UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEW TECH VENTURES, INC.
(Name of small business issuer in our charter)
Delaware 6770 13-4082874
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(State of other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or Incorporation or Identification Number)
organization) organization
Identification Number)
1501 Broadway, Suite 1807, New York, New York 10036 (212) 768-2583
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(Address and telephone number of principal executive offices)
Sierchio & Albert, P.C., 150 E 58th St., New York, New York 10155,
(212) 446-9500
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(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: as soon as practicable
after the effective date of this registration statement.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay our effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting under
said Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
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Title of Each Amount Price Maximum Registration
Class of Being Per Aggregate Fee(1)
Securities Being Registered Share Price
Registered
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Shares of common 4,000,000 $0.03 $120,000 $33.36
stock
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TOTAL 4,000,000 $0.03 $120,000 $33.36
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(1) Estimated for purposes of computing the registration fee under Rule 457.
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NEW TECH VENTURES, INC.
INITIAL PUBLIC OFFERING PROSPECTUS
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4,000,000 shares of common stock offered at $0.03 per share
We are offering for sale 4,000,000 shares (the "Shares") of common stock,
$.001 par value per share, at a purchase price of $0.03 per Share. The Shares
shall be sold exclusively by us on a best-efforts basis for a period of one
hundred eighty days, which may be extended an additional thirty days. There is
no minimum offering. This offering will be conducted directly by us, without the
use of a professional underwriter or securities dealer in compliance with Rule
419 of SEC Regulation C.
Pursuant to Rule 419, the offering proceeds and the securities to be issued
to purchasers will be placed in an escrow account (the "Rule 419 Escrow
Account") until the offering has been reconfirmed by our shareholders and a
business has been acquired in accordance with the provisions of such rule.
Please refer to the "Plan of Distribution," "Your Rights and Substantive
Protection Under Rule 419" on pages 30 and 8 respectively of this Prospectus.
No public market currently exists for shares of our common stock. No public
market may ever develop. Even if a market develops, you may not be able to sell
the Shares you purchase.
THIS IS A HIGHLY RISKY INVESTMENT. WE HAVE DESCRIBED THESE RISKS UNDER THE
CAPTION "RISK FACTORS" BEGINNING ON PAGE 10.
None of the Securities and Exchange Commission, any state securities
commission, or any other government agency has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Offering Information
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Per Share Total
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Initial public offering price .................... $ .03 $120,000.00
Underwriting discounts/commissions (1) ........... $ .00 $ .00
Estimated offering expenses (1) .................. $.006 $ 25,000.00
Net offering proceeds to the Company ............. $ .03 $120,000.00
(1) We are offering these Shares ourselves without the use of a professional
underwriter. We will not pay commissions on stock sales. All offering
costs, including filing, printing, legal, accounting, transfer agent and
escrow agent fees estimated at $25,000 will be paid from our existing
working capital.
This Prospectus is dated _________.
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TABLE OF CONTENTS
Page
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PROHIBITION AGAINST SELLING SHARES HELD IN ESCROW...........................4
NO MARKET FOR THE SHARES....................................................4
STATE AND LOCAL SECURITIES LAWS AND REGULATIONS.............................4
PROSPECTUS SUMMARY..........................................................5
YOUR RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419.......................8
RISK FACTORS...............................................................10
DILUTION...................................................................18
USE OF PROCEEDS............................................................19
CAPITALIZATION.............................................................20
PROPOSED BUSINESS..........................................................21
PLAN OF OPERATION..........................................................25
RELATED PARTY TRANSACTIONS.................................................26
DESCRIPTION OF SECURITIES..................................................26
MANAGEMENT.................................................................27
PRINCIPAL SHAREHOLDERS.....................................................28
MARKET FOR OUR COMMON STOCK................................................28
SHARES ELIGIBLE FOR FUTURE SALE............................................29
REPORTS TO SHAREHOLDERS....................................................30
PLAN OF DISTRIBUTION.......................................................30
ADDITIONAL INFORMATION.....................................................32
LEGAL PROCEEDINGS..........................................................32
LEGAL MATTERS..............................................................32
INTEREST OF NAMED COUNSEL..................................................32
FINANCIAL STATEMENTS.......................................................33
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by us. This prospectus does not
constitute an offer to sell or a solicitation of any offer to buy any securities
in any jurisdiction in which such offer or solicitation would be unlawful. The
delivery of this prospectus shall not under any circumstances create any
implication that there has not been any change in our affairs since the date
hereof; however, any changes that may have occurred are not material to an
investment decision. In the event there have been any material changes in our
affairs, a post-effective amendment will be filed. We reserve the right to
reject any order, in whole or in part, for the purchase of any of the shares
offered.
Until 90 days after the date when the funds and securities are released
from the escrow account, all dealers effecting transactions in the shares,
whether or not participating in this distribution, may be required to deliver a
prospectus.
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PROHIBITION AGAINST SELLING SHARES HELD IN ESCROW
RULE 15g-8 PROMULGATED PURSUANT TO THE EXCHANGE ACT OF 1934 MAKES IT UNLAWFUL
FOR ANY PERSON TO SELL OR OFFER TO SELL THE SHARES HELD IN ESCROW (OR ANY
INTEREST IN OR RELATED TO THE SHARES). THUS, YOU ARE PROHIBITED FROM MAKING ANY
ARRANGEMENTS TO SELL THE SHARES UNTIL THEY ARE RELEASED FROM THE ESCROW ACCOUNT.
NO MARKET FOR THE SHARES
Prior to this Offering there has been no public market for the Shares. There can
be no trading in the Shares while they are held in the Rule 419 escrow account.
There can be no assurance that any trading market in the Shares will develop
hereafter or if it does develop, that it will be sustained. We have no present
plans, proposals, arrangements or understandings with any person with regard to
the development of a trading market for the Shares.
The public offering price has been arbitrarily determined by us and bears no
relationship to the Company's assets, prospective earnings, book value or any
other recognized criteria of value. This offering will be conducted by us
without use of a professional underwriter or securities dealer.
STATE AND LOCAL SECURITIES LAWS AND REGULATIONS
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION.
IN THE UNITED STATES, THE COMPANY WILL OFFER AND SELL SHARES ONLY IN NEW YORK
AND FLORIDA. IN NEW YORK THE COMPANY HAS FILED FORM M-11 WITH THE STATE OF NEW
YORK REGISTERING THE SHARES FOR OFFER AND SALE IN NEW YORK. IN FLORIDA THE
SHARES WILL BE OFFERED AND SOLD PURSUANT TO THE EXEMPTION FROM REGISTRATION
AFFORDED BY SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES ACT.
PROSPECTIVE INVESTORS RESIDING IN THE STATE OF FLORIDA SHOULD NOTE THAT THE
SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT AND ARE BEING
OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION THEREUNDER AFFORDED BY
SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES ACT AND INVESTOR PROTECTION
ACT. IN THE EVENT THAT SALES ARE MADE TO FIVE (5) OR MORE PERSONS IN THE STATE
OF FLORIDA PURSUANT TO THE EXEMPTION FOR LIMITED OFFERS OF SALES OF SECURITIES
SET FORTH IN SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES ACT AND INVESTOR
PROTECTION ACT, ANY SALE IN FLORIDA MADE
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PURSUANT TO SUCH SECTION IS VOIDABLE BY THE PURCHASER IN SUCH SALE EITHER WITHIN
THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER
TO THE COMPANY, AN AGENT OF THE COMPANY, OR AN ESCROW AGENT OR WITHIN THREE (3)
DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER,
WHICHEVER OCCURS LATER. TO ACCOMPLISH THIS, IT IS SUFFICIENT FOR A FLORIDA
INVESTOR TO SEND A LETTER OR TELEGRAM TO THE COMPANY WITHIN SUCH THREE (3) DAY
PERIOD STATING THAT IT IS VOIDING AND RESCINDING THE PURCHASE. IF AN INVESTOR
SENDS SUCH A LETTER, IT IS PRUDENT TO DO SO BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO INSURE THAT THE LETTER IS RECEIVED AND TO EVIDENCE THE TIME OF
MAILING.
THE COMPANY WILL OFFER SHARES IN ST. KITTS AND NEVIS, THE BRITISH WEST
INDIES. SUCH OFFERS WILL BE SUBJECT TO BOTH ST. KITTS AND NEVIS COMPANIES
ACT WITH WHICH THE COMPANY BELIEVES THIS OFFERING COMPLIES.
THE SHARES OFFERED BY US ARE SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN OFFER TO
PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER, WITHOUT NOTICE.
WE RESERVE THE RIGHT TO REJECT ANY OFFER, IN WHOLE OR IN PART, FOR THE PURCHASE
OF ANY OF THE SHARES.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this Prospectus.
Because this is a summary, it may not contain all of the information that you
should consider before deciding to purchase the Shares. You should read this
entire Prospectus carefully.
The Company
We were organized on April 21, 1999 under the laws of the State of Delaware
as a vehicle to acquire or merge with a business or company (a "target
business"). We believe that our characteristics as an enterprise with nominal
liabilities and flexibility in structuring will make us an attractive
acquisition candidate. None of our officers, directors, promoters, their
affiliates or associates have had any preliminary contact or discussions and
there are no present plans, proposals, arrangements or understandings with any
representative of the owners of any business regarding the possibility of an
acquisition or merger transaction. We do not intend to engage in the business of
investing, reinvesting or trading in securities as our primary business or
pursue any business that would render us an investment company under the
Investment Company Act of 1940.
Since our organization, our activities have been limited to the sale of
initial shares for our organization and our preparation of a registration
statement and prospectus for our initial public offering. We will not engage in
any substantive commercial business following the
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offering. We maintain our principal office at 1501 Broadway, Suite 1807, New
York, New York 10036. Our phone and facsimile numbers are (212) 768-2383 and
(212) 768-3036.
The Offering
Securities offered................................4,000,000 shares of common
stock, $.001 par value, being
offered at $0.03 per share.
(Please refer to "Description
Securities" on page 26.)
Common stock outstanding
prior to the offering.............................1,010,000 Shares.
Common stock to be
outstanding after the offering....................5,010,000 Shares.
Offering Conducted in Compliance with Rule 419
We are a blank check company, and consequently this offering is being
conducted in compliance with Rule 419. You have certain rights and will receive
the substantive protection provided by that rule. To that end:
* The securities purchased by you and other investors and the funds received
by us in the offering will be deposited and held in the Rule 419 escrow
account until an acquisition meeting specific criteria is completed.
* Before the acquisition can be completed and before the funds can be
released to us and the Shares can be released to you, we are required to
update the registration statement with a post-effective amendment.
* Within the five days after the effective date of the post-effective
amendment, we are required to furnish you with the prospectus containing
the terms of a reconfirmation offer and information regarding the proposed
acquisition candidate and our business, including audited financial
statements.
* According to Rule 419, you must have no fewer than 20 and no more than 45
business days from the effective date of the post-effective amendment to
decide to reconfirm your investment and remain an investor or alternately,
require the return of your investment, less certain permitted deductions.
* If an investor does not make any decision within this 45 day period, we
will automatically return such investor's investment funds.
* Rule 419 further provides that if we do not complete an acquisition meeting
the specified criteria within 18 months of the date of this Prospectus, all
of the funds in the Rule 419 escrow account (less permitted deductions)
must be returned to the investors. If the offering period is extended to
our 7 month limit, we will have only 11 months in which to complete the
acquisition of a target company.
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Risk Factors
Purchase of the Shares is speculative and involves a high degree of risk.
The Shares should be purchased by you only if you can afford to lose your entire
investment. See "Risk Factors."
Determination Of Offering Price
The offering price of $0.03 per share for the Shares has been arbitrarily
determined by us. This price bears no relation to our assets, book value, or any
other customary investment criteria, including our prior operating history.
Among the factors considered by us in determining the offering price were:
* Estimates of our business potential
* Our limited financial resources
* The amount of equity desired to be retained by the present shareholder
* The amount of dilution to public investors
* The general condition of the securities markets
Use of Proceeds
Of the $120,000 offering proceeds deposited into the Rule 419 escrow
account, 10% or $12,000 will be released to us prior to a reconfirmation
offering in which you reconfirm your investment in accordance with procedures
required by Rule 419. The $12,000 will be used to defray our operating costs
pending our acquisition of a target business. The balance of the funds will
remain in the Rule 419 escrow account to be maintained by Firstrust Savings
Bank, as Escrow Agent, until such acquisition is completed under the guidelines
contained in Rule 419.
We intend to apply the balance of the deposited funds, when available, to
the payment of the costs and expenses incurred by us in connection with the
acquisition of a target business and in complying with the requirements of Rule
419. See "Use of Proceeds" on page 19.
Transfer Agent
StockTrans, Inc., 7 East Lancaster Avenue, Ardmore, Pennsylvania, will act
as the Company's transfer agent.
Escrow Agent
Firstrust Savings Bank, 1931 Cottman Avenue, Philadelphia, PA 19111 will
act as Escrow Agent.
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YOUR RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
Deposit of Offering Proceeds and Shares
Rule 419 requires that offering proceeds after deduction for underwriting
commissions, underwriting expenses and dealer allowances, if any, and the
securities purchased by you and other investors in this Offering, be deposited
into an escrow or trust account governed by an agreement which contains certain
terms and provisions specified by Rule 419.
Under Rule 419, the funds will be released to us and the Shares will be
released to you only after we have met the following three basic conditions:
* First, we must execute an agreement for an acquisition meeting certain
prescribed criteria.
* Second, we must file a post-effective amendment to the registration
statement which includes the terms of a reconfirmation offer that must
contain conditions prescribed by the rules. The post-effective amendment
must also contain information regarding the acquisition candidate and
business, including audited financial statements.
* Third, we must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that a certain minimum
number of investors must elect to remain investors.
After we submit a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition is closed, the
escrow agent can release the funds and securities.
Accordingly, we have entered into an escrow agreement with Firstrust
Savings Bank which provides that:
* The proceeds are to be deposited into the Rule 419 escrow account
maintained by the escrow agent promptly upon receipt. Rule 419 permits 10%
of the funds to be released to us prior to the reconfirmation offering. The
funds and any dividends or interest thereon, if any, are to be held for the
sole benefit of investors and can only be invested in bank deposit, in
money market mutual funds or federal government securities or securities
for which the principal or interest is guaranteed by the federal
government.
* All Shares issued in the Offering and any other shares issued in connection
with the Shares, such as stock split, stock dividends or similar rights,
are to be deposited directly into the Rule 419 escrow account promptly upon
issuance. Your name must be included on the stock certificates or other
documents evidencing the securities. The securities held in the Rule 419
escrow account are to remain as issued, and are to be held for your sole
benefit. You retain the voting rights, if any, to the securities held in
your name. The Shares held in the Rule 419 escrow account may neither be
transferred or disposed of nor any interest created in them other than by
will or the laws of descent and distribution, or under a qualified domestic
relations order as
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defined by the Internal Revenue Code of 1986 or Table 1 of the Employee
Retirement Income Security Act.
* Warrants, convertible securities or other derivative securities relating to
securities held in the Rule 419 escrow account may be exercised or
converted in accordance with their terms; provided, however, that the
securities received upon exercise or conversion together with any cash or
other consideration paid for the exercise or conversion are to be promptly
deposited into the Rule 419 escrow account.
Prescribed Acquisition Criteria
Rule 419 requires that before the funds and the securities can be released,
we must first execute an agreement to acquire an acquisition candidate meeting
certain specified criteria. The agreement must provide for the acquisition of a
business or assets for which the fair value of the business represents at least
80% of the maximum offering proceeds. The agreement must include, as a
precondition to its closing, a requirement that the number of investors
representing 80% of the maximum offering proceeds must elect to reconfirm their
investment. For purposes of the offering, the fair value of the business or
assets to be acquired must be at least $96,000 (80% of $120,000).
Post-Effective Amendment
Once the agreement governing the acquisition of a business meeting the
required criteria has been executed, Rule 419 requires us to update the
registration statement with a post-effective amendment. The post-effective
amendment must contain information about the proposed acquisition candidate and
their business, including audited financial statements, the results of this
offering and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The reconfirmation offer must include certain prescribed
conditions which must be satisfied before the funds and securities can be
released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Under Rule 419, the terms of the reconfirmation offer
must include the following conditions:
* The prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the Rule 419 escrow account
within 5 business days after the effective date of the post-effective
amendment.
* Each investor will have no fewer than 20 and no more than 45 business days
from the effective date of the post-effective amendment to notify us in
writing that the investor elects to remain an investor.
* If we do not receive written notification from any investor within 45
business days following the effective date, the proportionate portion of
the funds and any related interest or dividends held in the escrow account
on such investor's behalf will be
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returned to the investor within 5 business days by first class mail or
other equally prompt means.
* The acquisition will be closed only if a minimum number of investors
representing 80% of the maximum offering proceeds ($96,000) elect to
reconfirm their investment.
* If an acquisition has not occurred by ___________* (18 months from the date
of this Prospectus), the funds held in the escrow account shall be returned
to all investors on a proportionate basis within 5 business days by first
class mail or other equally prompt means.
RISK FACTORS
There is a high degree of risk is associated with an investment in shares
in a company like ours. You should know that our business, financial condition
or results of operations, and, more importantly, that of any business we
acquire, could be materially and adversely affected by any of the following
risks. You should carefully consider the following factors in addition to the
other information in this Prospectus before acquiring the shares.
Recently Organized Company.
We were only recently organized and have no operating history. We,
therefore, must be considered promotional and in our early formative and
development stage. Potential investors should be aware of the difficulties
normally encountered by a new enterprise, especially in view of the relatively
small size of this offering. There is nothing at this time upon which to base an
assumption that our business plan will be successful, and there is no assurance
that we or any business that we may purchase will be able to operate profitably.
We have limited resources and have had no revenue to date.
Experience of Management.
Although Management has general business experience, potential investors
should be aware that Management has limited experience regarding business
acquisitions. Management does not have, nor does it presently intend to enter
into, any contracts or agreements with any consultants or advisors with respect
to its proposed business activities. Consequently, Management has not
established the criteria that will be used to hire independent consultants
regarding their experience, the services to be provided, the term of service,
etc., and no assurance can be made that we will be able to obtain such
assistance on acceptable terms.
Anticipated Change in Control and Management.
We anticipate that, in connection with the acquisition of a target
business, we will have to issue shares of authorized but unissued common stock
which, when issued will comprise a majority of our then issued and outstanding
shares of common stock. Therefore, we anticipate that upon completion of the
acquisition of a target business we will no longer be controlled by
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the current shareholders and those shareholders who purchase the shares in the
Offering. In addition, existing management and directors may resign. We cannot
assure you of the experience or qualifications of new management either in the
operation of our activities or in the operation of the business, assets or
property acquired.
No Acquisition Candidate Identified.
As of the date of this Prospectus, we have not entered into or negotiated
any arrangements for the acquisition of a target business. Since we have not yet
attempted to seek a target business, and given our lack of experience, there is
only a limited basis upon which to evaluate our prospects for achieving our
intended business objectives.
No Access to Your Funds While Held In Escrow.
You will be offered return of your proportionate portion of the funds held
in the Rule 419 escrow account only upon the reconfirmation offering required to
be conducted upon execution of an agreement to acquire a target business having
assets which represents 80% of the maximum offering proceeds. If we are unable
to locate a target business which meets this acquisition criteria, you will have
to wait 18 months from the date of this Prospectus before a proportionate
portion of your funds (less any permitted deductions) are returned to you.
No Transfer of Escrowed Shares.
While held in the Rule 419 escrow account, no transfer or other disposition
of the Shares is permitted other than by will or the laws of descent and
distribution, or under a qualified domestic relations order as defined by the
Internal Revenue Code of 1986 as amended, or Title 7 of the Employee Retirement
Income Security Act, or the related rules. Under Rule 15g-8, it is unlawful for
any person to sell or offer to sell the securities or any interest in or related
to the securities held in the Rule 419 escrow account other than under a
qualified domestic relations order in divorce proceedings. Therefore, any and
all contracts for sale to be satisfied by delivery of the Shares and sales of
derivative securities to be settled by delivery of the Shares are prohibited.
You are further prohibited from selling any interest in the Shares or any
derivative securities whether or not physical delivery is required.
Failure of Sufficient Number of Investors to Reconfirm Investment.
An acquisition of a target business cannot be completed unless the
reconfirmation offering requirements of Rule 419 are met. If, after completion
of the reconfirmation offering, a sufficient number of investors (representing
80% of the maximum offering proceeds) do not reconfirm their investment, the
business combination will not be closed. In such event, all of the Shares held
in escrow will be returned to us for cancellation and the funds (less any
permitted deductions) will be returned to you on a proportionate basis.
Our officers, directors, current shareholders and any of their respective
affiliates or associates may purchase, but are not required to purchase up to
2,000,000 Shares. Such
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amount, however, cannot exceed 50% of the aggregate number of Shares sold.
Shares purchased by such persons will be included in determining whether
investors representing 80% of the maximum offering proceeds elect to reconfirm
their investment. The benefit of an objective 80% reconfirmation requirement by
investors may be reduced, as it is likely that such persons will elect to
reconfirm a proposed business combination.
Conflict of Interest - Management's Fiduciary Duties.
A conflict of interest may arise based upon Management's personal financial
benefit and its fiduciary duty to you. You should note that our present
director, officer and shareholders can purchase up to 2,000,000 Shares, if all
of the Shares are sold and may own up to 60% of our issued common stock after
the offering is completed. If they were to do so, they would have continuing
control of our corporate affairs. Further, Management's interest in their own
financial benefit may at some point compromise their fiduciary duty to you.
Our director and officer is or may become, in his individual capacity, an
officer, director, controlling shareholder and/or partners of other entities
engaged in a variety of businesses. Presently, Mr. Maxwell is engaged in other
business activities. Accordingly, the amount of time he will devote to our
business will only be about 5 to 20 hours per month. There exist potential
conflicts of interest including allocation of time between us and his other
business interests.
Conflicts with other blank check companies with which Management is
currently or, in the future may become affiliated, may also arise. To aid in the
resolution of such conflicts, we will adopt the following procedure: All target
businesses will first be presented to us and any other companies affiliated with
us that intend to file a registration statement under the Securities Act based
upon the effective date of each such registration statement. If there are no
other companies that have filed or will file such registration statements, then
based upon the time and date on which such companies were formed.
Possible Disadvantages of Blank Check Offering.
Our business may, but will not necessarily, involve the acquisition of a
target business which does not need substantial additional capital but which
desires to establish a public trading market for our shares. A target business
may desire to complete an acquisition with us to avoid what they may deem to be
adverse factors of undertaking a public offering. Such factors considered may
include:
* Time delays
* Significant expense
* Loss of voting control
In making an investment in us, you may be doing so under terms which may
ultimately be less favorable than making an investment directly in a company
with a specific business.
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Lack of Diversification.
In the event we are successful in identifying and evaluating a suitable
target business, we will in all likelihood, be required to issue our common
stock in connection with our acquisition. Inasmuch as our capitalization is
limited and the issuance of additional common stock will result in a dilution of
interest for present and prospective shareholders, we will only negotiate one
acquisition or merger. Consequently, our lack of diversification may subject us
to economic fluctuation within a particular industry in which a target business
conducts business.
Securities Law Regulation.
Although we will be subject to regulation under the Securities Act and the
Exchange Act, Management believes we will not be subject to regulation under the
Investment Company Act. The regulatory scope of the Investment Company Act,
which was enacted principally for the purpose of regulatory vehicles for pooled
investments in securities, extends generally to companies primarily in the
business of investing, reinvesting, owning, holding or trading securities. The
Investment Company Act may, however, also be deemed to be applicable to a
company which does not intend to be characterized as an investment company but
which, nevertheless, engages in activities which may be deemed to be within the
definition of the scope of certain provisions of the Investment Company Act. We
believe that our principal activities will not subject us to regulation under
the Investment Company Act. Nevertheless, we will might be deemed to be an
investment company. The offering funds may be invested primarily in certificates
of deposit, interest bearing savings accounts or government securities. In the
event we are deemed to be an investment company, we may be subject to certain
restrictions relating to our activities, including restrictions on the nature of
our investments and the issuance of securities. We have obtained no formal
determination from the Securities and Exchange Commission as to our status under
the Investment Company Act .
Limitations on Resale of Shares Imposed by Local Laws and Regulations.
In the United States, the Shares may be sold in New York State and the
Florida only, and, upon release from escrow, may be resold by you in New York
and Florida only until a resale exemption is available in other states. We will
require an opinion of counsel that any requested transfer is in full compliance
with all federal and state securities law. Resale of the Shares sold in British
West Indies will be subject to their respective Companies Acts with which the
Company believes it complies.
Taxation.
In the course of any acquisition or merger which we may undertake, a
substantial amount of attention will be focused upon federal and state tax
consequences to both us and the target business. Presently, under the provisions
of federal and various state tax laws, a qualified reorganization between
business entities will generally result in tax-free treatment to the parties to
the reorganization. While we expect to undertake any merger or acquisition so as
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to minimize federal and state tax consequences to both us and the target
business, such business combination might not meet the statutory requirements of
a reorganization or the parties might not obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could result
in the imposition of both federal and state taxes that may have a substantial
adverse effect on us.
No Underwriter.
We are selling the Shares ourselves without the use of a professional
securities underwriting firm. Consequently, there may be less due diligence
performed in conjunction with this Offering than would be performed in an
underwritten offering.
No Assurance that Net Proceeds will be Sufficient to Realize Our Goals.
Although we anticipate having sufficient working capital following the
consummation of the Offering, to satisfy our operating expenses for a period of
at least 18 months, there is no assurance that the net proceeds from the
Offering, will be sufficient to allow us to realize our goals.
Competition.
There are numerous firms which are larger than us, and which are also
seeking to effect business acquisitions similar to those contemplated by us.
Such companies may be in a better position to finance such subsidiaries and to
offer incentives to management to run the subsidiaries and to supervise them. We
anticipate encountering intense competition in the organizing or purchasing of
businesses which it hope may prove to be profitable.
Potential Future Rule 144 Sales.
Of the 30,000,000 shares of the Company's Common Stock authorized, there
are presently issued and outstanding 1,010,000, none of which are being
registered pursuant hereto; all are "restricted securities" as that term is
defined under the Securities Act, and in the future may be sold in compliance
with Rule 144 of the Securities Act, or pursuant to a Registration Statement
filed under the Securities Act. Rule 144 provides, in essence, that a person
holding restricted securities for a period of 1 year may sell those securities
in unsolicited brokerage transactions or in transactions with a market maker, in
an amount equal to 1% of our outstanding common stock every 3 months. Rule 144
also permits, under certain circumstances, that sale of Shares by a person who
is not an affiliate of ours and who has satisfied a 2 three year holding period
without any quantity limitation and whether or not there is adequate current
public information available. Investors should be aware that sales under Rule
144, or pursuant to a registration statement filed under the Securities Act, may
have a depressive effect on the market price of our common stock in any market
that may develop for such Shares. The one year hold period on the 1,010,000
shares currently outstanding will expire on April 23, 2000.
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Possible Issuance of Additional Shares.
Our Certificate of Incorporation, authorizes the issuance of 30,000,000
shares of common stock. Upon the sale of the maximum number of Shares offered
hereby, approximately 85% of our authorized shares will remain unissued. Our
Board of Directors has the power to issue any or all of such additional shares
without stockholder approval for such consideration as it deems. Management
presently anticipates that it may choose to issue a substantial amount in
connection with the acquisition of a target business.
Risks of Leverage.
There are currently no limitations relating to our ability to borrow funds,
to increase the amount of capital available to us to effect a business
combination or otherwise finance the operations of any acquired business. The
amount and nature of any borrowings by us will depend on numerous factors,
including our capital requirements, our perceived ability to meet debt services
on any such borrowings, and then-prevailing conditions in the financial markets
as well as general economic conditions. There can be no assurance that debt
financing, if required or otherwise sought, will be available on terms deemed to
be commercially acceptable and in our best interests. Our inability to borrow
funds required to effect or facilitate a business combination, or to provide
funds for an additional infusion of capital into an acquired business, may have
a material adverse affect on our financial condition and future prospects.
Additionally, to the extent that debt financing ultimately proves to be
available, any borrowings may subject us to various risks traditionally
associated with the incurring of indebtedness, including:
o if our operating revenues after the acquisition of a target business
combination were to be insufficient to pay debt service, there would be a
risk of default and foreclosure on our assets;
o if a loan agreement contains a covenant which is breached without a waiver
or renegotiation of the terms of that covenant, then the lender could have
the right to accelerate the payment of the indebtedness even if we have
made all principal and interest payments when due.
o if the interest rate on a loan fluctuated or the loan was payable on
demand, we would bear the risk of variations in the interest rate or demand
for payment;
o if the terms of a loan did not provide for amortization prior to maturity
of the full amount borrowed and the "balloon" payment could not be
refinanced at maturity on acceptable terms, we might be required to seek
additional financing and, to the extent that additional financing is not
available on acceptable terms, to liquidate our assets.
Possible Need for Additional Financing.
We cannot ascertain with any degree of certainty the capital requirements
for a particular acquired business inasmuch as we have not yet identified any
acquisition candidates.
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If the business we acquire requires additional financing, such additional
financing (which, among other forms, could be derived from the public or private
offering of securities or from the acquisition of debt through conventional bank
financing), may not be available, due to, among other things, the acquired
business not having sufficient:
o credit or operating history;
o income stream;
o profit level;
o asset base eligible to be collateralized; or
o market for its securities.
Since no specific business has been targeted for acquisition, it is not
possible to predict the specific reasons why conventional private or public
financing or conventional bank financing might not become available. Although
there are no agreements between us and any of our officers and/or directors
pursuant to which we may borrow and such officers and/or directors are obligated
to lend us monies, there are no restrictions on our right to borrow money from
officers and directors. No stockholder approval is required in connection with
any such loan.
No Dividends.
We have not paid any dividends on our common stock; nor do we intend to
declare and pay dividends prior to the consummation of an acquisition. The
payment of dividends after any acquisition will be within the discretion of our
then Board of Directors.
Arbitrary Determination of Offering Price.
Prior to this offering, there has been no public trading market for the
Shares. The initial public offering price of the Shares has been arbitrarily
determined by us and does not bear any relationship to such established
valuation criteria such as assets, book value or prospective earnings. Among the
factors considered by us were the lack of operating history, the proceeds to be
raised by the offering, the amount of capital to be contributed by the public in
proportion to the amount of stock to be retained by present stockholders, and
the current market conditions in the over-the-counter market.
Year 2000 Risks.
We do not own or lease any computer equipment and do not rely on any
computer or computer programs that will materially impact the operations of the
Company in the event of a Year 2000 disruption. However, like any other company,
advances and changes in available technology can significantly impact its
business operation. The "Year 2000" problem may create risks for us from
unforeseen problems in computer systems which we may acquire in the future or
the computer systems of third parties, including but not limited to any
acquisition candidate and/or financial institutions, with whom it transacts
business. Such failures of our and/or third parties' computer systems could have
a material impact on our ability to conduct
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its business. Prior to concluding an acquisition of a target business we intend
to assess the Year 2000 risks associated with the target business.
Penny Stock Rules.
Under Rule 15g-9, a broker or dealer may not sell a "penny stock" (as
defined in Rule 3a51-1) to or effect the purchase of a penny stock by any person
unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with Rule
15g-9 and (b) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock to
be purchased.
The Securities and Exchange Commission adopted regulations that generally
define a penny stock to be any equity security other than a security excluded
from such definition by Rule 3a51-1. Such exemptions include, but are not
limited to (a) an equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in continuous operations
for at least three years; (ii) net tangible assets of at least $5,000,000, if
such issuer has been in continuous operation for less than three years; or (iii)
average revenue of at least $6,000,000 for the preceding three years; (b) except
for purposes of Section 7(b) of the Exchange Act and Rule 419, any security that
has a price of $5.00 or more; (c) and a security that is authorized or approved
for authorization upon notice of issuance for quotation on the National
Association of Securities Dealers Automated Quotation System.
It is likely that our common stock will be subject to the regulations on
penny stocks; consequently, the market liquidity for our common stock may be
adversely affected by such regulations. This, in turn, will affect your ability
to sell your Shares following the completion of an acquisition .
No Assurance of a Public Market.
Pursuant to Rule 419, all shares issued by a blank check company, must be
placed in the Rule 419 Escrow Account. These shares will not be released from
escrow until the earlier of the consummation of a merger or acquisition as
provided for in Rule 419; or the expiration of 18 months from the date of this
Prospectus.
There is no current trading market for the Shares and there can be no
assurance that a trading market will develop, or, if such a trading market does
develop, that it will be sustained. The Shares, to the extent that a market
develops for the Shares at all, will likely appear in what is customarily known
as the "pink sheets" or on the NASD Bulletin Board, which may limit the
marketability and liquidity of the Shares.
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To date, neither we nor anyone acting on our behalf has taken any
affirmative steps to request or encourage any broker/dealer to act as a market
maker for our common stock. We have no discussions or understandings, with any
"market makers" regarding the participation of any such market maker in the
future trading market, if any, in our common stock. Management has no intention
of seeking a market maker for the Company's Common Stock at any time prior to
completion of an acquisition. Management expects that discussions in this area
will ultimately be initiated by the management in office after completion of the
acquisition in control of the entity after a business combination is reconfirmed
by the stockholders.
In order to prevent resale transactions in violation of state securities
laws, shareholders may only engage in resale transactions in the United States,
in New York and Florida and such other jurisdictions (there are none now) in
which an applicable secondary trading exemption is available or a blue sky
application has been filed and accepted.
Risks Associated with Operations in Foreign Countries.
Our business plan is to seek to acquire or merge with potential target
businesses that may in the opinion of Management, warrant our involvement.
Management's discretion is unrestricted, and we may participate in any business
whatsoever that may in the opinion of Management meet our business objectives.
We may acquire a target business outside the United States. We have not limited
the scope of our search to a particular region or country. Accordingly, if we
acquire a target business located, or operating in a foreign jurisdiction, our
operations may be adversely affected to the extent of the existence of unstable
economic, social and/or political conditions in such foreign regions and
countries.
DILUTION
At October 31, 1999, we had a net tangible book value of $29,500. The
following table sets forth the dilution to persons purchasing shares in this
offering without taking into account any changes in our net tangible book value,
except the sale of 4,000,000 shares at the offering price and receipt of
$120,000, less estimated offering expenses. The net tangible book value per
share is determined by subtracting total liabilities from our tangible assets
divided by the total number of shares of common stock outstanding.
Public offering price per share $ 0.03
Net tangible book value per share of common stock $ 0.03
before the offering(1)
Pro forma net tangible book value per share of $ 0.03
common stock after the offering
Increase to net tangible book value per share $ 0.00
attributable to purchase of common stock by new
investors
Dilution to new investors $ 0.00
(1) Our net tangible book value per share is determined by dividing the number
of shares of Common Stock outstanding into the our net tangible book value.
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USE OF PROCEEDS
The gross proceeds of this offering will be $120,000. Under Rule 419, after
all of the shares are sold, 10% of the funds, or $12,000, will be released from
the Rule 419 escrow account to us and used to defray our normal operating
expenses.
The balance of the proceeds, when available to us, will be utilized for the
payment of expenses incurred by us in investigating and, if a suitable
opportunity is found, acquiring or investing in a business, and in complying
with the requirements of Rule 419. We anticipate that investigation costs with
respect to any specific business opportunity will consist primarily of costs for
attorneys and accountants. There is no limit on the amount of such costs, and
they may be substantial. If a decision is made not to proceed with any given
specific business opportunity, such costs would not be recoverable. In this
connection, it is contemplated that Sierchio & Albert, P.C., will continue to
represent us in connection with an acquisition of a business and the preparation
and filing of a post effective amendment to the registration statement as to
which this prospectus is part; and be paid a fee, comparable to that payable to
an arms length third party providing similar services.
We are presently using the business office of our president, rent free,
until such time as the Offering is completed and a business combination if
effected. However, it may be necessary to incur some administrative costs for
clerical assistance, office supplies and related items, preparation and filings
of periodic reports with the Securities and Exchange Commission, the amount of
which is not expected to be more than $5,000 over the next 18 months. It is
expected that such costs would be paid from existing working capital.
Except as described in this Prospectus, no portion of the proceeds of the
offering will be paid to officers, directors and/or their affiliates or
associates.
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CAPITALIZATION
The following table sets forth the capitalization of the Company as of the
date of this Prospectus and as adjusted to reflect the sale of all of the
Shares. See "Description of Securities" and "Selected Financial Information."
Authorized Outstanding As Adjusted
---------- ----------- -----------
Common Stock,
$.001 par value 30,000,000 1,010,000 5,010,000
As of
October 31,1999 As Adjusted
--------------- -----------
Stockholder's Equity $ 1,010 $ 5,010
Common Stock
Additional Paid- $ 28,990 $144,990
In Capital
Income Accumulated During -- --
the Development Stage
Total Stockholders' $ 30,000 $150,000
Equity
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PROPOSED BUSINESS
History and Organization
We were organized under the laws of the State of Delaware on April 21,
1999. Since inception, our primary activity has been directed to organizational
efforts and obtaining initial financing. We were formed as a vehicle to pursue a
business combination. We have not engaged in any preliminary efforts intended to
identify possible business combination and have neither conducted negotiations
concerning nor entered into a letter of intent concerning any such acquisition
candidate.
We are, what is referred to in Rule 419 as, a "blank check" company.
Operations
We were organized for the purposes of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, engage in business combinations
presented to us by persons or firms who or which desire to employ our funds in
their business or to seek the perceived advantages of publicly-held corporation.
Our principal business objective will be to seek long-term growth potential in
the acquisition of a target business rather than to seek immediate, short-term
earnings. We will not restrict our search to any specific target business,
industry or geographical location.
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing business
combinations will be paid with money in our treasury or loaned by Management.
Persons purchasing shares in this offering and other shareholders will most
likely not have the opportunity to participate in any of these decisions. Our
proposed business is sometimes referred to as a "blank check" company because
you will entrust your investment to us before we have had a chance to analyze
any ultimate use to which the proceeds of the offering may be put. Although
substantially all of the funds of this offering are intended to be utilized
generally to complete a business acquisition, such proceeds are not otherwise
being designated for any specific purposes. Under Rule 419, prospective
investors who invest in us will have an opportunity to evaluate the specific
merits or risks of only the business combination which Management decides to
enter into. Cost overruns will be paid by Management. This is based on an
written agreement between management and us.
We may seek to acquire a target business which:
* Has only recently commenced operations
* Is a developing company in need of additional funds for expansion into new
products or markets
* Is seeking to develop a new product or service
* Is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital
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An acquisition business combination may involve a company which does not
need substantial additional capital but which desires to establish a public
trading market for its shares, while avoiding what it may deem to be adverse
aspects of undertaking a public offering itself, such as:
* Time delays
* Significant expense
* Loss of voting control
However, if the target business that is acquired requires additional
financing, we may seek to obtain such financing either as a condition to the
acquisition or thereafter, by the offer and sale of additional securities.
We will not acquire a target business candidate unless the fair value of
the target business represents at least 80% of the maximum offering proceeds. To
determine the fair market value of a target business, our management will
examine the audited financial statements, including balance sheets and
statements of cash flow and stockholders' equity, of any candidate, focusing
attention on a potential target business's assets, liabilities, sales and net
worth. If we determine that the financial statements of a proposed target
business do not clearly indicate that the fair market value test has been
satisfied, we will obtain an opinion from an investment banking firm which is a
member of National Association of Securities Dealers, Inc. as to the
satisfaction of such criteria.
Based upon the probable desire on the part of the owners of target business
to assume voting control over us in order to avoid tax consequences or to have
complete authority to manage the business, we will combine with just one target
business.
Upon completion of the acquisition of a target business, there will be, in
all likelihood, a change in control which may result in the resignation of our
present officer and director.
We have not had any preliminary contact or discussions with any
representative of any other entity regarding a possible acquisition.
Accordingly, any target business that is selected may be a financially unstable
company or an entity in its early stage of development or growth, including
entities without established records of sales or earnings. Accordingly, we may
become subjected to numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging growth companies. In
addition, we may effect a business combination with an entity in an industry
characterized by a high level of risk. Although Management will endeavor to
evaluate the risks inherent in a particular industry or acquisition candidate,
there can be no assurance that we will properly ascertain or assess all
significant risks. Please refer to "Risk Factors" for a more complete discussion
of such risks.
We anticipate that the selection and ultimate acquisition of a target
business will be complex and risky. Management believes that there are numerous
firms seeking even the
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limited additional capital which we will have and/or the benefit of a publicly
traded corporation because of:
* General economic conditions
* Rapid technological advances being made in some industries
* Shortages of available capital
Such perceived benefit of a publicly traded corporation may include:
* Facilitating or improving the terms on which additional equity financing
may be sought
* Providing liquidity for the principals of a business
* Creating a means for providing incentive stock options or similar benefit
to key employees
* Providing liquidity, subject to restrictions of applicable statutes, for
all shareholders
Potentially available business combinations may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
Evaluation of Business Acquisitions
The analysis of a target business will be undertaken by or under the
supervision of our officer and director, who is not a professional business
analyst. Management intends to concentrate on identifying preliminary
prospective business combinations which may be brought to our attention through
present associations.
Because we will be subject to Section 13 or 15(d) of the Exchange Act, we
will be required to furnish certain information about significant acquisitions,
including audited financial statements for the business acquired, covering one,
two or three years depending upon the relative size of the acquisition.
Consequently, acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition so long as
the reporting requirements of the Exchange Act are applicable.
Any acquisition of a target business will present certain risks. Many of
these risks cannot be adequately identified prior to selection, and you must,
therefore, depend on the ability of Management to identify and evaluate such
risks. In the case of some of the potential combinations available to us, it is
possible that the promoters of a target business have been unable to develop a
going concern or that such business is in its development stage in that it has
not generated significant revenues from its principal business activity prior to
our merger or acquisition. There is a risk, even after the completion of an
acquisition and the related expenditure of our funds, that the combined
enterprises will still be unable to become a going concern or advance beyond the
development stage. The acquisition may involve new and untested products,
processes, or market strategies which may not succeed. Such risks will be
assumed by us and, therefore, our shareholders.
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Target Business Acquisitions
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also purchase
stock or assets of an existing business. The structure manner of the acquisition
will depend on:
* The nature of the target business
* The respective needs and desires of us and other parties
* The management of the acquisition candidate
* The relative negotiating strength of us and such other management
You should note that any merger or acquisition completed by us can be
expected to dilute the percentage of shares held by our then-shareholders,
including purchasers in this offering, upon completion of the acquisition of a
target company. The acquisition candidate will have significantly more assets
than us; therefore, Management plans to offer a controlling interest in us to
the target business. While the actual terms of a transaction to which we may be
a party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called tax-free reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code. In order to obtain
tax-free treatment under the code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, our shareholders, including you, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would be
likely to result in significant dilution in the equity of such shareholders.
Management may choose to comply with these provisions. In addition, all of our
directors and officers may, as part of the terms of the acquisition transaction,
resign as directors and officers.
Management will not actively negotiate or otherwise consent to the purchase
of any portion of their common stock as a condition to or for a proposed
business combination unless such a purchase is requested by a target business as
a condition to a merger or acquisition.
We anticipate that any securities issued in a reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, we may agree to register such securities either at the time
the transaction is closed, under certain conditions, or at specified times
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in our common stock,
may have a depressive effect on such market.
If at any time prior to the completion of this offering we enter
negotiations with a possible merger candidate and such a transaction becomes
probable, then this offering will be suspended so that an amendment can be filed
which will include financial statements
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(including balance sheets and statements of cash flow and stockholders' equity)
of the proposed target company.
Employees
We presently have no employees. We have one officer and director. Mr.
Herbert Maxwell is engaged in other business activities, and the amount of time
he will devote to our business will only be between 5 and 20 hours per month
which amount of time we believe will be sufficient for us to carry on our
business plans. Please refer to the section of this Prospectus entitled
"Management" for a more complete description of Mr. Maxwell's experience and
background.
Facilities
We are presently using the office of our president, Herbert Maxwell, 1501
Broadway, Suite 1807, New York, New York 10036, at no cost as our office. Such
arrangement is expected to continue after completion of this offering only until
a business combination is complete, although there is currently no such
agreement between us and Mr. Maxwell. We at present own no equipment, and do not
intend to own any upon completion of this offering.
Year 2000 Issues
Because we currently have no operations, we do not anticipate incurring
significant expense with regard to Year 2000 issues.
PLAN OF OPERATION
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. We have no assets. Our expenses
to date including the costs of the Offering, are estimated to $25,000. These
expenses have been or will be funded from our existing working capital.
We do not anticipate incurring more than approximately $5,000 of additional
operating expenses over the next 18 months; these expenses will be paid from
working capital which upon completion of the Offering we estimate will be
approximately $17,000. However, we may issue additional securities, incur debt
or procure other types of financing if needed. We have not entered into any
agreements, plans or proposals for such financing and currently have no plans to
do so. We will not use the proceeds of the Offering as collateral or security
for any loan or debt incurred. If we do require additional financing, this
financing may not be available to us, or if available, may not be on terms
acceptable to us. The portion of the proceeds of the Offering, when available
will be used to offset the expenses we have incurred in locating, negotiating
and completing an acquisition including the cost of complying with Rule 419.
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We expect no Year 2000 problems, as our business is not dependent upon any
computer. However, the business we acquire could experience interruptions in its
business and significant losses if it or its customers or vendors rely on
computer information systems that are unable to accurately process dates
beginning on January 1, 2000. Prior to completing the acquisition of a target
business we intend to review the target business' Year 2000 compliance program.
RELATED PARTY TRANSACTIONS
A conflict of interest may arise as a result of Management's personal
financial benefit and Management's fiduciary duty to you. Management's interest
in its own financial benefit may at some point cause it to compromise its
fiduciary duty to you. Any remedy available under the laws of Delaware, in the
event that Management's fiduciary duties are compromised, will most likely be
prohibitively expensive and time consuming to pursue.
You should note that our present Management and shareholders (as well as
their respective affiliates) can purchase up to 2,000,000 Shares (such amount,
however, cannot exceed 50% of the total Shares sold) in this offering and thus
they may own 60% of all the common stock issued after the offering is completed.
They would therefore have continuing control.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue thirty million (30,000,000) shares of common
stock, $.001 par value per share, of which 1,010,000 shares were issued and
outstanding as of the date of this Prospectus. Each outstanding share of common
stock entitles the holder to one vote, either in person or by proxy, on all
matters that may be voted upon by the owners thereof at meetings of the
stockholders.
The holders of common stock (i) have equal rights to dividends from funds
legally available therefor, when, as and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of common stock upon liquidation,
dissolution or winding up of the affairs of the Company; (iii) do not have
preemptive, subscription or conversion rights, and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
All shares of common stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to the ownership thereof. The holders of shares of common stock of the
Company do not have cumulative voting rights, which means that the holders of
more than 50% of such outstanding shares, voting for the election of directors,
can elect all directors of the Company if they so choose and, in such
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event, the holders of the remaining shares will not be able to elect any of the
Company's directors.
Dividends
The Company has not declared any dividends since inception, and has no
present intention of paying any cash dividends on its common stock in the
foreseeable future. The payment by the Company of dividends, if any, in the
future, rests within the discretion of its Board of Directors and will depend,
among other things, upon the Company's earnings, its capital requirements and
its financial condition, as well as other relevant facts.
Transfer Agent and Registrar
StockTrans, Inc. is the transfer agent and register for our common stock.
MANAGEMENT
The following table and subsequent discussion sets forth information about
our directors and executive officers, each of whom will serve in the same
capacity with us upon completion of the offering, but will resign upon
completion of an acquisition. Mr. Maxwell was approved director and was elected
to his position as executive officer in April, 1999.
Name Age Title
Herbert Maxwell 76 President and Director
Our directors hold office until the next annual meeting of shareholders and
the election of their successors. Directors receive no compensation for serving
on the board other than reimbursement of reasonable expenses incurred in
attending meetings. Officers are appointed by the board and serve at their
discretion.
Executive Compensation
No compensation was awarded to, earned by, or paid to our sole director and
officer for services rendered to us in all capacities during the period
commencing April 21, 1999 and ending October 31, 1999.
Except for the repayment of certain out of pocket expenses incurred on
our behalf by Mr. Maxwell, Mr. Maxwell will not receive any compensation for
services rendered by him on our behalf.
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PRINCIPAL SHAREHOLDERS
The following table sets forth information about our current shareholders.
The persons named below have voting and investment power with respect to the
shares. The numbers in the table reflect shares of common stock held as of the
date of this prospectus. The numbers in this table assume 5,010,000 shares of
common stock outstanding following the offering:
================================================================================
SHARES OF COMMON APPROXIMATE
NAME AND ADDRESS OF STOCK BENEFICIALLY APPROXIMATE PERCENTAGE
BENEFICIAL OWNED PERCENTAGE TO BE OWNED
OWNER ----- OWNED AFTER OFFERING
----- ----- --------------
- --------------------------------------------------------------------------------
Dobbins & Dolenhoff, Ltd.(1) 291,667 29% 6%
Loward Cove E5
Frigate Bay, St. Kitts,
West Indies
- --------------------------------------------------------------------------------
Wesley Capital Ltd.(2) 291,666 29% 6%
P.O. Box 679 Hunkins Plaza,
Main Street
Charleston, Nevis
- --------------------------------------------------------------------------------
Aaronson & Aaronson, Inc.(3) 291,666 29% 6%
P.O. Box 679 Hunkins Plaza
Main Street
Charlestown, Nevis
- --------------------------------------------------------------------------------
Joseph Sierchio(4) 62,500 6% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------
Stephen A. Albert(5) 62,500 6% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------
Herbert Maxwell 10,000 1% 0.2%
1501 Broadway, Suite 1807
New York, NY 10036
- --------------------------------------------------------------------------------
Officers and Directors as
a Group (1 person) 10,000 1% 0.2%
================================================================================
(1) Mr. Rand Coulsonn is President and Director of Dobbins & Dolenhoff, Ltd.
(2) Mrs. Gillian Hobson is President and Director of Wesley Capital Ltd.
(3) Mr. Joshua D. Goldman is President and Director of Aaronson & Aaronson,
Inc.
(4) Mr. Sierchio is a principal of the law firm of Sierchio & Albert, P.C.
(5) Mr. Albert is a principal of the law firm of Sierchio & Albert, P.C.
MARKET FOR OUR COMMON STOCK
Prior to the date hereof, there has been no trading market for our common
stock. Under the requirements of Rule 15g-8 of the Exchange Act, a trading
market will not develop prior to or after the effectiveness of this prospectus
or while the common stock under this offering is maintained in escrow. The
common stock under this offering will remain in escrow until our closing of a
business combination under the requirements of rule 419. There are currently six
holders of our outstanding common stock. The outstanding common stock was sold
in reliance upon an exemption from registration contained in Section 4(2) of the
Securities Act. Assuming the sale of all of the Shares offered and that
Management and our current shareholder purchase 2,000,000 of the Shares in this
offering,
28
<PAGE>
current shareholders will own 60% of the outstanding shares upon completion of
the offering. As a result, there is no likelihood of an active public trading
market, as that term is commonly understood, developing for the shares. There
can be no assurance that a trading market will develop upon the closing of a
business combination and the subsequent release of the common stock and other
escrowed shares from escrow. To date, neither we nor anyone acting on our behalf
has taken any affirmative steps to retain or encourage any broker dealer to act
as a market maker for our common stock. Further, there have been no discussions
or understandings, preliminary or otherwise, between us or anyone acting on our
behalf and any market maker regarding the participation of any such market maker
in the future trading market, if any, for our common stock.
Present management does not anticipate that any such negotiations,
discussions or understandings shall take place prior to the execution of an
acquisition agreement. Management expects that discussions in this area will
ultimately be initiated by the party or parties controlling the entity or assets
which we may acquire. Such party or parties may employ consultants or advisors
to obtain such market maker, but our present management has no intention of
doing so at the present time.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 1,010,000 shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act.
SHARES ELIGIBLE FOR FUTURE SALE
Of the shares outstanding after the Offering, the 4,000,000 Shares sold in
this offering will have been registered with the Securities and Exchange
Commission and can be freely resold, except if they are acquired by our
director, officer or other persons or entities that he controls or which control
him. Our director, officer, and persons or entities that they control or which
control them will be able to sell Shares so long as they do so without violating
Securities and Exchange Commission Rule 144. The remaining 1,010,000 outstanding
shares, may be sold under SEC Rule144, assuming that all applicable conditions
of that Rule are satisfied.
Rule 144 provides, in essence, that a person holding restricted securities
for a period of 1 year may sell those securities in unsolicited brokerage
transactions or in transactions with a market maker, in an amount equal to 1% of
our outstanding common stock every 3 months. Rule 144 also permits, under
certain circumstances, that sale of Shares by a person who is not an affiliate
of ours and who has satisfied a 2 year holding period without any quantity
limitation and whether or not there is adequate current public information
available. Investors should be aware that sales under Rule 144, or pursuant to a
registration statement filed under the Securities Act, may have a depressive
effect on the market price of our common stock in any market that may develop
for such Shares.
We cannot predict the effect that sales of shares or the availability of
shares for sale will have on the any market price that may exist for our common
stock after completion of the
29
<PAGE>
Offering. We do know that, all other things being equal, sales of substantial
amounts of our common stock in the public market could drive down our stock
price.
REPORTS TO SHAREHOLDERS
We intend to furnish our shareholders with annual reports containing
audited financial statements as soon as practicable at the end of each fiscal
year. Our fiscal year ends on October 31st.
PLAN OF DISTRIBUTION
We offer the right to subscribe for up to 4,000,000 Shares at $0.03 per
Share. We propose to offer the Shares directly on a best efforts, no minimum
basis, and no compensation is to be paid to any person for the offer and sale of
the Shares. Purchases of Shares by officers, directors and current shareholders
may not exceed 50% of the total number of Shares sold. Shares purchased by our
officers, directors and principal shareholders will be acquired for investment
purposes and not with a view towards distribution.
Our president may distribute prospectuses related to this offering. We
estimate that approximately100 Prospectuses shall be distributed in such a
manner. He intends to distribute Prospectuses to acquaintances, friends and
business associates.
The Offering shall be conducted by our president. Although he is an
associated person as that term is defined in Rule 3a4-1 under the Exchange Act,
he is deemed not to be a broker for the following reasons:
* He is not subject to a statutory disqualification as that term is defined
in Section 3(a)(39) of the Exchange Act at the time of his participation in
the sale of our securities.
* He will not be compensated for his participation in the sale of our
securities by the payment of commission or other remuneration based either
directly or indirectly on transactions in securities.
* He is not an associated person of a broker or dealers at the time of his
participation in the sale of our securities.
* He will restrict his participation to the following activities:
* Preparing any written communication or delivering such communication
through the mails or other means that does not involve oral
solicitation by him of a potential purchaser;
* Responding to inquiries of potential purchasers in communications
initiated by the potential purchasers, provided however, that the
content of such responses are limited to information contained in a
registration statement filed under the Securities Act or other
offering document; and
* Performing ministerial and clerical work involved in effecting any
transaction.
30
<PAGE>
As of the date of this Prospectus, no broker has been retained by us for
the sale of Shares being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement will
be filed.
Neither we nor anyone acting on our behalf including our shareholders,
officers, directors, promoters, affiliates or associates will approach a market
maker or take any steps to request or encourage a market in these securities
either prior or subsequent to an acquisition of any business opportunity. There
have been no preliminary discussions or understandings between us or anyone
acting on our behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for our securities, nor
do we have any plans to engage in such discussions. We do not intend to use
consultants to obtain market makers. No member of Management, promoter or anyone
acting at their direction will recommend, encourage or advise you to open
brokerage accounts with any broker-dealer that is obtained to make a market in
the shares subsequent to the acquisition of any business opportunity. Our
investors shall make their own decisions regarding whether to hold or sell their
shares. We shall not exercise any influence over your decisions.
Arbitrary Determination of Offering Price.
The initial offering price of $0.03 per share has been arbitrarily
determined by us, and bears no relationship whatsoever to our assets, earnings,
book value or any other objective standard of value. Among the factors
considered by us in determining the initial offering price were:
* The lack of operating history
* The proceeds to be raised by the Offering
* The amount of capital to be contributed by the public in proportion to the
amount of stock to be retained by present stockholders
* The current market conditions in the over-the-counter market
Method of Subscribing
Persons may subscribe by filling in and signing the subscription agreement
and delivering it, prior to the expiration date, to us. The subscription price
of $0.03 per share must be paid in cash or by check, bank draft or postal
express money order payable in United States dollars to the order of "Firstrust
Savings Bank as Escrow Agent."
31
<PAGE>
Expiration Date
This offering will expire 180 days from the date of this Prospectus, unless
either (i) extended by us, for an additional 30 days or (ii) concluded by us on
such earlier date as we may deem appropriate.
ADDITIONAL INFORMATION
We have not previously been required to comply with the reporting
requirements of the Securities and Exchange Act. We have filed with the
Securities and Exchange Commission a registration statement on form SB-2 to
register the offer and sale of the Shares. This Prospectus is part of that
registration statement, and, as permitted by the Securities and Exchange
Commission's rules, does not contain all of the information in the registration
statement. For further information about us and the shares offered under this
Prospectus, you may refer to the registration statement and to the exhibits and
schedules filed as a part of the registration statement. You can review the
registration statement and its exhibits and schedules at the public reference
facility maintained by the Securities and Exchange Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Securities and Exchange Commission at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661. Please call the Securities and
Exchange Commission at 1-800-SEC-0330 for further information on the public
reference room. The registration statement is also available electronically on
the World Wide Web at http://www.Securities and Exchange Commission.gov.
You can also call or write us at any time with any questions you may have.
We'd be pleased to speak with you about any aspect of our business and this
offering.
LEGAL PROCEEDINGS
We not a party to or aware of any pending or threatened lawsuits or other
legal actions.
LEGAL MATTERS
The validity of the Shares offered under this Prospectus is being passed
upon for us by Sierchio & Albert, P.C.
INTEREST OF NAMED COUNSEL
Each of Messrs. Joseph Sierchio and Stephen Albert, the principals of
Sierchio & Albert, P.C., own an aggregate of 62,500 shares of common stock or
approximately 6% of the issued and outstanding shares of common stock.
32
<PAGE>
FINANCIAL STATEMENTS
The following are our financial statements, with independent auditor's
report, for the period ending October 31, 1999.
33
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Index To Financial Statements
Page
----
Report of Independent Public Accountants 35
Financial Statements:
Balance Sheet-October 31, 1999 ................................... 36
Statement of Income for the period April 21, 1999 (date of
Inception) Through October 31, 1999 ........................... 37
Statement of Changes in Shareholders' Equity for the period April 21,
1999 (date of Inception) Through October 31, 1999 ............. 38
Statement of Cash Flows for the period April 21, 1999 (date of
Inception) Through October 31, 1999 ........................... 39
Notes to Financial Statements ......................................... 40 to 42
34
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To New Tech Ventures, Inc.:
We have audited the accompanying balance sheet of New Tech Ventures, Inc. (a
Delaware corporation in the development stage) as of October 31, 1999, and the
related statements of income, changes in shareholders' equity and cash flows for
the period from April 21, 1999 (date of Inception) to October 31,1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Tech Ventures, Inc. as of
October 31,1999, and the results of its operations and its cash flows for the
period from April 21,1999 (date of Inception) to October 31,1999, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying financial
statements, the Company is a development stage enterprise with no significant
operating results to date. The factors discussed in Note 1 to the financial
statements raise a substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regards to those matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Prinzi & Company
Staten Island, New York
November 19, 1999
35
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Balance Sheet
October 31, 1999
Assets
Cash ......................................................... $30,000
Deferred registration costs .................................. 29,533
-------
Total Assets .............................................. $59,033
=======
Liabilities And Shareholders' Equity
Accrued registration costs ................................... $29,533
-------
Total Liabilities ......................................... 29,533
-------
Shareholders' Equity:
Common stock, $.001 par value, 30,000,000 shares authorized,
1,010,000 shares issued and outstanding ................... 1,010
Additional paid-in-capital ....................................... 28,990
-------
Total Shareholders' Equity ................................ 30,000
-------
Total Liabilities and Shareholders' Equity ................ $59,533
=======
See Accompanying Notes to Financial Statements
36
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Statement of Income
For the period April 21, 1999
(Date of Inception) Through October 31, 1999
Revenues ....................................................... $ 0
Total Expenses ................................................. 0
----------
Net Income (Loss) .............................................. $ 0
==========
Net Loss per Common Share ...................................... $ 0
==========
Weighted Average Number of Common Shares Outstanding ........... 1,010,000
==========
See Accompanying Notes to Financial Statements
37
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity
For the period April 21, 1999
(Date of Inception) Through October 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional Loss Accumulated
----------------------- Paid in During the
Shares Par Value Capital Development Stage Total
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of stock to original
founders for cash ................ 1,010,000 $ 1,010 $ 28,990 $ 30,000
Net Income For the period April
21, 1999 (Date of Inception)
Through October 31,
1999 ............................. -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Balance, October 31, 1999 ........ 1,010,000 $ 1,010 $ 28,990 -- $ 30,000
==========================================================================================================
</TABLE>
See Accompanying Notes to Financial Statements
38
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the period April 21, 1999
(Date of Inception) Through October 31, 1999
Cash Flows From Operating Activities:
Net Loss .................................................. $ 0
Net increase in Accrued Registration Costs ................ 29,533
Net increase in Deferred Registration Costs ............... (29,533)
--------
Net Cash Used in Operating Activities .................. 0
--------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock .................... 30,000
--------
Net Cash Provided By Financing Activities .............. 30,000
--------
Net Increase in Cash: 30,000
Cash, April 21, 1999 (Date of Inception) ....................... --
--------
Cash, October 31, 1999 ......................................... $ 30,000
========
See Accompanying Notes to Financial Statements
39
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND OPERATIONS
New Tech Ventures, Inc. ("the Company") was incorporated in the state of
Delaware on April 21, 1999, for the purpose of raising capital, which is to be
used to effect a business combination. The Company is currently in the
development stage. All activity of the Company to date relates to its formation
and proposed fund raising. Management has elected a December 31 year end for the
Company. An audit was performed at October 31, 1999 to satisfy the financial
requirements of a form SB-2 registration statement under the securities act of
1933.
The Company's ability to commence operations is contingent upon obtaining
financing through a public offering of the Company's common stock.
The Company is planning to register its securities with the Securities and
Exchange Commission and offer certain securities in a "blank check" offering
subject to Rule 419 of the Securities Act of 1933, as amended ("Rule 419"). The
offering allows for the Company to sell a maximum of 4,000,000 shares of common
stock, $.001 par value, at $.03 per share, on a best efforts, no minimum basis
and no compensation is to be paid to any person for the offer and sale shares.
Accordingly, the offering proceeds and the securities purchased by investors,
less 10% of the deposited funds which will be delivered to the Company as
permitted by Rule 419, will be held in escrow subject to the satisfaction of the
provisions of Rule 419.
As a result of its limited resources, the Company will, in all likelihood, have
the ability to effect only a single business combination. Accordingly, the
prospects for the Company's success will be entirely dependent upon the future
performance of a single business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash & Cash Equivalents
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments with original maturity of three months or less. For
the period April 21, 1999 (Date of Inception) through October 31, 1999 the
Company maintained its cash balances in a non-interest bearing account.
40
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Utilization of Estimates
The Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net Income Per Common Share
Net income per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
NOTE 3. CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of 30,000,000
shares of common stock. The Company's Board of Directors has the power to issue
any or all of the authorized but unissued common stock without stockholder
approval. The Company will, in all likelihood, issue a substantial number of
additional shares in connection with a business combination. To the extent that
additional shares of common stock are issued, dilution to the interest of the
Company's stockholders participating in the proposed offering under Rule 419
will occur.
NOTE 4. RELATED PARTY TRANSACTIONS
At October 31,1999, various members of the Company's legal counsel owned 125,000
shares of the Company's Common Stock.
41
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5. CONFLICTS OF INTEREST
The proposed business of the Company raises potential conflicts of interests
between the Company and its officers and directors. The Company has been formed
for the purpose of locating a suitable business opportunity in which to
participate. The officers and directors of the Company (Collectively the
"Management"), who will not devote full time to the Company, are engaged in
various other business activities. From time to time, in the course of such
activities they may become aware of investment and business opportunities and
may be faced with the issue of whether to bring such opportunities to the
attention of the Company for its participation.
Accordingly, Management may have a conflict in the event that another "blank
check" or "blind pool" associated with Management is actively seeking the
acquisition of properties and business that are identical or similar to those
that the Company may seek.
NOTE 6. DEFERRED REGISTRATION COSTS
Deferred registrations costs consists of the following:
Legal Expenses $25,000
Miscellaneous Incorporation Expenses 1,500
Accounting Expenses 3,000
SEC Registration Fees 33
-------
Total $29,533
=======
42
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Except as hereinafter set forth, there is no charter provision, bylaw,
contract, arrangement or statute under which any officer or director of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such.
Indemnification of Directors and Officers
Section 145 of The Delaware General Corporation Law, as amended, provides
for the indemnification of the Company's officers, directors and corporate
employees and agents under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
43
<PAGE>
interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of the directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested director so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of any undertaking by or on
behalf of such director to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses including attorneys' fees incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
44
<PAGE>
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
including (any constituent of a constituent) absorbed in a consolidation or
merger which, if separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, reference to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involve services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
The Securities and Exchange Commission's Policy on Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
45
<PAGE>
Item 25. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are as follows:
Item Amount
---- ------
Securities and Exchange Commission
Registration Fee $ 35.00
Cost of Electronic Filings 1,000.00
Cost of Printing and Engraving 500.00
Escrow Fees 500.00
Legal Fees 20,000.00
Accountants' Services and Expenses 1,000.00
"Blue Sky" Fees and Expenses 500.00
Miscellaneous Expenses 1,500.00
TOTAL $25,035.00
46
<PAGE>
Item 26. Recent Sales of Unregistered Securities
During the past three years, the Registrant has sold securities in the
manner set forth below without registration under the Securities Act of 1933, as
amended (the "Act").
In April 1999 the Company raised $30,010 in said capital through the sale
of 1,000,000 shares of Common Stock at a price of $.03 per share and the sale of
10,000 shares of Common Stock at a price of $.001 per share as follows:
================================================================================
APPROXIMATE
SHARES OF PERCENTAGE
NAME AND ADDRESS OF COMMON STOCK APPROXIMATE TO BE OWNED
BENEFICIAL BENEFICIALLY PERCENTAGE AFTER
OWNER OWNED OWNED OFFERING
----- ----- ----- --------
- --------------------------------------------------------------------------------
Dobbins & Dolenhoff, Ltd. 291,667 29% 6%
Loward Cove E5
Frigate Bay, St. Kitts
- --------------------------------------------------------------------------------
Wesley Capital Ltd. 291,666 29% 6%
P.O. Box 679, Hunkins Plaza
Main Street
Charleston, Nevis
- --------------------------------------------------------------------------------
Aaronson & Aaronson, Inc. 291,666 29% 6%
P.O. Box 679, Hunkins Plaza
Main Street
Charlestown, Nevis
- --------------------------------------------------------------------------------
Joseph Sierchio 62,500 6% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------
Stephen A. Albert 62,500 6% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------
Herbert Maxwell 10,000 1% .2%
1501 Broadway, Suite 1807
New York, NY 10036
================================================================================
Except for the securities being registered hereunder, such shares are
"restricted securities," as that term is defined in the rules and regulations
promulgated under the Securities Act, as amended, subject to certain
restrictions regarding resale. Certificates evidencing all of the
above-referenced securities have been stamped with a restrictive legend and will
be subject to stop transfer orders.
The Registrant believes that each of the above-referenced transactions was
exempt from registration under the Securities Act, pursuant to Regulation S as
promulgated under the Securities Act Rule 701 of the Securities Act and by
Section 4(2) of the Securities Act and the rules and regulations promulgated
thereunder as a transaction by an issuer not involving any public offering.
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Item 27. Exhibits
3(i) Certificate of Incorporation
3(ii) By-Laws
4(i)(1) Form of Escrow Agreement
4(i)(2) Form of Subscription Agreement
5(i) Opinion of Sierchio & Albert, P.C.
23(i)(1) Consent of Sierchio & Albert, P.C. (included in Exhibit 5(i))
23(i)(2) Consent of Prinzi & Company
24 Power of Attorney*
* Included on the Signature Page to the Registration Statement on Form SB-2
48
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Item 28. Undertakings
(1) To file, during any period in which offers and sales of the securities
offered hereby are made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act"); and
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
(4) That all such post-effective amendments will comply with the applicable
form, rules and regulations of the Securities and Exchange Commission in effect
at the time of the filing thereof.
(5) In the event any material changes or transactions not mentioned herein
arise, the Company has undertaken the responsibility to amend the Prospectus and
the Registration Statement, of which the prospectus is a part, through the
filing of post-effective amendments, indicating the existence of any such
material changes or transactions which are not reflected or contained herein, if
such changes occurs within 90 days of the Effective Date.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned hereunto duly authorized
in the City of New York on the 8th day of December, 1999.
NEW TECH VENTURES, INC.
(Registrant)
By: /s/ Herbert Maxwell
---------------------------------------
Herbert Maxwell, President and Director
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NEW TECH VENTURES, INC.
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ON FORM SB-2
----------
INDEX TO EXHIBITS
Document
3(i) Certificate of Incorporation
3(ii) By-Laws
4(i)(1) Form of Escrow Agreement
4(i)(2) Form of Subscription Agreement
5(i) Opinion of Sierchio & Albert, P.C.
23(i)(1) Consent of Sierchio & Albert, P.C. (included in Exhibit 5(i))
23(i)(2) Consent of Prinzi & Company
24 Power of Attorney*
- ----------
* Included on the signature page.
51
Exhibit 3(i)
CERTIFICATE OF INCORPORATION
OF
NEW TECH VENTURES, INC.
FIRST: The name of the corporation (herein referred to as the "Corporation") is:
NEW TECH VENTURES, INC.
SECOND: The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road in the City of Wilmington, County of New Castle,
19805. The name of its registered agent at such address is Corporation Service
Company.
THIRD: The purpose of the Corporation is:
To engage in, promote, conduct, and carry on any lawful acts or activities
for which corporations may be organized under the General Corporation Law
of the State of Delaware.
FOURTH: The total number of shares of common stock which the Corporation shall
have authority to issue is 30,000,000 and the par value of each share is $.001
amounting in the aggregate to $30,000.
FIFTH: The Corporation shall have the right to impose restrictions on the sale
or other disposition of its shares provided that all such restrictions are
placed upon the certificates evidencing the Corporation's shares to which such
restrictions apply.
SIXTH: The name and mailing address of the sole incorporator are:
Joseph Sierchio
41 East 57th Street
39th Floor
New York, New York 10022
SEVENTH: The Corporation is to have perpetual existence.
EIGHTH: The number of directors of the Corporation shall be such as from time to
time shall be fixed by, or in the manner provided in the bylaws. To the extent
that the number of directors is less than the number so fixed, the majority of
the directors then in office shall have
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the right, without shareholder vote, to appoint such number of additional
directors equal to the difference between the number of directors in office and
the maximum number of directors fixed in the bylaws. Election of directors need
not be by written ballot. The Board of Directors is authorized, without the
assent or vote of the shareholders, to make, alter or repeal the bylaws of the
Corporation.
NINTH: The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of ss. 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented. The Corporation shall, to
the fullest extent permitted by the provision of ss. 145 of the General
Corporation Law of the State of Delaware, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
TENTH: The officers, directors and other members of management of this
Corporation shall be subject to the doctrine of corporate opportunities only
insofar as its applies to business opportunities in which this corporation has
expressed an interest as determined from time to time by the Corporation's Board
of Directors as evidenced by resolutions appearing in the Corporation's Minutes.
When such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of an officer,
director or other member of management of this Corporation shall be disclosed
promptly to this Corporation and made available to it. The Board of Directors
may reject any business opportunity presented to it and thereafter any officer,
director or other member of management may avail himself or herself of such
opportunity. Until such time as this Corporation, through its Board of
Directors, has designated an area of interest, the officers, directors and other
members of management of this Corporation shall be free to engage in such areas
of interest on their own and the doctrine of corporate opportunities shall not
limit the rights of any officer, director or other member of management of this
Corporation to continue a business existing prior to the time that such area of
interest is designated by this Corporation. This provision shall not be
construed to release any employee of the Corporation (other than an officer,
director or member of management) from any duties which he or she may have to
the Corporation.
ELEVENTH: In furtherance and not in limitation of the rights, powers,
privileges, and discretionary authority granted or conferred by the General
Corporation Law of the State of Delaware or other statutes or laws of the State
of Delaware, the Board of Directors is expressly authorized without the consent
of our stockholders to:
A. Make, amend, alter, or repeal the bylaws of the Corporation;
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B. Authorize and cause to be executed mortgages and liens upon the real and
personal property of the Corporation, and to hypothecate such property;
C. Set apart out of any funds of the Corporation available for dividends a
reserve or reserves of any proper purpose and reduce any such reserve in
the manner in which it was created; and
D. Adopt from time to time bylaw provisions with respect to indemnification of
directors, officers, employees, agents, and other persons as it shall deem
expedient and in the best interest of the Corporation and to the extent
permitted by law. In the event no such bylaw provisions are adopted, then
the Corporation shall indemnify all persons whom it may indemnify to the
full extent permitted by Section 145 of the Delaware General Corporation
Law as amended from time to time.
TWELFTH: The books of the Corporation may be kept outside the State of Delaware
at such place or places as may be designated from time to time by the Board of
Directors or in the bylaws of the Corporation, subject to any provisions
contained in the statutes.
THIRTEENTH: The Corporation reserves the right to amend, alter, change, or
repeal any provisions herein contained, in the manner now or hereafter
prescribed by statute, and all rights, powers, privileges, and discretionary
authority granted or conferred herein upon stockholders or directors are granted
subject to this reservation.
The undersigned, being the sole incorporator herein before named, does
hereby make this Certificate of Incorporation, hereby declaring, affirming,
acknowledging, and certifying, under penalties of perjury, that this is the act
and deed of the undersigned and that the facts stated herein are true, and
accordingly has hereunto set his hand this 21st day of April, 1999.
/s/ Joseph Sierchio
----------------------------------
Joseph Sierchio, Sole Incorporator
3
Exhibit 3(ii)
BY-LAWS
OF
NEW TECH VENTURES, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stock-holders shall be held on
the first business day of the third week of September in each year, or as soon
thereafter as practicable, and shall be held at a place and time determined by
the board of directors (the "Board").
1.2 Special Meetings. Special meetings of the stockholders may be called by
resolution of the Board or the president and shall be called by the president or
secretary upon the written request (stating the purpose or purposes of the
meeting) of a majority of the directors then in office or of the holders of a
majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held in
or outside Delaware at the place and time specified by the Board or the officers
or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting of
stockholders shall be given to each stockholder entitled to vote at the meeting,
except that (a) it shall not be necessary to give notice to any stockholder who
submits a signed waiver of notice before or after the meeting, and (b) no notice
of an adjourned meeting need be given, except when required under section 1.5
below or by law. Each notice of a meeting shall be given, personally or by mail,
not fewer than 10 nor more than 60 days before the meeting and shall state the
time and place of the meeting, and, unless it is the annual meeting, shall state
at whose direction or request the meeting is called and the purposes for which
it is called. If mailed, notice shall be considered given when mailed to a
stockholder at his address on the corporation's records. The attendance of any
stockholder at a meeting, without protesting at the beginning of the meeting
that the meeting is not lawfully called or convened, shall
1
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constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present, any action may be taken that might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given, if the time and place are announced at the meeting at
which the adjournment is taken, except that, if adjournment is for more than 30
days or if, after the adjournment, a new record date is fixed for the meeting,
notice of the adjourned meeting shall be given pursuant to section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for each share registered in his name. Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by section 1.8. Directors shall be elected in the manner
provided in section 2.1. Voting need not be by ballot, unless requested by a
majority of the stockholders entitled to vote at the meeting or ordered by the
chairman of the meeting. Each stockholder entitled to vote at any meeting of
stockholders or to express consent to or dissent from corporate action in
writing without a meeting may authorize another person to act for him by proxy.
No proxy shall be valid after three years from its date, unless it provides
otherwise.
1.7 List of Stockholders. Not fewer than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not fewer than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be
2
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held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not fewer than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the entire Board, which initially shall
consist of one director. The number of directors may be changed by resolution of
a majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders by a plurality of the votes cast and shall hold office
until the next annual meeting of stockholders and until the election and
qualification of their respective successors, subject to the provisions of
section 2.9. As used in these by-laws, the term "entire Board" means the total
number of directors the corporation would have, if there were no vacancies on
the Board.
2.2 Quorum and Manner of Acting. A majority of the entire Board shall
constitute a quorum for the transaction of business at any meeting, except as
provided in section 2.10. Action of the Board shall be authorized by the vote of
the majority of the directors present at the time of the vote, if there is a
quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum, a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice
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as provided in section 2.6. Regular meetings of the Board may be held without
notice at such times and places as the Board determines. If the day fixed for a
regular meeting is a legal holiday, the meeting shall be held on the next
business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by a majority of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting also shall state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting, if all the members of the Board or the committee consent in
writing to the adoption of a resolution authorizing the action. The resolution
and the written consents by the members of the Board or the committee shall be
filed with the minutes of the proceedings of the Board or the committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or any committee of the Board may participate in
a meeting of the Board or the committee by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
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2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director also may be paid for
serving the corporation or its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an executive committee of one or more directors,
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the General Corporation Law of
Delaware or any other applicable law. The members of the executive committee
shall serve at the pleasure of the Board. All action of the executive committee
shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of the
entire Board, may designate other committees of one or more directors, which
shall serve at the Board's pleasure and have such powers and duties as the Board
determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In case of the absence or
disqualification of any member of a committee, the member or members
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<PAGE>
present at a meeting of the committee and not disqualified, whether or not a
quorum, may unanimously appoint another director to act at the meeting in place
of the absent or disqualified member. All action of a committee shall be
reported to the Board at its next meeting. Each committee shall adopt rules of
procedure and shall meet as provided by those rules or by resolutions of the
Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or
committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any time
by delivering his resignation in writing to the president or secretary of the
corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer elected or appointed by the Board or
appointed by an executive officer or by a committee may be removed by the Board
either with or without cause, and in the case of an officer appointed by an
executive officer or by a committee, by the officer or committee that appointed
him or by the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired term
in the manner
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prescribed in sections 4.2 and 4.3 for election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and the stockholders, shall be responsible
for giving notice of all meetings of stockholders and the Board, and shall keep
the seal and, when authorized by the Board, apply it to any instrument requiring
it. Subject to the control of the Board, he shall have such powers and duties as
the Board or the president assigns to him. In the absence of the secretary from
any meeting, the minutes shall be kept by the person appointed for that purpose
by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president, and by the secretary or an assistant
secretary or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
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5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in advance,
a date as the record date for the determination of stockholders entitled to
notice of or to vote at any meeting of the stockholders, or to express consent
to or dissent from any proposal without a meeting, or to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other action.
The record date may not be more than 60 or fewer than 10 days before the date of
the meeting or more than 60 days before any other action.
6. INDEMNIFICATION AND INSURANCE.
6.1 Right to Indemnification. Each 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 (a
"proceeding"), 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 as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action or inaction in an
official capacity or in any other capacity while serving as director, officer,
employee or agent, shall be indemnified and held harmless by the corporation to
the fullest extent permitted by the General Corporation Law of Delaware, as
amended from time to time, against all costs, charges, expenses, liabilities and
losses (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith, and that indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his heirs, executors and administrators;
provided, however, that, except as provided in section 6.2, the corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by that person, only if that proceeding
(or part thereof) was authorized by the Board. The right to indemnification
conferred in these by-laws shall be a contract right and shall include the right
to be paid by the corporation the expenses incurred in defending
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any such proceeding in advance of its final disposition; provided, however,
that, if the General Corporation Law of Delaware, as amended from time to time,
requires, the payment of such expenses incurred by a director or officer in his
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by that person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to the
corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced, if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under these by-laws or
otherwise. The corporation may, by action of its Board, provide indemnification
to employees and agents of the corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
6.2 Right of Claimant to Bring Suit. If a claim under section 6.1 is not
paid in full by the corporation within 30 days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant also shall be entitled to be paid
the expense of prosecuting that claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition, where the required
undertaking, if any, is required and has been tendered to the corporation) that
the claimant has failed to meet a standard of conduct that makes it permissible
under Delaware law for the corporation to indemnify the claimant for the amount
claimed. Neither the failure of the corporation (including its Board, its
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
permissible in the circumstances because he has met that standard of conduct,
nor an actual determination by the corporation (including its Board, its
independent counsel or its stockholders) that the claimant has not met that
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has failed to meet that standard of conduct.
6.3 Non-Exclusivity of Rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this section 6 shall not be exclusive of any other
right any person may have or hereafter acquire under any statute, provision of
the certificate
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of incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
6.4 Insurance. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against that expense, liability or
loss under Delaware law.
6.5 Expenses as a Witness. To the extent any director, officer, employee or
agent of the corporation is by reason of such position, or a position with
another entity at the request of the corporation, a witness in any action, suit
or proceeding, he shall be indemnified against all costs and expenses actually
and reasonably incurred by him or on his behalf in connection therewith.
6.6 Indemnity Agreements. The corporation may enter into agreement with any
director, officer, employee or agent of the corporation providing for
indemnification to the fullest extent permitted by Delaware law.
7. MISCELLANEOUS.
7.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
7.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the last day of the corporation's fiscal year shall
be October 31.
7.3 Voting of Shares in Other Corporations. Shares in other corporations
held by the corporation may be represented and voted by an officer of this
corporation or by a proxy or proxies appointed by one of them. The Board may,
however, appoint some other person to vote the shares.
7.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders.
10
Exhibit 4(i)(1)
ESCROW AGREEMENT
AGREEMENT made this day of ________, _____ between New Tech Ventures, Inc., a
Delaware corporation, with offices at 1501 Broadway, Suite 1807, New York, New
York 10036 (the "Issuer") and Firstrust Savings Bank, a state chartered savings
bank with offices at 1931 Cottman Avenue, Philadelphia, PA 19111 (the "Escrow
Agent").
W I T N E S S E T H :
WHEREAS, the Issuer has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") covering a
proposed public offering of 4,000,000 shares of its common stock, $.001 par
value per share, as described on the Information Sheet (as defined herein); and
WHEREAS, the Issuer proposes to offer the 4,000,000 shares for sale to the
public on a "best efforts basis" at the price per share as set forth on the
Information Sheet; and
WHEREAS, the Issuer proposes to establish an escrow account with the Escrow
Agent in connection with such public offering and the Escrow Agent is willing to
establish such escrow account on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Information Sheet.
Each capitalized term not otherwise defined in this Agreement shall have
the meaning set forth for such term on the Information Sheet which is attached
to this Agreement and is incorporated by reference herein and made a part hereof
(the "Information Sheet").
2. Establishment of Escrow Account.
The parties hereto shall establish a money market escrow account at the
office of the Escrow Agent, and bearing the designation, set forth on the
Information Sheet (the "Escrow Account").
2.1 On or before the date of the initial deposit in the Escrow Account
pursuant to this Agreement, the Issuer shall notify the Escrow Agent in writing
of the effective date of the Registration Statement (the "Effective Date") and
the Escrow Agent shall not be required to accept any amount for deposit in the
Escrow Account prior to its receipt of such notification.
2.2 The Offering Period, which shall be deemed to commence on the Effective
Date, shall consist of the number of calendar days or business days set forth on
the Information Sheet. The Offering Period shall be extended by an Extension
Period only if the Escrow agent shall have received written notice thereof at
least five (5) business days prior to the expiration of the
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Offering Period. The Extension Period, which shall be deemed to commence on the
next calendar day following the expiration of the Offering Period, shall consist
of the number of the calendar days of business days set forth on the Information
Sheet. The last day of the Offering Period, or the last day of the Extension
Period (if provided), is referred to herein as the "Termination Date". After the
Termination Date, the Issuer shall not deposit, and the Escrow Agent shall not
accept, any additional amounts representing payments by prospective purchasers.
3. Deposits in the Escrow Account.
3.1 Upon receipt, the Issuer shall promptly deposit all monies received
from investors with the Escrow Agent. All of these deposited proceeds (the
"Deposited Proceeds") shall be in the form of checks or money orders. All checks
or money orders deposited into the Escrow Account shall be made payable to
Escrow Agent. Any check or money order payable other than to the Escrow Agent as
required hereby shall be returned to the prospective purchasers, or if the
Escrow Agent has insufficient information to do so, then to the Issuer (together
with any Subscription Information, as defined below, or other documents
delivered therewith) within five (5) business days following receipt of such
check by the Escrow Agent, and such check shall be deemed not to have been
delivered to the Escrow Agent pursuant to the terms of this Agreement. The
Deposited Proceeds and interest or dividends thereon, if any, shall be held for
the sole benefit of the purchasers of the securities.
3.2 The Deposited Proceeds shall be invested in an obligation that
constitutes a "deposit" as that term is defined in Section (3)(1) of the Federal
Deposit Insurance Act;
3.3 Simultaneously with each deposit into the Escrow Account, the Issuer
shall inform the Escrow Agent of the name and address of the prospective
purchaser, the number of Securities subscribed for by such purchaser, and the
aggregate dollar amount of such subscription (collectively, the "Subscription
Information").
3.4 The Escrow Account shall not be required to accept for deposit into the
Escrow Account checks which are not accompanied by the appropriate Subscription
Information.
3.5 Interest or dividends earned on the Deposited Proceeds, if any, shall
be held in the Escrow Account until the Deposited Proceeds are released in
accordance with the provisions of Section 4 of the Escrow Agreement. If the
Deposited Proceeds are released to a purchaser of the shares, the purchaser
shall receive interest or dividends earned, if any, on such Deposited Proceeds
up to the date of release. If the Deposited Proceeds held in the Escrow Account
are released to the Company, any interest or dividends earned on such funds up
to the date of release may be released to the Company.
3.6 The Issuer shall deposit the certificate(s) representing the shares
sold (the "Deposited Securities") directly into the Escrow Account promptly upon
issuance, which certificates or other documents evidencing such shares shall
identify the purchaser of the shares.
3.7 The Deposited Securities shall be held for the sole benefit of the
purchasers. No transfer or other disposition of Deposited Securities held in the
Escrow Account or any interest related to such Deposited Securities shall be
permitted other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder.
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3.8 The Escrow Agent shall refund any portion of the Deposited Proceeds
prior to disbursement of the Deposited Proceeds in accordance with Section 4
hereof upon instruction in writing signed by the Issuer.
4. Disbursement from the Escrow Account.
4.1 The Deposited Proceeds may be released to the Company and the Deposited
Securities delivered to the purchaser or other registered owner only at the same
time as or after the Escrow Agent has received a signed representation letter
from the Company, together with an opinion of counsel that the requirements of
Rule 419 as promulgated pursuant to the Securities Act of 1933 as amended (the
"Act") as to the consummation of a business acquisition have been satisfied.
4.2 If a consummated acquisition(s) meeting the requirements of Rule 419
has not occurred by a date 18 months after the Effective Date, the Deposited
Proceeds, less amounts, delivered to the Company pursuant to Section 4.5 hereof,
shall be returned by first class mail or equally prompt means to the purchaser
and the Deposited Securities shall be delivered to the Subscription Agent within
five business days following that date.
4.3 Upon distribution of the Deposited Proceeds and Deposited Securities
pursuant to the terms of this Section 4, the Escrow Agent shall be relieved of
all further obligations and released from all liability under this Agreement.
4.4 Anything in this Escrow Agreement to the contrary notwithstanding,
after written notice is given by the Issuer to the Escrow Agent that the
Offering has been terminated, the Escrow Agent shall distribute to the Issuer an
amount equal to 10% of the aggregate Deposited Proceeds deposited by the Escrow
Agent (plus interest thereon). Upon receipt of the representation letter and
opinion referred to in Section 4.1 above, the balance of the Deposited Proceeds
(plus interest thereon) shall be delivered to the Company.
5. Rights, Duties and Responsibilities of Escrow Agent.
It is understood and agreed that the duties of the Escrow Agent are purely
ministerial in nature, and that:
5.1 The Escrow Agent shall not be responsible for the performance by Issuer
of its obligations under this Agreement.
5.2 The Escrow Agent shall not be required to accept from the Issuer any
Subscription Information pertaining to prospective purchases unless such
Subscription Information is accompanied by checks or money orders representing
the payment of money, nor shall the Escrow Agent be required to keep records of
any information with respect to payments deposited by the Issuer except as to
the amount of such payments; however, the Escrow Agent shall notify the Issuer
within a reasonable time of any discrepancy between the amount delivered to the
Escrow Agent therewith. Such amount need not be accepted for deposit in the
Escrow Account until such discrepancy has been resolved.
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5.3 The Escrow Agent shall be under no duty or responsibility to enforce
collection of any check delivered to it hereunder. The Escrow Agent, within a
reasonable time, shall return to the Issuer any check received which is
dishonored, together with the Subscription Information, if any, which
accompanied such check.
5.4 The Escrow Agent shall be entitled to rely upon the accuracy, act in
reliance upon the contents, and assume the genuineness of any notice,
instruction, certificate, signature instrument or other document which is given
to the Escrow Agent pursuant to this Agreement without the necessity of the
Escrow Agent verifying the truth or accuracy thereof. The Escrow Agent shall not
be obligated to make any inquiry as to the authority, capacity, existence or
identity of an person purporting to give any such notice or instructions or to
execute any such certificate, instrument or other document. The Escrow Agent
must, however, determine for itself whether the conditions permitting the
release of the funds in the Escrow Account have been met.
5.5 In the event that the Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions with respect to the Escrow
Account or the Deposited Proceeds which, in its sole determination, are in
conflict either with other instructions received by it or with any provision of
this Agreement, the Escrow Agent, at its sole option, may deposit the Deposited
Proceeds (and any other amounts that thereafter become part of the Deposited
Proceeds) with the registry of a court of competent jurisdiction in the Eastern
District of Pennsylvania, in a proceeding to which all parties in interest are
joined. Upon the deposit by the Escrow Agent of the Deposited Proceeds with the
registry of any court, the Escrow Agent shall be relieved of all further
obligations and released from all liability hereunder; and, the Escrow Agent
shall be reimbursed for its costs and expenses, including reasonable attorneys'
fees, incurred by it in connection therewith.
5.6 The Escrow Agent shall not be liable for any action taken or omitted
hereunder, or for the misconduct of any employee, agent or attorney appointed by
it, except in the case of willful misconduct. The Escrow Agent shall be entitled
to consult with counsel of its own choosing and shall not be liable for any
action taken, suffered or omitted by it in accordance with the advice of such
counsel.
5.7 The Escrow Agent shall have no responsibility at any time to ascertain
whether or not any security interest exists in the Deposited Proceeds or any
part thereof or to file any financing statement under the Uniform Commercial
Code with respect to the Deposited Proceeds or any part thereof.
5.8 The Escrow Agent hereby appoints Stocktrans, Inc., as its subscription
agent (the "Subscription Agent") for the purposes of maintaining complete and
accurate records of all subscription documentation and monies received; and for
the further purpose of facilitating distributions from the Escrow Account. The
Subscription Agent's fee, if any, will be paid directly by the Issuer.
6. Amendment; Resignation.
This Agreement may be altered or amended only with the written consent of
the Issuer and the Escrow Agent. The Escrow Agent may resign for any reason upon
thirty (30) business days written notice to the Issuer. Should the Escrow Agent
resign as herein provided, it shall not be required to accept any deposit, make
any disbursement or otherwise dispose of the Deposited Proceeds for a period of
not more than thirty (30) business days following the effective date of such
registration, at which time (a) if a successor escrow agent shall have been
appointed and written notice thereof (including the name and
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<PAGE>
address of such successor escrow agent) shall have been given to the resigning
Escrow Agent by the Issuer and such successor escrow agent, the resigning Escrow
Agent shall pay over to the successor escrow agent the Deposited Proceeds, less
any portion thereof previously paid out in accordance with this Agreement, or
(b) if the resigning Escrow Agent shall not have received written notice signed
by the Issue and a successor escrow agent, then the resigning Escrow Agent shall
promptly refund the amount in the Deposited Proceeds to each prospective
purchaser without interest thereon or deduction therefrom, and the resigning
Escrow Agent shall notify the Issuer in writing of its liquidation and
distribution of the Deposited Proceeds; whereupon, in either case, the Escrow
Agent shall be relieved of all further obligations and released from all
liability under this Agreement. Without limiting the provisions of Section 8
hereof, the resigning Escrow Agent shall be entitled to be reimbursed by the
Issuer for any expenses incurred in connection with its resignation, transfer of
the Deposited Proceeds to a successor Escrow Agent or distribution of the
Deposited Proceeds pursuant to this Section 6.
7. Representations and Warranties.
The Issuer hereby represents and warrants to the Escrow Agent that:
7.1 No party other than the parties hereto and the prospective purchasers
have, or shall have any lien, claim or security interest in the Deposited
Proceeds or any part thereof.
7.2 No financing statement under the Uniform Commercial Code is on file in
any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Deposited Proceeds or any part thereof.
7.3 The Subscription Information submitted with each deposit shall, at the
time of submission and at the time of the disbursement of the Deposited
Proceeds, be deemed a representation and warranty that such deposit represents a
bona fide sale to the purchaser described therein of the amount of Securities
set forth in such Subscription Information and that the Securities and Exchange
Commission has declared effective the Registration Statement referred to in the
Information Sheet.
7.4 All of the information contained in the Information Sheet is, as of the
date hereof and will be, at the time of any disbursement of the Deposited
Proceeds, true and correct.
8. Indemnification and Contribution.
8.1 The Issuer (for purposes of this Section 8 hereof, referred to as the
"Indemnitor") agrees to indemnify the Escrow Agent and its officers, directors,
employees, agents and shareholders (jointly and severally the "Indemnitees")
against, and hold them harmless of and from, any and all loss, liability, cost,
damage and expense, including, without limitation, reasonable counsel fees,
which the Indemnitees may suffer or incur by reason of any action, claim or
proceeding brought against the Indemnitees arising out of or relating in any way
to this Agreement or any transaction to which this Agreement relates, unless
such action, claim or proceeding is the result of the willful misconduct of the
Indemnitees.
8.2 If the indemnification provided for in this Section 8 is applicable,
but for any reasons held to be unavailable, the Indemnitors shall contribute
such amounts as are just and equitable to pay, or to reimburse the Indemnitees
for, the aggregate of any and all losses, liabilities, costs, damages and
expenses, including counsel fees, actually incurred by the Indemnitees as a
result of or in connection with,
5
<PAGE>
and any amount paid in settlement of any action, claim or proceeding arising out
of or relating in any way to any actions or omissions of the Indemnitors.
8.3 Any Indemnitee which proposes to assert the right to be indemnified
under this Section 8, promptly after receipt of notice of commencement of any
action, suit or proceeding against such Indemnitee in respect of which a claim
is to be made against the Indemnitor under this Section 8, will notify the
Indemnitor of the commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the omission so to notify the Indemnitor of any
such action, suit or proceeding shall not relieve the Indemnitor from any
liability which they may have to any Indemnitee otherwise than under this
Section 8. In case any such action, suit or proceeding shall be brought against
any Indemnitee and it shall notify the Indemnitor of the commencement thereof,
the Indemnitor shall be entitled to participate in and, to the extent that they
shall wish, to assume the defense thereof, with counsel satisfactory to such
Indemnitee. The Indemnitee shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such Indemnitee unless (i) the employment of counsel by such Indemnitee has
been authorized by the Indemnitor, (ii) the Indemnitee shall have concluded
reasonably that there may be a conflict of interest among the Indemnitor and the
Indemnitee in the conduct of the defense of such action (in which case the
Indemnitor shall not have the right to direct the defense of such action on
behalf of the Indemnitee) or (iii) the Indemnitor in fact shall not have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel shall be borne by the Indemnitor.
8.4 The Indemnitor agrees to provide the Indemnitee with copies of all
registration statements pre and post-effective amendments and/or supplements to
such registration statements including exhibits, whether filed with the
Commission prior to or subsequent to the disbursement of the Deposited Proceeds.
8.5 The provisions of this Section 8 shall survive any termination of this
Agreement, whether by disbursement of the Deposited Proceeds and Deposited
Securities, resignation of the Escrow Agent or otherwise.
9. Governing Law and Assignment.
This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Pennsylvania and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that any
assignment or transfer by any party of its rights under this Agreement or with
respect to the Deposited Proceeds shall be void as against the Escrow Agent
unless:
9.1 written notice thereof shall be given to the Escrow Agent; and
9.2 the Escrow Agent shall have consented in writing to such assignment or
transfer.
10. Notices.
All notices required to given in connection with this Agreement shall be
sent by registered or certified mail, return receipt requested, or by hand
delivery with receipt acknowledged, or by Express Mail service offered by the
United States Post Office or Federal Express, and addressed, if to the Issuer at
its address set forth on the Information Sheet, and if to the Escrow Agent, to
the address set forth on the
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Information Sheet, Attention of: Laurie Wallace or to such other persons or such
other address as any party hereto may designate in writing to the other as
provided herein.
11. Severability.
If any provision of this Agreement or the application thereof to any person
or circumstances shall be determined to be unpaid or unenforceable, the
remaining provisions of this Agreement or the application of such provision to
persons or circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby and shall be valid and enforceable
to the fullest extent permitted by law.
12. Pronouns.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular, or plural as the context may require.
13. Captions.
All captions are for convenience only and shall not limit or define the
term thereof.
14. Execution in Several Counterparts.
This Agreement may be executed in several counterparts or by separate
instruments and all of such counterparts and instruments shall constitute one
agreement, binding on all of the parties herein.
15. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings (written or oral) of the parties in connection herewith.
IN WITNESS WHEREOF, undersigned have executed this Agreement as of the day
and year the first above written.
Intertech Ventures, Inc.
By:
--------------------------------
Herbert Maxwell, President
Firstrust Savings Bank
By:
--------------------------------
7
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ESCROW AGREEMENT INFORMATION SHEET
1. The Issuer:
Name: New Tech Ventures, Inc.
1501 Broadway, Suite 1807
New York, New York 10036
2. Jurisdiction of Incorporation:
Delaware
3. The Securities:
4,000,000 shares of common stock, $.0O1 par value per share ("Common
Stock") at $.03 per share.
4. Type of Offering:
Registration Statement filed on Form SB-2 filed under the Securities Act of
1933, as amended (the "Act"). The offering shall terminate upon the earlier to
occur of (1) the sale of all of the Shares offered; (2) written notice given by
the Issuer terminating the Offering, which notice may be given at any time; or
(3) 150 days after the effective date of the Registration Statement unless
extended an additional 30 days by the Issuer (the "Termination Date"). The
offering will be considered a blank check offering in accordance with Rule 419
of the Act.
5. Escrow Agent:
Firstrust Savings Bank
1931 Cottman Avenue
Philadelphia, PA 19111
6. Fees: $500.00
8
Exhibit 4(i)(2)
SUBSCRIPTION AGREEMENT
NEW TECH VENTURES, INC.
1501 Broadway, Suite 1807
New York, New York 10036
IN ORDER TO PURCHASE SHARES OF COMMON STOCK, $.001 PAR VALUE
PER SHARE OF NEW TECH VENTURES, INC., (THE "COMPANY") AS
DESCRIBED IN THE PROSPECTUS DATED _____________,
ACCOMPANYING THIS SUBSCRIPTION AGREEMENT, EACH SUBSCRIBER
MUST COMPLETE, EXECUTE AND RETURN THIS SUBSCRIPTION
AGREEMENT, ALONG WITH THE PAYMENT, BY CHECK PAYABLE TO
"FIRSTRUST SAVINGS BANK, AS ESCROW AGENT," FOR THE SHARES
PURCHASED, TO THE COMPANY AT 1501 BROADWAY, SUITE 1807, NEW
YORK, NEW YORK 10036. CAPITALIZED TERMS USED HEREIN AND NOT
OTHERWISE DEFINED SHALL HAVE THE MEANING ASCRIBED THERETO IN
THE PROSPECTUS.
1. Subscription
The undersigned (the "Subscriber") hereby subscribes for and agrees to
purchase from New Tech Ventures, Inc. (the "Company"), subject to the terms and
conditions set forth in the Prospectus dated ________________ (the
"Prospectus"), a copy of which accompanied this Subscription Agreement, _____
shares of the Company's common stock $.001 par value per share, at a price per
Share of $.03 per share or $_____ in the aggregate (the "Subscription Price").
2. Payment
The Subscription Price must accompany this Subscription and shall be paid
by check payable to "Firstrust Savings Bank, as Escrow Agent."
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3. Subscription Information
If an Individual: If a Corporation:
--------------------------------- --------------------------------------
Full Name Full Corporation Name
--------------------------------- --------------------------------------
Residential Address Head Office Address
--------------------------------- --------------------------------------
City Province/State Postal Code City Province/State Postal Code
--------------------------------- --------------------------------------
Telephone Telecopier Attention
--------------------------------- --------------------------------------
Social Security No. or Tax Telephone Telecopier
Identification No. (US Persons)
--------------------------------------
Tax Identification No.
If a Corporation, please provide the names of its directors below:
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
2
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4. Representations of Non US Subscribers
If the prospective Subscriber is a resident of a jurisdiction (the
"International Jurisdiction") other than the United States of America or one of
its possessions or territories, such Subscriber will be required to represent
that:
(a) he is a resident of the International Jurisdiction;
(b) he is knowledgeable of, or has been independently advised as to, the
applicable securities laws of the International Jurisdiction, if any,
which would apply to this subscription;
3
<PAGE>
(c) he is purchasing the Shares pursuant to exemptions from the prospectus
and/or registration requirements under the applicable securities laws
of that International Jurisdiction; or, if such is not applicable, the
investor is permitted to purchase the Shares under the applicable
securities laws of the International Jurisdiction without the need to
rely on exemptions;
(d) the applicable securities laws do not require the Company to make any
filings or seek any approvals of any kind whatsoever from any
regulatory authority in the International Jurisdiction; and
(e) the investor will, if requested by the Company, deliver to the Company
a certificate or opinion of local counsel from the International
Jurisdiction which will confirm the matters referred to in
subparagraphs (c) and (d) above to the satisfaction of the Company,
acting reasonably.
5. Special State Law Considerations
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT, BY
REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF
THE OFFERING. THE SHARES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO
ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE FLORIDA SECURITIES
ACT, IF SUCH REGISTRATION IS REQUIRED.
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT. IN
THE EVENT THAT SALES ARE MADE TO FIVE (5) OR MORE PERSONS IN THE STATE OF
FLORIDA PURSUANT TO THE EXEMPTION FOR LIMITED OFFERS OR SALES OF SECURITIES SET
FORTH IN SECTION 517.061(11)(a) OF THE FLORIDA SECURITIES AND INVESTOR
PROTECTION ACT, ANY SALE IN FLORIDA MADE PURSUANT TO SUCH SECTION IS VOIDABLE BY
THE PURCHASER IN SUCH SALE EITHER WITHIN THREE (3) DAYS AFTER THE FIRST TENDER
OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE
ISSUER, OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF
THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER. TO
ACCOMPLISH THIS, IT IS SUFFICIENT FOR A FLORIDA INVESTOR TO SEND A LETTER OR
TELEGRAM TO THE COMPANY WITHIN SUCH THREE (3) DAY PERIOD STATING THAT IT IS
VOIDING AND RESCINDING THE PURCHASE. IF ANY INVESTOR SENDS SUCH A LETTER, IT IS
PRUDENT TO DO SO BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO INSURE THAT THE
LETTER IS RECEIVED AND TO EVIDENCE THE TIME OF MAILING.
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6. Miscellaneous
(a) All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, impersonal, singular or plural, as the
identity of the person or persons may require.
(b) This Subscription Agreement constitutes the legal, valid and binding
obligation of the undersigned enforceable in accordance with its terms. This
Subscription Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of New York, as such laws are applied
by New York courts to agreements entered into and to be performed in New York
and between residents of New York, and shall be binding upon the Subscriber, the
Subscriber's heirs, estate, legal representatives, successors and assigns. If
any provision of this Subscription Agreement is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof that
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(c) This Subscription Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and may be amended
only by a writing executed by both parties hereto.
(d) Except as set forth herein, neither this Subscription Agreement nor any
provision hereof shall be waived, modified, changed, discharged, terminated,
revoked or canceled except by an instrument in writing signed by the party
effecting the same against whom any change, discharge or termination is sought.
(e) The Offering may be withdrawn at any time prior to the issuance of
Shares to prospective Subscribers. Further, in connection with the offer and
sale of the Shares, the Company reserves the right, in its sole discretion, to
reject any subscription in whole or in part or to allot to any prospective
subscriber fewer than the Shares applied for by such subscriber. The Shares are
offered by the Company subject to prior sale, acceptance of an offer to
purchase, withdrawal, cancellation or modification of the offer, without notice.
(f) This Subscription Agreement does not constitute an offer to sell or a
solicitation of any offer to buy any securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
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In Witness Whereof, the Subscriber has executed this Subscription Agreement
on this ____ day of ________, ________.
------------------------------
Name of Subscriber
(Please type or Print)
------------------------------
[Signature of Subscriber or of
duly authorized signatory of a
corporation, partnership or
other subscriber that is not a
natural person]
------------------------------
Name:
------------------------------
Title: Please print or type
name and title of duly
authorized signatory of a
corporate, partnership or
other subscriber that is not a
natural person.
Accepted this ___ day of _________, _______
NEW TECH VENTURES, INC.
By:
----------------------------------------
(Signature of duly authorized signatory)
6
Exhibit 5(i)
[Form of Opinion of Sierchio & Albert, P.C.]
, 1999
New Tech Ventures, Inc.
Re: Registration Statement of Form SB-2
(SEC File No. ________)
of New Tech Ventures, Inc. (the "Registration Statement")
---------------------------------------------------------
Dear Sirs:
We have acted as your counsel in connection with the proposed issue and
sale by New Tech Ventures, Inc., a Delaware corporation (the "Company") of
4,000,000 shares of Common Stock, $.001 par value (the "Company Shares") on the
terms and conditions set forth in the Registration Statement.
In that connection, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents and corporate
records, and have examined such laws or regulations, as we have deemed necessary
or appropriate for the purposes of the opinions hereinafter set forth.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Delaware.
<PAGE>
2. The issue and sale of the Company Shares to be sold pursuant to the
terms of the Registration Statement as filed with the Securities and Exchange
Commission have been duly authorized and, upon the sale thereof in accordance
with the terms and conditions of the Registration Statement will be validly
issued, fully paid and non-assessable.
We hereby consent to be named in the Prospectus forming Part I of the
aforesaid Registration Statement under the caption, "Legal Opinions" and the
filing of this opinion as an Exhibit to said Registration Statement.
Very truly yours,
Sierchio & Albert, P.C.
By:
------------------------
Joseph Sierchio
Exhibit 23(i)(2)
[Letterhead of Prinzi and Company, Certified Public Accountants]
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement to Form SB-2 of our report dated November 19, 1999
relating to the financial statements of New Tech Ventures, Inc. as of October
31, 1999 and for the period from inception (April 21, 1999) to October 31, 1999,
which appears in such Prospectus. We also consent to the reference to us under
the heading "Experts" in such Prospectus.
Staten Island, New York
November 19, 1999
