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As filed with the Securities and Exchange Commission on February 9, 1999
Registration No. 333-71949
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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YOUNETWORK CORPORATION
(Name of Small Business Issuer in its charter)
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<S> <C> <C>
Delaware 13-399035
(State of Jurisdiction) (Primary Standard Industrial Classification Code Number) (I.R.S. Employee Identification No.)
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New York, New York 10010
212-576-2030
(Address and telephone number of principal executive offices
and principal place of business)
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Kyle S. Taylor, President
YouNetwork Corporation
220 East 23rd Street, Suite 607
New York, New York 10010
(212) 576 2030
(Name, address and telephone number of agent for service)
Copies of all communications to:
Silverman, Collura, Chernis & Balzano, P.C.
Gary W. Mair, Esq.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
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Approximate date of proposed sale to the public: As soon as
practicable after the effective date of this Registration
Statement.
If this form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration statement
number of he 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 registration statement 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, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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======================================= ====================== ===================== ======================== =====================
Proposed Maximum Proposed Maximum
Offering Price Per Aggregate Offering
Title of Each Class of Securities to Amount to be Shares(1) Price (1) Amount of
be Registered Registered Registration Fee
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Class A Common Stock, .0001 par value 1,000,000 $0.00 $0.00 $0.00
per share
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Class B Common Stock, .0001 par value
per share 1,000,000 $1.00 $1,000,000 $280.00
======================================= ====================== ===================== ======================== =====================
Total 2,000,000 $1,000,000 $280.00
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to 457(o).
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YOUNETWORK CORPORATION
Cross-Reference Sheet
pursuant to Item 501(b)
Showing Location in Prospectus of Information
Required by Items of Form SB-2
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Registration Statement Item Caption in Prospectus
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1. Front of Registration Statement and Facing Page; Cross-Reference Sheet;
Outside Front Cover of Prospectus Prospectus Cover Page
2. Inside Front and Outside Back Cover Prospectus Cover Page; Prospectus
Pages of Prospectus Back Cover Page
3. Summary Information and Risk Factors Prospectus Summary; YouNetwork
Corporation; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Risk Factors; Shares Eligible For Future
Sale
6. Dilution Dilution and Other Comparative
Data
7. Selling Security holders Not Applicable
8. Legal Proceedings Not Applicable
9. Plan of Distribution Not Applicable
10. Directors, Executive Officers, Promoters Management; Principal Stockholders
and Control Persons
11. Security Ownership of Certain Beneficial Principal Stockholders
Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts and Counsel Legal Matters; Experts
14. Disclosure of Commission Position on Description of Securities
Indemnification for Securities Act
Liabilities
15. Organization Within One Year Prospectus Summary; Risk Factors;
Business;Certain Transactions
16. Description of Business Business
17. Management's Discussion and Analysis Management's Discussion and
Analysis
18. Description of Property Business
19. Certain Relations and Related Certain Transactions
Transactions
20. Market for Common Equity and Related Outside Front Cover Of Prospectus;
Stockholder Matters Description of Securities; Risk Factors
21. Executive Compensation Management
22. Financial Statements Financial Statements
23. Changes in and Disagreements With Not applicable
Accountants on Accounting and Financial
Disclosure
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
YouNetwork's Certificate of Incorporation, as amended and Bylaws limit
the liability of directors and officers to the maximum extent permitted by
Delaware law. Delaware law provides that directors of a corporation will not be
personally liable for monetary damages for breach of their fiduciary duties as
directors, including gross negligence, except liability for (i) breach of the
directors' duty of loyalty; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law, (iii) the
unlawful payment of a dividend or unlawful stock purchase or redemption, and
(iv) any transaction from which the director derives an improper personal
benefit. Delaware law does not permit a corporation to eliminate a director's
duty of care, and this provision of our Certificate of Incorporation has no
effect on the availability of equitable remedies, such as injunction or
rescission, based upon a director's breach of the duty of care.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of LOA pursuant to the foregoing provisions, or otherwise, LOA has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Corporation Takeover Provisions
Section 203 of the Delaware General Corporation Law
We are subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Under Section 203, certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that
such stockholder became an interested stockholder, unless (i) the corporation
has elected in its original certificate of incorporation not to be governed by
Section 203 (we did not make such an election) (ii) the business combination
was approved by the Board of Directors of the corporation before the other
party to the business combination became an interested stockholder (iii) upon
consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the commencement of the transaction (excluding
voting stock owned by directors who are also officers or held in employee
benefit plans in which the employees do not have a confidential right to render
or vote stock held by the plan) or, (iv) the business combination was approved
by the Board of Directors of the corporation and ratified by two-thirds of the
voting stock which the interested stockholder did not own. The three-year
prohibition also does not apply to certain business combinations proposed by an
interested stockholder following the announcement or notification of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during t he previous three years or who became
an interested
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stockholder with the approval of the majority of the corporation's
directors. The term "business combination" is defined generally to include
mergers or consolidations between a Delaware corporation and an "interested
stockholder," transactions with an "interested stockholder" involving the
assets or stock of the corporation or its majority-owned subsidiaries and
transactions which increase an interested stockholder's percentage ownership of
stock. The term "interested stockholder" is defined generally as a stockholder
who, together with affiliates and associates, owns (or, within three years
prior, did own) 15% or more of a Delaware corporation's voting stock. Section
203 could prohibit or delay a merger, takeover or other change in control of
LOA and therefore could discourage attempts to acquire LOA.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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SEC Registration Fee $ $200
Printing and Engraving Expenses $ 5,000*
Legal Fees and Expenses (including blue sky fees and expenses) $ 100,000*
Accounting Fees and Expenses $ 15,000*
Transfer Agent's Fees and Expenses $ 5,000*
Miscellaneous Expenses $ 2,000*
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TOTAL $ 127,200*
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*Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following gives effect to the 330,000 to 1 exchange of Class C shares of
Common Stock effected February 3, 1999, pursuant to an Agreement and Plan of
Merger between YouNetwork, Corp., a New York corporation and the Registrant,
YouNetwork.
Pursuant to an agreement among YouNetwork, Dalia Silverman and
Kleopatra Georgiades (the "Investors"), the Investors purchased from YouNetwork,
for an aggregate purchase price of $200,000: (i) an aggregate of 8,910,000
shares of Common Stock (the "Purchased Shares") representing 27% of the issued
and outstanding Common Stock, on a fully diluted basis; and (ii) Options (the
"Purchase Options") to purchase in the aggregate such number of shares of Common
Stock, at nominal consideration, as shall equal, in the aggregate when added to
the Purchased Shares, 27% of the issued and outstanding Common Stock of
YouNetwork on a fully dilluted basis, immediately following the sale of
additional Common Stock by YouNetwork in consideration of the first $400,000 of
Common Stock sale proceeds received by YouNetwork following December 4, 1998.
The foregoing transaction was effected without registration under the
Securities Act in reliance on the exemption from registration provided pursuant
to Section 4(2) and Regulation D promulgated thereunder.
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Except as otherwise indicated, all exhibits listed below were filed
with YouNetwork's initial filing, Form SB-2 on February 5, 1999.
ITEM 27. EXHIBITS
EXHIBIT NO. DESCRIPTION
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2.1* Agreement and Plan of Merger Agreement, dated February 3,
1999, by and between YouNetwork Corp., a New York corporation
and YouNetwork Corporation, a Delaware corporation.
3.1* Certificate of Incorporation of Registrant, as amended
3.2* By-laws of Registrant
4.1* Specimen certificate representing Registrant's Class A Common
Stock
4.2* Specimen certificate representing Registrant's Class B Common
Stock
5.1*** Opinion of Silverman, Collura, Chernis & Balzano, P.C. with
respect to legality of the securities of the Registrant being
registered
10.1* Stockholders' Agreement, dated December 4, 1998
10.2* Stock and Warrant Purchase Agreement, dated December 4, 1998
10.3* Agreement between Muze, Inc. and YouNetwork , dated January
7, 1999
10.4* Agreement between Qwest International Inc. (a successor in
interest to LCI International Telecom Corp.), dated March 6,
1998.
10.5* Agreement between Baker & Taylor, Inc. and YouNetwork, dated,
July 9, 1998.
23.1*** Consent of Silverman, Collura, Chernis & Balzano, P.C.
(included in Exhibit 5.1)
23.2** Consent of Mahoney Cohen & Company, CPA, P.C.
27* Financial Data Schedule
* Previously filed
** Filed with this Amendment No. 1
*** To be filed by Amendment
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b. Financial Statement Schedules.
None
ITEM 28. UNDERTAKINGS.
(a) Rule 415 Offerings.
The undersigned issuer hereby undertakes that it will:
(1) 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 which,
individually or together, represent a fundamental change in
the information in the Registration Statement; and
(iii) Includes any additional or changed material information
on the plan of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) Request for acceleration of effective date.
(1) Insofar as indemnification for liabilities arising under
the Securities Act, may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the issuer of expenses incurred or paid by a director, officer or
controlling person of the issuer in the successful defense of any action, suit
or
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proceedings) is asserted by such director, officer or controlling person in
connection with the securities being registered, the issuer will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such court.
(2) For determining liability under the Securities Act, treat
the information in the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in the form of prospectus
file by the small business issuer under rule 424(b)(1), or (4) or 457(h) under
the Securities Act as part of this registration statement as at the time the
Commission declares it effective.
(3) 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.
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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 Amendment
No. 1 to this registration statement to be signed on its behalf by the
undersigned, in the City of New York, State of New York, on February 9, 1999.
YOUNETWORK CORPORATION
By: s/Kyle S. Taylor
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Kyle S. Taylor, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities with YouNetwork and on the dates indicated.
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SIGNATURE TITLE DATE
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/s/ Kyle S. Taylor President February 9, 1999
- ------------------ Director
Kyle S. Taylor
/s/ Don S. Senerath Chief Executive Officer, February 9, 1999
- ------------------- Director
Don S. Senerath
/s/ Peter R. Silverman Director February 9, 1999
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Peter Silverman
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2.1* Agreement and Plan of Merger Agreement, dated February 3,
1999, by and between YouNetwork Corp., a New York corporation
and YouNetwork Corporation, a Delaware corporation.
3.1* Certificate of Incorporation of Registrant, as amended
3.2* By-laws of Registrant
4.1* Specimen certificate representing Registrant's Class A Common
Stock
4.2* Specimen certificate representing Registrant's Class B Common
Stock
5.1*** Opinion of Silverman, Collura, Chernis & Balzano, P.C. with
respect to legality of the securities of the Registrant being
registered
10.1* Stockholders' Agreement, dated December 4, 1998
10.2* Stock and Warrant Purchase Agreement, dated December 4, 1998
10.3* Agreement between Muze, Inc. and YouNetwork , dated January
7, 1999
10.4* Agreement between Qwest International Inc. (a successor in
interest to LCI International Telecom Corp.), dated March 6,
1998.
10.5* Agreement between Baker & Taylor, Inc. and YouNetwork, dated,
July 9, 1998.
23.1*** Consent of Silverman, Collura, Chernis & Balzano, P.C.
(included in Exhibit 5.1)
23.2** Consent of Mahoney Cohen & Company, CPA, P.C.
27* Financial Data Schedule
* Previously filed
** Filed with this Amendment No. 1
*** To be filed by Amendment
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Independent Auditors' Consent
We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated January 20, 1999 except for Note 11, as to
which the date is February 3, 1999, in the Registration Statement and related
Prospectus of YouNetwork Corporation.
Our report dated January 20, 1999, except for Note 11, as to which the
date is February 3, 1999, contains an explanatory paragraph that states that
the Company's has incurred losses since inception and expects to incur losses
for the foreseeable future raises substantial doubt about the entity's ability
to continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of reported asset
amounts or the amounts and classification of liabilities that might result from
the outcome of that uncertainty.
/s/ Mahoney Cohen & Company, CPA, P.C.
New York, New York
February 9, 1999
