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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SEDONA SOFTWARE SOLUTIONS INC.
(Name of small business issuer in its charter)
NEVADA 98-0226926
------------------------- -----------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization)
Identification Number)
John E. Cooper, President
503 - 1755 Robson Street
Vancouver B.C. V6G 3B7
Canada SEC File No.:
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(Name and address of principal executive
offices, principal place of business and
agent for service of process)
Registrant's telephone number, including area code: (604) 681-6334
Approximate date of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule
462(c) 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 this Form is a post-effective amendment filed pursuant to Rule
462(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 the following box. |__|
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT (1) PRICE (2) FEE (2)
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Common Stock 1,375,500 shares $0.10 $137,550 $36.31
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(1) Based on last sales price on May 16, 2000
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT 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
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
2300 W. Sahara Blvd., Suite 500
Las Vegas, NV 89102
(702) 312-6255
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PROSPECTUS
SEDONA SOFTWARE SOLUTIONS INC.
1,375,500 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all
of the shares of our common stock offered through this prospectus.
See the section entitled "Selling Shareholders." The shares were
acquired by the selling shareholders directly from us in two private
offerings that were exempt from registration under US securities
laws. See the section entitled "Description of Securities."
Our common stock is presently not traded on any market or securities
exchange.
----------------
The purchase of the securities offered through this prospectus
involves a high degree of risk. See section entitled "Risk
Factors" on pages 4 through 7
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
----------------
The Date Of This Prospectus Is: November 6, 2000
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TABLE OF CONTENTS
PAGE
Summary ............................................................ 3
Risk Factors ....................................................... 4
Use of Proceeds .................................................... 8
Determination of Offering Price .................................... 8
Dilution ........................................................... 8
Selling Shareholders ............................................... 8
Plan of Distribution ............................................... 15
Legal Proceedings .................................................. 16
Directors, Executive Officers, Promoters and Control Persons ....... 16
Security Ownership of Certain Beneficial Owners and Management ..... 17
Description of Securities .......................................... 17
Interests of Named Experts and Counsel ............................. 18
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ....................................... 18
Organization Within Last Five Years ................................ 19
Description of Business ............................................ 19
Plan of Operation .................................................. 25
Description of Property ............................................ 26
Certain Relationships and Related Transactions ..................... 26
Market for Common Equity and Related Stockholder Matters ........... 27
Executive Compensation ............................................. 28
Index to Financial Statements ...................................... 29
Changes in and Disagreements with Accountants Disclosure ........... 29
Financial Statements ....................................... F-1 to F-18
Available Information .............................................. 30
2
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SUMMARY
The following is a summary of more detailed information, exhibits
and financial statements appearing elsewhere in this prospectus.
Prospective investors are urged to read this prospectus in its
entirety.
Sedona Software Solutions Inc.
We have entered into an option agreement with Markatech Industries
Corporation whereby we have the right to acquire all of the
technology, property and rights to their Autonet product. Autonet is
a wireless computerized communication system designed for use by
motor vehicle parking enforcement agencies. The Autonet system is
based on a hand-held computer/printer terminal that communicates
through a dedicated radio frequency with a central computerized data
base information system in real-time.
We were incorporated on July 14, 1999 under the laws of the state of
Nevada.
We have not begun any business operations. We currently intend to
commence business operations when we exercise our option.
OFFERING
Securities Being Offered Up to 1,375,500 shares of common stock. See
section entitled "Description of Securities
to be Registered."
Securities Issued
And to be Issued 5,376,500 shares of our common stock were
issued and outstanding as of the date of this
prospectus. All of the common stock to be
sold under this prospectus will be sold by
existing shareholders. See section entitled
"Description of Securities to be Registered."
Use of Proceeds We will not receive any of the proceeds from
the sale of our common stock by the selling
shareholders. See section entitled "Use of
Proceeds."
3
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RISK FACTORS
An investment in our common stock involves a high degree of risk.
Before investing in our common stock you should carefully consider
the risks described below in addition to other information
contained in this Prospectus and in our current and future filings
with the United States Securities and Exchange Commission. If any of
the following risks occur, our business, operating results and
financial condition could be seriously harmed. The trading price of
our common stock could decline due to any of these risks, and you
may lose all or part of your investment.
If We Do Not or Cannot Exercise Our Option to Obtain the Autonet
System, Then We Will Not Be Able to Proceed With Our Business Plan
and Our Business May Fail.
We do not currently own the rights to the Autonet System. In order
to be eligible to obtain these rights through the exercise of our
option agreement, we must first register our common stock with the
US Securities and Exchange Commission and have our shares listed or
quoted for trading on a recognized United States public market for
securities. Our failure to achieve such a listing by October 1,
2001, may result in the loss of our option rights. The loss of
these rights will leave us without a business and unable to pursue
our business plan.
Because We Currently Have A Limited Amount of Capital, We Will
Require Additional Financing In Order To Begin Any Business
Operations.
As of June 30, 2000, we had cash in the amount of $8,412. We will
require additional financing in order to establish business
operations. We do not currently have any arrangements for financing
and we can provide no assurance that we will be able to find such
financing if required. Obtaining additional financing would be
subject to a number of factors, including market conditions,
investor acceptance of our business plan, and investor sentiment.
These factors may make the timing, amount, terms or conditions of
additional financing unacceptable or unavailable to us. Our failure
to obtain such financing will mean that we will be unable to pursue
our business plan and our business will most likely fail.
Because We Have Not Yet Commenced Business Operations, We Face A
High Risk of Business Failure.
We were incorporated in July 1999 and we have not as yet commenced
any business operations. Accordingly, we have no operating history
for investors to evaluate our business. An investor should therefore
consider the risks, expenses and uncertainties that an early stage
company, like ours, faces. These risks include our ability to:
(1) Properly manufacture the Autonet system;
(2) Market and distribute the Autonet system;
(3) Meet the share liquidity requirement for us to be eligible
to exercise the option agreement;
(4) Respond effectively to competitive pressures;
(5) Continue to operate, develop, maintain and upgrade our
business assets.
If we are unsuccessful in addressing these risks, our business will
most likely fail.
4
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Because We Have Not Commenced Business Operations, We Can Expect to
Incur Operating Losses For the Foreseeable Future.
We have never been profitable and cannot commence business
operations or generate any revenues until we exercise the option
agreement. We therefore expect to incur continuing operating losses
into the foreseeable future and recognize that if we are unable to
generate significant revenues from the sale of the Autonet system
when complete, we will not be able to achieve profitability or
continue operations.
Risks Related To Our Market And Strategy
If Autonet Is Not Adopted by a Number of Parking Enforcement
Agencies, Our Business May Fail
The Autonet system has never been marketed. We expect to derive the
majority of our revenue from sales of the Autonet system to motor
vehicle parking enforcement agencies; however, if Autonet is not
accepted for use by a sufficient number of such agencies, we will
not be able to generate revenues and our business may fail
If We Are Unable to Maintain and Advance The Autonet System, Our
Business and Results of Operations Will Suffer.
The economic life cycle of the Autonet system will be directly
related to our ability to maintain and develop the technology
consistent with customer needs and demands, as well as technological
advances. In addition, competitors could develop proprietary or
patented features that would render our technology obsolete. Our
failure to keep up with such technological advances may result in a
loss of revenues and damage to our business.
If We Are Unable To Hire And Retain Key Personnel, We May Not Be
Able To Implement Our Business Plan And Our Business Will Fail
We do not currently have any personnel who are experienced in
operating a business involving the technology and sales that are
central to our planned business operations. Upon commencement of
business operations our success will be largely dependent upon our
ability to hire highly qualified individuals who can manage our
business and contribute to our ongoing business development. These
individuals are in high demand and we may not be able to attract the
staff we need. In addition, we may not be able to afford the high
salaries and fees demanded by qualified personnel, or may lose such
employees after they are hired. Our failure to hire key personnel
when needed would have a significant negative effect on our business
and results of operations.
If We Are Not Able To Effectively Respond To Competitors, Our
Business May Fail
There are other companies who provide parking violation management
systems to enforcement agencies. Competition for clientele is likely
to be intense and is expected to increase significantly in the
future as new technologies emerge. Increased competition could
result in decreased profit margins.
In addition, our competitors may develop products that achieve
greater market acceptance than our products. It is also possible
that new competitors may emerge and acquire significant market
share.
5
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Our inability to make sales and earn revenues due to
competition will have an adverse effect on our business, financial
condition and results of operations.
Risks Related To Legal Uncertainty
If We are Unable to Protect Our Intellectual Property, Our Business
May Be Negatively Effected.
We may not be able to protect our proprietary rights to intellectual
properties such as the touch and feel of the Autonet system, and our
inability or failure to do so could result in loss of business.
Additionally, we may choose to litigate to protect our intellectual
property rights, which could result in a significant cost of
resources and money. We cannot assure success in any such litigation
that we might undertake.
If We Are Required To Qualify To Do Business In Multiple
Jurisdictions, Our Business May Be Harmed
Because we may commercially exploit the Autonet system in a number
of states and foreign countries, we may be subject to the laws and
the court systems of multiple jurisdictions. Such jurisdictions may
claim that we are required to qualify to do business as a foreign
company. This process of qualifying to do business can be costly and
time consuming and will generally have a negative effect on our
ability to show a profit from operations. Failure to qualify as a
foreign company in a jurisdiction where required to do so could
subject us to taxes and penalties.
Risks Related To This Offering
Because Our President, Mr. John E. Cooper, Owns 55.8% Of Our
Outstanding Common Stock, Investors May Find That Corporate
Decisions Influenced By Mr. Cooper Are Inconsistent with the Best
Interests of Other Stockholders.
Mr. Cooper is one of three directors and is our president. He owns
approximately 55.8% of the outstanding shares of our common stock.
Accordingly, he will have a significant influence in determining the
outcome of all corporate transactions or other matters, including
mergers, consolidations and the sale of all or substantially all of
our assets, and also the power to prevent or cause a change in
control. The interests of Mr. Cooper may differ from the interests
of the other stockholders. Factors which could cause the interests
of Mr. Cooper to differ from the interest of other stockholders
include the impact of a corporate transaction on the business, time
required to be devoted by Mr. Cooper to our business, and the
ability of Mr. Cooper to continue to manage our business in light of
the anticipated corporate transaction.
Mr. Cooper has a background both as an Investment Banker and as a
Merchant Banker. These activities currently require his attention
for approximately 5 days per month. While Mr. Cooper presently has
available adequate time every month to attend to the interests of
our corporation, it is possible that the demands of Mr. Cooper's
other interests will increase with the result that he would no
longer be able to devote sufficient time to the management of our
business. In addition, Mr. Cooper may not have available sufficient
time for devotion to our business if the demands of managing our
business increase substantially beyond current levels. Competing
demands on Mr. Cooper's time may lead to a divergence between his
interests and the interests of other shareholders.
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Because All Members of Our Board of Directors are Related, Inventors
May Find That the Board of Directors May Advance Common Interests at
the Expense of Other Shareholders.
Mr. John E. Cooper, our president and a director, is the father of
Gordon E. Cooper and of Andrew J. Cooper, both of whom are directors
of Sedona. The three of these individuals constitute all of the
current members of the board. Notwithstanding the fact that each of
our directors is an accomplished businessman in his own right,
situations could arise where actions of the board of directors are
influenced by the common family interests of our directors to the
detriment of other shareholders.
Because the Exercise of the Option to Acquire Autonet Requires the
Issuance of a Substantial Number of Shares, Existing Shareholder's
Interest Will Be Diluted.
The issuing of 1,000,000 shares of our common stock in order to
acquire Autonet will dilute the interest of each existing
shareholder by approximately 17%. We can provide investors with no
assurance that this potential dilution will be offset by a
corresponding increase in the market value of our stock.
If A Market For Our Common Stock Does Develop, Our Stock Price May
Be Volatile.
There is currently no market for our common stock and we can provide
no assurance to investors that a market will develop. If a market
develops, we anticipate that the market price of our common stock
will be subject to wide fluctuations in response to several factors,
including:
(1) actual or anticipated variations in our results of
operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the technology sector.
Further, if our common stock is traded on the NASDAQ over the
counter bulletin board as we now currently intend, our stock price
may be impacted by factors that are unrelated or disproportionate to
our operating performance. Within the past year the trading prices
of many technology companies' stock reached historical heights that
reflected price and earnings ratios substantially above historical
levels. In recent months many of these price gains have been lost.
These market fluctuations, as well as general economic, political
and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market
price of our common stock.
We can provide no assurance that our common stock will be traded on
the bulletin board.
If Our Stock Price Drops Significantly, We May Become Subject To
Securities Litigation That Would Result In A Harmful Diversion Of
Our Resources.
In the past, following periods of volatility in the market price of
a particular company's stock, securities class action litigation has
been brought against that company. Because such litigation is
extremely costly, any litigation arising from the volatility in the
price of our common stock could have an adverse effect upon our
business, financial condition and results of operations.
7
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
risks and uncertainties. We use words such as anticipate, believe,
plan, expect, future, intend and similar expressions to identify
such forward-looking statements. You should not place too much
reliance on these forward-looking statements. Our actual results
could differ materially from those anticipated in these forward-
looking statements for many reasons, including the risks faced by us
described in the Risk Factors section and elsewhere in this
prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock.
Market factors and the independent decisions of the selling
shareholders will determine the offering price.
DILUTION
The common stock to be sold by the selling shareholders is common
stock that is currently issued and outstanding. Accordingly, there
will be no dilution to our existing shareholders.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all
of the 1,375,500 shares of common stock offered through this
prospectus. The shares include the following:
1. 1,250,000 shares of our common stock that the selling
shareholders acquired from us pursuant to a Pre-Incorporation
Agreement dated July 14, 1999, in an offering that was exempt
from registration under Regulation S of the Securities Act of
1933 and completed on October 29, 1999;
2. 125,500 shares of our common stock that the selling
shareholders acquired from us in an offering that was exempt
from registration under Regulation S of the Securities Act of
1933 and completed on May 16, 2000.
The following table provides as of November 6, 2000, information
regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
(1) the number of shares owned by each prior to this offering;
(2) the total number of shares that are to be offered by each;
(3) the total number of shares that will be owned by each upon
completion of the offering;
(4) the percentage owned by each; and
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(5) the identity of the beneficial holder of any entity that
owns the shares.
To the best of our knowledge, the named parties in the table that
follows are the beneficial owners and have the sole voting and
investment power over all shares or rights to the shares reported.
In addition, the table assumes that the selling shareholders do not
sell shares of common stock not being offered through this
prospectus and do not purchase additional shares of common stock.
The column reporting the percentage owned upon completion assumes
that all shares offered are sold, and is calculated based on
5,376,500 shares outstanding on November 6, 2000. All share
holdings, past and present, include shares underlying warrants
Total Total
Number Shares Percentage
Shares Of Shares To To Be Owned Owned
Owned Be Offered Upon Upon
Prior To For Selling Completion Completion
Name and Address Of This Shareholders Of This Of This
Selling Shareholder Offering Account Offering Offering
------------------- -------- ------------ ----------- -----------
Gregory Layton 250,000 250,000 0 0
4121 St. Georges Ave.
North Vancouver, B.C.
Canada, V7N 1W7
Alfred Fleury 250,000 250,000 0 0
Apdo Box 156
LaCruz de Huanacaxtle
Nayarit, Mexico
Roger Dahlquist 250,000 250,000 0 0
1-1301 Johnston Street
Vancouver, B.C.
Canada, V6H 3R9
Robert Sauer 267,500 267,500 0 0
c/o Trimpac Ltd.
520 Industrial Avenue
Vancouver, B.C.
Canada, V6A 2P3
9
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Richard Green 250,000 250,000 0 0
#701-1238 Melville
Street
Vancouver, B.C.
Canada, V6E 4N2
Reid Anderson 1,000 1,000 0 0
#207-1425 Marine Drive
West Vancouver, B.C.
Canada, V7T 1B9
Keith Baldersen 1,000 1,000 0 0
522-625 Howe Street
Vancouver, B.C.
Canada, V6C 2T6
Sean Bondaroff 1,000 1,000 0 0
6842 Barnfield Place
Whistler, B.C.
Canada, V0N 1B2
Lucile Boyko 11,000 11,000 0 0
1015 Ironwork Passage
Vancouver, B.C.
Canada, V6H 3R4
William Boyko 1,000 1,000 0 0
1015 Ironwork Passage
Vancouver, B.C.
Canada, V6H 3R4
Diane S. Brown 1,000 1,000 0 0
#31-920 Citadel Drive
Port Coquitlam, B.C.
Canada, V3C 5X8
Glenn D. H. Brown 5,000 5,000 0 0
#31-920 Citadel Drive
Port Coquitlam, B.C.
Canada, V3C 5X8
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Ian Callander 1,000 1,000 0 0
#43-600 Falon Drive
Pot Moody, B.C.
Canada, V3H 4E1
William Clark 11,000 11,000 0 0
5080 Ann St
Vancouver, B.C.
Canada, V5R 4J7
Ian Curle 1,000 1,000 0 0
#103-5765 Glover Road
Langley, B.C.
Canada, V3A 8M8
John Curle 1,000 1,000 0 0
#309-1395 Beach Ave.
Vancouver, B.C.
Canada, Canada, V6E 1V7
Dianne M. DeLong 1,000 1,000 0 0
Rossland, B.C.
Canada, V0G 1Y0
O.J. DeLong 1,000 1,000 0 0
Rossland, B.C.
Canada, V0G 1Y0
Gary Dekker 2,000 2,000 0 0
11710 Misuto Place
Maple Ridge, B.C.
Canada, V2X 8T5
Deborah Filippelli 1,000 1,000 0 0
194 Turtlehead Road
Belcarra, B.C.
Canada, V3H 4P1
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Ken Gillies 1,000 1,000 0 0
5485 128th Street
Surrey, B.C.
Canada, V3X 1T8
June Hamilton 1,000 1,000 0 0
408 Cambridge Way
Port Moody, B.C.
Canada, V3H 3V2
Keith Hamilton 1,000 1,000 0 0
408 Cambridge Way
Port Moody, B.C.
Canada, V3H 3V2
Rosemary Hancock 1,000 1,000 0 0
14816 20A Ave.
White Rock
Canada, V4A 8L3
Anna Havlik 1,000 1,000 0 0
PO Box 755
Rossland, B.C.
Canada, V0G 1Y0
Joe Havlik 11,000 11,000 0 0
806-5th Avenue, N.E.
Calgary, Alberta
Canada, T2E 0L3
Josef Havlik 2,000 2,000 0 0
PO Box 755
Rossland, B.C.
Canada, V0G 1Y0
Bill Iversen 1,000 1,000 0 0
450-800 West Pender St
Vancouver, B.C.
Canada, V6C 2V6
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Elisabeth Iversen 1,000 1,000 0 0
#203-1010 Chilco Street
Vancouver, B.C.
Canada, V6G 2R6
Dean Johnson 1,000 1,000 0 0
2551 Peregrine Place
Coquitlaim, B.C.
Canada, V3E 2C4
Martin E. Lamarche 1,000 1,000 0 0
#10-1301 Johnston
Street
Vancouver, B.C.
Canada, V6H 3R9
Anthony McLaughlin 21,000 21,000 0 0
204-1140 Strathaven
Drive
North Vancouver, B.C.
Canada, V7H 2Z6
Kevin Mills 1,000 1,000 0 0
#165-6753 Graybar
Road
Richmond, B.C.
Canada, V6W 1H7
Cheryl Ozysiuk 1,000 1,000 0 0
213-15210 Guilford
Drive
Surrey, B.C.
Canada, V3R 0X7
Rick Roy 1,000 1,000 0 0
Box 3207
Garibali Highlands,
B.C.
Canada, V0N 1T0
Darlene Sherritt 5,000 5,000 0 0
#103-3787 E. Pender St
Burnaby, B.C.
Canada, V5L 2L2
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Colleen Shields 1,000 1,000 0 0
PO Box 1724
Squamish, B.C.
Canada, V0N 3G0
Reginald Skippen 1,000 1,000 0 0
2736 12th Ave S.E.
Calgary, Alberta
Canada, T2C 0G2
Greg Stouffer 1,000 1,000 0 0
PO Box 3533
Garibaldi Highlands,
B.C.
Canada, V0N 1T0
Robert Teek 11,000 11,000 0 0
7 Jenkins Lane
Ajax, Ontario
Canada, L1S 3N7
Lawrie Thom 1,000 1,000 0 0
#401-555 6th Street
New Westminster, B.C.
Canada, V3L 5H1
Michael C. Travis 1,000 1,000 0 0
3622 Garibaldi Drive
North Vancouver, B.C.
Canada, V7H 2W2
Brian Warren 1,000 1,000 0 0
28 Chaparral Link
S.E.
Calgary, Alberta
Canada, T2X 3J7
To our knowledge, none of the selling shareholders has had a
material relationship with Sedona Software Solutions Inc. other than
as a shareholder, or has ever been an officer or directors of Sedona
Software Solutions Inc.
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PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to
sell their shares. However, they may sell some or all of their
common stock in one or more transactions, including block
transactions:
1. on such public markets or exchanges as the common stock may
from time to time be trading;
2. in privately negotiated transactions;
3. through the writing of options on the common stock;
4. in short sales; or
5. in any combination of these methods of distribution.
The sales price to the public may be:
1. the market price prevailing at the time of sale;
2. a price related to such prevailing market price; or
3. such other price as the selling shareholders determine from
time to time.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to
market makers acting as principals or brokers or dealers, who may
act as agent or acquire the common stock as a principal. Any broker
or dealer participating in such transactions as agent may receive a
commission from the selling shareholders, or, if they act as agent
for the purchaser of such common stock, from such purchaser. The
selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with
the selling shareholders to sell a specified number of shares at a
stipulated price per share and, to the extent such broker or dealer
is unable to do so acting as agent for the selling shareholders, to
purchase, as principal, any unsold shares at the price required to
fulfill the respective broker's or dealer's commitment to the
selling shareholders. Brokers or dealers who acquire shares as
principals may thereafter resell such shares from time to time in
transactions in a market or on an exchange, in negotiated
transactions or otherwise, at market prices prevailing at the time
of sale or at negotiated prices, and in connection with such re-
sales may pay or receive commissions to or from the purchasers of
such shares. These transactions may involve cross and block
transactions that may involve sales to and through other brokers or
dealers. If applicable, the selling shareholders also may have
distributed, or may distribute, shares to one or more of their
partners who are unaffiliated with us. Such partners may, in turn,
distribute such shares as described above. We can provide no
assurance that all or any of the common stock offered will be sold
by the selling shareholders.
We are bearing all costs relating to the registration of the common
stock. Any commissions or other fees payable to brokers or dealers
in connection with any sale of the common stock, however, will be
borne by the selling shareholders or other party selling such common
stock.
The selling shareholders must comply with the requirements of the
Securities Act of 1933 and the Securities Exchange Act of 1934 in
the offer and sale of their common stock. In particular, during such
times as the selling shareholders may be deemed to be engaged in a
distribution of the common stock, and therefore be considered to be
an underwriter, they must comply with applicable law and may, among
other things:
(1) not engage in any stabilization activities in connection
with our common stock;
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(2) furnish each broker or dealer through which common stock
may be offered, such copies of this prospectus, as amended
from time to time, as may be required by such broker or
dealer; and
(3) not bid for or purchase any of our securities or attempt
to induce any person to purchase any of our securities
other than as permitted under the Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our Officers and Directors and their respective ages as of October
5, 2000 are as follows:
Directors:
Name of Director Age
---------------------- -----
John E. Cooper 61 President and Director
Andrew J. Cooper 37 Director
Gordon E. Cooper 35 Director
Executive Officers:
Name of Officer Age Office
---------------------- ----- -------
Kathleen Smith 39 Corporate Secretary
Set forth below is a brief description of the background and
business experience of Messrs. John E. Cooper, Andrew J. Cooper,
Gordon E. Cooper and Kathleen Smith for the past five years.
Mr. John E. Cooper: For the past twenty years, Mr. John Cooper has
been involved in both merchant and investment banking activities.
These activities have been for his own account and on behalf of
various private and public corporate clients. Mr. Cooper holds a
BSc in chemistry from the University of British Columbia, received
in 1962, and an MBA in Finance from the Wharton Graduate School,
University of Pennsylvania, received in 1975.
Mr. Andrew J. Cooper: Andrew Cooper is a founding partner of the Eccco
Management Partnership, a precision geographical mapping firm formed in
1994. The firm's clients include major natural resources based
corporations and governments at locations in both Canada and Central
America. Mr. Cooper is responsible for data analysis, statistical
verification, processing and product output. In addition to these
activities, Andrew Cooper has developed and marketed a number of 3-D
computer graphic presentations.
Mr. Gordon E. Cooper: Gordon Cooper is a founding partner of the Eccco
Management Partnership, a precision geographical mapping firm formed in
1994. The firm's clients include major natural resources based
corporations and governments at locations in both Canada and Central
America. Mr. Cooper is responsible for the firm's fieldwork, general
administration and marketing.
16
<PAGE>
Ms. Kathleen Smith: Ms. Smith had a ten-year involvement in the drapery
and fabric industry, both as an employee and the operator of her own
firm called Kina's Draperies, prior to retiring 3 years ago. In
addition to being our corporate secretary, she holds an unpaid
executive position with a not-for-profit organization where she
oversees and implements the maintenance and capital budgets of a multi-
million dollar sports facility.
Term of Office
Our Directors are elected for one-year terms, to hold office until
the next annual general meeting of the shareholders, or until
removed from office in accordance with our bylaws. Our officers are
appointed by our board of directors and hold office until removed by
the board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as
of November 6, 2000, and by the officers and directors, individually
and as a group. Except as otherwise indicated, all shares are owned
directly.
Amount of
Title of Name and address of beneficial Percent of
Class beneficial owner ownership Class
---------- -------------------------- ---------- -----------
Common John E. Cooper 3,000,000 55.80%
60 the Watton
Brecon, Powys
Wales, LD3 7EL
Common Andrew J. Cooper 500,000 9.30%
Mile 18 r Upper Squamish
Valley Road
PO Box 1724
Squamish, B.C.
Canada, V0N 3G0
Common Gordon E. Cooper 500,000 9.30%
2301 Caylay Close
Whistler, B.C.
Canada, V0N 1B2
These percentages are based on 5,376,500 shares of common stock
issued and outstanding as of November 6, 2000. Shares owned by John
E. Cooper are held under the name of International Mineral
Exploration Corporation, a company wholly owned and controlled by
John E. Cooper.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 70,000,000 shares of common
stock at a par value of $0.001 per share and 5,000,000 shares of
preferred stock at a par value of $0.001 per share.
17
<PAGE>
Common Stock
As of November 6, 2000, there were 5,376,500 shares of our common
stock issued and outstanding that were held by approximately 47
stockholders of record.
Holders of our common stock are entitled to one vote for each share
on all matters submitted to a stockholder vote. Holders of common
stock do not have cumulative voting rights. Therefore, holders of a
majority of the shares of common stock voting for the election of
directors can elect all of the directors. Holders of our common
stock representing a majority of the voting power of our capital
stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of our stockholders. A vote by the holders of a majority of
our outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our
Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that
the board of directors, in its discretion, declares from legally
available funds. In the event of a liquidation, dissolution or
winding up, each outstanding share entitles its holder to
participate pro rata in all assets that remain after payment of
liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common
stock have no pre-emptive rights, no conversion rights and there are
no redemption provisions applicable to our common stock.
All shares offered by the selling stockholders are validly issued,
fully paid and non-assessable shares of our capital stock.
Preferred Stock
As of November 6, 2000, there were no shares of our preferred stock
issued and outstanding.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion
upon the validity of the securities being registered or upon other
legal matters in connection with the registration or offering of the
common stock was employed on a contingency basis, or had, or is to
receive, in connection with the offering, a substantial interest,
direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant
or any of its parents or subsidiaries as a promoter, managing or
principal underwriter, voting trustee, director, officer, or
employee.
Cane & Company, LLC, our independent counsel, has provided an
opinion on the validity of our common stock.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada
Revised Statutes and our bylaws. We have been advised that in the
opinion of the Securities and Exchange Commission indemnification
for liabilities arising under the Securities Act is against public
policy as expressed in
18
<PAGE>
the Securities Act, and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities is asserted by one
of our directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal
counsel the matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy to
a court of appropriate jurisdiction. We will then be governed by
the court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on July 14, 1999 under the laws of the state of
Nevada. We have not yet commenced business operations.
DESCRIPTION OF BUSINESS
Markatech Industries Corporation, the current owner and developer of
Autonet parking ticket violation management system is a Vancouver,
Canada, based technologies firm focused upon the development of
computer software and integrated hardware product solutions for
industry and government. On September 19, 2000, Markatech granted us
an option to acquire all of its right title and interest in its
Autonet system. The exercise of this option will require the
distribution of 1,000,000 shares of our stock to Markatech on or
before October 1, 2001. This option agreement expires on September
30, 2001, and further requires, as a condition precedent to our
exercise, that our common shares be listed or quoted for trading on a
recognized United States public trading market.
Markatech is a reporting British Columbia company currently
undergoing reorganization. Our president and director, John Cooper is
a member of the Markatech Advisory Board and holds options to
purchase approximately 30,000 shares of Markatech's stock, which
constitutes less than one percent of that company's currently
outstanding shares. Mr. Cooper is not a director, officer or
affiliate of Markatech.
The Autonet Parking Ticket Violation Management System
The development of the Autonet system began in early 1996 with the
goal of creating a system that aided parking violation enforcement.
This goal was realized with the design of a hand held wireless
computer based product that communicated with a remote central
computer through radio frequencies. The Autonet system has since been
field-tested and successful and operational in a private parking
environment.
The objective of the Autonet system is to increase the effectiveness
of parking violation enforcement and collection. The system can be
customized to reflect the correct action to be taken by the parking
enforcement officer. The immediate access to information at the
point of ticketing is believed to result in more effective
collection, reduced costs, and increased revenues.
1. Product Overview
-------------------
Autonet is a computerized motor vehicle ticket information system
designed to provide instant information to patrollers about any
licensed vehicle in a given region. The system utilizes a small hand
held computer which fits comfortably in the palm of the officer's
hand. The hand held computer features a user-friendly touch screen
operation and a built-in thermal printer for citation printing. The
19
<PAGE>
key difference between Autonet and other computer-based systems is
that the Autonet system allows communication with a central computer
center in real time, rather than through a delayed batch entry.
Within seconds upon keying in the license plate number, a patrolling
officer can have a full report on the subject vehicle. All
outstanding violations specifically linked to the subject vehicle can
be automatically listed on the hand held screen for the officer's
review. The system thus empowers the operator to accurately and
immediately access a history of the offender and delineates specific
actions that may be taken immediately.
The central computer also processes violations, initiates the fine
collection process and updates and administers the database.
The Autonet system provides six basic functions on a real time,
online basis that are important to the effective operation of any
private or government parking citation system.
* Data base surveillance;
* Accurate citation issuance;
* Host computer update capacity;
* Collection and notification services;
* Management and operation streamlining;
* Hardware facilities for all functionality.
Autonet features allow the operator to perform the following
functions, among other things:
(1) Manage and maintain parking violations.
* Enter parking violations automatically in real time;
* Record payments (both full and partial) by cash, check,
credit card or debit card;
* Void or un-void a parking violation;
* Put a hold on a parking violation, which prevents it from
going to its next stage;
* Print up a notice to collect an outstanding parking
violation;
* Generate a license hot-list of outstanding parking
violations;
* Tag a note to a particular parking violation;
* Calculate interest on outstanding parking violations;
* Print up detailed reports regarding the parking violation
or reprint the ticket;
20
<PAGE>
* Send the parking violation information to the local motor
vehicle registry to determine the vehicle's ownership;
* Record and add surcharges to insufficient check payments;
* Maintain a detailed log of all actions taken on violations;
* Log the wear and tear and maintenance on parking
enforcement vehicles;
* Maintain a special database such as for stolen vehicles,
outstanding tickets and additional charges.
(2) Export and import data via disk.
* Export and import information pertaining to registered
vehicle owners and offenders being sent to court or
collections.
(3) Maintain an officer's log and sending notes.
* Log the activities of the operating officer and print a
report detailing hours worked and an individual minute by
minute breakdown of patroller location and duties
performed.
* Sending notes or messages to one or all of the system
users, similar to email. Messages may be sent from the
main computer to the handheld units and vice a versa.
(4) Print reports
* Printouts of the officer's commission, duplicate
violations, summaries, voided tickets, payment statistics,
daily ticket totals and the like.
The main computer software is resident on a Pentium based computer.
The software is responsible for the maintenance and management of
parking violations. When a parking citation is issued, the host
computer database is updated. At the same time, the system can
determine if there are any outstanding violations related to the
vehicle and provide the officer with an immediate report. Appropriate
action may then be taken by the patrolling officer.
2. Product Benefits
-------------------
Autonet's key benefits are its ability to:
* Improve the collection of outstanding citations;
* Increase the effectiveness of violation enforcement
procedures;
* Improve access to information prior to ticketing a vehicle;
* Provide customized solutions to suit the needs of each
client;
* Share information gathered among different agencies;
* Save time and effort through real-time updating at the
point of ticketing.
21
<PAGE>
The Autonet system also provides increased accuracy in ticketing with
an on-line error detection process. Through this detection process,
errors are reported to the patrolling officer in the field at the
time of ticket creation.
The combination of an all-in-one hand held computer means no more:
* Need for ticket books;
* Need for carbon copies;
* Illegible writing problems;
* Key punch entry errors;
* Need for ticket data entry.
Competition
There are at least ten vendors of automated batch parking citation
systems offering a variety of products. Some manufacture their own
hardware, while others resell terminals produced by other companies
and integrate their own proprietary software.
The three industry leaders, AutoCITE, Radix and Clancy, offer an
integrated terminal unit with a built-in printer and self-contained
battery pack.
In some U.S. states, license numbers are bar-coded and displayed in
stickers attached to vehicle windows, therefore some systems
incorporate bar code readers so that the vehicle license number does
not need to be entered. All systems can print bar codes, so that the
ticket can be matched with the payment received.
The Autonet system will be differentiated from present competitors
primarily by the following features:
* Lightweight terminal unit (less than 3 lb.) incorporating the
printer, transmitter-receiver and battery pack into the same
device. The battery will support a full day's operation, and
the terminal will have sufficient memory to contain a full day's
transaction load so that the system can be operate in a batch
mode, if necessary.
* The software will contain sophisticated networking capabilities
at the central computer, so that it can support the requirements
of cities with multiple receiving stations and computer
interfaces.
* The user functionality will be broader than current systems.
The benefits of our parking system include:
* The ability to check for the latest, most up to the minute
information on parking violations and other items that would
typically be downloaded only once a day with other parking
systems.
* Immediate call-out of a police car or tow truck is provided for
wanted vehicles.
* The ability to double check database information with respect to
wanted vehicles prior to action being taken.
22
<PAGE>
* Better management control due to the ability to track
enforcement officers throughout the day.
* The ability to check license plates against car make in order to
avoid errors and detect license plate changes.
* More accurate ticketing with on-line, in field, error detection.
* Reduced response time in the case of an emergency.
* The ability of management to communicate directly with the
enforcement officers in the field.
Marketing Objectives
Our initial marketing and sales objectives will be to:
* establish an expert, in-house, direct sales team;
* initially target public/government users and private parking
operators in large western Canadian cities and selected large
urban centers in the Pacific Northwestern, including Vancouver,
Calgary, Edmonton, Seattle and associated cities.
* implement a marketing and advertising program consistent with
our objective of being recognized as a leader in the design and
development of unique wireless communication technologies.
The sales program will consist of trade show attendance, cooperative
advertising with resellers, direct advertising campaigns using
brochures, mail outs and electronic medium marketing.
We also intend to:
* develop a geographically based regional dealer program
consisting of value-added resellers who will sell, install and
service the System;
* seek key strategic marketing alliances with existing citation
issuance systems, manufacturers, suppliers or vendors, vendors
of related but non-associated products, terminal suppliers
and/or wireless hardware suppliers;
* attend business opportunity shows offering the reseller a
business opportunity;
* contact industry participants directly who have previously
expressed interest in selling our product line;
* hold education seminars for potential resellers;
* develop and distribute a corporate information kit, including
our product history, its uniqueness and the benefits of the
system and remanufacturing process;
* prepare and distribute brochures detailing the benefits of our
products;
23
<PAGE>
* attend industry trade shows;
* produce and distribute a corporate video; and
* develop cooperative advertising programs with resellers.
Market Definition and Target Markets
In the last few years, hand-held traffic ticket and parking citation
systems have gained increasing acceptance by the various law
enforcement authorities in North America. This acceptance has been
fueled both by the availability of cost effective hand-held computer
systems, as well as the need for the enforcement authorities to
increase the productivity of the ticket-issuing officers and to
increase their rate of collections.
This market may be segmented as follows:
1. Large Cities. For a number of reasons large cities have been slow
to adopt this technology. The main reason for this has been the
difficulty in adapting the current technology to a larger
jurisdiction where the technical complexity of a multi-station
environment poses difficult implementation challenges. In addition,
the capital investment required is prohibitive in many cases, even if
the cost benefits can be demonstrated. Recently, New York City has
embarked upon an evaluation process and, if that city proceeds to
adopt a system, the large city market will likely open up. In
Chicago, the Ardis Network is being used to check whether last minute
payment has been received from an owner whose car is about to be
towed. These events could open excellent opportunities for our
AutoNet system.
2. Medium-Sized Towns and Cities. Towns and cities with populations
from 50,000 to 500,000 have been the most aggressive in adopting this
kind of technology. This is in part due to the ability of these
towns and cities to make decisions on a timelier basis, a relatively
simple implementation process and the more obvious cost-benefits in
mid-size jurisdictions.
3. Small Towns. Although a number of smaller jurisdictions have
implemented automated systems, some small towns either do not have a
sufficiently large ticket issuance operation, or they do not wish to
appear overly aggressive with fine collections for political reasons.
Thus, these jurisdictions are not good prospects for our sales
efforts.
4. Other Public Institutions. Other institutions such as
universities, parks, libraries, cultural centers and the like have
been strong adapters of hand-held terminal technology. However, the
benefits of being on-line are not apparent in this market; therefore
it is unlikely that this segment represents a major opportunity for
us.
5. Private Parking Companies. Some of these companies have
implemented automated systems; however, they may be candidates for a
real time system.
Market Acceptance and Positioning
The acceptance of automated systems is increasing. The major systems
vendors claim several hundred installations, with a significant
number of requests for proposals being anticipated over the next 12
24
<PAGE>
months. We estimate that the medium sized city market is
approximately 25% penetrated, with the large city market being almost
untapped at this time.
We believe that the automation of these jurisdictions will continue
at an accelerated rate as prices come down and the available
technology improves.
The following summarizes our planed overall strategy for market
positioning:
------------------------------------------------------------
Image: The leading supplier of unique
proprietary wireless automated
software technology to the parking
industry.
------------------------------------------------------------
Pricing: Cost-effective, low price products
------------------------------------------------------------
Place: North America, expanding worldwide
------------------------------------------------------------
Distribution Process: Direct to users
- Value-Added Resellers
- Direct
------------------------------------------------------------
Research and Development Expenditures
During the past two fiscal years, we have not spent any amounts on
research and development activities.
Subsidiaries
We have no subsidiaries.
Employees
We have no employees other than our officers.
PLAN OF OPERATIONS
Our plan of operations for the twelve months following the date of
this Registration Statement is to complete the due diligence process
with respect to the acquisition of Autonet system as provided in the
option agreement and then to begin implementing our final product
development and product testing programs and our sales plan. We
anticipate that the due diligence process will be completed prior to
September 2001, and that the cost of this process will be $10,000.
Our operational objectives subsequent to acquiring the rights to the
AutoNet product are to:
* complete the evaluation and testing of hardware for the system
within three months;
* beta test the integrated AutoNet system within six months; and
* commence commercial marketing of the AutoNet System by the
beginning of the seventh month.
25
<PAGE>
We anticipate that our financing requirements for the 18 months
subsequent to acquisition of the Autonet Systems from Markatech will
be as follows:
Completion of AutoNet development,
including hardware and external
consulting services. $ 75,000
Marketing during the initial eighteen
months of operation 268,000
Customer service contract fulfillment 50,000
Administrative services 50,000
---------
TOTAL CAPITAL REQUIREMENTS $ 443,000
We anticipate that we will be spending approximately $2,500 per
month over the next twelve-month period prior to acquisition of the
Autonet Systems from Markatech pursuing this plan of operations. Our
cash position as of June 30, 2000 was $8,412.
We anticipate that our present cash reserves are insufficient for us
to complete our plan of operations and that we will require
additional financing in the near future. We anticipate that when we
pursue such additional financing, the financing will be an equity
financing achieved through the sale of our common stock. We do not
have any arrangement in place for any debt or equity financing at
this time. If we are successful in completing an equity financing,
existing shareholders will experience dilution of their interest in
our company.
Our actual expenditures and business plan may differ from the one
stated above. Our board of directors may decide not to pursue this
plan. In addition, we may modify the plan based on available
financing or new information obtained during the due diligence
process.
In the event we are unable or choose to not exercise the option
agreement, we will not be able to proceed with our business plan for
the acquisition of Autonet system and may at that time seek other
business opportunities. Due to our lack of operating history and
present inability to generate revenues, there exits substantial
doubt about our ability to continue as a going concern.
We believe the above statements to be forward-looking statements.
Our actual results and our actual plan of operations may differ
materially from what is stated above. Factors that may cause our
actual results or our actual plan of operations to vary include,
among other things, decisions of our board of directors not to
pursue a specific course of action based on its re-assessment of the
facts or new facts, general economic conditions and those other
factors identified in this prospectus.
DESCRIPTION OF PROPERTY
We do not lease or own any real property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None of the following parties has, since our date of incorporation,
had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will
materially affect us:
26
<PAGE>
(1) Any of our directors or officers;
(2) Any person proposed as a nominee for election as a director;
(3) Any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights
attached to our outstanding shares of common stock;
(4) Any of our promoters;
(5) Any relative or spouse of any of the foregoing persons who
has the same house as such person.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Present Public Market
There is presently no public market for our common stock. We
anticipate applying for trading of our stock with the Over the
Counter Bulletin Board upon the effectiveness of the registration
statement of which this prospectus forms a part. However, we can
provide investors with no assurance that our shares will be traded
on the OTC Bulletin Board or, if traded, that a public market will
materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had forty-seven
(47) registered shareholders.
Registration Rights
We have not granted registration rights to the selling shareholders
or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws
that prohibit us from declaring dividends. The Nevada Revised
Statutes, however, do restrict us from declaring dividends where,
after giving effect to the distribution of the dividend:
(1) we would not be able to pay our debts as they become due
in the usual course of business; or
(2) our total assets would be less than the sum of our total
liabilities, plus the amount that would be needed to
satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
We have not declared any dividends and we do not plan to declare any
dividends in the foreseeable future.
27
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the compensation earned for services
rendered for the fiscal year ended June 30, 2000 by our Officers and
Directors:
Annual Compensation Long Term Compensation
------------------- ----------------------
All
Other Other
Com- Restricted Com-
pen- Stock pen-
sa- Annual Options/ LTIP sa-
Name Year Salary Bonus tion Awarded SARs (#)payouts tion
---- ------- -------
John E. Pres. & 2000 $0 $0 $0 $0 $0 $0 $0
Cooper Director
Andrew J. Director 2000 $0 $0 $0 $0 $0 $0 $0
Cooper
Gordon E. Director 2000 $0 $0 $0 $0 $0 $0 $0
Cooper
Kathleen Director 2000 $0 $0 $0 $0 $0 $0 $0
Smith
Stock Option Grants
We did not grant any stock options to any executive officers or
directors during our most recent fiscal year ended June 30, 2000.
We have not granted any stock options to any executive officers or
directors since June 30,2000.
Employment Agreements
We do not have a written employment or consultant agreement with any
of our officers or directors or with any other person or entity.
Our officers and directors provide their services to us on a part-
time basis. We do not pay any salary or consulting fee to anyone.
EXPERTS
Our balance sheet as of June 30, 3000 and the related statements of
loss and deficit, stockholders deficiency, cash flows for the period
ending June 30, 2000, appearing elsewhere in this prospectus, have been
included herein in reliance on the report of Morgan & Co., Chartered
Accountants, given on the authority of said firm as experts in
accounting and auditing.
28
<PAGE>
INDEX TO FINANCIAL STATEMENTS
1. Auditors' Report
2. Audited Financial Statements:
a. Balance Sheet
b. Statement of Loss and Deficit
c. Statement of Cash Flows
d. Statement of Stockholders'Equity
e. Notes to Financial Statements
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants
since our incorporation in July, 1999.
29
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
JUNE 30, 2000
(Stated in U.S. Dollars)
<PAGE>
------------------------------------
Morgan & Company
------------------------------------
Chartered Accountants
------------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
------------------------------------
AUDITORS' REPORT
To the Directors of
Sedona Software Solutions, Inc.
We have audited the balance sheet of Sedona Software Solutions,
Inc. (a development stage company) as at June 30, 2000 and the
statements of loss and deficit accumulated during the development
stage, cash flows, and stockholders' equity for the period then
ended. 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 United States and
Canadian generally accepted auditing standards. Those standards
require that we plan and perform an audit to obtain reasonable
assurance 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, these financial statements present fairly, in all
material respects, the financial position of the Company as at
June 30, 2000 and the results of its operations and cash flows for
the period then ended in accordance with United States generally
accepted accounting principles.
Vancouver, B.C.
/s/ Morgan & Company
July 24, 2000, except for Note 5 Chartered Accountants
which is as of October 30, 2000
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 2000
(Stated in U.S. Dollars)
-------------------------------------------------------------------------
ASSETS
Current
Cash $ 8,413
=========================================================================
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
70,000,000 common shares, par value $0.001 per share
5,000,000 preferred shares, par value $0.001 per share
Issued and outstanding:
5,376,500 common shares $ 5,377
Additional paid in capital 12,523
Deficit Accumulated During The Development Stage (9,487)
-----------
$ 8,413
=========================================================================
Approved by the Directors:
__________________________ __________________________
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
-------------------------------------------------------------------------
PERIOD FROM
DATE OF
INCEPTION INCEPTION
JULY 14, JULY 14,
1999 TO 1999 TO
JUNE 30, JUNE 30,
2000 2000
-------------------------------------------------------------------------
Expenses
Consulting fees $ 2,500 $ 2,500
Professional fees 6,869 6,869
Bank charges 118 118
----------------------------
Net Loss For The Period 9,487 $ 9,487
============
Deficit Accumulated During The Development
Stage, Beginning Of Period -
-------------
Deficit Accumulated During The Development
Stage, End Of Period $ 9,487
==========================================================
Net Loss Per Share $ 0.01
==========================================================
Weighted Average Number Of
Shares Outstanding 1,992,630
==========================================================
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
-------------------------------------------------------------------------
PERIOD FROM
DATE OF
INCEPTION INCEPTION
JULY 14, JULY 14,
1999 TO 1999 TO
JUNE 30, JUNE 30,
2000 2000
-------------------------------------------------------------------------
Cash Flows From Operating Activity
Net loss for the period $ (9,487) $ (9,487)
Cash Flow From Financing Activity
Issue of common shares 17,900 17,900
----------------------------
Increase In Cash 8,413 8,413
Cash, Beginning Of Period - -
---------------------------
Cash, End Of Period $ 8,413 $ 8,413
=========================================================================
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
JUNE 30, 2000
(Stated in U.S. Dollars)
COMMON STOCK
--------------------------------
ADDITIONAL
PAID-IN
SHARES AMOUNT CAPITAL DEFICIT TOTAL
-----------------------------------------------------
Shares Issued For
Services 2,500,000 $ 2,500 $ - $ - $ 2,500
Shares Issued For
Cash At $0.001 2,750,000 2,750 - - 2,750
Shares Issued For
Cash At $0.10 126,500 127 12,523 - 12,650
Net Loss - - - (9,487) (9,487)
-----------------------------------------------------
Balance,
June 30, 2000 5,376,500 $ 5,377 $ 12,523 $(9,487) $ 8,413
=====================================================
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on July 14, 1999.
b) Development Stage Activities
The Company is in the development stage and currently is in
the process of reviewing new business opportunities.
Recovery of the Company's assets is dependent upon future
events, the outcome of which is indeterminable. In addition,
successful completion of the Company's development program
and its transition, ultimately to the attainment of
profitable operations is dependent upon obtaining adequate
financing to fulfil its development activities and achieve a
level of sales adequate to support the Company's cost
structure.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company has been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality, and
within the framework of the significant accounting policies
summarized below:
a) Development Stage Company
The Company is a developed stage company as defined in the
Statements of Financial Accounting Standards No. 7. The
Company is devoting substantially all of its present efforts
to establish a new business and none of its planned principal
operations have commenced. All losses accumulated since
inception have been considered as part of the Company's
development stage activities.
b) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting For Income Taxes" (SFAS 109).
This standard requires the use of an asset and liability
approach for financial accounting and reporting on income
taxes. If it is more likely than not that some portion, or
all if a deferred tax asset, will not be realized, a
valuation allowance is recognized.
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
c) Financial Instruments
The Company's financial instruments consist of cash.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
d) Net Loss Per Share
Net loss per share is based on the weighted average number of
common shares outstanding during the period plus common share
equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue, and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
3. NEW ACCOUNTING STANDARDS
a) Effective December 15, 1995, Statement of Financial
Accounting Standards No. 123 ("SFAS-123") "Accounting For
Stock-Based Compensation" was adopted for United States GAAP
purposes. SFAS-123 enables a company to elect to adopt a
fair value methodology for accounting for stock based
compensation. The Company has determined that the fair value
of stock options is similar to the issue price at the time of
granting. The Company does not expect to elect to adopt the
fair value methodology, although the pro-forma results of
operations and earnings per share determined as if the fair
value methodology had been applied will be disclosed as
required under SFAS-123 in future years.
b) In March, 1995, Statement of Financial Accounting Standards
No. 121 ("SFAS-121") "Accounting For Impairment Of Long-Lived
Assets And For Long-Lived Assets To Be Disposed Of" was
issued. Certain long-lived assets held by the Company must
be reviewed for impairment whenever events, or changes in
circumstances, indicate the carrying amount of an asset may
not be recoverable. Accordingly, the impairment loss is
recognized in the period it is determined. The Company has
adopted these standards. There was no material effect on its
financial position or results of operations of the Company
from its adoption.
<PAGE>
SEDONA SOFTWARE SOLUTIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Stated in U.S. Dollars)
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. Although the change in
date has occurred, it is not possible to conclude that all
aspects of the Year 2000 Issue that may affect the entity,
including those related to customers, suppliers, or other
third parties, have been fully resolved.
5. SUBSEQUENT EVENT
Pursuant to an agreement, dated April 30, 2000, the Company was
granted the right to conduct a due diligence review of certain
technology known as Autonet Parking Ticket Violation Management
System ("Autonet"). On completion of the due diligence and the
payment of $400 cash on September 19, 2000, the Company was
granted an option to acquire the exclusive ownership rights and
interest in the Autonet system. To exercise the option, the
Company is required to issue 1,000,000 common shares on or
before October 1, 2001 and is further required, as a condition
precedent to the exercise of the option, to be listed or quoted
for trading on a recognized United States public trading
market.
<PAGE>
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2 under the Act
with the Securities and Exchange Commission with respect to the
shares of our common stock offered by this prospectus. This
prospectus is filed as a part of the registration statement and does
not contain all of the information contained in the registration
statement and exhibits and reference is hereby made to such omitted
information. Statements made in this registration statement are
summaries of the terms of these referenced contracts, agreements or
documents and are not necessarily complete but all information we
considered material has been disclosed. Reference is made to each
exhibit for a more complete description of the matters involved and
these statements shall be deemed qualified in their entirety by the
reference. You may inspect the registration statement and exhibits
and schedules filed with the Securities and Exchange Commission at
the Securities and Exchange Commission's principle office in
Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the
Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Securities and Exchange Commission also
maintains a website (http://www.sec.gov) that contains reports,
proxy statements and information regarding registrants that file
electronically with the Commission. For further information
pertaining to us and our common stock offered by this prospectus,
reference is made to the registration statement.
30
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless
it is specifically limited by a company's articles of incorporation
which is not the case with our articles of incorporation. Excepted
from that immunity are:
(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the
director has a material conflict of interest;
(2) a violation of criminal law (unless the director had
reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her
conduct was unlawful);
(3) a transaction from which the director derived an improper
personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers
to the fullest extent not prohibited by Nevada law; provided,
however, that we may modify the extent of such indemnification by
individual contracts with our directors and officers; and, provided,
further, that we shall not be required to indemnify any director or
officer in connection with any proceeding, or part thereof,
initiated by such person unless:
(1) such indemnification is expressly required to be made by
law;
(2) the proceeding was authorized by our board of directors;
(3) such indemnification is provided by us, in our sole
discretion, pursuant to the powers vested us under Nevada
law; or
(4) such indemnification is required to be made pursuant to
the bylaws.
Our bylaws provide that we will advance to 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, by reason of the fact
that he is or was our director or officer, or is or was serving at
our request as a director or executive officer of another company,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or
on behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be
indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an
officer, except by reason of the fact that such officer is or was
our director, in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, if a determination is
reasonably and promptly made: (i) by the board of directors by a
majority vote of a quorum consisting of directors who were not
parties to the proceeding; or (ii) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested
31
<PAGE>
directors so directs, by independent legal counsel in a written opinion,
that the facts known to the decision-making party at the time such
determination is made demonstrate clearly and convincingly that such
person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to our best interests.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering denoted below. Please note that
that all amounts are estimates other than the Commission's
registration fee.
Securities and Exchange Commission registration fee $36.31
Federal Taxes $NIL
State Taxes and Fees $NIL
Transfer Agent Fees $500
Accounting fees and expenses $5,500
Legal fees and expenses $15,000
Blue Sky fees and expenses $NIL
Miscellaneous $NIL
----------
Total $21,038.24
==========
------------------------------------------------------------------------
We will pay all expenses of the offering listed above. No portion of
these expenses will be borne by the selling shareholders
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We issued 2,500,000 shares of our common stock to Mr. John E. Cooper
on July 14, 1999 in consideration for his assistance in our
formation. Mr. Cooper is our president, CEO and chief financial
officer, as well as one of our directors. These shares were issued
pursuant to Section 4(2) of the Securities Act of 1933, and are
restricted shares, as defined in the Act.
On July 7, 1999, pursuant to a pre-incorporation agreement of the
same date, Messrs. John E. Cooper, Andrew J. Cooper, and Gordon E.
Cooper, all directors of our company, each purchased 500,000 shares
of our common stock at a price of $0.001 per shares. These shares
were issued pursuant to Section 4(2) of the Securities Act of 1933,
and are restricted shares, as defined in the Act.
Pursuant to the pre-incorporation agreement, on July 14, 1999, we
agreed to sell 1,250,000 shares of our common stock to five persons
at a price of $0.001 per shares. We completed these sales pursuant
to Regulation S of the Act on or before June 2000. Each purchaser
represented to us that he was a non-US person as defined in the
regulation. We did not engage in a distribution of this offering in
the United States. Each purchaser represented his intention to
acquire the securities for investment only and not with a view
toward distribution. Appropriate legends were affixed to the stock
certificates issued to each purchaser in accordance with Regulation
S. Each investor was given adequate access to sufficient
information about us to make an informed investment decision. None
of the securities were sold through an underwriter and accordingly,
there were no underwriting discounts or commissions involved. No
registration rights were granted to any of the purchasers.
32
<PAGE>
On November 22, 1999, we issued 1,000 shares of our common stock to
Ms. Kathleen Smith, our corporate secretary, in consideration of the
payment of $0.10 per share. These shares were issued pursuant to
Section 4(2) of the Securities Act of 1933, and are restricted
shares, as defined in the Act.
In addition, on May 16, 2000 we completed the issue of 125,500
shares of common stock to thirty-nine purchasers at a price of $0.10
per share. We completed these sales pursuant to Regulation S of the
Act. Each purchaser represented to us that he was a non-US person
as defined in the regulation. We did not engage in a distribution
of this offering in the United States. Each purchaser represented
his intention to acquire the securities for investment only and not
with a view toward distribution. Appropriate legends were affixed
to the stock certificates issued to each purchaser in accordance
with Regulation S. Each investor was given adequate access to
sufficient information about us to make an informed investment
decision. None of the securities were sold through an underwriter
and accordingly, there were no underwriting discounts or commissions
involved. No registration rights were granted to any of the
purchasers.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
----------- --------------------
3.1 Articles of Incorporation
3.2 By-laws
4.1 Share Certificate
5.1 Opinion of Cane & Company, with Consent to Use
10.1 Document Review and Option Agreement with Markatech
23.1 Consent of Morgan & Co., Chartered Accountants
27.1 Financial Data Schedule
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(A) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement to:
(1) include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(2) reflect in the prospectus any facts or events arising
after the effective date of this registration statement,
or most recent post-effective amendment, which,
individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement; and
(3) include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement.
(B) 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
33
<PAGE>
the securities offered herein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(C) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby
which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the provisions above, or otherwise,
we have 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 us of expenses incurred or
paid by one of our directors, officers, or controlling persons in
the successful defense of any action, suit or proceeding, is
asserted by one of our directors, officers, or controlling persons
in connection with the securities being registered, we 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 such indemnification is against public policy
as expressed in the Securities Act, and we will be governed by the
final adjudication of such issue.
34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing Form SB-2 and
authorized this registration statement to be signed on its behalf by
the undersigned in the City of Vancouver, Province of British
Columbia on November 6, 2000.
Sedona Software Solutions Inc.
By:/s/ John E.Cooper
____________________________
John E. Cooper, President, Chief
Financial Officer and director
/s/ Gordon E. Cooper
____________________________
Gordon E. Cooper
/s/ Andrew J.Cooper
____________________________
Andrew J. Cooper
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Mr. John E. Cooper, his true and
lawful attorney-in-fact and agent, with full power of substitution
and re-substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all pre- or post-effective
amendments to this Registration statement, and to file the same with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents,
or any one of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following
persons in the capacities indicated on November 6, 2000.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ Gordon E. Cooper
______________________ Director November 6, 2000
Gordon E. Cooper
/s/ Andrew J.Cooper
______________________ Director November 6, 2000
Andrew J. Cooper
35
