<PAGE>
As filed with the Securities and Exchange Commission on May 25, 1999
REGISTRATION No. 333-75717
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 To
Form SB-2
Registration Statement Under the Securities Act of 1933
ENERGY LIBERTY UNLIMITED, INC.
(Name of small business issuer in its charter)
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Florida 8712 59-3544104
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization Classification Code Number) Identification No.)
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Charles E. Harder, Chairman
P.O. Box U
White Springs, Florida 32096
904-303-2200
(Address and telephone of principal
executive offices and principal place of business)
Lawrence A. Lempert
1601 West Sligh Ave.
Tampa, Fl. 33604
813-935-2162 FAX 813-932-4221
(Name, address and telephone of agent for service)
Approximate Date of Proposed Sales to the Public: As soon as
practicable
after the Registration Statement becomes effective.
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CALCULATION OF REGISTRATION FEE
=================================================================================================
Amount Proposed Proposed
Title of Each Class of To be Maximum Maximum Amount of
Securities to be Registered Registered Offering Price Aggregate Registration Fee (1)
Per Unit Offering Price
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Common Stock, no par value. 3,000,000 $ 17.00 $ 51,000,000 $ 14,178.00
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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 the registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PRELIMINARY 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.
<PAGE>
Prospectus (Subject To Completion) Dated May 25, 1999
[LOGO APPEARS HERE]
3,000,000 SHARES OF COMMON STOCK
This is our initial public offering of common stock. The initial offering
price per share is $17 and no public market currently exists for the shares of
common stock. The Company is a development stage company with no operating
history and no revenues through March 31, 1999.
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PRICING TABLE PRICE SALES PROCEEDS TO
TO PUBLIC (1) COMMISSION (2) COMPANY(3)
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PER SHARE ............................................... $ 17.00 $ 1.70 $ 15.30
MINIMUM PURCHASE 100 SHARES.............................. $ 1700.00 $ 170.00 $ 1530.00
TOTAL MAXIMUM ........................................... $51,000,000 $ 5,100,000 $ 45,900,000
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1. The offering price was determined in the Company's discretion.
2. The Company's officers and directors are selling the shares without
compensation. However, this column reflects the fact that the Company may engage
one or more licensed broker dealers as selling agents for agreed upon
commissions not to exceed ten percent (10%), who may allot a portion thereof to
other licensed broker dealers assisting in the sales. The Company and broker
dealers will mutually indemnify and defend each other for claims attributable to
the indemnifying party. Persons selling or assisting in sales may be deemed to
be underwriters under securities laws. No broker dealers or other terms of
selling have been determined.
3. Before deducting offering expenses payable by the Company estimated to total
$255,000 in the case of the Maximum Offering (.5% of gross proceeds). (See "Use
of Proceeds", herein.) The proceeds from the sale of shares will be transmitted
by noon of the business day following receipt, to the Company's bank account.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY, NOR HAVE THEY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
These securities are being sold on a best efforts, no minimum amount basis.
The offering will expire six months after the effective date of the registration
statement for the securities, if not updated by amendment or terminated sooner.
A current prospectus will be available so long as the offering is continued. The
shares are offered subject to prior sale, and the Company reserves the right to
reject subscriptions in whole or in part, or to accept them in any order. The
Company will send by U.S. mail to subscribers within thirty (30) days, signed
copies of their Subscription Agreement and Common Stock certificates. The
Company intends to qualify the securities in every state of the U.S. in which
sales are solicited or made.
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TABLE OF CONTENTS
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SUMMARY............................................................... 3
RISK FACTORS.......................................................... 5
DILUTION.............................................................. 7
PLAN OF DISTRIBUTION.................................................. 8
USE OF PROCEEDS....................................................... 9
PLAN OF OPERATION..................................................... 10
DESCRIPTION OF BUSINESS............................................... 10
MANAGEMENT............................................................ 12
REMUNERATION OF MANAGEMENT............................................ 14
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS ........ 14
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ............ 15
SECURITIES DESCRIPTION................................................ 15
TRANSFER AGENT........................................................ 15
LEGAL MATTERS......................................................... 15
FINANCIAL STATEMENTS.................................................. F-1
SUBSCRIPTION AGREEMENT................................................ A-1
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IMPORTANT INFORMATION
INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS
SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" HEREIN FOR CERTAIN SUBSTANTIAL RISKS
TO INVESTORS. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY.
THIS OFFERING IS INTENDED TO BE QUALIFIED (AS PROVIDED IN PUBLIC LAW 104-
290) FOR OFFERING IN ALL STATES OF THE UNITED STATES IN WHICH SALES ARE
SOLICITED OR MADE
<PAGE>
PROSPECTUS SUMMARY
ENERGY LIBERTY UNLIMITED, INC.
We are a new company formed to offer single family residential plans and
related equipment whereby our customers can construct and equip a home which
operates without dependence on commercially available utilities including
electricity and water. The Company is a development stage company with no
operating history and no revenues through March 31, 1999. While the company
does not yet have offices, the address is P.O. Box U, White Springs, Fl. 32096
and our telephone number is 904-303-2200. Our world-wide web address is
energyliberty.com. Information contained in our web site is not part of this
prospectus.
Energy Independent Residential Designs
Limited operations have begun in White Springs, Florida where the Company has
use of a test and demonstration site for its residential designs and equipment
products. In May,1999, sales commenced of an information package consisting of a
book and video. The package includes both home design and power system equipment
information whereby the customer may (1) order plans and build a residence which
functions independently of all public and private utilities, or (2) use the
information to modify an existing residence. The Company's information package
serves to consolidate a diverse body of knowledge regarding the basic function
and expected cost of the essential elements of alternative power systems. The
customer is thereby enabled to efficiently become informed regarding topics
otherwise requiring extensive and time consuming independent research.
Cost And Security Advantages
In our opinion, the home designs have significant economic, security and
reliability advantages over traditionally equipped and designed single family
residences. In addition to energy efficient residential designs, the ability to
operate the residence without connection to any electric, water, or other
utility provides a security and reliability advantage over traditional design
whereby the home is typically totally dependent upon the uninterrupted provision
by others of electricity, water and other utilities. The company has integrated
a number of existing technologies to create its product and make the residence
fully functional as well as more cost effective and secure.
The Company's People
Charles E. Harder: Board Chairman and CEO, is a founder of Energy Liberty
Unlimited, Inc. He started his career in radio broadcasting at age 14 and later
worked at commercial radio stations in Chicago, Tampa, and New York. He worked
on-air for NBC Talknet and founded the Sun Radio Network and Peoples Radio
Network. Mr. Harder also has a background in franchising, retailing and
distribution as a result of his relationship with Freedom Satellite Systems of
Tampa, Florida which had owned or franchised 16 retail stores in the mid 1980's.
Mr. Harder has also hosted a national TV show and currently produces and hosts a
daily radio talk show which is on-the-air via satellite weekdays via the Talk
America Radio Network (TA). Mr. Harder also spent much of his time in the study
of alternative and solar energy starting with the time period during which
President Carter began an initiative for the development and implementation of
alternative energy. Mr. Harder founded the non-profit Peoples Network Inc. (PNI)
in 1987 and is currently with PNI.
Mark V. Warner: President and a Director, is a founder of Energy Liberty
Unlimited, Inc. From 1996 to 1998, Mr. Warner was Controller for the United
Broadcasting Network, and prior thereto was a financial consultant to small and
medium sized businesses. From 1984 to 1989 he was Vice President, Finance for
Mnemonics, Inc. a computer systems government contractor. Mr. Warner was a
Branch Chief with the National Aeronautics & Space Administration (NASA) at the
Kennedy Space Center from 1980 to 1984. From 1977 to 1980 he was Vice President,
Finance for the Rovac Corporation, a publicly held research and development
company. From 1967 to 1968, Mr. Warner was a financial analyst with the
Securities & Exchange Commission (SEC). On military leave from the SEC, Mr.
Warner served from 1968 to 1970 with the U.S. Army Finance Corps as a data
processing instructor, and returned to the SEC as a senior financial analyst
from 1970 through 1977. Mr. Warner received his B.S. in Business Administration
from the University of Florida, Gainesville, Florida and his MBA in Finance and
Investments from the George Washington University, Washington, D.C.
<PAGE>
Daniel Donaldson: Director, is a founder of Energy Liberty Unlimited, Inc.,
and is responsible for the construction and testing of the Company's solar
energy test facility. He served in the U.S. Army Corps of Engineers, and for the
last 25 years has worked in all phases of the construction industry from
residential to commercial. For 4 1/2 years he was the building construction
manager at the Telford Hotel in White Springs, Fl. of which two years were also
devoted to hosting the Helpful Handyman radio talk show. In 1988 Mr. Donaldson
established The Creative Carpenter interior trim and cabinet business and is
currently taking classes to acquire his state certified builders contractors
license.
Dianne A. Mayfield-Harder: Director, is a founder of Energy Liberty Unlimited,
Inc., Board member and Treasurer of the Company. Mrs. Mayfield-Harder was
educated in accounting and worked for years for the Tampa Sports Authority which
operates the Tampa Stadium in Florida. Mrs. Mayfield-Harder had several duties
including the accounting for three municipally owned golf courses. In 1987 she
became comptroller for Sun Radio Network. In 1989 she was financial manager for
Peoples Network, Inc. (PNI), which grew from a garage in Cedar Key, Florida to
operating the historic three story 40 room Telford hotel which housed the PNI
broadcast center in White Springs, Florida. Her duties included oversight of a
4.9 million dollar yearly budget and approximately 100 employees. Dianne
Mayfield-Harder is the wife of Charles Harder and they have been married for 16
years.
Douglas O. Perreault: Director, is a founder of Energy Liberty Unlimited, Inc.
In April 1997, Mr. Perreault began serving as the chief executive officer and
the chief financial officer of American Community Oriented Radio Network, Inc.,
a wholly-owned subsidiary of Peoples Network, Inc. From April 1995 to April
1997, Mr. Perreault served as chief financial officer of TRADEex Electronic
Commerce Systems, Inc., a multi-national provider of commerce management
solutions software. From November 1987 to April of 1995, Mr. Perreault was
employed in the public practice of accounting. Mr. Perreault has been a
certified public accountant since October 1984 and has been a member of both the
American Institute of CPA's and the Florida Institute of CPA's for over ten
years. Mr. Perreault received his B.S. in Accounting from the State University
of New York, College of Arts and Science, Plattsburgh, and is currently
following the MBA program at the University of South Florida.
Noel Jacoby is a Board member and a Professor of Economics at Lake City
Community College, Lake City, Florida. He has taught for twenty five years and
also has had many other positions in the private sector in real estate,
insurance, production, publication and purchasing.
Darlene Stewart is a Board member and has completed college graphics and art
courses and has been in charge of start-up of several departments at PNI
including a national newspaper and hotel and dining operations. Subsequently she
worked for other firms including Super-Cuts haircutting system and located and
opened retail hair salons for Super-Cuts. Her skills are in graphics and
presentation of products and services for retailing and presentation to the
public. Darlene Stewart is the daughter of Dianne Mayfield-Harder.
Summary of the offering
With the proceeds from this offering, the Company will obtain for resale at
competitive prices the related alternative power equipment manufactured by
others as well as promote its sale of information packages relating to
residential plans and alternative energy equipment. Proceeds after offering
expenses will be used as follows:
. $35,000,000 equipment inventory
. $ 3,000,000 fulfillment expansion
. $ 2,545,000 administration
. $ 2,000,000 sales promotion
. $ 1,900,000 salaries
. $ 1,200,000 engineering
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RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND
SHOULD BE REGARDED AS SPECULATIVE. AS A RESULT, THE PURCHASE OF SHARES SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN AFFORD A LOSS OF THEIR ENTIRE INVESTMENT. IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING:
Because we have a limited history, we may not be able to successfully manage our
business or achieve profitability.
The Company is newly organized, and is dependent upon the proceeds of this
offering to market its residential plans and the equipment which plan purchasers
may order. Sale of the Company's information package describing its residential
plans started in May,1999 but sales may not be sufficient to generate the funds
necessary for the Company's continued operations. Accordingly, an investment in
the Company's shares is highly speculative and is only a suitable investment for
an investor who recognizes the high risks involved, has no need for liquidity in
the investment, and who can afford a total loss of the investment. There cannot
be any guarantee that the Company will be profitable or that additional capital
will not be required.
Our success depends on our ability to retain key personnel.
The Company is dependent on the services of the Company's principal Officers
and Directors. In the Company's development stage, the loss of this management
would have a materially adverse impact on the Company. The Company does not
currently maintain any key-person life insurance policy, but is investigating
acquiring this type of insurance.
Management will continue to control after the offering.
Upon completion of this offering, the officers and directors of the Company
will own, in the aggregate, 62.5% of the outstanding shares of the Company's
common stock, assuming the maximum shares (3,000,000) are sold. As a result, the
Company's management will continue to be able to elect a majority of the
directors and thus control the management and affairs of the Company.
Significant competition for the Company.
The residential industry and the alternative energy industry are highly
competitive, and the Company will be competing with numerous other companies,
both privately and publicly owned, which have substantially more resources and
experience available to them than the Company. This includes regional and local
developers, equipment suppliers, and existing energy independent living
suppliers.
Offering price arbitrary
The initial price at which the shares are offered hereby has been arbitrarily
set by the Company's management on a non-arm's length basis, and has no
relationship to the book value per share, current earnings of the Company,
(there having been none), or other generally accepted measurement of value.
Investors in this Offering will incur immediate and substantial dilution in net
tangible book value of their shares. See "Dilution".
No public market for the shares.
Prior to this Offering, there has been no public market for the shares
offered, and none is anticipated to develop in the near future. In the event a
regular public trading market does not develop, or is not sustained, any
investment in the Company's Common Stock would be highly illiquid. Accordingly,
an investor in the shares may not be able to sell the shares readily, if at all.
Consequently, if as a result of some change in circumstances arising from an
event not now contemplated, an investor wishes to transfer the shares owned, the
investor may find he or she has only a limited or no ability to transfer or
market the shares. The Company intends to apply for inclusion of its shares in
the NASDAQ quotation system, assuming eligibility results from this Offering.
<PAGE>
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in the
creation of a viable market in the Company's securities for the benefit of its
shareholders. Also, the Company may employ one or more finders to assist with
introductions to appropriate market makers, for which such finders would be paid
finders fees commensurate with current market practices. No such finders have
been identified, nor have any proposed terms of their engagement been
determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934, broker-dealers
acting as market makers are required to have certain current information about
the Company before they can make a market and thereafter as they continue making
a market in its common stock. If needed in addition to periodic reports filed
with the Securities and Exchange Commission, the Company will furnish
periodically to broker-dealers the information specified in Rule 15c2-11 in
order to enhance such firms' ability to make a market in the Company's stock.
There can be no assurance that market makers will be located to deal in the
Company's securities.
Substantial dilution for purchasers.
Purchasers of the shares offered hereby will suffer an immediate and
substantial dilution of their investment. Specifically, in the case of the
maximum offering, dilution will be up to $11.30 per share, or up to 66%, (or
more if less than all shares are sold). (See "Dilution" herein, where the
dilution is illustrated by a table).
Additional financing may be needed.
The Company cannot guarantee that sufficient funding will be available from
this offering to fund all its development and operational needs. In the event
the Company requires additional financing, the Company may seek such financing
through bank borrowing, debt, or other equity financing, or otherwise. There can
be no assurance that such financing will be available to the Company on
acceptable terms, if at all. The Company does not presently have a credit line
available with any lending institution. Any additional equity financing may
involve the sale of additional shares of the Company's Common Stock on terms
that have not yet been established. These terms may (or may not) be more
favorable than those contained herein. Any future sales of securities may (or
may not) result in dilution to the investors herein.
Trading activity (if any) may be reduced if "penny stock" rules apply.
Broker-dealer practices in connection with transactions in "penny stocks"
(also referred to as "designated securities") are regulated by certain penny
stock rules adopted by the Securities and Exchange Commission. Penny stocks
generally are equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The broker-
dealer also must provide the customer with current bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in
the transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to
the transaction. These requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. If the Company's common stock becomes subject
to the penny stock rules, investors in this offering may find it more difficult
to sell their shares.
Future sales of restricted stock may adversely affect market.
The 5,000,000 shares of Common Stock issued by the Company prior to this
Offering were sold in private transactions in reliance on an exemption from
registration under the Act. Accordingly, all of such securities are "restricted
securities" within the meaning of Rule 144 and cannot be resold without
registration, or except in reliance on Rule 144 or another applicable exemption
from registration.
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In general, under Rule 144 as currently in effect, a person (or persons whose
shares are required to be aggregated), including any affiliate of the Company,
who beneficially owns "restricted shares" for a period of one to two years is
entitled to sell within any three-month period, shares equal in number to the
greater of (i)1% (30,000) of the then outstanding shares of Common Stock after
this offering if the maximum shares are sold under this offering or (ii) the
average weekly trading volume of the same class of shares during the four
calendar weeks preceding the filing of the required notice of sale with the
Securities and Exchange Commission. The seller also must comply with the Form
144 notice and manner of sale requirements of Rule 144, and there must be
current public information available about the Company. In addition, any person
(or persons whose shares are aggregated) who is not, at the time of the sale,
nor during the preceding three months, an affiliate of the Company, and who has
beneficially owned restricted shares for at least two years, can sell such
shares under Rule 144 without regard to notice, manner of sale, public
information or the volume limitations described above.
Future sales of shares of Common Stock (or securities convertible into Common
Stock) by the Company or as stated above could adversely affect the prevailing
market price, if any, of the Company's Common Stock.
Possibility of no dividends.
The Company intends to pay dividends if and when the Company's operations
become profitable. However, there can be no assurance that dividends will ever
be paid on the Common Stock. No dividends on the Company's Common Stock have
been declared or paid by the Company to date.
DILUTION
As of March 31,1999, the aggregate net tangible book value (deficit) of the
Company's Common Stock was $(39,812.49) (See "Financial Statements"). The net
tangible book value (deficit) per share as of March 31, 1999 was $(0.01). Net
tangible book value per share is calculated by dividing the tangible net worth
of the Company (total tangible assets less total liabilities) by the number of
shares of Common Stock outstanding.
Giving effect to the sale by the Company of 3,000,000 shares of Common stock
offered hereby (at the offering price of $17.00 per share and after deducting
offering expenses), the pro forma net tangible book value of the Company as of
March 31, 1999, would have been $45,605,188 or $5.70 per share. This represents
an immediate increase in the net tangible book value of $5.71 to existing
stockholders and an immediate dilution of $11.30 per share to the persons
purchasing the shares offered hereby at the initial public offering price ("New
Investors").
THE FOLLOWING TABLE ILLUSTRATES THE PER SHARE DILUTION TO THE NEW INVESTORS:
MAXIMUM SUBSCRIPTIONS
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Initial offering price per share. $ 17.00
Net tangible book value (deficit) before offering. $ (39,812.00)
Net tangible book value (deficit) per share before the offering. $ (0.01)
Increase in net tangible book value per share attributable to
the cash payment by new investors. $ 5.71
Pro forma net tangible book value per share after offering $ 5.70
Dilution per share to New Investors. $ 11.30
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The following tables summarize on a pro forma basis as of March 31, 1999, the
number of shares of Common Stock purchased from the Company and the total
consideration paid by existing stockholders and by new investors in the offering
being made hereby (based on, in the case of new investors, an offering price of
$17.00 per share).
OUTSTANDING SHARES OF TOTAL AUTHORIZED 100,000,000
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At Maximum Subscription Shares Purchased Total Net Consideration
Number Percent Amount Percent
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Officers, & Directors: 5,000,000. 62.5% $ 500. 0%
New Investors: 3,000,000. 37.5% $45,900,000. 100%
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TOTAL: 8,000,000. 100% $45,900,500. 100%
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PLAN OF DISTRIBUTION
The shares are being offered at the offering price set forth on the Cover
Page of this Prospectus. An investor must purchase a minimum of 100 shares. The
shares are being sold on a best efforts basis, subject to no minimum offering
proceeds, up to a maximum of 3,000,000 shares. The offering expires six months
after the Registration Statement becomes effective, unless terminated sooner or
extended by the Company. A current prospectus will be available so long as the
offering is continued, which shall be at the Company's discretion.
The shares are being offered by the Company through its officers and
directors who will not receive compensation therefor.
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in the
creation of a viable market in the Company's securities for the benefit of its
shareholders. In this regard, the Company may employ one or more finders to
assist with introductions to appropriate market makers, for which such finders
would be paid finders fees commensurate with current market practices. No such
finders have been identified, nor have any proposed terms of their engagement
been determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934, broker-dealers
acting as market makers are required to have certain current information about
the Company before they can make a market and thereafter as they continue making
a market in its common stock. The Company will furnish periodically to broker-
dealers the information specified in Rule 15c2-11 if not contained in reports
filed with the Securities and Exchange Commission in order to enhance such
firms' ability to make a market in the Company's stock.
The price at which the shares are offered hereby has been arbitrarily set by
the Company's management, and has no relationship to the book value per share,
current earnings of the Company, or other generally accepted measurement of
value. No securities are to be offered for the account of any existing
shareholder.
The purchase price paid by investors must be wired or mailed directly to the
Company by check, or money order, payable only to: "ENERGY LIBERTY UNLIMITED,
INC." as stated in the enclosed Subscription Agreement. The proceeds from the
sale of the shares will be transmitted to the Company bank account by noon of
the business day following receipt. The shares are offered subject to prior sale
and the Company reserves the right to reject any offer in whole or in part, or
to accept subscriptions in any order, for any or no reason. The Company will
send by U.S. mail to subscribers within thirty (30) days, signed copies of the
Subscription Agreement and Common Stock certificates.
<PAGE>
USE OF PROCEEDS
The Company will use the maximum proceeds primarily for distribution of
alternative energy related equipment and commercialization of its products. The
following table illustrates the use of maximum proceeds.
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Maximum
Category Subscriptions Percentage Footnote
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Gross Offering Proceeds $51,000,000 100.0% (1)
Sales commission (Offering) 5,100,000 10.0% (2)
Offering Expenses 255,000 0.5% (3)
Equipment Inventory 35,000,000 68.6% (4)
Expansion of fulfillment capacity 3,000,000 5.9% (5)
Management Salaries 1,900,000 3.7% (6)
Sales and Promotion 2,000,000 3.9% (7)
Engineering 1,200,000 2.4% (8)
Administration 2,545,000 5.0% (9)
Total $51,000,000 100.0% (10)
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Footnotes
(1) Same as Prospectus Cover Page Pricing table footnote (1).
(2) Same as Prospectus Cover Page Pricing table footnote (2).
(3) Other offering expenses; totaling approximately $255,000. For filing,
accounting and legal fees, printing, travel, postage, delivery, miscellaneous,
lodging, phone, promotion, blue sky, Internet promotional development. See item
#25 in part-II for details.
(4) Equipment inventory requirements.
(5) Increase fulfillment capability
(6) Executive and senior management salary (three years).
(7) Advertising, sales promotions, trade shows, and related activities.
(8) System design, help desk support, and new feature development.
(9) Middle management and clerical support, including finance, accounting and
employee benefits.
(10) To the extent revenues may cover certain of the expenses shown, then such
amounts will be utilized to increase marketing and order fulfillment capability.
If less than the maximum proceeds were to be received, the Company would
expend the proceeds in approximately the same ratio as for the maximum proceeds.
In such event, the Company could seek more funding. Pending the actual use of
proceeds for the stated purposes, the Company intends to invest the funds in
U.S. Government issued securities, such as U.S. Treasury Bills.
<PAGE>
PLAN OF OPERATION
For the next twelve months, the Company plans to promote the sale of its
information package primarily by means of radio advertising. Other promotion
methods may be used including print, television, and internet. However, it is
management's opinion that the audience for Talk America Radio Network and
Peoples Network programming is responsive to the information provided by the
Company regarding energy independent residences. The Company expects that some
of the purchasers of its information package will subsequently purchase house
plans while others will use the information to modify their existing residences.
In both instances, the Company plans to make available the equipment and
components typically necessary regardless of whether used for new construction
or existing homes. The main use of the proceeds of this offering is to enable
the Company to obtain the equipment and components for resale to such customers.
If the maximum offering is achieved, it is not expected that further funding
will be required in the next twelve months unless unforeseen opportunities
arise. If the maximum offering is not achieved, the Company's ability to
deliver will be restricted. In the next twelve months, management expects to
(1) continue research and testing of alternative energy equipment with the
intent of offering the equipment for resale to both new and existing customers,
(2) if necessary, invest in increased order fulfillment capacity, and (3)
increase the number of employees commensurate with growth in the operations of
the Company.
DESCRIPTION OF BUSINESS
COMPANY HISTORY
The Company was incorporated in Florida on December 17, 1998. Sales of the
Company's soft cover book and video package commenced in May,1999. The $49.95
information package describes the Company's designs for energy self-sufficient
residences and describes the equipment necessary for achieving such self
sufficiency. Previously, the Company's founders constructed a facility with
which to test the performance of a variety of items of equipment and components
made by others, integrate the equipment operation, and achieve residential
designs incorporating the equipment as well as achieve minimum cost for
components.
DEMAND FOR ENERGY SELF-SUFFICIENT AFFORDABLE RESIDENCES
In the opinion of management, a substantial market exists for relatively
affordable single family residences which provide for the energy self sufficient
operation of such residences. While market data is not readily available at
reasonable cost or otherwise, it is management's experience that there exists a
significant demand for home plans and integrated utility systems which insulate
the owner from expected substantial increases in energy costs and potentially
questionable energy availability. The market includes a substantial number of
"baby boomers" for whom affordable retirement is becoming a significant concern
particularly given the decline in savings rates for many families and
individuals. In addition, affordable housing is an important concern for those
affected by the significant downsizing trends experienced by numerous categories
of workers in the labor market. The trends in utility costs and particularly
those resulting in increases in electricity costs are expected to contribute
significantly toward increased demand for residences which operate independently
of the established power distribution system.
PRODUCT
The Company has designed and developed plans for energy self-sufficient
residences and has tested the equipment made by others which is necessary for
achieving such self sufficiency. In May,1999,sales commenced of a soft cover
book and video which include home design and equipment information whereby the
customer may build a residence which functions independently of all public and
private utilities. The Company's information package serves to consolidate a
diverse body of knowledge regarding the basic function and expected cost of the
essential elements of alternative power systems. The equipment includes solar
panels, inverters, and batteries as well as propane powered electric generators,
wind powered generators, and elevated gravity fed water storage, as examples.
The customer is thereby enabled to efficiently become informed regarding topics
otherwise requiring extensive and
<PAGE>
time consuming independent research. The customer may then order engineered
house plans currently available for $299.95 per set. In the opinion of
management, the Company's home designs have significant economic, security and
reliability advantages over traditionally equipped and designed single family
residences. In addition to energy efficient residential designs, the ability to
operate the residence without connection to any electric, water, or other
utility provides a security and reliability advantage over traditional design
whereby the home is typically totally dependent upon the uninterrupted provision
by others of electricity, water and other utilities. In addition to the
Company's residential plans and related equipment information, the Company plans
to obtain for resale at competitive prices the related equipment manufactured by
others which is needed by the Company's customers for energy independence but
which may not be available locally to such customers. In light of the number of
suppliers of the variety of equipment and components, the Company is not
dependent on one or a small number of suppliers.
COMPETITION
There exists extensive indirect competition for the Company inasmuch as a
number of companies manufacture the variety of alternative energy equipment and
components incorporated into the Company's product. However, the Company is not
aware of any direct competitors who integrate the systems into a complete
package of information whereby the customer avoids the extensive research
required to independently obtain the information necessary to build an energy
independent residence. The Company intends to compete by offering a unique
product to an existing market of individuals and their families reached by means
of an established radio network. The Company is the only source we are aware of
which provides ready to build solar and energy efficient house plans for
$299.95.
MARKETING
The Company's marketing efforts include utilization of the established
advertising capabilities of the American Community Oriented Radio Network and
it's distribution of the Chuck Harder radio program both directly and by means
of over one hundred radio stations utilizing Talk America Radio Networks. Mr.
Harder broadcasts consumer advocacy programming and over a number of years has
established a significant listening audience. Advertising time is employed at
competitive rates to reach a sizeable and well established audience which, in
the opinion of management, is an audience particularly interested in both a cost
effective and a secure residential environment for themselves and their
families.
In addition to radio, the Company plans to expand its internet web site to
provide information and methodologies whereby alternative energy equipment,
components and supplies may be efficiently purchased from the Company. In light
of the expected nature and sources of the Company's customers, it is not
expected that the Company will be dependent on one or a few major customers.
DISTRIBUTION
The Company is utilizing the established fulfillment services of American
Community Oriented Radio Network (ACORN) to process orders for the Company's
products. Services include providing toll-free in-bound telephone service for
the United States and Canada, order processing including telephone, mail and
fax, phone center representatives to answer questions, credit card processing,
warehousing, shipment by USPS, UPS and FedEx, and sales tax collection and
remittance. In exchange for such services, ACORN receives 40% of the retail
price of the Company's information package which in the opinion of management is
comparable to services otherwise available. It is expected that the initial sale
of alternative energy equipment and components will also utilize the services of
ACORN. However, in light of (1) the variety of types of equipment, (2) the
numerous manufacturers, and (3) the fact that in some instances the equipment
may be shipped directly from the manufacturer to the customer, ACORN services
and compensation for equipment fulfillment services will be negotiated on a
case-by-case basis.
INTELLECTUAL PROPERTY
Energy Liberty Unlimited, Inc. has integrated existing technologies of
residential construction and alternative energy technology to create the design
of the residential plans offered to the Company's customers. The Company owns
all intellectual property created, and all business and technical solutions
developed are being treated as proprietary trade secrets. The Company does not
hold any patents or own any licenses. Trademark applications are pending.
<PAGE>
REGULATORY AFFAIRS
The Company's products are subject to regulatory review for safety,
performance and other requirements applicable to the manufacturer of the
individual equipment item. Regarding environmental laws, the Company does not
anticipate significant compliance costs or effects on the Company's operations.
However, to the extent that Company sales promote the use of solar power
equipment, which is an integral part of the energy independent design, the
environmental effect could be beneficial to the extent that such use diminishes
any adverse effects of fossil fuel consumption.
EMPLOYEES
The Company has one employee and has one of the founders working on an
independent contractor basis.
DESCRIPTION OF PROPERTY
The Company's property consists of office equipment.
MANAGEMENT
BACKGROUND OF MANAGEMENT
DIRECTORS
At the present time, the Company's Board of Directors consists of seven
members:
CHARLES E. (CHUCK) HARDER, age 55, is a founder and Chairman of Energy Liberty
Unlimited. He started his career in radio broadcasting at age 14 and later
worked at commercial radio stations in Chicago, Tampa, and New York. He worked
on-air for NBC Talknet and founded the Sun Radio Network and Peoples Radio
Network. Mr. Harder also has a background in franchising, retailing and
distribution as a result of his relationship with Freedom Satellite Systems of
Tampa, Florida which had owned or franchised 16 retail stores in the mid 1980's.
Mr. Harder has also hosted a national TV show and currently produces and hosts a
daily radio talk show which is on-the-air via satellite weekdays via the Talk
America Radio Network. Mr. Harder also spent much of his time in the study of
alternative and solar energy starting with the time period during which
President Carter began an initiative for the development and implementation of
alternative energy. Mr. Harder founded the non-profit Peoples Network in 1987
and is currently with PNI.
MARK V. WARNER, age 54, is a founder and President of Energy Liberty Unlimited.
From 1996 to 1998, Mr. Warner was Controller for the United Broadcasting
Network, and prior thereto was a financial consultant to small and medium sized
businesses. From 1984 to 1989 he was Vice President, Finance for Mnemonics, Inc.
a computer systems government contractor. Mr. Warner was a Branch Chief with the
National Aeronautics & Space Administration (NASA) at the Kennedy Space Center
from 1980 to 1984. From 1977 to 1980 he was Vice President, Finance for the
Rovac Corporation, a publicly held research and development company. From 1967
to 1968, Mr. Warner was a financial analyst with the Securities & Exchange
Commission (SEC). On military leave from the SEC, Mr. Warner served from 1968 to
1970 with the U.S. Army Finance Corps as a data processing instructor, and
returned to the SEC as a senior financial analyst from 1970 through 1977. Mr.
Warner received his B.S. in Business Administration from the University of
Florida, Gainesville, Florida and his MBA in Finance and Investments from the
George Washington University, Washington, D.C.
DOUGLAS 0. PERREAULT, CPA, age 36, is a founder and Director of Energy Liberty
Unlimited. In April 1997, Mr. Perreault began serving as the chief executive
officer and the chief financial officer of American Community Oriented Radio
Network, Inc., a wholly-owned subsidiary of Peoples Network, Inc. From April
1995 to April 1997, Mr. Perreault served as chief financial officer of TRADEex
Electronic Commerce Systems, Inc., a multi-national provider of commerce
management solutions software. From November 1987 to April of 1995, Mr.
Perreault was employed in the public practice of accounting. Mr. Perreault has
been a certified public accountant since October 1984 and has been a member of
both the American Institute of CPA's and the Florida Institute of CPA's for over
<PAGE>
ten years. Mr. Perreault received his B.S. in Accounting from the State
University of New York, College of Arts and Science, Plattsburgh, and is
currently following the MBA program at the University of South Florida.
DIANNE MAYFIELD-HARDER, age 54, is a founder, Board member and Treasurer of the
Company. Mrs. Mayfield-Harder was educated in accounting and worked for years
for the Tampa Sports Authority which operates the Tampa Stadium in Florida. Mrs.
Mayfield-Harder had several duties including the accounting for three
municipally owned golf courses. In 1987 she became comptroller for Sun Radio
Network. In 1989 she was financial manager for Peoples Network, Inc. (PNI),
which grew from a garage in Cedar Key, Florida to operating the historic three
story 40 room Telford hotel which housed the PNI broadcast center in White
Springs, Florida. Her duties included oversight of a 4.9 million dollar yearly
budget and approximately 100 employees. Dianne Mayfield-Harder is the wife of
Charles Harder and they have been married for 16 years.
DANIEL DONALDSON, age 44, is a founder and Director of Energy Liberty Unlimited
Inc. and is responsible for the construction and testing of the Company's solar
energy test facility. He served in the U.S. Army Corps of Engineers, and for the
last 25 years has worked in all phases of the construction industry from
residential to commercial. For 4 1/2 years he was the building construction
manager at the Telford Hotel in White Springs, Fl. of which two years were also
devoted to hosting the Helpful Handyman radio talk show. In 1988 Mr. Donaldson
established The Creative Carpenter interior trim and cabinet business and is
currently taking classes to acquire his state certified builders contractors
license.
DARLENE STEWART, age 36, is a Board member and has completed college graphics
and art courses and has been in charge of start-up of several departments at PNI
including a national newspaper and hotel and dining operations. Subsequently she
worked for other firms including Super-Cuts haircutting system and located and
opened retail hair salons for Super-Cuts. Her skills are in graphics and
presentation of products and services for retailing and presentation to the
public. Darlene Stewart is the daughter of Dianne Mayfield-Harder.
NOEL JACOBY, age 57, is a Board member and a Professor of Economics at Lake City
Community College, Lake City, Florida. He has taught for twenty five years and
also has had many other positions in the private sector in real estate,
insurance, production, publication and purchasing.
PERSONS NOMINATED OR CHOSEN TO BECOME DIRECTORS
At the present time, no other person, other than those listed above, has
been chosen or nominated to become a Director of the Company.
EXECUTIVE OFFICERS AND PERSONS CHOSEN TO BECOME EXECUTIVE OFFICERS
At present, the Company's Executive Officers consist of its Directors,
mentioned above, Charles E. Harder as Chairman, Mark V. Warner, President, and
Dianne Mayfield-Harder, Secretary and Treasurer. It is anticipated that
additional officers will be added.
CERTAIN LEGAL PROCEEDINGS
The Company is not aware of any legal proceedings within the last five years
against any Director, Officer, Significant Employee, or candidate for any such
position involving a petition under the Bankruptcy Act or any State insolvency
law or of any receiver, fiscal agent or similar officer appointed by a court for
the business or property of such person or any partnership in which he was
general partner or within two (2) years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two (2) years before the time of such filing; nor is the Company aware of
any of the above-mentioned persons being convicted in a criminal proceeding.
<PAGE>
REMUNERATION OF MANAGEMENT
The Company's current policy is that Directors serve without compensation.
However; in the future, it may be in the Company's best interests to compensate
Directors in a manner that will attract the most qualified people to serve on
the Company's Board. To date the officers of the Company have served without
compensation. The Company's management will determine when it is in the best
interest of the Company to compensate officers.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 31,1999 with respect to each
director and officer and any person who is known to the Company to be the
beneficial owner of five percent (5%) or more of the Company's outstanding
Common Stock. Also set forth in the table is the beneficial ownership of all
shares held by all directors and officers, individually and as a group.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
NAME AND ADDRESS SHARES OWNED PERCENT PERCENT AFTER
OF OWNER BEFORE OFFERING(a) MAXIMUM OFFERING.
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles E. Harder 1,000,000 20.0% 12.5%
Director, Chairman
P.O. Box U
White Springs, Fl 32096
Dianne Mayfield-Harder 1,000,000 20.0% 12.5%
Director, Secretary, Treasurer
P.O. Box U
White Springs, Fl 32096
Mark V. Warner 1,000,000 20.0% 12.5%
Director, President
P.O. Box U
White Springs, Fl 32096
Douglas Perreault 1,000,000 20.0% 12.5%
Director
P.O. Box U
White Springs, Fl 32096
Dan Donaldson 1,000,000 20.0% 12.5%
Director
P.O. Box U
White Springs, Fl 32096
- ----------------------------------------------------------------------------------
Subtotal 5,000,000 100.0% 62.5%
New Shareholders 3,000,000 -- 37.5%
From Offering
- ----------------------------------------------------------------------------------
TOTAL 8,000,000 100.0% 100.0%
</TABLE>
(a) Within the knowledge of the issuer, no other person holds or shares the
power to vote or direct the voting of securities described. No other person
holds shares or the power to vote 5% or more of the issuer's voting securities.
The Company may utilize treasury shares as incentive or compensation for the
product and service marketing efforts of the Company's employees, when
appropriate.
<PAGE>
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
All transactions during the previous two years and any presently proposed
transaction to which the issuer is a party in which any person having a
relationship with the issuer has a direct or indirect material interest are the
following transactions, and no others: the Company's fulfillment services are
being provided by American Community Oriented Radio Network, Inc. which is a
wholly owned subsidiary of Peoples Network, Inc. Peoples Network, Inc. is a not-
for-profit organization founded by Charles Harder, Chairman of the Company. In
the opinion of management, the services provided by American Community Oriented
Radio Network, Inc. are comparable to those provided by others in the
fulfillment services industry.
SECURITIES DESCRIPTION
The Company is offering only Common Stock in this Offering.
COMMON STOCK
The Company is authorized to issue up to One Hundred Million (100,000,000)
shares of Common Stock with no par value. 5,000,000 shares have been issued to
five persons as of the date of this Prospectus. Each holder of Common Stock is
entitled to one vote for each share held of record on each matter to be voted on
by stockholders, except as otherwise may be provided by law.
Subject to any preferences which may be granted to the holders of Preferred
Stock (if ever authorized by the shareholders) which the Company could choose to
issue in the future, each holder of Common Stock is entitled to receive ratably
such dividends as may be declared by the Board of Directors from funds legally
available. Upon liquidation or dissolution of the Company, the holders of Common
Stock are entitled to share ratability in all the assets after payment of all
creditors, subject to the rights of any Preferred Stock then outstanding. The
Common Stock does not have cumulative voting rights or preemptive purchase
rights.
The shares hereby offered, when paid for, will be fully paid and non-
assessable.
PREFERRED STOCK
The Company is not currently authorized to issue Preferred Stock. The
Company currently has no plans to issue shares of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The Company currently acts as its own Transfer Agent and Registrar for its
Common Stock
LEGAL MATTERS
Lawrence A. Lempert has provided a legal opinion as to certain matters
relating to the issuance of the shares pursuant to applicable securities laws.
This Prospectus has been prepared by the Company's management and its advisers.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
March 31, 1999
Report of Independent Certified Public Accountants F-2
Financial statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Energy Liberty Unlimited, Inc.
White Springs, Florida
We have audited the accompanying balance sheet of Energy Liberty Unlimited, Inc.
(a development-stage company) as of March 31, 1999 and the related statements of
operations, stockholders' (deficit) and cash flows for the period from December
17, 1998 (date of inception) through March 31, 1999. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Energy Liberty Unlimited, Inc.
(a development-stage company) as of March 31, 1999; and the results of its
operations, changes in its stockholders' (deficit) and its cash flows for the
period from December 17, 1998 (date of inception) through March 31, 1999; in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has a net capital deficiency as of March 31,
1999 and has no ongoing revenue producing business operations. These factors
raise substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 1. The
financial statements do not include any adjustments that may result from the
outcome of this uncertainty.
Schumacher and Associates, Inc.
Certified Public Accountants
12,835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
May 6, 1999
F-2
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
BALANCE SHEET
March 31, 1999
ASSETS
Current Assets
Cash $ 231
Other 500
--------
Total Current Assets 731
Computer equipment net of accumulated
depreciation of $129 1,418
Deferred offering costs 12,500
Other 250
--------
TOTAL ASSETS $ 14,899
========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses $ 7,865
Due to related party 33,846
--------
Total Current Liabilities 41,711
--------
TOTAL LIABILITES 41,711
--------
Commitments and contingencies (Notes 1,2, and 4) -
Stockholders' (Deficit):
Common stock, no par value,
100,000,000 shares authorized
7,000,000 shares issued and 5,000,000 shares outstanding 500
(Deficit) accumulated during development-stage (27,312)
--------
TOTAL STOCKHOLDERS' (DEFICIT) (26,812)
--------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ 14,899
========
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF OPERATIONS
From December 17, 1998 (date of inception) through March 31, 1999
Revenue $ -
----------
Expenses
Depreciation 129
Contract services 16,066
Salaries and payroll taxes 7,792
Other 3,325
----------
27,312
----------
Net (Loss) $ (27,312)
==========
Per Share $ ( .01)
==========
Weighted Average Shares Outstanding 5,000.000
==========
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
From December 17, 1998 (date of inception) through March 31, 1999
<TABLE>
<CAPTION>
Common Stock Common Stock Accumulated Total
-----
No./Shares Amount (Deficit)
---------- ------ ---------
<S> <C> <C> <C> <C>
Balance at
December 17, 1998 - $ - $ - $ -
Common stock issued
for cash, at
$.0001 per share 5,000,000 500 - 500
Net loss for the
period ended
March 31, 1999 - - (27,312) 27,312)
---------- ------ --------- --------
Balance 5,000,000 $ 500 $(27,312) (26,812)
========== ====== ========= ========
</TABLE>
F-5
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CASH FLOW
Cash flows from Operating Activities:
Net (loss) $(27,312)
Depreciation 129
Increase in accounts payable and
other accrued expenses 7,865
Net Cash (Used In) Operating Activities (750)
--------
(20,068)
--------
Cash Flows from Investing Activities:
Acquisition of computer equipment (1,547)
--------
Net Cash (used in) Investing Activities (1,547)
--------
Cash Flows from Financing Activities:
Common stock issued 500
Advances from related parties 33,846
Deferred offering costs incurred (12,500)
--------
Net Cash Provided by Financing Activities 21,846
--------
Increase in Cash 231
Cash, Beginning of Period -
--------
Cash, End of Period $ 231
========
Interest Paid $ -
========
Income Taxes Paid $ -
========
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
Summary of Accounting Policies
- ------------------------------
A summary of the significant accounting policies consistently applied in
the preparation of the accompanying financial statements follows:
Organization and Description of Business
----------------------------------------
Energy Liberty Unlimited, Inc. (Company) was incorporated under the
laws of Florida on December 17, 1998.
The Company was formed for the purpose of marketing a book, video and
construction plans for single family residences, incorporating a
design and equipment which allows the facility to function without
connection to the electrical power grid or utility.
The Company is considered to be a development-stage company since
principal planned operation has not yet commenced.
The Company has selected March 31 as its fiscal year end.
Per Share Information
---------------------
Per share, information is based upon the weighted average number of
shares outstanding during the period.
Use of Estimates in Preparation of Financial the Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
Going Concern
-------------
As of March 31, 1999, the Company has a net capital deficiency and has
no ongoing revenue producing business operation. These factors raise
substantial doubt about its ability to continue as a going concern.
If the Company does not establish revenue producing business
operations or obtain additional financing, the Company may be unable
to continue as a going concern. The financial statements do not
include any adjustments that may result from the outcome of this
uncertainty. Management as disclosed below, is attempting to raise
additional capital through a public stock offering.
Deferred Offering Costs
-----------------------
Costs related to the proposed public offering of stock, described
below, are being capitalized. If the offering is successful, the
costs will be charged against the proceeds of the offering. If the
offering is not successful, the costs will be charged to operations.
F-7
<PAGE>
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
Summary of Accounting Policies
- ------------------------------
Treasury Stock
--------------
The Company has issued 2,000,000 shares of its stock to itself for no
consideration. The Company's Board of Directors may issue these
shares to employees or independent contractors at their discretion for
future services that may be provided to the Company. The shares are
accounted for as treasury stock and are not considered to be
outstanding at March 31, 1999.
Computer Equipment
------------------
Computer equipment is carried at cost. Depreciation is provided on a
straight-line basis over the three year estimated useful life of the
equipment.
Related Party Transactions
- --------------------------
As of March 31, 1999, the Company had $33,846 payable to a related party
for advances received. The balance bears interest at 1% over the prime
rate, is uncollateralized, and is due in January 2000.
The Company uses office facilities provided by a stockholder at no cost to
the Company. No expense related to this use of an office has been provided
in the financial statements since it was determined to be immaterial.
Income Taxes
- ------------
As of March 31, 1999, the Company has approximately 27,000 of net operating
loss carryovers expiring in year 2018; available to offset future taxable
income, if any. As of March 31, 1999, the Company had deferred tax assets
of approximately $5,400 related to the net operating loss carryovers. A
valuation allowance has been provided for the total amount since the
amounts, if any, of future revenues necessary to be able to utilize the
carryovers are uncertain.
Proposed Public Offering
- ------------------------
The Company is proposing to offer 3,000,000 shares of its common stock to
the public at $17.00 per share.
F-8
<PAGE>
SUBSCRIPTION AGREEMENT
INVESTOR SUBSCRIPTION AGREEMENT FOR ENERGY LIBERTY UNLIMITED, INC.
Persons interested in purchasing shares of the Common Stock of Energy Liberty
Unlimited, Inc. must return this completed Subscription Agreement along with
their wire transfer, check or money order for their total payment, payable only
to: ENERGY LIBERTY UNLIMITED, INC., P.O. Box U, White Springs, Florida 32096. If
and when accepted by Energy Liberty Unlimited, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is $1,700
(100 shares). An accepted copy of this Agreement will be returned to you as your
receipt, and a stock certificate will be issued to you shortly thereafter.
Method of Payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "ENERGY LIBERTY UNLIMITED, INC.".
I hereby irrevocably tender this Subscription Agreement for the purchase of
_________ shares at seventeen dollars ($17.00) per share. With this subscription
Agreement, I tender payment in the amount of $__________ ($17.00 per share) for
the shares subscribed.
In connection with this investment in the Company, I represent and warrant as
follows:
(a) Prior to tendering payment for the shares, I received the Company's final
Prospectus dated ( ).
(b) I am a bona fide resident of the state of ________________________.
Please issue the shares which I am purchasing as follows:
1. INDIVIDUAL(S)--if more than one owner, please issue as follows:
- - --- Tenants-in-Common (all parties must sign--each investor has an undivided
interest)
- - --- Joint Tenants with Right of Survivorship (all parties must sign joint
ownership)
- - --- Minor with adult custodian under the Uniform Gift to Minors Act in your
state (the minor will have sole beneficial ownership)
- - ------------------------------- ---------------------------------
INVESTOR NO. 1 (PRINT NAME ABOVE) INVESTOR NO. 2 (PRINT NAME ABOVE)
Street (residence address) Street (residence address)
- --------------------------------- ---------------------------------
- --------------------------------- ---------------------------------
City State Zip City State Zip
- --------------------------------- ---------------------------------
Home Tele. Business Tele. Home Tele. Business Tele.
- --------------------------------- ---------------------------------
FAX e-mail FAX e-mail
- --------------------------------- ---------------------------------
Social Security Number Social Security Number
- --------------------------------- ---------------------------------
Signature Date Signature Date
ACCEPTED BY: ENERGY LIBERTY UNLIMITED, INC.
- -------------------------------------------
Name, Title Date.
A-1
<PAGE>
SUBSCRIPTION FORM FOR OTHER THAN INDIVIDUAL
Purchasers of shares of the Common Stock of Energy Liberty Unlimited, Inc. for
other than individuals must complete this form for the proper entity that will
hold title to the shares. Send this completed Subscription Agreement along with
the proper wire transfer, check or money order for the total payment, payable
only to: ENERGY LIBERTY UNLIMITED, INC., P.O. Box U, White Springs, Florida
32096. If and when accepted by Energy Liberty Unlimited, Inc., (the "Company"),
this Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is
seventeen hundred dollars ($1700.) (100 shares). An accepted copy of this
Agreement will be returned to you as your receipt, and a stock certificate will
be issued to you shortly thereafter.
Method of payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "Energy Liberty Unlimited, Inc".
Entity:
[ ] Corporation (authorized agent of corporation must sign)
[ ] Existing Partnership (at least one partner must sign)
[ ] Trust (all trustees must sign)
_____________________________________________________________
Name of Entity
_____________________________________________________________
Authorized Agent (print name above)
_____________________________________________________________
Title of Authorized Agent
_____________________________________________________________
Social Security or Federal Identification Number of Entity
_____________________________________________________________
Street (business address) or address of Registered Agent
_____________________________________________________________
City State Zip
_____________________________________________________________
Business Tele. or Home Tele. of Registered Agent of Entity
_____________________________________________________________
FAX e-mail
The undersigned acknowledges under the penalties of perjury that the foregoing
information is true, accurate, and complete.
_____________________________________________________________
Signature Date
_____________________________________________________________
For a Trust, all Trustees must sign. Add a line for each to the Right of form.
ACCEPTED BY: ENERGY LIBERTY UNLIMITED, INC.
_____________________________________________________________
Name, Title Date.
A-2
<PAGE>
- --------------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to provide any
information or make any representations about Energy Liberty except the
information or representations contained in this prospectus. You should not
rely on any additional information or representations if made.
This prospectus does not constitute an offer to sell, or a solicitation to buy
any securities:
- except the common stock offered by this prospectus;
- in any jurisdiction in which the offer or solicitation is not authorized;
- in any jurisdiction where the dealer or other salesperson is not
qualified to make the offer or solicitation;
- to any person to whom it is unlawful to make the offer or solicitation;
or
- to any person who is not a United States resident or who is outside the
jurisdiction of the United States.
The delivery of this prospectus or any accompanying sale does not imply
that:
- there have been no changes in the affairs of Energy Liberty after the
date of this prospectus; or
- the information contained in this prospectus is correct after the date
of this prospectus.
3,000,000 SHARES
[LOGO]
COMMON STOCK
----------
PROSPECTUS
----------
May 26, 1999
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Company's Articles of Incorporation and Bylaws contain provisions
indemnifying its directors and officers to the extent permitted by the Act.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act"), as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution
Filing Fee - SEC $ 14,178.00
Listing Fee -- Stock Exchange, If Qualified $ 5,000.00
Transfer Agent & Registrar's Fees $ 5,000.00
Accounting Fees $ 20,000.00
Legal Fees $ 25,000.00
Printing Expense $ 30,000.00
Indemnification Insurance Premium $ 10,000.00
Miscellaneous $ 15,000.00
Travel $ 20,000.00
Postage & Delivery $ 10,000.00
Lodging $ 10,000.00
Telephone $ 10,000.00
Internet Development $ 28,000.00
State Blue Sky Preparation and Filing Fees $ 30,000.00
Promotion and Advertising $ 22,822.00
Total $255,000.00
Item 26. Recent Sales of Unregistered Securities
In the past three (3) years the Company's sales of securities not registered
under the Securities Act of 1933 were as follows:
(b) Underwriter Non-Public Transferees. No underwriters. Five officers and
directors.
(c) Cash Offering Price, Commission.
$ .0001 per share to officers and directors, no commission paid, cash sales
(5,000,000 shares).
(d) Directors/Officers Purchases (persons, cash)
<TABLE>
<CAPTION>
DATE SHARES $/SH TOTAL
<S> <C> <C> <C>
3/15/99 5,000,000 $.0001 $500.00
TOTAL 5,000,000 $.0001 $500.00
</TABLE>
II-1
<PAGE>
Item 27. Exhibits
+3i. Articles of Incorporation
+3ii. Bylaws
+4. Common Stock voting rights per Articles of Incorporation Page 1,
incorporated by reference from Exhibit 3i
+5. Opinion of Lawrence A. Lempert as to the legality and non-accessibility of
the securities being distributed
23a. Consent of Schumacher & Associates, Inc.
+23b. Consent of Lawrence A. Lempert (filed as part of Exhibit 5)
+ Previously Filed
Item 28. Undertakings
(A) To the extent the registrant is registering securities under Rule 415 under
the Securities Act of 1933, the registrant will:
(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement; and notwithstanding the forgoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(B) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act"), as amended, may be permitted to Directors, Officers
and controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that
claims for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a Director, Officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such Director, Officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE>
Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned in the Town of White
Springs, State of Florida on May 25, 1999.
ENERGY LIBERTY UNLIMITED, INC.
/s/ Charles E. Harder
---------------------------
BY: Charles E. Harder
Chairman
Pursuant to the Securities Act of 1933, this Registration Statement was signed
by the following persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Signature Title Date
- --------------------------------------------------------------------------------
<S> <C> <C>
/s/ Charles E. Harder Director, Chairman. May 25, 1999.
- --------------------------------
Charles E. Harder
/s/ Mark V. Warner Director, President May 25, 1999.
- --------------------------------
Mark V. Warner
/s/ Douglas O. Perreault Director May 25, 1999.
- --------------------------------
Douglas O. Perreault
/s/ Dianne A. Mayfield-Harder Director, Treasurer May 25, 1999.
- --------------------------------
Dianne A. Mayfield-Harder
/s/ Daniel Donaldson Director May 25, 1999.
- --------------------------------
Daniel Donaldson
/s/ Darlene Stewart Director May 25, 1999.
- --------------------------------
Darlene Stewart
/s/ Noel Jacoby Director May 25, 1999.
- --------------------------------
Noel Jacoby
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
Exhibit Title of Exhibit
Number
3i. Articles of Incorporation.............................................. B/
3ii. By Laws, as amended.................................................... B/
23a. Consent of Schumacher & Associates, Inc................................ A/
5. Opinion and Consent of Lawrence A. Lempert as to the legality and
non-assessability of the securities being distributed....................... B/
Footnotes:
A/ Filed herewith
B/ Previously filed
II-4
<PAGE>
Exhibit 23a.
INDEPENDENT AUDITOR'S CONSENT
We hereby consent to the use of our reports dated May 6, 1999 accompanying the
financial statements of Energy Liberty Unlimited, Inc. as of March 31, 1999,
included in the Company's Registration Statement Form SB-2.
/s/
- -----------------------------
Schumacher & Associates, Inc.
May 10, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ENERGY
LIBERTY UNLIMITED, INC. MARCH 31, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> DEC-17-1998
<PERIOD-END> MAR-31-1998
<CASH> 231
<SECURITIES> 0
<RECEIVABLES> 500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 731
<PP&E> 14,297
<DEPRECIATION> 129
<TOTAL-ASSETS> 14,899
<CURRENT-LIABILITIES> 41,711
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> (27,312)
<TOTAL-LIABILITY-AND-EQUITY> 14,899
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 27,312
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (27,312)
<INCOME-TAX> 0
<INCOME-CONTINUING> (27,312)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,312)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
