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AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON December 22, 1999
REGISTRATION NO.333-93525
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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ArchivalCD Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 83-0324656
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
100 North Sixth #212 Crockett, Texas 75835
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(936) 545-9515
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
--------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE STATE SECURITIES
COMMISSION BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE IN WHERE THE OFFER OR SALE
IS NOT PERMITTED.
The securities are being offered as a Best Efforts underwriting and is self
underwritten. Corporate Vision, Inc is a Selling Shareholder and will be selling
500,000 shares.
SUBJECT TO COMPLETION, DATED December 22, 1999
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EXPLANATORY NOTE
Due to the extent of changes to the registration statement on Form SB-2, this
amendment is being filed without EDGAR redlining.
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PROSPECTUS [LOGO]
ArchivalCD, Inc.
3,700,000
Common Shares
This is an initial public offering of 3,700,000 shares of common stock, of
ArchivalCD, Inc.
There is currently no public market for the common stock. ArchivalCD, Inc.
anticipates that the initial public offering price per share will be $2.00. It
is anticipated that the common stock will be listed on the Over the Counter
markets under the symbol AHCD.
This prospectus also relates to the sale of shares of common stock held by
certain selling stockholders identified in this prospectus. Such shares may not
be sold for a period of nine months from the effective date of this prospectus
without the prior written consent of ArchivalCD Inc. ArchivalCD Inc. will not
receive any proceeds from the sale of such shares.
Investing in the common stock and warrants involves certain risks. You should
purchase these securities only if you can afford a complete loss.
<TABLE>
<CAPTION>
Per Share Total
------------ ------------
<S> <C> <C>
Public Offering Price $ 2.00 $ 7,400,000
Underwriting Discounts
and Commissions $ .30 $ 1,119,316
Proceeds to the Company $ 1.70 $ 5,430,684
Proceeds to Selling
Stockholders $ 1.20 $ 850,000
</TABLE>
Neither the Securities and Exchange Commission nor any State securities
commission has approved or disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Common Stock
Over the Counter Bulletin Board
TITLE OF EACH CLASS ON WHICH TO BE SO REGISTERED
Then nature of each class to be sold is common.
NATURE OF EACH EXCHANGE EACH CLASS IS TO BE REGISTERED
The nature of exchange will be OTC: Bullitin Board.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary....................5
Risk Factors..........................6
Use of Proceeds.......................9
Dilution.............................10
Management's Discussion and
Analysis of Financial Condition
and Results of Operations............11
Business.............................18
Management...........................22
Selling Stockholders.................24
Description of Capital Stock.........25
Legal Matters........................29
Index to Financial Statements.......F-1
</TABLE>
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Part I
Certain Forward-Looking Information
Certain statements included in this report, which are not historical facts, are
forward looking statements, including the information provided with respect to
future business opportunities, expected financing sources and related matters.
These forward looking statements are based on current expectations, estimates,
assumptions and beliefs of management, and words such as "expects,"
"anticipates," "intends," "believes," "estimates" and similar expressions are
intended to identify such forward looking statements. Since this information is
based on current expectations that involve risks and uncertainties, actual
results could differ materially from those expressed in the forward-looking
statements.
PROSPECTUS SUMMARY
You should read the entire Prospectus, including the "Risk Factors" section and
the Financial Statements and the notes to the Financial Statements, carefully.
The terms the "Company" and "ArchivalCD Inc." refers to our predecessor and us.
Unless stated otherwise, all information in this Prospectus (i) assumes an
initial public offering price of $2.00 per share.
The Company
ArchivalCD Inc., (ArchivalCD or the "Company") is a developmental stage
manufacturer, organized in November 1998, as a Delaware Corporation. The Company
has no products or services for sale at this time and has not generated any
production or revenues.
ArchivalCD Inc. will initiate production as a designer of Genealogical and
Business Archive Records digitized information and storage libraries. The
company develops, manufactures and digitizes microfilm documents of historical
value and places, them on a Compact Disk ("CD's"). The company founders have
five years of development, planning, programming, and analysis in this
specialized field of operations. The company plans on entering both the
microfilm sales portion of the market and the more expansive microfilm imagebase
on CD portion of the market. Doing both supports the furthering of genealogical
education and the corresponding historical and educational programs which
increases business potential.
The company incorporated as a Delaware corporation in November 1998. Our address
is 100 North Sixth Street Suite 212, Crockett, TX 75835, and our telephone
number is (936) 545 9515. Our Web site can be accessed at www.ArchivalCD.com.
Information contained on our Web site is not part of this Prospectus.
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THE OFFERING
<TABLE>
<S> <C>
Securities Offered............. 3,700,000 shares of Common Stock (the
"Common Stock")
Common Stock Outstanding
Before the Offering(1)(2)...... 18,305,726 shares
Common Stock Outstanding
After the Offering(1).......... 22,005,726
shares
Use of Proceeds................ Product development, sales and marketing,
facilities and other capital expenditures,
expansion of internal operations and working
capital and general corporate purposes.
Proposed trading Symbols....... Common Stock AHCD
</TABLE>
RISK FACTORS
This Prospectus contains forward-looking statements that involve risks and
uncertainties. Such statements can be identified by the use of words such as
"may," "will," "expect," "anticipate," "estimate," "continue," or other similar
words. These statements discuss future expectations, contain projections of
results of operations or of financial condition, or state other
"forward-looking" information. When considering such statements, you should keep
in mind the risk factors described below and other cautionary statements in this
Prospectus. The risk factors described below and other factors noted throughout
this Prospectus, including certain risks and uncertainties, could cause our
actual results to differ materially from those contained in any forward-looking
statement.
Limited Operating History; Accumulated Deficit; Anticipated Future Losses; We
have incurred significant losses since inception and we expect to continue to
incur substantial operating losses for the foreseeable future. We must, among
other things, establish widespread market acceptance of our existing products,
successfully develop and deliver new products and services, respond quickly and
effectively to competitive, market and technological developments, expand sales
and marketing operations, broaden customer support capabilities, control
expenses and continue to attract and retain qualified personnel. We may not
become profitable in the future.
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Unpredictability of Future Revenues; Potential Fluctuation in Quarterly
Operating Results. We expect to experience significant fluctuations in our
future quarterly operating results due to a variety of factors, many of which
are outside our control, including:
- - demand for products and services;
- - market acceptance of our new products and services;
- - price reductions or changes in pricing;
- - mix of products and services;
- - mix of distribution channels;
- - mix of international and North American revenues;
- - costs of litigation and intellectual property protection;
- - competitive factors;
- - growth in the use of the Internet;
- - technical difficulties with respect to the use
of our products; and
- - general economic conditions and economic
conditions specifically related to the Internet.
We believe that our quarterly revenues, expenses and operating results could
vary significantly in the future, and that you should not rely upon
period-to-period comparisons as indications of future performance.
Product Development; Rapid Technological Change. The markets for our products
are characterized by evolving industry standards, changing technologies and
frequent new product introductions and enhancements. Our future success will
depend in part on our ability to enhance our existing products and to develop
and introduce new products and features that meet changing customer requirements
and emerging industry standards. We may not successfully complete the
development or introduction of products on a timely basis, if at all. In
addition, our current or future products may not achieve market acceptance.
Products or technologies developed by others may render our products or
technologies noncompetitive or obsolete. Any failure by us to anticipate or
respond adequately to changing technologies, or any significant delays in
product development or introduction, could cause customers to delay or decide
against purchases of our products and would have a material adverse effect on
our business.
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We also rely on certain technology that we license from third parties, including
software that is integrated with internally developed software and used in our
products, to perform key functions. In the future, such third-party technology
licenses may not be available to us on commercially reasonable terms. The loss
of any of these technologies could have a material adverse effect on our
business, financial condition and results of operations.
We attempt to avoid infringing upon known proprietary rights of third parties in
our product development efforts. However, we have not conducted and do not
conduct comprehensive patent searches to determine whether the technology used
in our products infringes patents held by third parties. In addition, it is
difficult to proceed with certainty in a rapidly evolving technological
environment in which there may be numerous patent applications pending, many of
which are confidential when filed, with regard to similar technologies. If we
were to discover that our products violate third-party proprietary rights, we
may not be able to obtain licenses to continue offering such products without
substantial reengineering or that any effort to undertake such reengineering
would be successful, that any such licenses would be available on commercially
reasonable terms, if at all, or that litigation could be avoided or settled
without substantial expense and damage awards. Any claims relating to the
infringement of third-party proprietary rights, even if not meritorious, could
result in the expenditure of significant financial and managerial resources and
could result in injunctions preventing us from distributing certain products.
Such claims could materially adversely affect our business, financial condition
and results of operations.
Dependence on Key Personnel. We are dependent on the continued employment and
performance of our executive officers and key employees, particularly Dr. Daniel
J. Hay, Chief Executive Officer (and President, upon completion of this
offering). We have entered into employment agreements with Dr. Daniel J. Hay,
which will commence, on the closing of this offering. We do not maintain any key
man life insurance but it will be added in the future. The loss of the services
of any of our executive officers or key employees could have a material adverse
effect on our business.
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USE OF PROCEEDS
The net proceeds to the Company from the sale of the Securities offered hereby,
after deduction of underwriting discounts and other estimated expenses relating
to the offering, are estimated to be approximately $5,430,684 intends to use the
net proceeds as follows:
<TABLE>
<CAPTION>
Net Proceeds Percent of Total
<S> <C> <C>
Facilities and other capital expenditures..................... $3,100,000 58.0%
Working capital and general corporate......................... $1,047,684 19.0%
Product development expenses.................................. $ 500,000 9.0%
Sales and marketing expenditures.............................. $ 400,000 7.0%
Expansion of internal operations.............................. $ 350,000 6.0%
Repayment of certain indebtedness............................. $ 33,000 1.0%
Total......................................................... $5,430,684 100.0%
</TABLE>
The foregoing represents the Company's best estimate of the allocation of the
net proceeds of the offering, based upon the current status of its operations,
its current plans and current economic conditions. Proceeds may be reapportioned
among the categories listed above. The amount and timing of expenditures will
vary depending upon a number of factors, including progress of the Company's
operations, technical advances, terms of collaborative arrangements, and changes
in competitive conditions. The Company also expects, when the opportunity
arises, to acquire or invest in complementary businesses, products or
technologies. The Company has no present understandings, commitments or
agreements with respect to any material acquisition or investment.
The Company currently anticipates that the net proceeds of this offering, along
with cash provided by operations, will enable it to meet its operational and
capital requirements for at least the 12 months following the date of this
Prospectus. However, there can be no assurance that the net proceeds of this
offering and cash provided by operations will satisfy the Company's requirements
for any particular period of time. To the extent capital resources are
insufficient to meet future capital requirements, the Company will have to raise
additional funds to satisfy the Company's requirements. There can be no
assurance that such funds will be available on favorable terms, or at all.
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Part II
DILUTION
As of December 31, 1999 the net tangible book value of the Company was $307,052
or approximately $0.017 per share of Common stock. The net tangible book value
per share represents the amount of total tangible assets less total liabilities
divided by the number of shares of Common Stock issued and outstanding.
Common Stock offered hereby (after deducting underwriting and commissions and
estimated offering expenses payable by the company), net tangible book value of
the Company at December 31, 1999 would have been $5,737,736, or approximately
$0.299 per share of Common stock. This represents an immediate increase in the
tangible book value of $0.244 per share of Common Stock to existing stockholders
and an immediate dilution in net tangible book value of $ 1.756 per share of
Common Stock to new investors. The following table illustrates this per share
dilution:
Assumed initial public offering price per share of Common Stock $ 2.00
Pro forma net tangible book value prior to the offering $ 0.017
Increase per share attributable to the offering $ 0.299
Pro forma, as adjusted, net tangible book value per share after the offering
$ 0.244
Dilution per share to new investors $ 1.756
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLANS OF
OPERATIONS
The following discussion and analysis of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
Financial Statements and Notes thereto and the other financial information
included elsewhere in this Prospectus. In addition to historical information,
this Management Discussion and Analysis of Financial Condition and Results of
Operations and other parts of this Prospectus contain forward-looking
information that involves risks and uncertainties. The Company's actual results
could differ materially from those anticipated by such forward-looking
information as a result of certain factors, including but not limited to, those
set forth under "Risk Factors" and elsewhere in this Prospectus.
Overview
ArchivalCD Inc.purchased all the assets of ArchivalCD L.L.C., a Utah limited
liability company that was formed in 1995. The assets of ArchivalCD, L.L.C. were
purchased in exchange for common shares of ArchivalCD, Inc.
The Company believes that its success depends largely on building superior
technology and quality into its products, extending its technological lead on
the competition and developing brand recognition early in a product's life
cycle. Accordingly, the Company expects to continue spending heavily on these
activities in the near future. Despite these heavy investments in marketing and
product development, the historical growth in software sales, rentals and
license fees may not be sustainable in the future. In light of the Company's
limited operating history and rapid improvements in technology and marketing of
its products, the Company believes that period-to-period comparisons of its
revenues and operating results, including its gross profit and operating
expenses as a percentage of total net revenues, are not necessarily meaningful
and should not be relied upon as indications of future performance.
The Company has incurred significant net losses and negative cash flows from
operations since inception, and as of December 31, 1999, had an accumulated
deficit of $116,704. The Company intends to continue to invest heavily in
technology and infrastructure development, and marketing and promotion. As a
result, the Company believes that it will continue to incur operating losses and
negative cash flows from operations for the foreseeable future and that the rate
at which such losses will be incurred may increase from current levels. There
can be no assurance that the Company will be able to achieve or sustain revenue
growth, profitability, or positive cash flow on either a quarterly or annual
basis.
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Results of Operations
Operating Costs and Expenses
Selling, General and Administrative Expense. Selling, general and administrative
expenses consist primarily of salaries, taxes and benefits and related costs for
general corporate functions, including executive management, finance,
accounting, facilities, legal, fees for professional services and depreciation
and amortization.
Common Shares issued for: Number: Dollar Value
<TABLE>
<S> <C> <C>
Cash 45,449 $ 56,479
Services Rendered 3,762,010 $ 312,015
In lieu of Interest Pymnt 100 $ 149
To Acquire Assets 14,498,167 $ 355,112
Total Common Shares Issued: 18,305,726
</TABLE>
Research and Development Expenses.
Research and development expenses consist primarily of expenditures related to
technology and software development expenses. These costs are estimated to be
10% of the completed product cost.
Net Operating Loss Carryforwards. At December 31, 1999, the Company had
available net operating loss carryforwards of approximately $116,704 to offset
future taxable income for federal tax purposes. The utilization of the loss
carryforwards to reduce future income taxes will depend upon the Company's
ability to generate sufficient taxable income prior to the expiration of the net
operating loss carryforwards. The federal carryforwards expire beginning in the
year 2018. However, the Internal Revenue Code of 1986, as amended, limits the
maximum annual use of net operating loss and tax credit carryforwards in certain
situations where changes occur in the stock ownership of a corporation. As a
result of this offering, a change in ownership is likely to occur which would
substantially restrict the Company's use of the net operating loss carryforwards
for federal and state income tax purposes.
Liquidity and Capital Resources
The Company's capital requirements depend on numerous factors, including market
acceptance of the Company's products and services, the amount of resources the
Company devotes to investments in its products, the resources the Company
devotes to marketing and selling its services and its brand promotions and other
factors. The Company has experienced a substantial increase in its capital
expenditures since its inception consistent with the growth in the Company's
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operations and staffing, and anticipates that this will continue for the
foreseeable future. Additionally, the Company will continue to evaluate possible
investments in businesses, products and technologies, and plans to expand its
sales and marketing programs and conduct more aggressive brand promotions. The
Company currently anticipates that the net proceeds of the offering and
available funds will be sufficient to meet its anticipated needs for working
capital and capital expenditures for at least the next 12 months.
If the net proceeds of the offering, together with the Company's internally
generated cash flow, are not sufficient to satisfy its financing needs, the
Company will be required to seek additional funding through bank borrowings,
additional public or private sales of its securities, including equity
securities, or through other arrangements. The Company currently has no credit
facility or other committed sources of capital, however it intends to secure a
credit facility after the completion of the offering. There can be no assurance
that additional funds, if required, will be available to the Company on
favorable terms, if at all.
Recently Issued Accounting Standards
Effective January 1, 1999, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting comprehensive income, defined as all changes in equity from non-owner
sources. Adoption of SFAS No. 130 did not have a material effect on the
Company's financial position or results of operations.
Effective January 1, 1999, the Company adopted the provisions of SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 establishes standards for the way public enterprises report information
about operating segments in annual financial statements and requires those
enterprises to report selected information about operating segments in interim
financial reports issued to stockholders. Adoption of SFAS No. 131 did not have
a material effect on the Company's financial position or results of operations.
Effective January 1, 1999, the Company adopted American Institute of Certified
Public Accountants Statement of Position 98-9, "Software Revenue Recognition"
("SOP 98-9"). SOP 98-9 generally requires revenue earned on software
arrangements involving multiple elements such as
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software products, upgrades, enhancements, post-contract customer support,
installation and training to be allocated to each element based on the relative
fair values of the elements. The adoption of SOP 98-9 did not have an effect on
the Company's financial position or results of operations.
Sources of Supply
The Company deals in the exchange of information and has made arrangements to
purchase microform records from various entities of the United States, Foreign
Governments and private sources. The company scans the documents into digital
form and stores on various types of digital storage mechanisms, each of which is
commercially available.
The company has developed several sources, to supply the continued materials and
equipment needed to digitalize, produce and market its products.
Marketing and Sales
Management feels and marketing research shows that within the genealogy market
there is little marketing strategy because of the narrow vertical structure of
the market. All entities in the general market advertise in the same media
journals, all go to regional or national genealogy conferences, and have a
presence on the Internet. There are a number of advertising avenues overlooked
by most competitor entities in the market. Although well known, ArchivalCD
considers these marketing avenues proprietary knowledge ti be exploited.
Our marketing strategy has already been successfully accomplished during test
marketing by ArchivalCD and will be continued in future marketing endeavors.
Previously, and currently, none of the potential film-based competitors have
professional marketing personnel on staff. Dr. Hay had special emphasis on
marketing in his MBA, has had many years to work with marketing, and is able to
combine both knowledge and experience with an understanding of the market and
its advertisement channels. ArchivalCD will augment its management team with a
marketing specialist who has the capability of developing both print and web
marketing materials. ArchivalCD pioneered marketing to the genealogy market on
the Internet. ArchivalCD was the first to provide an ordering site on the web
with full catalog available there or on CD. Through the development of the
Golden Web Award it helped to direct the increase in quality of both personal
genealogy web pages and commercial web pages.
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ArchivalCD supported the first true Internet Genealogy Journal and management
has often provided training workshops and seminars on the use of the Internet
for expansion of genealogy research. Being present when needed is an important
key to being a successful company for this market.
ArchivalCD staff is known in the field through contributions of expertise;
through production of articles, columns and books relating to the field, and
through participation in seminars, workshops, and conferences at national and
state levels. Some of the special efforts ArchivalCD will extend include
cultivating the product reviewers for genealogy columns in local newspapers,
providing scholarships to each annual genealogy institute (five of them
presently), and making the company available to help thousands of smaller
genealogy organizations to produce their annual programs by supplying material,
speakers, and advertisement. Presently other market entities make little extra
effort in reaching the market - ArchivalCD will lead the way in this respect by
using market awareness to reiterate ArchivalCD's efforts. Early efforts by the
company have proven very fruitful as shares of the marketing budget. Marketing
research shows few competitive marketing entities are involved with the local
level of the market. By sponsoring conferences at minimum cost, by providing
registration services and manpower, the company will garner additional market
exposure. Extraction software tools, and assistance in publication, will be
offered to any society or library with a database that needs to be developed,
again at little or no cost. Management feels this marketing program merged with
a firm understanding of the market means ArchivalCD can execute local level
marketing of its product, through previously proven marketing strategies.
Market Analysis
ArchivalCD's market for CD using customers is comprised of a minimal two million
researching genealogists. As of June 1997, 67% were computer compatible with
ArchivalCD product (and more are becoming so each day). That equates to
1,340,000 persons. They are augmented by more than seventeen million more
individuals who have not previously known of the possibility of research with an
ArchivalCD product. The company will be more than successful with a small
portion of the 1,340,000 individual market. A 1997 report by American
Demographics magazine reports 40% of Americans are interested in genealogy and
about 100 million are attempting to trace their family history. A 1997 Wall
Street Journal article indicated that a competing firm, Banner Blue, sold more
than 600,000 copies of one genealogical CD title -- at worst case this would be
the minimal market for ArchivalCD.
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The film market is viewed either as a portion of the more than eighteen million
researching genealogists who have to have access to microfilm, or a percentage
of the known 60,000 film reader owners. The company prefers to count the 60,000
as the base film using market and projects capturing a regular customer usage of
3,000 to 6,000 users per year of multiple title purchases. Projections indicate
the market trend will expand, with the addition of over 10,000 people in the
United States turning age 50 per day. Surveys show 1% of this population express
an interest in genealogy. Further research shows 67% of that 1% is computer
compatible with ArchivalCD product. Using these projections, figures show up to
2,000 new users per month could be included into the genealogy market sector.
Additional research reveals the average age of active computer using
genealogists is now age 52. For the next twenty years the genealogy research
field should continue its rapid growth, if it continues the growth trend of the
past 20 years. Management feels most important is that fact that many of the
potential new customers are already computer literate and have compatible
computer systems, some estimates are approaching 95% of the targeted user
segment.
Supporting evidence shows, that in 1998 the Senate Committee on Aging was
informed that there are 7.8 million Internet users aged 55 or older. 42% of them
have purchased product via the Internet. This is further proof of the vast size
of the potential market as this age group is the strongest in the genealogical
market. In general, an Internet capable computer system is compatible with
ArchivalCD product.
Employees
At December 31, 1999 the Company selected for potential employment five
specialized technicians and senior managers, including the founder of ArchivalCD
Inc, Dr. Daniel J. Hay. Dr. Hay is the Director of Operations and the President
of ArchivalCD Inc.
The team has had experience in management of staff in similar working
environments. ArchivalCD has drawn upon both experience and dedication in
forming the management team. The team has experience in understanding the
genealogy market with exposure to the needs and wants of the individual
researcher, has worked with a major film retailer in the market, and is
dedicated to the success of ArchivalCD.
The Company is not a party to any collective bargaining agreement. The Company
considers its relations with its employees to be satisfactory and has not
experienced any interruption of operation due to labor disagreements with its
employees.
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Trade names and Trademarks
The Company does not hold United States Registered trademarks for some of its
various brand names, but uses various unregistered trade names, trademarks and
service marks. With the introduction of new products, the company anticipates
continuing to adopt additional unregistered names and marks.
ORDERS AND PROJECTED ORDERS
As part of its program to provide customers with just-in-time information
service management and year-round availability of products, via conventional and
internet accessibility, the Company has implemented measures to maintain
year-round in-stock information inventory and delivery systems of many of its
products at its facility. The Company historically has not experienced excess
inventory buildup nor has it been forced to sell substantial amounts of
inventory below cost. The Company believes that it will be able to control
excessive demand buildup, because a substantial portion of its initial public
offering have been allocated to servicing, products and information pre-ordered
by customers prior to manufacture.
Environmental Regulation
The Company's manufacturing operations does not routinely involve the use of
certain materials that are classified as hazardous.
Need for Governmental Approval
The sale of ArchivalCD Inc. genealogical information products does not require
any governmental approval. However, some production may involve businesses or
governmental projects which require some type of approval for that specific
project.
Seasonality
The Company does not expect to be subject to seasonality of its products, due to
the make up of its industry, customer base or the usage of internet systems.
Description of Property Facilities
The Company currently leases office space. Production facilities will require
extensive humidity control, computer power systems and special inventory
storage. Administrative offices will be moved to the
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new production and inventory facility upon completion of funding.
BUSINESS
Overview
ArchivalCD is a company dedicated to producing microfilm images on CD, to
furthering genealogical education, and to supporting historical and educational
programs. Continuous development of services, reproduction of historical data,
expansion to include other potential markets, and creation of value for the
company and its investors are prime goals of the company.
In supporting this mission the company plans on entering both the microfilm
sales portion of the market and the more expansive microfilm imagebase on CD
portion of the market. Doing both supports the furthering of genealogical
education and the corresponding historical and education programs. Present
status of the genealogy microfilm market indicates that ArchivalCD's entry into
film resale will allow a superior reproduction and state of the art customer
service to capture as much as one third of the genealogy microfilm sales market.
ArchivalCD Inc. Plans to produce specific microfilm titles on CD for the
genealogical, historical, and educational markets. The products are to be sold
primarily to a membership clientele from direct marketing, Internet marketing,
journal advertising, and personal contact at national and regional conferences
in much the same manner as the comparative microfilm rental/sales market
currently operates. Having acquired the initial film inventory the company will
also be in a position to supply diazo copies of microfilm to the portion of the
market that needs or prefers microfilm. This portion of the company will be
marketed as ArchivalFILM. Additional potential secondary markets are even larger
markets and are already being served by various competitors. These potential
markets are not currently addressed in the company business plan but are
considered an important aspect of expansion. Such markets consist of business
back file conversion, library archive collections, institutional archives, and
government office record retention.
The company has undergone five years of development, research, and analysis, one
year of actual market testing production and theory in practice and sits upon a
market demanding a product for the use of over one million individual
researchers needing seven to twenty new titles per year, per individual
researcher. This is a strong niche market that was first identified and created
by ArchivalCD's test marketing. Initial test marketing steered clear of
microfilm
18
<PAGE> 19
sales as it was necessary to obtain film from the leaders in that market.
Analysis of the research market supports simultaneous entry into the CD and Film
markets. Having the complete collection of the National Archives related
microfilm available for resale will allow the company immediate access to a
larger customer-base and easier marketing to the many library collections
worldwide.
As a niche market, microfilm imaging on CD is generating a great deal of
interest within a market that is typically served by companies not able, or
willing, to make the expenditures needed to profitably service it. As an example
consider that ArchivalCD's decision to also market film copies is based upon the
newer film duplicators that are automatic duplicators providing image
enhancement -- while none of the major film entities are upgrading to the newer
equipment. The major players in the film portion of the market are still using
older manual calibration duplicators with the inherent higher cost in materials
and manpower. Much of ArchivalCD marketing and ordering is enhanced by the
ArchivalCD web pages. With IBM, Microsoft, Netscape, Intel, and AT&T
announcements supporting business activity on the Internet it is expected that
continual upgrades to software will allow additional security for order
processing and continued interest in companies with a successful presence on the
Internet.
Industry Background
The Bureau of Labor Statistics indicates that there were 16 million workers aged
55 or older in the United States. American Demographics magazine indicated that
more than 40 percent of Americans were interested in genealogy and about 100
million were attempting to trace their family history. ArchivalCD's own studies
indicate only 18 million researchers (with 2,000,000 active) but will
effectively address either volume of researchers and provide a strong ROI with
an early exit plan or positive debt service. SeniorNet claims that 47% of
seniors are now using the Internet and buying from websites. For ArchivalCD
these figures just confirm the potential market, the current active market, and
the fact that the target market is becoming increasingly aware of digital data.
It is a market that consists of more than 18 million individuals, 4,000
Genealogy Societies, 6,000 Library Collections, two certification organizations,
five national organizations (NGS, FGS, APG, GSG, GCG), and is populated by the
largest market group in history - "baby boomers".
The company has created this market, itself, and by the overpowering demand of
the individuals within the market striving to acquire the materials they need in
their own research goals. Unlike a typical publisher of data, ArchivalCD
proposes to service the market not by creating a product to sell to a potential
buyer,
19
<PAGE> 20
but rather, by creating product only as it is needed and purchased by the
individual researcher. Unexploited processes and proprietary software make
ArchivalCD product/service desirable. Product is pre- sold, pre-paid, and
provided to the customer as a custom product each and every time it is needed.
It has been proven that researching genealogists desire to have access to the
film, or in ArchivalCD's case, the image of the film and that every, assumption
and relationship must be documented and proper citations of sources provided. An
index does not prove any data even if correct. The data must be documented with
primary source documents; and, microfilm is often the only source of that
original data. In most instances the microfilm image is now considered the
original document since the paper forms have often been destroyed. A digital
image of the film is conceptually and legally an original. Genealogists,
historians, and educators need and want access to these original documents and
ArchivalCD has created a means to fill that demand. They want this access to
such a degree that they are willing to pay for an annual membership fee as well
as purchase or rental fees.
The company is also aware of the impact the Internet currently has and will
continue to have on business activities worldwide. ArchivalCD, Inc. has already
developed a number of Internet projects and currently owns more than forty
domain names both for marketing tools and for expansion programs.
Strategy
The Company's objective is to be the leading Archival and Genealogical
information publishing and technology company, providing software and services
that enable the delivery of a broad range of genealogical content over the
Internet and intranets. To achieve this objective, the Company's strategy
includes the following key elements: additional features and functions like the
synchronized deployment of additional data types, enhanced desktop, and
Web-based digitalized files. As part of this strategy, the Company has devoted
and will continue to commit significant resources to the development of
technologies that increase the ease-of-use and functionality of its archival
recording and information solutions.
Build Brand Recognition and Strengthen Sales and Marketing Efforts.
The Company believes that its technology leadership, market position and brand
name are significant assets that the Company can leverage to maintain and
increase its market share and diversify its revenue base. The Company intends
20
<PAGE> 21
to capitalize on the growth in demand for genealogy and archiving software by
continuing to develop, market and support industry-leading products and
services. The Company believes that the introduction of such products and
services will expand the Company's user base and build greater brand
recognition. The Company also plans to strengthen its marketing, sales and
customer support efforts as the size of its market opportunity and customer base
increases.
Enhance and Expand Internal Operations. The Company intends to invest
substantially in operations and systems in anticipation of future growth. This
effort includes improving its management information systems, opening sales
offices in multiple locations, integrating sales activities, investing in
customer service, expanding its public relations, advertising, and trade show
activities, and developing on-line training and support programs which will help
support an outside network of resellers and distributors.
Expand Internationally. The Company intends to expand its international customer
base over the next several years by hiring additional employees, developing
international distribution and sales networks, enhancing its software products
by adding localized versions and multi-language support and increasing its
expenditures for marketing.
Sales, Marketing and Distribution
Sales. The Company has focused and will continue to focus its sales and
marketing efforts on the public, commercial and genealogical research groups,
along with the digitization of corporate and governmental records. Markets for
the next several years. Once the Company has firmly established itself in these
markets, the Company plans to expand into other vertical business markets and
consumer markets. The Company markets its products and services through a direct
sales force and through Internet sales.
Marketing. The Company participates in trade shows, conferences and seminars,
provides product information through the Company's Web site, and promotes the
Company and its products to industry analysts and the media. The Company's
marketing programs are aimed at informing potential partners and prospects about
the capabilities and benefits of the Company's products and services, increasing
brand name awareness, and stimulating demand across all
21
<PAGE> 22
market segments. The Company currently plans to increase its marketing staff to
two employees following the offering.
MANAGEMENT
Executive Officers and Directors of the Company
The directors and executive officers of the Company are:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Dr. Daniel Hay 42 President, CEO and
Chairman of the Board of Directors
William Hale 67 Director Corporate Vision Inc. Representative
</TABLE>
(1) William Hale is a director of Corporate Vision Inc. (OTC Bulletin Board:
CVIA). Corporate Vision Inc. retains 20% ownership of ArchivalCD Inc.
Officers
ArchivalCD, Inc. is expected to hold its annual shareholder meeting during the
first or second fiscal quarter of the year 2000, with the expressed
consideration that three additional board members are to be appointed or
approved by the shareholders of ArchivalCD Inc.
Daniel J. Hay, 42 (BA, MBA, DD) {President}: As a professional genealogist,
lecturer and author Hay joined Advanced Resources, Inc. (1995 as President for
development of large scale databases. In 1996 Hay became President and Managing
Partner of ArchivalCD, LLC. Primary responsibilities included market development
and product enhancement. In 1998 by Hay became CEO/ President of ArchivalCD,
Inc.
Upon the completion of the IPO Mr. Sirotka, age 54, will assume the office of
Chief Financial Officer/Treasurer. Mr. Sirotka has served as COO/CFO of
Aquaculture Technologies, Inc. since 1997. Previously, Sirotka was President and
CFO for The Regina Companies.
Brenda Saul, 39 (Vice President & Secretary)
(BA American History): Saul served as Subscription/Renewals manager with
American Genealogical Lending Library, Inc. prior to joining Advanced Resources
Inc in 1996 as office manager and became Office Manager upon the creation of
ArchivalCD LLC. Ms. Saul became Vice President of Archival CD, Inc. in 1998 with
responsibility for Human Resources and Office Management.
22
<PAGE> 23
Management Team Limitations
There are three important limitations in the Management Team for ArchivalCD. As
such, they are being addressed once the Initial Public Offering of the Company's
stock has been completed.
The present team, though strong in relation to the niche market and the
processes of ArchivalCD production, is weak in financial acumen. To strengthen
the management team a CFO has been added.
The Marketing Director position has been filled by Daniel J. Hay, although
Marketing Director is an unique position that is to be filled as soon as
feasible, when the right combination of person and qualifications is found. A
number of applicants are awaiting a final decision of the company.
The network specialist, programmer, and computer specialist is a unique
position. CIS MIS Computer Department Manager, this person and staff will be
needed to maintain three networks, maintain all computer systems in production.
Several persons have been identified for this position already. Final decision
will depend upon who is available at closing of funding from among the current
applicants.
Directors of the Company are elected to serve until the next annual meeting of
shareholders or until there respective successors are elected and qualified. The
Company does not pay direct remuneration for services to any of its directors.
All officers serve at the discretion of the Board of Directors subject to the
terms of their employment agreements.
ITEM 6 Executive Compensation
No employee or officer's salary exceeds $100,000 annually at the time of this
filing.
Daniel J. Hay, CEO/President received a total of $24,000 in compensation for
1999.
Stock Option Plan
The Board of Directors may from time to time amend or may terminate the Plan
without action by the Company's shareholders, but no such amendment may increase
the number of shares of Common Stock that may be issued under the Plan without
the consent of the Company's shareholders or impair the rights of holders of
outstanding options without the consent of such holders. To date no stock
options are outstanding under the plan.
23
<PAGE> 24
The Company has no pension or profit sharing plan or other contingent forms of
remuneration, but does expect to select a pension plan during the first year of
operation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth at December 31, 1999, the name of each person and
entity known by the Company to own beneficially more than 5% of the shares of
Common Stock of the Company and the number of shares owned by each such person
and by each officer and director and all officers and directors as a group,
together with the respective percentage holdings of such shares.
<TABLE>
<CAPTION>
Percent of Shares
Shares Name and Beneficially
Owned Address Owned
<S> <C> <C>
79% Dr. Daniel Hay 14,435,000
100 North Sixth, #212
Crockett, Texas 75835
20% Corporate Vision Inc.(1) 3,625,000
6130 South Memorial Drive
Tulsa, OK 74133
</TABLE>
(1) A 20% ownership position of the company was granted to Corporate Vision,
Inc. (NASD OTC:BB CVIA) for monetary seed funding considerations, underwriting
and consulting services rendered. In April 1999, Corporate Vision Inc.
distributed approximately 1% or 71,494 ArchivalCD Inc common shares to CVIA
shareholders of record. Creating a shareholder base for ArchivalCD Inc.
exceeding one thousand private investors.
SELLING STOCKHOLDERS
The registration statement, of which this Prospectus forms a part, also relates
to the registration by the Company, for the account of the Selling Stockholders,
of an aggregate of 500,000 shares of Common Stock. The Selling Stockholder is
Corporate Vision, Inc. Corporate Vision has a representative on the Board of
Directors of AHCD.
The sale of the Selling Stockholders Shares by the Selling Stockholders may be
effected from time to time in transactions (which may include block transactions
by or for the account of the Selling Stockholders) in the over-the-counter
market or in negotiated transactions, or through the writing of options on the
Selling
24
<PAGE> 25
Stockholders Shares, a combination of such methods of sale, or otherwise. Sales
may be made at fixed prices, which may be changed, at market prices prevailing
at the time of sale, or at negotiated prices.
The Selling Stockholders may effect such transactions by selling the Selling
Stockholders Shares directly to purchasers, through broker- dealers acting as
agents for the Selling Stockholders, or to broker-dealers who may purchase
shares as principals and thereafter sell the Selling Stockholders Shares from
time to time in the over-the-counter market, in negotiated transactions, or
otherwise. Such broker-dealers, if any, may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchaser for whom such broker-dealers may act as agents or to whom they may
sell as principals or both (which compensation as to a particular broker-dealer
may be in excess of customary commissions).
The Selling Stockholders and broker-dealers, if any, acting in connection with
such sales, might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
upon the resale of such securities might be deemed to be underwriting discounts
and commissions under the Securities Act.
Sales of any shares of Common Stock by the Selling Stockholders may depress the
price of the Common Stock in any market that may develop for the Common Stock.
CERTAIN TRANSACTIONS
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of (i) 25,000,000 shares of
Common Stock, par value $.01 per share and (iii) 1,000,000 shares of Preferred
Stock, par value $.01 per share ("Preferred Stock"). 18,305,726 shares of Common
Stock and no shares of Preferred Stock are currently outstanding.
Common Stock
The holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of the stockholders. Cumulative voting of shares of Common
Stock is prohibited. The holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be
25
<PAGE> 26
declared from time to time by the Board of Directors out of funds legally
available therefore, subject to the payment of any preferential dividends with
respect to any Preferred Stock that from time to time may be outstanding. In the
event of the liquidation, dissolution or winding up of the Company, the holders
of Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior distribution rights of the holders of
any outstanding Preferred Stock. The holders of Common Stock have no preemptive
or conversion rights or other subscription rights, and there are no redemptive
or sinking funds provisions applicable to the Common Stock. All of the
outstanding shares of Common Stock are fully paid and non-assessable, and all of
the shares of Common Stock offered hereby, when issued, will be fully paid and
non-assessable.
Vote of the holders of a majority of the issued and outstanding Common Stock
entitled to vote thereon is sufficient to authorize, affirm, ratify or consent
to such act or action, except as otherwise provided by law.
Under the Delaware General Corporation Law ("DGCL"), stockholders may take
certain actions without the holding of a meeting by a written consent or
consents signed by the holders of a majority of the outstanding shares of the
capital stock of the Company entitled to vote thereon. Prompt notice of the
taking of any action without a meeting by less than unanimous consent of the
stockholders will be given to those stockholders who do not consent in writing
to the action. The purposes of this provision are to facilitate action by
stockholders and to reduce the corporate expense associated with annual and
special meetings of stockholders. If stockholders action is taken by written
consent, the Company will be required to send each stockholder entitled to vote
on the applicable matter, but whose consent was not solicited, an information
statement containing information about the action taken.
The Company is a Delaware corporation and is subject to Section 203 of the DGCL.
In general, subject to certain exceptions, Section 203 prohibits a Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder, unless (i) prior to such date the
board of directors of the corporation approved either the business combination
or the transaction which resulted in the stockholder becoming an interested
26
<PAGE> 27
stockholder or (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding for purposes of determining the number of
shares outstanding those shares owned by (x) persons who are directors and also
officers and (y) employee stock plans in which employee participants do not have
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer), or (iii) on or subsequent to
such date the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66-2/3% of the outstanding vote
stock which is not owned by the interested stockholder. Section 203 defines a
"business combination" to include certain mergers, consolidations, asset sales
and stock issuances and certain other transactions resulting in a financial
benefit to an "interested stockholder." In addition, Section 203 defines an
"interested stockholder" to include any entity or person beneficially owning 15%
or more of the outstanding voting stock of the corporation and any entity or
person affiliated with such an entity or person.
Indemnification
The Amended and Restated Certificate of Incorporation (the "Certificate") of the
Company provides that, to the fullest extent permitted by applicable law, as
amended from time to time, the Company will indemnify any person who was or is a
party or is threatened to be made a party to an action, suit or proceeding
(whether civil, criminal, administrative or investigative) by reason of the fact
that such person is or was director, officer, employee or agent of the Company
or serves or served any other enterprise at the request of the Company.
In addition, the Certificate provides that a director of the Company shall not
be personally liable to the Company or its stockholders for monetary damages for
breach of the director's fiduciary duty. However, the Certificate does not
eliminate or limit the liability of a director for any of the following reasons:
(i) a breach of the director's duty of loyalty to the Company or its
stockholders; (ii) acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of law; (iii) a transaction
27
<PAGE> 28
from which the director derived an improper personal benefit; or (iv) for
unlawful payments of dividends or unlawful stock redemptions or repurchases.
The Company will purchase and maintain Directors' and Officers' Insurance as
soon as the Board of Directors determines practicable, in amounts which they
consider appropriate, insuring the directors against any liability arising out
of the director's status as a director of the Company regardless of whether the
Company has the power to indemnify the director against such liability under
applicable law.
The Company has been advised that it is the position of the Commission that
insofar as the foregoing provisions may be invoked to disclaim liability for
damages arising under the Securities Act, such provisions are against public
policy as expressed in the Securities Act and are, therefore, unenforceable.
Certain provisions of the Company's Certificate and Bylaws may have the effect
of making it more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, control of the Company. Such provisions
could limit the price certain investors might be willing to pay in the future
for shares of the Company's Common Stock. Certain of these provisions allow the
Company to issue Preferred Stock without stockholder approval and provide that
special meetings of stockholders of the Company may be called only by the
President of the Company, the Board of Directors or holders of not less than a
majority of the votes entitled to be cast at the special meeting. These
provisions may make it more difficult for stockholders to take certain corporate
actions and could have the effect of delaying or preventing a change in control
of the Company.
Section 102(b)(7) of the DGCL allows a Delaware corporation to limit a
director's personal liability for monetary damages for breaches of certain
fiduciary duties owned to the corporation and its stockholders. The Company's
Certificate of Incorporation contains a provision that limits the liability of
its directors for monetary damages for any breach of fiduciary duty as a
director to the maximum extent permitted by the General Corporation Law. This
provision, however, does not eliminate a director's liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for a transaction from which the
28
<PAGE> 29
director derived an improper personal benefit or (iv) in respect of certain
unlawful dividend payments or stock purchases or redemptions. The inclusion of
this provision in the Certificate of Incorporation may reduce the likelihood of
derivative litigation against directors and may discourage or deter stockholders
or management from bringing a lawsuit against directors for breaches of their
fiduciary duties, even though such an action, if successful, might otherwise
have benefited the Company and its stockholders. This provision does not prevent
the Company or its stockholder from seeking injunctive relief or other equitable
remedies against its directors under applicable state law, although there can be
no assurance that such remedies, if sought, would be obtained.
Transfer Agent
Transfer Online Inc. 227 Pine Street Suite 300
Portland, OR 97204
Phone: (503) 227-2950 Fax (503) 227-6874
LEGAL PROCEEDINGS
Management knows of no material legal proceeding pending, threatened or
contemplated which the Company is or may be a party to or which any of its
property is subject.
Changes in and Disagreements With Accountants.
None
Recent Sales of Unregistered Securities.
Securities that were not registered under the Securities Act have been issued or
sold by the Registrant within the past three years except as follows:
July 9, 1999 Registrant issued 3,750,000 Shares in connection to funding and
services rendered by Corporate Vision Inc.
July 9, 1999 Registrant issued 13,750,000 shares to the founders of the Company.
The aforementioned issuances and sales were made in reliance upon the exemption
from the registration provisions of the 1933 Act afforded by Section 4(2)
thereof and/or Regulation D promulgated there under, as transactions by an
29
<PAGE> 30
issuer not involving a public offering. The purchasers of the securities
described above acquired them for their own account and not with a view to any
distribution thereof to the public. The certificates evidencing the securities
bear legends stating that the securities may not be offered, sold or transferred
other than pursuant to an effective registration statement under the 1933 Act,
or an exemption from such registration requirements. The Registrant will place
stop transfer instructions with its transfer agent with respect to all such
securities.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 (together with all
amendments, exhibits, schedules and supplements thereto, the "Registration
Statement") under the Securities Act with respect to the Securities offered
hereby. This Prospectus, which forms a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement, as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Securities offered hereby,
reference is made to the Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document that has been
filed as an exhibit to the Registration Statement are qualified in their
entirety by reference to such exhibits for a complete statement of their terms
and conditions. The Registration Statement and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549 or at
certain of the regional offices of the Commission located at 7 World Trade
Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, upon payment of the fees prescribed by the
Commission. Copies of such material may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street N.W., Washington, D.C. 20549, at
prescribed rates. The Commission also maintains a Web site (http://www.sec.gov)
through which the Registration Statement and other information can be retrieved.
Following the offering, the Company will be subject to the reporting and other
requirements of the Exchange Act and intends to furnish its shareholders annual
reports containing financial statements audited by its independent auditors and
to make available quarterly reports containing unaudited financial statements
for each of the first three quarters of each year.
30
<PAGE> 31
ArchivalCD, INC.
(A Development Stage Company)
C O N T E N T S
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditor's Report 1
Financial Statements
Balance Sheet 2
Income Statement 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-13
</TABLE>
<PAGE> 32
ArchivalCD, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 1,255
Receivable from stockholders (Note 4) 1,000
Employee advances (Note 4) 24,127
---------
TOTAL CURRENT ASSETS 26,382
---------
PROPERTY AND EQUIPMENT, NET (NOTE 5) 327,952
---------
OTHER ASSETS
Deposit (Note 12) 1,000
---------
TOTAL ASSETS $ 355,334
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued liabilities $ 14,282
Loans from stockholders (Note 11) 1,000
Notes payable to stockholders, current portion (Note 6) 15,000
---------
TOTAL CURRENT LIABILITIES 30,282
---------
NOTES PAYABLE TO STOCKHOLDERS, NET OF CURRENT PORTION (NOTE 6) 18,000
---------
STOCKHOLDERS' EQUITY (NOTE 7)
Cumulative convertible preferred stock, $20 par value,
1,000,000 shares authorized, no shares outstanding --
Common stock, $0.01 par value; 25,000,000 shares
authorized; 18,305,726 shares issued and outstanding 183,057
Additional paid-in capital 240,699
Deficit accumulated during the development stage (116,704)
---------
TOTAL STOCKHOLDERS' EQUITY 307,052
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 355,334
=========
</TABLE>
Accompanying notes are an integral part of
the financial statements
Page 2 of 13
<PAGE> 33
ArchivalCD, INC.
(A Development Stage Company)
INCOME STATEMENT
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
<TABLE>
<S> <C>
OPERATING REVENUE $ --
-----------
GENERAL AND ADMINISTRATIVE EXPENSES 115,122
-----------
OTHER EXPENSES
Interest expense (1,582)
-----------
NET INCOME (LOSS) $ (116,704)
===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 8) 7,887,771
===========
NET INCOME (LOSS) PER COMMON SHARE $ (0.01)
===========
</TABLE>
Accompanying notes are an integral part of
the financial statements.
Page 3 of 13
<PAGE> 34
ArchivalCD, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCE AT NOVEMBER 12, 1998
(DATE OF INCEPTION) -- $ -- $ -- $ --
Common stock, par value $0.01
25,000,000 shares authorized:
Issued for cash 45,449 454 56,025
Issued in exchange for services rendered 3,762,010 37,620 274,395
Issued in lieu of interest payment 100 1 149
Issued to acquire assets 14,498,167 144,982 210,130
Costs of raising equity -- -- (300,000)
Net loss for the period -- -- -- (116,704)
---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 1999 18,305,726 $ 183,057 $ 240,699 $ (116,704)
========== ========== ========== ==========
</TABLE>
Accompanying notes are an integral part of
the financial statements.
Page 4 of 13
<PAGE> 35
ArchivalCD, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash paid for goods and services $(81,384)
Interest paid (150)
--------
NET CASH USED BY OPERATING ACTIVITIES (81,534)
--------
NET CASH USED BY INVESTING ACTIVITIES:
Fixed asset purchases (7,690)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 56,480
Proceeds from long-term debt 18,000
Proceeds from short-term debt 17,000
Repayment of short-term debt (1,000)
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 90,480
--------
NET INCREASE IN CASH 1,255
CASH AT BEGINNING OF PERIOD --
--------
CASH AT END OF PERIOD $ 1,255
========
</TABLE>
Accompanying notes are an integral part of
the financial statements.
<PAGE> 36
ArchivalCD, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
<TABLE>
<S> <C>
RECONCILIATION OF NET LOSS TO NET
CASH USED BY OPERATING ACTIVITIES:
Net loss $(116,704)
---------
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation 34,248
Stock issued in exchange for services 12,015
Stock issued in lieu of interest on shareholder loan 150
Stock issued as compensation (Note ) 602
Stock compensation accrual (Note ) 2,500
(Increase) Decrease in deposits (1,000)
(Increase) Decrease in receivables from shareholders (1,000)
(Increase) Decrease in employee receivables (24,127)
Increase (Decrease) in accrued liabilities 11,782
---------
Total Adjustments 35,170
---------
NET CASH USED BY OPERATING ACTIVITIES $ (81,534)
=========
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Stock issued to acquire fixed assets $ 354,510
</TABLE>
Page 5 of 13
<PAGE> 37
Archivalcd, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
ArchivalCD, Inc. (referred to herein as "Archival" or
"the Company") was incorporated in the state of Delaware on
November 12, 1998 to provide subscribers with access to
web-based genealogical records stored on software developed by
the Company. The Company was formed subsequent to the
dissolution of ArchivalCD, LLC (referred to herein as "the
LLC"), a Utah corporation. The Company's Chief Executive
Officer was a partner in the LLC. The Company is in the
development stage as its operations principally involve
research and development, market analysis, and other business
planning activities. The Company has had no significant
revenue from product sales.
As of December 31, 1999, the Company's accumulated
deficit in the development stage was $116,704, which was
funded primarily through loans from stockholders and the
proceeds from sales of common stock. The Company believes that
it will commence its principal operations and begin generating
revenues in the fiscal year ending December 31, 2000. Because
the Company is in the development stage, the accompanying
financial statements should not be regarded as typical for
normal operating periods.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The accompanying financial statements conform to the
standards applicable to development stage companies and are
prepared using the accrual basis of accounting in accordance
with generally accepted accounting principals, whereby
revenues and gains are recognized when earned, and expenses
and losses are recognized when incurred.
FISCAL YEAR END
The Company's fiscal year ends on December 31.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid assets with
maturities of three months or less to be cash equivalents.
Page 6 of 13
<PAGE> 38
Archivalcd, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less
accumulated depreciation. Depreciation expense is charged to
operations using the straight-line method for financial
reporting and accelerated methods for income tax purposes over
the estimated useful lives of the assets, typically 5 to 10
years. Maintenance, repairs, and minor renovations are charged
to expense as incurred.
INCOME TAXES
The Company has adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires the measurement of deferred tax assets for
deductible temporary differences and operating loss
carryforwards, and of deferred tax liabilities for taxable
temporary differences. Measurement of current and deferred tax
liabilities and assets is based on provisions of enacted tax
law. The effects of future changes in tax laws or rates are
not included in the measurement. Valuation allowances are
established when necessary to reduce deferred tax assets to
the amount expected to be realized. Income tax expense is the
tax payable for the period and the change during the period in
deferred tax assets and liabilities.
EARNINGS PER COMMON SHARE
The Company has adopted the provisions of SFAS No.
128, "Earnings per Share", which requires presentation on the
face of the income statement of both basic and diluted
earnings per share. Basic earnings (loss) per common share is
computed by dividing net income (loss) attributable to common
shares by the weighted average number of common shares
outstanding during the period. Diluted earnings per common
share is computed using the combination of dilutive common
share equivalents and the weighted average number of common
shares outstanding during the period. In years where the
Company recognizes a loss from continuing operations, the
assumed exercise of common share equivalents has an
antidilutive effect (i.e., it increases net loss per share)
and therefore would not be included in the weighted average
number of shares used in the calculation of loss per common
share.
Page 7 of 13
<PAGE> 39
Archivalcd, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMPUTER SOFTWARE COSTS
The Company has adopted Statement of Financial
Accounting Standards ("SFAS") No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise
Marketed" under which direct costs and allocated overhead
associated with the development of software products are
capitalized. Initial costs are charged to operations as
research prior to the development of a detailed program design
or a working model. Costs incurred subsequent to the product
release, and research and development performed under contract
are charged to operations. Capitalized costs are amortized
over the estimated product life on the straight-line basis.
Unamortized costs are carried at the lower of book value or
net realizable value.
The Company has also adopted the provisions of
Statement of Position ("SOP") 98-1, "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use",
issued by the American Institute of Certified Public
Accountants in March 1998. SOP 98-1 provides guidance on when
costs incurred for internal-use software are capitalized or
expensed and guidance on whether computer software is for
internal use. SOP 98-1 is effective for fiscal years beginning
after December 15, 1998 and applies to internal use software
costs incurred for all projects, including those in progress
upon initial application of the SOP.
USE OF ESTIMATES
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
VALUATION OF NON-EMPLOYEE STOCK-BASED COMPENSATION
The Company applies the provisions of SFAS No. 123
"Accounting for Stock-Based Compensation", to all issuances of
stock to non-employees in exchange for goods and services.
Accordingly, such issuances are accounted for based on the
fair value of the goods or services received or the fair value
of the shares issued, whichever is more reliably measured.
Page 8 of 13
<PAGE> 40
Archivalcd, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 3 - ACQUISITION OF ASSETS
On January 18, 1999, the Company purchased equipment
valued at $174,370 and certain archived records and software
valued at $140,140 from the defunct ArchivalCD, LLC and other
companies either owned or controlled by the Company's Chief
Executive Officer in exchange for 14,435,000 shares of the
Company's common stock. As these assets were under common
control of a significant shareholder prior to and after the
acquisition, the Company has valued the acquired assets at
their historical cost, which is consistent with the provisions
of APB Opinion No. 16 and the Securities and Exchange
Commission's Staff Accounting Bulletin (SAB) No. 48.
Apart from the asset purchase, the Company has agreed
to compensate the LLC's stockholders a total of $13,602 for
their investment in the LLC in the form of cash and/or the
Company's common stock. As of December 31, 1999, 60,167 shares
of common stock, valued at par ($602), had been issued to
these stockholders, with the remaining $13,000 reflected on
the Company's balance sheet as an accrued liability. This
additional compensation cost was charged to expense in the
current period.
On June 23, 1999, the Company purchased certain
archived records from an unrelated company valued at $40,000
in exchange for 3,000 shares of the Company's common stock.
The valuation of the transaction was based on the fair value
of the records received, as determined by the seller and as
detailed in the sale agreement.
NOTE 4 - RECEIVABLES
RECEIVABLE FROM STOCKHOLDERS
Pursuant to a stock repurchase agreement with a
stockholder, disclosed further in Note 12, on August 5, 1999
the Company paid $1,000 to repurchase 667 shares of its common
stock. As of December 31, 1999, the shares had not been
returned to the Company, resulting in a $1,000 receivable from
the stockholder at December 31, 1999.
Page 9 of 13
<PAGE> 41
Archivalcd, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 4 - RECEIVABLES (CONTINUED)
EMPLOYEE ADVANCES
Since inception, the Company had advanced funds to
and paid certain personal expenses for its chief executive
officer, which will be deducted from his future wages once the
payroll system has been implemented in fiscal year 2000. The
total receivable from the chief executive officer at December
31, 1999 was $24,127.
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at
December 31, 1999:
<TABLE>
<S> <C>
Equipment $ 174,370
Archived records 180,140
Automobile 2,600
Office equipment 5,090
Accumulated depreciation (34,248)
-------------
Property and equipment, net $ 327,952
=============
</TABLE>
Depreciation expense for the period ended December
31, 1999 was $34,248.
NOTE 6 - NOTES PAYABLE
Notes payable at December 31, 1999 consists of the
following:
<TABLE>
<S> <C>
Unsecured promissory note payable to a stockholder due
May 14, 2000, with interest at 10% per annum. $ 15,000
Loan agreement with a stockholder due October 19, 2002,
with interest at 15%, collateralized by unissued shares of the Company's common
stock at the rate of $1.00 per share. 18,000
Less current portion (15,000)
--------------
Long-term debt $ 18,000
==============
</TABLE>
Page 10 of 13
<PAGE> 42
ARCHIVALCD, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 6 - NOTES PAYABLE (CONTINUED)
Principal maturities of long-term debt are as
follows:
<TABLE>
<S> <C>
Fiscal year ended December 31, 2002 $ 18,000
============
</TABLE>
NOTE 7 - CAPITALIZATION
The capital stock of the corporation at December 31,
1999 was as follows:
Cumulative Convertible Preferred Stock, $20 par
value, 1,000,000 shares authorized. Dividends accrue annually
at 15%, payable in cash or common shares. Each share of
preferred stock must be held for a minimum of three years and
after five years must either be repurchased by the Company at
par value or converted into 10 shares of common stock at the
discretion of the board of directors. There were no preferred
shares outstanding at December 31, 1999.
Common Stock, $0.01 par value, 25,000,000 shares
authorized, 18,305,726 shares issued and outstanding at
December 31, 1999.
NOTE 8 - INCOME PER COMMON SHARE
The computations of basic and dilutive income per
share from continuing operations were as follows:
<TABLE>
<S> <C>
Income (loss) attributable to common shares $ (116,704)
Weighted average common shares outstanding 7,887,771
----------------
Basic and dilutive income (loss) per share $ (0.01)
================
</TABLE>
NOTE 9 - INCOME TAXES
The Company has incurred net operating losses since
inception and has a loss carryforward of approximately
$117,000 at December 31, 1999 expiring in years beginning in
2018. As of December 31, 1999, the Company had net deferred
tax assets of $46,682. In accordance with the provisions of
FASB Statement No. 109, "Accounting for Income Taxes," a
valuation
Page 11 of 13
<PAGE> 43
ARCHIVALCD, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 9 - INCOME TAXES (CONTINUED)
allowance has been recognized to fully offset this asset due
to the uncertainty of realizing the future benefit. The
Company continually reviews the adequacy of the valuation
allowance and will recognize the tax benefits of these assets
only as assessment indicates that it is more likely than not
that the benefits will be realized.
Significant components of the Company's net deferred
tax assets as of December 31, 1999 are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforward $ 46,682
Valuation allowance (46,682)
-------------
Net deferred tax assets $ --
=============
Deferred taxes reflect a combined federal and state
tax rate of approximately 40%. A reconciliation between the
amount of federal and state income taxes, based on a forty
percent (40%) tax rate, and the effective amount of income
taxes based on continuing operations is as follows:
Statutory income taxes (refund) $ (46,682)
Change in valuation allowance 46,682
-------------
Income tax expense charged to operations
$ --
============
</TABLE>
NOTE 10 - ADVERTISING COSTS
The Company expenses advertising costs as incurred.
During the period ended December 31, 1999, the company
expensed $314 in advertising costs.
NOTE 11 - RELATED PARTY TRANSACTIONS
During the period, the Company accepted $2,000 in
loans from stockholders for which no promissory notes were
executed. The Company agreed to pay these stockholders a flat
interest fee equal to 15% of the loans. At December 31, 1999,
the outstanding balance on these loans was $1,000.
Page 12 of 13
<PAGE> 44
ARCHIVALCD, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD NOVEMBER 12, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
NOTE 11 - RELATED PARTY TRANSACTIONS (CONTINUED)
Interest expense relating to stockholder loans was
$1,582 for the period ended December 31, 1999.
On July 7, 1999, the Company entered into a
consulting agreement with Corporate Vision, Inc., whereby
Corporate Vision will provide services valued at $300,000 to
assist the Company in making an initial public offering in
exchange for 3,750,000 shares of the Company's common stock.
The valuation of the transaction is based on the fair value of
the services as determined by the vendor and as specified in
the consulting agreement. As a result of the stock issue,
Corporate Vision, Inc. was the Company's second largest
shareholder, owning 20% of the total common shares outstanding
at
NOTE 12 - COMMITMENTS AND CONTINGENCIES
On May 12, 1999, the Company entered into a
repurchase agreement with a stockholder, whereby the Company
will repurchase up to 15,000 shares of its common stock at,
the direction of the stockholder, at the greater of $1.50 per
share or the market value on the date of repurchase. If the
Company offers to redeem the shares and the stockholder elects
to retain the shares, the agreement will become void six
months after the offer date and will be replaced by a two year
guarantee to repurchase the shares at $1.10 per share,
regardless of market price. As disclosed in Note 3, the
Company paid $1,000 to the stockholder to repurchase 667
shares, which had not been returned to the Company at December
31, 1999. At December 31, 1999, the stockholder held 13,833
shares that could be subject to this agreement.
The Company is obligated under a lease agreement for
its office facilities, which expires December 31, 2000, with
an option to renew. The Company is also operating under a
month-to-month lease for storage facilities. At December 31,
1999, there were no long-term lease commitments. The minimum
lease obligation for the fiscal year ending December 31, 2000
is $2,810. Rent expense under all operating leases totaled
$961 for the period ended December 31, 1999.
On October 8, 1999, the Company entered into an
agreement to purchase the distribution rights to a
genealogical software package for $7,500. As of December 31,
1999, the Company had made an initial payment $1,000, with the
entire purchase price payable at such time the master program
and all pertinent files are delivered to the Company.
Page 13 of 13
<PAGE> 45
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AChchivalCD, Inc.
By: /s/ DANIEL HAY Date: May 12, 2000
------------------------------------- -----------------------------------
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE> 46
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
5.1 Opinion of Jackson L. Morris, Attorney at Law
</TABLE>
<PAGE> 1
EXHIBIT 5.1
JACKSON L. MORRIS
Attorney at Law
Admitted in Florida, Georgia and The District of Columbia
By First Class U.S. Mail, Telephone Facsimile and Email
Board of Directors
ArhivalCD, Inc.
Suite 212
100 North Sixth Street
Crockett, Texas 75835
Re: Registration Statement on Form SB-2
Gentlemen:
I have been engaged as special counsel for ArchivalCD, Inc., a Delaware
corporation, (the "Company"), for the sole purpose of rendering the opinion
herein below set forth. I have been asked to provide my opinion in connection
with the registration under the Securities Act of 1933, as amended, (the "Act")
on Form SB-2, Commission File No. 333-93525 ("Registration Statement") for the
offer and sale of up to 3,700,000 shares of the Company's common stock, $.01 par
value per share, 3,200.000 shares of which are to be offered and sold by the
Company and 500,000 shares of which are to be offered and sold by certain
selling stockholders, ("Shares"). Based upon my review of the Company's Articles
of Incorporation, Bylaws, appropriate records of proceedings of the Company's
board of directors and the Company's audited balance sheet at December 31, 1999
and unaudited balance sheet at March 31, 2000 and statement of changes in
stockholders' equity from inception to March 31, 2000, it is my opinion that the
Shares are legally authorized and (i), with respect to the Shares to be offered
and sold by the Company, upon issuance and delivery against payment or receipt
of consideration therefor, they will be duly and validly issued, fully paid and
non-assessable and (ii), with respect to the Shares to be offered and sold by
certain selling stockholders, they are duly and validly issued, fully paid and
non-assessable.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and the reference to me therein under the caption "Interest of
Counsel."
Very truly yours
Jackson L. Morris
3116 West North A Street - Tampa, Florida 33609-1544
(813) 874-8854 FAX (813) 873-9628 - U.S.A.
