U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
PANGAEA COMMUNICATIONS, INC.
----------------------------
(Name of Small Business Issuer in Its Charter)
DELAWARE 95-4719021
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
104 PROSPECT HILL STREET, NEWPORT, RI 02840
------------------------------------------------------------
(Address of Principal Executive Offices) (ZipCode)
(401) 848-0646
--------------
Telephone Number
Securities to be registered under Section 12(b)
of the Exchange Act:
None
Securities to be registered under Section 12(g)
of the Exchange Act:
COMMON STOCK, $0.001 PAR VALUE
------------------------------
(Title of class)
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PART I
Page
Item 1. Description of Business............................................1
Item 2. Management's Discussion and Analysis or Plan of Operation..........5
Item 3. Description of Property............................................6
Item 4. Security Ownership of Certain Beneficial Owners and Management.....6
Item 5. Executive Officers, Promoters and Control Persons..................7
Item 6. Executive Compensation.............................................8
Item 7. Certain Relationships and Related Transactions.....................8
Item 8. Description of Securities..........................................8
PART II
Item 1. Market Price of and Dividends on the Registrants Common
Equity and Other Shareholder Matters..............................9
Item 2. Legal Proceedings...................................................9
Item 3. Changes in and Disagreements with Accountants......................10
Item 4. Recent Sales of Unregistered Securities............................10
Item 5. Indemnification of Directors and Officers..........................10
PART F/S
Financial Statements..........................................................11
PART III
Item 1. Index to Exhibits....................................................12
Item 2. Description of Exhibits............................................12
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PART I
Item 1. Description of Business.
OVERVIEW
Pangaea, Communications Inc. ("Pangaea" or the "Company") is in the process
of designing, producing and marketing what Company management believes will be
the most unique and successful online memorial company to date. The first phase
of the Company's marketing will involve making people aware of the product by
utilizing independent funeral homes, mailings and telemarketing. Management
believes that a five percent (5%) penetration with the mailer is possible. This
will be supported by a strong advertising campaign that is meant to `BRAND' name
the Pangaea Logo on television, on print, and on the Internet. Management
believes it will have an edge over the competition due in part to its intent to
have higher quality work, lower cost and strategy for decreasing overhead and
programming time. The Company's initial growth strategy will include targeting
independently-owned funeral homes in major metropolitan areas, beginning in
Phoenix, Arizona. In order to stimulate industry use, the Company intends to
initially offer very high commission rates with exclusive contracts to new
clients in new markets. With the proper arrangement, having funeral homes
selling the product can cut employee, phone, and space overhead costs.
Management believes that Pangaea will become the most dominant online
memorial service in the world through the implementation of a series of unique
strategies. By aligning the Company with the extremely large group of
independent funeral homes, the product will have a great visibility during the
at-need sales time. By using mailers and telemarketing, the Company will capture
the pre-need/post-need markets. Management believes that, with the rising costs
of funerals, the increase use of cremations and the fragmentation of families
around the country/world, an online memorial from Pangaea will provide families
with an inexpensive solution to mourn the loss of a loved one.
Pangaea intends to build tools to automate most of the memorial creation
but still give it that personal touch. Also, these tools will allow for an
immediate temporary memorial to be placed on its website while the family waits
for the full memorial to be built. Management believes that its business plan
will solve the problem of finding leads to sell this service to and will create
ways in which to cut down on the already low cost of doing business.
BUSINESS
Pangaea intends to implement an easy-to-use online memorial Internet site
that will offer a way for entire families that are scattered across the world to
come together at a time of need. It will allow families to continue their
healing process far after the tragic moment has occurred. All of this in the
private comfort of their own home at anytime. Pangaea will perform an
inexpensive service in the face of rising funeral costs. Now, someone does not
need to live in the state, city or even country of the loved one to visit their
memorial and say something to them.
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Pangaea will use the proven technology of the Internet, experienced
management, and systems that are being designed specifically for conducting its
own business. There are no off-the-shelf, pre-packaged software products or
outdated management structures to hash through. There are only open minds,
powerful technology, motivation and vision to carry the company and its goals
forward. Through the use of a strong advertising campaign, mailings followed up
by phone calls, and thousands of funeral homes displaying the product,
management believes that this service will be the next best thing in the funeral
industry.
"A Celebration of Life" ----------------------- The Company's Online
Memorial will feature four different packages of memorials and several optional
add-ons. With a sound technical infrastructure, special funeral home
relationships, an innovative sales and marketing strategy, and a management team
that is second to none, Pangaea is staging itself to be a dominant force in
reshaping how we celebrate life.
With the Internet paradigm in its infancy, and Pangaea already having a
sound business plan for expanding, all that is left in order to achieve the
Company's final goals is to increase awareness of the service to the masses and
`BRAND' name Pangaea.
Innovative Features
- -------------------
GUEST OPTIONS - Pangaea will allow each memorial site to have its own set
of guest options which will include sending an email to the family to lighting a
candle in remembrance of the loved one. This will allow family and friends to
leave their mark just as someone might leave flowers at a grave stone. Aside
from leaving flowers, lighting a candle or sending an email to the family, a
guest will be able to leave their name in a guestbook with a message to the
loved one for all to see. The Company feels this will prove to be the most
popular activity for both the family and the guests. Other future options
include a forum where the family can talk to the guests through a series of
posted messages to being able to place a donation to a charity in the loved
one's name.
USER FRIENDLY INTERFACE - The interface that Pangaea intends to deploy is
the result of many revisions based on user feedback. The site will be a
comfortable combination of technology, bells and whistles and user friendliness.
Many websites are utilizing features that make it more difficult for a novice
web surfer to find their way around the site. Some of the most recent interfaces
have adopted technology that eliminates a percentage of Internet users from
accessing their site at all. The Company is sensitive to the needs and desires
of the mass public and is designing its interfaces to ensure that usability,
fast download speeds and helpful features come first.
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FAST LOADING GRAPHICS TECHNOLOGY - Pangaea is designing its website using
specialized methods for reducing the size of graphics while enhancing the image
that users see on their screens. Utilizing this process will give Pangaea an
edge on the competition and, when coupled with the advanced technology and
computer systems that the site will be built on, will put the site within the
top few percent of fast loading sites.
The Five Elements of Success
- ----------------------------
The management of the Company believes that it has determined the five most
important features to make Pangaea a success.
* Great Advertising and Marketing.
* Strong Brand Name Campaign.
* Great Penetration from Mailings and Telemarketing.
* New Service/Options Expansion Capabilities.
* Tools Development Equals Less Overhead.
At-Need Sales through Funeral Homes - Revenue Source 1
- ------------------------------------------------------
AT-NEED - The Company's website will contract with independent funeral
homes to sell the memorial to grieving families at the time of need. Cremation
has increased considerably in the funeral industry, especially in urban markets,
and with that, the cost of funerals has decreased. The funeral homes are making
less money on less costly sales. An add-on like an online memorial to already
inexpensive cremation funeral is very attractive to the funeral homes. Initial
research has indicated that many independent funeral homes would be very
interested in another option to sell.
Mailings and Telemarketing Sales - Revenue Source 2
- ---------------------------------------------------
MAILINGS - Pangaea will mail out mass flyers and information packets on
services that the Company will offer. This tactic will allow the telemarketing
side of sales an `IN' when contacting a potential customer. The mailings will
generate sales and leads in their own regard and will be an inexpensive revenue
source. It is assumed that a 3% penetration from straight mailings is very
possible.
TELEMARKETING - Although Pangaea will mail out many flyers that generate
sales, the mailings are meant for the telemarketing sales team to have an `IN'
when contacting a potential customer. Management believes that a mass mailing
followed up with a phone call to answer any questions they might have on the
service will increase the penetration of the mailing from 3% to 5% or even as
high as 8%. The call will include answering questions of the service and showing
why this service is done.
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ADVERTISING AND MARKETING STRATEGY - Pangaea believes that to truly grab as
much market share as possible, a great deal of money will need to be spent on
advertising and marketing to `BRAND' name the service. Many of the thoughts
behind this decision have been the product of long standing principals of
business and past experiences from other careers. One such example is the
general philosophy behind advertising and marketing. At the onset of the
Internet revolution, many companies believed that this magical new medium was
the beginning of a revolution in marketing, mostly associated with the expense
of reaching consumers. Through careful analysis and experience that spans back
to the beginning of the consumer awareness of the Internet, the Company's
management strongly believes that in order to attract the volume of customers
that make a business venture highly successful, a great deal of money must be
spent on wise marketing efforts. Management realizes that the Internet is
capable of helping to attract customers who might not otherwise offer their
loyal business, but the masses still respond to the age old methods of branding,
value propositions and exposure.
Pangaea believes that with its service, advertising can be done in and
around its industry to much higher degree then to the mass media. The Company is
making relationships with funeral homes to carry the service or, at least, hand
out flyers when they sell a funeral service. This will greatly increase the
Pangaea name at a fraction of the cost of traditional means. Industry magazines,
newspapers, and Infomercials are all valid mediums to get the branding Pangaea
is looking for.
CROSS PROMOTIONAL TRAFFIC AND CO-OP ADVERTISING - The only right way to
cross promote products on its future website is through relationships with
different companies. Pangaea has begun to seek a partnership with a flower
company so customers and guests are able to send flowers to a family. Likewise,
other similar products will also be totted such as religious symbols and cards.
Also, certain charities will be represented so donations to them can be make in
a loved one's name. All of these partnerships will allow for free advertising
done on the both sides as well as a percentage of the sale going to Pangaea for
handling the transaction or generating the lead.
MARKETING PROPOSALS - Pangaea staff intends to work with the leading
Internet advertising companies to create and maintain the most effective
advertising campaigns to drive traffic and potential customers to the future
website. These will be advertising agencies that are competitive and retain
their clients through one method, creating the best advertising response for the
money. Currently, experts in all forms of advertising media including Internet
Banner placement and sponsorship programs, print advertising, TV, radio, and
direct mail, are developing the advertising rollout strategies for the Pangaea
service.
PANGAEA MARKETING - Pangaea is designing its own comprehensive marketing
campaign. The corporate campaign is targeting to establish Pangaea as the
leading online memorial website on the Internet. Equally as important and
critical to the long term success of Pangaea, is the Company's effort to brand
Pangaea as a "Celebration of Life".
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HARNESSING THE POWER OF THE INTERNET - Management believes that Pangaea has
the potential to become the largest memorial in the world. Pangaea will be open
24 hours a day, 365 days a year and will be accessible by anyone regardless of
their location, their physical disposition, gender, nationality or location. It
will be capable of hosting millions of memorials that can be seen always.
Pangaea will never close because of weather, nightfall, holidays or any other
reason. It will not be effected by regional, seasonal national economies, or
politics of demographics. It is summer in the world somewhere all the time. It
is peaceful in the world somewhere all the time. The economy is good somewhere
in the world all the time. From all of these places, in all different
conditions, whether the guest is in a hotel, an airplane, or a taxi, Pangaea
will always be there to be seen.
Add-on and Option Sales - Revenue Source 3
- ------------------------------------------
ADD-ON SALES - Pangaea is designing the online memorials to be upgradeable
by guests to the site. As family and friends move about a memorial, they will be
able to upgrade or add on to the site with different options that are available.
This, of course, will need to be approved by the original purchaser of the
memorial. Add-ons that will be available to the site will include adding
pictures and text, adding a photo gallery page, adding sound and/or audio, and
adding special moving effects.
OPTION SALES - Along with guests to the site being able to add onto a
memorial, Pangaea will follow up memorial sales with another phone call to make
sure the customer is satisfied with the design and layout. Customers will then
be given a chance to add-on other options at a small discount to make the
tribute a bit more special. Add-ons that will be available to the site will
include adding pictures and text, adding a photo gallery page, adding sound
and/or audio, and adding special moving effects.
Renewal Sales - Revenue Source 4
- --------------------------------
RENEWAL SALES - An online memorial purchased at Pangaea will be active for
five years from the time of purchase. After that point, the customer will be
contacted about a renewal fee to keep the memorial up for another five years for
$50.00. Likewise, the customer will be able to place that fee towards an upgrade
to the memorial site. The fifty dollars will be basically all profit minus the
cost of contacting the customer. Allowing them to use it towards an upgrade will
be done to increase interest in the memorial again. Increased interest will mean
more traffic to Pangaea. Also, customers will be able to pay a one time fee to
keep the memorial active for twenty years for only $150 dollars and for $300
dollars will keep it active for the entirety of Pangaea.
Item 2. Management's Discussion and Analysis or Plan of Operation.
RESULTS OF OPERATIONS
The following discussion and analysis below should be read in conjunction
with the financial statements, including the notes thereto, appearing elsewhere
in this Registration Statement. For the period since inception (September 15,
1998) through December 31, 1999, during the Company's development stage, the
Company has a zero cash balance, and has generated a net loss of ($1,114).
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FINANCIAL CONDITION AND LIQUIDITY
The Company has limited liquidity and has an ongoing need to finance its
activities. To date, the Company currently has funded these cash requirements by
offering and selling its Common Stock, and has issued 1,018,800 shares of Common
Stock for net proceeds of $1,000.00. The Company expects to fund its immediate
needs through private placements of its securities and may seek a suitable
business combination.
PLAN OF OPERATION
The Company has registered a dot.com name and has determined it can begin
conducting its business with limited financing that it has arranged.
Item 3. Description of Property.
The Company's executive and administrative offices are located at 104
Prospect Hill Street, Newport, RI 02840. The Company pays no rent for use of the
office and does not believe that it will require any additional office space in
the foreseeable future in order to carry out its plan of operations described
herein.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of December 31, 1999 certain information
relating to the ownership of the common stock.
Name and Address of Amount and Nature of Percent of
Beneficial Owner (1) Beneficial Ownership (2) Class (2)
- -------------------- ------------------------ ----------
Appletree Investment Company, Ltd 1,018,800(3) 100.00%
PageOne Business Productions, LLC 109,400 10.00%
George Todt 109,400(4) 10.00%
Besty Rowbottom 109,400(4) 10.00%
James Walters 109,400(4) 10.00%
All officers and directors as a group 109,400(4) 10.00%
(3 persons)
- ------------------------
(1) Unless otherwise indicated, the address of each beneficial owner is in the
care of Pangaea Communications, Inc., 104 Prospect Hill Street, Newport, RI
02840.
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(2) Unless otherwise indicated, Pangaea believes that all persons named in the
table have sole voting and investment power with respect to all shares of
common stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities which may be acquired by such person within
60 days from the date of this registration statement upon the exercise of
options, warrants or convertible securities. Each beneficial owner's
percentage of ownership is determined by assuming all options, warrants or
convertible securities that are held by such person (but not held by any
other person) and which are exercisable or convertible within 60 days of
this registration statement have been exercised or converted. Percent of
Class (third column above) assumes a base of 375,000 shares of common stock
outstanding as of December 31, 1999.
(3) Consists of 909,400 shares held of record by Appletree Investment Company,
Ltd., an Isle of Man corporation, and 109,400 shares held of record by
PageOne Business Productions, LLC, a Delaware limited liability company, of
which Appletree is a managing member.
(4) Consists solely of 109,400 shares of common stock held by PageOne Business
Productions, LLC, a Delaware limited liability company, of which Messrs.
Todt and Walters and Appletree Investment Company, Ltd. are managing
members and Ms. Rowbottom is Vice President.
Item 5. Directors, Executive Officers, Promoters and Control persons.
The following table sets forth certain information with respect to the
directors and executive officers of Pangaea.
Name Age(1) Position
- ---- ------ --------
George Todt........................ 46 Director
James Walters...................... 47 President, Vice President
and Treasurer
Betsy Rowbottom.................... 28 Secretary
- ----------------------------
(1) The ages of Messrs. Todt and Walters and Ms. Rowbottom are listed as of
December 31, 1999.
Our director and executive officers devote such time and attention to the
affairs of Pangaea as they believe reasonable and necessary. Set forth below is
a description of the background of our director and executive officers.
GEORGE A. TODT was the President from inception until November 30, 1999. He
has been the sole director since the inception of Pangaea. Since 1996, Mr. Todt
has been a managing member of PageOne Business Productions, LLC, a Delaware
limited liability company. From 1990 to 1995, Mr. Todt was the chief executive
officer of REPCO, Inc., a worldwide designer and builder of environmental
facilities.
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JAMES WALTERS has been the President since November 30, 1999, and
Vice-President and the Treasurer of Pangaea since its inception. For more than
20 years, Mr. Walters has been engaged as a certified public accountant with the
Los Angeles, California-based firm of Kellogg & Andelson.
BESTY ROWBOTTOM became Secretary of Pangaea in June 1999. She has been
employed by PageOne since 1997 and has served as its Vice President since March
1999. From 1994 to 1997, Ms. Rowbottom served as a talent agent at HSI
Productions, a Chicago, Illinois-based video production company.
Our board of directors currently consists of one member, who serves in such
capacity for a one-year term or until his successor has been elected and
qualified, subject to earlier resignation, removal or death. The number of
directors constituting the board of directors may be increased or decreased (but
not below the minimum number required by applicable law) from time to time by
resolution of the board of directors. Our officers serve at the discretion of
the board of directors, subject to any effective contractual arrangements.
Item 6. Executive Compensation.
Consistent with our present policy, no director or executive officer of
Pangaea receives compensation for services rendered to the company. However,
these persons are entitled to be reimbursed for expenses incurred by them in
pursuit of our business objectives.
Item 7. Certain Relationships and Related Transactions.
Not Applicable.
Item 8. Description of Securities.
Common Stock
- ------------
Pangaea is authorized to issue 100,000,000 shares of common stock, par
value $0.001 per share. Holders of common stock are entitled to one vote for
each share held of record on all matters on which the holders of common stock
are entitled to vote. There are no redemption or sinking fund provisions
applicable to the common stock. The outstanding shares of common stock are, and
the common stock issuable pursuant to this prospectus will be, when issued,
fully paid and nonassessable.
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Preferred Stock
- ---------------
Pangaea is authorized to issue 8,000,000 shares of "blank check" preferred
stock, par value $0.001 per share, in one or more series from time to time with
such designations, rights and preferences as may be determined from time to time
by the Board of Directors, including, but not limited to (i) the designation of
such series; (ii) the dividend rate of such series, the conditions and dates
upon which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes or series of 1
Solution's capital stock and whether such dividends shall be cumulative or
non-cumulative; (iii) whether the shares of such series shall be subject to
redemption for cash, property or rights, including securities of any other
corporation, by Pangaea or upon the happening of a specified event and, if made
subject to any such redemption, the times or events, prices, rates, adjustments
and other terms and conditions of such redemptions; (iv) the terms and amount of
any sinking fund provided for the purchase or redemption of the shares of such
series (v) whether or not the shares of such series shall be convertible into,
or exchangeable for, at the option of either the holder or Pangaea or upon the
happening of a specified event, shares of any other class or classes or of any
other series of the same class of Pangaea's capital stock and, if provision
be made for the conversion or exchange, the times or events, prices, rates,
adjustments and other terms and conditions of such conversions or exchanges;
(vi) the restrictions, if any, on the issue or reissue of any additional
preferred stock; (vii) the rights of the holders of the shares of such series
upon the voluntary or involuntary liquidation, dissolution or winding up of 1
Solution; and (viii) the provisions as to voting, optional and/or other special
rights and preferences, if any, including, without limitation, the right to
elect one or more directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which adversely affect the
voting power or other rights of the holders of the common stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances, as
a way of discouraging, delaying or preventing an acquisition or change in
control of Pangaea. Pangaea does not currently intend to issue any shares of its
preferred stock.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
There is currently no market for Pangaea's securities. Pangaea has never
paid cash dividends on its common stock. Payment of future dividends will be
within the discretion of Pangaea's Board of Directors and will depend on,
among other factors, retained earnings, capital requirements and the operating
and financial condition of Pangaea.
Item 2. Legal Proceedings.
Pangaea is not currently a party to any pending legal proceedings.
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Item 3. Changes in and Disagreements with Accountants.
Not Applicable.
Item 4. Recent Sales of Unregistered Securities.
In March 1999, Pangaea issued 900,000 shares of common stock to Appletree
and 100,000 shares of common stock to Page One. The purchase price for these
shares was $0.001 per share. The purchases were made pursuant to a Rule 504
Private Placement Offering. There was no underwriter or placement agent involved
in the offer or sale of these securities and there was no public solicitation or
advertisement by Pangaea in connection with the offer or sale of these
securities. The foregoing issuances of common stock were exempt from
registration under of the Securities Act of 1933, as amended, pursuant to
Section 4(2) thereof.
Item 5. Indemnification of Directors and Officers.
Pangaea's Restated Certificate of Incorporation limits the liability of its
directors to Pangaea or Pangaea's stockholders for monetary damages arising from
a breach of fiduciary duty owned to Pangaea or Pangaea's stockholders to the
fullest extent permitted by the Delaware General Corporation Law.
Pangaea's Restated Certificate of Incorporation and its Bylaws provide for
the indemnification by Pangaea of each person (including the heirs, executors,
administrators, or estate of such person) who is or was a director or officer of
Pangaea to the fullest extent permitted or authorized by law, including
attorneys' fees. Section 145 of the Delaware General Corporation Law provides in
relevant part that a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
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other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Delaware law further provides that nothing
in the above-described provisions shall be deemed exclusive of any other rights
to indemnification or advancement of expenses to which any person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of Pangaea
pursuant to the above statutory provisions or otherwise, Pangaea 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.
PART F/S
The following financial statements of Pangaea Communications, Inc., a
development stage company, are contained on Pages F-1 through F-7:
REPORT OF INDEPENDENT AUDITORS, WEINBERG & COMPANY P.A., CERTIFIED
PUBLIC ACCOUNTANTS, DATED APRIL 10, 2000.
BALANCE SHEET AS OF DECEMBER 31, 1999
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD FROM SEPTEMBER 15, 1998 (INCEPTION) TO DECEMBER
31, 1999
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE PERIOD
FROM SEPTEMBER 15, 1998 (INCEPTION) TO DECEMBER 31, 1999
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD FROM SEPTEMBER 15, 1998 (INCEPTION) TO DECEMBER
31, 1999
NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Pangaea Communications, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Pangaea Communications, Inc.
(a development stage company) as of December 31, 1999 and the related statements
of operations, changes in stockholders' deficiency and cash flows for the year
then ended and for the period from September 15, 1998 (inception) to December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Pangaea Communications, Inc. (a
development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended and for the period from
September 15, 1998 (inception) to December 31, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company is a development stage company without
operations and has had accumulated operating losses of $1,114 since inception
and a working capital deficiency of $95. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 10, 2000
F-1
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PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 1999
ASSETS
TOTAL ASSETS $ -
=======
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable - related party $ 95
-------
TOTAL LIABILITIES 95
-------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value, 8,000,000 shares
authorized, none issued and outstanding -
Common stock, $.001 par value, 100,000,000 shares
authorized, 1,018,800 issued and outstanding 1,019
Accumulated deficit during development stage (1,114)
-------
TOTAL STOCKHOLDERS' DEFICIENCY (95)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ -
=======
See accompanying notes to financial statements.
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<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Year September 15, 1998
Ended December (Inception) to
31, 1999 December 31, 1999
-------------- ------------------
INCOME $ - $ -
--------- ---------
EXPENSES
Accounting fees 500 500
Bank service charge 95 95
Consulting fees - 19
Legal fees 500 500
--------- ---------
NET LOSS $ (1,095) $ (1,114)
========= =========
NET LOSS PER SHARE
BASIC AND DILUTED $ (0.0015) $ (0.0019)
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD
BASIC AND DILUTED 753,047 585,396
========= =========
See accompanying notes to financial statements.
F-3
<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 15, 1998 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock During
--------------------- Development
Shares Amount Stage Total
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Common stock issuance for services 18,800 $ 19 $ - $ 19
Net loss for the year ended December 31, 1998 - - (19) (19)
--------- --------- --------- ---------
Balance, December 31, 1998 18,800 19 (19) -
Common stock issued for cash 1,000,000 1,000 - 1,000
Net loss for the year ended December 31, 1999 - - (1,095) (1,095)
--------- --------- --------- ---------
BALANCE AT DECEMBER 31, 1999 1,018,800 $ 1,019 $ (1,114) $ (95)
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
September
For the Year 15, 1998
Ended (Inception)
December To December
31, 1999 31, 1999
---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,095) $(1,114)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock issued for services - 19
------- -------
Net cash used in operating activities (1,095) (1,095)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES: - -
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan payable - related party 95 95
Proceeds from issuance of common stock 1,000 1,000
------- -------
Net cash provided by financing activities 1,095 1,095
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS - -
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - -
------- -------
CASH AND CASH EQUIVALENTS -
- --------------------------
END OF PERIOD $ - $ -
------------- ======= =======
See accompanying notes to financial statements.
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<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Pangaea Communications, Inc. (a development stage company) ("the
Company") was incorporated in Delaware on September 15, 1998 to engage
in an internet-based business. At December 31, 1999, the Company had
not yet commenced any revenue-generated operations, and all activity
to date relates to the Company's formation, proposed fund raising and
business plan development.
The Company's ability to commence revenue-generating operations is
contingent upon its ability to implement its business plan and raise
the capital it will require through the issuance of equity securities,
debt securities, bank borrowings or a combination thereof.
(B) Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered
or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. There were no current or
deferred income tax expense or benefits due to the Company not having
any material operations for the year ended December 31, 1999.
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<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(E) Loss Per Share
Net loss per common share for the year ended December 31, 1999 and for
the period from September 15, 1998 (inception) to December 31, 1999 is
computed based upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128 "Earnings Per Share".
There were no common stock equivalents outstanding at December 31,
1999.
NOTE 2 - LOAN PAYABLE - RELATED PARTY
The loan payable - related party is a non-interest-bearing loan payable
to PageOne Business Productions, LLC arising from funds advanced to the
Company. The amount is due and payable upon demand.
NOTE 3 - STOCKHOLDERS' DEFICIENCY
The Company was originally authorized to issue 100,000 shares of
preferred stock at $.01 par value, with such designations, preferences,
limitations and relative rights as may be determined from time to time
by the Board of Directors. It was also originally authorized to issue
10,000,000 shares of common stock at $.001 par value.
The Company issued 909,400 and 109,400 common shares to Appletree
Investment Company Ltd. and PageOne Business Productions, LLC
respectively. No preferred shares have been issued as of December 31,
1999.
Management filed a restated certificate of incorporation with the State
of Delaware which increased the number of authorized common shares to
100,000,000, increased the number of authorized preferred shares to
8,000,000 and decreased the par value of the preferred shares to $.001
per share. The financial statements at December 31, 1999 give effect to
common and preferred stock amounts and par values enumerated in the
restated certificate of incorporation.
NOTE 4 - GOING CONCERN
As reflected in the accompanying financial statements, the Company has
had accumulated losses of $1,114 since inception, a working capital
deficiency of $95, and has not generated any revenues since it has not
yet implemented its business plan. The ability of the Company to
continue as a going concern is dependent on the Company's ability to
raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
The Company intends to implement its business plan and is seeking
funding through the private placement of its equity or debt securities
or may seek a combination with another company already engaged in its
proposed business. Management believes that actions presently taken
provide the opportunity for the Company to continue as a going
concern.
F-7
<PAGE>
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
- ----------- ------------
3.1 Restated Certificate of Incorporation of the
Registrant*
3.2 By-Laws of the Registrant*
27 Financial Data Schedule (incorporated herein by
reference to Registrant's Annual Report on Form 10-KSB
for the year ended December 31, 1999)
*previously filed
Item 2. Description of Exhibits
See Item 1 above.
12
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Pangaea Communications, Inc.
(Registrant)
Amendment No. 1 /s/ James Walters
Date: April 27, 2000 By: --------------------------------
James Walters
President
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