As filed with the Securities and Exchange Commission on July 23, 1999
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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THINWEB.COM CORPORATION
---------------------------------
(Exact Name of registrant as specified in its charter)
Delaware 52-2102438 7372
- -------- ---------------------------- -------------------------
(State or other (I.R.S. Employer (Primary Standard
jurisdiction of Identification Industrial Classification
incorporation or Number) Code Number)
organization)
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thinWEB.com Corporation
Suite 101, Phase 3
6 Antares Drive
Ottawa, Ontario K2E 8A9
613/225-8446
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Gary Hannah
thinWEB.com Corporation
Suite 101, Phase 3
6 Antares Drive
Ottawa, Ontario K2E 8A9
613/225-8446
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to: Cassidy & Associates, 1504 R Street, N.W.
Washington, D.C. 20009, 202/387-5400
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement.
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 of 1933, 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
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. / /
CALCULATION OF REGISTRATION FEE
Amount
Title of to be Proposed Maximum
Class Registered Offering Aggregate Amount of
to be Maximum Price Offering Registration
Registered Offering Per Share Price Fee (2)
Common Stock 4,000,0000 $7.00 $28,000,000 $ 7,784
Common stock held by
selling
securityholders 6,212,500 $0.02 (1) $ 124,250 34
TOTAL $28,124,250 $ 7,818
(1) There is no current market for the securities and the
price at which the shares held by the Selling Securityholders
will be sold is unknown. Pursuant to Rule 457(f)(2), the
registration fee is based upon the estimated per share of
common stock book value of $0.02 as of March 31, 1999.
(2) Paid by electronic transfer.
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, as amended,
or until the Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
PROSPECTUS Subject to Completion, Dated July ______, 1999
The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement which
has been filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
THINWEB.COM CORPORATION
4,000,000 shares of common stock; and
6,212,500 shares of Common Stock to be sold by the Holders thereof
ThinWEB.com Corporation ("thinWEB.com" or the "Company"),
a recently created Delaware corporation, is offering for sale
4,000,000 shares of its common stock, par value $.0001 per share
(the "Company Shares") at an initial offering price of $7.00 per
Company Share. The offering price of the Company Shares was
determined arbitrarily by thinWEB.com and is not necessarily
related to asset or book value, net worth or any other established
criteria of value. See "DESCRIPTION OF SECURITIES."
The Company Shares are being offered for sale by the officers
and directors of the Company who will not receive any remuneration
for such sales. The Company Shares offered by thinWEB.com are being
offered on a "best efforts" basis and thinWEB.com is only required
to use its best efforts to sell the Company Shares, and there is
no assurance that any sales will be made. ThinWEB.com has not
established a minimum or maximum number of Company Shares
required to be sold and funds received from any sales of the
Company Shares will be immediately available for use
by thinWEB.com and will not be held
in escrow, trust or any type of similar arrangement.
ThinWEB.com will offer the Company Shares for a period
of six months from the effective date of this prospectus
which offering period can be extended by the Company for
an additional 90 days. See "PLAN OF DISTRIBUTION".
ThinWEB.com has limited operations, revenues and capital.
There has been no public market for the common stock of the
Company and no assurances may be given that a public market
will develop following completion of this offering or that,
if any such market does develop, it will be sustained. See
"PLAN OF DISTRIBUTION".
Price Underwriting Discounts Proceeds
to Public and Commissions (1) to Company
or Others (2)
Per Company Share $7.00 $ 0 $7.00
Total $7.00 $ 0 $7.00
(Footnotes on following page)
This Prospectus also relates to the offer and sale of 6,212,500
shares of common stock (the "Selling Securityholder Shares") of
thinWEB.com by 41 holders of such shares (the "Selling Securityholders").
(The Company Shares and Selling Securityholder Shares are collectively
referred to, when applicable, as the "Shares"). All costs incurred in
the registration of the Shares are being borne by thinWEB.com.
ThinWEB.com will not receive any funds from the sale of the Selling
Securityholder Shares; all funds received by the sale of the Selling
Securityholder Shares will be retained by the Selling Securityholders.
These securities involve a high degree of risk.
See "Risk Factors" contained in this prospectus beginning on page _____.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
The date of this Prospectus is July ____, 1999
(Footnotes from prior page)
(1) The officers and directors of the Company are offering the
Company Shares for sale. If an underwriter is used, of which
there can be no assurance, discounts or commissions are not
anticipated to exceed 10% of the offering price.
(2) Does not include an estimated $118,000 in expenses of
issuance and distribution of this offering.
The Selling Securityholders, directly or through agents,
dealers or representatives to be designated from time to
time, may sell the Selling Securityholder Shares on terms
to be determined by them at the time of sale. See "PLAN OF
DISTRIBUTION." The Selling Securityholders reserve the sole
right to accept or reject, in whole or in part, any proposed
purchase of the Selling Securityholder Shares being offered by them.
Following the completion of this offering, certain broker-dealers
may be the principal market makers for the securities offered hereby.
Under these circumstances, the market bid and asked prices for the
securities may be significantly influenced by decisions of the market
makers to buy or sell the securities for their own account. No assurance
can be given that any market making activities of the market makers, if
commenced, will be continued.
In connection with this offering, certain underwriters may engage
in passive market making transactions in the Company's common stock
on Nasdaq in accordance with Rule 103 of Regulation M. See "Plan of
Distribution".
For a period of at least one year following closing of this
offering, the Company will be required by the Securities Exchange
Act of 1934 to file periodic reports and other information with the
Securities and Exchange Commission. Such material may be inspected
at the Commission's principal offices at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20459 or at its web site http://www.sec.gov
and copies may be obtained on payment of certain fees prescribed by the
Commission. The Company will furnish to holders of its common stock
annual reports containing
audited financial statements examined and reported upon, and with
an opinion expressed by an independent certified public accountant.
The Company may issue other unaudited interim reports to its shareholders
as it deems appropriate.
INCORPORATION BY REFERENCE
The Company hereby incorporates by reference in its
entirety the Form 8-K filed by the Company with the
Securities and Exchange Commission on May 28, 1999
(file no. 000-25419).
PROSPECTUS SUMMARY
The following is a summary of certain information
contained elsewhere in this Prospectus.
Reference is made to, and this summary is qualified by,
the more detailed information set forth in this Prospectus,
which should be read in its entirety.
RISK FACTORS
There are substantial risk factors involved in investment in the Company.
Investment in the Company is speculative and no assurances
can be made of any return to investors. See "RISK FACTORS".
THE COMPANY
ThinWEB.com Corporation is a recently created Delaware
corporation formed to develop Internet e-business software
applications targeted to organizations that require rapid
access to data and immediate interaction with customers and
employees over the Internet.
ThinWEB.com maintains its executive offices at Suite 101,
Phase 3, 6 Antares Drive, Ottawa, Ontario K2E 8A9 and
its telephone number is 613/225-8446.
TRADING MARKET
There is currently no trading market for thinWEB.com's
securities, including its common stock. ThinWEB.com
intends to apply initially for admission to quotation
of its common stock on the NASD OTC Bulletin Board.
There can be no assurance that the Company will qualify
for quotation of its securities on the NASD OTC
Bulletin Board. See "RISK FACTORS--Absence of Trading Markets" and
"DESCRIPTION OF SECURITIES--Admission to Quotation on Nasdaq
SmallCap Market or the NASD OTC Bulletin Board".
SELECTED FINANCIAL DATA
The following table sets forth the selected consolidated
financial data for ThinWeb Software Incorporated for the
period from April 22, 1998 to December 31, 1998 and the
three months ended March 31, 1999:
Income statement data:
Period ended Three Months Ended
December 31, March 31,
1998 1999
(unaudited)
Revenues 1,156 253
Research and development expense 43,888 38,034
Loss for the period (100,296) (100,882)
Balance sheet data: December 31, March 31,
1998 1999
(unaudited)
Current Assets 103,258 602,055
Total Current liabilities 200,906 287,366
<PAGE>
RISK FACTORS
The securities offered hereby are speculative in nature and involve a
high degree of risk. The securities offered hereby should be purchased
only by persons who can afford to lose their entire investment. Therefore,
each prospective investor should, prior to purchase, consider very carefully
the following risk factors, as well as all of the other information set
forth elsewhere in this prospectus and the information contained in the
financial statements, including all notes thereto.
GOING CONCERN QUESTION
ThinWEB.com has suffered losses from its start-up activities and has
insignificant operations and revenues which raise doubt about its ability
to continue as a going concern. The ability of thinWEB.com to continue
as a going concern is dependent upon it obtaining the necessary financing
to complete its research and development projects, to market those products
once available and to develop profitable operations. There can be no
assurance that thinWEB.com will be able to complete the development of its
products, or if completed, that
it will be able to market them successfully. If ThinWEB.com is not able
to raise financing or to obtain alternative sources of funding, management
will be required to curtail development of operations and there is no
assurance that the Company will be able to continue.
UNCERTAINTY OF FUTURE PROFITABILITY EVEN IF SOFTWARE APPLICATIONS MARKETED
There is no assurance that even if completed and marketed that revenues
from the Company's software applications will be sufficient to fund its
operations or to fund any additional research, development or marketing.
ThinWEB.com may be required to raise additional capital through debt or
equity financing. There are no assurances that the Company will receive
any revenues from operations or other proceeds nor that it will be able
to raise such capital through debt or equity financing.
THINWEB.COM MAY NEED ADDITIONAL FINANCING
Future events, including the problems, delays, expenses and difficulties
frequently encountered by software development companies may lead to delays
and cost increases that could make the net proceeds of this offering
insufficient to fund thinWEB.com's proposed operations. ThinWEB.com
may seek additional sources of capital, including an additional offering
of its equity securities, an offering of debt securities or obtaining
financing through a bank or other entity. ThinWEB.com anticipates that
it will offer for sale certain of its equity securities. ThinWEB.com has
not yet determined the terms of such offering, but the proceeds from such
offering, if any, are crucial to the continuationof the development of
its operations. ThinWEB.com has not established a limit as to the
amount of debt it may incur nor has it adopted a ratio of its equity
to a debt allowance. If it needs to obtain additional financing, however,
there is no assurance that financing will be available, for any source, or
that it will be available on terms acceptable to it, or that any future
offering of securities will be successful. If thinWEB.com is not
able to raise such financing or to obtain alternative sources of funding,
management will be required to curtail development of operations and there
is no assurance that the Company will be able to continue.
OPERATING LOSS
ThinWEB.com has had insignificant operations and revenues to date.
ThinWEB.com has used funds raised from the offering of its securities
and from borrowing to finance its operations. ThinWEB.com's ability to
develop operations is dependent upon its ability to bring its two developed
products to market and to sell such products at a profit.
THINWEB.COM HAS NO OPERATING HISTORY
ThinWEB.com and its subsidiaries have no operating histories, have
not begun any operations and to date have received only insignificant
revenues from start-up operations. ThinWEB.com's operations will be
subject to all the risks inherent in the establishment of a relatively
new business enterprise, including the lack of significant operating
history. There can be no assurance that future operations will be
profitable. Revenues and profits, if any, will depend upon various factors,
including market acceptance of its concepts, market awareness,
reliability of the software products, dependability and accuracy of technical
support, and general economic conditions.
There is no assurance that thinWEB.com will achieve its expansion
goals and the failure to achieve such would have an adverse impact on it.
SELLING SECURITYHOLDERS MAY SELL SECURITIES AT ANY PRICE OR TIME
After effectiveness of this prospectus, the Selling Securityholders may
offer and sell their Selling Securityholder Shares at a price and time
determined by the Selling Securityholder in accordance with applicable
federal and state securities laws. Affiliates of the Company will be
subject to limitations of Rule 144, including its volume limitations
in the sale of their Selling Securityholder Shares. The timing of
such sales and the price at which the Selling Securityholder Shares
are sold by the Selling Securityholders could have an adverse effect
upon the public market for the common stock should one develop.
POSSIBILITY OF NOT DEVELOPING ACCEPTABLE SOFTWARE
ThinWEB.com's two products are currently in beta testing status and
the Company anticipates their release in the summer of 1999. There
is no assurance that circumstances or events will not delay or prevent
such release, including insufficient funds to finalize the products.
It is possible that the beta testing may produce results that require
the products to be redeveloped or reworked. A delay in the release of
the products would adversely impact thinWEB.com's projected operations
and business plan.
CHANGES IN SOFTWARE PLATFORM
ThinWEB.com's software is Java based, which is currently a widely
used computer platform. There can be no assurance that the Java
platform will have such continued wide-spread acceptance or that a
competitor to Java will not develop a better and more widely used
platform not compatible with thinWEB.com's software. Although the
software would continue to be available and usable with the Java
platform, there is no assurance that the Java platform market would
continue to expand or that, potentially in light of a better platform,
would not decrease in size.
LACK OF CONTINUED DEVELOPMENT OF E-COMMERCE MARKET
The use of the Internet and World Wide Web for commercial purposes
is expanding dramatically. There is no assurance, however, that as
increased commerce takes place on the Internet that unforeseen overloads,
lack of sufficient hardware, telephone availability or other problems may
develop. In addition, consumer use of the Internet for purchases, banking,
and other commercial uses may decline for any number of reasons such as
security problems, overload difficulties, shopping trends, or slow Internet
access.
COMPETING SOFTWARE MAY HURT THINWEB.COM'S MARKET
There is no assurance that a competitor may not offer similar or identical
or better software to that being developed or to be developed by
thinWEB.com prior to the availability of thinWEB.com's software.
In addition, a competitor may offer similar or identical software at
a cheaper price or as free software. There is an increasing amount of
software on the World Wide Web available for download without charge
("freeware"). Given the intense competition in the software market,
it can be an important factor to be the first available in an application
or to be offered for the cheapest price.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER MARKETABILITY
The competition in the software industry is very intense. There are numerous
well-established competitors, including national, regional and local software
developers possessing substantially greater financial, marketing, personnel
and other resources than thinWEB.com. ThinWEB.com may not be able to market
or sell its products if faced with direct product competition from these
larger software developers.
TRADEMARK PROTECTION AND PROPRIETARY MARKS
Notwithstanding the pending registration of its trade names with the
United States Trademark Office and the Canadian Intellectual Property
Office, there is no assurance that thinWEB.com will be able to enforce
against use of these marks against prior users. There is also no
assurance that thinWEB.com will be able to prevent competitors from
using the same or similar marks, concepts or appearances or that
thinWEB.com will have the financial resources necessary to protect
its marks against infringing use.
MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL SHAREHOLDER VOTE
ThinWEB.com's executive officers and directors, together with entities
affiliated with them, beneficially own approximately 53.8% of the
outstanding common stock. As a result, these stockholders are able
to exercise controlling interest over matters requiring stockholder
approval, including the election of directors and the approval of
material corporate matters such as change of control transactions.
The effects of such control could be to delay or prevent a change of
control of the Company unless the terms are approved by such stockholders.
SPECULATIVE NATURE OF INVESTMENT
The e-commerce, Internet and software industries are extremely
competitive and the commercial success of any software application or
other program is often dependent on factors beyond the control of the
developing company, including but not limited to immediate availability
of competing software, initial user acceptability, and general market
conditions. ThinWEB.com may experience cost overruns in marketing its
applications and may not have sufficient capital to successfully complete
any of its projects. ThinWEB.com may not be able to sell or license
its applications because of industry conditions, general economic conditions,
competition from other producers and distributors, or lack of acceptance by
users. ThinWEB.com may also incur uninsured losses for liabilities which
arise in the ordinary course of business in the software industry, or which
are unforeseen, including but not limited to copyright infringement, product
liability, and employment liability. See "BUSINESS."
THINWEB.COM'S DEVELOPMENT OF SOFTWARE APPLICATIONS IS HIGHLY DEPENDENT ON
EXPERTISE OF TWO OF ITS OFFICERS.
Bryan MacLean, Vice President and a Director, and Cory Reid, Vice
President, are the initial developers of thinWEB.com's two current
software applications. The loss of their services for any reason
would have a material adverse effect on thinWEB.com's business and
operations and its prospects for the future. The competition for
information technology expertise, including Internet, computer and
software programmers and developers is intense and thinWEB.com may
have difficulty in replacing the services of these two individuals,
if lost for any reason. The development of thinWEB.com's business
plan is dependent on retaining the services of these two officers
and obtaining and retaining the services of similar expert
personnel. ThinWEB.com does not have a "key man" life insurance
on the lives of any of its executive officers.
ISSUANCE OF ADDITIONAL COMMON STOCK WILL REDUCE INVESTORS PERCENTAGE OWNERSHIP
The Certificate of Incorporation of thinWEB.com authorizes the
issuance of a maximum of 100,000,000 shares of common stock and
20,000,000 shares of "non-designated" preferred stock. There are
17,066,344 shares of common stock outstanding and 1,500,000 shares
of preferred stock outstanding. The future issuance of all or part
of the remaining authorized common stock or preferred stock could
result in substantial reduction in the percentage of thinWEB.com's
common stock held by its then shareholders, including purchasers of
the Shares offered herein.
ISSUANCE OF ADDITIONAL COMMON STOCK MAY DILUTE SHARE VALUE
ThinWEB.com may issue common stock for future acquisitions, or other
items, or may sell shares of its common stock at a price lower than
price paid by any purchaser hereof. Such issuance may have the effect
of diluting the value of the shares held by its then shareholders and
might have a material adverse effect on any trading market, should a
trading market develop for thinWEB.com's securities.
THE POSSIBILITY OF THINWEB.COM ISSUING ADDITIONAL PREFERRED STOCK
WITH CERTAIN PREFERENCES MAY DEPRESS MARKET PRICE OF THE COMMON STOCK
ThinWEB.com has 20,000,000 shares of non-designated preferred stock
authorized which it may issue from time to time by action of the Board
of Directors. As of the date hereof, the Board of Directors has
designated 2,000,000 shares and issued 1,500,000 shares of preferred
stock. The Board of Directors may designate additional series or
classes of preferred shares without shareholder consent which
designations may give the holders of the preferred stock voting
control and other preferred rights such as to liquidation and dividends.
The authority of the Board of Directors to issue such stock without
shareholder consent may have a depressive effect on the market price
of thinWEB.com's common stock even prior to any such designation or
issuance of the preferred stock.
THE POSSIBILITY OF ISSUING PREFERRED STOCK FOR ANTI-TAKEOVER EFFECT
COULD PREVENT TAKEOVERS FAVORED BY SHAREHOLDERS
The Board of Directors has the authority, without further approval
of stockholders, to issue preferred stock, having such rights,
preferences and privileges as the Board of Directors may determine.
Any such issuance of shares of preferred stock, under certain
circumstances, could have the effect of delaying or preventing a
change in control of thinWEB.com or other take-over attempt and
could adversely materially affect the rights of holders of shares
of the common stock.
OFFICERS AND DIRECTORS HAVE LIMITED LIABILITY AND HAVE INDEMNITY RIGHTS
The Certificate of Incorporation and By-Laws of thinWEB.com provide
that thinWEB.com indemnify its officers and directors against losses
sustained or liabilities incurred which arise from any transaction in
such officer's or director's respective managerial capacity unless such
officer or director violates a duty of loyalty, did not act in good
faith, engaged in intentional misconduct or knowingly violated the law,
approved an improper dividend, or derived an improper benefit from the
transaction. The Company's Certificate of
Incorporation and By-Laws also provide for the indemnification by it
of its officers and directors against any losses or liabilities
incurred as a result of the manner in which such officers and
directors operate the thinWEB.com's business or conduct its
internal affairs, provided that in connection with these activities
they act in good faith and in a manner which they reasonably believe
to be in, or not opposed to, the best interests of thinWEB.com and
their conduct does not constitute gross negligence, misconduct or breach
of fiduciary obligations.
THINWEB.COM COMMON STOCK MAY BE SUBJECT TO PENNY STOCK REGULATION
There has been no public market for thinWEB.com's common stock. If
a market for the common stock develops and the price of the common
stock falls below $5.00 per share, then the common stock may be
considered "penny stock". Penny stocks generally are equity
securities with a price of less than $5.00 per share other than
securities registered on certain national securities exchanges or
quoted on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such securities
is provided by the exchange or system. The Company's securities may
be subject to "penny stock" rules that impose additional sales
practice requirements on broker-dealers who sell such securities
to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse).
For transactions covered by these rules, the broker-dealer must make
a special suitability determination for the purchase of such securities
and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to
the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information
on the limited market in penny stocks. Consequently, the "penny stock"
rules may restrict the ability of broker-dealers to sell thinWEB.com's
securities.
IMMEDIATE AND SUBSTANTIAL DILUTION
Purchasers of the Company Shares offered herein will incur
immediate and substantial dilution in the net tangible book
value of the common stock. See "DILUTION". Additional dilution
to investors may result when, and if, any warrants are exercised
or the Preferred Shares converted at a time when the net tangible
book value per share of the common stock exceeds the exercise price
of such Warrants or the conversion price of such Preferred Shares.
ADDITIONAL SHARES WILL COME INTO MARKET AS SHARES BECOME AVAILABLE
FOR RESALE PURSUANT TO RULE 144
Sales of restricted securities by a person who is not an affiliate
of thinWEB.com (as defined in the Securities Act) and who has
satisfied a two year holding period may be made without any volume
limitation. The outstanding restricted securities of thinWEB.com
may become eligible for sale in the public market pursuant to Rule
144 without additional capital contribution to thinWEB.com. Possible
or actual sales of thinWEB.com's outstanding common stock by all or
some of the present stockholders may have a material adverse effect
on the market price of thinWEB.com's outstanding common stock should
a public trading market develop.
ADDITIONAL SHARES ENTERING MARKET PURSUANT TO RULE 144 WITHOUT
ADDITIONAL CAPITAL CONTRIBUTION
Of the 17,066,344 issued and outstanding shares of thinWEB.com's
common stock, 16,916,344 are "restricted securities" including the
6,212,500 which are the subject of this registration statement, as
such term is defined in Rule 144 ("Rule 144") of the General Rules
and Regulations of the Securities and Exchange Commission (the
"Rules") promulgated under the Securities Act. In general, under
Rule 144, if adequate public information is available with respect
to a company, a person who has satisfied a one year holding period
as to his restricted securities or an affiliate who holds unrestricted
securities may sell, within any three month period, a number of that
company's shares that does not exceed the greater of one percent of
the then outstanding shares of the class of securities being sold or,
if the security is trading on the Nasdaq Stock Market or an exchange,
the average weekly trading volume during the four calendar weeks prior
to such sale. Sales of restricted securities by a person who is not
an affiliate of the company (as defined in the Securities Act) and
who has satisfied a two year holding period may be made without any
volume limitation. Pursuant to such Rule 144, after the expiration
of the holding period certain shares of common stock now restricted
for trading will become eligible for trading in the public market
without any payment therefore or increase to the Company's capitalization.
Possible or actual sales of the Company's outstanding common stock
by all or some of the present stockholders may have an adverse effect
on the market price of thinWEB.com's common stock should a public
trading market develop. The additional availability of such shares to be
traded in the public market would increase the "public float" of the
Company without any corresponding increase in its capital. Upon
effectiveness of the Registration Statement of which this prospectus
forms a part, the 6,212,500 shares registered herein will no longer be
subject to Rule 144 except such registered shares held by affiliates
of thinWEB.com (including officers and directors) which will continue
to be subject to the restrictions on the transferability of shares
held by affiliates contained in Rule 144.
RESALES OF THE SELLING SECURITYHOLDER SHARES UNDER STATE SECURITIES LAWS
The National Securities Market Improvement Act of 1996 ("NMSIA")
limits the authority of states to impose restrictions upon sales of
Securities made pursuant to Sections 4(1) and 4(3) of the Securities Act of
companies which file reports under Sections 13 or 15(d) of the
Securities Exchange Act. Sales by the Selling Securityholders of
the Selling Securityholder Shares in the secondary market will be
made pursuant to Section 4(1) (sales other than by an issuer,
underwriter or broker). It is anticipated that following the effective
date of this prospectus the Selling Securityholder's Shares will be
eligible for resale in the secondary market in each state.
LIMITED STATE REGISTRATION OF COMPANY SHARES
ThinWEB.com anticipates that it will primarily sell the Company
Shares in a limited number of states. ThinWEB.com will not accept
subscriptions from investors resident in other states unless it
effects a registration therein or determines that no such registration
is required.
In order to comply with the applicable securities laws, if any, of
certain states, the Company Shares will be offered or sold in such
states through registered or licensed brokers or dealers in those
states. In addition, in certain states, the Company Shares may not
be offered or sold unless they have been registered or qualified for
sale in such states or an exemption from such registration or
qualification requirement is available and with which thinWEB.com
has complied.
NO PRIOR MARKET FOR THINWEB.COM'S COMMON STOCK
Prior to this offering, no public trading market existed for the common
stock of thinWEB.com or any of its subsidiaries.
NO ASSURANCE THAT A PUBLIC MARKET WILL DEVELOP FOR THINWEB.COM'S COMMON STOCK
There is no assurance that a public trading market for the common stock
will develop or that a public trading market, if developed, will be
sustained. If a trading market does in fact develop for the common stock
offered hereby, there can be no assurance that it will be maintained.
Furthermore, if for any reason the common stock is not listed on the NASD
OTC Bulletin Board or a public trading market does not otherwise develop,
purchasers of the Shares may have difficulty selling their common stock or
warrants should they desire to do so.
COMPUTER SYSTEMS FACING UNKNOWN PROBLEMS ON CHANGE TO YEAR 2000
Many existing computer programs use only two digits to identify a year
in such program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for which
four digits will be required to accurately report the date. If not
corrected, many computer applications could fail or create erroneous
results by or following the year 2000 ("Year 2000 Problem"). Many of
the computer programs containing such date language problems have not
been corrected by the companies or governments operating such programs.
ThinWEB.com's plans for its operations are contingent upon the
continued use and acceptability of the Internet. A computer failure that
impacted on the Internet for any length of time could undermine the
Company's business plan. In addition, any failure of the Internet may
damper its use and growth and stall or depress the market for e-business.
In addition, the Company could be impacted by the failure of other
domestic and international companies and countries to timely correct
their computer system, telephone systems, mail and package delivery
systems, transportation systems, financial systems, and others. If
any of these systems or systems of other companies or countries
become inoperational the Company may be directly and significantly
affected. The extent or duration of the problems connected with the
Year 2000 Problem are impossible to predict.
AVAILABLE INFORMATION
ThinWEB.com has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form SB-2 under the
Securities Act with respect to the Shares offered hereby. This
prospectus does not contain all the information contained in that
registration statement. For further information regarding the
Company and the securities offered hereby, reference is made to
the registration statement, including all exhibits and schedules
thereto, which may be inspected without charge at the public
reference facilities of the Commission's Washington, D.C. office,
450 Fifth Street, N.W., Washington, D.C. 20549. Each statement
contained in this prospectus with respect to a document filed
as an exhibit to the registration statement is qualified by
reference to the exhibit for its complete terms and conditions.
ThinWEB.com will provide without charge to each person who receives
a copy of this prospectus, upon written or oral request by such person,
a copy of any of the information incorporated herein by reference, not
including exhibits. Such requests should be made in writing to Gary
Hannah, President, thinWEB.com Corporation, Suite 101, Phase 3, 6
Antares Drive, Ottawa, Ontario K2E 8A9 Canada, or by telephone at
613/225-8446.
ThinWEB.com will be subject to the informational requirements of
the Securities Exchange Act of 1934 ("Exchange Act") and in
accordance therewith will file reports and other information
with the Commission. Reports, proxy statements and other information
filed by thinWEB.com can be inspected and copied on the Commission's
home page on the World Wide Web at http://www.sec.gov or at the public
reference facilities of the Commission, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as the following
Regional Offices: 7 World Trade Center, Suite 1300, New York, N.Y.
10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago Illinois. 60661-2511. Copies can be obtained from the
Commission by mail at prescribed rates. Request should be directed to
the Commission's Public Reference Section, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549.
ThinWEB.com intends to furnish its stockholders with annual reports
containing audited financial statements and such other reports as may
be required by law.
THE COMPANY
ThinWEB.com Corporation has two wholly-owned subsidiaries,
Thinweb.com Inc., a Nova Scotia corporation and ThinWeb Software
Incorporated, a Nova Scotia corporation. Thinweb.com Inc. was
created to effect the exchange of stock with ThinWeb Software
Incorporated and has no operations. As a result of the exchange
of stock, ThinWeb Software Incorporated has become a wholly-owned
subsidiary of Thinweb.com Inc.
Effective as of May 27, 1999, as reported in the Form 8-K filed
by the Company and incorporated herein by reference, the Company's
subsidiary Thinweb.com Inc. purchased all the outstanding shares of
common stock of ThinWeb Software Incorporated (16,916,344 shares)
for an aggregate consideration of:
(i) issuance of 16,916,344 Class A exchangeable non-voting
participating common shares of its common stock;
(ii) the Company's issuance to StockTrans, Inc., Ardmore,
Pennsylvania, as trustee for the ThinWeb Software Incorporated
shareholders (the "Trustee"), 16,916,344 shares of its common
stock to be held in trust under the terms of an exchange and
voting agreement dated April 22, 1999; and
(iii) the Company's issuance of 1,500,000 shares of its preferred
stock to 583317 British Columbia, Ltd., a British Columbia corporation,
at $.0001 per share.
Each beneficial shareholder of the Class A Shares has, through
the Trustee, voting rights in thinWEB.com equal to the number of
Class A Shares held for his benefit by the Trustee. The Class A
Shares may be converted into or exchanged for an equal number of
shares of thinWEB.com held by the Trustee upon proper notice to
thinWEB.com. By having the Class A Shares exchangeable at some
time in the future for issued shares of thinWEB.com held by the
Trustee, the Thinweb Software Incorporated shareholders were able
to defer certain Canadian taxes otherwise payable upon the
disposition of their Thinweb Software Incorporated shares while
maintaining voting rights in thinWEB.com.
As part of the transaction, the Company changed its name from
Warwick Acquisition Corporation to thinWEB.com Corporation.
ThinWeb Software Incorporated was founded in April, 1998, by
two of the Company's present officers, Bryan MacLean, also a
director, and Cory Reid, to focus on e-commerce business
applications. Messrs. MacLean and Reid were part of the
initial software development team at Sanga International, Inc.,
a company providing web-based software business solutions using
Java technology. Messrs. MacLean and Reid determined that a
market opportunity existed to develop web-based software
applications targeted to software applications targeted to
software developers and Internet providers based on the use
of Sun Microsystems' Java software programming language.
Messrs. MacLean and Reid began development of ThinAccess
and WebCrumbs and its core technology in March, 1998, and
thereafter established ThinWeb Software Incorporated
through which they continued development of the technology
and products. As of May 27, 1999, ThinWeb Software
Incorporated was a wholly-owned subsidiary of
thinWEB.com Corporation.
ThinWEB.com Corporation has an authorized capitalization of
100,000,000 shares of common stock, par value of $.0001 per
share and 20,000,000 shares of non-designated preferred stock,
par value $.0001, of which 2,000,000 shares have been designated.
See "DESCRIPTION OF SECURITIES". The main offices of the Company
are located at Suite 101, Phase 3, 6 Antares Drive, Ottawa, Ontario
K2E 8A9 and its telephone number is 613/225-8446.
USE OF PROCEEDS
If all the Company Shares are sold at the initial selling price
of $7.00 per share, of which there can be no assurance, the proceeds
to the Company will be $28,000,000 not including broker or underwriting
commissions which the Company anticipates would not exceed 10% of the
proceeds if any.
The following table sets forth the Company's anticipated use of
proceeds from the offering:
Total Proceeds $ 28,000,000
Commissions or underwriting Fees, if any 2,800,000
Offering expenses 118,000
Administrative expenses 1,282,100
Marketing and advertising 8,800,000
Research and development 7,500,000
Acquisition of third party software applications 5,000,000
Contingency 2,500,000
The foregoing represents thinWEB.com's best estimate of the net
proceeds of the offering based on current planning and business
conditions. The exact allocation of the proceeds for the purposes
set forth above and the timing of the expenditures may vary
significantly depending upon the exact amount of funds raised
and status of the Company's business plan.
The Company believes that the proceeds from offering in addition
to potential revenues from operations in addition to the funds
from subscriptions already received will be sufficient to fund
its operations for the next 12 months. If the Company is not
able to sell all the Company Shares, or to sell the Company Shares
at the initial offering price, it may be required to delay, scale
back or eliminate parts of its development plan or obtain funds
through additional financing, including loans or additional offerings
of its securities. The Company has no agreements or understandings
with respect to any future financing or loan agreements.
DILUTION
Purchasers of the Company Shares may experience immediate and
substantial dilution in the value of the common stock. Dilution
represents the difference between the initial public offering price
per share paid by the purchasers in the offering and the net
tangible book value per share immediately after completion of
the offering. Net tangible book value per share represents the
net tangible assets of the Company (total assets less total
liabilities), divided by the number of shares of common stock
outstanding upon closing of the offering.
At March 31, 1999 Thinweb Software Incorporated (the only
operating subsidiary) had a net tangible book value of $400,285
or $0.02 per share. Assuming sale of all 4,000,000 Company Shares
at $7.00 per Company Share (and assuming no conversion of the
convertible preferred stock and no exercise of the outstanding
warrant), the net tangible book value of the Company would be
$25,440,285 or $1.21 per share.
This represents an immediate dilution to purchasers of the Company
Shares of $5.79 per share and the aggregate increase in net tangible
book value to present shareholders of $1.19 per share. The following
table illustrates such effect:
Initial public price per Company Share $7.00
Net tangible book value before offering $0.02
Increase per share attributable to
new investors $1.19
Net tangible book value per share after Offering $1.21
Dilution per share to new investors $5.79
In addition, any sales by the Selling Securityholders of their shares
for an amount less than that paid by the purchaser of the Company Shares
would result in a further dilution to value of the purchaser's common
stock. The following table sets forth, on a pro forma basis, the
differences between existing shareholders and new investors in the
offering with respect to the number of shares of Common Stock purchased
from the Company, the total consideration paid to the Company and the
average price per share paid by existing shareholders and by new investors:
Assuming all Company Shares sold: Percen-
tage
Percentage of Total
Oustand- Consid- Consid- Average
Number of ing eration eration Price per
Shares Shares Paid Paid Share
Existing
Shareholders 17,066,344 81.0% $602,500 2.1% $.035
New Investors 4,000,000 19.0% 28,000,000 97.8% $ 7.00
Total 21,066,344 100% $ 28,602,500 100%
DIVIDEND POLICY
ThinWEB.com currently intends to retain substantially all of its
earnings, if any, to support the development of its business and
has no present intention of paying any dividends on its common stock
in the foreseeable future. Any future determination as to the payment
of dividends will be at the discretion of the Board of Directors , and
will depend on thinWEB.com's financial condition, results of operations
and capital requirements, and such other factors as the Board of
Directors deems relevant.
BUSINESS
References herein to the Company or thinWEB.com Corporation include
its wholly-owned subsidiaries, Thinweb.com Inc. and ThinWeb Software
Incorporated, unless the context otherwise requires. ThinWEB.com
Corporation is a start-up company and has insignificant operations
or revenues to date. Its ability to continue is dependent upon it
obtaining the necessary financing to complete its research and
development projects and upon future-profitable operations. There
can be no assurance that it will be able to complete the development
of its products, or if completed that it will be able to market them
successfully. There is no assurance that even if completed and marketed that
revenues from the products will be sufficient to fund thinWEB.com's
operations or fund any additional research, development or marketing.
OVERVIEW
ThinWEB.com Corporation develops e-business software applications
for organizations that require rapid access to data and immediate
interaction with customers or employees over the Internet. The
Company intends that all its software applications will utilize
Java, the universal language released in 1995 by Sun Microsystems
that provides a universal platform that can run on any computer
and on most operating systems without alteration. ThinWEB.com's
use of Java will enable it to develop applications for mobile
and wireless devices and other emerging technologies that require
platform independent, swift deployment, flexibility, fast operation
and low-cost.
The Company anticipates that its customer base will consist of
either stand alone software development companies, Internet
providers or software development teams within large organizations
developing web-based applications. There is no assurance that the
Company will be able to successfully develop or market its
technology. See "RISK FACTORS".
ThinWEB.com has developed a core technology that will support
current and future e-commerce applications developed by it. The
core technology will provide the framework for all future software
developed by thinWEB.com and will eliminate the need and cost for
developing a particular framework for each application. The Company's
first two applications are targeted for the e-commerce web applications
market.
TECHNOLOGY AND PRODUCTS
Core Technology. Through its subsidiary, ThinWeb Software Incorporated,
thinWEB.com has developed its core technology which will be utilized by
its e-commerce applications. The core technology provides a framework
for component containment, interaction, naming and other perimeters.
The core technology uses Java software compliance and enterprise
Application Programming Interfaces (APIs) from Sun Microsystems, Inc.
to retrieve data and business logic wherever located and to integrate
it into new applications for use on the web. The core technology
approach treats applications as a tapestry of inter-linked
collaborating and intelligent modular objects called components.
Each component is responsible for encapsulation of its internal
data as well as displaying the designed behavior. Any component
connected into the core requiring a particular action of another
component can send instructions via that component's interpretation
mechanism, the API. The core technology eliminates the need to build
a new framework for each new application developed by the Company.
ThinWEB.com anticipates that its use of its core technology will
allow it more rapid product research and development of applications by:
Decreasing duplication of effort. A problem encountered in a
development project can be solved once and abstracted into a
component for use by others in the project with the same or similar
problem.
Decreased lines of code. Component specializations reduces needed
lines of code since specific functions are encapsulated in one place
and can be referenced by other developers.
Developer specialization. A developer can specialize in one or a few
components with regard to performance, functions, and other areas and
not use time attempting tasks with which he is not familiar.
Increase bug detection and fixing. Common operations and algorithms
are encapsulated into components shared by all the developers; when a
bug occurs with one of these operations or algorithms, it can be
quickly isolated to one component and fixed for at one time for
developers utilizing the operation or algorithm.
Easier adaptation. As applications evolve, components can be easily
added, updated or replaced with minimal effect at the application level.
The thinWEB.com core technology is designed for TCP/IP ("transmission
control protocol/internet protocol") networks using web clients such as
web browsers, middle tier services such as web servers, application
servers and database middle-wares with support for industry standard
protocols.
The core technology is not intended to directly be a marketable
product; the core technology was specifically developed to provide
a competitive technical advantage in the development of the Company's
web applications.
During the past year, the Company has developed its first two
marketable applications utilizing the core technology: ThinAccess
and WebCrumbs. ThinAccess was tested and approved by Sun Microsystems
for listing on Sun Microsystem's Web site as being an approved Java
cross platform application (i.e. "100% Pure Java") and WebCrumbs,
utilizing the same framework, was also listed. Both products are
in the beta-marketing phase. The Company has additional products
in the design and development phases.
ThinAccess. ThinAccess is a packaged software application that can
be downloaded from a web site. A customer is able to download this
application in the form of an installation program. ThinAccess is
designed to offer remote access to any database over the Internet
running in any web browser featuring exceptional speed with an
ultra-thin download. Databases are widely used in computing and
are crucial to many e-commerce applications including payroll and
employee records departments, travel and reservation systems,
financial services systems, accounting departments and many other
areas in both government and private industry organizations. Timely
access to databases is crucial and ThinAcess is designed to provide
such database access in seconds.
ThinAccess is designed to work on any platform, including cellular
phones and personal data assistants. ThinAccess is designed to be
specialized for database access from Internet applications running
in any web browser. Java Database Connectivity (JDBC) is a standard
defined by Sun Microsystems to allow database access from Java applets
and applications. ThinAccess is intended to provide high performance,
powerful features and scalable JDBC database access to network
databases. This improves user responsiveness for web database
applications and gives web developers a single interface to access
all databases enabling web applications to manipulate all
databases uniformly.
ThinAccess first requires the ThinAccess Server to be started.
Once this product is initialized customers are able to configure
the ThinAccess Server using the graphical administrator contained
in ThinAccess. Configuration issues for customers include importing
database middlewares, specifying properties such as user name and
password to connect to the database, and pre-configuring database
objects. ThinAccess is shipped to customers pre-configured with an
SQL ("structured query language") compliant Java database called
InstantDB. With a configured ThinAccess Server running, web clients
are able to access their databases in Java applets, servlets, or
applications using JDBC drivers or ultra-thin Thinlets.
Thinlets provide an ultra-thin download and high performance mechanism
to directly access a pre-configured component existing on the
ThinAccess Server. They drastically reduce the time to perform
database operations because many critical path issues can be
performed before the user clicks on the button. For example, it
is possible to instantly access a pre-configured connection to
save on the time it takes to create a connection, access a
pre-configured database query result or access a pre-configured
query to execute if required.
Three JDBC drivers are included with ThinAccess that support the
JDBC standard for Java database connectivity. The choice of driver
depends on the requirements of the project. Factors determining the
appropriate driver include the web browser support required,
firewalls requiring HTTP tunneling, and JDK version or proxying.
ThinAccess can be used to connect to any database accessible via
a JDBC driver and supports access to any ODBC database as well.
JDBC drivers involve low level protocols that connect to databases.
Downloading these drivers to web browsers introduces many potential
obstacles including breaking browser security models, Java sandbox
issues, huge class downloads from loading drivers, client software
installation issues such as DLLs ("dynamic link libraries"),
insecure transmission of database user id's and passwords,
complicated JDBC URL's ("uniform resource locators") and many
more. ThinAccess provides all the functionality of these
JDBC drivers without the downloading obstacles.
ThinAccess provides "remote" access to these drivers, without the
need to download the driver. This immediately saves a class download
that could take minutes for network users to complete. When a JDBC
request is made by the client, ThinAccess proxies this request
over to the middle tier server where it is executed, then the
results returned.
ThinAccess is specifically aimed at providing thin client Java
database access for Java applets, servlets and applications.
ThinAccess is designed to improve the performance at both the
client and server level with these key features:
Decreases database application development cost
Can use any browser, any database, or any platform
Reuses database connections across multiple clients
Provides remote management over the web
Connects to multiple databases with one driver download
Increases web page response time by avoiding large driver downloads
Saves redundant database processing by enabling multiple clients
to browse same query results
Ease of use and installation saves costs of installation of
specialized software
No software installations required of clients
Ships with a SQL compliant pure Java database
Utilities include a Query Tool, Interactive SQL and Schema Viewer
TECHNICAL BENEFITS OF THINACCESS:
One location for all JDBC drivers. In environments where multiple
databases and database drivers exist, ThinAccess can simplify this
environment by organizing database connectivity in one place.
Simplicity for web developers. ThinAccess gives web developers a
simple JDBC URL to access databases by simple names. Using the ThinWeb
JDBC URL means the web developer does not have to know underlying
database specifics including the need to know SQL.
Seamless access when database changes occur. When databases are
upgraded, new JDBC driver versions are released, ports change,
database user identifications and passwords change, and the physical
location of the database changes. This means the user must change all
its database applications to reflect these changes. With ThinAccess
this is avoided since the web developer deals simply with the user
defined name. The database could change but the ThinAccess application
does not have to be changed.
One driver download for multiple databases. If an applet requires
connectivity to multiple databases, a user could be faced with multiple
downloads. With ThinAccess, one JDBC driver download is sufficient.
Pre-configuration for premium performance and scalability. It is
possible to pre-configure database connections, statements and result
sets so they can be instantly accessed and processed by many clients
simultaneously.
Work in any version of any Java enabled web browser. Web browsers
only support one version of Java and if there is a download of an
applet with the wrong driver version, the application will not work.
ThinAccess contains a JDBC driver that works in any browser and avoids
having to keep a separate driver for every version of a web browser.
Use of the more efficient Type 2 drivers. Web enabled databases
using "type 2" drivers are regarded as the best performing and most
reliable since they use native database libraries. Most often the
type 2 driver is much more stable and preferred but it cannot be
deployed over networks without customer software installations.
ThinAccess uses the type 2 driver.
Avoids transmitting database user identifications and passwords
over the network. Many JDBC drivers send user identifications and
passwords from the application over the Internet and often are
unprotected. ThinAccess avoids transmitting any user identification
or password information.
Flexibility of use. ThinAccess can plug into any web server, any
browser, or any database on any platform supporting the Java
specifications.
WebCrumbs. WebCrumbs is designed to be a web site management and
smart-agent analysis tool. WebCrumbs is a shrink-wrapped packaged
application which can be graphically installed and easily used to
run in correlation with the corporate web server. WebCrumbs is
intended to gather and analyze information about a visitor to a
particular web site and to generate a personalized look to the
web site in response to the information learned about that visitor.
WebCrumbs runs on any operating system supporting Java, any web
server supporting Java Servlets, and communicates with any database
supporting JDBC or ODBC ("open database connectivity").
As a web site analysis and reporting tool, WebCrumbs is intended
to offer a non-intrusive installation and integrated real-time
reporting and the ability to use any in-house database customer
reporting tool. Real time, high performance database communication,
via JDBC or ODBC, allows WebCrumbs to provide web-based industry
standard analysis reports, in both HTML ("hypertext markup language")
and 3D graphs quickly and accurately to any web browser. This database
communication also allows WebCrumbs to serve up dynamic database
pages and complicated real time web pages.
Management believes WebCrumbs to be unique from other web site
analysis tools by its utilization of the "Dynamic Navigation Technology",
a technology developed by the Company that automatically generates
customized web pages based on pre-defined business rules and tracks
web site activity in real time.
WebCrumbs Smart Agent technology learns about a visitor's preferences
by monitoring such visitor's web site usage patterns (such as pages
visited and length of stay) and utilizes such information in real time
by instantly presenting on the web site information and advertising most
suitable.
ThinWEB.com anticipates that WebCrumbs will be a commerce tool on
many Web sites. These sites will display different pages to visitors
based on the visitor's past behavior. Web sites will present users
with personalized content or purchase recommendations based on
individual interests and preferences. Since this data is updated
continuously in real-time, new suggestions for additional purchases
are available instantly.
WebCrumbs' personalization of the web site takes two basic forms:
collaborative filtering and profiling. Both are attempts to collect
specific information that will aid in generating additional traffic,
click-throughs and revenue on web sites.
Collaborative filtering is voluntary. It accepts information provided
by the user and predicts what information will be of interest to him or
her. It can also compare a user profile with those of other users to
create common-interest groups and make recommendations based on other
customer preferences.
Profiling on the other hand is not voluntary. A visitor's actions are
observed and tracked. Subsequent user clicks identify patterns of
behavior and interests, which result in the presentation of specific
information to Web sites visited.
The Company anticipates that future versions of WebCrumbs will all
be based on the core features WebCrumbs provides. The versions will
include both an ISP ("Internet Service Provider") and Enterprise
edition. ISPs have the unique problem of having to handle multiple
domain name web sites so all tools must be able to handle their
environment. The Enterprise edition will be a more scalable,
multi server version.
The WebCrumbs Community edition will enable multiple sites, the
community, to collaboratively share certain information obtained
by WebCrumbs about visitors as they move from one site to another
in the community.
Future Products and Research and Development. The Company intends
to develop additional e-commerce focused Internet applications on
its core technology, in response to perceived market demands. The
development of newer versions of the two products currently developed
and the development of new e-commerce products will require a material
investment of resources. During its first nine months, the Company
expended US$107,750 on research and development which figure does not
include the research and development which figure does not include the
research and development activities of the principle developers of the
products prior to the incorporation of ThinWeb in April, 1998.
TRADEMARKS
The Company does not have any patents. On December 4, 1998, the
Company applied for trademark registration in Canada for "WebCrumbs"
and "ThinWeb" and on April 16, 1999, for "ThinAccess". On June 4, 1999,
the Company applied for trademark protection in the United States for
"WebCrumbs", "ThinWeb" and "ThinAccess" . There is no guarantee that
other companies do not already utilize these names as their company
name or for their products and there is no assurance the Company
would be able to enforce against prior users. Even if such trademark
protection is granted, there is no assurance that the Company will be
able to prevent competitors from using the same or similar marks,
concepts or appearances or that the Company will have the financial
resources necessary to protect its marks against infringing use.
REVENUES AND OTHER FINANCING
To date, the Company has used monies received from loans and equity
investment to develop its products and to pay administrative expenses.
See "FINANCIAL STATEMENTS".
The Company projects that funds may be received from the following sources:
(1) The sale of the Company's products. The Company is actively
pursuing marketing and sales partnerships with established companies
in the Java marketplace.
(2) The sale of the Company's securities. The Company anticipates
that it will raise funds through the sale of its securities.
The holder of the Company's 1,500,000 issued Preferred Shares shall
be entitled to convert such shares into ordinary shares of the Company,
on a one-for-one exchange basis, at any time before November 1, 1999
provided that such holder was instrumental in arranging equity financing
on terms acceptable to the Company resulting in the receipt of net proceeds
by the Company of not less than $5,000,000.
There is no assurance that the Company will be successful in any
sales of its products or support packages or that it will be able
to raise any funds through the sales of its securities. In such
event the Company may be required to seek financing for its operations
from other sources, including debt financing or borrowing from financial
institutions or other sources. There can be no assurance that any such
funding will be available, or available on terms acceptable to the Company,
if and when needed by the Company.
LICENSES
Sun Microsystems, Inc. On September 2, 1998 ThinWeb Software
Incorporated entered into a 100% Pure Java Logo License Agreement
with Sun Microsystems, Inc. of Palo Alto, California whereby Sun
Microsystems granted a non-exclusive, non-transferable, personal,
royalty-free license to use the 100% Pure Java logo and the "For
Java" tagline (a) on the products, splash screens and product packaging,
and (b) in the marketing, advertising, distribution and sale of the
products, provided that ownership of the logo and tagline are
attributed to Sun Microsystems. The license only extends to those
products which have successfully passed Sun Microsystem's certification
tests. Both ThinAccess and WebCrumbs have passed the certification tests.
New Atlanta Communications, LLC. On December 15, 1998 ThinWeb
Software Incorporated entered into a reseller agreement with New
Atlanta Communications LLC of Alpharetta, Georgia whereby New
Atlanta granted ThinWeb Software a non-exclusive right to license
and market New Atlanta=s ServletExec, Version 2.0 software to its
customers provided it is bundled with ThinWeb Software's products.
ThinWeb Software has the right to purchase the license for use with
WebCrumbs versions 1.0 and 2.0 and other products developed
at very favorable pricing, including the option to pay a one-time
lump sum fee for a 3 year period.
The pricing terms also apply to any upgrades of the Servlet Exec
Version 2.x series made by New Atlanta during the term of the
agreement. If ThinWeb Software markets WebCrumbs version 2.0
without bundling ServletExec 2.0 the agreement automatically
terminates and New Atlanta is to be paid an amount as liquidated
damages. New Atlanta is to provide technical support to ThinWeb
Software and its customers as is customarily provided to New Atlanta's
own retail customers. The term of the agreement is for one year
commencing February 1, 1999, and is automatically
renewed for an additional one year term unless canceled by ThinWeb
Software in writing not less than 30 days prior to expiration
of the initial one year term. Either party may terminate the
agreement upon 30 days written notice if the other party breaches
the agreement.
Cloudscape, Inc. On March 31, 1999, ThinWeb Software entered into
a license agreement with Cloudscape, Inc., Oakland, California, by
which Cloudscape granted ThinWeb Software a non-exclusive, non-
transferable license to use its JBMS embedded client and workgroup
server deployment software to (i) develop a limited use version of
the software and (ii) distribute or otherwise deploy to end users
the limited use version of the software. One year of maintenance
and support of the software is included in the license, including
upgrades, new versions, and new products within the embedded software
product family. The term of the license agreement is one year,
renewable annually from year to year unless canceled by ThinWeb
Software in writing not less than 90 days prior to an anniversary
date. Cloudscape may terminate the agreement upon 30 days written
notice in the event that ThinWeb Software is in breach of the agreement.
ThinWeb Software agreed to pay a minimum license fee over 12 months and
a royalty of 3% of the selling price for distribution of Cloudscape
restricted limited use licenses with development copies of ThinWeb
Software. A royalty of 10% of the selling price is payable by ThinWeb
Software for distribution of Cloudscape unrestricted licenses with
deployment copies of ThinWeb Software. No royalty fee is payable in
any quarter during the first year except to the extent that it exceeds
the quarterly payment. Support is charged on a per call basis with the
minimum 10 pack of support calls at $1,000 to be charged against the
initial prepayment.
MARKETING--GENERAL STRATEGY
The Company intends to target software manufacturers (database and
application), software developers and Internet service providers.
The Company anticipates that its products will be marketed directly
to businesses. The Company also anticipates that it will market its
technology to developers directly through Internet sales on its web
site in the form of a developers tool kit. The Company anticipates
that its thinner and faster Internet solution will have a significant
appeal to many software suppliers. Many of the current database software
companies have an application too thick to be easily Internet ready.
The Company anticipates generating sales inquiries through an
on-line marketing campaign designed to lead Java software developers
to the Company's web site. Using discussion forums, chat groups, and
web site advertising banners to be placed on strategic web sites,
customers will be able to link directly to the thinWEB.com web site
and learn more about and download the products.
The Company plans to support its on-line advertising with attendance
at industry trade shows and selected magazine advertisements.
The Company began to establish a marketing staff during the second
quarter of 1999 with the employment of three industry-experienced
personnel. The Company intends to expand this marketing staff with
three additional employees. The Company has leased space in Halifax,
Canada to accommodate increased research and development, accounting
and administrative personnel in addition to its executive offices in
Ottawa, Ontario, Canada.
MARKETING AND SALES STRATEGY--THINACCESS
The target markets for ThinAccess are database software development
companies that need to web-enable their products and developers seeking
to enable client server applications either for internal use or re-
marketing. The Company believes that a major shift is taking place
in the way information and applications are accessed and that such
shift will provide users access to powerful computer applications
and information through inexpensive and easy to use information
access devices i.e. thin clients.
ThinAccess sales efforts will be initially focused on the major
database companies, sales force automation and customer relations
of vendors. The Company anticipates that it will attempt to establish
long-term agreements with original equipment manufacturing companies
("OEM") whereby ThinAccess would be bundled or embedded within that
vendors software and shipped as a web enhancement. The Company intends
to focus on assisting these vendors to enable their products to remotely
access the Internet, Intranet and extranet with the eventual target
of entering into a binding royalty or one-time fee structure with these
vendors. Pricing for ThinAccess will start at US$11,000 per CPU
(Central Processing Unit) with OEM pricing based upon type sales stream
i.e. either bundled with a version of the database or sold embedded
with all versions with subsequent annual maintenance fees.
The Company will also target ThinAccess to the wireless market segment.
The Company will attempt to establish relationships with vendors who
require a faster and smaller footprint to allow effective deployment
of their application such as palm-held organizers, certain Windows
applications, cellular phones and pagers. There is no assurance that
the Company can meet these expectations or that it will be able to
establish agreements or relationships with the OEM or wireless markets.
MARKETING AND SALES STRATEGY--WEBCRUMBS
The target markets for WebCrumbs are Internet Service Providers
(ISPs), call center application vendors and web houses. The Company
will attempt to market WebCrumbs to ISPs by focusing on the use of
WebCrumbs to increase the value of advertising on web sites. By
using WebCrumbs, the Company believes that an ISP will be able to
charge a premium for advertising. The Company anticipates that it
will charge a "click charge" to the ISP, that is, each time the ISP
uses WebCrumbs, the Company will receive a fee. The Company will
also try to obtain a "powered by thinWeb.com" logo on the ISP's
web site.
The Company anticipates that it will market WebCrumbs to call
center vendors to improve their customer experience by proactively
and online having the ability to adjust to the caller's needs. The
Company anticipates that the fee for embedding WebCrumbs into the
software applications will be based on a royalty fee structure.
Web houses design and deploy web sites for other companies,
including the design, functionality enhancements and, often,
the hosting. The Company anticipates first introducing the
software developers tool kit (discussed below) to web houses to
assist them in improving web site features and then building
WebCrumbs to that. The Company hopes to eventually charge a license
fee to such web houses for use of WebCrumbs with subsequent annual
maintenance fees. There is no assurance that the Company can meet
these expectations or that it will be able to establish any such
agreements or relationships.
SOFTWARE DEVELOPERS TOOL KIT
The Company believes that the key to the success of any software
company is its linking the input of customers and prospects with
the input from the software developer community. ThinWEB.com will
make available a software developers tool kit that will enable
developers to develop applications using thinWEB.com products.
The Company anticipates that it will sell the software developers
tool kit directly, through its web site, to assist in-house
information technology departments and developers to work with
thinWEB.com technology. Both ThinAccess and WebCrumbs will be
available to be downloaded directly from the thinWEB.com web site
for a 30-day no risk trial. After the trial period, the software
developers tool kit for ThinAccess and WebCrumbs will be available
for purchase at US$995 and will include a 5-user license. The
software developers tool kit will be only for development use and once
an application is to be deployed to more than five users, the Company
anticipates it will enter into a license agreement.
MARKETING--SPECIFIC ALLIANCES
ThinWEB.com has joined several alliances with certain major computer
companies which it anticipates will assist in the promotion and sales
of its products.
Sun Developer Connection. ThinWeb Software is a member of the Sun
Developer Connection Alliance, a free alliance open to 100% Pure Java
certified companies. As a member of the Sun Developer Connection Alliance
the Company anticipates the promotion of ThinWeb Software and its products
on the Sun web site, a web site description of ThinWeb Software and a
link to ThinWeb Software's web site from the Javasoft web site,
distribution of evaluation copies of ThinWeb Software's products
bundled on Sun Solutions' widely distributed CD's, inclusion in the
Sun Solutions Catalogue which is distributed to all Sun Microsystem
hardware customers, and possible Sun trade show participation (such
as Sun's Java One and Java Business Expo trade shows).
Microsoft Independent Software Vendors Program. ThinWeb Software
is a member of the Microsoft Independent Software Vendors Program
which is designed for ISVs which produce shrink-wrapped or
downloadable software that supports or runs on Microsoft products,
technologies and platforms. Benefits include opportunities to
promote the Company and its products within and outside of Microsoft
to potential customers and developers, regular receipt of current
information on the latest technology, product news and product
strategy from Microsoft, discounts and special pricing.
Novell. ThinAccess is listed on the Novell web site as an approved
product for use with Novell's operating system.
MARKETING--ALLIANCE STRATEGY
ThinWEB.com will attempt to form alliances with major database
manufacturers, operating system manufacturers, Internet Service
Providers and other software manufacturers to establish technical,
marketing and OEM ("original equipment manufacturer") alliances.
ThinWEB.com anticipates that technical alliances will enhance
current and future products where there is a clear business
advantage to incorporate the vendor's product versus building
elements of the Company's products. A typical technical alliance
would have thinWEB.com use a vendor's technology to enhance its
products. Currently thinWEB.com has a technical alliance with New
Atlanta with their Servlet Exec product.
ThinWEB.com anticipates that marketing alliances will increase
market presence through cross selling to other vendors' customers,
reducing the costs of marketing by combining efforts and shortening
the sales cycle. ThinWEB.com will attempt to form marketing alliances
with firms that have complimentary products. A typical marketing
alliance for ThinAccess would be for a database vendor to commend
ThinAccess as a preferred remote access tool to its customers on
its web site and in its literature. These alliances will enable
thinWEB.com to gain broader coverage in media, trade shows, joint
sales calls and promotions.
ThinWEB.com will attempt to establish OEM alliances which would
bundle thinWEB.com's software applications with vendor's products.
There are different levels of OEM alliances depending on the
manufacturer, product maturity and market potential. The most
common methods that the Company anticipates will be used for its
software applications are bundled and embedded. A bundling OEM
alliance would have the technology shipped or sold with selective
models or products. An embedded OEM Alliance would have the
technology sold every time the vendor's product is sold.
TECHNICAL SUPPORT
ThinWEB.com anticipates that it will develop a dedicated web site
to support and attract software developers. The Company's research
and development team will provide the support for such developers.
ThinWEB.com will also host online chat sessions to allow its developers
to network and discuss issues and ideas. The Company anticipates that
it will provide second level support for the OEM alliances, i.e. the
manufacturer will be responsible for supporting its customers directly
and the Company will provide support for the OEM alliances, i.e.
the manufacturer will be responsible for supporting its customers
directly and the Company will provide support for product
issues and "bug" fixes to the manufacturer. The Company intends to
establish a secure section of its web site to list any known
deficiencies in the products and known "work arounds". This is
intended to ensure that the OEM manufacturers do not spend time
debugging known issues.
THE MARKET
ThinWEB.com's first two products are intended to target the Internet
e-business access and intelligence software applications markets.
The future prospects for the Company are tied directly to the future
growth and continued global acceptance of the Internet. The Internet
has grown in less than a decade from a limited research tool to a
global network consisting of millions of computers and users.
Management believes that the Internet is becoming the computing
structure of choice for global business. Companies are introducing
new web-based applications in mainstream operations such as sales
force automation, call center integration, one-to-one marketing,
remote training, and customer support.
Both of thinWEB.com's products are"100% Pure Java"certified software
solutions, the Sun Microsystems standard of excellence in Java
programming. The Company has developed its applications in Java
based on the belief that it is fast becoming the standard for
Internet programming. The Company expects to benefit from investments
being made in Java technology by enterprises worldwide. The Company
believes that application development budgets for Java endeavors will
almost double in the next 24 months and will continue to grow exponentially
as Java microprocessors flourish in Internet devices such as TV set-top
boxes, smart phones, personal digital assistants ("PDAs"), hand-held
devices, pagers and laser printers.
The primary target market for ThinAccess is companies utilizing
Internet web applications with any database, any web browser and
requiring "thin client" database connectivity. The Company
perceives a major initiative by e-commerce companies to web-enable
their business activity and to provide it as another medium for their
customers. Database access is crucial to web-enabling business
activity as it is the predominant mechanism to store and access
information. The Company also perceives wireless devices and sales
force automation as a major target market for ThinAccess. The
Company believes projections that predict the global thin client
market will expand dramatically,
potentially aggregating over $1 billion annually.
The primary target market for WebCrumbs is the web site management
and analysis market with a secondary target including Internet Service
Providers, call center integrations and remote training. WebCrumbs
targets companies that desire to upgrade their web sites with the
ability to learn about and respond to web site visitors by instantly
personalizing that company's Web site for that visitor. This
personalization provides companies with the increased ability of
turning web visitors into clients. The Company anticipates that
this will assist companies to increase customer response and
to increase sales. The Company believes that as a result of the
growth of online applications (e.g. e-commerce,
extranets, automated customer service) and related businesses, web
traffic analyzers will become an even more strategic element with
larger budgets for web traffic analysis tools and services. The
Company believes that companies that now analyze or will develop
analysis capabilities of web site traffic patterns or web site
personalization need powerful data analysis solutions such as
WebCrumbs that will integrate effortlessly with other applications
and platforms.
The Company anticipates that companies can increase their web site
investment return by better understanding the profiles and preferences
of site visitors.
COMPETITION
The Company faces competition from different companies for different
aspects of its technology and for its different software applications.
ThinAccess connects to any database over the web with swift high
performance downloads of web database applications. ThinWEB.com
considers the competitors to ThinAccess to be those products that
can provide thin client (under 100K download) distributed access
in Java. Software Synergy's JDBCConnect provides a thin access
database application product, but it is a Windows specific product
supporting ODBC databases. IDS Software's IDS Server is another
competitor and is also a Windows/Linux product with support for
ODBC and Oracle databases.
The Company anticipates that WebCrumbs will face competition
from companies in the e-commerce field including Web Trends,
Active Concepts, Net.Genesis, Andromedia and Accrue. These
companies primarily supply static Web analyzer software providing
detailed reports on Web site activity without the Dynamic Navigation
Technology used by WebCrumbs which allows a Web page viewed by one
visitor to be different than the same Web page viewed by another.
The software industry is highly competitive with frequent entries
into all markets and fields by new start-up companies and by established
companies with new products. Many of these competitors may have more
experience and access to resources, including financial and technological
resources, than the Company.
PROPERTY
The Company's executive offices are located at Suite 101, Phase 3,
6 Antares Drive, Ottawa, Canada, at an annual rent of CDN$20,950 and
its telephone number is 613/225-8446. The Company leases its research
and development offices at Suite 1510, 1505 Barrington Street, Halifax,
Canada at an annual rent of CDN$41,615 and its telephone number is
902/425-2802.
The Company Web site is http://www.thinweb.com.
PLAN OF OPERATION
OVERVIEW
The Company is a development stage company
which develops Internet e-business software solutions.
The Company has two developed software applications,
ThinAccess, designed for organizations that require
rapid access to data over the Internet, and WebCrumbs,
designed for organizations that require immediate
interaction with customers and employees.
ThinWEB.com's use of Java enables it to develop
applications for mobile and wireless devices and
similar and other technologies as they emerge that
require platform independence, swift deployment,
flexibility, fast operation and low-cost. ThinWeb
Software Incorporated, the Company's wholly owned
subsidiary, has developed a core technology and two
software applications that are in the final beta
testing phase. The Company anticipates beginning sales
of the two software applications in Summer, 1999.
RESULTS AND PLAN OF OPERATIONS
The Company has insignificant sales and
revenue. Since inception the Company (and its
subsidiaries) have focused on organizational activities
and research and development of the software
applications.
The Company's ability to continue its
operations is dependent upon its receiving funds
through revenues from the sale of its products and
alternate sources of financing. ThinWEB.com may be
required to raise additional capital through debt or
equity financing.
The Company may raise additional capital
by the sale of its equity securities, through an
offering of debt securities, or from borrowing from a
financial institution. The Company does not have a
policy on the amount of borrowing or debt that the
Company can incur.
The Company intends to use future funds,
if any, for the refinement and marketing of its two
software applications and the development of additional
software applications. The Company's two applications,
ThinAccess and WebCrumbs are in the final beta testing
phase and management anticipates that they will release
these applications into the market in the Summer, 1999.
Management believes that the Internet as a
source of e-business will continue to experience rapid
technological and user growth and that Java-based
technology will continue to increasingly become the
user standard. The Company's first two applications
have been certified by KeyLabs on behalf of Sun
Microsystems as "100% Pure Java" which is considered
the industry seal of approval and assures customers
that these products are of the highest quality,
interpretable Java solutions. The Company anticipates
that all its future applications will be certified as
"100% Pure Java".
Management has developed a sales and
marketing strategy to introduce these products into the
market. As part of its marketing strategy, the Company
anticipates entering into license arrangements and
alliance relationships with major database
manufacturers, operating system manufacturers, Internet
Services Providers and others to establish technical,
marketing and OEM ("original equipment manufacturer")
alliances. The Company has a license agreement with
Sun Microsystems, Inc. to utilize the Pure Java logo
and For Java tagline in its packaging and advertising.
The Company has entered into an agreement with New
Atlanta Communications, LLC to license and market New
Atlanta's ServletExec, Version 2.0 software, to its
customers bundled with the Company's products. The
Company entered into a license agreement with
Cloudscape, Inc. to use Cloudscape's JBMS embedded
client and workgroup server deployment software to
develop a limited use version of the software and to
distribute it to end users.
LIQUIDITY AND CAPITAL RESOURCES
The Company, including its subsidiary, has
incurred start-up costs, including administrative costs
and research and development costs. To date the
Company has received funds from sales of its securities
and from loans. The Company has primarily used the
proceeds from the sale of the securities of ThinWeb
Software Incorporated (prior to becoming a subsidiary)
for payment of operating costs to date.
Since inception, ThinWeb Software
Incorporated has received an aggregate of $602,500 from
the sale of its securities. ThinWeb Software
Incorporated took out a loan from Business Development
Bank of Canada for an aggregate amount of $18,900 which
has been repaid in full from such subscription proceeds.
The Company has entered into a loan agreement
with E-Capital Management, Inc.,acting on behalf of
Amery Associates Inc., Arrendadora Solarsa S.A.,
Butternut Capital Limited, Cannon Equity Limited,
Corporate Solutions Limited, Greensted Equities
Limited, International Shareholdings Corp., Seismic
Investments Limited and Strathglen Capital Limited, all
of whom are Selling Securityholders herein and all of
whom are clients of Lines Overseas Management Limited.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
The loan agreement set up a two part credit facility
for up to an aggregate available borrowing of CDN
$1,335,000. One part of the credit facility provides
for borrowing up to CDN $375,000, without interest, to
be repaid from the proceeds of the first significant
financing event obtained by the Company. To date, the
Company has borrowed CDN $300,000 from this facility.
The second part of the credit facility provides for
borrowing up to CDN $960,000 at 12% interest per annum
to be repaid from the proceeds of the first significant
financing event obtained by the Company. At the option
of E-Capital Management Inc.,all or any portion of the
outstanding amount of the interest-bearing credit
facility may be converted into securities of the
Company at the time of and on the same terms and
conditions as such securities are issued pursuant to a
significant financing event. E-Capital Management Inc.
will be issued, for no additional consideration, common
stock purchase warrants equal to the amount drawn down
under the interest-bearing facility divided by the
price of the Company's shares of common stock issued
pursuant to a significant financing event. Such
warrants will be exercisable at a per share price equal
to the price at which the Company's common stock is
issued pursuant to such significant financing event for
an exercise period of one year from the date of closing
of such transaction. To date, the Company has borrowed
CDN $60,000 under the interest-bearing facility.
In addition, certain employees of the Company
have loaned the Company an aggregate of CDN $112,936
with no written terms of repayment but with the
understanding that such loans will be repaid when the
Company receives sufficient funds to enable it to so
repay such loans.
ThinWeb Software Incorporated had a net loss of
$201,178 from operating activities for the period April
22, 1998 to March 31, 1999.
ThinWeb Software has approximately $160,000 in
losses for income tax purposes available to reduce
future taxable income. The availability of utilizing
such losses to reduce income taxes expires in 2005.
The cash flow of ThinWeb Software Incorporated
from financing activities for the period April 22, 1998
to March 31, 1999 was primarily from the receipt of
outstanding capital subscriptions.
The Company has no commitments for capital
expenditures in the near future. The Company
anticipates that it will primarily focus on marketing
ThinAccess and WebCrumbs and refining these
applications. The Company anticipates developing
additional software applications for use in e-business
over the Internet.
GOING CONCERN QUESTION
The financial statements appearing
elsewhere in this prospectus have been prepared
assuming that the Company will continue as a going
concern. The Company's ability to continue its
operations is dependent upon its receipt of revenues
through sales of its software applications or through
raising capital through debt or equity financing or
borrowings, or a combination of the foregoing. These
conditions raise substantial doubt about the Company's
ability to continue as a going concern and if
substantial additional funding is not acquired,
alternative sources developed, or revenues from sales
not received, management will be required to curtail
its operations.
MANAGEMENT
OFFICERS AND DIRECTORS
The officers and directors of the Company are as
follows:
Name Age Title
James S. Anthony 51 Chairman of the Board
Gary T. Hannah 35 President, Chief Executive Officer
and Director
C. James Enman 45 Vice President and Secretary
Bryan C. MacLean 30 Vice President and Director
Cory Reid 28 Vice President
All directors of the Company hold office
until the next annual meeting of shareholders or until
their successors are elected and qualified. At
present, the Company's Bylaws provide for not less than
one nor more than five directors. Currently, there are
three directors of the Company. The Bylaws permit the
Board of Directors to fill any vacancy and such
director may serve until the next annual meeting of
shareholders or until his successor is elected and
qualified. Officers serve at the discretion of the
Board of Directors.
The principal occupation and business
experience for each officer and director of the
Company, for at least the last five years are as follows:
JAMES S. ANTHONY has served as Chairman of
the Board of ThinWeb since March, 1999. Since June,
1974, Mr. Anthony has been the President of J. S.
Anthony Ltd., Toronto, Canada, which provides
consulting services to corporations, including the
Company, including strategic planning, finance and
corporate organization. Mr. Anthony is the founder of
The Foundation for the Study of Objective Art, a
charitable foundation which operates an art gallery in
Toronto and funds art education programs for the
public. Mr. Anthony also serves on the board of
directors of Agritek Bio Ingredients Corporation,
Toronto, Canada, an agricultural biotechnology
investment company listed on the Montreal Exchange;
and, Denbridge Capital Corporation, Toronto, Canada, a
digital radar imaging company listed on the Toronto
Stock Exchange. Mr. Anthony formerly served on the
board of directors of Borneo Gold Corporation, Toronto,
Canada, a gold exploration company listed on the
Vancouver Stock Exchange and Independence Resources
Ltd., Toronto, Canada, a gold exploration company
listed on the Vancouver Stock Exchange. From 1986 to
1993, Mr. Anthony served as a director and strategist
for Softkey Software, Inc., a public company traded on
the Toronto Stock Exchange, which subsequently through
mergers became The Learning Company and was acquired in
1999 by Mattel. Mr. Anthony received his Bachelor of
Arts degree from the University of Manitoba in 1968 and
attended Carleton University from 1968 to 1970.
GARY T. HANNAH has served as President and
Chief Executive Officer and a director of ThinWeb since
April, 1999. From 1995 to 1999, Mr. Hannah held
increasingly senior positions in the marketing, sales
and service divisions, culminating as Vice President,
of JetForm Corporation, an Ottawa, Ontario software
manufacture. From 1991 to 1995, Mr. Hannah held senior
management positions with Alliance Network Inc., a
subsidiary of Crowntek Business Centres, Inc.,
Missisauga, Ontario, a computer distribution company,
including serving as its president from 1993 to 1995.
In 1994, GE Capital purchased Crowntek Business
Centres, Inc. and Mr. Hannah continued to serve as
president of Alliance Network until it was sold 1995.
Mr. Hannah graduated from Saskatchewan Technical
Institute in 1983 with a diploma in Radio, Television
and Communications.
C. JAMES ENMAN, ESQ. has served as Vice
President and Secretary for ThinWeb since March, 1999.
From 1990, Mr. Enman was a member of the law
partnership of Goldberg Thompson, Halifax, Nova Scotia,
where he practiced corporate and commercial laws,
including securities, financing and intellectual
property. Mr. Enman received his Bachelor of Arts
degree from Acadia University in 1977 and his LL.B.
degree from Dalhousie University in 1980. Mr. Enman is
a member of the Nova Scotia Barristers Society,
Canadian Tax Foundation, and is a Canadian Trademark
Agent. Mr. Enman serves as general counsel to the
Company.
BRYAN C. MACLEAN has served as Vice
President and a director of ThinWeb since its inception
in April, 1998. Mr. MacLean is the co-founder of
ThinWeb Software Incorporated and co-developer of the
Company's Java software e-commerce applications. From
1996 to 1998, Mr. MacLean was a software engineer for
Sanga International Research, Boston, Massachusetts
specializing in Java software solutions. From 1994 to
1996, Mr. MacLean was a software engineer for Northern
Telecom, Ottawa, Canada specializing in asynchronous
transfer software switch development. During 1996, Mr.
MacLean was employed by Bell Canada, Ottawa, Canada as
a software engineer where he served as one of the lead
developers of that company's project to process
telephone bills over the Web using electronic data
interchange. Mr. MacLean obtained his Bachelor
Commerce degree from St. Francis Xavier University in
1990 and his Bachelor of Computer Science degree from
DalTech University of Nova Scotia in 1994.
CORY REID has served as Vice President of
ThinWeb since its inception in April, 1998. Mr.
MacLean is the co-founder of ThinWeb Software
Incorporated and co-developer of the Company's Java
software e-commerce applications. From 1996 to 1998,
Mr. Reid was a senior designer for Java Internet
software at Sanga International Research, Boston,
Massachusetts and Halifax, Nova Scotia. From 1995 to
1996, Mr. Reid was a senior software designer at AT&T,
Herndon, Virginia specializing in telecommunications.
Mr. Reid received his Bachelor of Computer Science
degree from DalTech University of Nova Scotia in 1993.
REMUNERATION
Gary Hannah, President of the Company, has
entered into an employment agreement with the Company
and receives an annual salary of CDN$200,000. In
addition, Mr. Hannah was issued 1,181,344 shares of the
Company's common stock for nominal consideration.
Messrs. MacLean and Reid, a director and Vice
Presidents, are negotiating employment agreements with
the Company and each receives an annual salary of
CDN$120,000. Mr. Enman, Vice President, Secretary and
General Counsel, receives an annual salary of
CDN$100,000 and is negotiating an employment agreement
with the Company. Through his company J. S. Anthony &
Co., Ltd., Mr. Anthony receives consulting fees for
consultancy services rendered to the Company.
The following table sets forth the total
compensation paid or accrued by the Company on behalf
of the Chief Executive Officer and President of the
Company during 1998. No officer of the Company
received a salary and bonus in excess of $100,000 for
services rendered during the fiscal year ended December
31, 1998.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
FISCAL OTHER COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS& AWARDS ALL OTHER
James Anthony 1998 -0- -0- -0-
Chairman of the Board
Gary Hannah 1998 -0- -0- -0-
Current President
Bryan MacLean 1998 $51,986 -0- -0-
Former President
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS
The Certificate of Incorporation and Bylaws
of thinWEB.com provide that it shall, to the fullest
extent permitted by applicable law, as amended from
time to time, indemnify all of its directors, as well
as any of its officers or employees to whom the Company
has agreed to grant indemnification.
Section 145 of the Delaware General
Corporation Law ("DGCL") empowers a corporation to
indemnify its directors and officers and to purchase
insurance with respect to liability arising out of
their capacity or status as directors and officers
provided that this provision shall not eliminate or
limit the liability of a director (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) arising under Section
174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an
improper personal benefit.
The Delaware General Corporation Law
provides further that the indemnification permitted
thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be
entitled under the corporation's by-laws, any
agreement, vote of shareholders or otherwise.
The effect of the foregoing is to require
the Company to indemnify the officers and directors of
the Company for any claim arising against such persons
in their official capacities if such person acted in
good faith and in a manner that he reasonably believed
to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his
conduct was unlawful.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY BE
PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING
THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS
THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION
THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information as of the effective date of this prospectus
regarding the beneficial ownership of thinWEB.com's
common stock by each of its officers and directors and
by each person who owns in excess of five percent of
its common stock giving effect to the exercise of
warrants or options held by the named securityholder.
Amount
of Common Percent of Common Percent of Common
Stock Benefi- Stock Beneficially Stock Beneficially
cially Owned Owned or Right Owned or Right
or Right to to Direct Vote to Direct Vote
Name Direct Vote(1)(2) Prior to Offering(1) After Offering(2)
James S. Anthony 250,000 1.5% *
Chairman (3)
158 Amelia Street
Toronto, Canada
Gary T. Hannah
President (4) 1,181,344 6.9% 4.7%
Chief Executive Officer
Director
1250 Squire Drive
Manotick, Ontario
Canada K4M 1B8
C. James Enman
Vice President (5) 3,090,000 18.1% 13.7%
Secretary
1883 Seldon Street
Halifax, Nova Scotia,
Canada B3H 3X3
Bryan MacLean (6) 3,090,000 18.1% 13.7%
Vice President
Director
5444 Victoria Road, #8
Halifax, Nova Scotia,
Canada B3H 1M5
Cory Reid
Vice President (7) 3,090,000 18.1% 13.7%
1360 Lower Water Street
Suite 207
Halifax, Nova Scotia,
Canada B3S 3N2
All directors and
executive officers as
a group (5 persons) 10,701,344 62.7% 46.1%
(1) Based upon 17,066,344 outstanding shares of
common stock. Includes rights to acquire
common stock through exercise of exchangeable
Class A Shares.
(2) Assumes all Company Shares are sold resulting
in 21,066,344 shares of common stock
outstanding (assuming no conversion of
Convertible Preferred stock). Includes rights
to acquire common stock through exercise of
exchangeable Class A Shares.
(3) James Anthony is the founder, director and
president of The Foundation for the Study of
Objective Art, a charitable trust, and may be
deemed to be the beneficial owner of the
250,000 shares owned by it, of which 200,000
are registered herein for sale.
(4) Of which 200,000 shares are registered
herein for sale.
(5) James Enman is the trustee and beneficiary
of the Enman Family Investment Trust and
is deemed to be the beneficial owner of
the 3,090,000 Class A Shares held by it,
of which 200,000 shares are registered
herein for sale.
(6) Bryan MacLean is the trustee and
beneficiary of the B. MacLean Family Trust
and is deemed to be the beneficial owner
of the 3,090,000 Class A Shares held by
it, of which 200,000 shares are registered
herein for sale.
(7) Cory Reid is the trustee and beneficiary
of the C. Reid Family Trust and is deemed
to be the beneficial owner of the
3,090,000 Class A Shares held by it, or
which 200,000 shares are registered herein
for sale.
SELLING SECURITYHOLDERS
In addition to the Company Shares offered
for sale herein by thinWEB.com, the Company is
registering for offer and sale shares of its common
stock held by 41 security holders. These Selling
Securityholders will offer their Selling Securityholder
Shares for sale on a continuous or delayed basis
pursuant to Rule 415 under the 1933 Act. See "RISK
FACTORS--Additional Shares Entering Public Market
without Additional Capital Pursuant to Rule 144" and
"Selling Securityholders May Sell Shares at any Price
or Time."
The Company is applying for quotation on
the NASD OTC Bulletin Board for its common stock;
however, there can be no assurance that the common
stock will be accepted for quotation thereon. See
"RISK FACTORS--No Current Trading Market for the
Company's Securities" and "DESCRIPTION OF
SECURITIES--Admission to Quotation to Nasdaq SmallCap
Market and Bulletin Board".
All of the Selling Securityholder Shares
registered herein will become tradeable on the
effective date of this prospectus.
The following table sets forth the
beneficial ownership of the Selling Securityholder
Shares held by each person who is a Selling
Securityholder and by all Selling Securityholders as a
group.
NUMBER
COMMON OF SHARES PERCENT OF STOCK OWNED
NAME AND ADDRESS OF STOCK REGISTERED PRIOR TO AFTER
BENEFICIAL OWNER OWNED FOR SALE OFFERING(1) OFFERING(2)
Gary T. Hannah (3) 1,181,344 200,000 6.9% 4.7%
1250 Squire Drive
Manotick, Ontario,
Canada K4M 1B8
C. James Enman (4) 3,090,000 200,000 18.1% 13.7%
1883 Seldon Street
Halifax, Nova Scotia,
Canada B3H 3X3
Bryan MacLean (5) 3,090,000 200,000 18.1% 13.7%
5444 Victoria Road,#8
Halifax, Nova Scotia,
Canada B3H 1M5
Cory Reid (6) 3,090,000 200,000 18.1% 13.7%
1360 Lower Water St.
Suite 207
Halifax, Nova Scotia,
Canada B3S 3N2
T. MacLean Family 300,000 100,000 1.8% *
Trust (7)
1338 Molli Street
Halifax, Nova Scotia
Canada B3J 1T9
J. Smyth Family Trust (8) 300,000 100,000 1.8% *
1991 Brunswick Street
Apartment 620
Halifax, Nova Scotia
Canada B3J 3N2
Amery Associates Inc. 473,000 473,000 2.8% 0%
Apartada Postal 1802-1002
Passeo de los Estudiantes
San Jose, Costa Rica
Anjula Ltd. 5,000 2,500 * *
Bahamas Financial Centre
Shirley & Charlotte Street
3rd Floor, PO Box CB13135
Nassau, Bahamas
Arrendadora Solarsa S.A. 500,000 500,000 2.9% 0%
600 mts. Sur oeste de
la Antigua Fabrica
Paco, San Rafael
San Jose, Costa Rica
Stephanie Bigelow 80,000 40,000 * *
10 Crichton Park Road
Dartmouth, Nova Scotia
Canada
Patrick Birmingham 10,000 5,000 * *
322 Millwood Drive
Sackville, Nova Scotia
Canada
Butternut Capital Limited 613,000 613,000 3.5% 0%
Apartada Postal 7-3330-1000
San Jose, Costa Rica
Cannon Equity Limited 398,000 398,000 2.3% 0%
Avenida 7, Calla 3 Bix
Edifico Teresa 3 Piso
San Jose, Costa Rica
Dale Chaisson Auto 20,000 10,000 * *
Sales, Inc.
218 Micmac Boulevard
Dartmouth, Nova Scotia
Canada
Corporate Solutions 602,000 602,000 3.5% 0%
Limited
Apartada Postal 1555-1000
San Jose, Costa Rica
Everest Private Trust 14,000 7,000 * *
PO Box HM2706
4th Floor, Jardine House
33 Reid Street
Hamilton HM 12 Bermuda
The Foundation for the 250,000 200,000 1.5% *
Study of Objective Art (9)
80 Gerard Street East
Toronto, Ontario Canada
M5B 1G6
Greensted Equities Limited 471,000 471,000 2.8% 0%
Apartada Postal 7-3330-1000
San Jose, Costa Rica
Iguana Investments Ltd. 100,000 50,000 * *
Buckingham Square
West Bay Road
Seven Mile Beach,
Grand Cayman
International 387,000 387,000 2.3% 0%
Shareholdings Corp.
Apartada Postal 1802-1002
Paseo de los Estudiantes
San Jose, Costa Rica
Althea Lacas 5,000 2,500 * *
1005 Beaufort Avenue
Halifax, Nova Scotia
Canada
Andrew Lacas 5,000 2,500 * *
1005 Beaufort Avenue
Halifax, Nova Scotia
Canada
Betty Lacas 12,000 6,000 * *
1005 Beaufort Avenue
Halifax, Nova Scotia
Canada
Peter Lacas 14,000 7,000 * *
1005 Beaufort Avenue
Halifax, Nova Scotia
Canada
Paul Landry, Jr. 10,000 10,000 * *
32 Greenwood Drive
Antigonish, Nova Scotia
Canada B2G 2H8
Darlene Letun 100,000 50,000 * *
107 Douglas Park View SE
Calgary, Alberta Canada
Scott MacKinnon 70,000 35,000 * *
69 Chameau Crescent
Dartmouth, Nova Scotia
Canada
Michael MacDonald & 80,000 40,000 * *
Natasha Pavlinovic
14 Stratford Way
Halifax, Nova Scotia
Canada
William Mahody 50,000 25,000 * *
Suite 205 --
99 Portland St.
PO Box 1126
Dartmouth, Nova Scotia
Canada
Diane Marsh 50,000 25,000 * *
7365 Bradner Road
Mt. Leyman, British
Columbia Canada
Curtis Mayert 50,000 25,000 * *
1422 Joliet Avenue, SW
Calgary, Alberta Canada
Brian McAvoy 20,000 10,000 * *
7157 Trysail Circle
Tampa, Florida 33607
Christine Musgrave 10,000 5,000 * *
6 Stonepointe Avenue
Napean, Ontario Canada
Sean O'Regan 50,000 25,000 * *
11 Gladstone Avenue
Dartmouth, Nova Scotia
Canada
Gary Rubenstein 50,000 25,000 * *
3 Sandhurst Close
Halifax, Nova Scotia
Canada
Richard Shirley 30,000 15,000 * *
41 Bayside Drive
Bayside, Nova Scotia
Canada
Seismic Investments Ltd. 577,000 577,000 3.4% 0%
Apartada Postal 1555-1000
San Jose, Costa Rica
Strathglen Capital Limited 479,000 479,000 2.8% 0%
Apartada Postal 1802-1002
Passeo de los Estudiantes
San Jose, Costa Rica
Louis Toth 60,000 30,000 * *
32 Craigburn Drive
Dartmount, Nova Scotia
Canada
Gary West 20,000 10,000 * *
38 Chadwick Street
Dartmouth, Nova Scotia
Canada
Donald Wile 100,000 50,000 * *
82 Empire Street
Bridgewater,
Nova Scotia
Canada
- ------------
Denotes less than 1%.
(1) Assumes 17,066,344 shares of common stock outstanding.
(2) Assumes sale of all the Company Shares and
all Selling Securityholder Shares offered
by the Selling Securityholders resulting
in 21,066,344 shares of common stock outstanding.
(3) Of which 200,000 shares are registered
herein for sale. The named Selling
Securityholder is President, Chief
Executive Officer and a Director of the
Company.
(4) Of which 200,000 shares are registered
herein for sale. The named Selling
Securityholder is Vice President and
Secretary of the Company.
(5) Of which 200,000 shares are registered
herein for sale. The named Selling
Securityholder is Vice President and a
Director of the Company.
(6) Of which 200,000 shares are registered
herein for sale. The named Selling
Securityholder is Vice President of the
Company.
(7) Of which 100,000 shares are registered
herein for sale. The T. MacLean Family
Trust is controlled by an employee of the
Company and the shares of common stock
held by it are deemed to be beneficially
owned by such employee.
(8) Of which 100,000 shares are registered
herein for sale. The J. Smyth Family
Trust is controlled by an employee of the
Company and the shares of common stock
held by it are deemed to be beneficially
owned by such employee.
(9) Of which 200,000 shares are registered
herein for sale. James Anthony is the
founder, director and president of The
Foundation for the Study of Objective Art
and may be deemed the beneficial owner of
the shares held by it.
In the event the Selling Securityholders
receive payment for the sale of their Selling
Securityholder Shares, thinWEB.com will not receive any
of the proceeds from such sales. ThinWEB.com is
bearing all expenses in connection with the
registration of the Selling Securityholder Shares of
the Selling Securityholders offered hereby.
The Selling Securityholder Shares owned by the
Selling Securityholders are being registered pursuant
to Rule 415 of the General Rules and Regulations of the
Securities and Exchange Commission, which Rule pertains
to delayed and continuous offerings and sales of
securities. In regard to the Selling Securityholder
Shares offered under Rule 415, the Company has given
certain undertakings in Part II of the Registration
Statement of which this Prospectus is a part which, in
general, commit the Company to keep this prospectus
current during any period in which offers or sales are
made pursuant to Rule 415.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
E-Capital Management Inc. ("E-Capital")
has been engaged by the Company to assist in raising
capital for the Company. J. Gregory Wilson is the
president of E-Capital Management. E-Capital
Management is owned by The Greg Wilson Family Trust,
the beneficiaries of whom are the spouse and children
of J. Gregory Wilson. J. Gregory Wilson is the
president and sole shareholder of 583317 British
Columbia Ltd. ("583317 B.C. Ltd.). ThinWEB.com has
issued 1,500,000 shares of Convertible Preferred Stock
to 583317 B.C. Ltd. for consideration of $.0001 per
share. The holder of these shares is entitled to
convert such shares into shares of common stock of
thinWEB.com on a one-for-one exchange basis at any time
before November 1, 1999 provided that the holder was
instrumental in arranging an equity financing which
results in the receipt of net proceeds by thinWEB.com
of not less than $5,000,000. After November 1, 1999,
thinWEB.com may redeem any remaining outstanding
Convertible Preferred Stock at a redemption price of
$.0001 per share. E-Capital assisted the Company in
the sale of certain of the Company's securities to
3024701 Nova Scotia Limited, Everest (Private) Trust
Company and Donald Wile for a total investment of
$502,500. Brokerwise Communications Inc. has been
engaged by the Company to handle investor relations.
The Company has entered into a loan agreement
with E-Capital Management, Inc.,acting on behalf of
Amery Associates Inc., Arrendadora Solarsa S.A.,
Butternut Capital Limited, Cannon Equity Limited,
Corporate Solutions Limited, Greensted Equities
Limited, International Shareholdings Corp., Seismic
Investments Limited and Strathglen Capital Limited, all
of whom are Selling Securityholders herein and all of
whom are clients of Lines Overseas Management Limited.
The loan agreement set up a two part credit facility
for up to an aggregate available borrowing of CDN
$1,335,000. One part of the credit facility provides
for borrowing up to CDN $375,000, without interest, to
be repaid from the proceeds of the first significant
financing event obtained by the Company. To date, the
Company has borrowed CDN $300,000 from this facility.
The second part of the credit facility provides for
borrowing up to CDN $960,000 at 12% interest per annum
to be repaid from the proceeds of the first significant
financing event obtained by the Company. At the option
of E-Capital Management Inc.,all or any portion of the
outstanding amount of the interest-bearing credit
facility may be converted into securities of the
Company at the time of and on the same terms and
conditions as such securities are issued pursuant to a
significant financing event. E-Capital Management Inc.
will be issued, for no additional consideration, common
stock purchase warrants equal to the amount drawn down
under the interest-bearing facility divided by the
price of the Company's shares of common stock issued
pursuant to a significant financing event. Such
warrants will be exercisable at a per share price equal
to the price at which the Company's common stock is
issued pursuant to such significant financing event for
an exercise period of one year from the date of closing
of such transaction. To date, the Company has borrowed
CDN $60,000 under the interest-bearing facility.
Certain officers and employees of the Company
including Bryan MacLean, Cory Reid, Trevor MacLean, and
Jeremy Smyth, have loaned the Company, CDN $48,509, CDN
$48,509, CDN $8,751, and CDN $7,168, respectively,
aggregating CDN $112,936 with no written terms of
repayment but with the understanding that such loans
will be repaid when the Company receives sufficient
funds to enable it to so repay such loans.
DESCRIPTION OF SECURITIES
The Company has authorized capital of
100,000,000 shares of Common stock, $.0001 par value,
and 20,000,000 shares of preferred stock, $.0001 par
value. As of the date hereof, the Company has
17,066,344 shares of common stock issued and
outstanding and 1,500,000 shares of Convertible
Preferred Stock outstanding.
Effective as of May 27, 1999, the Company's
subsidiary Thinweb.com Inc. purchased all the
outstanding shares of common stock of ThinWeb Software
Incorporated (16,916,344 shares) for an aggregate
consideration of:
(i) the issuance of 16,916,344 Class A
exchangeable non-voting participating common
shares of common stock of Thinweb.com Inc.;
(ii) the issuance by the Company to
StockTrans, Inc., a Pennsylvania corporation,
as trustee for the ThinWeb Software
Incorporated shareholders (the "Trustee"),
16,916,344 shares of its common stock to be
held in trust under the terms of an exchange
and voting agreement dated April 22, 1999; and
(iii) the issuance by the Company of 1,500,000
shares of its Convertible Preferred Stock to
583317 B.C. Ltd., a British Columbia
corporation, at $.0001 per share.
Each beneficial shareholder of the Class A
Shares has, through the Trustee, voting rights in
thinWEB.com equal to the number of Class A Shares held
for his benefit by the Trustee. The Class A Shares may
be converted into or exchanged for an equal number of
the shares of thinWEB.com held by the Trustee. As a
result of the transaction, ThinWeb Software
Incorporated became a wholly owned subsidiary of
Thinweb.com Inc., a wholly-owned subsidiary of
thinWEB.com created solely to effect the purchase of
such shares.
CLASS A SHARES
The Company's subsidiary, Thinweb.com Inc. has
an authorized 20,000,000 Class A exchangeable
non-voting shares of which 16,916,344 have been issued
to the ThinWeb Software Incorporated shareholders. The
Class A Shares are not entitled to receive notice of or
to attend any meeting of the shareholders of
Thinweb.com Inc. nor to vote on any matters that come
before its shareholders.
The Class A Shares have voting rights in
thinWEB.com equal to one vote for each Class A Share
held on all matters that properly come before the
shareholders of thinWEB.com at a meeting of
shareholders or in connection with any action taken by
shareholder consent. The holders of the Class A Shares
are entitled to receive notice of and attend any
meeting of shareholders of thinWEB.com and to vote at
any such meetings.
The Class A Shares may be converted into or
exchanged for an equal number of shares of the
thinWEB.com which shares are held by the Trustee for
such conversion or exchange.
The Trust Agreement sets forth the rights and
restrictions pertaining to the Class A Shares and the
shares of common stock of the Company held by the
Trustee. Upon conversion, the Company shares held by
the Trustee will be released to the converting holder
and an equal number of Class A Shares will be delivered
to the Company. The holders of the Class A Shares have
the right to vote their interests in the Company
directly or through the Trustee as holder of the
Company shares.
The shares, while held by the Trustee, will not
be entitled to participate in dividends declared by the
Company; however, the Company has agreed that should it
declare a dividend on its common stock it will ensure
that its subsidiary, Thinweb.com Inc. has the means to
pay a like dividend on its Class A Shares.
The Company has issued to and placed with the
Trustee 16,916,344 shares of its common stock for use
in exchange of the Class A Shares pursuant to a certain
exchange agreement. The Class A Shares contain certain
rights and provisions as set forth in the trust
Agreement which is incorporated herein by reference and
discussed below. These rights and provisions are a
summary only and should be read in conjunction with the
descriptions provided in the documents which were filed
as exhibits with the Form 8-K and are incorporated
herein by reference.
(i) EXCHANGE RIGHTS ON THE LIQUIDATION OF THE
PURCHASER. Holders of the Class A Shares have the
right, upon the occurrence and during the continuance
of any proceeding in bankruptcy, insolvency,
dissolution or winding up commenced by Thinweb.com Inc.
or against it, to require the Company to purchase from
each or any holder of the Class A Shares all or any
part of the Class A Shares held at an amount equal to
(a) the current market price of the Company's common
stock on the last business day prior to the day of
purchase plus (b) an additional amount equal to the
full amount of all dividends declared and upon on such
Class A Shares and on all dividends declared on the
Company's common stock which have not been declared on
the Class A Shares.
(ii) AUTOMATIC EXCHANGE ON THE LIQUIDATION OF
THE REGISTRANT. In order that holders of the Class A
Shares will be able to participate on a pro rata basis
with the holders of the Company's common stock in the
event of a voluntary or involuntary dissolution,
liquidation or winding-up of the Company, all of the
then outstanding Class A Shares shall be automatically
exchanged for shares of common stock of the Company in
the absence of an affirmative written election from a
holder of Class A Shares not to participate in the
automatic exchange.
(iii) RETRACTION BY HOLDER. A holder of Class
A Shares is entitled at any time to require Thinweb.com
Inc. to redeem any or all of the Class A Shares held by
it in an amount equal to (a) the current market price
of the Company's common stock on the last business day
prior to the retraction date which may be satisfied in
full by the Thinweb.com Inc. causing to be delivered to
such holder one share of common stock of the Company
for each Class A Share held by the retracting holder
plus (b) an additional amount equal to the full amount
of all dividends declared and upon on such Class A
Shares and on all dividends declared on the Company's
common stock which have not been declared on the Class
A Shares.
(iv) AUTOMATIC REDEMPTION BY THE PURCHASER.
On the 25th anniversary of the closing date of the
stock exchange transactions, unless otherwise extended
or accelerated, the Thinweb.com Inc. shall redeem all
the then outstanding Class A Shares for an amount per
Class A Share equal to (a) the current market price of
the Company's common stock on the last business day
prior to the redemption date which may be satisfied in
full by Thinweb.com causing to be delivered to such
holder one share of common stock of the Company for
each Class A Share held by the retracting holder plus
(b) an additional amount equal to the full amount of
all dividends declared and upon on such Class A Shares
and on all dividends declared on the Company's common
stock which have not been declared on the Class A Shares.
(v) PURCHASE FOR CANCELLATION. Thinweb.com
Inc. may at any time and from time to time offer to
purchase for cancellation all or any of the outstanding
Class A Shares at any price by tender to all of the
holders of the Class A Shares then outstanding at any
price per share determined by it plus an amount equal
to all declared and unpaid dividends thereon. If in
response to such tender offer, more Class A Shares are
tendered than Thinweb.com Inc. is willing to purchase,
then Thinweb.com Inc. shall purchase as nearly as
possible pro rata according to the number of shares
tendered by each holder.
(vi) RECIPROCAL CHANGES. If the Company
issues or distributes its warrants, options or other
rights to purchase its securities to the holders of its
outstanding common stock or issues shares or securities
of any other class of the Company than the common stock
exchangeable by the Class A Shares, or evidences of
indebtedness of the Company or assets of the Company,
then Thinweb.com Inc. shall issue to the holders of the
Class A Shares the economic equivalent on a per share
basis of such rights, options, securities, shares,
evidences of indebtedness or other assets.
(vii) RECLASSIFICATIONS. If the Company
subdivides, redivides or changes the outstanding number
of its common stock into a greater number or reduces,
combines or consolidates the outstanding number of its
common stock into a lesser number or reclassifies or
otherwise changes its common stock or effects an
amalgamation, merger, reorganization or other
transaction affecting its common stock, then
Thinweb.com Inc. will make the same or an economically
equivalent change simultaneously to, or in the rights
of the holders of, the Class A Shares.
COMMON STOCK
The Company is offering 4,000,000 Company
Shares for sale at an initial offering price of $7.00
per share and is registering an aggregate of 6,212,500
shares of common stock for sale by the 41 Selling
Securityholders at a price to be determined in the
future. If the price of the Company's common stock
falls below $5.00 per share, then the Company's common
stock may be considered "penny stock" as that term is
defined by the Securities and Exchange Commission.
Special sales practice requirements apply to
broker-dealers on sales of penny stocks. The sales of
the Company's common stock may be subject to such
special rules.
Holders of the common stock do not have
preemptive rights to purchase additional shares of
common stock or other subscription rights. The common
stock carries no conversion rights and is not subject
to redemption or to any sinking fund provisions. All
shares of common stock are entitled to share equally in
dividends from sources legally available therefor when,
as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether
voluntary or involuntary, to share equally in the
assets of the Company available for distribution to
stockholders. All outstanding shares are validly
authorized and issued, fully paid and nonassessable,
and all shares to be sold and issued as contemplated
hereby will be validly authorized and issued, fully
paid and nonassessable.
The Board of Directors is authorized to issue
additional shares of common stock, not to exceed the
amount authorized by the Company's Certificate of
Incorporation, and to issue options for the purchase of
such shares, on such terms and conditions and for such
consideration as the Board may deem appropriate without
further stockholder action.
NONCUMULATIVE VOTING
Each holder of common stock is entitled to one
vote per share on all matters on which such
stockholders are entitled to vote. Shares of common
stock do not have cumulative voting rights. The
holders of more than 50 percent of the shares voting
for the election of directors can elect all the
directors if they choose to do so and, in such event,
the holders of the remaining shares will not be able to
elect any person to the Board of Directors.
WARRANT
ThinWEB.com has granted a warrant to
purchase up to 50,000 registered shares of the
Company's common stock at a strike price of $1.00 per
share, exercisable for a period of five years from
April 8, 1999, to TPG Capital Corporation, an
affiliated company to Cassidy & Associates, the law
firm which prepared this prospectus.
PREFERRED STOCK
The Company has 20,000,000 authorized shares of
non-designated preferred stock, $.0001 par value per
share, of which 2,000,000 has been designated
("Convertible Preferred Shares") and 1,500,000 of which
have been issued. The Convertible Preferred Shares are
not entitled to dividends and are non-voting. In the
event of the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, the
holders of the Convertible Preferred Shares shall be
entitled to receive the par value of each share before
any amount shall be paid or any property or assets
distributed to the holders of the ordinary shares.
After payment in full to the holders of the Convertible
Preferred Shares, the surplus assets, if any, shall
belong to and shall be divided among the holders of
other stock or shares in the Company.
The Company may redeem at any time commencing
November 1, 1999, any number of the Convertible
Preferred Shares then outstanding by paying to the
holder thereof the par value thereof. The holder of
the Preferred Shares shall be entitled to convert such
shares into ordinary shares of the Company on a
one-for-one exchange basis at any time before November
1, 1999 provided that the holder was instrumental in
arranging an equity financing which resulted in the
receipt of net proceeds by the Company of not less than
$5,000,000.
The Board of Directors is authorized to provide
for the issuance of additional shares of preferred
stock in series and, by filing a certificate pursuant
to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be
included in each such series, and to fix the
designation, powers, preferences and rights of the
shares of each such series and the qualifications,
limitations or restrictions thereof without any further
vote or action by the shareholders. Any shares of
Preferred Stock so issued would have priority over the
common stock with respect to dividend or liquidation
rights. Any future issuance of preferred stock may
have the effect of delaying, deferring or preventing a
change in control of the Company without further action
by the shareholders and may adversely affect the voting
and other rights of the holders of common stock. At
present, the Company has no plans to issue any
preferred stock nor adopt any series, preferences or
other classification of preferred stock.
ADDITIONAL INFORMATION DESCRIBING STOCK
The above descriptions concerning the stock of
the Company do not purport to be complete. Reference
is made to the Company's Certificate of Incorporation
and By-Laws which are incorporated herein by reference
and which are available for inspection at the Company's
offices. Reference is also made to the applicable
statutes of the State of Delaware for a more complete
description concerning rights and liabilities of
shareholders.
ADMISSION TO QUOTATION TO NASDAQ SMALLCAP MARKET AND
NASD OTC BULLETIN BOARD
If the Company meets the qualifications, the
Company intends to apply for quotation of its
Securities on the NASD OTC Bulletin Board. Until the
Company meets such qualifications, its Securities will
be quoted in the daily quotation sheets of the National
Quotation Bureau, Inc., commonly known as the "pink
sheets". If the Company's Securities are not quoted
on the NASD OTC Bulletin Board, a securityholder may
find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the
Company's Securities. The over-the-counter market
("OTC") differs from national and regional stock
exchanges in that it (1) is not cited in a single
location but operates through communication of bids,
offers and confirmations between broker-dealers and (2)
securities admitted to quotation are offered by one or
more broker-dealers rather than the "specialist" common
to stock exchanges. To qualify for quotation on the
NASD OTC Bulletin Board, an equity security must have
one registered broker-dealer, known as the market
maker, willing to list bid or sale quotations and to
sponsor such a Company listing. If it meets the
qualifications for trading securities on the NASD OTC
Bulletin Board the Company's Securities will trade on
the NASD OTC Bulletin Board until such future time, if
at all, that the Company applies and qualifies for
admission for listing on the Nasdaq SmallCap Market.
There can be no assurance that the Company will qualify
or if qualified that it will be accepted for listing
of its securities on the NASD SmallCap Market.
To qualify for admission for listing on
the Nasdaq SmallCap Market, an equity security must, in
relevant summary, (1) be registered under the
Securities Exchange Act of 1934; (2) have at least
three registered and active market makers, one of which
may be a market maker entering a stabilizing bid; (3)
for initial inclusion, be issued by a company with
$4,000,000 in net tangible assets, or $50,000,0000 in
market capitalization, or $750,000 in net income in two
of the last three years (if operating history is less
than one year then market capitalization must be at
least $50,000,000); (4) have at a public float of at
least 1,000,000 shares with a value of at least
$5,000,000; (5) have a minimum bid price of $4.00 per
share; and (6) have at least 300 beneficial
shareholders.
PENNY STOCK REGULATION
Penny stocks generally are equity securities
with a price of less than $5.00 per share other than
securities registered on certain national securities
exchanges or listed on the Nasdaq Stock Market,
provided that current price and volume information with
respect to transactions in such securities is provided
by the exchange or system. The "penny stock" rules
impose additional sales practice requirements on
broker-dealers who sell such securities to persons
other than established customers and accredited
investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000 or
$300,000 together with their spouse). For transactions
covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of
such securities and have received the purchaser's
written consent to the transaction prior to the
purchase. Additionally, for any transaction involving
a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a disclosure
schedule prescribed by the Commission relating to the
penny stock market. The broker-dealer also must
disclose the commissions payable to both the
broker-dealer and the registered representative and
current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price
information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the
ability of broker-dealers to sell the Company's
securities. The foregoing required penny stock
restrictions will not apply to the Company's securities
if such securities reach and maintain a market price of
$5.00 or greater.
TRADING OF SHARES
There are no outstanding options, options to
purchase, or securities convertible into, the shares of
the Company other than the securities described herein.
The Company has not agreed with any shareholders, to
register their shares for sale, other than for this
registration. The Company does not have any other
public offerings in process or proposed.
TRANSFER AGENT AND REGISTRAR AND TRUSTEE
StockTrans, Inc., Ardmore, Pennsylvania, serves
as the transfer agent for the Company and as Trustee
for the Class A Shares.
REPORTS TO SHAREHOLDERS
The Company will furnish to holders of its
common stock annual reports containing audited
financial statements examined and reported upon, and
with an opinion expressed by, an independent certified
public accountant. The Company may issue other
unaudited interim reports to its shareholders as it
deems appropriate.
PLAN OF DISTRIBUTION
ARBITRARY DETERMINATION OF OFFERING PRICE
The initial offering price of the Company
Shares has been determined arbitrarily by thinWEB.com.
Among the factors considered were the Company's
potential operations, current financial conditions and
financial requirements of the Company, estimates of the
business potential and prospects of the Company, the
perceived market demand for its software applications,
the economics of the information technology, Internet
and software industries, the general condition of the
equities market, and other factors.
LIMITED STATE REGISTRATION
The Company will qualify or register the sales
of the Company Shares in a limited number of states.
The Company will not accept subscriptions from
investors resident in other states.
SALE OF THE COMPANY SHARES
The Company Shares are being offered by the
Company on a "best efforts" basis through its officers
and directors. No sales commission will be paid to any
officer or director of the Company. The Company will
reimburse its officers and directors for expenses
incurred in connection with the offer and sale of the
Company Shares. The officers and director of the
Company are relying on Rule 3a4-1 of the Exchange Act
as a "safe harbor" from registration as a broker-dealer
in connection with the offer and sales of the Company
Shares. In order to rely on such "safe harbor"
provisions provided by Rule 3a4-1, an officer or
director must (1) not be subject to a statutory
disqualification; (2) not be compensated in connection
with such selling participation by payment of
commissions or other remuneration based either directly
or indirectly on such transactions; and (3) not be an
associated person with a broker or dealer; and (4) (i)
restrict participation to transactions involving offers
and sale of the securities, and (ii) perform
substantial duties for the issuer after the close of
the offering not connected with transactions in
securities, and has not been associated with a broker
or dealer for the preceding 12 months, and does not
participate in selling an offering of securities for
any issuer more than once every 12 months, and (iii)
restrict participation to written communications or
responses to inquiries of potential purchasers. The
officers and directors of the Company intend to comply
with the guidelines enumerated in Rule 3a4-1.
COMPANY USE OF A BROKER-DEALER
The Company may locate a broker-dealer who may
offer and sell the Company Shares on terms acceptable
to the Company. If the Company determines to use a
broker-dealer, such broker-dealer must be a member in
good standing of the National Association of Securities
Dealers, Inc. and registered, if required, to conduct
sales in those states in which it would sell the
Company Shares. The Company anticipates that it would
not pay in excess of 10% as a sales commission for any
sales of the Company Shares. If a broker-dealer were to
sell the Company Shares, it is likely that such
broker-dealer would be deemed to be an underwriter of
the securities as defined in Section 2(11) of the
Securities Act and the Company would be required to
obtain a no-objection position from the National
Association of Securities Dealers, Inc. regarding the
underwriting and compensation terms entered into
between the Company and such potential broker-dealer.
In addition, the Company would be required to file a
post-effective amendment to the registration statement
of which this prospectus is a part to disclose the name
of such selling broker-dealer and the agreed
underwriting and compensation terms. The Company has
no agreements or understandings with any broker-dealer
to offer the Company Shares for sale.
In order to comply with the applicable
securities laws, if any, of certain states, the Company
Shares will be offered or sold in such states through
registered or licensed brokers or dealers in those
states.
SALE OF THE SELLING SECURITYHOLDER SHARES
The Company will not receive the proceeds of
any sale of Selling Securityholder Shares by the
Selling Securityholders pursuant to this prospectus.
The Selling Securityholder Shares may be sold to
purchasers from time to time directly by and subject to
the discretion of the Selling Securityholders. The
Selling Securityholders may from time to time offer
their securities for sale through underwriters, dealers
or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from
the Selling Securityholders and/or the purchasers of
the securities for whom they may act as agents. Any
underwriters, dealers or agents who participate in the
distribution of the securities may be deemed to be
"underwriters" under the 1933 Act and any discounts,
commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be
underwriting discounts and commissions under the 1933 Act.
At the time a particular offer is made by
or on the behalf of the Selling Securityholders, a
prospectus, including any necessary supplement thereto,
will be distributed which will set forth the number of
shares of common stock and other securities being
offered and the terms of the offering, including the
name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriter for the
Selling Securityholder Shares purchased from the
Selling Securityholders, any discounts, commissions and
other items constituting compensation from the Selling
Securityholders, any discounts, commissions or
concessions allowed, reallowed or paid to dealers, and
the proposed selling price to the public.
Pursuant to Regulation M of the General Rules
and Regulations of the Securities and Exchange
Commission, any person engaged in a distribution of
securities, including on behalf of a selling security
holder, may not simultaneously bid for, purchase or
attempt to induce any person to bid for or purchase
securities of the same class for a period of five
business days prior to the commencement of such
distribution and continuing until the selling security
holder (or other person engaged in the distribution) is
no longer a participant in the distribution.
If, at some time, the Company meets the
requirements of the Nasdaq SmallCap Market it will
apply for listing thereon. If is should be accepted
for listing thereon, then certain underwriters may
engage in passive market making transactions in the
Company's common stock in accordance with Rule 103 of
Regulation M.
The Selling Securityholder Shares sold by the
Selling Securityholders may be sold from time to time
in one or more transactions: (i) at an offering price
that is fixed or that may vary from transaction to
transaction depending upon the time of sale or (ii) at
prices otherwise negotiated at the time of sale. Such
prices will be determined by the Selling
Securityholders or by agreement between the Selling
Securityholders and any underwriters.
In order to comply with the applicable
securities laws, if any, of certain states, the
securities will be offered or sold in such states
through registered or licensed brokers or dealers in
those states. In addition, in certain states, the
securities may not be offered or sold unless they have
been registered or qualified for sale in such states or
an exemption from such registration or qualification
requirement is available and with which the Company has
complied.
Under applicable rules and regulations
promulgated under the Exchange Act, any person engaged
in a distribution of securities may not simultaneously
bid for or purchase securities of the same class for a
period of two business days prior to the commencement
of such distribution. In addition and without limiting
the foregoing, the Selling Securityholders will be
subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder in connection
with transactions in the securities during the
effectiveness of the Registration Statement of which
this Prospectus is a part.
The Company will pay all of the expenses
incident to the registration of the securities of the
Selling Securityholders (including registration
pursuant to the securities laws of certain states)
other than commissions, expenses, reimbursements and
discounts of underwriters, dealers or agents, if any.
In addition and without limiting the
foregoing, the Selling Securityholders will be subject
to applicable provisions of the Exchange Act and the
rules and regulations thereunder in connection with
transactions in the sale of the Selling Securityholder
Shares during the effectiveness of this prospectus.
The Company will pay all of the expenses
incident to the registration of the Shares (including
registration pursuant to the securities laws of certain
states) other than commissions, expenses,
reimbursements and discounts of underwriters, dealers
or agents, if any.
LEGAL MATTERS
LEGAL PROCEEDINGS
The Company is not a party to any litigation
and management has no knowledge of any threatened or
pending litigation against the Company.
LEGAL OPINION
Cassidy & Associates, Washington, D.C. has
given its opinion as attorneys-at-law that the Company
Shares offered herein when issued pursuant to the terms
hereof, will be fully paid and non-assessable and that
the Selling Securityholder Shares offered for sale
herein have been fully paid, validly issued and
non-assessable. Cassidy & Associates has passed on the
validity of the securities being issued but purchasers
of the securities offered by this prospectus should not
rely on Cassidy & Associates with respect to any other
matters.
James M. Cassidy, a principal of Cassidy &
Associates, is an officer and director and controlling
shareholder of TPG Capital Corporation, which owns
150,000 shares of common stock of the Company and holds
a warrant to purchase 50,000 shares of common stock of
the Company.
EXPERTS
The financial statements in this Prospectus
have been included in reliance upon the report of
PricewaterhouseCoopers LLP, Halifax, Canada,
Independent Accountants, and upon the authority of such
firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The audited balance sheet of ThinWeb Software
Incorporated as of December 31, 1998 and the statements
of operations and deficit and cash flows for the period
from April 22, 1998 to December 31, 1998 are included
herein.
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA--
U.S. REPORTING DIFFERENCE
In the United States, reporting standards for auditors require the addition
of an explanatory paragraph (following the opinion paragraph) when the
financial statements are affected by conditions and events that cast
substantial doubt on the company's ability to continue as a going concern,
such as those described in note 1 to the financial statements. Our report
to the board of directors of THINWEB SOFTWARE INCORPORATED dated May 20,
1999 is expressed in accordance with the Canadian reporting standards
which do not permit a reference to such events and conditions in the
auditors' report when these are adequately disclosed in the financial
statements.
Halifax, Canada PRICEWATERHOUSECOOPERS LLP
May 20, 1999 Chartered Accountants
<PAGE>
ThinWeb Software Incorporated
(A Development Stage Company)
Financial Statements
December 31, 1998
(Information as at March 31, 1999 and the three
months ended March 31, 1999 is unaudited)
(expressed in U.S. dollars)
Report of Independent Accountants
To the Board of Directors of
ThinWeb Software Incorporated
We have audited the balance sheet of ThinWeb Software Incorporated as of
December 31, 1998 and the statements of operations and deficit and cash
flows for the period from April 22, 1998 to December 31, 1998. 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 an audit
to obtain reasonable assurance 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.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as of
December 31, 1998 and the results of its operations and its cash
flows for the period then ended in accordance with generally accepted
accounting principles in Canada.
PRICEWATERHOUSECOOPERS LLP
Halifax, Canada
May 20, 1999 Chartered Accountants
<PAGE>
ThinWeb Software Incorporated
(A Development Stage Company)
Balance Sheet
As of December 31, 1998
(expressed in US dollars)
March 31 December 31
1999 1998
(unaudited)
$ $
Assets
Current assets
Cash (note 3) 253,375 31,566
Subscriptions receivable 267,961 --
Investment tax credits receivable (note 4) 66,838 65,908
Other 13,881 5,784
------- -------
602,055 103,258
Capital assets (notes 4 and 5) 15,314 10,895
Trademarks 563 555
------ ------
617,932 114,708
-------- -------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 97,280 21,470
Accrued salaries 99,344 89,657
Current portion of long-term debt (note 7) 2,998 2,957
Loan payable 66,260 65,338
Amounts due to shareholders 21,484 21,484
------ ------
287,366 200,906
Long-term debt (note 7) 13,153 13,754
-------- ------
300,519 214,660
------- -------
Shareholders' Equity
Capital stock (note 8) 519,065 1
Foreign currency translation adjustments (474) 343
Deficit accumulated during the development
stage (201,178) (100,296)
-------- --------
317,413 (99,952)
------- ------
617,932 114,708
------- -------
ThinWeb Software Incorporated
(A Development Stage Company)
Statement of Operations and Deficit
For the period from April 22, 1998 to December 31, 1998
(expressed in U.S. dollars)
Cumulative Three Months Period ended
April 22, 1998 to ended December 31
March 31, 1999 March 31, 1999 1998
(unaudited) (unaudited)
$ $ $
Revenue 1,409 253 1,156
------ ------- ------
Expenses
Research and development
(note 4) 81,922 38,034 43,888
Selling, general and
administration 117,376 61,480 55,896
Amortization 3,289 1,621 1,668
------- ------ -------
202,587 101,135 101,452
------- ------- -------
Loss for the period (201,178) (100,882) (100,296)
Deficit accumulated during the
development stage-
Beginning of period --- (100,296) --
-------- --------- ---------
Deficit accumulated during the
development stage-
End of period (201,178) (201,178) (100,296)
--------- --------- ---------
Loss per share 1.03 28.30
Weighted average number of shares ------- --------
outstanding during the period 97,711 3,544
------- --------
<PAGE>
ThinWeb Software Incorporated
(A Development Stage Company)
Statement of Cash Flows
For the period from April 22, 1998 to December 31, 1998
(expressed in U.S. dollars)
Cumulative Three Months Period Ended
April 22, 1998 ended December 31
to March 31, 1999 March 31, 1999 1998
(unaudited) (unaudited)
$ $ $
Cash provided by (used in)
Operating activities
Loss for the period (201,178) (100,882) (100,296)
Amortization 3,289 1,621 1,668
Net change in non-cash working
capital balances related
to operations
Increase in investment tax
credits receivable (66,918) --- (66,918)
Increase in other current
assets (13,875) (8,002) (5,873)
Increase in accounts payable
and accrued liabilities 97,176 75,377 21,799
Increase in accrued salaries 99,438 8,407 91,031
------ ------ ------
(82,068) (23,479) (58,589)
-------- ------- -------
Financing activities
Proceeds from bank loan 16,966 --- 16,966
Repayments of bank loan (794) (794) --
Proceeds from loan payable 66,339 -- 66,339
Issue of common shares 251,132 251,132 --
Proceeds from shareholder
loans 20,628 -- 20,628
------- ------- -------
354,271 250,338 103,933
------- ------- -------
Investing activities
Acquisition of capital assets (18,609) (5,878) (12,731)
Acquisition of trademarks (564) -- (564)
------- ------- -------
(19,173) (5,878) (13,295)
-------- ------- -------
Effect of exchange rate
changes in cash 345 828 (483)
-------- ------- -------
Increase in cash during
the period 253,375 221,809 31,566
Cash-- Beginning of period -- 31,566 --
------- ------- ------
Cash-- End of period 253,375 253,375 31,566
------- ------- ------
<PAGE>
ThinWeb Software Incorporated
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information as of March 31, 1999 and for the
three months ended March 31, 1999 is unaudited)
(expressed in U.S. dollars)
1 Nature of operations and basis of presentation
The company incorporated on April 22, 1998 and is primarily a
software research and development company that has not yet
commenced commercial operations. All of the company's
operations are in Canada. These statements are prepared on
a going-concern basis. There is substantial doubt that as to
whether or not the company will be able to continue as a going
concern. The ability of the company to continue as a going-concern
is dependent upon it obtaining the necessary financing to
commercialize and market its products and upon future
profitable operations. Like other
companies at this stage of development, the company is subject to
numerous risks, including the uncertainty of its chosen market,
its ability to develop its markets and other risks.
The company plans to raise funds through a private
placement; however, there are no commitments for the private
placement and there can be no assurance that the company will
be successful in raising the required capital to finance operations.
2 Accounting policies
a) Financial statement presentation
These financial statements have been prepared in accordance
with Canadian generally accepted accounting principles.
The significant differences between these principles
and those that would be applied under U.S. generally
accepted accounting principles are disclosed in note 11.
b) Foreign currency translation
The company's currency of measurement is Canadian dollars;
however, the reporting currency is U.S. dollars. The assets
and liabilities of the company are translated into U.S.
dollars at year-end exchange rates, and income and expense
items are translated at rates approximating the average rates
of exchange for the year. Gains and losses from the translation
are excluded from the statement of operations and
deficit and are accumulated in the cumulative foreign
currency translation adjustment account.
c) Capital assets and amortization
Amortization of the following capital assets is calculated
using the declining balance method at annual rates
which will amortize their cost over their estimated useful lives.
These rates are:
Computer hardware 30%
Computer software 100%
Office furniture and equipment 20%
d) Income taxes
The company uses the liability method of accounting for income
taxes. Under this method, current income taxes are recognized
for the estimated income taxes payable for the current year.
Future income tax assets and liabilities are recognized for
temporary differences between the tax and accounting bases of
assets and liabilities as well as for the benefit of losses
available to be carried forward to future years for tax purposes.
Future income tax assets are evaluated and if realization is not considered
"more likely than not", a valuation allowance is provided.
Investment tax credits relating to scientific research and
experimental development expenditures are recorded in the
accounts in the fiscal period the qualifying expenditures
are incurred provided there is reasonable assurance
that the tax credit will be realized. Investment
tax credits in connection with research and development
activities are accounted for using the cost reduction
method which recognizes the credits as a reduction
of the cost of the related assets or expenditures.
e) Revenue recognition
The company recognizes revenue at the time of
delivery of its licensed software products to customers,
provided collectibility of proceeds from the sale of
licensed software is reasonably assured.
Currently, all sales are made from the company's web
site. An electronic order form is filled out on-line
by the customer; payment for the order is then
received when the customer provides a credit card number;
the product is then downloaded by the customer.
The product is not returnable; therefore, no provision is
required for sales returns.
f) Research and development
Research costs are expensed in the period incurred. Where,
in the opinion of management, the deferral criteria established
by the Canadian Institute of Chartered Accountants are
satisfied in all material respects, development expenditures
are capitalized and amortized over the estimated earning
life of the related products. To date, no development costs
have been deferred.
g) Loss per common share
Loss per common share is calculated using the weighted
number of common shares issued and outstanding during each
period. Fully diluted earnings per share are not
presented as the exercise of warrants and options
would be antidilutive.
h) Use of estimates
The presentation 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 liabilities at the date of the financial
statements and the reported amounts of revenues and
expenditures during the reported period. Actual
results could differ from those reported.
i) Financial instruments
The fair value of the company's cash, subscriptions
receivable, investment tax credits receivable, other current
assets, accounts payable and accrued liabilities, accrued
salaries, long-term debt, loan payable and amounts due to
shareholders approximate their carrying values.
3 Restrictions on cash
Included in cash is $235,000 held in a trust account by the
company's solicitors, which requires the approval of two
shareholders in order to be released. The cash is to be
used to fund certain expenditures within the next year.
4 Investment tax credits receivable
For small, closely held Canadian corporations, a credit
of approximately 40% of eligible scientific research and
experimental development expenditures is available, refundable
in cash if no taxes are owed. For all other Canadian
corporations, the credit is reduced to approximately 20%
on a non-refundable basis, available only against taxes
otherwise payable. Eligible scientific research and
experimental development expenditures include direct
current and capital costs and an allowance for overhead in the
amount of 65% of specified salaries and wages.
During 1998, investment tax credits in the amount of $63,862
have been applied to reduce research and development expenditures
and $3,056 have been credited to the cost of capital assets.
5 Capital assets
March 31 December 31
1999 1998
---------------------------------------------------------------------------
Accumulated
Cost amortization Net
$ $ $ $
Computer hardware 13,289 1,790 11,499 8,705
Computer software 3,944 1,295 2,649 972
Office furniture
and equipment 1,371 205 1,166 1,218
------ ----- ------ ------
18,604 3,290 15,314 10,895
------ ----- ------ ------
6 Income taxes
The company has approximately $160,000 in losses for income
tax purposes, with an expiry date of 2005, which are available
to reduce future taxable income. This potential benefit is
offset by $53,000 in temporary differences between income
for accounting purposes and income for tax purposes.
The net potential future tax benefit, calculated at the
statutory rate of approximately 45%, amounts to $48,000.
This future income tax asset has been reduced to $nil
through the application of a valuation allowance based on the
likelihood of realization.
7 Long-term debt
March 31 December 31
1999 1998
$ $
Business Development Bank of Canada,
authorized amount $18,900, bearing interest
at 8.7% per annum, repayable in one principal
payment of $108 and 72 principal payments of
$261, secured by personal guarantees of certain
shareholders in the amount of $4,100 16,151 16,711
Less: Current portion 2,998 2,957
------ ------
13,153 13,754
------ ------
The loan was repaid in full subsequent to March 31, 1999.
8 Capital Stock
Authorized
On March 31, 1999, the company increased its authorized capital
by the creation of 90,000,000 common shares without nominal
or par value. At March 31, 1999, the authorized capital of the company is:
100,000,000 common shares, without nominal or par value
<PAGE>
Ascribed
Number of Value
Shares $
Issued
Issued in 1998 pursuant to share
subscription agreements 900,000 32,669
Subscriptions receivable --- (32,668)
------- --------
Balance--December 31, 1998 900,000 1
Issued in the three months ended
March 31, 1999
For cash 1,447,333 73,565
Pursuant to share subscription
agreements 7,027,667 462,097
Subscriptions receivable --- (16,598)
-----------------------------------
Balance --- March 31, 1999 9,375,000 519,065
--------- -------
Subscriptions receivable are presented as a reduction
from capital stock unless paid subsequent to the period end.
Subsequent to March 31, 1999, $267,961 in share subscriptions
receivable were paid in cash.
9 Uncertainty due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using year 2000 dates is
processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something
other than a date. The effects of the Year 2000 Issue may be
experienced before, on, or after January 1, 2000, and, if not addressed,
the impact on operations and financial reporting may range from minor
errors to significant systems failure which could affect the
company's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue
affecting the company, including those related to the efforts
of customers, suppliers, or other third parties, will be fully resolved.
10 Subsequent events
a) Repayment of loan payable
Subsequent to March 31, 1999, the company repaid in full,
the loan payable of $66,260 which was outstanding at March 31, 1999.
The company also paid a premium in the amount of $16,565 to the lender.
The premium was agreed with the lender in April 1999 and has been
accrued in the financial statements. As part of the loan repayment,
the company also issued, for no cash consideration, 100,000 shares
to the lender and 10,000 shares to the individual who arranged
the initial loan. Both individuals deal at arm's length with
the company.
b) Share issuances
Subsequent to March 31, 1999, the company issued shares as follows:
Ascribed
Number of value
shares $
For cash 7,431,344 83,435
Related to the repayment of loan payable 110,000 --
--------- ---------
7,541,344 83,435
The company appointed a new chief executive officer subsequent
to March 31, 1999. As part of the terms of the employment agreement,
the chief executive officer was issued 1,181,344 common shares
from treasury for no cash consideration, with 28.58% of
the shares vesting immediately, 35.71% vesting in one year
and the balance of 35.71% vesting in two years.
c) Corporate Re-organization
On April 22, 1999, the company entered into a combination
agreement with Warwick Acquisition Corporation ("Warwick").
This agreement was adopted by the Board of Directors of
Warwick and approved by the shareholders of Warwick on
May 20, 1999. Thinweb.com Inc. ("Thinweb.com"),
formerly 3028184 Nova Scotia Limited, a wholly-owned
subsidiary of Warwick, will acquire all of the issued
and outstanding shares of the company through the issuance of
16,916,344 Class "A" exchangeable, non-voting, participating common
shares without par value ("Exchangeable Shares") of Thinweb.com.
The Exchangeable Shares entitle the holder to voting rights in
Warwick as if the shareholder held an equivalent number of common
shares in Warwick. The Exchangeable Shares are exchangeable for
shares in Warwick on a share-for-share basis without any further
consideration.
Pursuant to this agreement, 4,850,000 of the issued and
outstanding shares of Warwick were redeemed and retired resulting
in 150,000 common shares of Warwick being issued and outstanding.
On closing of this transaction, Warwick issued 16,916,344 common
shares to be held in trust pending receipt of the Exchangeable Shares.
Warwick also issued 1,500,000 preferred shares on closing of this
agreement for deemed consideration of $0.0001 per share.
The holders of the preferred shares of Warwick are entitled to
convert them into common shares of Warwick on a share-for-share
basis any time prior to November 1, 1999, provided the holders
were instrumental in arranging financing for the company of not less than
$5,000,000. In addition, Warwick will grant a five year transferable
warrant entitling the holder to acquire up to 50,000 common shares
of Warwick for consideration of $1 per share.
If all Exchangeable Shares and preferred shares are converted
into shares of Warwick, the former shareholders of ThinWeb
Software Incorporated will own approximately 91% of the
issued shares of Warwick.
11 Differences between Canadian and U.S. Generally
Accepted Accounting Principles
The financial statements of the company have been prepared
in accordance with generally accepted accounting principles
in Canada ("Canadian GAAP") which are different in certain
respects from those applicable in the United States ("U.S. GAAP"),
as described below.
a) Comprehensive income
Under SFAS 130, "Comprehensive income", the company is required
to show the change in net assets, excluding shareholder
investments and distributions. The following summarizes
the company's comprehensive loss:
Three months ended Period ended
March 31, 1999 December 31
(unaudited) 1998
$ $
Loss for the period (100,882) (100,296)
Change in foreign currency
translation adjustment (474) 343
--------- --------
Comprehensive loss (101,356) (99,953)
--------- -------
b) Recent pronouncements
In 1998, Statement of Financial Accounting Standards No. 133 (SFAS 133),
"Accounting for Derivative Instruments and Hedging Activities" was issued
and is effective for fiscal years commencing after June 15, 1999. The
company will comply with the requirements of SFAS 133 in fiscal year 2000
and does not expect the adoption of SFAS 133 will be material to the
company's results of operations.
In 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-up Activities". SOP 98-5 is effective in fiscal years
beginning after December 15, 1998 with earlier adoption permitted.
SOP 98-5 requires costs of start-up activities and organization costs
to be expenses as incurred. The company has complied with the
requirements of SOP 98-5.
No dealer, salesman or any other person has been authorized to
give any information or to make any representations other than those
contained in this prospectus, and, if given or made, such
information or representations may not be relied on as having been
authorized by the Company or by any of the Underwriters. Neither
the delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create an implication that there has been
no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer to sell, or solicitation of
any offer to buy, by any person in any jurisdiction in which it is
unlawful for any such person to make such offer or solicitation.
Neither the delivery of this Prospectus nor any offer, solicitation
or sale made hereunder, shall under any circumstances create any
implication that the information herein is correct as of any time
subsequent to the date of the Prospectus.
------------------------
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . . . . .
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Operation. . . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . . . . . . . .
Selling Securityholders. . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions . . . . . . . . . . . .
Description of Securities. . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index to Financial Statements. . . . . . . . . . . . . . . . . . . . .
Until 90 days after the date of this Prospectus, all dealers
effecting transactions in the registered Securities, whether or not
participating in this distribution, may be required to deliver a
Prospectus.
=======================
THINWEB.COM CORPORATION
4,000,000 shares of common stock
and
6,212,500 shares of Common Stock
to be sold by the Holders thereof
----------
PROSPECTUS
----------
_______________, 1999
=======================
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated in Delaware. Under Section 145
of the General Corporation Law of the State of Delaware, a Delaware
corporation has the power, under specified circumstances, to
indemnify its directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them
by a third party or in the right of the corporation, by reason of
the fact that they were or are such directors, officers, employees
or agents, against expenses incurred in any action, suit or
proceeding. The Certificate of Incorporation and the By-laws of the
Company provide for indemnification of directors and officers to the
fullest extent permitted by the General Corporation Law of the State
of Delaware.
The General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision
eliminating the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary
duty as a director provided that such provision shall not eliminate
or limit the liability of a director (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) under
Section 174 (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit. The Company's Certificate of Incorporation contains such
a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS,
OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE
FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection
with this Registration Statement. All of such expenses are
estimates, other than the filing fees payable to the Securities and
Exchange Commission.
Filing Fee - Securities and Exchange Commission $
8,000
Fees and Expenses of Accountants and legal counsel 100,000
Blue Sky Fees and Expenses 4,000
Printing and Engraving Expenses 5,000
Miscellaneous Expenses 1,000
Total $118,000
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The Company (and ThinWeb Software Incorporated prior to
becoming a subsidiary of the Company) issued shares of Common
Stock, par value $.0001 per share, to the following individuals or
entities for the consideration as listed in cash.
If any of these sales were made within the United States or
to United States citizens or residents, such sales were made in
reliance upon the exemption from registration provided by Section
4(2) of the Securities Act of 1933 except 5,000,000 shares of common
stock issued by Warwick Acquisition Corporation prior to the stock
exchange transaction, which shares were issued in reliance on Rule
506 of Section 4(2) of the Securities Act and Rule 701 of Section
3(b) of the Securities Act. Of the 5,000,000 shares issued by
Warwick Acquisition Corporation 4,850,000 were redeemed pursuant to
the stock exchange transaction.
Pursuant to the stock exchange transaction among thinWEB.com
Corporation, ThinWeb Software Incorporated, and Thinweb.com Inc.,
thinWEB.com (the Company) issued 16,916,344 shares of common stock
to a Trustee as part of the consideration for the purchase of the
outstanding stock of ThinWeb Software Incorporated by the Company's
subsidiary, Thinweb.com Inc. Thinweb.com Inc. issued 16,916,344
Class A shares entitling the holders voting rights in thinWEB.com.
As part of the stock exchange, ThinWeb Software Incorporated became
a subsidiary of the Company.
Some of holders of the shares listed below may have
subsequently transferred or disposed of their shares and the below
list does not purport to be a current listing of shareholders of the
Company.
Number Number
Date Shareholder of Pre- of Post-
Exchange Exchange Consid-
Shares Shares or eration
Right to
Direct Vote
6/9/98 Pierce Mill Associates, Inc 4,250,000 redeemed $425
6/9/98 TPG Capital Corporation 750,000 150,000 75
Butternut Capital Limited 613,000 613,000 4*
International Shareholdings Corp 387,000 387,000 3*
Seismic Investments Ltd. 577,000 577,000 4*
Amery Associates Inc. 473,000 473,000 3*
Cannon Equity Limited 398,000 398,000 3*
Corporate Solutions Limited 602,000 602,000 4*
Strathglen Capital Limited 479,000 479,000 3*
Greensted Equities Limited 471,000 471,000 3*
Arrendadora Solarsa S.A. 500,000 500,000 83,389*
Transatlantic Co., S.A. 250,000 250,000 2*
Cheetah Systems Ltd. 500,000 500,000 3*
Shaftesbury Global Limited 500,000 500,000 3*
Midland Shareholdings Limited 500,000 500,000 3*
B. MacLean Family Trust 2,666,667 2,666,667 16,349*
C. Reid Family Trust 2,666,667 2,666,667 16,349*
Enman Family Investment Trust 2,666,666 2,666,666 33,130*
J. Smyth Family Trust 175,000 175,000 1*
T. MacLean Family Trust 195,000 195,000 1*
3024704 Nova Scotia Limited 891,000 891,000 445,500*+
Donald Wile 100,000 100,000 50,000*
Everest (Private) Trust Company 14,000 14,000 7,000*
Gary Hannah 1,181,344 1,181,344 8*
Paul Landry Sr. 100,000 100,000 0*
Paul Landry Jr. 10,000 10,000 0*
* Amount paid for original investment in shares of ThinWeb
Software Incorporated which were subsequently exchanged for
Class A Shares of Thinweb.com Inc. and accompanying voting
rights in thinWEB.com Corporation
+ 3024704 Nova Scotia Limited was subsequently dissolved and
shares of ThinWeb Software Incorporated distributed pro rata
to shareholders.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
3.1** Certificate of Incorporation, filed with the
Registration Statement of Warwick Acquisition
Corporation on Form 10-SB (file no. 0-25419) filed
with the Commission on February 19, 1999 and
incorporated herein by reference.
3.2** By-Laws of the Company, filed with the Registration
Statement of Warwick Acquisition Corporation on
Form 10-SB (file no. 0-25419) filed with the
Commission on February 19, 1999 and incorporated
herein by reference.
4.1** Share Exchange and Share Purchase Agreement among
Warwick Acquisition Corporation, Thinweb.com Inc.,
ThinWeb Software Incorporated, and all of the
shareholders of ThinWeb Software Incorporated,
filed with the Form 8-K of Warwick Acquisition
Corporation (file no. 0-25419) filed with the
Commission on May 28, 1999, and incorporated herein
by reference.
4.2** Exchange and Voting Agreement among Warwick
Acquisition Corporation, ThinWeb Software
Incorporated, the Trustee, and all of the
shareholders of ThinWeb Software Incorporated, and
all of the shareholders of ThinWeb Software
Incorporated, filed with the Form 8-K of Warwick
Acquisition Corporation (file no. 0-25419) filed
with the Commission on May 28, 1999, and
incorporated herein by reference.
5.1* Opinion of Cassidy & Associates
10.1* License Agreement with Sun Microsystems
10.2* Reseller agreement with New Atlanta Communications, LLC
10.3* License agreement with Cloudscape, Inc.
24.1 Consent of Accountant
24.2* Consent of Cassidy & Associates (included in Exhibit 5)
27 Financial Data Schedule
- ---------------
* To be filed by amendment
** Previously filed
(b) The following financial statement schedules are
included in this Registration Statement.
None.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement.
(b) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of 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 the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the
Securities Act of 1933, 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 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(ii) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, thinWEB.com Corporation certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form SB-2 and has duly caused this Registration
Statement on Form SB-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Halifax on
the 20th day of July, 1999.
THINWEB.COM CORPORATION
By /s/ Gary Hannah
President
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/James S. Anthony Director July 20, 1999
/s/ Gary T. Hannah Director July 20, 1999
/s/Bryan c. MacLean Director July 20, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the prospectgus constituting part of
this Registration Statement on Form SB-2 of our report dated May 20,
1999, relating to the financial statements of ThinWeb Software
Incorporated, which appears in such prospectus. We also consent to
the reference to us under the heading "Experts" in such prospectus. It
should be noted that PricewaterhouseCoopers LLP has not prepared or
certified the information under the heading "Selected Financial
Data" in such prospectus.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants
Halifax, Canada
July 21, 1999
