UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SEURITIES OF
SMALL BUSINESS ISSUERS Under Section 12(b) or
(g) of the Securities Exchange Act of 1934
Emporia Systems
(Name of Small Business Issuer in its charter)
Nevada 88 0423785
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
38820 N. 25TH Avenue, Phoenix, AZ 85086
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(Address of principal executive offices) (zip code)
1-602-617-4456 (Phone) 1-480-905-8078 (FAX)
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Issuer's Telephone Number
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
to be registered each class is to be registered
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Securities to be registered under section 12(g)of the Act:
Common Stock, $.001 par value per share, 25,000,000 shares authorized,
9,360,000 issued and outstanding as of November 01, 2000.
Copies of Communications sent to:
Georgios Polyhronopoulos, President.
Emporia Systems
38820 N 25th Avenue
Phoenix Arizona 85027
Tel: (602) 617-4456 - Fax: (480) 905-8078
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FORWARD LOOKING STATEMENTS
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Emporia Systems, a developmental stage company ("Emporia," or the "Company" or
the "Registrant") cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward-looking statements that may be deemed to have been made in this
Document or that are otherwise made by or on behalf of the Company. For this
purpose, any statements contained in the Document that are not statements of
historical fact may be deemed to be forward-looking statements. This
Registration contains statements that constitute "forward-looking statements."
These forward-looking statements can be identified by the use of predictive,
future-tense or forward-looking terminology, such as "believes," "anticipates,"
"expects," "estimates," "plans," "may," "will," or similar terms. These
statements appear in a number of places in this Registration and include
statements regarding the intent, belief or current expectations of the Company,
its directors or its officers with respect to, among other things: (i) trends
affecting the Company's financial condition or results of operations for its
limited history; (ii) the Company's business and growth strategies; (iii) the
Internet and Internet commerce; and, (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors.
Factors that could adversely affect actual results and performance include,
among others, the Company's limited operating history, dependence on continued
growth in the use of the Internet, the Company's inexperience with the Internet,
potential fluctuations in quarterly operating results and expenses, security
risks of transmitting information over the Internet, government regulation,
technological change and competition.
The accompanying information contained in this Registration, including, without
limitation, the information set forth under the heading "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" identifies important additional factors that could
materially adversely affect actual results and performance. All of these
factors should be carefully considered and evaluated. All forward-looking
statements attributable to the Company are expressly qualified in their entirety
by the foregoing cautionary statement. Any forward- looking statements in this
report should be evaluated in light of these important risk factors. The
Company is also subject to other risks detailed herein or set forth from time to
time in the Company's filings with the Securities and Exchange Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Part I ....................................................... 4
Item 1. Description of Business................................ 4
Item 2. Management's Discussion and Analysis or Plan of
Operation............................................. 20
Item 3. Description of Property............................... 22
Item 4. Security Ownership of Management and Others
and Certain Security Holders......................... 23
Item 5. Directors, Executives, Officers and Significant
Employees............................................. 25
Item 6. Remuneration of Directors and Executive
Officers.............................................. 30
Item 7. Certain Relationships and Related Transactions........ 30
Part II ...................................................... 31
Item 1. Market Price of and Dividends of the Registrant's
Common Equity and Other Stockholder Matters........... 31
Item 2. Legal Proceedings..................................... 32
Item 3. Recent Sales of Unregistered Securities............... 32
Item 4. Description of Securities............................. 34
Item 5. Indemnification of Directors and Officers............. 35
Part F/S ...................................................... 36
Item 1. Financial Statements.................................. 36
Item 2. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure................... 36
Part III ...................................................... 37
Item 1. Index to Exhibits..................................... 37
Item 2. Description of Exhibits............................... 37
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the Financial Statements and
Notes related thereto appearing elsewhere in this Registration. Except where
the context otherwise requires, all references in this Registration to (a) the
"Registrant" or the "Company" or "Emporia" refer to Emporia Systems, a Nevada
corporation, (b) the "Web" refer to the World Wide Web and the "site" refers to
the Company's Web site.
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Part I
Item 1. Description of Business
A. Business Development, Organization and Acquisition Activities Emporia
Systems, is a developmental stage Company, who plans to market its products
through the Internet, hereinafter referred to as "Emporia Systems" or the "
Company" or the "Registrant", was organized by the filing of Articles of
Incorporation with the Secretary of State of the State of Nevada on March 02,
1999.Emporia Systems, a Nevada corporation, is a developmental stage company
with a principal business objective to become a world leading web hosting and
E-Commerce solutions company offering a wide range of services: web site and web
store hosting, web server co-location and domain name registration. and to
support these services through it's World Wide Web (www.emporiasystems.com).
The Company's web site is currently under development and the company hopes to
have it published in the near future The original Articles of the Company
authorized the issuance of twenty- five million (25,000,000) common shares.
There are twenty-five million (25,000,000) shares of Common Stock at par value
of $0.001 per share and no Preferred stock. The Registrant was incorporated on
March 02, 1999, in the state of Nevada under the name Emporia Systems In
connection with its formation, a total of two million (2,000,000) shares of its
common stock were purchased by the One founder of the Company, on March 05, 1999
for cash. Between March 22 and March 24, 1999, the Company sold one million
(1,000,000) shares of its common stock in connection with a public offering at a
price of $0.025 per share. On or about March 24, 1999, the Company completed a
non-public offering of shares of common stock of the Company pursuant to
Regulation "D," Rule 504 of the Securities Act of 1933, as amended, whereby it
sold one million (1,000,000) shares of the Common Stock of the Company for
twenty-five thousand ($25,000) dollars to approximately twenty-five (25)
unaffiliated shareholders of record. The Company filed an original Form D with
the Securities and Exchange Commission on or about March 24, 1999. On
May,20,2000 the company executed a 10% convertible not payable in the amount of
$50,000 . As of November 01,2000 , the Company has nine million shares
(9,000,000) shares of its $0.001 par value common voting stock issued and
outstanding which are held by approximately twenty-six (26) shareholders,
including the founding shareholder, of record. The Company is a newly formed
development stage company, which plans to become a world leading web hosting and
E-Commerce solutions company offering a wide range of services: web site and web
store hosting, web server co-location and domain name registration. and to
support these services through it's World Wide Web site., www.emporiasystemscom.
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B. Business of Issuer
1) Principal Products, Services and Principal Markets.
The Company is developmental stage company, which plans to become a world
leading web hosting and E-Commerce solutions company offering a wide range of
services: web site and web store hosting, web server co-location and domain name
registration. and to support these services through it's World Wide Web site
The Internet is a global matrix of interconnected computer networks using the
Internet Protocol (IP) to communicate with each other. For simplicity, the term
"Internet" is used to encompass all such data networks and hundreds of
applications such as the World Wide Web and e-mail that run on those networks,
even though some electronic commerce activities may take place on proprietary or
other networks that are not technically part of the Internet.
During the past few years, the United States economy has performed beyond most
expectations shrinking budget deficit, low interest rates, a stable
macroeconomic environment, expanding international trade with fewer barriers,
and effective private sector management are all credited with playing a role in
this healthy economic performance. Many observers believe advances in
information technology (IT), driven by the growth of the Internet, have also
contributed to creating this healthier-than-expected economy. The dramatic
improvements in computing power and communication and information technology
appear to have been a major force behind this beneficial trend." Some have even
suggested that these advances will create a "long boom" which will take the
economy to new heights over the next quarter century.
While the full economic impact of information technology cannot yet be precisely
evaluated, its impact is significant. IT industries have been growing at more
than double the rate of the overall economy- a trend that is likely to continue.
Investments in IT now represent over 45 percent of all business equipment
investment. Declining prices for IT products have lowered overall inflation.
This report also begins a discussion about the potential impact on the economy
of the Internet and electronic commerce. Recent rapid growth of the Internet is
in part attributable to its strength as a medium of communication, education and
entertainment, and, more recently, as a tool for electronic commerce.
E-commerce is not unlike any other kind of commerce. It involves the buying and
selling of goods, only in this case, over the Internet. E-commerce sites range
from a simple web page highlighting a single item to fully developed on-line
catalogs featuring thousands of products. The common theme in e-commerce sites
is instant purchase, instant payment (if desired) and instant gratification for
you and your customers. The internet is changing the way people think and shop.
In today's fast-paced world, we all want what we want now. What better way is
there to quickly receive orders and get your products into the hands of the
people who want them? In addition, the Internet is perhaps the best sales tool
ever invented as it allows customers to browse endlessly in privacy. They can
return and order again and again without ever leaving their home. Most agree
that it is only a matter of time before all sales-oriented companies must have
some sort of e-commerce presence just to stay in business.
Businesses in virtually every sector of the economy are beginning to use the
Internet to cut the cost of purchasing, manage supplier relationships,
streamline logistics and inventory, plan production, and reach new and existing
customers more effectively. Cost savings, increased consumer choice and
improved consumer convenience are driving growth in the sale of physical goods
and in the digital delivery of goods and services via the Internet. Because the
Internet is new and its uses are developing very rapidly, reliable economy-wide
statistics are hard to find. Further research is needed. This report therefore
uses industry and company examples to illustrate the rapid pace at which
Internet commerce is being deployed and the benefits being realized. Examples
showing the growth of the Internet and electronic commerce this past year are
numerous: - Fewer than 40 million people around the world were connected to the
Internet during 1996. By the end of 1997, more than 100 million people were
using the Internet. - As of December 1996, about 627,000 Internet domain names
had been registered. By the end of 1997, the number of domain names more than
doubled to reach 1.5 million.5 - Traffic on the Internet has been doubling every
100 days.6 - Cisco Systems closed 1996 having booked just over $100 million in
sales on the Internet. By the end of 1997, its Internet sales were running at a
$3.2 billion annual rate. - In 1996, Amazon.com, the first Internet bookstore,
recorded sales of less than $16 million
No aspect of e-business has garnered more attention than e-commerce. The
ability to offer goods and services over the Web has had a remarkable impact on
a wide number of industries. Over $750 million in airline tickets were sold
over the Web last year, and the brokerage industry now manages $200 billion
worth of assets in online account
The enterprise solutions:
* Electronic presentation of goods and services
* Online order taking and bill presentment
* Automated customer account inquiries
* Online payment and transaction handling
Here are some of the ways we can help your company implement an e-commerce
strategy with e-business in mind:
* Develop a dynamic, database-driven online catalog.
* Provide for online ordering by securely integrating your front-end
presentation with an order entry system.
* Move static billing statement data to an interactive Web-based
presentment server
* Accept electronic payment methods (credit cards, EFT, etc.) for
full-transaction shopping or bill payment
Emporiasystem's web hosting packages shall provide a complete long term solution
to all web publishing needs. Including both UNIX and NT hosting. The secure
transactions feature shall uses Secure Socket Layer (SSL) encryption technology
to provide for site authentication and peer to peer secure communication. This
feature allows you to safely transmit and receive sensitive information such as
credit card numbers or passwords.
EmporiaCash enables you to securely process credit card transactions 24 hours a
day, seven days a week to a new global marketplace. EmporiaCash works with all
popular browsers, as well as the majority of Internet hardware, software,
servers, communication protocols, and Web store applications.
As companies increasingly leverage the Internet as a primary way to do business
with customers and partners, security becomes a critical issue. Today, most
e-commerce sites on the Internet require usernames and passwords for security.
However, as services begin to include higher levels of personalization and
higher-value transactions, customers want greater assurance that their privacy
will be maintained and their information will be protect Netscape Directory for
Secure E-Commerce is a flexible security solution that enables organizations to
provide a range of security options to their customers, depending on the
sensitivity and level of privacy required for different information. Directory
for Secure E-Commerce also provides the infrastructure required to
cost-effectively manage user and account information and personalized services
for thousands or millions of users.
The Net Economy enables an enterprise to achieve significant process and cost
efficiencies by attracting new customers, developing new ways to serve existing
customers, and integrating more tightly with business partners. It also offers
new opportunities for an enterprise to quickly bring new products and services
to market. The greater reach and targeted marketing offered by the Internet
make it possible to acquire customers at dramatically reduce cost.
Personalization and availability 24 hours a day, seven days a week, build
customer loyalty and increase customer value over time.
A services-ready infrastructure is key to gaining the advantages and meeting the
challenges of the Net Economy. For an enterprise that chooses to build its own
e-commerce applications, a services-ready infrastructure provides a foundation
for developing Internet commerce applications that are highly available,
scalable, and extensible.
As the Net Economy grows and evolves, new applications must continually be built
and upgraded to keep pace with fast-moving competitors an developing customer
expectations. A services-ready infrastructure provides consistency across
applications and enables developers to focus on business logic instead of
infrastructure when building an application. This helps speed time to market
and ensures that applications will scale support a growing number of users.
The Company will attempt to become a leader in marketing and supporting
e-commerce solutions over the World Wide Web via it's site at
www.emporiasystems.com. The Company intends to enter into a web site consulting
agreement with Smack Corporation. Under this agreement, Smack will market the
Company's web site with the major search engines (e.g. Yahoo, Lycos, etc.) in
order to increase traffic across our web site. When finished, potential clients
may access our web site by searching under common names these search engines.
Some of the common names will be: e-commerce or web hosting. The Company has
reserved the web site address www.emporiasystems.com
MANAGEMENT
Management believes their products have value for the following reasons:
Emporia Systems shall provide tangible solutions to the challenges of global
e-Business, delivering three key benefits to customers: A faster and more
reliable end-user experience, enhancing brand loyalty, sales, and customer
satisfaction. Greater geographic reach with the ability to transparently serve
multiple regions with more relevant content. , and customer satisfaction Lower
total cost of conducting global e-Business.
To create our world-class Global e-Business Delivery Network, Emporia Systems
will combine the most advanced computing and networking technology with a
private fiber-optic network for optimum reach and reliability. Technically
advanced regional Data Centers in New York, San Jose, Honolulu, Hong Kong,
London, and Tokyo will link Emporia Systems customers directly into 26 countries
with more than 500 Connected Enterprise Servers. By building and maintaining
its own infrastructure backed by industry-leading Service Level Agreements
(SLAs), Emporia Systems will guarantee its Global e-Business Delivery Network
will be secure, reliable, and scalable to any customer's needs.
E-Business initiatives will be enabled through Emporia Systems's integrated
platform of Hosting, Network, Content Delivery, Application, and Professional
Services. Companies can choose from these services to intelligently deploy
their e-Business proposition across continents, while guaranteeing a fast,
reliable, and locally relevant experience.
Emporia Systems intends to become the leading Global e-Business Delivery
Network, guaranteeing fast and relevant end user experiences for customers and
enabling e-Business without limits for your company.
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(a) Limited Operating History
The Company was first incorporated in the State of Nevada on February 16, 1999.
Accordingly, the Company has a limited operating history upon which an
evaluation of the Company, its current business and its prospects can be based,
each of which must be considered in light of the risks, expenses and problems
frequently encountered by all companies in the early stages of development, and
particularly by such companies entering new and rapidly developing and mature
markets. The Company's prospects must be considered in light of the risks,
uncertainties, expenses and difficulties frequently encountered by companies in
their early stages of development, particularly companies who face competition
from other more established companies in this market. Such risks include,
without limitation, the lack of broad acceptance of the company's products, the
company's inability to build a customer base, inability for the Company to fully
develop and utilize its Internet Web site, the possibility that the Internet
will fail to achieve broad acceptance, the inability of the Company to generate
significant revenues from customers, the company's inability to anticipate and
adapt to a developing market, the failure of the company's network
infrastructure (including its server, hardware and software) to efficiently
handle its Internet traffic, changes in laws that adversely affect the company's
business, the ability of the Company to manage its operations, including the
amount and timing of capital expenditures and other costs relating to the
expansion of the company's operations, the introduction and development of
different or more extensive communities by direct and indirect competitors of
the Company, including those with greater financial, technical and marketing
resources, the inability of the Company to maintain and increase levels of
traffic on its Web site, the inability of the Company to attract, retain and
motivate qualified personnel and general economic conditions.
(b) Anticipated Losses for the Foreseeable Future
The Company has not achieved profitability to date, and the Company anticipates
that it will continue to incur net losses for the foreseeable future. The
extent of these losses will depend, in part, on the amount of growth in the
Company's revenues from sales of its products. As of September 30, 2000, the
Company had an accumulated deficit of Fifty Four Thousand Three Hundred Sixty
Five ($54,365) dollars. The Company expects that its operating expenses will
increase significantly during the next several years, especially in the areas of
sales and marketing, and brand promotion. Thus, the Company will need to
generate increased revenues to achieve profitability. To the extent that
increases in its operating expenses precede or are not subsequently followed by
commensurate increases in revenues, or that the Company is unable to adjust
operating expense levels accordingly, the Company's business, results of
operations and financial condition would be materially and adversely affected.
There can be no assurances that the Company can achieve or sustain profitability
or that the Company's operating losses will not increase in the future.
(c) Dependence on Continued Growth of demand for e-commerce solutions
The Company's future success is substantially dependent upon acceptance of
outsourcing of electronic commerce solutions. To generate product sales, the
Company must identify a customer base that had a need for their products. There
are no assurances that this can take place. The Internet may prove not to be a
viable commercial marketplace for their products. Additionally, due to the
ability of their customers to easily compare prices of similar products or
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services on competing Web sites, gross margins for e-Commerce transactions may
narrow in the future and, accordingly, the Company's revenues from utilizing its
Web site may be materially negatively impacted. If use of the Internet does not
continue to grow, the Company's business, results of operations and financial
condition would be materially and adversely affected. Additionally, to the
extent that the Internet continues to experience significant growth in the
number of users and the level of use, this can be no assurance that its
technical infrastructure will continue to be able to support the demands placed
upon it. The necessary technical infrastructure for significant increases with
the Internet, such as a reliable network backbone, may not be timely and
adequately developed. In addition, performance improvements, such as high-speed
modems, may not be introduced in a timely fashion. Furthermore, security and
authentication concerns with respect to transmission over the Internet of
confidential information, such as credit information, may remain. Issues like
these could lead to resistance against the acceptance of the Internet as a
viable commercial marketplace. Also, the Internet could lose its viability due
to delays in the development or adoption of new standards and protocols required
to handle increased levels of activity, or due to increased governmental
regulation. Changes in or insufficient availability of telecommunications
services could result in slower response times and adversely affect usage of the
Internet. Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty, and this
exist few proven services and products.
The Internet may not be commercially viable in the long term for a number of
reasons, including potentially inadequate development of the necessary network
infrastructure or delayed development of enabling technologies, performance
improvements and security measures. To the extent that the Internet continues
to experience significant growth in the number of users, their frequency of use
or their band width requirement, this can be no assurance that the
infrastructure for the Internet and other online services will be able to
support the demands placed upon them. In addition, the Internet or other online
services could lose their viability due to delays in the development or adoption
of new standards and protocols required to handle increased levels of Internet
or other online service activity, or due to increased governmental regulation.
Changes in or insufficient availability of telecommunications services to
support the Internet or other online services also could result in slower
response times and adversely affect usage of the Internet and other online
services generally and Emporia Systems. in particular. If use of the Internet
and other online services does not continue to grow or grows more slowly than
expected, if the infrastructure for the Internet and other online services does
not effectively support growth that may occur, or if the Internet and other
online services do not become a viable commercial marketplace, the Company's
business, results of operations and financial condition would be adversely
affected.
(d) Risk Supply Failures
The Company plans to use Routers and Swithching equipment supplied by Nortel
Networks, a major equipment manufacturer.However there can be no assurance that
there will not be delays in equipment deliveries.
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(e) Risk of System Failures
The Company's ability to facilitate trade successfully and provide high quality
customer service via the Internet, depends on the efficient and uninterrupted
operation of its computer and communications through its designated Internet
Service Provider (ISP). These systems and operations are vulnerable to damage
or interruption from earthquakes, floods, fires, power loss, telecommunication
failures, break-ins, sabotage, intentional acts of vandalism and similar events.
The Company does not have fully redundant systems, a formal disaster recovery
plan or alternative providers of hosting services and does not carry business
interruption insurance to compensate it for losses that may occur. Despite any
precautions taken by, and planned to be taken by the Company, the occurrence of
a natural disaster or other unanticipated problems with its ISP could result in
interruptions in the services provided by the Company.
In addition, the failure by the ISP to provide the data communications capacity
required by the Company, as a result of human error, natural disasters other
operational disruption, could result in interruptions in the Company's service.
Any damage to or failure of the systems of the Company could result in
reductions in, or terminations of, the Emporia Systems services, which could
have a material adverse effect on the Company's business, results of operations
and financial condition. In the case of frequent or frequent or persistent
system failures, the Company's reputation and name brand could be materially
adversely affected. Although the Company has implemented certain network
security measures, the Company and its ISP's are also vulnerable to computer
viruses, physical or electronic break-ins and similar disruptions, which could
lead to interruptions, delays, loss of data or the inability to complete
customer auctions. In addition, although the Company works to prevent
unauthorized access to Company data, it is impossible to eliminate this risk
completely. The occurrence of any and all of these events could have a material
adverse effect on the Company's business, results of operations and financial
condition.
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(f) Competition
The Company expects to experience heavy competition in marketing its
services. The Company will experience competition from Corporations who are
developing their own Information Technology (IT) departments using similar off
the shelf technologies. Management believes that they can deliver a more
cost-effective turn-key program with the ability to share consumer information
and profiles between clients and build a comprehensive database for resale.
However, there are no assurances that they will be successful in this endeavor.
Providers of e-commerce solutions are now marketing to secondary adopters whose
require a shift from being the new technological wonder to providing legitimate
solutions for businesses. The e-commerce industry has yet to prove fully the
technology's case as a legitimate business tool. End users are still exploring
other applications such as , internet commerce and network security, the market
has stalled as far as the end-user is concerned with warning signs that the next
few years will be lean, and may include the failure and, delays in project
roll-out, and extreme pricing competition.
The market for providing e-commerce services over the Internet is relatively
new, rapidly evolving and intensely competitive, and the Company expects
competition to intensify further in the future. Barriers to entry are
relatively low, and current and new competitors can launch new sites at a
relatively low cost using commercially- available software. The Company
potentially competes with a number of other companies marketing similar products
over the Internet. Competitive pressures created by any of the Company's
competitors, could have a material adverse effect on the Company's business,
results of operations and financial condition. The Company believes that the
principal competitive factors in its market are volume and selection of goods,
population of buyers and sellers, community cohesion and interaction, customer
service, reliability of delivery and payment by users, brand recognition, WEB
site convenience and accessibility, price, quality of search tools and system
reliability. Some of the Company's potential competitors have longer operating
histories, larger customer bases, greater brand recognition and significantly
greater financial, marketing, technical and other resources than the Company.
In addition, other online trading services may be acquired by, receive
investments from or enter into other commercial relationships with larger,
well-established and well-financed companies as use of the Internet and other
online services increases.
Therefore, certain of the Company's competitors with other revenue sources may
be able to devote greater resources to marketing and promotional campaigns,
adopt more aggressive pricing policies and devote substantially more resources
to Web site and systems development than the Company or may try to attract
traffic by offering services for free. Increased competition may result in
reduced operating margins, loss of market share and diminished value in the
Company's brands. This can be no assurance that the Company will be able to
compete successfully against current and future competitors. Further, as a
strategic response to changes in the competitive environment, the Company may,
from time to time, make certain pricing, service or marketing decisions or
acquisitions that could have a material adverse effect on its business, results
of operations and financial condition. New technologies and the expansion of
existing technologies may increase the competitive pressures on the Company by
enabling the Company's competitors to offer a lower-cost service.
Certain Web-based applications that direct Internet traffic to certain Web sites
may channel users to trading services that compete with the Company. Although
the Company plans to establish arrangements with online services and search
engine companies, this can be no assurance that these arrangements will be
renewed on commercially reasonable terms or that they will otherwise bring
traffic to the Emporiasystems.com WEB site. In addition, companies that control
access to transactions through network access or Web browsers could promote the
Company's competitors or charge the Company substantial fees for inclusion. Any
and all of these events could have a material adverse effect on the Company's
business, results of operations and financial condition.
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(g) Potential Fluctuations in Operating Results; Quarterly Fluctuations
The Company's operating results may fluctuate significantly in the future as a
result of a variety of factors, many of which are outside the Company's control.
See "-Limited Operating History." As a strategic response to changes in the
competitive environment, the Company may from time to time make certain pricing
or marketing decisions with their web hosting business that could have a
material short-term or long-term adverse effect on the Company's business,
results of operations and financial condition. In particular, in order to
accelerate the promotion of the Company's Web Site (www.emporiasystems.com), the
Company intends to market it Web site through the major search engines. The
Company believes that it may experience seasonality in its business, with use of
the Internet and emporiasystems.com being somewhat lower during the summer
vacation and year-end holiday periods. Advertising impressions (and therefore
revenues) may be expected to decline accordingly in those periods.
Additionally, seasonality may affect significantly any potential advertising
revenues during the first and third calendar quarters, as advertisers
historically spend less during these periods. This can be no assurance that
such patterns will not have a material adverse effect on the Company's business,
results of operations and financial condition. In addition to selling its
brands, it is the Company's strategy is to generate additional revenues through
e- Commerce arrangements including for other companies to advertise on the
Company's Web site. This can be no assurance that the Company will receive any
material amount of revenue under these agreements in the future. The foregoing
factors, in some future quarters, may lead the Company's operating results to
fall below the expectations.
(h) Risk Of Capacity Constraints And Systems Failures
A key element of the Company's strategy is to support its web hosting services
through its Web site. The Company's ability to attract customers and to achieve
market acceptance of its products depends significantly upon the performance of
the Company and its network infrastructure (including its server, hardware and
software). The Company plans to enter into a web site agreement with Smackdab
Corporation. Under this agreement, Smackdab will market the Company's web site
with the major search engines (e.g., Yahoo, Lycos, Infoseek, etc.) in order to
increase traffic to the Company's Web Site. Any system failure that causes
interruption or slower response time of the Company's products and services
could result in less traffic to the Company's Web site and, if sustained or
repeated, could reduce the attractiveness of the Company's products. An
increase in the volume of user traffic could strain the capacity of the
Company's technical infrastructure, which could lead to slower response time or
system failures, and could adversely affect operating results. This can be no
assurance that the Company and its technical infrastructure will be able to grow
accordingly, and the Company faces risks related to its ability to scale up to
its expected customer levels while maintaining superior performance. Any
failure of the Company's server and networking systems to handle current or
higher volumes of traffic would have a material adverse effect on the Company's
business, results of operations and financial condition. The Company is also
dependent upon third parties to provide product support. In the past, users
have occasionally experienced difficulties with Internet and online services due
to system failures, including failures unrelated to the Company's systems. Any
disruption in
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Internet access provided by third parties could have a material adverse effect
on the Company's business, results of operations and financial condition.
Furthermore, the Company is dependent on hardware suppliers for prompt delivery,
installation and service of equipment used to deliver the Company's products and
services. The Company's operations are dependent in part upon its ability to
protect its operating systems against damage from human error, fire, floods,
power loss, telecommunications failures, break-ins and similar events. The
Company does not presently have redundant, multiple-site capacity in the event
of any such occurrence. The Company's servers are also vulnerable to computer
viruses, break-ins and similar disruptions from unauthorized tampering with the
Company's computer systems. The occurrence of any of these events could result
in the interruption, which could have a material adverse effect on the Company's
business, results of operations and financial condition. In addition, the
Company's reputation could be materially and adversely affected.
(i) Risks Associated With New Services, Features and Functions
This can be no assurance that the Company would be able to expand its
operations in a cost-effective or timely manner or that any such efforts would
maintain or increase overall market acceptance. Furthermore, any Smart Card
business launched by the Company that is not favorably received by customers
could damage the Company's reputation and diminish the value of its brand name.
Expansion of the Company's operations in this manner would also require
significant additional expenses and development, operations train the Company's
management, financial and operational resources. The lack of market acceptance
of the Company's products would result in the Company's inability to generate
satisfactory revenues and its inability to offset their costs could have a
material adverse effect on the Company's business, results of operations and
financial condition.
(j) Online Commerce Security Risks
A significant barrier to online emporia systems service support and
communications is the secure transmission of confidential information over
public networks. Emporia Systems plans to support its services via its Web
site. The Company will rely on encryption and authentication technology
licensed from third parties to provide the security and authentication
technology to effect secure transmission of confidential information, including
confidential customer information. This can be no assurance that advances in
computer capabilities, new discoveries in the field of cryptography, or other
events or developments will not result in a compromise or breach of the
technology used by the Company to protect customer transaction data from one its
competitors.
If any such compromise of the Company's security were to occur, it could have a
material adverse effect on the Company's reputation and, Therefore, on its
business, results of operations and financial condition. Furthermore, a party
who is able to circumvent the Company's security measures could misappropriate
proprietary information or cause interruptions in the Company's operations. The
Company may be required to expend significant capital and other resources to
protect against such security breaches or to alleviate problems caused by such
breaches. Concerns over the security of transactions conducted on the Internet
and other online services and the privacy of users may also inhibit the growth
of the Internet and other online services generally, and the Web in particular,
especially as a means of conducting commercial transactions. To the extent that
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activities of the Company involve with the storage and transmission of
proprietary information, security breaches could damage the Company's reputation
and expose the Company to a risk of loss or litigation and possible liability.
This can be no assurance that the Company's security measures will prevent
security breaches or that failure to prevent such security breaches will not
have a material adverse effect on the Company's business, results of operations
and financial condition.
(k) Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company would acquire
businesses, technologies, services or product(s) that the Company believes are
strategic.
The Company currently has no understandings, commitments or agreements with
respect to any other material acquisition and no other material acquisition is
currently being pursued. This can be no assurance that the Company will be able
to identify, negotiate or finance future acquisitions successfully, or to
integrate such acquisitions with its current business. The process of
integrating an acquired business, technology, service or product(s) into the
Company may result in unforeseen operating difficulties and expenditures and may
absorb significant management attention that would otherwise be available for
ongoing development of the Company's business. Moreover, this can be no
assurance that the anticipated benefits of any acquisition will be realized.
Future acquisitions could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or amortization
expenses related to goodwill and other intangible assets, which could materially
adversely affect the Company's business, results of operations and financial
condition. Any future acquisitions of other businesses, technologies, services
or product(s) might require the Company to obtain additional equity or debt
financing, which might not be available on terms favorable to the Company, or at
all, and such financing, if available, might be dilutive.
(l) Risks Associated With International Operations
A component of the Company's strategy is to offer its products online to
international customers. Expansion into the international markets will require
management attention and resources. The Company has limited experience in
localizing its service, and the Company believes that many of its competitors
are also undertaking expansion into foreign markets. There can be no assurance
that the Company will be successful in expanding into international markets. In
addition to the uncertainty regarding the Company's ability to generate revenues
from foreign operations and expand its international presence, this are certain
risks inherent in doing business on an international basis, including, among
others, regulatory requirements, legal uncertainty regarding liability, tariffs,
and other trade barriers, difficulties in staffing and managing foreign
operations, longer payment cycles, different accounting practices, problems in
collecting accounts receivable, political instability, seasonal reductions in
business activity and potentially adverse tax consequences, any of which could
adversely affect the success of the Company's international operations.
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To the extent the Company expands its international operations and has
additional portions of its international revenues denominated in foreign
currencies, the Company could become subject to increased risks relating to
foreign currency exchange rate fluctuations. There can be no assurance that one
or more of the factors discussed above will not have a material adverse effect
on the Company's future international operations and, consequently, on the
Company's business, results of operations and financial condition.
2) Distribution Methods of the Products and Services
The Company will be significantly dependent on a number of third-party
relationships to supply services, and increase traffic to emporiasystems.com.
Additionally, with regards to the Company's Internet Web site is generally
dependent on other Web site operators that provide links to emporia systems
(www.emporiasystems.com). The Company does not have any agreements with any Web
site operators that provide links to its Web site at this time, and, if the
Company can established such links the other Web site operators may terminate
such links at any time without notice to the Company. This can be no assurance
that third parties will regard their relationship with the Company as important
to their own respective businesses and operations. There can be no assurance
that the Company will ever develop a relationships with third parties that
supply the Company with links to their Web site. In particular, the elimination
of a pre- installed bookmark on a Web browser that directs traffic to the
Company's Web site could significantly reduce traffic on the Company's Web site,
which would have a material adverse effect on the Company's business, results of
operations and financial condition. Additionally, at this time, the Company has
not entered into any agreements with any suppliers to ship and provide products.
3) Status of Any Announced New Product or Service
The Company does not have any announced new product or service. The Company
needs to develop a customer base for its web hosting services The Company,
however, has yet to announce any new products and has not announced any other
recent additions or services.
4) Industry Background
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The Web has experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and could face such outages and delays
in the future, including outages and delays resulting from the inability of
certain computers or software to distinguish dates in the 21st century from
dates in the 20th century. These outages and delays could adversely affect the
level of Web usage and also the level of traffic for Emporia Systems . In
addition, the Web could lose its viability due to delays in the development or
adoption of new development or adoption of new standards and protocols to handle
increased levels of activity or due to increased governmental regulation.
The Internet allows marketers to collect meaningful demographic information and
feedback from consumers, and to rapidly respond to this information with new
messages. This offers a significant new opportunity for businesses to increase
the effectiveness of their direct marketing campaigns. In traditional media, a
significant portion of all advertising budgets are spent on direct marketing
because of its effectiveness. However, the effectiveness of direct marketing
campaigns is dependent upon the quality of consumer data used to develop and
place complementary products, services or facilities are developed and the Web
becomes a viable commercial marketplace in the long term, the Company might be
required to incur substantial expenditures in order to adapt its products to
changing Web technologies, which could have a material adverse effect on the
Company's business, results of operations and financial condition.
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(a) E-Commerce and Direct Marketing.
The Internet has become a significant marketplace for buying and selling goods
and services. Industry estimates that the amount of goods or services purchased
in online consumer transactions will grow from approximately $2.6 billion in
1997 to approximately $37.5 billion in 2002. Improvements in security,
interface design and transaction- processing technologies have facilitated an
increase in online consumer transactions. Early adopters of such improvements
include online merchants offering broad product catalogs (such as books, music
CDs and toys), those seeking distribution efficiencies (such as PCs, flowers and
groceries) and those offering products and services with negotiable pricing
(such as automobiles and mortgages). The Company believes that online companies
provide businesses an opportunity to link Internet customers with like
interests. The Internet allows marketers to collect meaningful demographic
information. The Company's business strategy relies on providing support for
the Company's services via the Company's Web site. Any significant
deterioration in general economic conditions that adversely affected these
companies could also have a material adverse effect on the Company's business,
results of operations and financial condition.
5) Raw Materials and Suppliers
The Company is a not a manufacturer and is dependent in purchasing plastic cards
with embedded microprocessors from other suppliers. Therefore, the Company does
not use any raw materials.
6) Customers
The Company believes that establishing and maintaining brand identity through is
a critical aspect of its efforts to attract new customers In order to attract
new customers, the Company intends to make a commitment to the creation and
maintenance of brand hosting services among these groups. The Company plans to
accomplish this, although not exclusively, through advertising its Web site
through the various search engines, marketing its site to businesses/customers
through e-mail, online media, and other marketing and promotional efforts.
There can be no assurance that brand promotion activities will yield increased
revenues or that any such revenues would offset the expenses incurred by the
Company in building its brands. Further, this can be no assurance that any new
users attracted to Emporia Systems will conduct business with the Company on a
regular basis. If the Company fails to promote and maintain its brand or incurs
substantial expenses in an attempt to promote and maintain its brand or if the
Company's existing or future strategic relationships fail to promote the
Company's brand or increase brand awareness, the Company's business, results of
operations and financial condition would be materially adversely affected.
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7) Patents, Trademarks, Licenses, Franchises, Concessions,
Royalty Agreements, or Labor Contracts
The Company regards substantial elements of its future and underlying
infrastructure and technology as proprietary and attempts to protect them by
relying on trademark, service mark, copyright and trade secret laws and
restrictions on disclosure and transferring title and other methods. The
Company plans to enter into confidentiality agreements with its future
employees, future suppliers and future consultants and in connection with its
license agreements with third parties and generally seeks to control access to
and distribution of its technology, documentation and other proprietary
information. Despite these precautions, it may be possible for a third party to
copy or otherwise obtain and use the Company's proprietary information without
authorization or to develop similar technology independently. Legal standards
relating to the validity, enforceability and scope of protection of certain
proprietary rights in Internet-related businesses are uncertain and still
evolving, and no assurance can be given as to the future viability or value of
any of the Company's proprietary rights. This can be no assurance that the
steps taken by the Company will prevent misappropriation or infringement of its
proprietary information, which could have a material adverse effect on the
Company's business, results of operations and financial condition. Litigation
may be necessary in the future to enforce the Company's intellectual property
rights, to protect the Company's trade secrets or to determine the validity and
scope of the proprietary rights of others. Such litigation might result in
substantial costs and diversion of resources and management attention.
Furthermore, this can be no assurance that the Company's business activities
will not infringe upon the proprietary rights of others, or that other parties
will not assert infringement claims against the Company, including claims that
by directly or indirectly providing hyperlink text links to Web sites operated
by third parties. Moreover, from time to time, the Company may be subject to
claims of alleged infringement by the Company or service marks and other
intellectual property rights of third parties. Such claims and any resultant
litigation, should it occur, might subject the Company to significant liability
for damages, might result in invalidation of the Company's proprietary rights
and, even if not meritorious, could result in substantial costs and diversion of
resources and management attention and could have a material adverse effect on
the Company's business, results of operations and financial condition.
8) Regulation
The law relating to the liability of companies promoting their products and
services online is currently unsettled. It is possible that claims could be
made against online e-Commerce companies under both United States and foreign
law for defamation, libel, invasion of privacy, negligence, copyright or
trademark infringement, or other theories based on the nature and content of the
materials disseminated through their Web site. Several private lawsuits seeking
to impose such liability upon other online companies are currently pending.
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9) Effect of Existing or Probable Government Regulations
Government legislation has been proposed that imposes liability for or prohibits
the transmission over the Internet of certain types of information.
The imposition upon the Company and other online providers of potential
liability for information carried on or disseminated through their services
could require the Company to implement measures to reduce its exposure to such
liability, which may require the Company to expend substantial resources and/or
to discontinue certain service offerings. In addition, the increased attention
focused upon liability issues as a result of these lawsuits and legislative
proposals could impact the growth of Internet use.
The Company does not believe that such regulations, which were adopted prior to
the advent of the Internet, govern the operations of the Company's business nor
have any claims been filed by any state implying that the Company is subject to
such legislation. This can be no assurance, however, that State government will
not attempt to impose these regulations upon the Company in the future or that
such imposition will not have a material adverse effect on the Company's
business, results of operations and financial condition. Several States have
also proposed legislation that would limit the uses of personal user information
gathered online or require online services to establish privacy policies. The
Federal Trade Commission has also recently settled a proceeding with one online
service regarding the manner in which personal information is collected from
users and provided to third parties. Changes to existing laws or the passage of
new legislation, could create uncertainty in the marketplace that could reduce
demand for the services of the Company or increase the cost of doing business as
a result of litigation costs or increased service delivery costs, or could in
some other manner have a material adverse effect on the Company's business,
results of operations and financial condition. In addition, because the
Company's services are accessible worldwide, and the Company may facilitate
sales of goods to users worldwide, other jurisdictions may claim that the
Company is required to qualify to do business as foreign corporation in
particular state or foreign country. Due to the increasing popularity and use
of the Internet and other online services, it is possible that a number of laws
and regulations may be adopted with respect to the Internet or other online
services covering issues such as user privacy, freedom of expression, pricing,
content and quality of products and services, taxation, advertising,
intellectual property rights and information security. Although sections of the
Communications Decency Act of 1996 (the "CDA") that, among other things,
proposed to impose criminal penalties on anyone distributing "indecent" material
to minors over the Internet, were held to be unconstitutional by the U.S.
Supreme Court, this can be no assurance that similar laws will not be proposed
and adopted. Certain members of Congress have recently discussed proposing
legislation that would regulate the distribution of "indecent" material over the
Internet in a manner that they believe would withstand challenge on constitution
law.
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Any new legislation or regulation, or the application of laws or regulations
from jurisdictions whose laws do not currently apply to the Company's business,
for third-party activities and jurisdiction. The adoption of new laws or the
application of existing laws may decrease the growth in the use of the Internet,
which could in turn decrease the demand for the Company's services, increase the
Company's cost of doing business or otherwise have a material adverse effect on
the Company's business, results of operations and financial condition. The
Company does not believe that such regulations, which were adopted prior to the
advent of the Internet, govern the operations of the Company's business nor have
any claims been filed by any state implying that the Company is subject to such
legislation. This can be no assurance, however, that State government will not
attempt to impose these regulations upon the Company in the future or that such
imposition will not have a material adverse effect on the Company's business,
results of operations and financial condition.
10) Research and Development Activities
The Company, among other things, plans to develop and market its Web site,
enhance its brands, implement and execute its business and marketing strategy
successfully, continue to develop and upgrade its technology and
information-processing systems, meet the needs of a changing market, provide
superior customer service, respond to competitive developments and attract,
integrate, retain and motivate qualified personnel provided the company can
generate sales and profit.
The Company also needs to develop and identify Emporia services that achieve
market acceptance by its end-users. This can be no assurance that Emporia
Systems will achieve market acceptance. Accordingly, no assurance can be given
that the Company's business model will be successful or that it can sustain
revenue growth or be profitable. The market for SmartCards has matured and is
finite. As is typical of any rapidly evolving market, demand and market
acceptance for products are subject to a high level of uncertainty and risk.
Moreover, because this market is rapidly evolving, it is difficult to predict
its future growth rate, if any, and its ultimate size.
If the market fails to develop, develops more slowly than expected or becomes
saturated with competitors, or if the Company's products do not achieve or
sustain market acceptance, the Company's business, results of operation may be
materially and adversely affected.
There can be no assurances the Company will be successful in accomplishing all
of these things, and the failure to do so could have a material adverse effect
on the company's business, results of operations and financial condition.
11) Impact of Environmental Laws
The Company is not aware of any federal, state or local environmental laws which
would effect is operations.
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12) Employees
The Company currently has three (2) employees: one President, and one Secretary,
all of which are Directors of the Company. The Company has no intention at
this time to add full employees.
(i) The Company's performance is substantially dependent on the performance
of its corporate President and CEO, Georgios Polyhronopoulos. In particular,
the Company's success depends on his ability to define and develop markets and
business for the Company.
(ii) The Company does not carry key person life insurance on any of its
personnel. The loss of the services of any of its executive officers or other
key employees could have a material adverse effect on the business, results of
operations and financial condition of the Company. The Company's future success
also depends on its ability to retain and attract highly qualified technical and
managerial personnel.
(iii) There can be no assurance that the Company will be able to retain its
key managerial and technical personnel or that it will be able to attract and
retain additional highly qualified technical and managerial personnel in the
future. The inability to attract and retain the technical and managerial
personnel necessary to support the growth of the Company's business, due to,
among other things, a large increase in the wages demanded by such personnel,
could have a material adverse effect upon the Company's business, results of
operations and financial condition.
14) The Industry & Potential Effect on the Company's Plan of Operations
The rapid adoption of the Internet as a means to gather information,
communicate, interact and be entertained, combined with the vast proliferation
of Web sites, has made the Internet an important new mass medium. Industry
estimates that the number of Web users exceeded 68 million in 1997, and will
grow to over 319 million by 2002. The market for Internet products and services
is characterized by rapid technological developments, evolving industry
standards and customer demands, and frequent new product introductions and
enhancements. These market characteristics are exacerbated by the emerging
nature of the market and the fact that many companies are expected to introduce
new Internet products and services in the near future. The Company's future
success will depend in part on its ability to continually improve the
performance, features and reliability of its product(s) to both evolving demands
of the marketplace and competitive product and service offerings; and, there can
be no assurance that the Company will be successful in doing so. Accordingly,
the Company's future success will depend on its ability to adapt to rapidly
changing technologies, to adapt to evolving industry standards and to
continually improve the performance, features and reliability of its service in
response to competitive service and product offerings and evolving demands of
the marketplace. The failure of the Company to adapt to such changes would have
a material adverse effect on the Company's business, results of operations and
financial condition. In addition, the widespread adoption of the Internet,
networking or telecommunications technologies or other technological changes
could require substantial expenditures by the Company to modify or adapt its
services or infrastructure, which could have a material adverse effect on the
Company's business, results of operations and financial condition.
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15) Present Licensing Status
None - Not Applicable.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
All statements, trend analysis and other information contained in this
Registration relative to markets for the Company's products and trends in
revenues, gross margin and anticipated expense levels, as well as other
statements including words such as "believe," "anticipate," "expect,"
"estimate," "plan" and "intend" and other similar expressions, constitute
forward-looking statements. Those forward- looking statements are subject to
business and economic risks, and the Company's actual results of operations may
differ from those contained in the forward-looking statements. The following
discussion of the financial condition and results of operations of the Company
should also be read in conjunction with the Financial Statements and Notes
related thereto included elsewhere in this Registration.
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Item 2
Item 2. Management's Discussion and Analysis or Plan of Operation
A. Management's Plan of Operation
1) In its initial six operating period ended September 30, 2000, the Company
incurred a net loss of $54,365 from operations. It has yet to receive any
revenues from operations.
An original stock offering was made in reliance upon an exemption from the
registration provisions of Section 5 of the Securities Act of 1993, as amended,
pursuant to Regulation D, Rule 504, of the Act. a total of two million
(2,000,000) shares of its common stock were purchased by the one founders of the
Company, on March 05, 1999 for cash. Between February 23 and February 28, 1999,
the Company sold One Million (1,000,000) shares of its common stock in
connection with a public offering at a price of $0.025 per share. On or about
March 24, 1999, the Company completed a public offering of shares of common
stock of the Company pursuant to Regulation "D," Rule 504 of the Securities Act
of 1933, as amended, whereby it sold one million (1,000,000) shares of the
Common Stock of the Company for twenty-five thousand ($25,000) dollars to
approximately twenty-five (25) unaffiliated shareholders of record. The Company
filed an original Form D with the Securities and Exchange Commission on or about
March 24, 1999.November 01 2000 the company executed a 10%convertible note
payable In the amount of $50,000
Management fully anticipates that the proceeds from the note sale will be
sufficient to provide the Company's capital needs for the next twelve (12)
months. If the Company cannot generate sufficient revenues or raise money in
the next 12 months, it is most likely the company will not be able to stay in
business. Emporia Systems is a developmental stage company. The Company does
not anticipate any revenues until it can identify and sell customers its
products.
The Company currently anticipates that it has enough available funds to meet its
anticipated needs for working capital, capital expenditures and business
expansion for the next twelve (12) months. The Company expects that it will
continue to experience negative operating cash flow for the foreseeable future
as a result of significant spending on advertising and infrastructure. The
Company does not have significant cash or other material assets, nor does it
have an established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is, however, the intent of
the Company to seek to raise additional capital via a private placement offering
pursuant to Regulation "D" Rule 505 or 506 or a private placement once the
Company is trading on OTC-BB. If the Company needs to raise additional funds in
order to fund expansion, develop new or enhanced services or products, respond
to competitive pressures or acquire complementary products, businesses or
technologies, any additional funds raised through the issuance of equity or
convertible debt securities, the percentage ownership of the stockholders of the
Company will be reduced, stockholders may experience additional dilution and
such securities may have rights, preferences or privileges senior to those of
the Company's Common Stock. The Company does not currently have any contractual
restrictions on its ability to incur debt and, accordingly, the Company could
incur significant amounts of indebtedness to finance its operations. Any such
indebtedness could contain covenants which would restrict the Company's
operations. There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all. If adequate funds are
not available or are not available on acceptable terms, the Company may not be
able to continue in business, or to a lessor extent not be able to take
advantage of acquisition opportunities, develop or enhance services or products
or respond to competitive pressures. The company does not have significant cash
or other material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. The Company does not have any preliminary agreements or understandings
between the company and its stockholders/officers and directors with respect to
loans or financing to operate the company.
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2) No engineering, management or similar report has been prepared or
provided for external use by the Company in connection with the offer of its
securities to the public.
3) Management believes that the Company's future growth and success will
depend on its ability to find customers for its web hosting services, and their
ability to develop a Web site to support their services. The Company expects to
continually evaluate its potential products to determine what additional
products or enhancements are required by the marketplace. The Company does not
plan to develop products internally, but find suppliers who would be willing to
sell, market or license their products through the Company. This can help avoid
the time and expense involved in developing actual products.
The Company has yet to incur any research and development costs through
September 30, 2000. The only research and development the Company plans to
incur in finding suitable products which offer the Company potential for
revenues and profits.
4) The Company currently does not expect to purchase or sell any of its
equipment, since it owns no equipment. Any computer equipment to be utilized is
equipment owed by the Officers of the Company.
B. Segment Data
As of september 30, 2000, no sales revenue has been generated by the Company.
Accordingly, no table showing percentage breakdown of revenue by business
segment or product line is included.
Item 3. Description of Property
A. Description of Property
The address of the principal office is: 38820 N. 25th Avenue, Phoenix, AZ
85027. One of the Officers of the Company is providing office space and
computer use at no cost to the Company. Management believes that this is
currently suitable for the Company's needs for the next twelve (12) months.
Item 4. Security Ownership of Management and Certain Security Holders
A. Security Ownership of Management and Certain Beneficial Owners
The following table sets forth information as of the date of this Registration
Statement certain information with respect to the beneficial ownership of the
Common Stock of the Company concerning stock ownership by (i) each director,
(ii) each executive officer, (iii) the directors and officers of the Company
as a group, (iv) and each person known by the Company to own beneficially more
than five (5%) of the Common Stock. Unless otherwise indicated, the owners have
sole voting and investment power with respect to their respective shares.
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Title Name & Address Amount of Percent
of of Beneficial shares of
Class Owner of Shares (1) Position held by Owner Class
------ ------------------- --------- ------------- ------
Common Georgios Polyhronopoulos President/ 6,000,000 66.00%
CEO
All Executive Officers and Directors as a
Group (3 persons), purchased shares 6,000,000 66.00%
(1) These 6,000,000 shares were issued at par value ($0.001) to this
individual on March 05, 1999 for services.
(1) C/O EMPORIA SYSTEMS 38820 N. 25TH AVENUE, PHOENIX, AZ 85086
B. PERSONS SHARING OWNERSHIP OF CONTROL OF SHARES
No person other than Georgios Polyhronopoulos, President/CEO owns or shares the
power to vote ten percent (10%) or more of the Company's securities.
C. NON-VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company has not issued any non-voting securities.
D. Options, Warrants and Rights
This are no options, warrants or rights to purchase securities of the Company.
E. Parents of Issuer
Under the definition of parent, as including any person or business entity who
controls substantially all (more than 80%) of the issuers of common stock, the
Company has no parents.
F. Other
Not applicable
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Item 5. Directors, Executives, Officers and Significant Employees The names,
ages and positions of the Company's directors and executive officers are as
follows:
Name Age Position
-------- ------ ----------
Georgios Polyhronopoulos 41 President, CEO, &
Director
B. Work Experience
Georgios Polyhronopous (George Poulos), President and CEO of Emporia Systems.,
organized and formed the company.
George Poulos, President and CEO of the Company, since inception. He has 10
years experience in corporate development, and has managed multiple projects.
Mr. Poulos has been directly involved in taking several companies "Public" from
seed funding to IPO. He has worked as an Investment Banker and Broker. Mr.
Poulos closely follows Technological developments and Trends, as they relate to
both the Telecommunications Industry and the Internet and World Wide Web. He is
a Professional Member of the National Association of Certified Valuation
Analysts.
1998-1999, Director Enterprise Solutions, Telemax Communications, he is
responsible for developing a Corporate Finance team to seek out and attract
funding sources during Telemax's various stages of development. His position at
Telemax requires him to interface with licensees, negotiate lease management
arrangements, and deal with the providers of enterprise solutions, such as:
educational institutions; public utilities; community, city, state, and federal
offices; media relations and medical facilities.
1997-present, Co-founder/Corporate Secretary, Infobuild Networks, he provided
investors to "seed" the Company, he structured and prepared the Offering for the
Company. He initially negotiated the licensing of certain technologies, and
eventually the acquisition of said technologies. He recruited the Board of
Directors, and the Chief Technology Officer. And was responsible for developing
the World Wide Web presence for the Company at www.infobuild.com.
1989-1996, Managing Director, Capcom Equities Inc., he was responsible for
facilitating mergers and or acquisitions for private and public development
stage and Micro-cap companies provided strategic financing advice and the
development of public market strategies. Mr. Poulos performed many of the same
functions as his position as an Investment Banker.
25
<PAGE>
1989-1996, Broker/Investment Banker, Osler Inc., Mr. Poulos spent seven years
in the Securities Industry in Vancouver, Canada, initially as a retail broker;
he progressed to assistant of the lead analyst, and eventually became part of
the Investment Banking team focusing on emerging technologies. His duties
included full due-diligence review of the Companies and their industries, and
complete evaluation and comparison of the business case.
26
<PAGE>
Maurice Pez Director of the Company
Mr. Pez started his career in 1977 with Raymond Letkeman Architects in the
City of Vancouver, BC, Canada. During the eight years he worked with the firm,
Mr. Pez served as Project Architect for a number of large complex residential
and hotel projects in Vancouver and Whistler. As an associate of the firm Mr.
Pez was responsible for the design, approvals and management of a major
proportion of the firms larger commissions. During his tenure, Mr. Pez built a
reputation in the development community as a creative Project Designer with
strong technical and managerial skills.
In 1986, Mr. Pez joined Downs Archambault and Partners Architects and Planners
as Project Architect for a variety of large developments in Vancouver, BC and
the Seattle, Washington area. At Downs Archambault and Partners Architects and
Planners, Mr. Pez furthered his experience on the design and approvals of large
complex multi-use urban projects. Maurice was a member of the Architectural and
Planning Consortium that secured approvals for one of the largest urban
waterfront projects in North America, Concorde's Pacific Place (the old Expo '86
lands), an 8000 unit residential high-rise and commercial mixed use development
on False Creek in Downtown Vancouver.
Polygon Homes, the largest low-rise multifamily builder in British Columbia
recruited Mr. Pez as a Senior Development Manager in 1991, to head up a 30 acre
major rezoning and development multi-use project in Langley, BC. During the
next four years, Mr. Pez also managed the development of 10 major projects with
over 1200 units of multifamily residential and "Lifestyle" product with sales of
over $240 million. In 1994, Mr. Pez was promoted to Vice President of
Development. Polygon Homes is recognized as an industry leader in market driven
residential development and construction in Canada and Mr. Pez contributed
significantly to the company's advancements in design and cost-effective
construction.
Mr. Pez left Polygon Homes in 1995, to start up a private architectural and
development consulting firm, Maurice Pez Architect Ltd. (MPA Ltd.). From 1995
to 1998 the firm's major client was Greystone Properties Ltd. in Vancouver, BC.
MPA Ltd. managed the Arbutus lands in Vancouver's west side for Greystone and
produced the overall development and marketing plans for 8 high profile
residential projects valued at over $200 million dollars. Operating in a
difficult approvals environment, Mr. Pez worked with the City of Vancouver to
finalize the design and approvals of the streets, parks, greenways and managed
the development of the low and high-rise condominium projects. MPA Ltd. also
managed the design and approvals of the Eau Claire Lands, downtown Calgary for
Greystone's sister company, the Prairie Land Corporation. This 10 acre high
profile site on the Bow River in the exclusive Eau Claire area of downtown
Calgary had a history of failed development applications. Working closely with
Calgary planning, the neighbourhood residents and marketing consultants, MPA
Ltd. was able to secure development permit approvals for a multi-tower
high-rise project of 450 units in an unprecedented period of 5 months. MPA Ltd.
also provided development consulting services to two major developers in the
Seattle, Washington area, Wakefield Homes and Polygon Northwest. Projects
included large multifamily rezoning and development approvals for 500 unit
master planned communities.
In 1998, Mr. Pez was hired on as Vice President of Residential Development for
Concert Properties Ltd. (formerly known as Greystone Properties) in Vancouver,
BC. Reporting directly to the President and Chief Executive Officer, David
Podmore, Mr. Pez oversees the acquisition and development management of all the
company's residential properties in British Columbia. These include large
multifamily market and rental high-rise projects in Vancouver and resort
developments on Vancouver Island and the Interior of BC.
Concert is one of the leading full service real estate development companies in
the Province, established and owned by British Columbia-based pension funds with
an asset base in excess of $5 billion. The company's activities include the
development of multifamily housing for sale, rental housing, commercial and
industrial projects throughout BC.
28
<PAGE>
Item 6. Remuneration of Directors and Executive Officers
(1) Compensation of Executive Officers
Only the President and CEO of Company has been compensated for the period from
March 05, 1999 to March 05, 2000 for services provided as an Officer.
Compensation is for this Officer is $12,000 per year, paid on a monthly basis.
"See Employment Agreements, Exhibits 10(a)."
(2) Compensation of Directors
This were no arrangements pursuant to which any director of the Company was
compensated for any service provided as a director. In addition, no such
arrangement is contemplated for the foreseeable future as the Company's only
directors are its current executive officers. "See Employment Agreements,
Exhibits 10(a)." The By-laws of the Company state: "Section 6.1. Compensation -
The directors may be paid their expenses of attendance at each meeting of the
Board of Directors and may be paid a fixed sum for attendance at each meeting of
the Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefore. Members of special or standing committees may
be allowed like reimbursement and compensation for attending committee
meetings."
Item 7. Interest of Management and Others in Certain Transactions
None-Not applicable.
30
<PAGE>
Part II
Item 1. Market price of and Dividends on the Registrant's Common Equity and
Other Stockholder matters
A. Market Information
The common stock of the Company is currently not traded on the NASDAQ OTC
Bulletin Board or any other formal or national securities exchange. This is no
trading market for the Company's Common Stock at present and this has been no
trading market to date. At this time, management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities, but the Company may initiate such discussions in the
future following receipt of an effective date for this Registration Statement.
(i) There is currently no Common Stock which is subject to outstanding
options or warrants to purchase, or securities convertible into, the Company's
common stock.
(ii) There is currently no common stock of the Company which could be sold
under Rule 144 under the Securities Act of 1933 as amended or that the
registrant has agreed to register for sale by security holders.
(iii) There is currently no common equity that is being or is proposed to be
publicly offered by the registrant, the offering of which could have a material
effect on the market price of the issuer's common equity.
B. Holders
As of November 01, 2000, the Company has approximately twenty-six (26)
stockholders of record. Penny Stock Regulation Broker-dealer practices in
connection with transactions in "Penny Stocks" 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 risk associated with the penny stock market. The broker-dealer
must also 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 penny stock rules
generally require that prior to a transaction in a penny stock, the broker-
dealer must make a written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to
the transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. When the Registration Statement becomes
effective and the Company's securities become registered, the stock will likely
have a trading price of less than $5.00 per share and will not be traded on any
exchanges. Therefore, the Company's stock will become subject to the penny
stock rules and investors may find it more difficult to sell their securities,
should they desire to do so.
C. Dividend Policy
The Company has not paid any dividends to date. In addition, it does not
anticipate paying dividends in the immediate foreseeable future. The Board of
Directors of the Company will review its dividend policy from time to time to
determine the desirability and feasibility of paying dividends after giving
consideration to the Company's earnings, financial condition, capital
requirements and such other factors as the Board may deem relevant.
31
<PAGE>
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports containing
audited financial statements and such other periodic reports as the Company may
determine to be appropriate or as may be required by law. Upon the
effectiveness of this Registration Statement, the Company will be required to
comply with periodic reporting, proxy solicitation and certain other
requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company is
Holladay Stock Transfer, 2939 North 67th Place, Scottsdale, Arizona, Phone:
480-481-3940.
Item 2. Legal Proceedings
The Company is not currently involved in any legal proceedings nor does it have
knowledge of any threatened litigation.
Item 3. Recent sale of Unregistered Securities
A total of two million (2,000,000) shares of its common stock were purchased by
the founder of the Company, on March 05, 1999 for cash. Between March 22 and
March 24, 1999, the Company sold One Million (1,000,000) shares of its common
stock in connection with a public offering at a price of $0.025 per share. On
or about February 24, 1999, the Company completed a public offering of shares of
common stock of the Company pursuant to Regulation "D," Rule 504 of the
Securities Act of 1933, as amended, whereby it sold one million (1,000,000)
shares of the Common Stock of the Company for twenty-five thousand ($25,000)
dollars to approximately twenty-five (25) unaffiliated shareholders of record.
The Company filed an original Form D with the Securities and Exchange Commission
on or about March 24, 1999.On May 20,2000 the company executed a 10% convertible
note payable in the amount of $50,000. This note bears interest at the brate of
10% per annum. This note matures June 15, 2002. The note may be converted to
common shares of the company at the rate of $0.025 per share or 2,000,000
shares. As of November 01, 2000, the Company has four million shares
(9,000,000) shares of its $0.001 par value common voting stock issued and
outstanding which are held by approximately twenty-five (25) shareholders,
including the founding shareholder, of record.
32
<PAGE>
Item 4. Description of Securities
A. Common Stock
(1) Description of Rights and Liabilities of Common Stockholders
i. Dividend Rights - The holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available Therefore at such
times and in such amounts as the board of directors of the Company may from time
to time determine.
ii. Voting Rights - Each holder of the Company's common stock are entitled
to one vote for each share held of record on all matters submitted to the vote
of stockholders, including the election of directors. All voting is
noncumulative, which means that the holder of fifty percent (50%) of the shares
voting for the election of the directors can elect all the directors. The board
of directors may issue shares for consideration of previously authorized but
unissued common stock without future stockholder action.
iii. Liquidation Rights - Upon liquidation, the holders of the common stock
are entitled to receive pro rata all of the assets of the Company available for
distribution to such holders.
iv. Preemptive Rights - Holders of common stock are not entitled to
preemptive rights.
v. Conversion Rights - No shares of common stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of common
stock.
vii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of common stock are subject to
Further call or assessment by the issuer. The Company has not issued stock
options as of the date of this Registration Statement.
(2) Potential Liabilities of Common Stockholders to State and Local
Authorities
No material potential liabilities are anticipated to be imposed on stockholders
under state statues. Certain Nevada regulations, however, require regulation of
beneficial owners of more than 5% of the voting securities. Stockholders that
fall into this category, Therefore, may be subject to fines in circumstances
where non-compliance with these regulations are established.
B. Debt Securities
The Company is not registering any debt securities, there is an convertible note
outstanding.
C. Other Securities To Be Registered
The Company is not registering any security other than its common stock.
34
<PAGE>
Item 5. Indemnification of Directors and Officers
In 1995, management recognized the need for affordable housing in the Las Vegas
market and began to develop value-priced single-family detached homes. The
Company opened its first single-family home development in April 1996. The
Company had 11 residential community developments in process, in three states,
as of September 30, 2000.
Article 10 of the Articles of Incorporation states: "No Director or Officer of
this Corporation shall be personally liable to the Corporation or to any of its
stockholders for damages for breach of fiduciary duty as a director or officer
involving any act or commission of any such director or officer provided,
however, that the foregoing provision shall not eliminate or limit the liability
of a director or officer for acts of omissions which involve intentional
misconduct, fraud or a knowing violation of law, or the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or
modification of this Article by the Stockholders shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts or omissions prior to such
repeal or modification."
Article 11 of the Company's By-laws state: " Every person who was or is a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or a person of whom he is the legal representative is or was
a director or officer of the corporation or is or was serving at the request of
the corporation or for its benefit as a director or officer of another
corporation, or as its representative in a partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless to the fullest extent
legally permissible under the General Corporation Law of the State of Nevada
from time to time against all expenses, liability and loss (including moneys'
fees, judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. The expenses of officers
and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. Such right of indemnification
shall be a contract right which may be enforced in any manner desired by such
person. Such right of indemnification shall not be exclusive of any other right
which such directors, officers or representatives may have or hereafter acquire
and, without limiting the generality of such statement, they shall be entitled
to their respective rights of indemnification under any bylaw, agreement, vote
of stockholders, provision of law or otherwise, as well as their rights under
this Article.
The Board of Directors may cause the corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws with respect
to indemnification and may amend these and such Bylaws to provide at all times
the fullest indemnification permitted by the General Corporation Law of the
State of Nevada."
35
<PAGE>
Part F/S
Item 1. Financial Statements
The following documents are filed as part of this report:
a) Emporia Systems
Report of Barry L. Friedman, CPA
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE #
------
INDEPENDENT AUDITORS REPORT F-1
ASSETS F-2
LIABILITIES AND STOCKHOLDERS' EQUITY F-3
STATEMENT OF OPERATIONS F-4
STATEMENT OF STOCKHOLDERS' EQUITY F-5
STATEMENT OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7-11
<PAGE>
b) Interim Financial Statements are not provided at this time as they are
not applicable at this time.
c) Financial Statements of Businesses Acquired or to be Acquired are not
provided at this time as they are not applicable at this time.
d) Pro-forma Financial Information is not provided at this time as it is not
applicable at this time.
Item 2. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure
None-Not Applicable
36
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2000
December 31, 1999
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-10
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors October 17, 2000
EMPORIA SYSTEMS
Phoenix, Arizona
I have audited the accompanying Balance Sheets of EMPORIA SYSTEMS, (A
Development Stage Company), as of September 30, 2000, and December 31, 1999, and
the related Statements of Operations, Stockholders' Equity and Cash Flows for
the periods January 1, 2000, to September 30, 2000, and March 2, 1999,
(inception), to December 31, 1999. These Financial Statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these Financial Statements, based on my audit.
I conducted my 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the Financial Statements referred to above present fairly,
in all material respects, the financial position of EMPORIA SYSTEMS, (A
Development Stage Company), as of September 30, 2000, and December 31, 1999, and
the results of its operations and cash flows for the periods January 1, 2000, to
September 30, 2000, and March 2, 1999, (inception), to December 31, 1999, in
conformity with generally accepted accounting principles.
The accompanying Financial Statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 in the "Notes
to the Financial Statements," the Company has had no operations and has no
established source of revenue. This raises substantial doubt about its ability
to continue as a going concern. Management's plans, in regard to these matters,
are also described in Note #5. The Financial Statements do not include any
adjustments that might result from the outcome of this uncertainty.
------------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, Nevada 89123
(702) 361-8414
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
BALANCE SHEET
ASSETS
Sept. December
30, 2000 31, 1999
CURRENT ASSETS
Cash $ 24,791 $ 30
TOTAL CURRENT ASSETS $ 24,791 $ 30
OTHER ASSETS $ 0 $ 0
TOTAL OTHER ASSETS $ 0 $ 0
TOTAL ASSETS $ 24,791 $ 30
The accompanying notes are an integral part of these financial statements
- 2 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
Sept. December
30, 2000 31, 1999
CURRENT LIABILITIES
Officers' Advances (Note #8) $ 350 $ 100
Accrued Interest Payable 1,806 0
Notes Payable (Note #7) 50,000 0
TOTAL CURRENT LIABILITIES $ 52,156 $ 100
STOCKHOLDERS' EQUITY (Note #4)
Common stock, $.001 par value
Authorized 25,000,000 shares
Issued and outstanding at
December 31, 1999 - 9,000,000 shares $ 9,000
September 30, 2000 - 9,000,000 shares $ 9,000
Additional paid in capital 18,000 18,000
Deficit accumulated during
the development stage -54,365 -27,070
TOTAL STOCKHOLDERS' EQUITY $ -27,365 $ -70
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 24,791 $ 30
The accompanying notes are an integral part of these financial statements
- 3 -
<PAGE>
<TABLE>
<CAPTION>
EMPORIA SYSTEMS
(A Development Stage Company)
STATEMENT OF OPERATIONS
Jan. 1, Mar. 2, Mar. 2, 1999
2000, to 1999, to (Inception)
Sep. 30, Dec. 31, to Sep. 30,
2000 1999 2000
<S> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0
EXPENSES General and Administrative $ 25,489 $ 27,070 $ 52,559
TOTAL EXPENSES FROM OPERATIONS $ 25,489 $ 27,070 $ 52,559
Less: Interest Expense 1,806 0 1,806
Net Loss $ -27,295 $ -27,070 $ -54,365
Net loss per share - Basic $ -.0030 $ -.0030 $ -.0060
Diluted $ -.0025 $ -.0025 $ -.0049
Weighted average number of common shares outstanding 9,000,000 9,000,000 9,000,000
Assuming average number of diluted shares outstanding 11,000,000 11,000,000 11,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements
- 4 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional
Common Stock paid-in Accumulated
Shares Amount Capital Deficit
March 5, 1999
Issued for services 2,000,000 $ 2,000 $ 0
March 24, 1999 Issued for cash 1,000,000 1,000 +24,000
May 25, 1999
Forward Stock
Split 3 to 1 6,000,000 +6,000 -6,000
Net loss,
March 2, 1999
(Inception) to December 31, 1999 $-27,070
Balance, December 31, 1999 9,000,000 $ 9,000 $18,000 $-27,070
Net loss, January 1, 2000
to September 30, 2000 -27,295
Balance, September 30, 2000 9,000,000 $ 9,000 $18,000 $-54,365
The accompanying notes are an integral part of these financial statements
- 5 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Jan. 1, Mar. 2, Mar. 2, 1999
2000, to 1999, to (Inception)
Sep. 30, Dec. 31, to Sep. 30,
2000 1999 2000
Cash Flows from
Operating Activities
Net loss $ -27,295 $ -27,070 $ -52,559
Issuance of common stock
for services 0 +2,000 +2,000
Officers' Advances +250 +100 +350
Accrued Interest Payable +1,806 0 0
Notes Payable +50,000 0 +50,000
Net Cash Flows from
Operating Activities $ +24,761 $ -24,970 $ -209
Cash flows from
Investing Activities $ 0 $ 0 $ 0
Cash Flows from
Financing Activities
Issuance of common
stock for cash $ 0 $ +25,000 $ +25,000
Net Cash Flows
from Financing Activities $ 0 $ +25,000 $ +25,000
Net increase in cash $ +24,761 $ +30 $ +24,791
Cash, Beginning of period 30 0 0
Cash, End of period $ 24,791 $ 30 $ 24,791
The accompanying notes are an integral part of these financial statements
- 6 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 2000, and December 31, 1999
NOTE #1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized March 2, 1999, under the laws of the State of Nevada,
as Emporia Systems. The Company currently has no operations and, in accordance
with SFAS #7, is considered a development stage company.
NOTE #2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of Financial Statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
which 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.
Cash and Equivalents
The Company maintains a cash balance in a non-interest-bearing bank, which
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments, with the maturity of
three months or less, are considered to be cash equivalents. There are no cash
equivalents as of December 31, 1999, or September 30, 2000.
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109)
"Accounting for Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
- 7 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2000, and December 31,
1999
NOTE #2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-Up
Activities," which provides guidance on the financial reporting of start-up
costs and organization costs. It requires most costs of start-up activities and
organization costs to be expensed, as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the adoption of SOP 98-5,
there has been little or no effect on the Company's Financial Statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
loss per share reflects per-share amounts that would have resulted if dilutive
common stock equivalents had been converted to common stock. There is a Note
Payable for $50,000 that could be converted to common stock at the rate of
$0.025 per share. If a conversion took place it would require the issuance of
2,000,000 shares.
Year End
The Company has selected December 31st, as its year-end.
Year 2000 Disclosure
The Y2K issue had no effect on this Company.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash transaction is
to issue the equivalent amount of stock equal to the fair market value of the
assets or services received.
- 8 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 2000, and December 31, 1999
NOTE #3 - INCOME TAXES
There is no provision for income taxes for the period ended September 30, 2000.
The Company's total deferred tax asset, as of December 31, 1999, is as follows:
Net operation loss carry-forward $ 27,070
Valuation allowance $ 27,070
Net deferred tax asset $ 0
The federal net operating loss carry-forward will expire in 2019.
This carry-forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE #4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the Company consists of 25,000,000 shares, with
a par value of $0.001 per share.
Preferred Stock
EMPORIA SYSTEMS has no preferred stock.
On March 5, 1999, the Company issued 2,000,000 shares of its $0.001 par value
common stock for services for $0.001 per share, or a total of $2,000, to its
director.
On March 24, 1999, the Company completed a public offering that was offered
without registration, under the Securities Act of 1933, as amended ("The Act"),
in reliance upon the exemption from registration afforded by Sections 4 (2) and
3 (b) of the Securities Act, and Regulation D promulgated thereunder. The
Company sold 1,000,000 shares of common stock at a price of $0.025 per share,
for a total amount raised of $25,000.
On May 25, 1999, the Company approved a forward stock split on the basis of 3:1,
thus increasing the outstanding common stock from 3,000,000 shares to 9,000,000
shares.
- 9 -
<PAGE>
EMPORIA SYSTEMS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2000, and December 31,
1999
NOTE #5 - GOING CONCERN
The Company's Financial Statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have and established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating company.
NOTE #6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer
of the corporation provides office services without charge. Such costs are
immaterial to the Financial Statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE #7 - NOTE PAYABLE
On May 20, 2000, the Company executed a 10% Convertible Note Payable in the
amount of $50,000.00. This Note bears interest at the rate of 10% per annum.
This note matures June 15, 2002. Also this note may be converted to common
shares of the Company at the rate of $0.025 per shares or 2,000,000 shares.
NOTE #8 - OFFICERS ADVANCES
While the Company is seeking additional capital, an officer of the Company has
advanced funds on behalf of the Company to pay for any costs incurred by it.
These funds are interest free. As of September 30, 2000, the amount advanced
was $350,00.
- 10 -
<PAGE>
To Whom It May Concern: October 17, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents to
the inclusion of their report of October 17, 2000, on the Financial Statements
of EMPORIA SYSTEMS, as of September 30, 2000, in any filings that are necessary
now or in the near future with the U.S. Securities and Exchange Commission.
Very truly yours,
---------------------------
Barry L. Friedman
Certified Public Accountant
26,
s/s Barry L. Friedman
------------------------------
Barry L. Friedman
Certified Public Accountant
F-1
F-2
<PAGE>
Emporia Systems
(A Development Stage Company)
STATEMENT OF CASH FLOWS
------------------------
STATEMENT OF CASH FLOWS
Feb. 16, 1999
(Inception)
to Aug. 26,
1999
-------------
Cash Flows from
Operating Activities
Net Loss $ -32,660
Amortization +59
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities 0
Changes in assets and
Liabilities
Officer's Advances +500
-------------
Net cash used in
Operating activities $ -32,101
Cash Flows from
Investing Activities
Organization costs -588
Cash Flows from
Financing Activities
Issuance of Common
Stock for Cash +77,000
-------------
Net Increase (decrease) $ 44,311
Cash,
Beginning of period 0
-------------
Cash, End of Period $ 44,311
-------------
See accompanying notes to financial statements & audit report
F-3
<PAGE>
Part III
Item 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB)
Exhibit Number Name and/or Identification of Exhibit
1. Underwritten agreement
None. Not Applicable
2. Plan of Acquisition, Reorganization, Arrangement, Liquidation,
or Succession.
None. Not Applicable
b) Asset Purchase and Liability Assumption Agreement
None. Not Applicable
c) Interest Purchase Agreement
None. Not Applicable
d) Agreement for Bill of Sale and Assignment of Assets
None. Not Applicable
e) Exchange Stock Agreement
None. Not Applicable
3. Articles of Incorporation & By-Laws
3.1 Articles of Incorporation of the Company Filed
February 16, 1999
3.2 By-Laws of the Company adopted March 2, 1999
4. Instruments Defining the Rights of Security Holders
Those included in exhibit 3, and sample of Stock Certificate
5. Opinion on Legality
None. Not Applicable
6. No Exhibit Required
Not Applicable
7. Opinion on Liquidation Preference
None. Not Applicable
8. Opinion on Tax Matters
None. Not Applicable
9. Voting Trust Agreement and Amendments
None. Not Applicable
10. Material Contracts
Employment Agreements with:
10.1 Georgios Polyhronopoulos
37
<PAGE>
11. Statement Re Computation of Per Share Earnings
None. Not Applicable. Computation of per share earnings can be clearly
determined from the Statement of Operation from the Company's financial
statements.
12. No Exhibit Required
13. Annual or Quarterly Reports - Form 10-Q
None. Not Applicable
14. Material Foreign Patents
None. Not Applicable
15. Letters on Unaudited Interim Financial Information
None. Not Applicable
16. Letter on Change in Certifying Accountant
None. Not Applicable
17. Letter of Director Resignation
None. Not Applicable
18. Letter on Change in Accounting Principles
None. Not Applicable
19. Reports Furnihed to Security Holders
None. Not Applicable
20. Other Documents or Statements to Security Holders
None. Not Applicable
21. Subsidiaries of Small Business Issuers
None. Not Applicable
38
<PAGE>
22. Published Report Regarding Matters Submitted to Vote of
None. Not Applicable
23. Consent of Experts and Counsel
Exhibit 23, Barry L. Friedman, CPA
24. Power of Attorney
None. Not Applicable
25. Statement of Eligibility of Trustee
None. Not Applicable
26. Invitations for Competitive Bids
None. Not Applicable
27. Financial Data Schedule
Exhibit 27
28. Information from Reports Furnished to State Insurance
Regulatory Authorities
None. Not Applicable
29. Additional Exhibits
None. Not Applicable
39
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, hereunto duly authorized.
Emporia Systems
--------------------
(Registrant)
Dated: October 4, 1999
By: /s/ Georgios Polyhronopoulos
----------------------------------
Georgios Polyhronopoulos, Chairman of the Board, President
and Chief Executive Officer
By: /s/ Larry L. Richardson
-----------------------------
Georgios Polyhronopoulos, Corporate Secretary
40
<PAGE>
