As filed with the Securities and Exchange Commission on November 7, 2000.
Registration No. 333-93233
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
AMENDMENT NO. 3
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
AMERICOM NETWORKS INTERNATIONAL, INC.
(Name of Small Business Issuer in its charter)
Florida [ ] 13-4013027
(State of Jurisdiction) (Primary Standard Industrial (I.R.S. Employee
Classification Code Number) Identification No.)
17 State Street, 5th Floor
New York, New York 10004
212-514-7334
(Address and telephone number of principal executive
offices and principal place of business)
----------------------------------------
Dominick Zappia, President
Americom Networks International, Inc.
17 State Street, 5th Floor
New York, New York 10004
(212) 514-7334
(Name, address and telephone number of agent for service)
Copies of all communications to:
Silverman, Collura & Chernis, P.C.
Gary W. Mair, Esq.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
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 he 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 any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended ("Securities Act"), other than securities offered only in
connection with dividend or reinvestment plans, check the following box. [X]
If this form is a post-effective registration statement 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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum Maximum
Title of Class of Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered(1) Registered Share(2) Price (1) Registration Fee
=================================================================================================================
<S> <C> <C> <C> <C>
Common Stock held by Selling
Stockholders 171,227 $1.50 $256,840.50 $71.40
-----------------------------------------------------------------------------------------------------------------
Total 171,227 -- $256,840.50 $71.40
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 of the Securities Act.
(2) Common stock price per share calculated in accordance with Rule 457(c) of
the Securities Act using the last sale price for the common stock on
December 15, 1999.
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 said Section 8(a),
may determine.
ii
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 2000
AMERICOM NETWORKS INTERNATIONAL, INC.
171,227 Shares of Common Stock
This prospectus relates to the registration for resale of 171,227 shares
of common stock held by certain selling stockholders identified in this
prospectus. We will not receive any proceeds from the sale of these shares.
----------
Our selling stockholders' shares shall be deposited in an escrow account
and may not be traded or transferred until an acquisition meeting certain
specified criteria has been made and a sufficient number of investors reaffirm
their investment as required under Rule 419 of the Securities Act.
Please see the risk factors beginning on page 4 to read about certain
factors you should consider before buying shares of common stock.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information in this preliminary prospectus is not complete and may be
changed. The securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the sale is not permitted. [left margin-in
red]
Prospectus dated _______, 2000
iii
<PAGE>
[INSIDE FRONT COVER]
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
PROSPECTUS SUMMARY......................................................................................................1
American Networks International, Inc...........................................................................1
The Offering...................................................................................................2
Summary Financial Data.........................................................................................3
RISK FACTORS............................................................................................................4
We are presently not engaged in any business, have incurred loss and anticipate continuing losses..............4
We have only been in operation since 1998 and have sold substantially all of our assets, which may
make it difficult for you to judge our prospects...............................................................4
Since we have no business we rely heavily on the acquisition of assets, property or a business
beneficial to us...............................................................................................4
If we acquire a business we may issue additional shares of our common stock, which may result in a
change of control and will cause significant dilution to your investment in us.................................4
Restriction on the sale of certain selling stockholders' shares will prevent them from trading their
shares and may make it more difficult for you to sell our shares...............................................4
We are required to file a post-effective amendment explaining the acquisition of a business by us,
which will delay the consummation of an acquisition by us and may require the approval of the
Securities and Exchange Commission.............................................................................4
Shares placed in escrow may not be released until we either execute an agreement for the acquisition
of a business and have declared effective a related post-effective amendment or 18 months from the
date of this prospectus........................................................................................4
Resale of the selling stockholders shares may be prohibited in certain states even after they are
released from escrow...........................................................................................4
We have no independent directors, audit or compensation committee..............................................5
We have only one officer who will devote part of his time to our affairs and two directors, one of
which owns a major portion of our shares.......................................................................5
We have limited marketing resources and no experience as a blank check company, which may make
it more difficult for us to acquire a business.................................................................5
We currently have no negotiations with any entity or individual regarding an acquisition or merger.............5
We have limited funds and no revenue, which makes it difficult for us to acquire a suitable business...........5
Since we have no business we are not regulated by the government; however, we may be regulated
by the government after we acquire a business, which may have a materially adverse effect on our
business.......................................................................................................6
We are currently named a defendant in a civil action and a judgment was entered against us in the
amount of $300,000, plus interest..............................................................................6
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
We are dependent on the successful acquisition of a business and our ability to become a reporting
company........................................................................................................6
We are registering the resale of our shareholders securities only, which requires us to raise proceeds
from other sources such as a future private or public offering.................................................6
We maintain a public market on the pink sheets, which makes it more difficult for an investor
to sell shares rather on than the Over the Counter, Nasdaq small cap market or a national exchange.............7
The loss of the services of our chief executive, officer, could prevent us from forming strategic
alliances to acquire a successful business.....................................................................7
DIVIDEND POLICY.........................................................................................................7
DESCRIPTION OF BUSINESS.................................................................................................8
Overview.......................................................................................................8
PLAN OF OPERATION.......................................................................................................9
Corporate History..............................................................................................9
Selection of a Business........................................................................................9
Type of business we may acquire...............................................................................10
Acquisition of a business.....................................................................................11
After we execute an agreement to acquire an entity............................................................13
Reconfirmation offering.......................................................................................13
Release of deposited securities ..............................................................................13
Operation of business after an acquisition....................................................................13
We need to manage our growth effectively......................................................................13
Leverage......................................................................................................13
Agreements....................................................................................................14
Governmental regulation.......................................................................................14
Competition...................................................................................................15
Employees.....................................................................................................15
Facilities....................................................................................................15
Legal Proceedings.............................................................................................15
Available Information.........................................................................................15
MANAGEMENT.............................................................................................................17
Directors and Officers........................................................................................17
Compensation of Directors.....................................................................................17
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
EXECUTIVE COMPENSATION.................................................................................................18
Limitations of liability and indemnification of directors and officers........................................18
PRINCIPAL STOCKHOLDERS.................................................................................................19
CERTAIN TRANSACTIONS...................................................................................................20
DESCRIPTION OF SECURITIES..............................................................................................21
Common Stock..................................................................................................21
TRANSFER AGENT.........................................................................................................21
SELLING STOCKHOLDERS...................................................................................................21
SHARES ELIGIBLE FOR FUTURE SALE........................................................................................23
LEGAL MATTERS..........................................................................................................24
EXPERTS................................................................................................................24
AMERICOM NETWORKS INTERNATIONAL, INC...................................................................................24
</TABLE>
vi
<PAGE>
PROSPECTUS SUMMARY
You should carefully read the entire prospectus, including the Risk Factors
section and the financial statements and the notes to the financial statements.
When we refer to us or we, we are also referring to our predecessor entities.
Americom Networks International, Inc.
From July of 1998 to May of 1999, we engaged in limited business
operations in the area of developing telecommunications systems to market to
high-value users for their use or resale. In September of 1999, we sold
substantially all of our assets. As of the date of this prospectus, we are not
engaged in any business operations and have no material tangible assets or
property. We are currently seeking business opportunities believed to hold a
potential for profit. As a result, we intend to seek out the acquisition of
assets, property or a business that may be beneficial to us or our stockholders.
We have not identified a specific business area of direction that we will
follow; therefore, no principal operation has yet commenced. We currently have
no products and offer no services.
Since we have no specific business plan and have indicated that our plan
is to engage in a merger or acquisition with an unidentified company, we are
required under Rule 419 of the Securities Act to deposit in escrow all
securities of our selling stockholders governed by an agreement, which contains
certain terms and provisions specified by Rule 419.
Our selling stockholders' securities are currently held in escrow.
Certificates for the deposited Securities will be issued in the names of the
each selling stockholder who retain all voting rights, if any.
The securities held in escrow may not be transferred, disposed of, nor any
interest created other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order. Our selling stockholders
securities held in escrow may be released only after the escrow agent has
received a signed representation from us and any other evidence acceptable by
the escrow agent that we have executed an agreement for the acquisition of a
business, which meets the requirements under Rule 419 of the Securities Act.
We were incorporated in Florida in 1989. Our principal offices are located
at 17 State Street, 5th Floor, New York, New York 10004, telephone (212)
514-7334, facsimile (212) 514-7335.
1
<PAGE>
The Offering
Shares of common stock
outstanding before the
offering 4,946,227 shares of common stock
Securities outstanding upon 4,946,227 shares of common stock issued
completion of this offering and outstanding.
Risk factors Our shares of common stock are highly
speculative, involve a high degree of
risk and could cause immediate and
substantial dilution. Our shares should
not be purchased by an investor who
cannot afford the loss of his or her
entire investment.
Proposed OTC electronic ANIW
bulletin board symbol
2
<PAGE>
SUMMARY FINANCIAL DATA
The summary financial information presented below as of December 31,
1999 and 1998, and for the years ended December 31, 1999 and 1998, was derived
from our audited financial statements appearing elsewhere in this prospectus.1
You should read this summary financial information in conjunction with our plan
of operation, financial statements and related notes to the financial
statements, each appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
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Three Month Ended Three Month Ended Six Months Ended Six Months Ended
Year Ended Year Ended June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
December 31, December 31, -------------- -------------- -------------- --------------
Results of Operations: 1999 1998 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales-discontinued $ 236,685 $ 2,415 $ -- $103,924 $ -- $233,185
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) (1,342,135) (913,526) (48,392) (284,303) (86,637) (703,215)
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share (.26) (.28) (.10) (.05) (.02) (.13)
------------------------------------------------------------------------------------------------------------------------------------
Weighted average common
and common equivalent
shares outstanding 5,101,943 3,245,417 4,946,227 5,344,715 4,946,227 5,243,817
------------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
---------------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
December 31, December 31, June 30, 2000
1999 1998 (Unaudited)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total assets $182,192 $551,311 $127,300
---------------------------------------------------------------------------------------------------------------------
Total liabilities 436,106 436,927 467,851
---------------------------------------------------------------------------------------------------------------------
Working capital deficit (303,914) (356,792) (340,551)
---------------------------------------------------------------------------------------------------------------------
Stockholders' equity (deficit) (253,914) 114,384 (340,551)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
(1) The financial information for the three and six months ended, June 30,
2000 and 1999, was derived from our unaudited financial statements. In the
opinion of management, the financial information for the three and six months
ended June 30, 2000 and 1999, contain all adjustments, consisting only of normal
recurring accruals necessary for the fair presentation of the results of
operations and financial position for such period.
3
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors and other
information in this prospectus before deciding to invest in shares of our common
stock. The risk factors described below and other factors noted throughout this
prospectus, including certain risks and uncertainties, could cause our actual
results to differ from those contained in any forward-looking statement.
We are presently not engaged in any business, have incurred losses and
anticipate continuing losses.
We are presently not engaged in any business operations; therefore, we
have no source of revenue. Our operations for the year ended December 31, 1998,
primarily represents activity from July 1, 1998, prior to this date we were
inactive. Operations for the year ended December 31, 1999, represent activity
from January 1, 1999 through May, 1999. As of December 31, 1999, our accumulated
deficit was approximately $2,260,661.
We may be unable to operate as a going concern because we have suffered
recurring losses from operations have a working capital deficiency and no source
of revenue. Our independent accountants have included an explanatory paragraph
stating that our financial statements have been prepared assuming that we will
continue as a going concern and that we have suffered recurring losses from
operations and have a working capital deficiency, which causes substantial doubt
as to our ability to continue as a going concern.
We have only been in operation since 1998 and have sold substantially all of our
assets, which may make it difficult for you to judge our prospects.
We commenced our business in July, 1998, and produced limited revenue
through May of 1999. We have not engaged in any business operation since May of
1999. In September 1999, we sold substantially all of our assets and currently
we have no revenue. As a result, we have a limited operating history upon which
you can evaluate our prospects. Our historical data is of limited value in
projecting future operating results. You must consider our business in light of
the risks, expenses and problems frequently encountered by companies with
limited operating histories.
Since we have no business we rely heavily on the acquisition of assets, property
or a business beneficial to us.
We have devoted all our efforts this year to various organizational
activities, including our effort to acquire a suitable business. We intend to
seek out the acquisition of assets, property or a business that may be
beneficial to us or our stockholders. We have not as yet identified any business
or product for possible acquisition. We face all of the risks inherent in a new
business and those risks specifically inherent in the type of business in which
we propose to engage namely, the investigation and acquisition of an interest in
a business. Even if we become engaged in a new business, there can be no
assurance that we will be able to generate revenues or profits therefrom. Our
business must be considered in light of the risks, expenses and problems
frequently encountered by companies in their early stages of development,
particularly blank check companies, which have no business plan.
If we acquire a business we may issue additional shares of our common stock,
which may result in a change of control and will cause significant dilution to
your investment in us.
It is likely that we will issue additional shares of our common stock if
we merge, consolidate or have some other business reorganization. If we issue
additional shares to purchase a business your investment in us shall be
substantially diluted and there will be a material decrease in your equity
interest in us.
Restriction on the sale of certain selling stockholders' shares will prevent
them from trading their shares and may make it more difficult for you to sell
our shares.
We are required to deposit our selling stockholders' securities in escrow.
Under Rule 419 of the Securities Act it is unlawful for any person to sell or
offer to sell the securities held in escrow or any interest in or related to the
securities held in escrow other than pursuant to a qualified domestic relations
order. Investors will not be able to liquidate their investment until the
securities are released from escrow as provided in Rule 419. As a result, there
will be no trading market for the selling stockholders securities following
completion of this offering. Even if the securities are released from escrow
following a business acquisition pursuant to Rule 419, there can be no assurance
that a public market for our securities will develop. As a result, holders of
our securities may not be able to liquidate their investment readily, if at all.
We are required to file a post-effective amendment explaining the acquisition of
a business by us, which will delay the consummation of an acquisition by us and
may require the approval of the Securities and Exchange Commission.
Once the agreement governing the acquisition of a business meeting the
criteria set forth under Rule 419 has been met we are required to update this
registration statement with a post-effective amendment. The amendment must
contain information about: the proposed acquisition candidate, its business,
including audited financial statements; the results of this offering; and, the
use of the funds disbursed from escrow.
Shares placed in escrow may not be released until we either execute an agreement
for the acquisition of a business and have declared effective a related
post-effective amendment or 18 months from the date of this prospectus.
The securities deposited in escrow by our selling stockholders may be
released only after the escrow agent has received a signed representation from
us and any other evidence acceptable to it that we have executed one or more
agreements for the acquisition of one or more business for which the fair market
value of the business represents at least 80% of the offering proceeds, if any,
and that we have filed the required amendment; the amendment has been declared
effective; the mandated reconfirmation offer containing the conditions
prescribed by Rule 419 has been completed; we have satisfied all of the
prescribed conditions of the reconfirmation offer; and the acquisition of the
business with the fair value of at least 80% of the offering proceeds, if any,
is consummated. If an acquisition is not consummated within 18 months of the
date of this prospectus, the deposited securities held in escrow shall be
returned to all investors on a pro rata basis within five business days by first
class mail or other equally prompt means.
Resale of the selling stockholders shares may be prohibited in certain states
even after they are released from escrow.
Certain states have adopted regulations that may prohibit sale of the
selling stockholders shares after they are released from escrow. All
certificates representing the selling stockholders shares shall contain a legend
prohibiting the resale of their shares in those states which prohibit the resale
of shares released from escrow under Rule 419 of the Securities Act.
4
<PAGE>
We have no independent directors, audit or compensation committee.
Currently, we have no independent directors, audit or compensation
committee.
We have only one officer who will devote part of his time to our affairs and two
directors, one of which owns a major portion of our shares.
One of our director's, Ael Apelboim, currently owns a major portion of our
outstanding shares. Mr. Apelboim is currently employed or engaged full-time in
another position or activity, and will devote only that amount of time to our
affairs which he deems appropriate. Our sole officer and other director,
Dominick Zappia, shall devote part of his time to our affairs.
We have limited marketing resources and no experience as a blank check company,
which may make it more difficult for us to acquire a business.
We have limited marketing capabilities or resources to seek out an
appropriate company to acquire. Our sole officer is currently seeking out the
acquisition of a suitable business. Our prospects will be significantly affected
by our ability to successfully develop strategic alliances with third parties.
Establishing satisfactory strategic alliances will require significant financial
and other resources, which we currently do not have. In addition, strategic
alliances may require financial or other commitments by us. We may be unable for
financial or other reasons, to enter into strategic alliances on commercially
acceptable terms, or at all. Failure by us to enter into these strategic
alliances or the inability to raise proceeds through future public or private
financing would have a material adverse effect on us.
We currently have no negotiations with any entity or individual regarding an
acquisition or merger.
Neither our officer, nor our director, have had any preliminary contact
discussion, and there are no present plans, proposals, arrangements or
understandings, with any representatives of the owners of any business or
company regarding the possibility of an acquisition or merger transaction
contemplated in this prospectus.
We have limited funds and no revenue, which makes it difficult for us to acquire
a suitable business.
Since we have no revenue and have sold substantially all of our assets, it
is unlikely that we will be able to commit our limited funds to the acquisition
of more than one specific business. Our inability to acquire more than one
business increases the likelihood of our success or failure depending on the
initial business that we acquire.
Moreover, our limited funds will likely make it impracticable to conduct a
complete and exclusive investigation and analysis of a business. Our management
decisions will likely be made without detailed feasibility studies, independent
analysis, market surveys due to the lack of desirable funds available. We will
be particularly dependent in making decisions on information provided by our
officer, or others associated with the businesses seeking our participation,
which will have a direct economic interest in completing a transaction with us.
Our failure to eventually acquire or merge into a suitable business shall have a
material affect on our future business.
5
<PAGE>
Since we have no business we are not regulated by the government; however, we
may be regulated by the government after we acquire a business, which may have a
materially adverse effect on our business.
We are currently not regulated by any federal, state or local agency
because we are presently not conducting any business. There is the possibility
that a business that we may acquire in the future could be subject to
governmental regulations, including environmental and taxation matters, which
regulations could have a materially adverse effect on us and our stockholders.
We are currently named a defendant in a civil action and a judgment was entered
against us in the amount of $300,000, plus interest.
We recently had a judgment entered against us in the amount of $300,000,
by Communications Telesystems International, plus pre-judgment interest at the
rate of 10% retroactive to September 1999. We do not intend to appeal. We are
also named defendants in a civil lawsuit brought by one of our former
stockholders for a claim based on the stockholder's failure to sell certain of
our shares. Stockholder is seeking compensatory damages in the amount of
$3,000,000 and punitive damages in the amount of $10,000,000. Such claims and
any resultant litigation, might subject us to significant liability for damages,
and even if not meritorious, could be time consuming, expensive to defend, and
result in the diversion of management time and attention, any of which might
have a material adverse effect on our business, results of operations and
financial condition.
We are dependent on the successful acquisition of a business and our ability to
become a reporting company.
We intend to list our common stock on the over the counter bulletin board.
The success of our business plan is based largely on our ability to become a
publicly reporting company and to apply for listing on the over the counter
bulletin board. Our listing on the over the counter bulletin board and the
effectiveness of this registration statement will enable us to negotiate the
possible acquisition of an entity under terms more favorable to our stockholders
than if we are not a publicly reporting company. If this offering is
unsuccessful, it is likely that our present stockholders may lose their entire
investment, since the liquidity of our common stock could be impaired and we may
have less leverage to consummate our plan to acquire a business if we stay on
the pink sheets.
We are registering the resale of our shareholders securities only, which
requires us to raise proceeds from other sources such as a future private or
public offering.
We will not receive proceeds from the resale of our shares. Moreover, we
currently have no revenue and do not expect to have any revenue until we
commence operations following the acquisition of a business. We will need to
raise additional funds through a private or public offering of our securities in
order to fund our operations while we continue to seek the acquisition of a
suitable business. If additional funds are raised through the issuance of equity
or convertible debt securities, the percentage ownership of our stockholders
will be reduced, stockholders may experience dilution, and those securities may
have rights, preferences or privileges senior to those securities held by
existing stockholders. Additional financing may not be available on terms which
are favorable to us, or at all. If adequate funds are not available or not
available on acceptable terms, we may not be able to fund our future operations,
take advantage of unanticipated acquisition opportunities, develop or enhance
services or respond to competitive pressures. Any such inability could have a
material adverse effect on our business, results of operations and financial
condition.
6
<PAGE>
We maintain a public market on the pink sheets, which makes it more difficult
for an investor to sell shares rather on than the Over the Counter, Nasdaq small
cap market or a national exchange.
Failure to develop or maintain an active trading market could negatively
effect the price of our shares. Currently, our shares are listed on the pink
sheets; however, we intend to publicly trade our shares on the over the counter
bulletin board. As a result, it would be difficult for an investor to dispose of
our shares on the pink sheets rather than the over the counter bulletin board, a
security traded on the Nasdaq Smallcap Market or a national securities exchange.
We may in the future apply to have the shares listed on the Nasdaq SmallCap
Market.
The loss of the services of our chief executive officer, could prevent us from
forming strategic alliances to acquire a successful business.
We are dependent on the continued employment and performance of our
executive officer, Dominick Zappia. The loss of Mr. Zappia, or his incapacity to
perform his duties, would have a materially negative effect upon our activities
to form strategic alliances and the prospect of acquiring a business. We do not
have key man life insurance coverage on the life of Mr. Zappia.
DIVIDEND POLICY
We have never paid any dividends on our common stock. We do not intend to
declare or pay dividends on our common stock, but to retain our earnings, if
any, for the operation and expansion of our business. Dividends will be subject
to the discretion of our board of directors and will be contingent on future
earnings, if any, our financial condition, capital requirements, general
business conditions and other factors as our board of directors deems relevant.
7
<PAGE>
DESCRIPTION OF BUSINESS
The following discussion and analysis of the financial condition and
results of our operations should be read in conjunction with, and is qualified
in its entirety by, the more detailed information including the summary
financial information and our financial statements and the notes thereto
included elsewhere in this prospectus. This prospectus contains forward-looking
statements which can be identified by the use of words such as "intend,"
"anticipate," "believe," "estimate," "project," or "expect" or other similar
statements. These statements discuss future expectations, contain projections of
results of operations or of financial condition, or state other forward-looking
information. Our actual results may differ materially from the results discussed
in the forward-looking statements. Factors that may cause or contribute to such
differences include those discussed in "Risk Factors," as well as those
discussed elsewhere in this prospectus.
Overview
As of the date of this prospectus, we have ceased our business operations
and have no material tangible assets or property. We are currently seeking
business opportunities believed to hold a potential for profit. As a result, we
intend to seek out the acquisition of assets, property or a business that may be
beneficial to us or our stockholders. We have not identified a specific business
area of direction that we will follow; therefore, no principal operation has yet
commenced. We currently have no products and offer no services.
We plan after our registration statement is declared effective, for which
this prospectus forms a part, to seek, investigate, and ultimately acquire an
interest in a business with long-term growth potential. We currently have no
commitment or arrangement to participate in a business and cannot now predict
what type of business we may enter into or acquire. It is emphasized that the
business objectives discussed in this offering are extremely general and are not
intended to be restrictive on the discretion of our management.
Although there are no specific business combinations or other transactions
contemplated by management, it may be expected that any such target business
will present such a level of risk that conventional private or public offerings
of securities or conventional bank financing would not be available to us once
we acquire a business.
Management anticipates that it may be able to participate in only one
potential business venture, due primarily to our limited financing. This lack of
diversification should be considered a substantial risk of investing in us
because it will not permit us to offset potential losses from one venture
against gains from another.
8
<PAGE>
PLAN OF OPERATION
Corporate History
We were incorporated on July 22, 1989, under the name Sea Green, Inc., a
Florida corporation for the purpose of developing communication systems to
market high value users for their use and resale. We filed an Amendment to our
certificate of incorporation on June 3, 1998, changing our name to Americom
Networks Corp. On July 10, 1998, we again changed our name to Americom Networks
International, Inc. Since July of 1998 through May of 1999, we engaged to a
limited extent in the business of developing telecommunications systems to
market high-volume users for use or resale. Since then we have ceased our
business operations.
Selection of a Business
In connection with our investigation of a possible business, and in order
to supplement the business experience of our management, we may employ
accountants, technical experts, appraisers, attorneys, or other consultants or
advisors. The selection and engagement of any such advisors will be made by
management without the approval from our stockholders. It is anticipated that
professionals may be engaged by us on an independent basis without a continuing
fiduciary duty or other obligation to us.
While it is not presently anticipated that we will engage unaffiliated
professional firms specializing in business acquisitions on reorganizations,
such firms may be retained if management deems it in our best interest.
Compensation to a finder or business acquisition firm may take various forms,
including one-time cash payments, payments based on a percentage of revenues or
product sales volume, payments involving issuance of our equity securities, or
any combination of these or other compensation arrangements. We estimate that
any fees for such services will not exceed 10% of the amount of the securities
issued or cash paid by us to acquire a business. We will not have funds to pay a
retainer in connection with any consulting arrangement, and no fee will be paid
unless and until an acquisition is completed.
We currently have no arrangement or understanding to employ any of our
officers or directors as outside advisors. We anticipate that in the future,
businesses for possible acquisition will be referred by various sources,
including our officer and directors, professional advisors, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. We will seek businesses from all
known sources, but will rely principally on personal contacts of our officer,
directors and their affiliates, as well as indirect associations between them
and other business and professional people. While it is not presently
anticipated that we will engage unaffiliated professional firms specializing in
business acquisitions on re- organizations, such firms may be retained if
management deems it in our best interest.
To finance our present and future business plans and the filing of this
registration statement, employment of accountants, attorneys, or other
consultants or advisors for a contemplated acquisition of a business, we rely
heavily on the proceeds due to us under an agreement we entered into on November
28, 1999. Under the agreement, Typereader, Ltd., an Israeli corporation, agreed
to return $200,000 of the original $250,000 advance paid by us in four
installments, the first which was paid on December 13, 1999, in the amount of
$25,000, $60,000 in May 2000, and the balance in the amount of $115,000 to be
paid in two installments as follows: $65,000 on or before November 28, 2000; and
$50,000 on or before March 28, 2001, without recourse to the shareholders of
9
<PAGE>
Typereader. To achieve our business plan; however, we will need to raise
additional proceeds through a private or public offering of our securities.
Type of business we may acquire
We will not restrict our search to any particular business, industry, or
geographical location, and management reserves the right to evaluate and enter
into any type of business in any location. We may participate in newly organized
business venture or a more established company entering a new phase of growth or
in need of additional capital to overcome existing financial problems.
Participation in a new business venture entails greater risks since in many
instances management of such a venture will not have proved its ability, the
eventual market of such venture's product or services will likely not be
established, and the profitability of the venture will be unproven and cannot be
predicted accurately. If we participate in a more established firm with existing
financial problems, we may be subjected to risk because our financial resources
may not be adequate to eliminate or reverse the circumstances leading to such
financial problems.
In seeking a business venture, the decision of our management will not be
controlled by an attempt to take advantage of any anticipated or perceived
appeal of a specific industry, management group, product, or industry, but will
be based on the business objective of seeking long-term capital appreciation in
real value.
The analysis of new businesses will be undertaken by or under the
supervision of our officer and directors. In analyzing a prospective business,
management will consider, to the extent applicable, the available technical,
financial, and managerial resources, working capital and other prospects for the
future, the nature of present and expected competition; the quality and
experience of management services which may be available and the depth of that
management; the potential for further research, development, or exploration; the
potential for growth and expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trade or service
marks; name identification; and other relevant factors.
It is possible that we may propose to acquire a business in the
development stage. A business is in the development stage if it is devoting
substantially all of its efforts to establishing a new business, and either
planned principal operations have not commenced or planned principal operations
have commenced but there has been no significant revenue.
The decision to participate in a specific business may be based on
management's analysis of the quality of the other firm's management and
personnel, the anticipated acceptability of new products or marketing concepts,
the merit of technological changes, and other factors which are difficult, if
not impossible, to analyze through any objective criteria. It is anticipated
that the results of operations of a specific firm may not necessarily be
indicative of the potential for the future because of the requirement to
substantially shift marketing approaches, expand significantly, change product
emphasis, change or substantially augment management, and other factors.
We will analyze all available factors and make a determination based on a
composite of available facts, without reliance on any single factor. The period
within which we may participate in a business on completion of this offering
cannot be predicted and will depend on circumstances beyond our control,
including the availability of businesses, the time required for us to complete
our investigation and analysis of prospective businesses, the time
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<PAGE>
required to prepare appropriate documents and agreements providing for our
participation, and other circumstances. It is anticipated that the analysis of
specific proposals and the selection of a business will take several months.
We may be unable to operate as a going concern because we have suffered
recurring losses from operations have a working capital deficiency and no source
of revenue. Our independent accountants have included an explanatory paragraph
stating that our financial statements have been prepared assuming that we will
continue as a going concern and that we have suffered recurring losses from
operations and have a working capital deficiency which cause substantial doubt
as to our ability to do so. Management expects to incur additional losses for
the foreseeable future and recognizes the need for an infusion of cash to
achieve their business plan. We are actively pursuing various options which
include seeking additional equity financing. We believe that we will be able to
raise sufficient funds to achieve our planned business objectives through
private placements. We have no bank lines of credit and there can be no
assurance that we will be able to obtain any needed additional financing on
commercially reasonable terms. If we are unable to obtain sufficient funds, it
may be necessary for us to explore other options which could have a material
adverse effect on our business. The financial statements do not include any
adjustments to reflect the possible future effects on the recover ability and
classification of assets or the amounts and classifications of liabilities that
may result.
We are subject to Rule 419 of the Securities Act which may impact the type of
business we acquire.
We are subject to requirements of Rule 419 under the Securities Act along
with certain reporting requirements under the Exchange Act; therefore, we may be
required to furnish certain information about significant acquisitions,
including audited financial statements for the company acquired, covering one,
two, or three years, depending on the relative size of the acquisition.
Acquisition prospects that do not have or are unable to obtain the required
audited statements which meet the requirements of Rule 419 and the Exchange Act
will not be appropriate for our acquisition. Even after we locate a prospective
acquisition target, we still may have to comply with the reconfirmation mandate
of Rule 419, which may take months.
Acquisition of a Business.
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, or other reorganization with another
corporation or entity; joint venture; license; purchase and sale of assets; or
purchase and sale of stock, the exact nature of which we cannot predict. We
currently do not intend to participate in a business through the purchase of
minority stock positions. On the consummation of a transaction, it is likely
that our present management and stockholders will not be in control of us.
Moreover, a majority or all of our directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new directors without vote of
our stockholders.
In connection with our acquisition of a business, our present
stockholders, including our officer and directors, may, as a negotiated element
of the acquisition, sell a portion or all of our common stock held at a
significant premium over their original investment in us. As a result of such
sales, to affiliates of the entity participating in the business reorganization
with us, would acquire a higher percentage of equity ownership in us. Although
our present stockholders did not acquire our shares with a view towards any
subsequent sale in connection with a business reorganization, it is not unusual
for affiliates of the entity participating in the reorganization to negotiate to
purchase shares held by the present stockholders in order to reduce the number
of restricted securities held by persons no longer affiliated with a company and
thereby reduce the potential adverse impact on the public market in a company's
common stock that could result from substantial sales of such shares after the
restrictions no longer apply. Public investors will not receive any portion of
the premium that may be paid in the circumstances noted above. Our stockholders
may not be afforded an opportunity to approve or consent to any particular stock
buy-out transaction.
It is likely that we will issue additional shares of our common stock in
connection with a potential merger, consolidation, or other business
reorganization. As a result of a reorganization, there may be a change of
control in management; significant dilution to the public stockholders'
investment; and a material decrease in the public stockholders' equity interest
in us. Since we have not made any determination with respect to the acquisition
of any specific business, we cannot speculate on the form of any potential
business reorganization or the amount of
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<PAGE>
securities, which we may issue. Our board of directors may issue additional
securities on terms and conditions, which the board of directors, in its sole
discretion, determines to be in our best interest and without seeking
stockholder approval.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of the transaction, we may agree to register such securities
either at the time the transaction is consummated, under certain conditions, or
at specified times thereafter. Although the terms of such registration rights
and the number of securities, if any, which may be registered cannot be
predicted, it may be expected that registration of securities by us in these
circumstances would entail substantial expense to us. The issuance of
substantial additional securities and their potential sale into any trading
market, which may develop in our securities, may have a depressive effect on
such market.
The manner in which we participate in a business will depend on the nature
of the business, our respective needs and desires and other parties, the
management of the business, and our relative negotiating strength and such other
management.
It is possible that we will not have sufficient funds to fully undertake
such development, marketing, and manufacturing of products which may be
acquired. Accordingly, following the acquisition of any such product rights, we
may be required to either seek additional debt or equity financing or obtain
funding from third parties, in exchange for which we would probably be required
to give up a portion of its interest in any acquired product. There is the
possibility that we shall be unable to either obtain additional financing or
interest third parties in providing funding for the further development,
marketing, and manufacturing of any products acquired.
We will participate in a business only after the negotiation and execution
of appropriate written agreements. Although the terms of such agreements cannot
be predicted, generally, such agreements will require specific representations
and warranties by all of the parties thereto, will specify certain events of
default, will detail the terms of closing and the conditions which must be
satisfied by each of the parties prior to such closing, will outline the manner
of bearing costs if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms.
It is anticipated that the investigation of specific businesses and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, our obligation to file exchange act reports, and other instruments
will require substantial management time and attention and substantial costs for
accountants, attorneys, and others. If a decision is made not to participate in
a specific business, the costs theretofore incurred in the related investigation
would not be recoverable. Even if an agreement is reached for the participation
in a specific business, the failure to consummate that transaction may result in
the loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and participate in additional businesses.
To fund all of the above we shall rely on the obligation of Typereader to
return to us certain funds pursuant to a rescission agreement, dated November
11, 1999, which requires Typereader to pay us $200,000 in four installments, the
first of which was paid in December 13, 1999, in the amount of $25,000, $60,000
in May 2000, and the balance in the amount of $115,000 to be paid in two
installments as follows $65,000 on or before November 28, 2000 and $50,000 on or
before March 28, 2001. We shall need to raise additional funding
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<PAGE>
through a private placement or another public offering. There can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all.
After we execute an agreement to acquire an entity.
Once the agreement governing the acquisition of a business meeting the
criteria under Rule 419 of the Securities Act has been consummated we are
required to file a registration statement with a post-effective amendment. The
amendment must contain information about: the proposed acquisition candidate,
including audited financial statements and the results of this offering. The
amendment must also include the terms of the reconfirmation offer mandated by
Rule 419. The reconfirmation offer will include certain prescribed conditions
which must be satisfied before the selling stockholders securities can be
released from escrow.
Reconfirmation offering
o The reconfirmation offer must commence within five business days after the
effective date of the amendment. Pursuant to Rule 419, the terms of the
reconfirmation offer must include the following conditions
o The prospectus contained in the amendment shall be delivered to each
investor whose securities are held in escrow within five business days
after the effective date of the amendment;
o Each investor will have not less than 20, nor more than 45, business days
from the effective date of the amendment to notify us in writing, that the
investor elects to remain an investor;
o If we do not receive written notification from investors, within 45
business days following the effective date of their election to reconfirm
their investments in the selling stockholder shares, the securities held
in escrow for all investors' will be returned to them on a pro rata basis
within five business days by first class mail or other equally prompt
means;
o If an acquisition is consummated, any investor who does not reconfirm his
investment in the securities, in writing, within 45 days following the
effective date of the amendment, will receive his pro rata portion of the
escrow securities held in escrow for all investors' within five business
days by first class mail or other equally prompt means;
o If an acquisition is not consummated within 18 months of the date of this
prospectus, the escrow securities shall be returned to all investors on a
pro rata basis, without any interest, within five business days by first
class mail or other equally prompt means.
Release of deposited securities.
The selling stockholders securities may be released to us and the
investors, respectively, after our escrow agent receives a signed representation
from us and any other evidence acceptable to us that:
o we executed one or more agreements for the acquisition of one or more
business and have filed the required amendment;
o the amendment has been declared effective;
o the mandated reconfirmation offer containing the conditions prescribed by
Rule 419 has been completed;
o all of the prescribed conditions of the reconfirmation offer have been
satisfied;
Operation of business after an acquisition.
Our operation following our acquisition of a business will be dependent on
the nature of the business and the interest acquired. We are unable to predict
whether we will be in control of the business or whether the present management
will be in control of us following the acquisition. It may be expected that the
business will present various risks to investors some of which have been
generally summarized in our risk factors. The specific risks of a given business
cannot be predicted at the present time.
We need to manage our growth effectively.
If we acquire a business, we will place a significant strain on our
managerial, operational and financial resources. If we acquire a business we
need to:
o improve our financial and management controls, reporting systems and
procedures;
o expand, train and manage our work force for marketing, sales and
support, product development, site design, and network and equipment
repair and maintenance; and
o manage multiple relationships with various customers, strategic
partners and other third parties.
Leverage.
We may be able to participate in a business involving the use of leverage.
Leveraging a transaction involves the acquisition of a business through
incurring indebtedness for a portion of the purchase price of that business,
which is secured by the assets of the business acquired. One method by which
leverage may be used is by locating an operating business available for sale and
arrange for the financing necessary to purchase such business.
Leveraging a transaction would involve significant risks due to the fact
that the borrowing involved in a leveraged transaction will ordinarily be
secured by our combined assets and the business to be acquired. If the combined
enterprises are not able to generate sufficient revenues to make payments on the
debt incurred to acquire the business, the lender would be able to exercise the
remedies provided by law or by contract, and foreclose on substantially all of
our assets. Consequently, our participation in a leveraged transaction may
significantly increase our risk of loss. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as during periods
of lower interest rates because the investment in the business held on a
leveraged basis will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing.
The likelihood of us obtaining a conventional bank loan for a leveraged
transaction would depend largely on the business being acquired and its
perceived ability to generate sufficient revenues to repay the debt. Generally,
businesses suitable for leveraging are limited to those with income-producing
assets that are either in operation or can be placed in operation relatively
quickly. We cannot predict whether it will be able to locate any such business.
As a general matter, it may be expected that we will have few, if any,
opportunities to examine businesses where leveraging would be appropriate.
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Even if we are able to locate a business where leveraging techniques may
be used, financing for the acquisition may not be available to us or, if
available, on terms acceptable to us. Lenders from which we may obtain funds for
purposes of a leveraged buy-out may impose restrictions of the future borrowing,
dividend, and operating policies. It is not possible at this time to predict the
restrictions, if any, which lenders may impose or the impact on us.
Agreements.
Outstanding loan
We entered into three loan agreements with Millennium Holdings dated
September 24, 1999, October 6, 1999 and January 21, 2000, in the amount of
$10,000, $10,000 and $20,000, respectively, for a period ending December 24,
1999, January 6, 2000 and January 21, 2001 respectively. Pursuant to a
subsequent agreement with Millennium, Millennium has agreed to extend the terms
of the two $10,000 Notes one year from the date of issue, without interest.
Rescission Agreement
On November 28, 1999, we entered into a rescission agreement to rescinded
an exchange agreement we entered into with Typereader, Ltd., an Israeli
corporation. We entered into the exchange agreement with Typereader on July 2,
1999, for the exchange of all the issued and common stock of Typereader for
shares of our common stock and cash consideration in the amount of $250,000.
As a result, the exchange agreement, dated July 22, 1999, between
Typereader and us has no further force or effect, with the exception of the
obligations of both parties to return the shares exchange under the exchange
agreement and the obligation by Typereader to return certain cash consideration
paid by us for the Typereader shares. Both parties have returned the shares;
however, Typereader has agreed to return $200,000 of the original $250,000
advance paid by us in four installments, the first which was paid on December
13, 1999, in the amount of $25,000, $60,000 in May 2000 and the balance in the
amount of $115,000 to be paid in two installments as follows: $65,000 on or
before November 28, 2000; and $50,000 on or before March 28, 2001, without
recourse to the shareholders of Typereader.
Governmental regulation.
It is impossible to predict the government regulation, if any, to which we
may be subject until we have acquired an interest in a business. The use of
assets or conduct of businesses which we may acquire could subject us to
environmental, public health and safety, land use, trade, or other governmental
regulations and state or local taxation. In selecting a business in which to
acquire an interest, management will endeavor to ascertain, to the extent of our
limited resources, the effects of such government regulation on our prospective
business. In certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be possible to
predict with any degree of accuracy the impact of government regulation. The
inability to ascertain the effect of government regulation on a prospective
business activity will make the acquisition of an interest in such business a
higher risk.
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Competition.
We will be involved in intense competition with other business entities,
many of which will have a competitive edge over us by virtue of their more
substantial financial resources and prior experience in business. Until such
time as we acquire a business - we cannot determine our competition. We may not
be successful in obtaining suitable investments.
Employees.
We currently have no employees. Our executive officer, who has agreed to
defer his compensation for his time will devote only part of his time to our
affairs. Our management expects to use consultants, attorneys, and accountants
as necessary, and does not anticipate a need to engage any full-time employees
so long as it is seeking and evaluating prospective businesses. The need for
employees and their availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business industry. We are
currently not seeking a business and do not intend to do so until our
registration, for which this prospectus forms a part, is declared effective.
Facilities.
Our headquarters are currently located in Manhattan, New York, consisting
of approximately 200 square feet. We are under no obligation to pay rent on the
use of this office space pursuant to an oral agreement with the lessor. We
believe that this facility is adequate for current operations.
Legal Proceedings.
On September 23, 1999, Communication TeleSystems International doing
business as World Change Communication made an arbitration claim against us
before the JAM arbitration panel located in California for $300,000. The
complaint alleges that by mistake, Communication TeleSystems delivered to us two
checks, each in the amount of $150,000, for a total of $300,000. Subsequently, a
judgment was entered against us in the amount of $300,000 plus pre-judgment
interest retroactive to September 1999. The judgment and accrued interest have
been included in accrued expenses in the audited financial statement for the
period ending December 31, 1999, and the unaudited financial statements for the
six months ending, June 30, 2000, which are included in this registration
statement.
On December 10, 1999, Jeffrey Namer brought an action against us based on
an alleged failure by us to allow Mr. Namer to sell 310,000 shares of our common
stock. Mr. Namer is seeking compensatory damages in the amount of $3,000,000 and
punitive damages in the amount of $10,000,000. We believe Mr. Namer's claim is
without merit and we intend to vigorously oppose it.
The U.S. Securities and Exchange Commission has commenced an investigation
regarding, among other things, statements made by certain persons or entities in
connection with the offer or sale of Americom's securities.
Americom is cooperating with the Commission in its investigation. This
investigation is ongoing.
AVAILABLE INFORMATION
We have filed with the commission a registration statement on Form SB-2
under the Securities Act, with respect to the common stock offered for resale by
this prospectus. In this prospectus we refer to that registration statement,
together with all amendments, exhibits and schedules to that registration
statement, as the registration statement. This prospectus, which is part of the
registration statement, omits certain information, exhibits, schedules and
undertakings set forth in the registration statement. For further information
with respect to us and the securities offered by this prospectus, reference is
made to the registration statement. Statements contained in this prospectus
concerning a
15
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document filed as an exhibit to the registration statement is not necessarily
complete and, in each instance, reference is made to the document filed as an
exhibit to the registration statement, each statement being qualified in all
respects by this reference.
The registration statement and other information may be read and copied at
the commission's Public Reference Room at, 450 Fifth Street, NW, Room 1024,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the commission at 1-800-SEC-0330. The
commission maintains a web site at http://www.sec.gov that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the commission.
We are not currently a reporting company under the Securities and Exchange
Act of 1934, and therefore have not filed any reports with the commission.
Simultaneously with the commission's declaration that this prospectus is
effective, we will be registered under the Exchange Act. Under the Exchange Act,
we will furnish our stockholders with annual reports containing audited
financial statements reported on by independent auditors and make available
quarterly reports containing unaudited financial information for the first three
quarters of each fiscal year.
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MANAGEMENT
Directors and Officers
The following table sets forth certain information concerning our
directors and officer as of November 3, 2000:
Name Age Position
---- --- --------
Dominick Zappia 36 President, Secretary and
Treasurer
Ael Apelboim 35 Director
Dominick Zappia is our President, Secretary and Treasurer. He has served in this
position since May of 1999. In 1990, Mr. Zappia was part of an overall
management team responsible for downsizing its information systems from IBM
mainframes to LAN and SQL, servers at ASCAP. From 1992 to 1997, he was
responsible for the management of business analysis, business process modeling,
software, and information systems architecture projects at International Fund
Administration. In 1997 to 1998, he was registered as a lead analyst at the firm
Energex Introducing Brokers. From November 1998 through May 1999, Mr. Zappia
worked at Neovision Inc. as a chief consultant and lead product developer. Mr.
Zappia is currently working as a freelance business consultant. Mr. Zappia
attended the State University of New York at Cortland from 1982 to 1987.
Ael Apelboim is a member of our board of directors and is major
shareholder. He has served in this capacity since July of 1998. Since March of
1993 Mr. Appleboim has been a partner in the firm of Sutra Ltd., an Israeli
company engaged in property and real estate development.
Certain conflicts of interest may exist between us and our director, Ael
Apelboim due to the fact that he is employed full-time in other endeavors.
Moreover, our director owns approximately 44.5% of the outstanding shares of our
common stock. Our sole officer currently does not own any of our shares.
Accordingly, our director will possess substantial control over our operations.
This control may allow him to amend corporate filings, elect all of our board of
directors, and substantially control all matters requiring approval by our
stockholders, including approval of significant corporate transactions.
Compensation of Directors
Our directors are elected to serve until the next annual meeting of the
stockholders and until their successors have been duly elected and qualified.
Directors do not receive compensation for attendance at meetings of the board of
directors, but will be reimbursed for certain expenses in connection with
attendance at board meetings.
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EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of our chief executive officer and each of our other most highly
compensated executive officers whose aggregate salary, bonus and other
compensation exceeded $100,000 during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other
Annual Restricted Securities
Name and Compen- Stock Underlying LTIP All Other
Principal Position Year Salary Bonus sation Award(s) Options\SARs Payouts Compensation
------------------ ---- ------ ----- ------ -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dominick Zappia(1) 1999 $64,000 -0- -0- -0- -0- -0- -0-
Mary Ellen TeFarikis(2) 1999 $30,031 -0- -0- -0- -0- -0- $33,095(3)
</TABLE>
1. Pursuant to the terms of a deferred compensation agreement, Mr.
Zappia has agreed to defer his compensation for a ten month period
commencing January, 1, 2000, until such time as we raise in a
private placement of equity financing proceeds of at least
$1,000,000. The deferred compensation has been included in
operations and accrued expenses in the unaudited financial
statements for the six months ended, June 30, 2000, which are
included in this registration statement.
2. Ms. TeFarikis is no longer employed by us as of May 1999.
3. Health insurance premiums paid on behalf of Ms. TeFarikis by the
Company.
Limitations of liability and indemnification of directors and officers.
Our certificate of incorporation, as amended, and bylaws, as amended,
limit the liability of directors and officers to the maximum extent permitted by
Florida law. We 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, if that person is or was a director,
officer, employee or agent of us or serves or served any other enterprise at our
request. However, the certificate does not eliminate or limit the liability of a
director for any of the following reasons:
o breach of the directors' duty of loyalty to us or our stockholders;
o acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law;
o the unlawful payment of a dividend or unlawful stock purchase or
redemption; and any transaction from which the director derives an
improper personal benefit.
We intend to purchase and will maintain directors and officers' insurance
in the amount of $1,000,000. This insurance will insure directors against any
liability arising out of the director's status as our director, regardless of
whether we have the power to indemnify the director against the liability under
applicable law.
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We have been advised that it is the position of the commission that
insofar as the indemnification provisions referenced above may be invoked to
disclaim liability for damages arising under the Securities Act, these
provisions are against public policy as expressed in the Securities Act and are,
therefore, unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of November 3, 2000, the number and
percentage of outstanding shares of common stock beneficially owned by each
person who beneficially owns:
o more than 5% of the outstanding shares of our common stock;
o each of our officers and directors; and
o all of our officers and directors as a group.
Except as otherwise noted, the persons named in this table, based upon
information provided by these persons, have sole voting and investment power
with respect to all shares of common stock owned by them. Unless otherwise
indicated, the address of each beneficial owner is c/o Americom Networks
International, Inc. 17 State Street, 5th Floor New York, New York 10004.
% Beneficially % Beneficially
Name and Address of Number of Shares Owned Before Owned After
Beneficial Owner Beneficially Owned Offering Offering
------------------- ------------------ -------------- --------------
Dominick Zappia 0 0 0
Ael Apelboim 2,200,000 44.5% 44.5%
All Officers and Directors
as a Group (2 persons) 2,200,000 44.5% 44.5%
* Less than 1%
To our knowledge, none of the selling stockholders has had any position with,
held any office of, or had any other material relationship with us.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Percentage calculations are based upon
4,946,227 shares of our common stock outstanding as of October 10, 2000. We will
not receive any of the proceeds from the sale of our selling stockholders'
shares. We believe, based on information supplied by the selling stockholders,
that each of them has sole voting and investment power with respect to the
shares of common stock.
19
<PAGE>
CERTAIN TRANSACTIONS
We entered into an employment agreement dated May 25, 1998, pursuant to
which we were to pay our former president, Mary Ellen TeFarikis, a base salary
of $104,000 per annum commencing May 25, 1998. The employment agreement calls
for additions to the base salary of $25,000 per annum for each additional
commercially usable linkage established by TeFarikis. There is a cap of $260,000
on total compensation for a year. Pursuant to the terms of the agreement, Ms.
TeFarikis also received 100,000 shares of our common stock subject to continued
employment with us until June 1, 1999, otherwise, we are entitled to purchase
the 100,000 shares from the employee for $100. Ms. TeFarakis employment with us
was terminated in May 1999. Pursuant to the terms of the employment agreement,
we repurchased the 100,000 shares of common stock owned by Ms. TeFarakis for
$100. We believe that we have no further obligation under the terms of the
employment agreement.
Pursuant to the terms of a deferred compensation agreement, dated February
4, 2000, Mr. Zappia has agreed to defer his compensation for the period
commencing January 1, 2000 and ending October 31, 2000, or until such time as we
raise in a private placement of equity financing proceeds of at least
$1,000,000. The deferred compensation has been included in operations and
accrued expenses in the unaudited financial statements for the six months ended,
June 30, 2000, which are included in this registration statement.
20
<PAGE>
DESCRIPTION OF SECURITIES
The following section does not purport to be complete, and is qualified in
all respects by reference to the detailed provisions of our certificate of
incorporation and by-laws, copies of which have been filed with our registration
statement of which this prospectus forms a part.
Our authorized capital stock consists of 50,000,000 shares of common
stock, $.001 par value. As of October 10, 2000, 4,946,227 shares of common stock
were issued and outstanding. As of this date, there were 13 record holders of
our common stock. We are not authorized to issue preferred stock.
Common Stock.
Our shares are currently listed on the Pink Sheets. We intend to list our
the common stock on the over the counter bulletin board. Shares of our common
stock are entitled to one vote per share, either in person or by proxy, on all
matters that may be voted upon by the owners of our shares at meetings of our
stockholders. There is no provision for cumulative voting with respect to the
election of directors by the holders of common stock. Therefore, the holders of
more than 50% of our shares of outstanding common stock can, if they choose to
do so, elect all of our directors. In this event, the holders of the remaining
shares of common stock will not be able to elect any directors.
The holders of common stock:
o have equal rights to dividends from funds legally available
therefore, when and if declared by our board of directors;
o are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; and
o do not have preemptive rights, conversion rights, or redemption of
sinking fund provisions.
The outstanding shares of our common stock are duly authorized, validly
issued, fully paid and nonassessable.
TRANSFER AGENT
Interwest Transfer Company is the transfer agent and registrar for our
shares of our common stock.
SELLING STOCKHOLDERS
The registration statement, of which this prospectus forms a part, relates
to our registration, for the account of the selling stockholders, of an
aggregate of 171,227 shares of common stock.
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 stockholders' shares, a combination of these methods of
sale, or otherwise. Sales may be made at fixed prices which may be changed, at a
market prices prevailing at the time of sale, or at negotiated prices.
21
<PAGE>
The selling stockholders may effect the 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. These 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 which 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 these sales might be deemed to be underwriters within the meaning of
Section 2(11) of the Securities Act. Any commission they receive and any profit
upon the resale of the 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.
The following table sets forth information known to us regarding ownership
of our common stock by each of the selling stockholders as of March 30, 2000,
and as adjusted to reflect the sale of shares offered by this prospectus. None
of the selling stockholders has had any position with, held any office of, or
had any other material relationship with us during the past three years.
We believe, based on information supplied by the following persons, that
the persons named in this table have sole voting and investment power with
respect to all shares of common stock which they beneficially own. The last
column in this table assumes the sale of all of our shares offered in this
prospectus. Susan Adams is the sole shareholder of one of our selling
stockholders, SMS Holdings, Inc.
Common Stock Shares Owned
Names of Selling Shares Owned Prior Offered by After Offering
Stockholders to Offering Number Beneficial Owner Number
---------------- ------------------ ---------------- ------
Izchk Ficher 58,190 58,190 0
Avraham Goldberg 36,592 36,592 0
Shay Cohen 15,048 15,048 0
Jeff Bermen 7,111 7,111 0
SMS Holdings, Inc. 20,952 20,952 0
Leonard Cuku 33,334 33,334 0
22
<PAGE>
We will not receive any of the proceeds from the resale of the shares of
common stock, which are included in this registration statement, for which this
prospectus forms a part. We believe, based on information supplied by the
selling stockholders, that each of them has sole voting and investment power
with respect to the shares of common stock.
Presently, there are no plans, proposals, arrangements, or understandings
with respect to the sale or issuance of additional securities of ours prior to
the location of an acquisition or merger candidate.
After we reach an agreement for acquisition of a business, we are required
by Rule 419 to prepare and disseminate an amendment to this prospectus to all
investors, which will describe the business to be acquired.
SHARES ELIGIBLE FOR FUTURE SALE
2,525,360 of the 4,946,227 shares to be outstanding upon the completion of
the offering, will be restricted securities as defined in Rule 144. 2,354,133 of
these restricted securities have been held for more than one year as of the date
of this prospectus. Therefore, 2,354,133 of our shares may be eligible for
public sale beginning 90 days after the effective date of this prospectus in
accordance with the requirements of Rule 144.
Prior to this offering, there has been no public market for our common
stock. Future sales of substantial amounts of common stock in the public market,
or the availability of shares for sale, could adversely affect the prevailing
market price of our common stock and our ability to raise capital through an
offering of equity securities. As of the date of this prospectus, we have
approximately 13 holders of our common stock.
Upon completion of this offering, we will have 4,946,227 shares of common
stock outstanding. After the offering, 2,420,867 of the 4,946,227 shares of
common may be immediately tradeable without restriction under the Securities
Act, except for any shares purchased by an affiliate of ours, as that term is
defined in the Securities Act. Affiliates will be subject to the resale
limitations of Rule 144 under the Securities Act.
We issued the remaining 2,525,360 shares of common stock in private
transactions in reliance upon one or more exemptions contained in the Securities
Act. These shares will be deemed restricted securities as defined in Rule 144.
In general, under Rule 144, a stockholder, or stockholder whose shares are
aggregated, who has beneficially owned restricted securities for at least one
year will be entitled to sell an amount of shares within any three month period
equal to the greater of:
o 1% of the then outstanding shares of common stock, or
o the average weekly trading volume in the common stock during the
four calendar weeks immediately preceding the date on which notice
of the sale is filed with the commission, provided certain
requirements are satisfied.
In addition, our affiliates must comply with additional requirements of
Rule 144 in order to sell shares of common stock, including shares acquired by
affiliates in this offering. Under Rule 144, a stockholder who had not been our
affiliate at any time during the 90 days preceding a sale by him, would be
entitled to sell those shares without regard to the Rule 144 requirements if he
owned the restricted shares of common stock for a period of at least two years.
23
<PAGE>
LEGAL MATTERS
The validity of the common stock being offered in this prospectus will be
passed upon for us by Silverman, Collura & Chernis, P.C.
EXPERTS
Citrin Cooperman & Company, LLP, independent certified accountants, have
audited our financial statements included in this registration statement for the
years ended December 31, 1999 and 1998. Their report appears elsewhere in this
prospectus. The financial statements have been included in reliance upon that
report and upon the authority of the firm as experts in accounting and auditing.
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful. The information in this
prospectus is current only as of the date of this prospectus.
AMERICOM NETWORKS INTERNATIONAL, INC.
Until _____________, 2000 (90 days after the date of this prospectus) all
dealers that buy, sell or trade these securities, whether or not participating
in this offering, may be required to deliver a prospectus. This is in addition
to the dealers' obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
24
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 and 1998
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
TABLE OF CONTENTS
Page No.
Independent Auditors' Report 1
Financial Statements:
Balance Sheets as of December 31, 1999 and 1998 and
June 30, 2000 (unaudited) 2
Statements of Operations and Accumulated Deficit for
the years ended December 31, 1999 and 1998 and the
three and six months ended June 30, 2000 (unaudited) 3
Statements of Stockholders' Equity (Deficit) for
the years ended December 31, 1999 and 1998 and the
six months ended June 30, 2000 (unaudited) 4
Statements of Cash Flows for the years ended
December 31, 1999 and 1998 and the six months ended
June 30, 2000 (unaudited) 5
Notes to Financial Statements 6-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Americom Networks International, Inc.
We have audited the accompanying balance sheets of Americom Networks
International, Inc. as of December 31, 1999 and 1998, and the related statements
of operations and accumulated deficit, stockholders' equity (deficit) and cash
flows for the years 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Americom Networks
International, Inc. as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has a working capital deficiency,
stockholders' deficit and no current source of revenue. This raises substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 8. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
CITRIN COOPERMAN & COMPANY, LLP
------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS
March 31, 2000
1
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
June 30, --------------------------
2000 1999 1998
---------- ---------- ----------
ASSETS (Unaudited)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 12,300 $ 7,027 $ 45,886
Receivable, current portion 115,000 125,000
Prepaid expenses 28,232
Other current assets 165 6,017
---------- --------- ----------
Total current assets 127,300 132,192 80,135
---------- --------- ----------
Property and equipment:
At cost - net of accumulated depreciation
of $94,453 in 1998 346,858
---------- --------- ----------
Other assets:
Security deposits 109,567
Receivable - net of current portion 50,000
Organization costs net of accumulated
amortization of $1,341 in 1998 14,751
---------- --------- ----------
Total other assets 50,000 124,318
---------- --------- ----------
TOTAL ASSETS $ 127,300 $ 182,192 $ 551,311
========== ========== ==========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Current liabilities:
<S> <C> <C> <C>
Accounts payable, accrued expenses
and sundry liabilities $ 427,851 $ 416,106 $ 185,789
Loans payable 40,000 20,000 251,138
---------- --------- ----------
Total current liabilities 467,851 436,106 436,927
---------- --------- ----------
Stockholders' equity (deficit):
Common stock - par value $.001 per share
authorized 50,000,000 shares; issued and
outstanding 5,185,000 shares in 1998
and 4,946,227 in 1999 4,946 4,946 5,185
Additional paid in capital 2,001,801 2,001,801 1,027,725
Accumulated deficit (2,347,298) (2,260,661) (918,526)
---------- --------- ----------
Total stockholders' equity (deficit) (340,551) (253,914) 114,384
---------- --------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 127,300 $ 182,192 $ 551,311
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30, Years Ended December 31,
---------------------------- ------------------------ ----------------------------
2000 1999 2000 1999 1999 1998
---------- ----------- --------- ---------- ----------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Revenue - discontinued operations $ $ 103,924 $ $ 233,185 $ 236,685 $ 2,415
Direct expenses 160,789 505,824 572,913 314,253
---------- ---------- ----------- ---------- ----------- ----------
Direct loss (56,865) (272,639) (336,228) (311,838)
---------- ---------- ----------- ---------- ----------- ----------
Operating expenses:
Selling, general and administrative 48,392 168,365 86,637 327,766 585,585 439,104
Depreciation and amortization 46,589 89,624 101,693 65,794
Loss on write down/sale of assets 12,506 12,506 317,149 96,667
---------- ---------- ----------- ---------- ----------- ----------
Total operating expenses 48,392 227,460 86,637 429,896 1,004,427 601,565
---------- ---------- ----------- ---------- ----------- ----------
Loss before other income
and provision for taxes (48,392) (284,325) (86,637) (702,535) (1,340,655) (913,403)
Other income 22 380 380 577
---------- ---------- ----------- ---------- ----------- ----------
Loss before provision for taxes (48,392) (284,303) (86,637) (702,155) (1,340,275) (912,826)
Provision for taxes 1,060 1,860 700
---------- ---------- ----------- ---------- ----------- ----------
NET LOSS $ (48,392) $ (284,303) $ (86,637) $ (703,215) $(1,342,135) $ (913,526)
========== ========== =========== ========== =========== ==========
Net loss per share $ (0.10) $ 10.05 $ (0.02) $ (0.13) $ (0.26) $ (0.28)
========== ========== =========== ========== =========== ==========
Weighted average shares outstanding 4,946,227 5,344,715 4,946,227 5,243,817 5,101,943 3,245,471
========== ========== =========== ========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
AMERICOM NETWORKS INTERNATIONAL LTD.
STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Common Stock Additional
------------------------ Paid In Accumulated
Shares $ Capital Deficit Total
---------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance - January 1, 1998 $ $ $ (5,000) $ (5,000)
Shares issued for initial
capitalization 5,000 5,000 5,000
Change in par value (4,995) 4,995
Forward split 200:1 995,000 995 (995)
Shares issued for cash 4,160,000 4,160 998,750 1,002,910
Shares issued for services 25,000 25 24,975 25,000
Net loss (913,526) (913,526)
--------- ------- ---------- ----------- -----------
Balance - December 31, 1998 5,185,000 5,185 1,027,725 (918,526) 114,384
Conversion of debt 58,190 58 305,439 305,497
Shares issued for cash 113,037 113 668,327 668,440
Return and cancellation
of shares (410,000) (410) 310 (100)
Net loss (1,342,135) (1,342,135)
--------- ------- ---------- ----------- -----------
Balance - December 31, 1999 4,946,227 4,946 2,001,801 (2,260,661) (253,914)
Net loss (unaudited) (86,637) (86,637)
--------- ------- ---------- ----------- -----------
Balance - June 30, 2000(unaudited) 4,946,227 $ 4,946 $2,001,801 $(2,347,298) $ (340,551)
========= ======= ========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30, Years Ended December 31,
------------------------- ---------------------------
2000 1999 1999 1998
----------- ----------- ------------ -----------
Operating activities: (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net loss $ (86,637) $ (703,215) $(1,342,135) $ (913,526)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 89,624 101,693 65,794
Loss on write down/sale of assets 12,506 317,149 96,667
Reduction of impairment provision 50,000
Shares issued for services 30,000
Changes in assets and liabilities:
Prepaid expenses 15,527 28,232 (28,232)
Other current assets 165 5,852 5,852 (6,017)
Security deposits 109,567 (109,567)
Accounts payable, accrued expenses and
sundry liabilities 11,745 228,336 209,277 180,789
Organization expenses (16,092)
--------- ---------- ----------- ----------
Net cash used by operating activities (74,727) (351,370) (520,365) (700,184)
--------- ---------- ----------- ----------
Investing activities:
Investment in Typereader (250,000)
Repayment from Typereader 60,000 25,000
Proceeds on sale of assets 19,200
Purchase of property and equipment (31,705) (76,433) (441,311)
--------- ---------- ----------- ----------
Net cash provided by investing activities 60,000 (31,705) (282,233) (441,311)
--------- ---------- ----------- ----------
Financing activities:
Proceeds from loan payable 20,000 20,000 251,138
Principal payments on equipment obligations (66,667)
Proceeds from issuance of common stock 695,231 722,799 1,002,910
Purchase of common stock (100)
--------- ---------- ----------- ----------
Net cash provided by financing activities 20,000 695,231 742,699 1,187,381
Increase (decrease) in cash and cash equivalents (5,273) 312,156 (38,859) 45,886
Cash and cash equivalents - beginning 7,027 45,886 45,886
--------- ---------- ----------- ----------
CASH AND CASH EQUIVALENTS - ENDING $ 12,300 $ 358,042 $ 7,027 $ 45,886
========= ========== =========== ==========
Supplemental cash flow information:
Cash paid during the period for:
Interest $ $ $ $ 1,501
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Americom Networks International, Inc. (the "Company") was
incorporated in the State of Florida on July 22, 1988 to engage
principally in the business of developing telecommunications systems
which it was marketing to high-volume users for their use or resale.
Operations for the year ended December 31, 1999 primarily represent
the activity through May 1999. Subsequent to May 1999 the Company
had discontinued operations and was winding down the business.
Operations for the year ended December 31, 1998 primarily represent
the activity from July 1, 1998. Prior to that date the Company was
inactive.
Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results
could differ from those estimates.
Property and equipment
Property and equipment is recorded at cost. Expenditures for major
additions and betterment's are capitalized. Maintenance and repairs
are charged to operations as incurred. Depreciation of property and
equipment is computed by both straight-line and accelerated methods
over the assets' estimated lives ranging from three to seven years.
Leasehold improvements are amortized over the lesser of the lease
terms or the assets' useful lives. Upon sale or retirement of plant
and equipment, the related cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in
operations.
Cash Equivalents
The Company considers highly liquid investments with original
maturities of three months or less to be cash equivalents.
Earnings Per Share
Basic and diluted loss per share is based on the average number of
shares of common stock outstanding during each period. Since the
Company has experienced net operating losses, outstanding options
and warrants to purchase common stock have an antidilutive effect.
Therefore, such options and warrants were not included in the
diluted loss per share calculation.
6
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Organization Costs
The Company incurred organization costs of $16,092 consisting of
legal fees, which were deferred and amortized by the straight-line
method over a period of sixty months in 1998. In 1999, the remaining
unamortized balance of $14,751 was written off in accordance with
SOP 98-5.
Revenue Recognition
Revenues are recognized as earned when the telecommunications are
provided.
Advertising Expenses
Advertising expenses are charged to operations in the period in
which they are incurred. Advertising expenses for the years ended
December 31, 1999 and 1998 was $12,000 and $4,930, respectively.
Note 2 - RECEIVABLES
On July 2, 1999 the Company entered into an agreement to acquire
Typereader, Ltd. ("Typereader") an Israeli corporation by exchanging
400,000 shares of the Company's common stock for all of the issued
and outstanding shares of Typereader. In addition, the agreement
provided for the Company to invest $1,500,000 in Typereader which
would be paid $250,000 upon execution of the agreement and the
balance, $1,250,000, paid in six equal quarterly installments
commencing September 1, 1999. If at any time prior to the payment in
full of the $1,500,000, the closing price of the Company's common
stock for 10 consecutive days fell below $2.00 per share then
Typereader had the option to rescind the agreement.
In November 1999 the agreement with Typereader was rescinded by the
Company. The Company is to be reimbursed $200,000 of the $250,000
originally advanced to Typereader with the balance of $50,000 being
expensed during the year ended December 31, 1999. Of the
reimbursement, $25,000 was received in 1999 and $175,000 is due in
installments as follows on or before:
May 28, 2000 $ 60,000
November 28, 2000 65,000
March 28, 2001 50,000
--------
$175,000
7
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 3 - PROPERTY AND EQUIPMENT
As at December 31, 1998 property and equipment consisted of:
Furniture and fixtures $ 4,513
Technical equipment 346,716
Computer equipment 24,722
Computer software 5,500
Telephone equipment 9,860
---------
441,311
Less: accumulated depreciation (94,453)
---------
Total $346,858
---------
At December 31, 1998 the Company recorded a loss of $50,000 on the
write down on the impairment of property and equipment.
During 1999 the Company discontinued operations and sold or
abandoned all of its property and equipment. A loss of $256,910 on
the sale and write-off of assets after a reduction of the impairment
loss of $50,000 was recorded for the year ended December 31, 1999.
Note 4 - LOANS PAYABLE
The Company obtained bridge financing under a loan payable at
December 31, 1998 which was subsequently converted to 58,190 shares
of common stock at a price of $5.25 per share or a total of
$305,497, including additional amounts of approximately $54,000,
which were loaned in January, 1999. No interest was payable on the
loan prior to the conversion.
During 1999, the Company borrowed $20,000 under two non-interest
bearing notes of $10,000 each. The notes were originally due in
December 1999 and January 2000 and were extended until September
2000 and October 2000, respectively.
Note 5 - EQUIPMENT OBLIGATION
The Company financed its acquisition of certain technical equipment
under a capital lease obligation payable in twelve monthly
installments of $33,333 per month, which includes no interest and,
maturing on October 1, 1999. The obligation was secured by the
equipment with a book value of $333,400 at December 31, 1998. The
obligation balance at December 31, 1998 is $333,333. The equipment
was terminated by the lessor subsequent to December 31, 1998 and the
Company recorded a loss of approximately $46,600 on the transactions
during the year ended December 31, 1998.
8
<PAGE>
AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 6 - COMMON STOCK
On March 1, 1998, the Company issued 5,000 shares of its $1.00 par
value common stock for services of $5,000.
On May 5, 1998 the State of Florida approved the Company's restated
articles of Incorporation, which increased its capitalization from
7,500 common shares to 50,000,000 common shares. The par value was
changed from $1.00 to $.001.
On May 5, 1998 the Company forward split its common stock 200:1 thus
increasing the number of outstanding common shares from 5,000 shares
to 1,000,000 shares.
On June 2, 1998 the Company issued 2,910,000 shares of its $.001 par
value common stock at $.001 per share for cash of $2,910. Also on
the same date, the Company completed a private placement of
1,000,000 shares at $.25 per share or $250,000.
On July 8, 1998 warrants were exercised at $3.00 per share for
250,000 shares of its $.001 par value common stock for cash of
$750,000.
On October 1, 1998, 25,000 shares of its $.001 par value common
stock was issued to the one of the members of the Company's board of
directors as compensation at a value of $1.00 per share.
During 1999, 79,704 shares were issued for cash at $5.25 per share
totaling $418,440 and 33,333 shares were issued for cash at $7.50
per share totaling $250,000.
The Company repurchased 100,000 shares for $100 from an officer
which were returned and canceled.
During 1999, 310,000 shares were returned to the Company by a
shareholder and canceled. The original issue price was charged to
additional paid in capital. The shareholder has filed a lawsuit
against the Company claiming that he lost a substantial amount in
not be being able to trade the securities. He seeks compensatory
damages in the amount of $3,000,000 and punitive damages in the
amount of $10,000,000. The case in the early stages of discovery and
no opinion on the ultimate outcome is available at this time.
Note 7 - COMMITMENTS AND CONTINGENCIES
Leases
The Company leased office space under a operating lease expiring in
the year 2003. The lease was terminated during 1999.
Total rent expense charged to operations for the years ended
December 31, 1999 and 1998 was approximately $147,300 and $51,100,
respectively.
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AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Consulting Agreement
Pursuant to an agreement, the Company was obligated to pay fees to a
consultant whose purpose was to provide advisory services relating
to the development and implementation of the Company's international
network. The agreement was for a one year period which would
automatically renew for successive one year periods, unless
terminated by either party. The agreement was terminated in 1999.
Total consulting expense charged to operations for the years ended
December 31, 1999 and 1998 amounted to $11,119 and $39,000,
respectively.
Employment Agreement
Pursuant to an employment agreement dated May 25, 1998, the Company
was obligated to pay compensation to its President and CEO for a
period of three years from date of the agreement at $104,000 per
year.
The employment agreement called for additions to the base salary of
$25,000 per annum for each additional commercially usable linkage
established by the employee. There was a cap of $260,000 on total
compensation for the year. The President was terminated in May 1999
and the Company feels that it is under no obligation to pay any
additional compensation under the agreement subsequent to the
termination date. The 100,000 shares of the Company's common stock
owned by the President were repurchased by the Company for $100 in
June 1999 and the shares returned and canceled. There can be no
assurance that the former President will agree to these matters or
that no litigation will result due to the termination.
On February 4, 2000 the Company entered into an agreement with its
new president whereby he agreed to defer his compensation for the
period commencing January 1, 2000 and ending October 31, 2000, or
until such time as the Company raises at least $1,000,000 in equity
financing or a private placement.
Facility Costs
Pursuant to various agreements, the Company was obligated to pay
rent, maintenance and management fees for several locations where
the Company has established telecommunication linkage. Future
minimum payments through December 31, 1999 under non-cancelable
agreements as of December 31, 1998 were $220,000. Subsequent to
December 31, 1998 the Company reduced these commitments to
approximately $84,000 and all agreements were terminated in 1999.
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AMERICOM NETWORKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note 8 - GOING CONCERN
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. At December 31,
1999 the Company has a working capital deficiency of $303,914, a
stockholders' deficit of $253,914 and no current source of revenue.
The Company's ability to continue as a going concern is dependent on
its ability to generate revenues and to obtain sufficient capital
until such time as it is able to generate revenues. The Company is
currently seeking business opportunities for acquisitions, although
it has not identified a specific business area of direction. In
order to finance an acquisition and to repay existing obligations
the Company will have to obtain financing. There can be no assurance
that the Company will be able to establish an operation, obtain
financing or will be able to continue as a going concern.
Note 9 - UNAUDITED FINANCIAL STATEMENT
The unaudited balance sheet at June 30, 2000 and the unaudited
statements of operations for the three and six months ended June 30,
2000 and 1999 and cash flows for the six months ended June 30, 2000
and 1999 have not been audited, but have been prepared in conformity
with generally accepted accounting principles as applied in the
Company's audited financial statements. In the opinion of
management, this information includes all material adjustments, of a
normal and recurring nature, necessary for a fair presentation.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee $ 71.40
OTC Filing Fee $ 2,000*
Printing and Engraving Expenses $ 10,000*
Legal Fees and Expenses $ 50,000*
Accounting Fees and Expenses $ 10,000*
Transfer Agent's Fees and Expenses $ 2,500*
Blue Sky Fees and Expenses $ 2,000*
Miscellaneous Expenses $ 2,000*
----------
TOTAL $78,571.40*
*Estimated
The Selling Stockholders will not pay any portion of the foregoing
expenses of issuance and distribution.
ITEM 25. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Americom's Certificate of Incorporation, as amended and Amended Bylaws
limit the liability of directors and officers to the maximum extent permitted by
Florida law.
Americom is planning to enter into indemnification agreements with each of
its current and future directors and officers which provide for indemnification
of, and advancing of expenses to, such persons to the greatest extent permitted
by Florida law, including by reason of action or inaction occurring in the past
and circumstances in which indemnification and the advancing of expenses are
discretionary under Florida law. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of Americom pursuant to the foregoing provisions, or
otherwise, Americom has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
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ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Common Stock.
On March 1, 1998, we issued 5,000 shares valued at $5,000 for certain
services rendered to an affiliate of ours. Subsequently, we forward split these
shares at 200 to 1 on May 5, 1998, to 1,000,000. The offering was a private
transaction exempt from registration provisions of the Securities Act of 1933,
as amended, pursuant to section 4(2) and 4(6) of the Securities Act and/or
Regulation D Rule 506 promulgated under the Securities Act.
On June 2, 1998, we issued 2,910,000 shares of our common stock in
consideration of $2,910. We also completed a private placement for the sale of
1,000,000 shares at an offering price of $0.25 per share for total proceeds of
$250,000 to accredited investors. The offering was a private transaction exempt
from registration provisions of the Securities Act of 1933, as amended, pursuant
to section 4(2) and 4(6) of the Securities Act and/or Regulation D Rule 506
promulgated under the Securities Act.
On October 1, 1998, 25,000 shares of our common stock were issued to an
affiliate of ours for services rendered in connection with certain consulting
services. The offering was a private transaction exempt from registration
provisions of the Securities Act of 1933, as amended, pursuant to section 4(2)
and 4(6) of the Securities Act and/or Regulation D Rule 506 promulgated under
the Securities Act.
Warrants.
In February 1998, we issued warrants to purchase 58,152 shares of common
stock at an exercise price of $5.25 per share exercisable before December 31,
1999 to a non-affiliate.
In June of 1998, we issued warrants to purchase 250,000 shares of our
common stock at an exercise price of $3.00 per share exercisable before December
31, 1998 to a non-affiliate. On July of 1998,the 58,152 and the 250,000 warrants
to purchase shares of our common stock were exercised by the holder of the
warrants in consideration of $750,000.
No information about Americom was given to accredited individuals, but
they were provided with the opportunity to review our corporate records. All of
the above warrants were issued pursuant to an exemption under Section 4(2) of
the Securities Act. All of the above securities were issued pursuant to an
exemption under Section 4(2) of the Securities Act or pursuant to Regulation D
of the Securities Act.
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ITEM 27. EXHIBITS
Unless noted otherwise, the exhibits mentioned below have been previously
filed.
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of Registrant, as amended
3.2* By-laws of Registrant, as amended
4.1*** Specimen certificate representing Registrant's Common
Stock
5.1*** Opinion of Silverman, Collura & Chernis, P.C. with
respect to legality of the securities of the Registrant
being registered.
10.1* Promissory note between the Company and Millennium
Holdings and related extension.
10.2* Deferred compensation agreement between the Company and
Dominick Zappia, President of the Company.
23.1*** Consent of Silverman, Collura & Chernis, P.C. (included
in Exhibit 5.1)
23.2** Consent of Citrin, Cooperman & Company, LLP.
27** Financial Data Schedule
b. Financial Statement Schedules.
* Filed by Amendment No. 1.
** Filed by Amendment No. 2
*** To be filed by Amendment
ITEM 28. UNDERTAKINGS.
(a) Rule 415 Offerings.
The undersigned issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement to:
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(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the Registration Statement; and
(iii) Includes any additional or changed material information
on the plan of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) Request for acceleration of effective date.
(1) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the issuer
of expenses incurred or paid by a director, officer or controlling person of the
issuer in the successful defense of any action, suit or proceedings) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the issuer 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 by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such court.
(2) For determining liability under the Securities Act, treat the
information in the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in the form of prospectus
file by the small business issuer under rule 424(b)(1), or (4) or 457(h) under
the Securities Act as part of this registration statement as at the time the
Commission declares it effective.
(3) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities
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offered in the registration statement, and that offering of the securities at
that time as the initial bona fide offering of those securities.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing this Form SB-2 Amendment No. 3 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of New York, State of New York, on November 3, 2000.
AMERICOM NETWORKS INTERNATIONAL, INC.
By: /s/ Dominick Zappia
---------------------------------
Dominick Zappia, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities with Americom Networks International, Inc. on the dates
indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer,
/s/ Dominick Zappia Principal Financial Officer and November 3, 2000
--------------------- Director
Dominick Zappia
Ael Apelboim Director November 3, 2000
---------------------
Ael Apelboim
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