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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-SB
(Amendment No. 1)
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
TECHLABS, INC.
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(Name of Small Business Issuer in Its Charter)
FLORIDA 65-0843965
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3435 Galt Ocean Drive
Ft. Lauderdale, FL 33308
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(Address of principal executive offices)
Issuer's telephone number: (954) 630-1898
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Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
None None
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
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PART I
Item 1. Business
Forward-looking Statements
This Registration Statement includes forward-looking statements. These
statements are based on management's beliefs and assumptions and on information
currently available to management. Forward-looking statements include statements
in which words such as "expect," "anticipate," "intend," "plan," "believe,"
"estimate," "consider," or similar expressions are used.
Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions. The Company's future results
and stockholder values may differ materially from those expressed in these
forward-looking statements. Many of the factors that will determine these
results and values are beyond the Company's ability to control or predict. In
addition, the Company does not have any intention or obligation to update
forward-looking statements after the effectiveness of this Registration
Statement, even if new information, future events or other circumstances have
made them incorrect or misleading.
History
TECHLABS, INC. ("Techlabs" or "Company") is a Florida corporation
organized in May, 1998 as Coordinated Physician Services, Inc. to organize and
operate primary care physician networks for managed medical care organizations.
In February 1999 we abandoned this business due to excessive competition and
changed our name to Techlabs, Inc. and embarked on a strategy to develop and
operate Internet related business operations directly and through subsidiaries
and strategic alliances.
The Company's principal office is located at 3435 Galt Ocean Drive, Ft.
Lauderdale, Florida 33308, and its telephone number is (954)630-1898. We are
currently in the developmental stage.
Business Opportunities on the Internet
We believe that Internet related businesses will benefit from the
increasing number of Internet users and that advertisers will more likely choose
to advertise on Web sites that demonstrate a high volume of user traffic and
provide content designed for specific demographic groups. The Company believes
that opportunities for providers of business and finance, sports and Internet-
related content in reaching certain niches of the Internet user community will
parallel opportunities for those offering complementary technologies such as
search/index guides and portals like the Internet Sleuth.
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The Company expects that the Internet market for advertising will
continue to grow in the foreseeable future. According to the Internet
Advertising Bureau, by 1997, advertising reached $900 million and is expected to
grow to approximately $4 billion by the year 2000. Because of the
diversification in user groups, the focus of Internet advertising is no longer
geared toward computer-based or Internet related products. The mushrooming of
Internet advertising reflects this greater diversity of products and target
audience. According to a Coopers & Lybrand spokesman, "[1997] is the year the
Internet has come into its own . . . We are witnessing the evolution of the
Internet into a vitally important consumer advertising medium . . ." Portals,
which now attract 15% of Internet page-views, receive 59% of Internet
advertising, according to Ziff Davis Publishing's ZDNet News. This share of
Internet traffic is projected to reach 20% and 30% of advertising dollars by
2002.
Projections of growth in Internet commerce consider that a primary
impetus will derive from a greater participation from foreign economies.
According to Robert Hult, vice president and general manager of Alta Vista,
"The international market will be 50 percent of the total traffic on the
Internet in a few years." Yahoo! President and CEO, Tim Koogle reports that 40%
of its page-views come from outside North America, up from 20% two years ago. We
believe that license agreements and partnerships within foreign companies may
present important opportunities as the Internet continues to expand globally.
We believe that an important factor in the recognition of the World
Wide Web as a legitimate advertising medium is the ability to direct advertising
to specific user groups, directly distribute targeted information to users on an
individualized basis and receive timely feedback from users. Current technology
allows Web sites to monitor the demographics of their users and deliver specific
information to the advertisers and advertising agencies. The Company believes
that continued improvements in the tools and technologies used to measure user
response to advertisements on the Internet and to track purchasing decisions
should increase the effectiveness and attractiveness of Internet-based
advertising. The emerging model for advertising rates recognizes that
advertisers are willing to pay a premium for the targeted audience that the
internet can deliver. The Internet can also provide the user with direct access
to the advertiser with "click-through" advertisements, where an electronic
transaction is capable of occurring immediately if the advertiser has a Web site
capable of conducting sales and purchases via the Internet. Another perceived
advantage of Internet-based advertising is that such advertising can be
evaluated and monitored daily, and in the future should be capable of being
monitored in real-time. If an Internet-based advertisement is not delivering the
anticipated results, an advertiser can remove the advertisement within a short
period of time and replace it with an advertisement that may be more likely to
deliver the anticipated results.
We believe that the growth of the Internet and its adaptation to
commercial use presents a significant new opportunity for merchants to reach a
wider customer base. We are beginning to see the growth curve as consumers,
merchants and financial institutions have become satisfied that the electronic
manifestations of existing payment methods are as safe, convenient and secure as
their current counterparts.
The Company is a developer and incubator of start-up and emerging
Internet companies and businesses, seeking to make strategic alliances with such
companies and further their growth and development through a variety of
consulting and financing services.
The Company was incorporated on May 26, 1998 and its sole operating
activities through March 31, 1999 were the conception and development of its
subsidiary's internet site, http//www.Interplanner.com, and corresponding
business plan, the hiring of employees, including programmers and designers, and
administrative staff and the negotiation of strategic alliances with other
internet companies. The Company has reported no cash revenues from inception,
May 26, 1998, through March 31, 1999.
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Current Internet Initiatives
The following describes the current business activities undertaken by
Techlab:
Interplanner.com
We are developing a World Wide Web site based on a personal information
manager (PIM) application, www.Interplanner.com, which will allow users to
create and maintain a variety of their personal information such as contacts,
appointments, task lists and group calendars. The site will enable users to view
information received from other World Wide Web sources such as news, weather and
stock market data. The site's calendar can be set to send reminders of
appointments, events and tasks on an individual or group basis. Since the
application resides in the site's servers, it can be accessed from any device
that can access the World Wide Web and from any location with World Wide Web
access.
As of the date of this filing, the site is under development. It is
available for a tour of its elements and registration for notification by
e-mail of actual operational launch of the site and other information on the
site. We anticipate that the site will be operational by September, 1999.
Revenue Sources - While it is anticipated that the Interplanner.com
site will be free to users, we expect to obtain revenue from a variety of
sources including sale of advertising on the site, commission on sales obtained
through the site, affiliation of other web sites which desire to utilize our
site, and sale or licensing of the software underlying the site. As of the date
of this filing, we have not made any arrangements for revenue from our
interplanner.com website, and there can be no assurance that revenue will be
generated by the site.
Competition - Besides competing with PIM's run on individual computers,
there are competing web-based PIM's, including when.com, planetall.com and
webcal.com. We expect to compete based on ease of use, quality of links to the
websites and features included in our site. Since all such sites are free to the
user, the features of a PIM site and ease of use will be the most relevant
competitive elements, as well as marketing of the site to bring it to attention
of potential users.
We have entered into a Strategic Marketing Agreement with The
BigHub.Com, Inc. under which we may acquire advertising space on iSleuth.com on
advantageous terms as described below.
The BigHub.Com, Inc.
On April 27, 1999, the Company negotiated the acquisition and
redemption of an aggregate of 1,000, 000 shares of the preferred stock of The
BigHub.Com, Inc. formerly named iSleuth.Com, Inc., (OTC Bulletin Board Trading
Symbol: BHUB), receiving 1,000,000 restricted shares of the common stock of The
BigHub.com (representing approximately 7% of the total outstanding common shares
of The BigHub.com), in exchange for $627,000, 250,000 shares of the restricted
common stock of Techlabs (representing approximately 3.5% of the total
outstanding common shares of Techlabs).
This transaction represents the commencement of relations between the
Company and The BigHub.com. The BigHub.com has agreed to provide to Techlabs,
its related companies and subsidiaries, strategically located advertising
space, offered at a 25% discount to standard market rates to be then offered by
The BigHub.com, throughout The BigHub.com's network of affiliate sites on the
Internet in order to expose Techlabs, its related companies and subsidiaries to
Internet users at high traffic areas on the Internet.
We believe that the exchange of shares between the Company and The
BigHub.Com, Inc. will enable the two firms to establish a closer working
relationship with each other for similar reasons that a company issues stock
options to its employees, to achieve an attitude of ownership rather than just a
commercial relationship.
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Risk Factors
We are still in the development stage. Our first Internet business,
Interplanner.com is under development and there can be no assurance that this
will result in profitable operations or that any other initiatives of the
Company will result in revenues or profits.
Need for additional working capital.
We may require additional working capital to support any
Internet-related operations we develop.
Government Regulations
Although there are currently few laws and regulations directly
applicable to the Internet, it is possible that new laws and regulations will be
adopted covering issues such as, among other things, privacy, copyrights,
access, obscene or indecent communications and the pricing, characteristics and
quality of Internet products and services. The Communications Decency Act or
other legislation could dampen the growth of the Internet generally and decrease
the acceptance of the Internet as an advertising medium, and could, thereby,
have a material adverse effect on the Company's business, financial condition
and operating results.
Competition
We believe that competition represents the greatest risk to our
proposed Plan of Operation. The Internet has attracted a large number of
business attention from established companies who are seeking to expand into the
Internet as well as newer Internet businesses such as Amazon and Yahoo.
Employees
We currently employ 2 persons.
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations.
We intend to develop and operate Internet related business ventures
including specialized content providers.
The Company intends to adopt a strategy of seeking opportunities to
realize significant gains through the selective sale of interests in our
Internet ventures or having separate subsidiaries or affiliates sell minority
interest to outside investors. The Company believes that this strategy will
provide the ability to significantly increase shareholder value as well as
provide capital to support the growth in the Company's operations.
We hope to become a significant service provider within each respective
market niche for specialized content which we enter. The critical success
factors are: understanding, developing and applying information technology to
the Internet, interactive media markets, and data access and software tools;
narrowing market focus while consummating strategic alliances to complement
product and service offerings; investing in strategic Internet or interactive
media investments or acquisitions and most importantly, a continued
understanding of customers' needs.
We will seek to participate in the Internet interactive media
industries and develop market share. Key elements of this strategy include:
1. The Company intends to devote significant resources into
operations which seek to capitalize on opportunities surrounding the growth of
the Internet and the interactive marketing industry. The Company intends to
pursue the growth and development of Internet related technologies and services
and introduce such services and products commercially. Additionally, the Company
intends to continue to evaluate new opportunities to further its Internet
strategy and also to seek out opportunities to realize significant shareholder
value through the sale of selected operations or technologies or having separate
subsidiaries sell a minority interest to outsiders.
2. We intend to attend numerous trade shows in the Internet, high
technology, direct marketing, mutual fund, book, and library markets, while
further supplementing its sales efforts with space advertising and product and
services listings in appropriate directories. In addition, the
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Company will sponsor user group meetings for its mutual fund clients and major
lists participants in the InfoBuyers List database, where new products and
services are highlighted.
3. We intend to conduct numerous mailing of list catalogs,
flyers, newsletters and other product information throughout the year to
primarily book, magazine, journal, newsletter and software publishers and
resellers, seminar companies, professional associations, business supply
catalogers, consumer electronic, high technology and financial service
organizations.
4. The Company intends to develop and market a variety of
Internet related products and services, as well as a number of database software
technologies. These industries are characterized by rapid technological
development. The Company believes that its future success will depend in large
part on its ability to continue to enhance its proposed products and services
and to develop other products and services which complement existing ones. In
order to respond to rapidly changing competitive and technological conditions,
the Company expects to continue to incur significant research and development
expenses during the initial development phase of new products and services as
well as on an ongoing basis.
The following discussion regarding the Company and its business and
operations contains "forward-looking statements" within the meaning of Private
Securities Litigation Reform Act 1995. Such statements consist of any statement
other than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof or other variations thereon or comparable
terminology. The reader is cautioned that all forward-looking statements are
necessarily speculative and there are certain risks and uncertainties that could
cause actual events or results to differ materially from those referred to in
such forward looking statements. The Company does not have a policy of updating
or revising forward-looking statements and thus it should not be assumed that
silence by management of the Company over time means that actual events are
bearing out as estimated in such forward looking statements.
The Company has no operating history upon which an evaluation of the
Company and its prospects can be based. The Company anticipates that advertising
revenues from the its Internet site and investment income from its equity
investments will constitute substantially all of the Company's revenues, if any,
during the foreseeable future. Since the Company anticipates that it will incur
negative cash flows from operations for the foreseeable future, the Company
believes that its success will depend upon its ability to obtain revenues from
advertising on its Internet site, which can not be assured. The Company's
ability to generate revenues is subject to substantial uncertainty. The
Company's prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by start-up companies in general, and
specifically with respect to the new and rapidly evolving market for Internet
products, content and services. To address these risks, the Company must, among
other things, effectively establish, develop and maintain relationships with
advertising customers, advertising agencies and other third parties, provide
original, useful technologies to Internet users, develop and upgrade its
technology, respond to competitive developments, attract new qualified personnel
and retain existing qualified personnel. There can be no assurance that the
Company will succeed in addressing such risks and the failure to do so would
have a material adverse effect on the Company's business, financial condition
and operating results. Additionally, the Company's lack of an operating history
makes prediction of future operating results difficult. Accordingly, there can
be no assurance that the Company will be able to generate revenues or that the
Company will achieve, or maintain profitability or generate revenues from
operations in the future. Since inception, the Company has incurred losses and,
as of March 31, 1999, had an accumulated deficit of $43,765.
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The Company's quarterly operating results may fluctuate significantly as a
result of a variety of factors, many of which are outside of the Company's
control. Factors that may adversely affect the Company's quarterly operating
results include the level of use of the Internet, demand for advertising,
seasonal trends in both Internet use and advertising placements, the addition
or loss of advertisers, advertising budgeting cycles of individual advertisers,
the level of use of the Company's Internet sites, the amount and timing of
capital expenditures and other costs relating to the development, operation and
expansion of the Company's Internet operations, the introduction of new sites
and services by the Company or its competitors, price competition or pricing
changes in the industry, technical difficulties or system failures, general
economic conditions and economic conditions specific to the Internet and
Internet media. In seeking to effectively implement its operating strategy, the
Company may elect from time to time to make certain advertising and marketing
or acquisition decisions that could have a material adverse effect on the
Company's business, financial condition and operating results. The Company
believes that period to period comparisons of its operating results are not
meaningful and should not be relied upon for an indication of future
performance. Due to all of the foregoing factors, it is likely that in some
future quarters, the Company's operating results may be below the expectations
of public market analysts and stockholders. In such event, the price of the
Company's Common Stock would likely be materially adversely affected.
Results of Operations
Revenues
From the date of inception through March 31, 1999, the Company did not generate
any cash revenues. As of March 31, 1999, the Company was not a party to any
advertising or other agreement or arrangement from which it could record
deferred revenues or reasonably expect to generate cash revenue. The sole
source of funds for the Company from the date of inception through March 31,
1999 has been through the sale of equity. The Company believes that its
subsidiary, Interplanner.com, will continue to develop and introduce its
products commercially, actively pursue increased advertising revenues, and look
to expand in to new market opportunities during the remainder of fiscal 1999.
Additionally, subsequent to March 31, 1999, the Company purchased an equity
interest in TheBigHub.com, Inc. and an interest in a privately held online
direct marketing Company. Therefor, as a result of both increased revenue from
existing companies, and incremental revenues from new acquisitions and
investments, the Company expects to report future revenue growth.
Costs of Revenues
Since inception and through March 31, 1999, the Company had not incurred any
cost of revenues, as the Company had not generated revenues during such period.
There can be no assurance that the Company will be able to generate sufficient
revenues, advertising or otherwise, to cover its costs of revenues. The failure
to generate sufficient revenues in order to cover its costs of revenues will
result in continued losses and will continue to have a material adverse effect
on the Company's business, financial condition and operating results.
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Operating Expenses
Organizational expenses incurred from inception to December 31, 1998 were
capitalized and recorded as organization costs. During the three months ended
March 31, 1999, these costs were expensed and included in the caption
"cumulative effect of change in accounting principle" on the Statements of
Operations.
Operating expenses totaling $31,916, for the three months ended March 31, 1999,
consist primarily of professional, consulting fees and other organization
costs. The Company expects operating expenses to significantly increase in
future periods as a result of, among other things, the additional costs of
being a public company.
Income Taxes
The Company has not recorded an income tax benefit because it has incurred net
operating losses since inception. As of December 31, 1998, and March 31, 1999,
the Company had insignificant Federal net operating loss carryforwards.
Liquidity and Capital Resources
At March 31, 1999, the Company's principal source of liquidity was $127,325 in
cash and cash equivalents derived from private sales of the Company's equity
securities. The Company has primarily financed its operations through the
private sale of equity securities. The Company has no material commitments for
capital expenditures. The Company anticipates a substantial increase in its
capital expenditures through the remainder of fiscal1999 consistent with its
anticipated growth. The Company currently believes that available funds, cash
flows expected to be generated from operations, if any, and the net proceeds of
private placements will be sufficient to fund its working capital and capital
expenditures requirements for the remainder of fiscal 1999. Thereafter, the
Company may need to raise additional funds. The Company's ability to grow will
depend in part on the Company's ability to expand and improve its Internet
operations, expand its advertising and marketing efforts, expand and improve
its Internet user support capabilities and develop new Internet content and
applications. In connection therewith, the Company may need to raise additional
capital in the foreseeable future from public or private equity or debt sources
in order to finance such possible growth.
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There can be no assurance that we will be successful in establishing meaningful
or profitable operations in any area. Although there is great opportunity in the
Internet, there is little barrier to entry by competitors.
Year 2000 Computer Problem
Since the Year 2000 Computer Problem was well known prior to our
incorporation, we have been able to plan our business strategies to minimize the
problem. We have been assured that the server hosting our Interplanner.com site
is Year 2000 compliant. We expect to utilize only equipment and services which
can assure us of Year 2000 compliance. Nevertheless, we may be affected by Year
2000 problems of service suppliers over which we have little control such as
electricity suppliers and telecommunications suppliers on which the Internet
depends.
Item 3. Description of Property
The Company leases 2,500 square feet of office space in Fort
Lauderdale, Florida under a lease which expires in August 2002. Monthly rental
payment is $2,000.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of June 1, 1999 with
respect to the beneficial ownership of our voting securities by (i) each person
known by the Company to own beneficial 5% or more of our voting securities (ii)
each director and officer of the Company and (iii) all directors and officers as
a group. The number of shares of Common Stock owned are those "beneficially
owned" as determined under the rules of the Securities and Exchange Commission,
Including any shares of Common Stock as to which a person has sole or shared
voting or investment power and any shares of Common Stock which the person has
the right to acquire within 60 days through the exercise of any option, warrant
or right.
<TABLE>
<CAPTION>
Common Stock
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Number of Percent of
Name and Address of Beneficial Owner Shares Owned Class Owned
- ------------------------------------ ------------ -----------
<S> <C> <C>
Thomas J. Taule 750,000 11%
c/o Techlabs, Inc.
3415 Galt Ocean Drive
Ft. Lauderdale, Florida 33308
Blue Sky Investment Group, Inc. 1,000,000 14.6%
3389 Sheridan Street
Hollywood, Florida 33021
</TABLE>
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<TABLE>
<CAPTION>
Number of Percent of
Name and Address of Beneficial Owner Shares Owned Class Owned
- ------------------------------------ ------------ -----------
<S> <C> <C>
Nomad Investment Group, Inc. 833,334 12.2%
3116 N. Federal Hwy.
Lighthouse Point, Florida 33064
Reveal Online Information, Inc. 833,333 12.2%
1003 S.E. 17th Street
Fort Lauderdale, Florida 33315
Strategic Holdings, Inc. 833,333 12.2%
16 Port Side Lane
Fort Lauderdale, Florida 33064
Mayjay Holdings, Inc. 750,000 11%
1570 Madruga Avenue
Suite 211
Coral Gables, FL 33146
Upside Investments, Inc. 750,000 11%
1570 Madruga Avenue
Suite 211
Coral Gables, FL 33146
Hollywood, Florida 33021
Yucatan Holdings Company 750,000 11%
3003 Keller Blvd. Rd
Knoxville, TN 37922
All Directors and Officers as a Group
(Two (2) persons) 750,000 11%
CLASS A SPECIAL PREFERRED STOCK
Thomas J. Taule 4,500,000 50%
c/o Techlabs, Inc.
3415 Galt Ocean Drive
Ft. Lauderdale, Florida 33308
Yucatan Holdings Company 4,500,000 50%
3003 Keller Blvd. Rd
Knoxville, TN 37922
</TABLE>
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Item 5. Directors and Executive Officers.
The following table sets forth the name, age and position of each
director and executive officer of the Company as of the date hereof.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Thomas J. Taule 29 Chairman, Secretary, Treasurer and Director
John J. Bennett 38 President and Director
</TABLE>
JOHN J. BENNETT
Mr. Bennett, President and Director of Techlabs since May 17, 1999, possesses an
extensive background in the Internet services industry, with a particular
emphasis on site design and development, operation and e-commerce. While serving
as CEO and President of TheBigHub.com (formerly iSleuth.com. Inc.) from August
1998 through May 1999, he successfully guided the transformation of that
company's "Internet Sleuth" search engine site (http://www.isleuth.com) from its
origins as a non-commercial web search site into that of a premier Internet
gateway portal site offering a variety of features and services. During the
course of his tenure, he directed the introduction of a wide range of new site
services, including shopping and e-commerce, free e-mail, and in-depth news,
weather, financial, business and investment information. Mr. Bennett also
developed and implemented a variety of innovative traffic building programs for
the isleuth.com site which resulted in an increase in the site's user base over
a nine month period from approximately 300,000 unique users to well over
1,200,000. Since May 1994, Mr. Bennett has also served as President of Direct
Digital Communications, an Internet-based marketing and Web site development
company that specializes in working with Web site owners and operators to build
traffic and revenues through the development of site sponsorships, advertising
programs and partnership arrangements.
THOMAS J. TAULE
Thomas J. Taule, Chairman, Secretary, Treasurer and Director of Techlabs, Inc.
since May 1998, was Executive Vice President of operations of TheBigHub.com
(formerly iSleuth.com. Inc.) from August 1998 to May 1999, where he directed the
successful transformation of the Company from it's origins as a physician
practice management business to that of an Internet site owner and operator. Mr.
Taule was chiefly responsible for development and adoption of the new business
plan which guided that transformation, as well as the acquisition of the
Internet Sleuth search engine and web site that formed the backbone of its
Internet operations. From February 1994 to August 1998 Mr. Taule served as
Chairman of the Board, President and CEO of Coordinated HealthCare, Inc., the
predecessor of thebighub.com/isleuth.com and was also a founder of the Company.
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Item 6. Executive Compensation
The Company has not paid any compensation to its current officers and
directors. The Company expects to pay reasonable compensation at such time as
the Company s business develops to such extent that it is able to do so. The
Company does not have any incentive or stock option plans and does not have any
employment agreements.
Item 7. Certain Relationships and Related Transactions
None.
Item 8. Description of Securities
COMMON STOCK
The Company's authorized capital consists of 50,000,000 shares of
Common Stock, par value $.001 per share. Holders of shares of Common Stock are
entitled to one vote per share at all meetings of stockholders. In the event of
liquidation, dissolution or winding up of the Company, holder of the Common
Stock will be entitled to receive on a pro rata basis 99% of assets of the
Company remaining after satisfaction of all liabilities and payment of any
preferred liquidation rights with liquidation preference.
PREFERRED STOCK
The Articles of Incorporation as amended, authorize the issuance of the
following Preferred Stock:
<TABLE>
<CAPTION>
<S> <C>
10,000,000 shares of Preferred Stock $.001 par value per share
25,000,000 shares of Special Preferred Stock $.001 par value per share
</TABLE>
12,500,000 shares of the Special Preferred Stock have been designated
Class A Special Preferred Stock. The shares of Special Preferred Stock which are
not Class A Special Preferred Stock may be issued, with a majority of
shareholder approval, with designations, powers, preferences and relative rights
determined by the Board of Directors.
VOTING RIGHTS
Preferred Stock - Each share of Preferred Stock is entitled to one vote
per share.
Special Preferred Stock - The voting rights of the Special Preferred
Stock is to be determined at the time of issuance.
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Class A Special Preferred Stock - Three votes per share. Votes as a
single class with the Common Stock and Preferred Stock.
LIQUIDATION RIGHTS
Preferred Stock - Has the right to receive 1% of the assets of the
corporation available to the shareholders upon liquidation with the holders of
the common stock receiving the other 99%.
Special Preferred Stock - Liquidation rights to be determined upon
issuance. May have priority over liquidation payments to common stock and other
series of preferred stock.
Class A Special Preferred Stock - does not share in proceeds upon
liquidation.
REDEMPTION
Preferred Stock - At the option of the company, may be redeemed for one
share of common stock.
Special Preferred Stock - Redemption to be determined at time of
issuance.
Class A Special Preferred Stock - Manner of redemption, redemption
price and terms and conditions to be determined by the Board of Directors.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters
Our Common Stock has been trading on the over-the-counter market
since January 4, 1999. The following sets forth the range of high and low bid
quotations for the periods indicated as reported by National Quotation Bureau,
Inc. Such quotations reflect prices between dealers without retail mark-up,
markdown or commission and may not represent actual transactions and is quoted
on the OTC Bulletin Board under the symbol TKLB.
<TABLE>
<CAPTION>
High Bid Low Bid
-------- -------
<S> <C> <C>
January 5, 1999 through March 31, 1999 $ 1.50 $ .50
April 1, 1999 thorough June 30, 1999 $16.00 $1.50
</TABLE>
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HOLDERS OF RECORD
As of May 15, 1999, there were approximately 38 holders of record of
the Company's Common Stock.
The Company has never paid a cash dividend on its Common Stock nor does
the Company anticipate paying cash dividends on its Common Stock in the near
future. It is the present policy of the Company not to pay cash dividends on the
Common Stock but to retain earnings, if any, to fund growth and expansion. Any
payment of cash dividends of the Common Stock in the future will be dependent
upon the Company's financial condition, results of operations, current and
anticipated cash requirements, plan for expansion, as well as other factors the
Board of Directors deems relevant.
Item 2. Legal Proceedings
As of the date hereof, the Company is not a party to any material
pending legal proceeding and is not aware of any threatened legal proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Item 4. Recent Sales of Unregistered Securities
The following provides information concerning all sales of securities
within the last three (3) years which were not registered under the Securities
and Exchange Act of 1933:
1. In May 1998, the Company issued 1,000,000 shares of its Common Stick
to its founders for par value of $.001 per share pursuant to an exemption from
registration under Section 4(2) of the Securities and Exchange Act of 1933.
2. In August 1998, the Company completed a private placement of its
Common Stock to 32 investors pursuant to Rule 504 of Regulation D. as
promulgated by the Securities and Exchange Commission under the Securities Act.
The Company issued 100,000 shares of its Common Stock at $.25 per share.
3. In March 1999, the Company completed a private placement of its
Common Stock to 4 investors pursuant to Rule 504 of Regulation D as promulgated
by the Securities and Exchange Commission under the Securities Act. The Company
issued 1,500,000 shares of its Common Stock at $.10 per share and an option to
acquire 3,500,000 shares of Common Stock for $.10 per share. These options were
exercised in April 1999 and the Company issued 3,500,000 shares of Common Stock
for $.10 per share to 6 investors.
-13-
<PAGE> 15
4. In March 1999, 1,000,000 shares of Common Stock issued to founders
in May 1998 were converted into 9,000,000 shares of Class A Special Preferred
Stock pursuant to an exemption from registration under Section 3(a)(9) of the
Securities and Exchange Act of 1933.
5. In April 1999, the Company completed a Private Placement of 230,000
shares of Common Stock to 3 investors for $230,000 pursuant to Rule 504 of
Regulation D for $1.00 per share.
Item 5. Indemnification of Directors and Officers
The Company's Certificate of Incorporation, as amended, provides that
the Company must, to the fullest extent permitted by the General Corporation Law
of the States of Florida, indemnify all persons whom it has the power to
indemnify from and against all expenses, liabilities or other matters. The
Company's By-laws further provide that the Company must indemnify its directors,
officers, employees and agents to the fullest extent permitted by the Florida
Law and provides for the advancement of expenses incurred by such person in
advance of final disposition of any civil or criminal action, suit or
proceeding, subject to repayment if it is ultimately determined that he or she
was not entitled to indemnification. The indemnification and advancement of
expenses provided in the By-laws are expressly deemed to not be exclusive of any
other rights to which a person seeking indemnification or advancement of
expenses may otherwise be entitled.
PART F/S
The following financial statements of Techlabs, Inc. are included in this Part
F/S.
For the period May 26, 1998 (inception) through December 31, 1998:
Report of Independent Auditors.
Balance Sheet as of December 31, 1998.
Statements of Operations for the period from May 26, 1998 (inception)
to December 31, 1998.
Statements of Shareholders' Equity for the period from May 26, 1998
(inception) to December 31, 1998.
Statements of Cash Flows for the period from May 26, 1998 (inception)
to December 31, 1998.
Notes to Financial Statements.
For the quarter ended March 31, 1999 (unaudited):
-14-
<PAGE> 16
- --------------------------------------------------------------------------------
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
March 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C> <C>
FINANCIAL STATEMENTS:
2
Balance Sheet 3
Statements of Operations 4
Statements of Changes in Stockholders' Equity 5
</TABLE>
-15-
<PAGE> 17
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 127,325
Other receivable 10,000
---------
TOTAL ASSETS $ 137,325
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,500
---------
TOTAL LIABILITIES $ 1,500
STOCKHOLDERS' EQUITY
Common stock ($.001 par value, 50,000,000 shares
authorized, 3,100,000 shares issued and outstanding) 3,100
Additional paid-in capital 167,400
Preferred stock - special class A ($.001 par value,
12,500,000 shares authorized, 9,000,000 shares issued and outstanding) 9,000
Deficit accumulated during the development stage (43,765)
---------
TOTAL STOCKHOLDERS' EQUITY 135,735
---------
$ 137,235
=========
</TABLE>
-16-
<PAGE> 18
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1999 and
For the Period from May 26, 1998 (Inception)
Through March 31, 1999
(Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Three From
Months Inception to
Ended March 31,
March 31, 1999 1999
-------------- ------------
<S> <C> <C>
REVENUE $ -0- $ -0-
OPERATING EXPENSES
Office (275) (275)
Consulting fees (5,010) (5,010)
Organization expenses (25,131) (25,131)
Professional (1,500) (1,500)
-------------- ------------
Loss from operations (31,916) (31,916)
OTHER EXPENSES
Cumulative effect of change in accounting principle (11,849) (11,849)
-------------- ------------
Net Loss $ (43,765) $ (43,765)
============== ============
</TABLE>
-17-
<PAGE> 19
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Three Months Ended March 31, 1999 and
For the Period from May 26, 1998 (Inception)
Through March 31, 1999
(Unaudited)
===============================================================================
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL
---------------------- ----------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL
--------- ------ ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, May 26, 1998 -0- $ -0- -0- $ -0- $ -0- $ -0- $ -0-
Initial capitalization of the Company 1,000,000 1,000 1,000
December, 1998, issuance of
common stock under private
placement offering 100,000 100 24,900 25,000
--------- ------ ---------- -------- -------- -------- --------
Balance, December 31, 1998 -0- -0- 1,100,000 1,100 24,900 -0- 26,000
February, 1999, issuance of common
stock under private placement
offering, net of offering costs of
$15,000 1,500,000 1,500 148,500 150,000
February, 1999, conversion of common
stock into preferred 9,000,000 9,000 (1,000,000) (1,000) (8,000) -0-
March, 1999, sale of shares at par 1,500,000 1,500 1,500
Consideration for the issuance of
option agreement 2,000 2,000
Net loss (43,765) (43,765)
--------- ------ ---------- -------- -------- -------- --------
Balance, March 31, 1999 9,000,000 $9,000 3,100,000 $ 3,100 $167,400 $(43,765) $135,735
========= ====== ========== ======== ======== ======== ========
</TABLE>
-18-
<PAGE> 20
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 1998
===============================================================================
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
FINANCIAL STATEMENTS:
Report of Independent Auditors 2
Balance Sheet 3
Statement of Operations 4
Statement of Changes in Stockholders' Equity 5
Statement of Cash Flows 6
Notes to Financial Statements 7
</TABLE>
-19-
<PAGE> 21
REEL & SWAFFORD, PLLC
Certified Public Accountants
<TABLE>
<CAPTION>
<S> <C> <C>
Office Address Mailing Address
2611 Emoriland Blvd. American Institute of Certified Public Accountants P. O. Box 27599
Knoxville, Tennessee 37917 SEC Practice Section-AICPA Knoxville, TN 37917-7599
(423) 637-7196 Telephone Tennessee Society of Certified Public Accountants (423) 637-6437 Facsimile
</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Techlabs, Inc.
We have audited the accompanying balance sheet of Techlabs, Inc. (a
Development Stage Company, formerly Coordinated Physician Services, Inc.)
as of December 31, 1998, and the related statements of operations, changes
in stockholders' equity and cash flows for the period from May, 26, 1998
(inception) through 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 the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Techlabs, Inc. as of
December 31, 1998 and the results of its operations and its cash flows for
the period from May, 26, 1998 (inception) through December 31, 1998 in
conformity with generally accepted accounting principles.
REEL & SWAFFORD, PLLC
Certified Public Accountants
Knoxville, Tennessee
March 17, 1999
-20-
<PAGE> 22
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31, 1998
===============================================================================
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS
Cash $15,000
INTANGIBLE ASSETS
Organization Costs 11,849
-------
TOTAL ASSETS $26,849
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 849
-------
TOTAL LIABILITIES 849
STOCKHOLDERS' EQUITY
Common stock ($.001 par value, 50,000,000 shares
authorized, 1,100,000 shares issued and outstanding) 1,100
Additional paid-in capital 24,900
-------
TOTAL STOCKHOLDERS' EQUITY 26,000
-------
$26,849
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
-21-
<PAGE> 23
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
REVENUE $ -0-
EXPENSES -0-
----------
Net Income $ -0-
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-22-
<PAGE> 24
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings Total
------ -------- --------- -------
<S> <C> <C> <C> <C>
Balance, May 26, 1998 $ -0- $ -0- $ -0- $ -0-
Initial capitalization of the Company 1,000 1,000
Sale of 100,000 shares of common
stock under Rule 504 offering 100 24,900 25,000
------ -------- --------- -------
Balance, December 31, 1998 $1,100 $ 24,900 $ -0- $26,000
====== ======== ========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
-23-
<PAGE> 25
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C>
Net income (loss) $ -0-
Adjustments to reconcile net income to net
cash provided by operating activities:
Increase in accounts payable 849
--------
Net Cash Provided by Operating Activities 849
INVESTING ACTIVITIES
Organization costs incurred (11,849)
--------
Net Cash Used in Investing Activities (11,849)
FINANCING ACTIVITIES
Sale of common stock 26,000
--------
Net Cash Provided by Financing Activities 26,000
--------
Change in Cash and Cash Equivalents 15,000
Cash and cash equivalents, May 26, 1998 -0-
--------
Cash and cash equivalents, December 31, 1998 $ 15,000
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-24-
<PAGE> 26
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
BUSINESS Techlabs Inc. (a Development Stage Company, formerly Coordinated
Physician Services, Inc.) was organized under the laws of the State of Florida
on May 26, 1998. In February, 1999, the Company changed its name to Techlabs,
Inc. (See Note 5). With the name change, the Company's plans have been
redirected towards exploring opportunities for the development and operation of
companies focused on the Internet. The Company intends to accomplish its goals
predominantly though strategic venture investments. The Company's plans include
investment in Internet companies either directly or through venture capital
funding arrangements. To a lesser extent, the Company will also effect
strategies aimed at the internal development and operation of majority owned
subsidiaries. Because of its lack of operating history, the Company is
considered in the development stage and the accompanying financial statements
represent that of a development stage enterprise.
ORGANIZATION COSTS The Company capitalizes costs associated with its start-up
and with its organization. These costs are to be amortized over a ten year
period beginning with the inception of operations. See Note 3.
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
INCOME TAXES Deferred income taxes are provided for temporary differences in
reporting income for financial statement and tax purposes. Because no revenue or
expense has been recorded in the Company's accounts, no provision for income
taxes has been made.
CASH AND CASH EQUIVALENTS For purposes of the statements of cash flows, the
Company considers all highly liquid investments with initial maturities of three
months or less which are readily convertible to cash without significant loss or
penalty to be cash equivalents.
NOTE 2 - STATEMENT OF CASH FLOWS SUPPLEMENTAL DISCLOSURE
During the period ended December 31, 1998, the Company paid no interest or
income taxes.
NOTE 3 - IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS
Statement of Position 98-5, Reporting on the Costs of Start-Up Activities ("SOP
98-5"), issued by the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants, is effective for the Company in 1999.
SOP 98-5 will require the Company to expense costs associated with
-25-
<PAGE> 27
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
NOTE 3 - IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
start-up activities as incurred beginning with 1999. Adoption of SOP 98-5 will
also require the Company to report the effects of applying SOP -98-5 as a
cumulative effect of a change in accounting principles in its 1999 financial
statements.
NOTE 4 - STOCKHOLDERS' EQUITY
On August 10, 1998, the Company amended its Articles of Incorporation to provide
for an additional class of stock and to increase the authorized shares of its
common stock. The amendment increased the Company's common stock from 100,000 to
50,000,000 shares authorized and provided authorization for 20,000,000 shares of
$.001 par value preferred voting stock.
Concurrent with the amendment, the Company effected a ten for one stock split,
restating par value of the outstanding common shares from $.01 to $.001. All
amounts presented give effect for the split.
The preferred stock's participation rights as a class in any dividends or
liquidation proceeds are limited to one percent. Each share of preferred stock
receives one vote in stockholder voting matters. At the option of the Company,
the preferred stock may be redeemed in the Company's common shares at an
exchange rate of one share of common stock for each share of preferred stock.
All of the shares of the Company's common stock issued are "Restricted
Securities" as defined under the Securities Act of 1933 (the 1933 Act). These
shares may not be sold or transferred unless they are covered under an effective
registration, or there is an available exemption for such registration
requirement. Current law provides that unregistered shares may be sold pursuant
to Rule 144, which imposes certain limitations on quantity, requires a minimum
of one year of ownership, and imposes conditions upon the manner of sale.
NOTE 5 - SUBSEQUENT EVENTS
On February 24, 1999, the Company amended its Articles of Incorporation to
reduce authorization of the Company's $.001 par value preferred voting stock
from 20,000,000 to 10,000,000 shares and provided authorization for 25,000,000
shares of $.001 par value special preferred stock. Of these 25,000,000
authorized shares, 12,500,000 were designated as Class A special preferred
stock.
The special preferred stock is to receive no preference in dividend
distributions or in the event of liquidation. Each share of special preferred
stock shall receive one vote in stockholder voting matters. Dividend and
redemption features are determinable at the discretion of the board of
directors.
-26-
<PAGE> 28
===============================================================================
TECHLABS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Period from May 26, 1998 (Inception)
Through December 31, 1998
===============================================================================
NOTE 5 - SUBSEQUENT EVENTS (CONTINUED)
Also on February 24, 1999, the Company amended its charter to effect a change in
the Company's name from Coordinated Physician Services, Inc. to Techlabs, Inc.
Subsequent to the balance sheet date, the Company has offered, pursuant to
exceptions permitted under Regulation D of the 1933 Act, 1,500,000 shares of
common stock at $.10 per share, on a "best efforts" basis, by its officers and
directors.
-27-
<PAGE> 29
Balance Sheet as of March 31, 1999.
Statements of Operations for the three months ended March 31, 1999 and
from inception (May 26, 1999) through March 31, 1999.
Statements of Changes in Stockholder's Equity for the period from May
26, 1998 (inception) through March 31, 1999.
PART III
Item 1. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2(a) Articles of Incorporation of the Registrant
2(b) Articles of Amendment to Articles of
Incorporation (Composite)
2(c) By-Laws of the Registrant
6(a) Agreement for shares of iSleuth.Com, Inc.
22 Subsidiaries
27 Financial Data Schedule (for SEC use only)
</TABLE>
SIGNATURES
In accordance with Section 12 of the Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized this 30th day of July, 1999.
TECHLABS, INC.
By: /s/Thomas J. Taule
--------------------------------------
Thomas J. Taule,
Chairman
-28-
