties of administering foreign operations generally;
o reduced protection for intellectual property rights;
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o potentially adverse tax consequences; and
o obligations to comply with a wide variety of foreign laws and
other regulatory requirements.
The growth of our Internet subsidiary could be impaired by limitations on access
to the capital markets
To date, there have been a substantial number of Internet-related
initial public offerings and additional offerings are expected to be made in the
future. If the market for Internet-related companies and initial public
offerings were to weaken for an extended period of time, the ability of our
Internet subsidiary and the companies in which it invests to grow and access the
capital markets will be impaired.
Our Internet subsidiary may be unable to obtain maximum value for their
interests in other companies
While we generally do not anticipate that our Internet subsidiary will
sell its interests in other companies, if they were to divest all or part of an
interest in a company, they may not receive maximum value for such positions.
For companies with publicly-traded stock, our Internet subsidiary may be unable
to sell its interest at then-quoted market prices. Furthermore, for those
companies that do not have publicly-traded stock, the realizable value of our
Internet subsidiary's interests may ultimately prove to be lower than the
carrying value currently reflected in our consolidated financial statements.
Our Internet subsidiary may not have opportunities to acquire interests in
companies
Our Internet subsidiary may be unable to identify companies that
complement its strategy, and even if they identify a company that complements
their strategy, they may be unable to acquire an interest in the company for
many reasons, including:
o A failure to agree on the terms of the acquisition, such as the
amount or price of the acquired interest;
o Incompatibility between our Internet subsidiary and management of
the company;
o Competition from other acquirers of Internet related companies;
o A lack of capital to acquire an interest in the company; and
o The unwillingness of the company to partner with our Internet
subsidiary.
If our Internet subsidiary cannot acquire interests in attractive
companies, our strategy to build a collaborative network of companies through
our Internet subsidiary may not succeed.
We may have to buy, sell or retain assets when we would otherwise not wish to in
order to avoid registration under the Investment Company Act of 1940
We believe that our Internet subsidiary will be actively engaged in the
Internet business through their network of majority-owned subsidiaries and
companies that they will "control." Under the Investment Company Act, a company
is considered to control another company if it owns more than 25% of that
company's voting securities. A company may be required to register as an
investment company if more than 45% of its total assets consist of, and more
than 45% of its income/loss and revenue attributable to it over the last four
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quarters is derived from, ownership interests in companies it does not control.
Because many of the companies our Internet subsidiary will own will not be
majority-owned subsidiaries, and because our Internet subsidiary will own 25% or
less of the voting securities of a number of companies, changes in the value of
their interests in the income/loss and revenue attributable to companies it owns
could subject our Internet subsidiary to regulation under the Investment company
Act unless our Internet subsidiary takes precautionary steps. For example, in
order to avoid having excessive income from "non-controlled" interests, our
Internet subsidiary may not sell minority interests they would otherwise want to
sell or they may have to generate non-investment income by selling interests in
companies that they are considered to control. Our Internet subsidiary may also
need to ensure that they retain more than 25% ownership interests in companies
after any equity offerings. In addition, our Internet subsidiary may have to
acquire additional income or loss generating majority-owned or controlled
interests that they may not otherwise have acquired or may not be able to
acquire "non-controlling" interests in companies that they would otherwise want
to acquire. It is not feasible for our Internet subsidiary to be regulated as an
investment company because the Investment Company Act rules are inconsistent
with our Internet subsidiary's strategy of actively managing, operating and
promoting collaboration among companies in its network.
Our business is dependent upon our executive officers and our ability to attract
and retain other key personnel
Our success is dependent in large part on the continued employment and
performance of our President and Chief Executive Officer, Paul Hokfelt, as well
as other key management and operating personnel. The loss of any of these
persons could have a material adverse effect on our business. We do not have key
person life insurance on any of our employees.
Our future success also will depend upon our ability to recruit
personnel, and to hire and to retain additional qualified personnel with respect
to our Internet business. The failure to recruit such personnel or failure to
otherwise obtain such expertise would have a material adverse effect on our
business and financial condition.
WARNING REGARDING FORWARD LOOKING STATEMENTS
This prospectus contains certain forward-looking statements, including
but not limited to statements regarding:
o products to be developed;
o technological and competitive advantages;
o timetable for commercial introduction of products using our
technology;
o strategic alliances;
o entrance into the Internet incubation business; and
o our proposed restructuring.
These forward-looking statements are based on current expectations that
involve numerous risks and uncertainties. Assumptions relating to the foregoing
involve judgments with respect to, among other things, future economic,
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competitive, and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Although we believe that our assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, we cannot assure you that the results discussed or
implied in such forward-looking statements will prove to be accurate. In light
of the significant uncertainties inherent in such forward-looking statements,
the inclusion of such statements should not be regarded as a representation by
us or any other person that our objectives and plans will be achieved. Words
such as "believes," "anticipates," "expects," "intends," "may," and similar
expressions are intended to identify forward-looking statements, but are not the
exclusive means of identifying such statements. We undertake no obligation to
revise any of these forward-looking statements.
DIVIDEND POLICY
We have never declared or paid dividends, and do not intend to pay any
dividends in the foreseeable future on shares of our common stock. Our earnings,
if any, are expected to be retained for use in expanding our business. The
payment of dividends is within the discretion of our Board of Directors and will
depend upon our earnings, if any, capital requirements, financial condition, and
such other factors as are considered to be relevant by our Board of Directors
from time to time.
PRICE RANGE OF COMMON STOCK
Our common stock is traded on the OTC Bulletin Board under the symbol
"NGPX". The following table sets forth for the periods indicated the high and
low bid quotations for our common stock as reported on the OTC Bulletin Board.
for all periods subsequent to our merger with SW Venture, Inc. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commission, and
may not necessarily represent actual transactions.
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High Low
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4th Quarter 1999, ended 12/31/99 $8.5 $6.25
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3rd Quarter 1999, ended 9/30/99 $8.5 $4.125
-------------------------------------- ---------- ------------
6/11/99 through 6/30/99 $8.25 $7.25
-------------------------------------- ---------- ------------
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As of [_____], 2000, there were approximately [95] holders of record of
our common stock. On [______], 2000, the last sale price reported on the OTC
Bulletin Board for our common stock was $[____] per share.
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THE COMPANY
We were incorporated in the State of Delaware on April 15, 1999. We
were the surviving entity in a merger which took place on June 10, 1999 with SW
Ventures, Inc., a Nevada corporation organized on May 7, 1996. Since the merger,
our business purpose has focused on the commercial development of our patented
plastic processing technology. On January 25, 2000, the Board announced our
intention to enter into an additional business involving the establishment of a
European Internet Incubator network (See "Business").
From its inception in May of 1996 until the date of our merger, SW
Ventures, Inc. business involved seeking out and investing in various oil and
gas opportunities in the Western United States. SW Ventures participation in the
oil and gas business ceased on June 10, 1999 when it contributed all of its
assets and liabilities relating to the oil and gas business to a wholly owned
Nevada subsidiary, SW Oil and Gas Company. Immediately thereafter all of the
stock of SW Oil and Gas Company was sold to Guido Cloetens, the former majority
shareholder of SW Ventures, Inc., in exchange for a Promissory Note with a
principal amount of $90,000 and the assumption of certain liabilities of SW
Ventures, Inc. by Mr. Cloetens and SW Oil and Gas Company.
On June 8, 1999, at a special meeting of the shareholders of SW
Ventures, Inc., the following actions were approved: (a) the reverse split of
the common stock of SW Ventures, Inc. (15 for 1), (b) the disposition of all of
the assets and liabilities of SW Ventures, Inc. relating to its oil and gas
operations to SW Oil and Gas Company, (c) the merger of SW Ventures, Inc. and
New Generation Plastic, Inc. with New Generation Plastic, Inc. as the surviving
entity and (d) the issuance of 11,580,000 post split shares of common stock of
New Generation Plastic, Inc. to Bachkine & Meyer Industries, S.A., a British
Virgin Islands corporation, pursuant to an exemption from the registration
requirements of Section 5 of the Securities Act of 1933, as amended under
Regulation S, in exchange for all of the assets and liabilities relating to our
patented technology pursuant to the terms of the Asset Contribution Agreement by
and between Bachkine & Meyer Industries, S.A. and SW Ventures, Inc. and Guido
Cloetens dated as of April 14, 1999.
Proposed Restructuring
On March 9, 2000, we announced a proposed restructuring which we
believe will allow us to more effectively pursue our Internet strategy. As part
of this restructuring, we recently formed a wholly owned subsidiary, New
Generation Partners, Inc., in the State of Delaware.
We expect that this recently formed subsidiary will develop and
physically host a number of Internet companies primarily in Europe. We
anticipate that we will develop a collaborative network of companies involved in
B2B e-commerce and ventures oriented towards new emerging Internet
infrastructure and wireless Internet applications.
Subject to stockholder approval, we intend to transfer all of our
assets and liabilities relating to our plastic business to another recently
formed wholly owned Delaware subsidiary, NG Plastic, Inc. As part of the
restructuring, we anticipate changing our name from "New Generation Plastic,
Inc." to "New Generation Holdings, Inc." subject to stockholder approval and
changing the name of "NG Plastic, Inc." to "New Generation Plastic, Inc.". We
anticipate that the transfer of our assets and liabilities relating to our
plastic business and the change of our corporate name, among other things, will
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be presented for a vote of our stockholders at our annual meeting which is
expected to be held in April, 2000.
BUSINESS
Plastic Business
Our plastic blending technology enables the production of homogeneous,
commercially usable polymers from a varied stream of otherwise immiscible waste
plastic or virgin feedstock. To date we have not generated any revenue from our
technology and have devoted our efforts to developing the technology to a
commercially viable stage. We believe that our technology is unique in its
ability to combine mixed plastic, including blending different polymers which
are normally incompatible, into homogenous compounds (the "NGP Compounds")
through a mechanical process. The NGP Compounds are created without the use of
costly additives, known as compatibilizers, which link non-compatible resins. We
believe that NGP Compounds can be customized to meet desired physical
specifications. Moreover, our technology can utilize consumer and industrial
plastic waste, as well as virgin materials. In this regard, we believe that our
technology provides a solution for the processing of mixed plastic waste.
Therefore, we expect that initial commercialization efforts will be focused on
the recycling market.
The core component of our technology is an integrated ultra high
shearing chamber that creates in situ compatibilization of otherwise
non-compatible resins and deeply microhomogenizes different polymers into a
continuous amalgam. The chamber is a cylindrical structure within which a rotor
with impellers turns at very high speed (peripheral tip speed ranges between 40
and 65 m/sec during final processing). The speed and timing of the motor is
programmed according to the materials being processed and the nature of the
compounds to be created. The mixed plastic, as a result of the friction between
the plastic particles, rotor blades and chamber wall, are melted into a
homogeneous blend. A sharp increase of the torque indicates that the molten
mixture has reached the predetermined "gelification" level and is ready to be
discharged from the chamber.
All processing steps are computer controlled by software. Parameters
for programming include temperature, rotor speed, torque variation and time.
Depending on the type of mixture processed, the cycle time should last between
20 and 60 seconds and temperatures of the expulsed hot compound melt range
between 180(Degree)C and 280(Degree)C.
We believe that the finished product is significantly more processable
than otherwise compatibilized or compacted mixed plastic and offers economic
advantages over current plastic recycling. For example, the finished product is
normally pelletized allowing it to be used in conventional plastic injection and
extrusion equipment.
We are currently operating a bench top prototype with a capacity of
approximately 30 kg/hour, have finalized the plans for the creation of a 150
kg/hour pilot unit and have plans for a full commercial size unit with a
capacity of 1,000 kg/hour (the "NGP Unit"). We expect that all of the above will
be made available to the master licensee (See "Management's Plan of Operation -
Plastic Business"). Our technology is protected by a patent that is issued or
pending in 62 jurisdictions worldwide.
We estimate that Newplast, NV and its affiliates (together,
"Newplast"), the prior owner of our technology, spent in excess of $12,000,000
from 1991 to 1996 in their effort to find a commercial application for our
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technology. Seven prototypes were produced and tested, with the last and largest
unit having a standard capacity of 350kg/hour. Newplast was forced into
liquidation by their creditors in 1996. In 1998, Bachkine & Meyer Industries,
S.A. bought the patent rights covering the plastic blending technology from a
secured creditor and hired Bernard Dubrulle d'Ohrcel, the chief engineer in
charge of the development of the prototypes for Newplast.
The thermoplastic end product created by our technology from mixed
plastic waste is expected to have physical and chemical properties that are
comparable to certain virgin resins. In our opinion, current recycled mixed
plastic products have poor physical and chemical properties that have limited
their commercial acceptance. We expect that products using our technology will
be able to produce a series of NGP Compounds with specified characteristics by
controlling the mix of the recycled plastic feedstock without the use of
compatibilizers. Additionally, NGP Compounds can be created from mixed virgin
resins that are currently immiscible.
Historically, virgin resins were not mixed due to the costs of chemical
processes, limited miscibility of polymers and limited markets due to higher end
product costs. However, over the past 10 years, polymer blends have garnered as
much as a 30% market share of polymer consumption. We believe that our
technology is well suited for the development of additional polymer blends and
may offer an economical process for recycling those blended products.
NGP Compounds can be pelletized and easily used in standard plastic
manufacturing techniques, such as injection, extrusion, extrusion/calendar, blow
molding and compression molding. These pellets can then be used in a range of
applications such as building materials, highway construction and sign posts,
agriculture, transportation, household products, office equipment, consumer
electronics, etc. The raw material costs of NGP Compounds utilizing plastic
waste are expected to be approximately half of the cost of using commodity
virgin resins (depending on geographic variables such as electric and labor
costs, percentage content/volume/costs of the plastic waste stream and the
specific resin the NGP Compounds are being compared to).
Our Technology - Recycling Application
For a plastic recycling application, our technology must be integrated
into a three zone system. Generally, a 25,000 square foot facility is necessary
for operations. The activities within each zone are as follows:
Zone One - Cleaning and Size Reduction. Within the first zone, waste plastic
materials are shred, separated, washed, dried and ground to specification for
the process feedstock. Material is then conveyed to silos for composition
analysis and short-term storage. If necessary, the mixture can be supplemented
with mono-materials and/or additives for specific applications/technical
specifications.
Zone Two - NGP Unit. Within the second zone, material is transported into the
ultra high shearing processing chamber. Depending on the type of mixture
processed, the cycle time should last between 35 and 120 seconds. Peripheral tip
speed ranges between 40 to 65 m/sec and temperatures of the expulsed hot
compound melt ranges between 180(Degree)C and 280(Degree)C during final
processing. The Company believes that within 20 - 60 seconds a phase change
occurs, causing molecular grafting or linking (re-arranging of the various
polymers) of various polymer chains, creating a homogeneous amalgam. The amalgam
is then extracted by centrifugal force from the inner chamber and is forced into
the reception area of a specially designed first phase extruder for temperature
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control and extrusion. At the end of the first stage extruder is a special
filtration unit combined with an extrusion die designed to discharge the hot
melt in a spaghetti-like state into the degassing chamber. The filtered and
degassed hot melt is then introduced to the mouth of the second stage extruder
for pelletization or direct extrusion/compression of end products.
Zone Three - Packaging. Within the third zone, the pellets are conditioned and
transferred into 25 kg or larger containers to be shipped to production
equipment either on site or at an off-site manufacturing facility.
For the waste management market, our technology requires a feedstock or
raw material which has been collected, transported and sorted with a maximum 30%
non-plastic content (water, paper, dirt, glass, metal, etc.). The mixed plastics
are typically generated from the collection of municipal solid waste, industrial
(computer, electronics, automotive) waste and agricultural (film, packaging,
etc.) waste.
The integrated NGP Unit located within Zone Two can be sold to
customers that already have cleaning and packaging equipment or customers that
will not be using dirty plastic waste. We hope to enter into a venture or
ventures with one or more partners for the purpose of commercially producing
identified streams of plastic. We anticipate that such an arrangement may result
in the payment of royalties to us equal to a fixed amount per kilo of
production.
Competition
We believe that current plastic or rubber processing equipment
manufacturers could compete with us through the use of new or existing
technology. There are more established and better funded waste processing
equipment companies that currently manufacture waste processing equipment that
will compete with equipment utilizing our technology. We anticipate that one or
more of those companies will be the exclusive or nonexclusive manufacturers for
our NGP Units.
While there are numerous companies involved in plastic recycling, most
of these firms are focused on collection and processing rather than technology
development.
With regard to the mechanical recycling of mixed plastic there are
several techniques currently being utilized by companies in the recycling
industry, including:
Intrusion - This technique involves the use of a specially
designed extruder, in which, the low melting point polymers melt
from the main body of material as they are extruded through round
or square profiles. The unmelted polymer flakes are used as
filler. This technique involves some pre-sorting, but the
commercial use of the end product is limited due to physical and
chemical characteristics. Companies that utilize this process
include ART (Belgium), Remaplan (Germany), Testa (France) and
Hammer Plastic (United States).
Cyrogenefication (micronisation) - This process utilizes very
low temperatures to create the micronisation of the feedstock into
a fine powder. The fine powder is then extruded with standard
plastic processing equipment. The resulting end product has better
surface aspects and a more homogeneous core than the end products
from intrusion. The powder can also be transformed into end
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products by compression molding and be used as filler with a skin
made of virgin polymers. The mechanical properties of the end
product utilizing this technique are generally poor, though
better than intrusion. This process is also costly.
There has been recent development work of other chemical processes in
Germany and France on the treatment of plastic waste, but costs associated with
these processes significantly limit market applications. Additionally, the costs
of incineration and landfill disposal (the largest waste management use for
plastic waste) are high and will continue to meet public resistance. New waste
management processes such as thermolization and pyrolization that are attempting
to take market share away from incineration (providing no toxic gas emissions)
are costly which has limited their market appeal. Pyrolisis has been developed
by large chemical companies to take polymers back to their original state via
high temperature and high pressure causing the materials to convert to the state
of synthetic oil; however, this technique is extremely costly (the end product
costs between 6 to 10 times more than the price of crude oil).
Sources and Availability of Equipment/Raw Materials
We believe that the reclaimed plastic waste utilized as a raw material in
our technology is readily available worldwide at little or no cost. In some
circumstances, we believe that we may receive payment to remove the plastic
waste materials we utilize.
Most of the equipment that makes up the NGP Unit is available from various
manufacturers worldwide. The processing chamber is a unique design, but we
believe that it can be manufactured by any of a number of the major plastic
machinery manufacturers.
Patents and Trademarks
Our plastic blending technology currently utilizes our U.S. Patent Number
5,891,955 issued on April 6, 1999, entitled Process for Transforming a Starting
Material Containing At Least Two Different Thermoplastic Materials Into A New
Homogenous Thermoplastic Material. This patent has been filed or is pending in
62 jurisdictions worldwide. The European Patent No. 92907183.5-2307 issued on
September 16, 1998 was opposed by an application filed by Solvay, SA. We have
retained counsel in Munich, Germany to handle the opposition and we believe that
the patent will be upheld in substantially the form it was issued. A decision on
Solvay's opposition to our European patent is not expected until the fourth
quarter of 2000. If the challenge to our European patent is successful, it could
result in a material adverse effect on our business and our financial condition.
We have filed for the registration of the following three (3) trademarks
with the United States Patent and Trademark Office:
A) Mark: New Generation Plastic
App. No.: 75/628132
App. Date: January 27, 1999
Status: Filed
B) Mark: NewGen Plastic
App. No.: 75/628971
App. Date: January 27, 1999
Status: Filed
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C) Mark: NGP
App. No.: Not yet assigned
App. Date: January 27, 1999
Status: Filed
Each application covers the following goods and services: (a) Machinery for the
Production of Plastic Material, (b) Computer Software Used for the Production of
Plastic Material, (c) Plastic Material Used for Manufacturing and (d)
Manufacture of Plastic Products for Others, Recycling of Mixed Waste Plastic
Products for Others.
To date none of the trademarks has been issued; however, we are
diligently pursuing the applications.
Research and Development
We have been engaged in internal and external research and development
efforts aimed at bringing our technology to a commercially viable stage. A
research agreement was entered into with an independent polymer research and
testing organization called Pole Europeen de Plasturgie ("PEP") located in
Oyonnax, France to further analyze our technology and the NGP Compounds it
produces. In addition, some of the materials produced by the our bench type
prototype are being tested by Polymer Diagnostics, Inc. ("PDI") an independent
testing group based in Lake Avon, Ohio. PEP and PDI were commissioned to
accelerate the development and commercialization of our technology. Their
objectives were to: 1) show the improved technology performance relative to
conventional blending equipment, 2) show the commercial potential by processing
several readily available mixed plastic waste streams and some innovative blends
from virgin materials, and 3) gain process understanding to predict material
properties and develop quality control software in commercial machines. In 1999,
approximately $62,000 was spent on research and development with PEP and PDI.
We expect that the research agreement with PEP will be terminated in
the near future. We anticipate that the master licensee will be responsible for
future research and development costs (See "Management's Plan of Operation -
Plastic Business").
Number of Employees
We have 6 employees as of the date hereof. We anticipate that 5 of the
6 employees will become employees of our Internet subsidiary.
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Internet Business
We formed New Generation Partners, Inc., a wholly owned Delaware
subsidiary in February of 2000 for the purpose of establishing an Internet
Incubation Network throughout Europe. We anticipate that our Internet subsidiary
will enable us to develop and physically host a number of Internet companies,
which we refer to as Network Companies. We expect that by creating such an
Incubation Network, we can use the collective knowledge and resources of the
Network Companies and our management team to create synergies and promote growth
among Network Companies.
The Internet Market
The Internet has created a significant and abrupt shift in the way in
which many companies do business. The Internet provides global connectivity and
unprecedented breadth of information accessible at rapid speed and minimal cost.
This low cost interconnectivity has changed how many companies communicate
internally, transact business with vendors and customers and compete with firms
around the world. These factors coupled with the relatively low costs associated
with establishing an Internet company have led to a boom in new Internet
companies.
Nevertheless, we believe that there will be significant opportunities
for new Internet companies due to the expected rise in Internet users worldwide
(both individual and commercial), particularly in Europe. Currently, we estimate
that the United States accounts for over 40% of worldwide Internet usage.
Estimates indicate that Europe will surpass the United States in number of
Internet subscribers by the end of 2001 and will account for approximately 50%
of worldwide Internet usage by 2005. Combined revenues for Internet access in
Europe are projected to grow from a recent estimate of $2.5 billion to almost
$12 billion in 2001. It is expected that revenues generated from European
e-commerce will grow from approximately $39 billion in 2000 to over $430 billion
in 2003. We estimate that while there are approximately 400+ U.S. Internet
related public companies, there are only 100+ such companies in Europe.
Incubation Network
We expect our Internet subsidiary to develop and physically host a
number of Internet related companies primarily in Europe. We expect that
specific areas of focus will include B2B e-commerce and ventures oriented
towards new emerging Internet infrastructure and wireless Internet applications.
We anticipate that initial Incubation facilities will be located in London,
Paris and Munich. By providing initial funding, administration, accounting and
legal assistance, consulting services, marketing, technology and contacts for
additional funding, we hope to enable Internet start-up companies to focus on
their core business while keeping operational expenses and other distractions
normally associated with start-up businesses to a minimum. We believe that
Internet entrepreneurs and companies requiring funding will actively seek out
our Internet subsidiary. We also expect that our Internet subsidiary will make
significant investments in non-Network Companies.
Our Process
Through our Internet subsidiary, we intend to identify opportunities at
a very early stage and incubate these ideas into successful businesses. We
expect that as to each prospective incubation candidate, our Internet subsidiary
will analyze the markets, core business concepts, the entrepreneur's
capabilities and the nature and size of the equity stake that the Internet
subsidiary will receive as an "incubation fee." If the Internet subsidiary
agrees to admit the Network Company to Phase I incubation, our incubator
facilities will provide infrastructure for the Network Company to develop their
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ideas into a business plan over an initial 30-90 day period. The infrastructure
will include a senior local executive who will act as a partner to the
entrepreneurs and organize support in hardware, software, design, marketing
assessment, financial planning and administration. We will provide our local
executives with an Incubation rule book which the executive will use to guide
him or her as to the criteria for admitting companies to our Incubation Network,
how to develop these companies and how to network within our Internet
subsidiary's entire Incubation Network. We expect that our Internet subsidiary
will receive an equity stake of no less than 25% in the Network Company for this
first stage of incubation.
After the production of the business plan, our Internet subsidiary and
the Network Company will agree whether to continue collaboration. If agreed, we
will begin the process of verifying and refining the business plan over an
additional 30-90 day period. During this period, we expect that the Internet
subsidiary will provide seed capital financing to the Network Company in an
amount up to $500,000. We anticipate that our Internet subsidiary will identify,
contract with and pay for the services of various advisors in an effort to
verify the business plan. We expect that this portion of Phase 1 incubation will
yield us additional equity, the amount of which will be determined on a case by
case basis.
In the event that the business plan developed in Phase 1 is deemed
viable after verification, we anticipate that we will assist the Network Company
in the further development and financing of the business in what we refer to as
Phase 2. A Phase 2 Network Company will be expected to obtain its own space and
will no longer be physically based by our incubation facility. We anticipate
that we will assist the Phase 2 Network Company in preparing for and obtaining
an initial round of third party financing. We expect that we will participate in
that financing in return for additional equity. We anticipate that we will
continue to assist in the management of the Phase 2 Network Company and we
expect that we will have representation on the Board of Directors.
Our Investment Policy
We expect that our Internet subsidiary will follow a defined investment
policy. At the present time, we anticipate that the policy will provide that 20%
of available funds will be used in very early stage or Phase 1 Incubation
ventures with seed investments up to $500,000 per company. We anticipate that
35% of funds will be allocated to the development of Network Companies coming
out of Phase 1 incubation and slightly more mature European and North American
ventures that are not Network Companies or Phase 2 ventures. We expect that the
average investment in Phase 2 ventures will be $2,000,000. We anticipate that
remaining funds may be invested in discrete investments in more mature
businesses with higher capital requirements or Phase 3 companies. We expect that
we will make a significant number of the Phase 2 and Phase 3 investments in
Network Companies coming out of Phase 1. We hope to obtain active control of the
companies in which we invest through shareholdings of 25% or more.
Strategic Alliances
We are entering into agreements with Double Impact Inc. and eMarketer
an affiliate of e-lond, Inc. which we believe will greatly enhance our ability
to provide Incubation services to Network Companies. Double Impact is a highly
regarded Internet venture catalyst, providing Internet companies and
entrepreneurs with a range of business development, investment and advisory
services. The company targets entrepreneurial companies, corporations and
investors and in assists them in formulating Internet strategy, forging
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partnerships, competing effectively, expanding globally and maximizing upside
potential. We believe the agreement with Double Impact will provide us with a
range of Internet experience and expertise, incubation development skills and
analysis services which will assist us in developing protocols regarding
industries and companies to invest in.
eMarketer is a worldwide authority on online business. As a new media
publisher, the company has numerous products and services. eMarketer's
award-winning web site has been visited by hundreds of thousand of e-marketers,
entrepreneurs, business analysts and industry experts from over 105 countries.
We believe the agreement with eMarketer will provide us with significant real
time research and market trend data.
Competition
The past few years have seen the emergence of several public companies
in the United States that invest broadly in promising pre-IPO Internet-related
start-up companies. These publicly traded incubator companies are a blend
between venture capital firms and corporate parents, assisting startups in a
myriad of financial, marketing and management areas. We expect that these
companies will be our chief competitors; however, there may be other entrants
into the Internet incubation market that will compete with us. Two of them, CMGI
and ICGE are discussed below. However, we believe that none of these U.S.
companies have a specific focus on European Internet investments and incubation
activities, such as we have.
More specifically, some of our potential competitors in Europe are
currently in dialogue with us to become either consultants or partners. Some of
these European companies are based in Sweden. One of the reasons we are
approaching these firms is due to the fact that a significant portion of the
cross Atlantic Internet traffic goes through Stockholm on the European side.
Additionally, Sweden has been on the cutting edge of Internet start-ups and
technology.
The following are some of the public companies already involved in
pre-IPO Internet funding.
CMG Information Services, Inc. (CMGI) - Andover, Massachusetts
Since 1995, CMGI invests, develops, acquires and operates various
Internet companies. The company provides incubating services for
Internet-related start-up businesses and provides capital resources. These
companies, as they grow within the CMGI network, are both public and private.
Numerous investment banks are covering CMGI with a "buy" rating. As of
mid December, CMGI's publicly traded assets totaled approximately $5 billion.
Many analysts believe the company's valuation over the next 18-month period will
rise to over $20 billion.
CMGI has several business units. First, the Company has majority stakes
in a range of Internet-related businesses including, technology, ISP and
marketing companies at various stages of development, including AltaVista,
iCAST, MyWay.com, NaviNet, Adsmart, Activerse, Engage, et al. Further, CMGI is
directly involved in fulfillment services (the market segment which offers
integrated Web-based product fulfillment including turnkey outsourcing,
telemarketing and sales/lead inquiry management) through its investment in
SalesLinkCorp, which in turn has purchased major competitors.
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CMGI also has an affiliated venture capital group formed in 1995 that
makes the early-stage venture transactions through three Venture funds. The
synergy amongst the start-up investments with the more mature companies allows a
network of relationships, experiences and management to feed off of each other
and improve all of the company's future business prospects. The company offers
its affiliates and network of holdings access to corporate resources, facilities
collaboration, development of strategic alliances and technical access to
corporate resources, technological innovation. Strategic investors include
Microsoft, Intel, Sumitomo and Compaq.
Investment Capital Group (ICGE) - Wayne, Pennsylvania
ICGE is an Internet holding company actively engaged in
business-to-business e-commerce through a network of Partner Companies. It
provides operational assistance, capital support, industry expertise, and a
strategic network of business relationships intended to maximize the long-term
market potential of more than 45 business-to-business e-commerce partner
companies. The company has or had stakes in VerticalNet Inc., MatchLogic,
WiseWire, and Breakaway Solutions Inc. ICGE focuses on investments in online
companies that provide Internet-commerce services for businesses and suppliers.
Its investors include Safeguard Scientifics Inc., General Electric Co. and
Comcast Corp.
Leveraging off of an initial $45 million start up in 1996, the company
has had a series of equity and debt moneys raised to fund their investments in
Internet companies. A public offering in August and a tag on private placement
with IBM this summer created a pool of approximately $225 million to make
additional Internet investments.
Other parties in the marketplace include:
SafeGuard Scientific - Wayne, Pennsylvania
Safeguard is an Internet-centric holding company that identifies, acquires,
operates and manages business-to-business companies and has interests in several
private equity funds. Safeguard currently focuses on companies engaged in
e-commerce, e-communication, and e-business services. Safeguard Scientifics,
Inc. develops and operates entrepreneurial, rapidly growing, information
technology companies with an emphasis on E-Commerce, E-Business Software and
Services, and E-Communications.
Other significant companies in the incubation market are:
SOFTBANK, Inc. - Tokyo, Japan;
Rare Medium - New York;
eCompanies - Santa Monica, California;
i-Hatch Ventures - New York;
KPE - London, New York and Los Angeles'
Protege - UK and California;
Ci4net - Jersey (UK);
Dawnay Day Lander - London;
Europ@web - France;
Antfactory - London;
GorillaPark - Amsterdam;
Cell Ventures -Sweden;
Icon Medialab International - Sweden; and
Framfab - Sweden.
Employees
Our Internet subsidiary currently has no employees. We anticipate that
the number of employees will grow to [25] by the end of 2000.
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MANAGEMENT'S PLAN OF OPERATION
You should read the following plan of operation in conjunction with the
financial statements and notes thereto contained elsewhere in this prospectus.
The following information contains forward-looking statements which are subject
to risks and uncertainties. If one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward-looking statements.
Overview
We are a development stage company that has not yet generated any
revenue. We have decided to restructure our existing plastic business and enter
into a new business involving incubation of primarily European Internet
businesses. These two businesses will be carried out in two of our subsidiaries
formed for those purposes. After the completion of the transactions, we will
become a holding company with no operations aside from the ownership of the
subsidiary corporations' stock.
Plastic Business
Over the course of the next twelve months, we anticipate that we will
engage in the following activities:
1. We expect that upon receipt of stockholder approval, we will
complete the transfer of all assets and liabilities relative to
the plastic business to a wholly owned subsidiary.
2. We expect to identify a master licensee and enter into an
exclusive master license agreement for use of our plastic
technology. We anticipate that our plastic subsidiary will
receive royalty payments on a per kilogram basis.
3. We expect to maintain patent and trademark filings.
4. We expect to provide any necessary administrative or technical
assistance to master licensee with regard to our plastic
technology.
The foregoing activities reflect the fact that we will no longer be
directly responsible for continuing research and development costs and capital
expenditures with regard to the commercialization of selected applications for
the plastic technology. We expect that the master licensee will be responsible
for all such costs.
Internet Business
Over the course of the next twelve months, we anticipate that we will
engage in the following activities:
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1. We expect to identify and establish strategic partnerships with
firms that provide expertise that will benefit Network Companies.
2. We expect to establish an initial incubator site in London and
additional sites in Paris and Munich.
3. We anticipate hiring a Chief Investment Officer and Internet
Analyst.
4. We expect to identify candidates for incubation and direct
investment. It is expected that these candidates will be involved primarily in
B2B e-commerce, wireless Internet, or Internet infrastructure.
5. We anticipate entering into the initial phase of incubation with
approximately 45 Network Companies.
6. We expect that we will provide seed capital investments of up to
$500,000 to approximately 18 of the initial 45 Network Companies.
7. We anticipate that we will invest an average of $2,000,000 in 6 of
the 18 Network Companies that we provide seed capital.
8. We expect to provide seed capital of up to $500,000 each to 3
non-Network Companies (companies which are not part of our incubation program).
9. We anticipate that we will invest an average of $2,000,000 in the
initial round of third party financing of 4 non-Network Companies. We expect
that this will represent approximately 30% of such initial financing for each of
these non-Network Companies.
10. We expect that we will make investments in 3 pre-initial public
offering non-Network Companies with more mature Internet businesses. We expect
that the average investment in each of these companies will be $5,000,000 which
will represent approximately one-third of the funds raised by these companies.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to generate
any revenue from our business operations. Consequently, we have been solely
dependent upon shareholder advances from Bachkine & Meyer Industries, S.A. to
fund our cash requirements.
Plastic Business
As of December 31, 1999, we had assets of $607,191 and liabilities of
$3,337,984. For the next twelve months, we anticipate that we will require
$150,000 in additional capital. We anticipate that these funds will either be
provided by additional loans from Bachkine & Meyer Industries, S.A. or from the
proceeds of a private placement of our equity securities. We do not plan to
purchase any significant equipment in the next twelve months.
Internet Business
Our Internet business is in its initial stage of development. This
business has not generated any revenues to date and we do not expect any revenue
to be generated in the next twelve months. In order to operate this business in
accordance with our current business plan, we intend to raise approximately
$60,000,000 in the next twelve months. We anticipate that in the next 90 days,
we will raise approximately $2,000,000 to $5,000,000. We further anticipate
raising an additional $55,000,000 to $60,000,000 in equity financing (private
and/or public) in the next 12 months.
29
<PAGE>
We cannot guarantee that any new capital will be available to us or
that adequate funds for operations will be available as or when needed, or on
terms satisfactory to us. Our failure to obtain adequate additional financing
may require us to delay, curtail or scale back some or all of our proposed
activities and potentially to cease operations in both the plastic and Internet
businesses.
We expect that the Internet subsidiary will commit an aggregate of up
to approximately $50,000,000 to investments in Network and non-Network
Companies. In addition, we expect that we will incur approximately $3,200,000 of
corporate overhead expenditures for salaries, rent, expenses, and legal and
accounting expenses. The anticipated expenses for establishing and operating
the initial network of incubation sites will be $9,200,000. Finally, we expect
that we will expend approximately $500,000 in legal, accounting and other
expenses directly related to investments in non-Network Companies.
Year 2000 Issue
Management believes that our accounting and operational systems are
year 2000 compliant. We received verification from GE/Fanuc that the process
control software for the NGP Technology was year 2000 compliant. We have not yet
experienced any material year 2000 operating problems and do not expect to
encounter any such problems.
Facilities
We currently have a short term lease agreement for use of office space
and conference facilities with Regus Business Center Corp. at 245 Park Avenue,
39th Floor; New York, New York 10167. The agreement is on a month to month basis
at a rate of $225, plus expenses. This arrangement is sufficient to conduct the
day to day operations of its business. In addition, we have a month to month
arrangement with Bachkine & Meyer Industries, S.A. to utilize space in their
representative office at Rue de la Rotisserie 29, Geneva, Switzerland.
Currently, there is no rental paid to Bachkine & Meyer Industries, S.A. for the
use of the space.
Legal Proceedings
We are not a party to any pending legal proceedings and, to the best of
our knowledge, no such action by or against us has been threatened.
30
<PAGE>
MANAGEMENT
The following table sets forth the names, ages and positions of our
executive officers and directors:
Name Age Position and Offices with the Company
---- ---- -------------------------------------
Jacques Mot 42 Chairman of the Board of Directors
Paul Hokfelt 46 President, Chief Executive Officer
Elliot Levine 47 Interim Chief Financial Officer
Marc Engel 40 Executive Vice President
Thomas Marshall 42 Executive Vice President, Secretary and
General Counsel and Director
Marcel Rokegem 50 Director
Jacques Mot has served as the Chairman of the Board since April of 1999
and he served as President and Chief Executive Officer from April 1999 to
January 24, 2000. Mr. Mot is a founder of Bachkine & Meyer Industries, S.A.
("BMI"). Prior to the start up of BMI, Mr. Mot was an independent consultant to
Unilabs Group (listed on the Nasdaq and Swiss Stock Exchanges). Mr. Mot's
activities have primarily been securities related matters and investor
relations.
Mr. Mot was also a Director of Argenta & Magnum Management Company Ltd.
- - Gilbratar, a company that created and marketed offshore entities. From 1987 to
1992, Mr. Mot was the General Manager and Director of Iesa Investissements S.A.,
a portfolio management and investment company, where he handled portfolio and
investment management on a confidential basis. Mr. Mot attended to the
University of Lausanne, Switzerland studying economics from 1976-1979.
Paul Hokfelt has served as our President and Chief Executive Officer
since January 25, 2000. Paul is a Swedish national who has been active
internationally and gained senior management experience in several European
countries and the United States with service providers in the medical field.
Prior to joining us, Paul was most recently a director and CEO of UCT
International, a contract research organization. Additionally, he was
instrumental in his role as managing director and COO in the rapid growth of
Unilabs, S.A., a company he joined from its start-up and led through its trading
on the Swiss Stock Exchange in April 1997. Unilabs, S.A. is a European leader in
the field of medical diagnostics.
Prior to these appointments, Paul was a senior officer with several
Scandinavian financial institutions for over ten years, amongst them SEB, which
specializes in the structuring of complex financing solutions. He holds a degree
in Business Administration from the Stockholm School of Economics (1976).
Elliot Levine has served as our Interim Chief Financial Officer since
April of 1999. Mr. Levine is a founding member of the accounting firm of Levine
& Seltzer, LLP, Certified Public Accountants. He became a member of the American
Institute of Certified Public Accountants in February of 1975. Mr. Levine's work
experience includes five years at Arthur Young, ten years as partner and
Director of Taxes of Leslie Sufrin & Co., P.C., CPAs and seven years as senior
member of Levine & Seltzer, LLP.
Mr. Levine is a graduate of Queens College, City University of New
York. During Mr. Levine's 24 years as a CPA, he has given numerous speeches and
has chaired several conferences on the topic of Mergers and Acquisitions.
Marc R. Engel has served as our Executive Vice President in charge of
Business Development since April of 1999. Prior to these activities Mr. Engel
was the founder and principal of 21ST Century Capital Advisors, Inc. a financial
advisory firm specializing in environmental and technology company financings
and business development.
Mr. Engel was a senior advisor and vice president at Hambro Resource
Development, the Hambros Bank subsidiary in New York, specializing in corporate
and project finance. He has also held various national marketing and sales
management positions within the construction and direct marketing industries.
Marc received his B.A. from Boston College in 1980.
Thomas R. Marshall has served as General Counsel, Executive Vice
President and Secretary since August of 1999. He has also been a member of our
Board of Directors since April of 1999. Prior to joining us, Mr. Marshall was
counsel to the New York office of the law firm of Schnader Harrison Segal &
Lewis LLP (from 1996 to 1999) where he concentrated in Taxation and Corporate
31
<PAGE>
and Securities law. From 1993 to 1996, he was associated with the law firm of
Keck, Mahin & Cate where he performed similar duties.
Mr. Marshall holds a BS in Business Administration from the University
of Rhode Island, a JD from St. John's University School of Law and he was
awarded an LLM in Taxation from the New York University School of Law.
Marcel Rokegem has served as a Director since April, 1999. Mr. Rokegem
is currently a consultant to Van Moer Santerre Group, a brokerage firm with
offices in Brussels, Luxemburg and Monaco. From 1987 to 1992 he was a
co-founding Partner and Director of Euro Suisse Limited London, a member of the
London Stock Exchange. Mr. Rokegem was a Partner of Jessup and Lamont
International Limited of London, an affiliate of Jessup and Lamont Securities
Co., Inc., a member of the New York Stock Exchange from 1982 to 1987. Prior to
that Mr. Rokegem served as the Partner in Charge of International Equity trading
for BIARD, Hombergen, Pringiers & Co. Mr. Rokegem began his career in 1970 with
Kredietbank, NV of Brussels where he was responsible for domestic and
international equity trading, as well as Eurobond sales until 1980.
Mr. Rokegem has a degree in Applied Economic Sciences for Antwerpen
Jesuit University, as well as a diploma from the International Securities
Marketing Association. Mr. Rokegem is fluent in Dutch, French, English and
German.
Executive Compensation
The following table sets forth information regarding compensation paid
by us to our former Chief Executive Officer. None of our other officers received
salary and bonus payments in excess of $100,000 during the period beginning
April 15, 1999 and ended December 31, 1999.
32
<PAGE>
<TABLE>
<CAPTION>
Summary of Compensation Table
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
- ----------------------------- ------------------------------------------- ---------------------------------------------------------
Annual Compensation Awards Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities
Name and Other Restricted Underlying LTIP
Principal Salary Bonus Annual Stock Options/SARs Payout All Other
Position Year ($) ($) Comp. Award (#) ($) Comp.
-------- ---- --- --- ----- ------- --- --- -----
Jacques Mot, CEO 1999 0(1) 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
(1) During 1999 we made an advance of $100,000 to induce Mr. Hokfelt to join
our company as CEO. He did not begin his employment until January 25, 2000.
This payment is currently being offset against salary payments owed to Mr.
Hokfelt commencing on January 25, 2000. Mr. Hokfelt's current annual salary
is 240,000CHF.
Employment Agreements
We have an employment agreement with Paul Hokfelt, our President and
Chief Executive Officer pursuant to which we pay him commencing January 25, 2000
an annual salary of 240,000 CHF (approximately $145,000). We also pay for all
expenses relating to the lease and maintenance of Mr. Hokfelt's car including
insurance and gas. We anticipate that we will adopt bonus and stock option plans
in the near future and that Mr. Hokfelt will participate in these programs. The
agreement is for an initial term of three years and renews automatically for
additional one year terms unless either party provides written notice of
termination.
In the event that we terminate Mr. Hokfelt's employment without cause,
he is entitled to receive his base salary and fringe benefits for the remainder
of the then current term and his pro-rated bonus. The agreement also contains a
non-competition covenant.
Compensation of Directors
Currently members of our Board of Directors do not receive any
compensation for service on our Board. We expect that a compensation plan for
Directors may be adopted in the future.
Stock Option Plan
We have no stock option plan in place at the present time. However, we
expect to adopt a stock option plan at our annual meeting which is expected to
be held in April of 2000.
Indemnification and Limitation of Liability
Our certificate of incorporation provides that our directors will not
be personally liable to our company or our stockholders for monetary damages for
breach of their fiduciary duties as directors to the extent permitted by
Delaware law.
Our bylaws provide that we must indemnify our directors, officers and
employees so long as they act in good faith and are not adjudged liable to the
Corporation. Our bylaws also provide for the prepayment of expenses to persons
entitled to indemnification (subject to certain conditions), and permit us to
purchase and maintain insurance on behalf of any director, officer, employee, or
agent against any liability asserted against them in any such capacity, whether
or not our bylaws would permit or require such indemnification.
33
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, certain information, as of [_______],
2000, regarding beneficial ownership of our common stock by
- each stockholder known by us to be the beneficial owner of more
than five percent (5%) of the outstanding shares of common stock;
- each of our directors;
- each of the named executive officers; and
- all of our current executive officers and directors as a group.
<TABLE>
<CAPTION>
Name of Number of Shares
Beneficial Owner Beneficially Owned(1) Percent of Class (1)
- ---------------- --------------------- --------------------
<S> <C> <C>
Bachkine & Meyer Industries, S.A. 6,406,762 54.13
Paul Hokfelt 0 0
Jauques Mot 0 0
Marcel Rokegem 0 0
Thomas R. Marshall 0 0
Marc R. Engel 0 0
Elliot H. Levine 0 0
All executive officers and directors 0 0
as a group
</TABLE>
(1) Shares of common stock subject to warrants currently exercisable or
exercisable within 60 days of the date hereof are deemed outstanding for
computing the number of shares beneficially owned and the percentage of
outstanding shares of the class held by a person holding such warrants, but
are not deemed outstanding for computing the percentage of any other
person. Except as indicated by footnote, and subject to community property
laws where applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
34
<PAGE>
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
The following table sets forth
o the names of each of the selling stockholders,
o the number of shares of common stock beneficially owned by each
selling stockholder prior to the offering,
o the number of shares of common stock that may be offered by each
of the selling stockholders pursuant to this prospectus, and
o the number of shares of common stock beneficially owned by each
selling stockholder after completion of the offering, assuming
all of the shares covered by this prospectus are sold.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Number of
Number of Securities Number of
Securities Offered Securities
Beneficially for Selling Owned of Percentage
Owned Prior to Stockholder's Record After Owned After
Name of Selling Stockholder Offering Account Offering Offering
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bachkine & Meyer Industries, S.A. 6,406,762 500,000 5,906,762 49.91
- --------------------------------------------------------------------------------------------------------------------
Guido Cloetens 62,531 3,197 59,334 +
- --------------------------------------------------------------------------------------------------------------------
ET International Limited 20,000 20,000 - -
- --------------------------------------------------------------------------------------------------------------------
VP Bank (Schweiz) AG 6,600 6,600 - -
- --------------------------------------------------------------------------------------------------------------------
Credit Europeen S.A. 134,200 134,200 - -
- --------------------------------------------------------------------------------------------------------------------
Mees Pierson (Schweiz) AG 5,000 5,000 - -
- --------------------------------------------------------------------------------------------------------------------
VP Bank (Vaduz) AG 5,500 5,500 - -
- --------------------------------------------------------------------------------------------------------------------
VP Bank Luxembourg S.A. 98,300 98,300 - -
- --------------------------------------------------------------------------------------------------------------------
Charles Carpentier 1,000 1,000 - -
- --------------------------------------------------------------------------------------------------------------------
Nadine Van Acker 1,000 1,000 - -
- --------------------------------------------------------------------------------------------------------------------
Jan Rasschaert 123,231 123,231 - -
- --------------------------------------------------------------------------------------------------------------------
Van Moer Santerre & Cie. 244,995 244,995 - -
- --------------------------------------------------------------------------------------------------------------------
Yvan Verstraeten 25,000 25,000 - -
- --------------------------------------------------------------------------------------------------------------------
Luc de Troyer 2,500 2,500 - -
- --------------------------------------------------------------------------------------------------------------------
Henri de Rick 2,500 2,500 - -
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Number of
Number of Securities Number of
Securities Offered Securities
Beneficially for Selling Owned of Percentage
Owned Prior to Stockholder's Record After Owned After
Name of Selling Stockholder Offering Account Offering Offering
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Peter Blanckaert 2,000 2,000 - -
- --------------------------------------------------------------------------------------------------------------------
Marcel van Bun 1,800 1,800 - -
- --------------------------------------------------------------------------------------------------------------------
Filip de Gheest 1,200 1,200 - -
- --------------------------------------------------------------------------------------------------------------------
Marc Adam 7,200 7,200 - -
- --------------------------------------------------------------------------------------------------------------------
Roger Coppens 825 825 - -
- --------------------------------------------------------------------------------------------------------------------
Gabrielle Coppens 144 144 - -
- --------------------------------------------------------------------------------------------------------------------
Amandine van der Vurst 481 481 - -
- --------------------------------------------------------------------------------------------------------------------
Nicole van Belle 1,350 1,350 - -
- --------------------------------------------------------------------------------------------------------------------
Marc de Rick 2,400 2,400 - -
- --------------------------------------------------------------------------------------------------------------------
De Rick BVBA 1,500 1,500 - -
- --------------------------------------------------------------------------------------------------------------------
Willy Clement 14,450 14,450 - -
- --------------------------------------------------------------------------------------------------------------------
Guy de Vuyst 9,080 9,080 - -
- --------------------------------------------------------------------------------------------------------------------
Henri van Emelen 5,000 5,000 - -
- --------------------------------------------------------------------------------------------------------------------
Andre de Backer 2,500 2,500 - -
- --------------------------------------------------------------------------------------------------------------------
Didier Bodson 6,750 6,750 - -
- --------------------------------------------------------------------------------------------------------------------
Paul Driessens 3,000 3,000 - -
- --------------------------------------------------------------------------------------------------------------------
Werner Kempenaerts 8,030 8,030 - -
- --------------------------------------------------------------------------------------------------------------------
Paul Kempenaerts 58,333 58,333 - -
- --------------------------------------------------------------------------------------------------------------------
G. Kiekens-Menschaert 5,850 5,850 - -
- --------------------------------------------------------------------------------------------------------------------
V. De Paepe-Menschaert 2,800 2,800 - -
- --------------------------------------------------------------------------------------------------------------------
Johnny Temmerman 5,250 5,250 - -
- --------------------------------------------------------------------------------------------------------------------
Linda Toeback 2,655 2,655 - -
- --------------------------------------------------------------------------------------------------------------------
Victor van Bos 15,250 15,250 - -
- --------------------------------------------------------------------------------------------------------------------
Gommaire Verbruggen 67,500 67,500 - -
- --------------------------------------------------------------------------------------------------------------------
Jean-Paul Vranckx 10,000 10,000 - -
- --------------------------------------------------------------------------------------------------------------------
Dirk de Knibber 5,064 5,064 - -
- --------------------------------------------------------------------------------------------------------------------
Simonne Batselier 1,135 1,135 - -
- --------------------------------------------------------------------------------------------------------------------
Ward Rogiers 16,000 16,000 - -
- --------------------------------------------------------------------------------------------------------------------
Romaine Bruenin 3,300 3,300 - -
- --------------------------------------------------------------------------------------------------------------------
Bank Sarasin & Co. 420,000 420,000 - -
- --------------------------------------------------------------------------------------------------------------------
Eddy van de Casteele 1,500 1,500 - -
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Number of
Number of Securities Number of
Securities Offered Securities
Beneficially for Selling Owned of Percentage
Owned Prior to Stockholder's Record After Owned After
Name of Selling Stockholder Offering Account Offering Offering
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rudy Vunck 51,350 51,350 - -
- --------------------------------------------------------------------------------------------------------------------
Jean-Pierre de Bavay 1,000 1,000 - -
- --------------------------------------------------------------------------------------------------------------------
Jos Deno-Stuyck 15,050 15,050 - -
- --------------------------------------------------------------------------------------------------------------------
Jacques Diependaele 1,934 1,934 - -
- --------------------------------------------------------------------------------------------------------------------
Bertels-Deno 2,200 2,200 - -
- --------------------------------------------------------------------------------------------------------------------
Carine de Cock 500 500 - -
- --------------------------------------------------------------------------------------------------------------------
Willy Claes 3,000 3,000 - -
- --------------------------------------------------------------------------------------------------------------------
Double Impact, Inc. 4,000 4,000 - -
- --------------------------------------------------------------------------------------------------------------------
Abrdor Group Ltd. 70,802 70,802 - -
- --------------------------------------------------------------------------------------------------------------------
Freddy van Poucke 500 500 - -
- --------------------------------------------------------------------------------------------------------------------
Jayne Rokegem 5,100 5,100 - -
- --------------------------------------------------------------------------------------------------------------------
Luc Hespeels 20,000 20,000 - -
- --------------------------------------------------------------------------------------------------------------------
Banque Syz & Cie. 507,705 507,705 - -
- --------------------------------------------------------------------------------------------------------------------
Donmar Equities 510,000 510,000 - -
- --------------------------------------------------------------------------------------------------------------------
Park Tower Finance Ltd. 510,000 510,000 - -
- --------------------------------------------------------------------------------------------------------------------
Everston Ltd. 510,000 510,000 - -
- --------------------------------------------------------------------------------------------------------------------
Millhopper Ltd. 260,000 260,000 - -
- --------------------------------------------------------------------------------------------------------------------
Colvin Finance Limited 250,000 250,000 - -
- --------------------------------------------------------------------------------------------------------------------
Bank Ippa & Associes 86,000 86,000 - -
- --------------------------------------------------------------------------------------------------------------------
Euromedia Communications Inc 10,000 10,000 - -
- --------------------------------------------------------------------------------------------------------------------
Westerman Shapiro Pollack Draghi &
Miller, LLP
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Executive Officer
** Director
The selling stockholders are entitled to receive all of the proceeds
from the future sale of their shares.
37
<PAGE>
The selling stockholders, from time to time, depending on market
conditions and other factors, may offer or sell their shares in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated transactions.
The shares may be sold by various methods, including:
o block trades in which a broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchases; and
o face to face transactions between sellers and purchasers without
a broker or dealer.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. These
brokers or dealers may receive commissions or discounts from the selling
stockholders in amounts to be negotiated. These brokers, dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with these sales.
We will bear all costs and expenses of the registration of the shares
under the Securities Act and certain state securities laws, other than discounts
or commissions, if any, payable with respect to sales of the shares.
The selling stockholders are not restricted as to the number of shares
that may be sold at any one time, and it is possible that a significant number
of shares could be sold at the same time. Sales of the shares by the selling
stockholders may have an adverse effect on the market price of the common stock.
CERTAIN TRANSACTIONS
Bachkine & Meyer Industries, S.A, our majority shareholder, has been
advancing us funds pursuant to the terms of a Line of Credit Agreement dated as
of April 15, 1999. The balance of such advances as of December 31, 1999 is
$2,175,186. Bachkine & Meyer did not charge interest on advances until July 1,
1999 at which time it began charging interest at the prime rate currently 8%.
Bachkine & Meyer has indicated it wishes to convert all the amounts advanced
under the Line of Credit Agreement into equity at the market price on March __,
2000. The fairness of the conversion price will be determined by an independent
committee of the Board of Directors established for that purpose.
In addition to the Line of Credit Agreement discussed above, B.A.M.I.
Consulting, S. A., a British Virgin Islands corporation, and an affiliate of
Bachkine & Meyer is entitled to receive a monthly management consulting fee of
$75,000 pursuant to the terms of a Consulting Agreement dated as of April 15,
1999. As of December 31, 1999, we owe B.A.M.I. $675,000 which we have accrued as
a general and administrative expense, but have not yet paid. B.A.M.I. has
indicated it wishes to convert all the amounts due under the consulting
agreement into equity at the market price on March __, 2000. The fairness of the
conversion price will be determined by an independent committee of the Board of
Directors established for that purpose.
38
<PAGE>
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 50,000,000 shares of common
stock, par value $.001 per share, and 1,000,000 shares of preferred stock, par
value $.001 per share. As of December 31, 1999, there were 11,842,761 shares of
common stock issued and outstanding; no shares of preferred stock were issued.
In addition, as of December 31, 1999, warrants to purchase 3,020,706 shares of
common stock were also outstanding.
Common Stock
All holders of common stock have one vote per share on all matters
submitted to a vote of stockholders. Stockholders do not have rights to
accumulate their votes in the election of directors under our certificate of
incorporation or applicable provisions of the General Corporation Law of the
State of Delaware.
The holders of common stock have the right to receive dividends, when,
and if declared, by our Board of Directors out of funds legally available
therefor. We have never paid any cash dividends on our common stock. We
presently intend to retain earnings, if any, to finance our operations, and
therefore do not anticipate paying any cash dividends in the future. If we
liquidate, holders of our common stock would share ratably in any assets
available for distribution to stockholders after payment of all our obligations.
Our common stock is neither redeemable nor has any preemptive,
subscription, sinking fund or conversion rights. All outstanding shares of
common stock are fully paid and non-assessable.
Preferred Stock
Our Board of Directors may authorize the issuance up to 1,000,000
shares of preferred stock without any further stockholder approval. The Board is
expressly authorized to provide for the issuance of shares of preferred stock in
one or more classes or series, and to fix for each such class or series the
powers, rights, privileges, preferences, qualifications, limitations or
restrictions, including dividend rights, dividend rates, conversion rights,
voting rights, redemption rights, redemption prices, liquidation preferences,
and the designation of and the number of shares constituting any class or
series.
Warrants
Of the 7,709,426 shares of common stock covered by this prospectus,
3,020,706 shares are issuable pursuant of the exercise of warrants. The warrants
expire at various times during the next four (4) years, and are exercisable at
prices ranging from $6.00 to $12.00 per share. All of the warrants contain
anti-dilution provisions.
Transfer Agent and Registrar
Colonial Stock Transfer Company of Salt Lake City, Utah, serves as
transfer agent and registrar for the common stock.
39
<PAGE>
Antitakeover Effects of Provisions of Delaware Law and Our Charter
Provisions of Delaware law and our certificate of incorporation could
discourage takeover attempts. These include:
o Delaware Antitakeover Law. We are subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203
prohibits a publicly-held Delaware corporation from engaging in a
business combination with an interested stockholders for a period
of three years from the date the stockholder became an interested
stockholder, unless the business combination or the transaction
in which the person became an interested stockholder is approved
in the manner provided in Section 203. Generally, a business
combination includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested
stockholder. Generally, an interested stockholder is a person
who, together with affiliates and associates, owns or within
three years prior to the determination of interested stockholder
status did own 15% or more of the corporation's outstanding
voting stock.
o Our right to issue preferred stock. Our certificate of
incorporation authorizes the issuance of preferred stock with
such designations, rights, and preferences as may be determined
from time to time by our Board of Directors, without any further
vote or action by our stockholders. Therefore, our Board of
Directors is empowered, without stockholder approval, to issue
preferred stock with voting rights or preferences that could
prevent or discourage unsolicited takeover attempts.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of this prospectus, we had [________] shares of common
stock outstanding, [________] of which are freely tradable, and [_____] of which
are restricted shares. In addition, there are warrants outstanding to purchase
[_______] of our shares.
The resale of [_______] of the restricted shares and the 3,020,706
shares underlying the warrants are covered by the registration statement of
which this prospectus is a part. These shares may be resold in the open market
at any time, subject to
o the continued effectiveness of the registration statement;
o and our ability to suspend sales under the registration statement
in certain instances.
No prediction can be made as to what effect, if any, the sale of these
shares will have on the prevailing market price. The possibility that
substantial amounts of common stock may be sold in the public market may
adversely affect prevailing market prices for the common stock, and could impair
our ability to raise capital through future sales of equity securities.
40
<PAGE>
After the effective date of this registration statement, [_______]
shares owned by Bachkine & Meyer Industries, S.A. will remain restricted
pursuant to the terms of Regulation S of the Securities Act of 1933, as amended.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
us by Westerman Shapiro Pollack Draghi & Miller, LLP, Garden City, New York
("WSPD"). As part of our agreement with WSPD, we have agreed to pay a portion of
their legal fee in our common stock based on the fair market value of our common
stock during the billing period. The shares of common stock issued to WSPD are
being registered for sale pursuant to the terms of this Registration Statement.
As of [the effective date of this registration statement], WSPD owned ___ shares
of our common stock.
EXPERTS
The financial statements of New Generation Plastic, Inc. as of December
31, 1999 and for the period from April 15, 1999 (inception) through December 31,
1999 have been included herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
The report of KPMG LLP covering the December 31, 1999 financial
statements contains an explanatory paragraph that states that the Company's loss
from operations and net capital deficiency raise substantial doubt about the
entity's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of that
uncertainty.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C., a registration statement on Form SB-2 under the
Securities Act of 1933, with respect to the shares to be sold in this offering.
This prospectus, which is part of the registration statement, does not contain
all of the information contained in the registration statement. For further
information with respect to us and the shares of our common stock offered
hereby, we refer you to the registration statement, including the exhibits
thereto, which may be inspected, without charge, at the office of the Securities
and Exchange Commission.
Copies of the registration statement may be obtained from the
Commission in Washington, D.C., upon payment of the requisite fees, or from the
Commission's Website at http://www.sec.gov. Statements contained in this
prospectus as to the contents of any contract or other document referred to are
not necessarily complete, and in each instance we refer you to the copy of such
contract or other document filed as an exhibit to the registration statement,
each such statement being qualified in all respects by the more complete
description of the matters involved.
41
<PAGE>
INDEX TO FINANCIAL STATEMENTS
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
- --------------------------------------------------------------------------------
Page
----
- --------------------------------------------------------------------------------
Independent Auditors' Report F-2
- --------------------------------------------------------------------------------
Balance Sheet F-3
- --------------------------------------------------------------------------------
Statement of Operations F-4
- --------------------------------------------------------------------------------
Statement of Stockholders' Equity F-5
- --------------------------------------------------------------------------------
Statement of Cash Flows F-6
- --------------------------------------------------------------------------------
Notes to Financial Statements F-7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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F-1
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
New Generation Plastic, Inc.:
We have audited the accompanying balance sheet of New Generation Plastic, Inc.
(a development stage company) (the "Company") as of December 31, 1999, and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the period from April 15, 1999 (inception) through December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Generation Plastic, Inc. (a
development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the period from April 15, 1999 (inception)
through December 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 7 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in note 7. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
KPMG LLP
McLean, VA
March 3, 2000
F-2
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
December 31,
Assets 1999
------------
<S> <C>
Current assets:
Cash $ 3,708
Prepaid expenses 159,554
-----------
Total current assets 163,262
Intangible assets, net 443,929
-----------
Total assets $ 607,191
===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 487,798
Accrued consulting expense 675,000
Due to shareholder 2,175,186
-----------
Total liabilities 3,337,984
-----------
Stockholders' equity (deficit):
Common stock, $0.001 par value; 50,000,000 shares authorized,
11,842,761 shares issued and outstanding 11,843
Preferred stock, $0.001 par value; 1,000,000 shares authorized,
none issued or outstanding --
Additional paid-in capital 804,690
Deficit accumulated during the development stage (3,547,326)
-----------
Total stockholders' equity (deficit) (2,730,793)
-----------
Commitments and contingencies
Total liabilities and stockholders' equity (deficit) $ 607,191
===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Operations
Period from
April 15, 1999
(inception)
through
December 31,
1999
--------------
Operating expenses:
General and administrative $ 2,046,982
Product development 1,426,236
------------
Loss from operations (3,473,218)
Interest expense (74,108)
------------
Loss before income taxes (3,547,326)
Income taxes --
------------
Net loss $ (3,547,326)
============
Basic and diluted net loss per common share $ (0.30)
Shares used to compute basic and diluted net loss per
common share 11,842,761
See accompanying notes to financial statements
F-4
<PAGE>
<TABLE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
<CAPTION>
Common Stock
------------------------- Additional
Number of paid-in Accumulated
Shares Amount Capital Deficit Total
--------- ------ ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Balance at April 15, 1999 (inception) -- $ -- -- -- --
Issuance of common stock to Bachkine &
Meyer Industries, S.A. 11,580,000 11,580 804,953 -- 816,533
Issuance of common stock in conjunction with
merger with SW Ventures, Inc. 262,761 263 (263) -- --
Net loss -- -- -- (3,547,326) (3,547,326)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1999 11,842,761 $ 11,843 804,690 (3,547,326) (2,730,793)
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
<TABLE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Cash Flows
<CAPTION>
Period from
April 15, 1999
(inception)
through
December 31,
1999
--------------
<S> <C>
Cash flows from operating activities:
Net loss $(3,547,326)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization 73,270
Changes in operating assets and liabilities:
Increase in prepaid expenses (159,554)
Increase in accounts payable 487,798
Increase in accrued consulting expense 675,000
-----------
Net cash used in operating activities (2,470,812)
-----------
Cash flows provided by financing activities:
Cash received from shareholder loans 2,175,186
Issuance of common stock 816,533
-----------
Net cash provided by financing activities 2,991,719
-----------
Cash flows used in investing activities:
Purchase of patents (517,199)
-----------
Net cash used in investing activities (517,199)
-----------
Net increase in cash and cash equivalents 3,708
Cash and cash equivalents at the beginning of period --
-----------
Cash and cash equivalents at the end of period $ 3,708
===========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(1) Organization
New Generation Plastic, Inc. (the "Company") was organized on April 15,
1999 under the laws of the State of Delaware. During June 1999, the
Company exchanged 262,761 shares of its common stock for all of the
issued and outstanding common stock of SW Ventures, Inc. (SWV).
Concurrently, SWV changed its name to New Generation Plastic, Inc. As of
the date of the merger, the net assets of the Company and SWV were
determined to have nominal value. Accordingly, the transaction has been
recorded at the par value of the stock exchanged.
(2) Summary of Significant Accounting Policies
(a) Development Stage Enterprise
During the period from April 15, 1999 (inception) through December
31, 1999, New Generation Plastic, Inc. devoted substantially all
of its efforts to develop and market the patented technology
designed to process two or more discrete plastic polymers ("NGP
Process"). The Company believes the NGP Process is capable of
producing commercially usable plastic polymers from a mixed stream
of discrete virgin polymers or waste plastic. Its planned
principal operations have not commenced.
(b) Cash and Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less from the date of purchase to be
cash equivalents.
(c) Intangible Assets
Intangible assets consist of the costs associated with the
purchase of the patents. Such patents are being amortized over
their estimated useful life of five years. As of December 31,
1999, the related accumulated amortization was $73,270.
(d) Product Development Costs
Product development costs include expenses incurred by the Company
for research, design and development of the Company's proprietary
technology. Product development costs are expensed as incurred.
(e) Income Taxes
The Company uses the asset and liability method of accounting for
income taxes. Under the asset and liability method, deferred tax
assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
(Continued)
F-7
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
(f) Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance
with Statement of Financial Accounting Standard ("SFAS") No. 128,
Earnings Per Share. Under the provisions of SFAS 128, basic net
income (loss) per share is computed by dividing the net income
(loss) for the period by the weighted average number of common
shares outstanding during the period. Diluted net income (loss)
per share is computed by dividing the net income (loss) for the
period by the weighted average number of common and dilutive
potential common shares outstanding during the period. As the
Company had a net loss during the period presented, basic and
diluted net income (loss) per share are the same.
(g) 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 amount 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 expenses during the reporting
period. Actual results may differ from those estimates.
(3) Related Party Transaction
Bachkine & Meyer Industries, S.A. ("BMI"), the holder of a majority of
the outstanding common stock of the Company, has been advancing funds to
the Company pursuant to a line of credit agreement dated April 15, 1999.
As of December 31, 1999, $2,175,186 had been advanced to the Company
under the terms of this agreement. Under the terms of the agreement,
principal payments are due on demand after July 15, 2000. Interest is due
quarterly in arrears and is based upon the prime rate; 8.0 percent as of
December 31, 1999.
In addition to the line of credit agreement discussed above, B.A.M.I.
Consulting, S.A. ("BAMI"), a British Virgin Islands corporation and an
affiliate of BMI, is entitled to receive a monthly management consulting
fee of $75,000 in exchange for engineering expertise in the development
and commercialization of the NGP Process. For the period ended December
31, 1999, $675,000 (nine months' fees) of such fee has been accrued as
general and administrative expense, but has not yet been paid.
(4) Income Taxes
No provision for federal or state income taxes has been recorded as the
Company has incurred a net operating loss since inception. As of December
31, 1999, the Company has a net operating loss carryforward available to
offset future taxable income of approximately $1,426,000, which expires
in 2019. The actual income tax benefit differed from the income tax
benefit which would be computed based upon the statutory federal tax
rates as a result of recording a valuation allowance. The valuation
(Continued)
F-8
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
allowance was recorded as it is not more likely than not that the
deferred tax assets will be recoverable.
Temporary differences that give rise to deferred tax assets and
liabilities at December 31, 1999 are as follows:
Deferred tax assets/liabilities:
Net operating loss carryforwards $ 584,757
Start-up costs 839,263
Other 30,384
----------
Total deferred tax assets 1,454,404
Less: valuation allowance (1,454,404)
--------
Net deferred tax assets $ --
========
(5) Warrants
The Company declared a pro-rata distribution to each holder of its common
stock of record on October 14, 1999 consisting of a warrant to purchase
one share of the Company's common stock at an exercise price of $6.00 per
share for each four shares of common stock owned by the stockholder.
These warrants are not exercisable until the shares purchasable upon
exercise of the warrants have been registered under the Securities Act of
1933 and expire two years after the date upon which they first become
exercisable. As a result of this declaration, 2,960,706 warrants were
issued.
(6) Basic and Diluted Net Loss Per Share
The Company computes net income (loss) per share in accordance SFAS 128,
Earnings Per Share, which requires certain disclosures relating to the
calculation of income (loss) per common share, as follows.
Period from
April 15, 1999
(inception) through
December 31, 1999
--------------------
Net loss $ (3,547,326)
============
Weighted average shares of common stock
outstanding $ 11,842,761
============
Basic and diluted net loss
per common share $ (0.30)
============
(7) Financial Results and Liquidity
The Company incurred a net loss of $3,547,326 during the period from
April 15, 1999 (inception) through December 31, 1999. Significant amounts
of additional cash will be needed to continue the development of the NGP
Process and to fund losses until the Company can achieve profitability.
Based on management's proposed plan as of December 31, 1999, the Company
estimates that at least $3.5 million would be required to fund the
Company's operations through December 31, 2000 and that additional
amounts could be required thereafter.
(Continued)
F-9
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
While there is no assurance that funding will be available to execute the
plan, the Company is continuing to seek financing to support its
development efforts and is exploring a number of alternatives in this
regard.
(8) Commitments and Contingencies
In conjunction with the incorporation of the Company, the Company entered
into consulting agreements with several third parties. Under those
agreements the Company is contractually obligated to issue, upon the
adoption of a stock option plan, options to purchase an aggregate of
50,000 shares of the Company's common stock at exercise prices ranging
from $7.50 to $9.50.
One of the Company's European patents related to the plastic technology
has been opposed by a third party. While the Company believes its patent
will be upheld in substantially the form it was issued, the Company can
provide no assurances that it will be successful in its patent defense.
An adverse determination with respect to the enforceability of the
Company's European patent could have a material adverse effect on the
Company's business and financial condition.
(9) Subsequent Events
Effective January 25, 2000, the Board of Directors approved a change in
the business model of the Company to include the incubation of
Internet-related companies primarily located in Europe. As part of this
restructuring, the Company formed a wholly owned subsidiary, New
Generation Partners, Inc., in the State of Delaware. Through this
subsidiary, the Company anticipates developing a collaborative network of
Internet companies involved in business-to-business (B2B) e-commerce and
ventures oriented towards new emerging Internet infrastructure and
wireless Internet applications.
Also as part of the restructuring, the Company formed another wholly
owned Delaware subsidiary, NG Plastic, Inc. Subject to stockholder
approval, the Company intends to transfers all the assets and liabilities
relating to its plastic business to NG Plastic, Inc.
On February 21, 2000, the Company authorized the issuance of warrants to
purchase 165,000 shares of the Company's common stock at $12.00 per share
on a one-for-one basis. 90,000 of these warrants expire on March 5, 2004
and 75,000 of these warrants expire on February 24, 2000. Concurrently,
the Company issued 60,000 of the warrants with expiration date of March
5, 2000 to 2 shareholders. These warrants are not exercisable until the
shares purchasable upon exercise of the warrants have been registered
under the Securities Act of 1933.
F-10
<PAGE>
Until __________, 2000, all dealers that effect transactions in our
common stock, whether or not participating in this offering, may be required to
deliver a prospectus. This requirement is in addition to the dealer's obligation
to deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
New Generation Plastic, Inc.
[_________] Shares of Common Stock
-----------
PROSPECTUS
__________ , 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Article IX of the Registrant's Bylaws provides for indemnification by
the Registrant of its directors, officers and employees to the extent that they
act in good faith and are not adjudged liable to the Corporation.
Article IX of the Registrant's Bylaws also provides for the prepayment
of expenses to persons entitled to indemnification (subject to certain
conditions), and permits the Registrant to purchase and maintain insurance on
behalf of any director, officer, employee, or agent against any liability
asserted against or incurred by them in any such capacity, or arising out of
their status as such, whether or not the Registrant would have the power or
obligation to indemnify them against such liability under the Registrant's
Bylaws.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchase, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. Article SIXTH of the Registrant's Certificate of
Incorporation provides for such limitation of liability.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer, director, agent, or employee may be required
to bear the economic burdens of the foregoing liabilities and expenses.
II-1
<PAGE>
Item 25. Other Expenses of Issuance and Distribution.
The estimated expenses of the Registrant in connection with the
issuance and distribution of the securities being registered hereby (other than
underwriting discounts and commissions) are as follows:
- --------------------------------------------------------------------------------
Item Amount
- --------------------------------------------------------------------------------
Registration Fee (Securities and Exchange Commission)........... $
- --------------------------------------------------------------------------------
Accounting Fees and Expenses ................................... $
- --------------------------------------------------------------------------------
Legal Fees and Expenses......................................... $
- --------------------------------------------------------------------------------
Transfer Agent's Fees........................................... $
- --------------------------------------------------------------------------------
Miscellaneous Expenses ......................................... $
- --------------------------------------------------------------------------------
Total........................................................... $
- --------------------------------------------------------------------------------
The Registrant will bear all costs and expenses of the registration of
the shares under the Securities Act and certain state securities laws, other
than any discounts or commissions payable with respect to sales of the shares.
Item 26. Recent Sales of Unregistered Securities.
As part of our merger with SW Ventures, Inc. which took place on June
10, 1999, we issued shares of common stock which were restricted securities
pursuant to Regulation S of the Securities Act of 1933, as follows: Bachkine &
Meyer Industries, S.A (11,580,000 shares), ET International (20,000 shares) and
Guido Cloetens (5,000 shares). On January 19, 2000 we issued 4,000 shares of
restricted securities to Double Impact, Inc. in connection with our negotiations
to enter into a definitive working agreement with them with regard to our
Internet business.
II-2
<PAGE>
Item 27. Exhibits.
----------------- ---------------------------------------------------
Exhibit No. Description
----------------- ---------------------------------------------------
3.1** Certificate of Incorporation
----------------- ---------------------------------------------------
3.2** Bylaws
----------------- ---------------------------------------------------
4.1** Form of Common Stock Certificate
----------------- ---------------------------------------------------
4.2** Form of Warrant Certificates of _______
----------------- ---------------------------------------------------
5* Opinion of Counsel
----------------- ---------------------------------------------------
10** Material Agreements [To come]
----------------- ---------------------------------------------------
23.1* Consent of KPMG LLP
----------------- ---------------------------------------------------
23.2* Consent of Counsel (contained in opinion of counsel
filed as Exhibit 5)
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference to _______.
Item 28. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
II-3
<PAGE>
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by final adjudication of
such issue.
The undersigned Registrant hereby undertakes that it will:
(1) For purposes of determining any liability under the
Securities Act, treat the information omitted from the form of
Prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of Prospectus filed by the
Registrant pursuant to Rule 424(b)(1), or (4) or 497(h) under the
Securities Act as part of this Registration Statement as of the time
the Commission declared it effective.
(2) For determining any liability under the Securities Act,
treat each post-effective amendment that contains a form of Prospectus
as a new registration statement for the securities offered in the
registration statement, and that offering of the securities at that
time as the initial bona fide offering of those securities.
(3) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement
to:
(i) Include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) Reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or together, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) Include any material information with respect to
the plan of distribution not previously discussed in the
registration statement or any material change to such
information in the registration statement.
(4) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in the City of Geneva,
Country of Switzerland and the City of New York, State of New York,
respectively, March 9, 2000.
NEW GENERATION PLASTIC, INC.
By: /s/ Paul Hokfelt
----------------------------------
Paul Hokfelt
Chief Executive Officer, President
(Principal Executive Officer)
By: /s/ Elliot Levine
----------------------------------
Elliot Levine
Interim Chief Financial Officer,
(Principal Financial and
Accounting Officer)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul Hokfelt, as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ------- -----
/s/ Jacques Mot Director March 9, 2000
- ------------------------
Jacques Mot
/s/ Marcel Rokegem Director March 9, 2000
- ------------------------
Marcel Rokegem
/s/ Thomas Marshall Director March 9, 2000
- ------------------------
Thomas Marshall
II-5
<PAGE>
New Generation Plastic, Inc.
EXHIBIT INDEX
----------------- ---------------------------------------------------
Exhibit No. Description
----------------- ---------------------------------------------------
3.1** Certificate of Incorporation
----------------- ---------------------------------------------------
3.2** Bylaws
----------------- ---------------------------------------------------
4.1** Form of Common Stock Certificate
----------------- ---------------------------------------------------
4.2** Form of Warrant Certificates of _______
----------------- ---------------------------------------------------
5* Opinion of Counsel
----------------- ---------------------------------------------------
10** Material Agreements [To come]
----------------- ---------------------------------------------------
23.1* Consent of KPMG LLP
----------------- ---------------------------------------------------
23.2* Consent of Counsel (contained in opinion of counsel
filed as Exhibit 5)
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
----------------- ---------------------------------------------------
* Filed herewith
** To be filed by amendment
(1) Incorporated by reference to _______________.
Exhibit 5
_______, 2000
Board of Directors
New Generation Plastic, Inc.
245 Park Avenue
New York, NY 10167
Gentlemen:
It is our opinion that, under the General Corporation Law of the State of
Delaware, the securities being registered with the Securities and Exchange
Commission pursuant to the Registration Statement of New Generation Plastic,
Inc. on Form SB-2 will, when sold, be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the aforesaid
Registration Statement and further consent to the reference made to us under the
caption "Legal Matters" in the Prospectus constituting part of such Registration
Statement.
Very truly yours,
/s/ Westerman Shapiro Pollack Draghi & Miller, LLP
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
New Generation Plastic, Inc.:
We consent to the use of our report included herein and to the reference to our
firm under the heading "Experts" in the prospectus.
Our report dated March 3, 2000, contains an explanatory paragraph that states
that the Company suffered a loss from operations and has a net capital
deficiency, which raise substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of that uncertainty.
KPMG LLP
McLean, Virginia
March 8, 2000
