UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEW TECH VENTURES, INC.
(Name of small business issuer in our charter)
<TABLE>
<S> <C> <C>
Delaware 6770 13-4082874
-------- ---- ----------
(State of other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or organization) Incorporation or organization Identification Number)
Identification Number)
</TABLE>
1501 Broadway, Suite 1807, New York, New York 10036 (212) 768-2583
(Address and telephone number of principal executive offices)
Sierchio & Albert, P.C., 150 E 58th St., New York, New York 10155,
(212) 446-9500
(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.
If this Form is filed to register additional securities for an offering pursuant
to Rule 426(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 426(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 426(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Title of Each Class of Amount Being Price Maximum Registration Fee(1)
Securities Being Registered Per Aggregate
Registered Share Price
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of common stock 4,000,000 $0.03 $120,000 $33.36
- ----------------------------------------------------------------------------------------------------------
TOTAL 4,000,000 $0.03 $120,000 $33.36
==========================================================================================================
</TABLE>
(1) Estimated for purposes of computing the registration fee under Rule 457.
<PAGE>
NEW TECH VENTURES, INC.
INITIAL PUBLIC OFFERING PROSPECTUS
----------------
4,000,000 shares of common stock offered at $0.03 per share
We are a "blank check" company, organized for the purpose of acquiring as
yet an unidentified business or asset.
We are offering for sale 4,000,000 shares of our common stock, at a
purchase price of $0.03 per share. The minimum number of shares that you may
purchase is 1,000. The shares will 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. We will not use the services of an underwriter or
broker/dealer to complete our offering. There is no minimum number of shares
that we are required to sell in order to complete our offering. This means that
if you purchase shares, your funds will not be returned to you if we do not sell
all 4,000,000 shares that we are offering.
We are offering the shares subject to the conditions imposed on us by Rule
419. Rule 419 requires that the proceeds from the sale of the shares and the
shares sold be placed in an escrow account until we complete an acquisition
meeting the requirements of Rule 419. Please refer to the "Plan of
Distribution," and "The Offering" on pages 27 and 18 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.
The purchase of shares is a highly risky investment. We have described
these risks under the caption "Risk Factors" beginning on page 7.
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
---------------------
Per Share Total
--------- -----
Initial public offering price..................... $ .03 $120,000.00
Estimated offering expenses (1)................... $.007 $ 29,435.00
Net offering proceeds to the Company.............. $.023 $ 90,565.00
(1) All offering costs, including filing, printing, legal, accounting, transfer
agent and escrow agent fees estimated at $29,435 will be paid from our
existing working capital.
This Prospectus is dated _________.
2
<PAGE>
TABLE OF CONTENTS
Page
----
PROHIBITION AGAINST SELLING SHARES HELD IN ESCROW...................... 4
NO MARKET FOR THE SHARES............................................... 4
STATE AND LOCAL SECURITIES LAWS AND REGULATIONS........................ 4
PROSPECTUS SUMMARY..................................................... 6
RISK FACTORS........................................................... 7
DILUTION............................................................... 14
USE OF PROCEEDS........................................................ 15
CAPITALIZATION......................................................... 15
PROPOSED BUSINESS...................................................... 16
PLAN OF OPERATION...................................................... 21
RELATED PARTY TRANSACTIONS............................................. 22
DESCRIPTION OF SECURITIES.............................................. 22
MANAGEMENT............................................................. 23
PRINCIPAL SHAREHOLDERS................................................. 26
MARKET FOR OUR COMMON STOCK............................................ 27
REPORTS TO SHAREHOLDERS................................................ 27
PLAN OF DISTRIBUTION................................................... 27
ADDITIONAL INFORMATION................................................. 29
LEGAL PROCEEDINGS...................................................... 29
LEGAL MATTERS.......................................................... 29
INTEREST OF NAMED COUNSEL.............................................. 30
FINANCIAL STATEMENTS................................................... 31
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, that 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 an 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 of
this prospectus; 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.
3
<PAGE>
PROHIBITION AGAINST SELLING SHARES HELD IN ESCROW
Rule 15g-8 of the Exchange Act of 1934 makes it unlawful for any person to
sell or offer to sell the shares (or any interest in or related to the shares)
held in the escrow account. Accordingly, you are prohibited from making any
arrangements to sell the shares until they are released from the escrow account.
NO MARKET FOR THE SHARES
There is no public market for the shares. Rule 15g-8 prohibits any trading
in the shares (or any interest in or related to the shares) while they are held
in the escrow account. There can be no assurance that any trading market in the
shares will develop after they are released from the escrow account 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.
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 shares offered by us in any jurisdiction or to any
person to which it is unlawful to make such an offer or solicitation.
In the United States, we will offer and sell shares only in New York and
Florida.
We filed a 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 under the exemption from
registration afforded us by section 517.061(11)(a) of the Florida Securities
Act.
If you reside in the State of Florida, you should note that the shares have
not been registered under the Florida Securities Act and are being offered under
the exemption from registration afforded by Section 517.061(11)(a) of the
Florida Securities Act and Investor Protection Act.
Under Florida law, in the event that sales are made to five (5) or more
persons in the State of Florida under 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 of shares in Florida made under this
section is voidable by the purchaser in that sale either (i) within three (3)
days after the first offer of payment is made by a purchaser to us, our agent,
or our escrow agent or (ii) within three (3) days after the availability of such
privilege is communicated to the purchaser, whichever occurs later. To
accomplish this, it is sufficient for a Florida investor to send a letter or
telegram to us within the three (3) day period stating that it is voiding and
rescinding the purchase. If an investor sends
4
<PAGE>
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.
We will offer shares in St. Kitts and Nevis, and the British West Indies.
These offers will be subject to both St. Kitts and Nevis Companies Act with
which we believe 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.
5
<PAGE>
PROSPECTUS SUMMARY
This is a summary of the more detailed 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.
Therefore, you should read this entire prospectus carefully.
The Company
We were organized on April 21, 1999, under the laws of the State of
Delaware, for the purpose of acquiring or merging with a business, asset or
company which we have yet to identify. We refer to this business, company or
asset as a "target business." 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.
Principal Office
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 22.)
Common stock outstanding
prior to the offering........................... 1,010,000 shares.
Common stock to be
outstanding after the offering
(assuming the maximum number
of shares offered are sold)..................... 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. Rule 419 imposes conditions on our
ability to offer shares which afford you certain rights and substantive
protection provided by that rule. Please refer to "The Offering" on page 18.
6
<PAGE>
Risk Factors
The 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. Please refer to "Risk Factors" on page 7.
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.
Please refer to "Proposed Business - The Offering" on page 18.
Use of Proceeds
Of the offering proceeds deposited into the escrow account, 10% will be
released to us prior to a reconfirmation offering in which you reconfirm your
investment in accordance with procedures required by Rule 419. These funds will
be used, if necessary, to defray our operating costs pending our acquisition of
a target business. The balance of the funds, if any, will remain in the escrow
account to be maintained by our escrow agent until an 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. Please refer to "Use of Proceeds"
on page 15.
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.
RISK FACTORS
There is a high degree of risk is associated with an investment in the
shares. 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.
7
<PAGE>
We have a limited operating history.
We were only recently organized and have no operating history. We,
therefore, must be considered promotional and in our early formative and
development stage. 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.
Our management has limited experience in effecting business mergers and
acquisitions.
Although our management has general business experience, you should be
aware that our management has limited experience in connection with business
acquisitions and 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.
We anticipate change in our control and in our management.
We anticipate that upon completion of the acquisition of a target business
we will no longer be controlled by the current shareholders and those
shareholders who purchase the shares in the offering but by the shareholders of
the target business who will be issued shares in connection with the
acquisition. In addition, existing management and directors may resign. We
cannot assure you of the experience or qualifications of the new management
either in the operation of our activities or in the operation of the business,
assets or property acquired.
We have not identified a potential target business.
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.
You will not have access to your funds while held in escrow.
You will be offered the return of your proportionate portion of the funds
held in the escrow account only upon the reconfirmation offering required to be
conducted upon the execution of an agreement to acquire a target business
meeting the requirements of Rule 419. If we are unable to locate a target
business which meets the Rule 419 acquisition criteria, you will have to wait 18
months from the date of this prospectus before your funds (less any permitted
deductions) are returned to you.
You may not transfer or sell the shares while held in the escrow account.
While held in the 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, Title 7 of the
8
<PAGE>
Employee Retirement Income Security Act, or the related rules. 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.
Even if you reconfirm you investment, failure of sufficient number of investors
to reconfirm their investment will result in your shares being returned to us
and the purchase proceeds (less 10%) being returned to you.
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 completed. In that 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.
Conflicts of interest may arise as a result of Mr. Maxwell serving as an officer
or director of other blank check companies.
Conflicts with other blank check companies with which Mr. Maxwell is
currently or, in the future may become affiliated, may arise. To aid in the
resolution of these potential 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 the
companies were formed.
In addition, Mr. Maxwell 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.
It is not likely that we will be able to complete more than one acquisition.
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 in all likelihood
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.
9
<PAGE>
There are limitations on the resale of shares once released from the escrow
account imposed by local laws and regulations.
In the United States, upon release from escrow, the shares may be sold in
the States of New York and the 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 and St. Kitts will be
subject to their respective Companies Acts with which we believe we comply.
An acquisition of a target business may result in a taxable event.
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
to minimize federal and state tax consequences to both us and the target
business, the 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.
We may receive only nominal proceeds in the offering which would significantly
restrict our operations
As the offering is on a best-efforts basis, it is possible that no or
nominal shares will be sold and proceeds received. Thus, 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 fully implement our business plans. If we receive no proceeds, we will not
close the offering.
We face competition from a number of blank check companies, most of which do not
need to comply with the onerous requirements of the Rule 419.
There are numerous firms which are larger than us, and which are also
seeking to effect business acquisitions similar to those contemplated by us.
These firms may be in a better position to finance any subsidiaries and to offer
incentives to management to run the subsidiaries and to supervise them. We
believe that most of these companies do not need to comply with the requirements
of Rule 419 and accordingly will have distinct advantage over us in completing
an acquisition. We anticipate encountering intense competition in the organizing
or purchasing of businesses which we hope may prove to be profitable.
10
<PAGE>
The market price, if any, of the shares may be adversely affected by potential
future Rule 144 sales.
There are 1,010,000 shares presently issued and outstanding, none of which
are being registered under this registration statement. These shares 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
based on 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 some circumstances,
the 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 based on 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 our shares. The one year
hold period on the 1,010,000 shares currently outstanding will expire on April
23, 2000.
By letter dated January 21, 2000 in response to a request for
"guidance" by the NASD, the staff of the Securities and Exchange Commission
stated that "promoters and affiliates" of a blank check company and their
transferees both before and after a business combination will be deemed
underwriters and accordingly may sell their shares only based on an effective
registration statement. We and our counsel do not fully understand what the
import of the January 21, 2000 letter may be. On its face, it appears to be a
unilateral effort to effect a change to Rule 144 and long standing precedent
without the benefit of the long established rule making process. Moreover, the
determination of whether any individual person is an underwriter is based on
fact. To declare, as Mr. Richard Wulff has done on behalf of the Division of
Corporate Finance, a universal truth that the affiliates and promoters of a
blank check company are and always will be underwriters without a review and
analysis of the pertinent facts is a conclusion that runs against established
legal precedent.
Accordingly, from your perspective, in reaching an investment decision you
should certainly take into account the distinct possibility that the 1,010,000
shares, notwithstanding Mr. Wulff's letter, may be sold and the consequent
depressant effect on the market price, if any, on the shares, at such time.
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 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.
We may issue additional shares which will reduce your percentage of ownership.
Our Certificate of Incorporation, authorizes the issuance of 30,000,000
shares of common stock. In the event that the maximum number of shares offered
in this offering are
11
<PAGE>
sold, approximately 85% of our authorized shares will remain unissued. Our Board
of Directors has the power to issue any additional shares without stockholder
approval for whatever consideration it deems proper. Our management presently
anticipates that it may choose to issue a substantial amount in connection with
the acquisition of a target business.
Our operations may be subject to risks of leverage if we borrow funds.
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 merger 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 borrowings, and then-prevailing conditions in the financial
markets as well as general economic conditions.
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 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.
We have not paid nor do we intend to pay 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.
We arbitrarily determined the offering price of the shares.
As there is 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 any established valuation criteria such as assets, book
value or prospective earnings.
12
<PAGE>
The shares will be subject to the penny stock rules which may adversely affect
your ability to sell your shares following the completion of a business
combination.
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) the 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 that definition by Rule 3a51-1. Those 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 that issuer has been in continuous operations
for at least three years; (ii) net tangible assets of at least $5,000,000, if
that 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 those regulations. This, in turn, will affect your ability
to sell your shares following the completion of an acquisition .
We cannot assure you that a public market will develop once the shares are
released from the escrow account.
Under Rule 419, all shares issued by a blank check company, must be placed
in an 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.
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
13
<PAGE>
have no discussions or understandings, with any "market makers" regarding the
participation of a market maker in the future trading market, if any, in our
common stock. Our management has no intention of seeking a market maker for our
common stock at any time prior to completion of an acquisition. Our 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 with a target business 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.
We may encounter 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 our management, warrant our involvement.
Our management's discretion is unrestricted, and we may participate in any
business whatsoever that may in the opinion of our 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 that
foreign regions and countries.
DILUTION
At December 31, 1999, we had a net tangible book value of $30,094. 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 before the offering $0.03
Pro forma net tangible book value per share of common stock after the $0.024
offering
Increase to net tangible book value per share ($0.006)
attributable to purchase of common stock by new investors
Dilution to new investors $0.006
14
<PAGE>
USE OF PROCEEDS
This offering is not contingent on a minimum number of shares being sold.
That is, no level of sales must be reached before we can complete the offering.
The shares will be sold on a first come-first serve basis.
If all 4,000,000 shares offered are sold, the gross proceeds of this
offering will be $120,000 and the net proceeds will be $90,565. If no or a
nominal number of shares are sold, the gross proceeds of this offering will be
nominal. We expect expenses of the offering to equal approximately $29,435. Such
expenses will be paid from our working capital. In addition, under Rule 419,
after the offering is complete, 10% of the funds, or $12,000 in the event
4,000,000 shares are sold, will be released from the escrow account to us and if
necessary, used to pay any accrued unpaid registration costs and to defray our
normal operating expenses. If we do not sell any shares in this offering, the
offering will not be closed.
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. To the extent that the proceeds available to
us are insufficient to cover these expenses, we will seek to have the target
business pay the excess. 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 these 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 the offering is completed and a business combination is 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 these costs
would be paid from existing working capital. Accordingly, although we will
receive 10% of the proceeds of the offering deposited in the escrow account, we
anticipate maintaining these funds in a working capital reserve for payment of
unexpected operating expenses.
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.
CAPITALIZATION
The following table sets forth our capitalization as of the date of this
prospectus and as adjusted to reflect the sale of all of the shares. It is
possible that we may sell less than the maximum number of shares since the
offering is being conducted on a best-efforts basis. For illustrative purposes
we have shown adjustment to capitalization based on the sale of 1,000,000
15
<PAGE>
shares and the maximum of 4,000,000 shares. See "Description of Securities" and
"Financial Statements" on pages 22 and 31.
<TABLE>
<CAPTION>
Authorized Outstanding As Adjusted
---------- ----------- -----------
1,000,000 4,000,000
shares sold shares sold
----------- -----------
<S> <C> <C> <C> <C>
Common Stock, 30,000,000 1,010,000 2,010,000 5,010,000
$.001 par value
<CAPTION>
As Adjusted
------------
As of 1,000,000 4,000,000
December 31,1999 shares sold shares sold
---------------- ----------- -----------
<S> <C> <C> <C> <C>
Stockholder's Equity Common Stock $ 1,010 $ 2,010 $ 5,010
Additional Paid In Capital $28,990 $28,555 $115,555
Income Accumulated During the 94 94 94
Development Stage
Total Stockholders' Equity $30,094 $30,659 $120,659
</TABLE>
PROPOSED BUSINESS
History and Organization
We were organized in 1999. Since inception, our primary activity has been
directed to organizational efforts and obtaining initial financing. We were
formed for the purpose of acquiring or merging with a target business. We have
not engaged in any preliminary efforts intended to identify a possible business
combination and have neither conducted negotiations nor entered into a letter of
intent concerning any acquisition candidates.
Operations
We are, what is referred to in Rule 419 as, a "blank check" company. Our
principal business objective will be to seek long-term growth potential in the
acquisition of a target business. 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 a business
combination will be paid with money in our treasury and to the extent available
to us, proceeds of the offering. Although substantially all of the funds of this
offering are intended to be utilized generally to complete a business
acquisition or merger, these proceeds are not otherwise being designated for any
specific purposes.
Under Rule 419, you will have an opportunity through the reconfirmation
process to evaluate the specific merits or risks of the proposed acquisition or
merger transaction.
16
<PAGE>
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
A target business may be 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 that 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 of
this offering ($96,000 if the maximum number of shares offered is sold). 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 that 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, in all likelihood, 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.
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 an acquisition or merger transaction with an entity in
17
<PAGE>
an industry characterized by a high level of risk. Although our 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.
We anticipate that the selection and ultimate acquisition of a target
business will be complex and risky. Our management believes that there are
numerous companies seeking even the 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
The 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 these business opportunities
extremely difficult and complex.
The Offering
Rule 419 requires that promptly upon receipt, 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 the terms and provisions specified by Rule 419.
Accordingly, we have entered into an escrow agreement with Firstrust Savings
Bank.
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 the
prescribed criteria. The agreement must provide for the acquisition of a
business assets for which 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 our offering, the fair value of the
business
18
<PAGE>
or assets to be acquired must be at least $96,000 (80% of $120,000)
assuming all 4,000,000 shares that we are offering are sold.
* Second, we must file a post-effective amendment to the registration
statement that includes the terms of a reconfirmation offer. The
post-effective amendment must also contain information regarding the
acquisition candidate and business, including audited financial statements,
the results of our offering and the intended use of the funds disbursed
from the escrow account.
* Third, we must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that the prospectus
contained in the post-effective amendment be sent to you within 5 days
after its effective date.
* You 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
you elect to remain an investor.
* If we do not receive written notification from you within 45 days following
the effective date, the proportionate portion of the funds and any related
interest or dividends held in the escrow account on your behalf will be
returned to you 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 elect to reconfirm their
investment.
* If an acquisition has not occurred by _____________ (18 months form the
date of this Prospectus), the funds held in the escrow shall be returned to
you on a proportionate basis within 5 business days by first class mail or
other equally prompt means.
After we submit a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition is completed,
the escrow agent can release the funds and securities.
Rule 419 also requires that:
* The funds deposited into the escrow account and any interest on these
funds, 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 sold in the offering and any other shares issued in connection
with the shares, such as through a stock split, stock dividends or similar
rights, are to be deposited directly into the escrow account promptly upon
issuance. Your name must be included on the stock certificates or other
documents evidencing the shares. The shares held in the 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 shares held in your name. The shares held
in the 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 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
19
<PAGE>
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.
* 10% of the proceeds deposited in the escrow account must be released to us.
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. Our 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 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.
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
* Our relative negotiating strength and that of the target business
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. 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
therefore 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 that 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 our shareholders. Our
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.
20
<PAGE>
Our 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 those 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 that market.
If at any time prior to the completion of this offering we enter
negotiations with a possible merger candidate and a transaction becomes
probable, then this offering will be suspended so that an amendment can be filed
which will include financial statements (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 as our office the office of our president, Herbert
Maxwell, located at 1501 Broadway, Suite 1807, New York, New York 10036, at no
cost. This arrangement is expected to continue after completion of this offering
only until a business combination is complete, although there is currently no
agreement regarding this issue between us and Mr. Maxwell. We at present own no
equipment, and do not intend to own any upon completion of this offering.
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 at $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
21
<PAGE>
upon completion of the offering we estimate will be approximately $17,000 if all
of the shares we are offering are sold. Although we will receive 10% of the
proceeds deposited in the escrow account for the purpose of defraying expenses,
these funds are not anticipated to be required to cover currently projected
expenses of approximately $2,500 per annum. As such, we anticipate that our
current working capital will cover these projected expenses even if only a
minimal number of shares are sold in the offering. 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 that 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, if and 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. To the extent that amount is insufficient, we
will seek to have the target business pay any excess.
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. We have not incurred any Year 2000 problems to
date.
RELATED PARTY TRANSACTIONS
A conflict of interest may arise as a result of management's personal
financial interest 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 (the amount,
however, cannot exceed 50% of the total number of shares sold) in this offering.
Thus, they may own 60% of all the common stock issued after the offering is
completed if all 4,000,000 shares that we are offering are sold. 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 of those shares at meetings of the
stockholders.
22
<PAGE>
The holders of common stock (i) have equal rights to dividends from funds
legally available for the payment of dividends, when, as and if declared by our
board of directors; (ii) are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; (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 their ownership. The holders of shares of our common stock do not
have cumulative voting rights, which means that the holders of more than 50% of
the outstanding shares, voting for the election of directors, can elect all of
our directors if they so choose and, in that event, the holders of the remaining
shares will not be able to elect any of our directors.
Dividends
We have not declared any dividends since inception, and have no present
intention of paying any cash dividends on our common stock in the foreseeable
future. The payment of dividends, if any, in the future, rests within the
discretion of our board of directors and will depend, among other things, upon
our earnings, our capital requirements and our financial condition, as well as
other relevant facts.
Transfer Agent and Registrar
StockTrans, Inc. is the transfer agent and registrar for our common stock.
MANAGEMENT
The following table and subsequent discussion sets forth information about
our director and executive officer, who 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.
Mr. Maxwell is not acting on behalf of nor will act at the direction of any
other person other than our stockholders.
Name Age Title
Herbert Maxwell 76 President and Director
Mr. Maxwell has been an independent businessman for the past five years and
has been a consultant for troubled companies and a principal in investment
groups for the past two decades. Mr. Maxwell has also served as a director and
officer (and was a principal stockholder) of four publicly held companies which
consummated acquisitions similar to the type described in this Prospectus. These
include:
23
<PAGE>
(1) Zachary Ventures, Inc. was organized in December, 1993. It conducted an
offering under Rule 419 for the purpose of completing a business
combination. That offering was concluded in March 1994. Zachary sold
600,000 shares at $0.10 per share or an aggregate of $60,000. Zachary
Ventures did not complete a business acquisition under Rule 419 and in
June, 1996 returned the proceeds held in escrow to the investors as
required by that rule. Zachary Ventures has been dissolved and is no longer
in business.
(2) Lloyd Ventures, Inc. was organized in February, 1995. On November 12,
1996, Lloyd Ventures commenced an offering under Rule 419 for the purpose
of completing a business combination. By the conclusion of that offering,
Lloyd Ventures had sold 982,000 shares at $0.10 per share or an aggregate
of $98,200. Lloyd Ventures did not complete a business combination under
Rule 419 and on or about May, 1998 returned the proceeds held in escrow to
the investors as required by that rule.
(3) C.S. Primo Corp. was organized in 1986 initially through a stock
distribution as an inactive publicly held corporation pursuing a business
acquisition. Mr. Maxwell became a principal stockholder and a director of
C.S. Primo Corp. on or about June 3, 1988. On or about March 4, 1991, C.S.
Primo Corp. acquired approximately 98% of the issued and outstanding common
stock of Dynasty World Express, Inc. in exchange for approximately 90% of
C.S. Primo Corp.'s common stock; since then, C.S. Primo Corp. has changed
its name to Phoenix Information Systems Corp. and its common stock trades
on the over-the-counter market. Mr. Maxwell served as a director from June,
1988 to March, 1991.
(4) Lewis Resources, Inc. was organized in 1987, initially through a stock
dividend distribution, as an inactive publicly held corporation pursuing a
business acquisition. Mr. Maxwell was one of the initial stockholders and
directors of Lewis Resources. On September 28, 1993, Lewis Resources
acquired from Lema Investments Ltd. all of the outstanding shares of
Gallium Arsendie Industries Ltd., a development stage Israeli company.
Since then, Lewis Resources has changed its name to Israel Semiconductor
Corporation and its common stock trades on the over-the-counter market. Mr.
Maxwell served as a director from its formation through September, 1993.
(5) Lewison Enterprises Inc. was organized in 1988 initially, through a
stock dividend distribution, as an inactive publicly held corporation
pursuing a business acquisition. Mr. Maxwell was one of the initial
stockholders and directors of Lewison Enterprises. In July, 1993 Lewison
Enterprises Inc. issued 8,000,000 shares of common stock to the
stockholders of Omega Development Corp. in exchange for all of the issued
and outstanding shares of common stock of Omega Development Corp. Since
then, Lewison Enterprises has changed its name to Omega Development, Inc.
To date, no trading market has developed for shares of its common stock.
Mr. Maxwell has been a director since its formation.
24
<PAGE>
(6) On November 19, 1999 Mr. Maxwell became the sole director and President
of San Fabian Resources, Inc. San Fabian Resources has not conducted a
public offering of securities. It has filed a registration statement on
Form 10SB and is currently seeking a target business.
Except for Omega Development, Inc., San Fabian Resources, Inc. and Lloyd
Ventures, Inc. Mr. Maxwell is not longer a principal stockholder, director of
officer of any of the corporations mentioned above. Except as set forth above,
Mr. Maxwell does not presently serve as a director of any public company. He is
an active investor and writes a newsletter on the New York Theater.
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 December 31, 1999.
Except for the repayment of the 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.
25
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information about our current shareholders.
The persons named below have sole voting and investment power with respect to
the shares.
The numbers in the following table reflect shares of common stock held as
of the date of this prospectus. As the offering is being conducted on a
best-efforts basis, it is possible that we may sell less than the maximum number
of shares offered. Thus, for illustrative purposes, the percentages of ownership
after the offering have been based on the sale of 1,000,000 shares and the
maximum of 4,000,000 shares. That is, the numbers assume respectively, 2,010,000
and 5,010,000 shares of common stock outstanding following the offering.
<TABLE>
<CAPTION>
==========================================================================================================================
Approximate Percentage
to be Owned
Name and address of Shares of Common Approximate After Offering
Beneficial Stock Beneficially Percentage ----------------------------------------------
Owner Owned Owned 1,000,000 shares sold 4,000,000 shares sold
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dobbins & Dolenhoff, Ltd.(1) 291,667 29% 14.5% 6%
Loward Cove E5
Frigate Bay, St. Kitts, West Indies
- --------------------------------------------------------------------------------------------------------------------------
Wesley Capital Ltd.(2) 291,666 29% 14.5% 6%
P.O. Box 679 Hunkins Plaza,
Main Street
Charleston, Nevis
- --------------------------------------------------------------------------------------------------------------------------
Aaronson & Aaronson, Inc.(3) 291,666 29% 14.5% 6%
P.O. Box 679 Hunkins Plaza
Main Street
Charlestown, Nevis
- --------------------------------------------------------------------------------------------------------------------------
Joseph Sierchio(4) 62,500 6% 3.1% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------------------------------------------------
Stephen A. Albert(5) 62,500 6% 3.1% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------------------------------------------------
Herbert Maxwell 10,000 1% .5% 0.2%
1501 Broadway, Suite 1807
New York, NY 10036
- --------------------------------------------------------------------------------------------------------------------------
Officers and Directors as a 10,000 1% .5% 0.2%
Group (1 person)
==========================================================================================================================
</TABLE>
- ----------
(1) Mr. Rand Coulsonn is President and Director of Dobbins & Dolenhoff, Ltd.,
an investment company.
(2) Mrs. Gillian Hobson is President and Director of Wesley Capital Ltd., an
investment company.
(3) Mr. Joshua D. Goldman is President and Director of Aaronson & Aaronson,
Inc., an investment company.
(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.
26
<PAGE>
MARKET FOR OUR COMMON STOCK
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
shares are held in the escrow account. The shares purchased by you will remain
in escrow until our closing of a business combination under the requirements of
Rule 419 or the voluntary termination of the escrow account by us.
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.
There can be no assurance that a trading market will develop upon the
closing of a business acquisition and the subsequent release of the 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 negotiations, discussions
or understandings with any market makers shall take place prior to the execution
of an acquisition agreement. Present 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. This party or parties may employ consultants or
advisors to obtain a 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.
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. The minimum number of shares you can purchase is 1000. We propose to
offer the shares directly on a best efforts, no minimum basis. Therefore, no
level of sales must be reached before the offering can be completed. 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.
27
<PAGE>
Our president may distribute prospectuses related to this offering. We
estimate that approximately 100 Prospectuses will be distributed by him. He
intends to distribute Prospectuses to acquaintances, friends and business
associates.
Although our President 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 that 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 those 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.
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.
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
28
<PAGE>
Method of Subscribing
You 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."
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
an 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.
29
<PAGE>
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.
30
<PAGE>
FINANCIAL STATEMENTS
The following are our financial statements, with independent auditor's
report, for the period ending October 31, 1999.
31
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Index To Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants ...................................... 33
Financial Statements:
Balance Sheet-December 31, 1999 .......................................... 34
Statement of Income for the period April 21, 1999 (date of
Inception) Through December 31, 1999 ................................. 35
Statement of Changes in Shareholders' Equity for the period April 21, 1999
(date of Inception) Through December 31, 1999 ........................ 36
Statement of Cash Flows for the period April 21, 1999 (date of Inception)
Through December 31, 1999 ............................................ 37
Notes to Financial Statements ................................................. 38 to 40
</TABLE>
32
<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 December 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 December 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
December 31,1999, and the results of its operations and its cash flows for the
period from April 21,1999 (date of Inception) to December 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
April 5, 2000
33
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1999
Assets
Cash ........................................................... $ 8,647
Deferred registration costs .................................... 29,435
-------
Total Assets ............................................... $38,082
=======
Liabilities And Shareholders' Equity
Accrued registration costs ..................................... $ 7,988
-------
Total Liabilities .......................................... 7,988
-------
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
Retained Earnings ................................................... 94
-------
Total Shareholders' Equity ................................. 30,094
-------
Total Liabilities and Shareholders' Equity ................. $38,082
=======
See Accompanying Notes to Financial Statements
34
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Statement of Income
For the period April 21, 1999
(Date of Inception) Through December 31, 1999
Revenues ....................................................... $ 94
Total Expenses ................................................. 0
----------
Net Income (Loss) .............................................. $ 94
==========
Net Loss per Common Share ...................................... $ .0001
==========
Weighted Average Number of Common Shares Outstanding ........... 1,010,000
==========
See Accompanying Notes to Financial Statements
35
<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 December 31, 1999
<TABLE>
<CAPTION>
Common Stock
------------------------- Additional Net Income
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
December 31, 1999 ............................. -- -- -- $ 94 94
-----------------------------------------------------------------------------
Balance, December 31, 1999 1,010,000 $ 1,010 $ 28,990 $ 94 $ 30,094
=============================================================================
</TABLE>
See Accompanying Notes to Financial Statements
36
<PAGE>
New Tech Ventures, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the period April 21, 1999
(Date of Inception) Through December 31, 1999
Cash Flows From Operating Activities:
Net Income ................................................ $ 94
Net increase in Accrued Registration Costs ................ 7,988
Net increase in Deferred Registration Costs ............... (29,435)
--------
Net Cash Used in Operating Activities ................. (21,353)
--------
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: .......................................... 8,647
Cash, April 21, 1999 (Date of Inception) ....................... --
--------
Cash, December 31, 1999 ........................................ $ 8,647
========
See Accompanying Notes to Financial Statements
37
<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 December 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 December 31, 1999 the
Company maintained its cash balances in a non-interest bearing account.
38
<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 December 31,1999, various members of the Company's legal counsel owned
125,000 shares of the Company's Common Stock.
39
<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 $20,000
Miscellaneous Incorporation Expenses 3.000
Accounting Expenses 5,000
SEC Registration and Filing Fees 1,435
-------
Total $29,435
=======
40
<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
41
<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.
42
<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 Securities 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.
43
<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 1,400.00
Cost of Printing and Engraving 500.00
Escrow Fees 500.00
Legal Fees 20,000.00
Accountants' Services and Expenses 5,000.00
"Blue Sky" Fees and Expenses 500.00
Miscellaneous Expenses 1,500.00
TOTAL $29,435.00
44
<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.
In April 1999 the company raised $30,010 in 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:
<TABLE>
<CAPTION>
====================================================================================================================
Approximate Percentage
to be Owned
After Offering
Name and address of Shares of Common Stock Approximate ------------------------------------
Beneficial Beneficially Percentage 1,000,000 4,000,000
Owner Owned Owned shares sold shares sold
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dobbins & Dolenhoff, Ltd. 291,667 29% 14.5% 6%
Loward Cove E5
Frigate Bay, St. Kitts
- --------------------------------------------------------------------------------------------------------------------
Wesley Capital Ltd. 291,666 29% 14.5% 6%
P.O. Box 679, Hunkins Plaza
Main Street
Charleston, Nevis
- --------------------------------------------------------------------------------------------------------------------
Aaronson & Aaronson, Inc. 291,666 29% 14.5% 6%
P.O. Box 679, Hunkins Plaza
Main Street
Charlestown, Nevis
- --------------------------------------------------------------------------------------------------------------------
Joseph Sierchio 62,500 6% 3.1% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------------------------------------------
Stephen A. Albert 62,500 6% 3.1% 1%
150 East 58th Street
25th Floor,
New York, NY 10155
- --------------------------------------------------------------------------------------------------------------------
Herbert Maxwell 10,000 1% .5% .2%
1501 Broadway, Suite 1807
New York, NY 10036
====================================================================================================================
</TABLE>
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, 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.
45
<PAGE>
Each of Stephen Albert, Herbert Maxwell and Joseph Sierchio, who were the
purchasers in the transactions made in reliance on Section 4(2) of the
Securities Act, is a sophisticated investor. Stephen Albert and Joseph Sierchio
are principals of Sierchio & Albert, P.C., the Company's counsel. Mr. Maxwell is
the president of the Company. As such, Messrs. Albert, Maxwell and Sierchio had
substantial knowledge of and access to all corporate information prior to
purchasing their shares in reliance on Section 4(2) of the Securities Act. The
factors relied upon to make such exemption available included the small number
of offerees, shares sold, and size of the offering as well as the manner of the
offering.
46
<PAGE>
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**
* Previously filed.
** Included on the Signature Page to the Registration Statement on Form SB-2
47
<PAGE>
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; 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 Securities
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.
48
<PAGE>
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 Amendment No. 1 to
the registration statement to be signed on its behalf by the undersigned
hereunto duly authorized in the City of New York on the 1st day of May, 2000.
NEW TECH VENTURES, INC.
(registrant)
By: /s/ Herbert Maxwell
-----------------------------------
Herbert Maxwell, President and Director
49
<PAGE>
NEW TECH VENTURES, INC.
AMENDMENT NO. 1 TO THE 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**
- ----------
* Previously filed.
** Included on the signature page.
50
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Amendment No. 1 to Form SB-2 of our report dated April
5, 2000 relating to the financial statements of New Tech Ventures, Inc. as of
December 31, 1999 and for the period from April 21, 1999 (date of inception) to
December 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
April 6, 2000
51
