<PAGE>
Registration Number: 333-36058
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOURTH AMENDMENT
TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BLUE THUNDER CORP.
--------------------------------
(Name of small business
issuer in its charter)
Delaware 6770 06-1573316
----------------------- ---------------------------- -------------------
(State of incorporation (Primary Standard Industrial (I.R.S. Employer
or jurisdiction Classification Code Number) Identification No.)
of organization)
64-34 79th Street, Middle Village, New York, 11379 (718)326-4286
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(Address and telephone number of principal executive offices)
64-34 79th Street, Middle Village, New York, 11379 (718)326-4286
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(Address of principal place of business or intended principal place of business)
Sheila G. Corvino Esq., 811 Dorset West Road, Dorset, VT 05251 (802) 867-0112
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(Name, address, and telephone number of agent for service)
Copies to:
Sheila Corvino, Esq.
811 Dorset West Road
Dorset, Vermont 05251
Phone: (802) 867-0112
Fax: (802) 867-2468
Approximate date of proposed sale to the public: as soon as practicable
after the effective date of the registration statement and date of the
prospectus.
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Each Class of Amount Offering Aggregate Amount of
Securities Being Being Price Per Offering Registration
Registered Registered Unit (1) Price(1) Fee
-------------------------------------------------------------------------------
Shares of Common Stock
Contained in Units 2,000,000 $ 0.02 $ 40,000 $ 10.56
"A" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "A" Warrants 2,000,000 .20 400,000 105.60
"B" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "B" Warrants 2,000,000 .30 600,000 158.40
"C" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "C" Warrants 2,000,000 3.00 6,000,000 1,584.00
---------- ----------
TOTAL $7,040,000 $ 1,858.56
(1) Estimated solely for the purposes of computing the registration fee pursuant
to Rule 457.
The registrant hereby amends the 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 the registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
---- ------------- --------------------
1. Front of Registration Statement
and Outside Front Cover of
Prospectus Front of Registration
Statement and Outside
Front Cover of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus Inside Front Cover Page
of Prospectus and Outside
Front Cover Page of
Prospectus
3. Summary Information and Risk
Factors Prospectus Summary;
Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering
Price Front Cover Page;
Plan of Distribution
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers,
Promoters and Control Persons Management
<PAGE>
11. Security Ownership of Certain
Beneficial Owners and Management Principal Stockholders
12. Description of Securities Description of Securities
13. Interest of Counsel Legal Matters
14. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities Statement as to
Indemnification
15. Organization Within Last
Five Years Management; Certain
Transactions
16. Description of Business Proposed Business
17. Management's Discussion
and Analysis or Plan of
Operation Proposed Business -
Plan of Operation
18. Description of Property Proposed Business
19. Certain Relationships and Related
Transactions Certain Transactions
20. Market for Common Stock and
Related Stockholder Matters Front Cover Page;
Market for Our
Common Stock;
Plan of Distribution
21. Executive Compensation Remuneration
22. Financial Statements Financial Statements
23. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure Not Applicable
<PAGE>
Subject to completion: Dated December 11, 2000
PROSPECTUS
Initial Public Offering
BLUE THUNDER CORP.
2,000,000 UNITS OF COMMON STOCK
$.02 PER UNIT
Blue Thunder Corp. is a start-up company organized in the State of Delaware
to pursue a business combination.
We are offering these units through our president, Edward Reilly without
the use of a professional underwriter. We will not pay commissions on unit
sales.
This offering will expire 90 days from the date of this prospectus.
This is our initial public offering; and no public market currently exists
for our shares. The offering price may not reflect the market price of our units
after this offering.
-------------------
This investment involves a high degree of risk. You should purchase shares
only if you can afford a complete loss. See "Risk Factors" beginning on page 4.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------------
Offering Information
Per unit Total
-------- -----------
Initial public offering price $ .02 $ 40,000.00
Underwriting discounts/commissions (1) $ .00 $ .00
Estimated offering expenses (1) $ .00 $ .00
Net offering proceeds to
Blue Thunder Corp. $ .02 $ 40,000.00(1)
-----------------------
(1) Does not include offering costs, including filing, printing, legal,
accounting, transfer agent and escrow agent fees estimated at $25,500
which we paid from funds in our treasury.
The date of this prospectus is December11, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
Prospectus Summary.............................................
Limited State Registration.....................................
Summary Financial Information..................................
Risk Factors...................................................
Your Rights and Substantive Protection Under Rule 419..........
Dilution.......................................................
Use of Proceeds................................................
Capitalization.................................................
Proposed Business..............................................
History and organization..................................
Operations................................................
Evaluation of business combinations ......................
Business combinations.....................................
Finding a business........................................
Regulation................................................
Employees.................................................
Facilities................................................
Plan of Operation..............................................
Related Party Transactions.....................................
Description of Securities......................................
Common stock..............................................
Preferred stock...........................................
Redeemable common stock purchase warrants.................
Future financing..........................................
Reports to stockholders...................................
Dividends.................................................
Transfer agent............................................
Shares Eligible for Future Sale................................
Management.....................................................
Information...............................................
Conflicts of interest.....................................
Remuneration..............................................
Management involvement....................................
Prior blank check company involvement.....................
Management control........................................
Statement as to Indemnification................................
Principal Stockholders.........................................
Certain Transactions...........................................
Where You Can Find More Information............................
Market for our Common Stock....................................
Plan of Distribution...........................................
Conduct of thus offering..................................
Arbitrary determination of offering price.................
Possible lack of market for your shares...................
Method of subscribing.....................................
Expiration date...........................................
Legal Proceedings..............................................
Legal Matters..................................................
Experts........................................................
Financial Statements...........................................
2
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and, if given or made, you must not rely on such information or
representations as having been authorized by us. This prospectus does not
constitute an offer to sell or a solicitation of any offer to buy any securities
in any jurisdiction in which such offer or solicitation would be unlawful. The
delivery of this prospectus shall not under any circumstances create any
implication that there has not been any change in our affairs since the date
hereof; however, any changes that may have occurred are not material to an
investment decision. In the event there have been any material changes in our
affairs, we will file a post-effective amendment. We reserve the right to reject
any order, in whole or in part, for the purchase of any of the securities
offered.
Until 90 days after the date when the funds and securities are released
from the escrow account, all dealers effecting transactions in the shares or
warrants constituting the units, whether or not participating in this
distribution, may be required to deliver a prospectus.
PROSPECTUS SUMMARY
We are a blank check company subject to Rule 419 under the Securities Act
of 1933. We were organized as a vehicle to acquire or merge with an operating
business. We have no present plans, proposals, agreements, arrangements or
understandings to acquire or merge with any specific business or company nor
have we identified any specific business or company for investigation and
evaluation for a merger with us.
Since our organization, our activities have been limited to the sale of
initial shares for our organization and our preparation in producing a
registration statement and prospectus for our initial public offering. We will
not engage in any substantive commercial business following this offering. Our
address is 64-34 79th Street, Middle Village, New York, 11379 and our telephone
number is (718)326-4286.
The Offering
------------
Securities offered 2,000,000 units each consisting of one share
of our common stock, $0.001 par value, one
class A warrant, one class B warrant and
one class C warrant. (1)
Offering price $.02 per unit.
Offering proceeds $40,000
Expiration date The offering will expire 90 days from the
date of this prospectus.
Common stock outstanding
prior to the offering 2,550,000 shares
Common stock to be
outstanding after the offering 4,550,000 shares
Warrants to be outstanding
after the offering 2,000,000 class A warrants;
2,000,000 class B warrants;
2,000,000 class C warrants.
-----------------
(1) The warrants are exercisable into shares of our common stock until two
years after the date of this prospectus as follows:
Class Exercise price Net proceeds from exercise
Class A $ .20 per share $ 400,000
Class B $ .30 per share $ 600,000
Class C $ 3.00 per share $ 6,000,000
3
<PAGE>
Limited State Registration
--------------------------
Initially, the only state in which our securities may be sold is New York
State. Therefore, you may only resell your shares or warrants in New York State.
In addition, we may sell units to investors who reside in foreign countries. In
that event, we will register or qualify the sale of our units in such country
unless an exemption from registration or qualification is available. We intend
to offer our securities to residents of the Province of British Columbia,
Canada. In British Columbia, the sale to fewer than 50 residents is exempt from
registration.
SUMMARY FINANCIAL INFORMATION
The following is a summary of our financial information and is qualified in
its entirety by our audited financial statements.
From February 2, 2000
to September 30, 2000
-----------------------
Statement of Income Data:
Net Sales $ 0
Net profit (Loss) $ (18,095)
Net Loss Per Share $ (0.01)
Shares Outstanding at 09/30/00 2,550,000
As of
September 30, 2000
-----------------
Balance Sheet Data
Cash $ 7,405
Working Capital $ 7,405
Total Assets $ 7,405
Long Term Debt $ 0
Total Liabilities $ 0
Total Shareholders' Equity $ 7,405
4
<PAGE>
RISK FACTORS
You may not have access to your funds for up to 18 months from the date of this
--------------------------------------------------------------------------------
prospectus; if returned you will not get interest on your funds.
----------------------------------------------------------------
If we are unable to locate an acquisition candidate meeting our acquisition
criteria, you will have to wait 18 months from the date of this prospectus
before a proportionate portion of your funds is returned, without interest. You
will be offered return of your proportionate portion of the funds held in escrow
only upon the reconfirmation offering required to be conducted upon execution of
an agreement to acquire an acquisition candidate which represents 80% of the
maximum offering proceeds, including the total exercise price of the class A and
class B warrants.
If a sufficient number of investors do not reconfirm their investments, the
--------------------------------------------------------------------------------
business combination will not be closed and you will not be issued your
--------------------------------------------------------------------------------
securities.
-----------
A business combination with an acquisition candidate cannot be closed
unless, for the reconfirmation offering required by Rule 419, we can
successfully convince you and a sufficient number of investors representing 80%
of the maximum offering proceeds to elect to reconfirm your investments. If,
after completion of the reconfirmation offering, a sufficient number of
investors do not reconfirm their investment, the business combination will not
be closed. In that event, none of the securities held in escrow will be
distributed and the funds will be returned to you on a proportionate basis.
Management does not devote full time to the company and we may end up missing a
--------------------------------------------------------------------------------
target opportunity.
-------------------
Our directors and officers are, in their individual capacities, officers,
directors, controlling stockholders and/or partners of other entities engaged in
a variety of businesses. Edward Reilly, our president/treasurer and a director,
and Bridget Vasile, our secretary and a director, are engaged in
outside business activities, and the amount of time each of them will devote to
our business will only be about five (5) to twenty (20) hours per month. Each
officer and director has a potential conflict of interest including allocation
of time between us and such other business entities. As a result of the lack of
time allocated to our company, we may miss the opportunity to identify and
acquire a target company.
5
<PAGE>
YOUR RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
Deposit of offering proceeds and certificates
---------------------------------------------
Rule 419 requires that offering proceeds, after deduction for underwriting
commissions, underwriting expenses and dealer allowances, if any, and
certificates representing the securities purchased by you and other investors in
this offering, be deposited into an escrow or trust account governed by an
agreement which contains certain terms and provisions specified by Rule 419.
Under Rule 419, the funds will be released to us and the securities will be
released to you only after we have met the following three basic conditions:
-- First, we must execute an agreement for the acquisition of a business or
asset that will constitute our business and for which the fair value of the
business or net assets to be acquired represents at least 80% of the
maximum offering proceeds, but excluding underwriting commissions,
underwriting expenses and dealer allowances, if any.
-- Second, we must file a post-effective amendment to our registration
statement which includes the results of this offering including, but not
limited to, the gross offering proceeds raised, the amounts paid for
underwriting commissions, underwriting expenses and dealer allowances, if
any, amounts disbursed to us and amounts remaining in the escrow account.
In addition, we must disclose the specific amount, use and appropriation of
funds dispersed to us to date, including, payments to officers, directors,
controlling shareholders or affiliates, specifying the amounts and purposes
of these payments, and the terms of a reconfirmation offer that must
contain conditions prescribed by Rule 419. The post-effective amendment
must also contain information regarding the acquisition candidate and its
business, including audited financial statements.
-- Third, we must mail to each investor within five business days of a
post-effective amendment, a copy of the prospectus contained in the
registration statement.
-- After we submit a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition is closed,
the escrow agent can release the funds to us and the certificates to you
and our investors.
Accordingly, we have entered into an escrow agreement with State Street
Corporation which provides that:
-- The proceeds are to be deposited promptly upon receipt into the escrow
account maintained by the escrow agent. Rule 419 permits 10% of the funds
to be released to us prior to the reconfirmation offering, and we do intend
to release these funds. The funds and stock dividends, if any, are to be
held for the sole benefit of the investor and can only be invested in bank
deposit, money market mutual funds or federal government securities or
securities for which the principal or interest is guaranteed by the federal
government.
6
<PAGE>
-- All securities issued in this offering and any other securities issued to
investors as a result of their ownership of the offered securities,
including securities issued as a result of stock splits, stock dividends or
similar rights are to be deposited directly into the escrow account
promptly upon issuance. Your name must be included on the stock
certificates or other documents evidencing the securities. The securities
held in the escrow account are to remain as issued, and are to be held for
your sole benefit. You retain the voting rights, if any to the securities
held in your name. The securities held in the escrow account may neither be
transferred or disposed of nor any interest created in them other than by
will or the laws of descent and distribution, or under a qualified domestic
relations order as defined by the Internal Revenue Code of 1986 or Table 1
of the Employee Retirement Income Security Act.
-- Warrants, convertible securities or other derivative securities relating to
securities held in the escrow account may be exercised or converted in
accordance with their terms, provided that certificates representing the
securities received upon exercise or conversion, together with any cash or
other consideration paid for the exercise or conversion, be promptly
deposited into the escrow account.
Prescribed acquisition criteria
-------------------------------
Rule 419 requires that, before the funds and the securities can be
released, we must first execute an agreement to acquire a candidate meeting
certain specified criteria. The agreement must provide for the acquisition of a
business or assets for which the fair value of the business represents at least
80% of the maximum offering proceeds. The agreement must include, as a
precondition to its closing, a requirement that the number of investors
representing 80% of the maximum offering proceeds, including the total exercise
price of the warrants, must elect to reconfirm their investment. Thus, for
purposes of the offering, the fair value of the business or assets to be
acquired must be at least $5,632,000 (80% of $7,040,000).
Post-effective amendment
------------------------
Once the agreement governing the acquisition of a business meeting the
required criteria has been executed, Rule 419 requires us to update the
registration statement with a post-effective amendment. The post-effective
amendment must contain information about the proposed acquisition candidate and
its business, including audited financial statements, the results of this
offering and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The reconfirmation offer must include certain prescribed
conditions which must be satisfied before the funds and securities can be
released from escrow.
Reconfirmation offer
--------------------
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Under Rule 419, the terms of the reconfirmation offer
must include the following conditions:
-- The prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the escrow account within 5
business days after the effective date of the post-effective amendment.
7
<PAGE>
-- Each investor will have no fewer than 20 and no more than 45 business days
from the effective date of the post-effective amendment to notify us in
writing that the investor elects to remain an investor.
-- If we do not receive written notification from any investor within 45
business days following the effective date, the proportionate portion of
the funds and any related dividends held in the escrow account on that
investor's behalf will be returned to the investor within 5 business days
by first class mail or other equally prompt means.
-- The acquisition will be closed only if a minimum number of investors
representing 80% of the maximum offering proceeds, equaling $32,000, elect
to reconfirm their investment.
-- If a closed acquisition has not occurred by --------- , 2002 (18 months
from the date of this prospectus), the funds held in the escrow account
shall be returned to all investors on a proportionate basis within 5
business days by first class mail or other equally prompt means.
Release of certificates and funds
---------------------------------
The funds will be released to us, and the securities will be released to
you, 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 candidate for which
the fair market value of the business represents at least 80% of the
maximum offering proceeds, including the total exercise price of the
warrants, and has filed the required post-effective amendment.
-- The post-effective amendment has been declared effective.
-- We have satisfied all of the prescribed conditions of the reconfirmation
offer.
-- The acquisition of the business with a fair value of at least 80% of the
maximum proceeds, including the total exercise price of the warrants has
closed.
DILUTION
The difference between the initial public offering price per share of
common stock and the net tangible book value per share after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share of common stock is determined by dividing our net tangible book value
(total tangible assets less total liabilities) by the number of shares of common
stock outstanding.
Our net tangible book value as of September 30, 2000 was $7,405. Our net
tangible book value per share was $0.003. Net tangible book value represents our
net tangible assets which are our total tangible assets less our total
liabilities. The public offering price per unit (each unit containing one share
of common stock) is $0.02 represents both gross and net proceeds per share as
all expenses of the offering are being paid from funds in our treasury. The pro
forma net tangible book value after the offering will be $48,904. The pro forma
net tangible book value per share after the offering will be $0.011 per share.
The shares (contained in the units) purchased by investors in the offering will
be diluted $0.009 or 45%. As of September 30, 2000, there were 2,550,000 shares
of our common stock outstanding. Dilution represents the difference between the
public offering price and the net pro forma tangible book value per share
immediately following the completion of the public offering.
The following table illustrates the dilution which will be experienced by
investors in the offering:
Public offering price per unit (containing one share) ........... $ 0.020
Net tangible book value per share before offering................ $ 0.003
Pro-forma net tangible book value per share after offering....... $ 0.011
Pro-forma increase per share attributable to offered shares...... $ 0.008
Pro-forma dilution to public investors........................... $ 0.009
The following table sets forth, as of the date of the prospectus, the
percentage of equity to be purchased by the public investors compared to the
percentage of equity to be owned by the present stockholders, and the
comparative amounts paid for the units (each unit containing one share) by the
public investors as compared to the total consideration paid by our present
stockholders.
Approximate Approximate
Percentage Percentage
Public Shares Total Shares Total Total
Stockholder Purchased Outstanding Consideration Consideration
------------------------------------------------------------------------------
New Investors 2,000,000 44.0% $ 40,000 61.5%
Existing
Shareholders 2,550,000* 56.0% $ 25,500 38.5%
--------------
* We sold 2,550,000 shares of common stock prior to the offering at $.01 per
share. These shares are not being registered.
USE OF PROCEEDS
Both gross and net proceeds of this offering will be $40,000 as all costs
associated with this offering have been or will be paid from funds presently in
our treasury.
Rule 419, prior to the reconfirmation of this offering, permits 10% of the
funds ($4,000) to be released from escrow to us. We intend to request release
of these funds. This offering is contingent on the entire offering being
subscribed to and will be sold on a first come, first served basis. If
subscriptions exceed the amount being offered, these excess subscriptions will
be promptly refunded without deductions for commissions or expenses.
Accordingly, we will receive these funds in the event a business combination is
closed in accordance with Rule 419.
Under Rule 419, after the reconfirmation offer and the closing of the
business combination, and assuming the successful completion of this offering,
$36,000, plus any dividends received, but less any amount returned to investors
who did not reconfirm their investment under Rule 419, will be released to us.
In the event we need funds in excess of $4,000 to find a suitable business
entity, our management has agreed to advance any additional funds required.
Neither our company nor the combined entity will repay our management for any
such advances nor will management receive any additional equity.
9
<PAGE>
Percentage
of net proceeds
Amount of the offering
-----------------------------------------
Escrowed funds pending
Business combination(1)(2) $36,0000 90%
(1) The entire amount of proceeds will be given to the acquisition candidate
for working capital.
(2) Offering proceeds of $40,000 will be held in escrow pending a business
combination less the release to us of 10% of these funds under Rule 419. No
compensation will be paid or due or owing to any present officer or
director.
The proceeds received in this offering will be put into the escrow account
pending closing of a business combination and reconfirmation. Such funds will be
in an insured depository institution account in either a certificate of deposit,
interest bearing savings account or in short term government securities as
placed by State Street Corporation.
CAPITALIZATION
The following table sets forth our capitalization as of September 30, 2000.
September 30, 2000
--------------------
Long-term debt $ 0
Stockholders' equity:
Common stock, $.001 par value;
authorized 50,000,000 shares,
issued and outstanding
2,550,000 shares; $ 2,550
Preferred stock, $.001 par value;
authorized 5,000,000 shares,
issued and outstanding -0-.
Additional paid-in capital $ 22,950
Deficit accumulated during
the development period $ (18,095)
-----------
Total stockholders' equity $ 7,405
-----------
Total capitalization $ 7,405
10
<PAGE>
PROPOSED BUSINESS
History and organization
------------------------
We were organized under the laws of the State of Delaware on February 2,
2000. Since our inception, we have been engaged in organizational efforts and
obtaining initial financing. We were formed as a vehicle to pursue a business
combination. We have not engaged in any preliminary efforts intended to identify
possible business combination and have neither conducted negotiations concerning
nor entered into a letter of intent concerning any such acquisition candidate.
Our initial public offering will comprise 2,000,000 units, each composed of
one share of common stock and three common stock purchase warrants, at a
purchase price of $0.02 per unit.
We are filing this registration statement in order to initiate a public
offering for our securities.
Operations
----------
We were organized for the purposes of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, engage in a business
combination presented to us by persons or firms who or which desire to employ
our funds in their business or who seek the perceived advantages of a
publicly-held corporation. Our principal business objective will be to seek
long-term growth potential in a business combination rather than to pursue
immediate, short-term earnings. We will not restrict our search to any specific
business, industry or geographical location and, thus, may acquire any type of
business located in the United States or abroad.
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing business
combinations will be paid with money in the treasury. Cost overruns will be
borne by management who will not be repaid nor receive any additional equity.
Persons purchasing units in this offering and other shareholders will most
likely not have the opportunity to participate in any of these decisions. Our
proposed business is sometimes referred to as a "blank check" company because
you will entrust your investment monies to our management before they have a
chance to analyze any ultimate use to which this money may be put. Although
substantially all of the funds of this offering are intended to be utilized,
generally to close a business combination, such proceeds are not otherwise being
designated for any specific purposes. Under Rule 419, as a prospective investor,
you will have an opportunity to evaluate the specific merits or risks only of
the business combination that management decides to enter into.
We may seek a business combination with firms which:
-- have recently commenced operations,
-- are developing companies in need of additional funds for expansion into new
products or markets,
-- are seeking to develop a new product or service, or
-- are established businesses which may be experiencing financial or operating
difficulties and are in need of additional capital.
11
<PAGE>
A business combination may involve the acquisition of, or merger with, a
company which does not need substantial additional capital but which desires to
establish a public trading market for our shares, while avoiding what it may
deem to be adverse consequences of undertaking a public offering itself, such
as:
-- time delays,
-- significant expense,
-- loss of voting control, or
-- compliance with various federal and state securities laws.
We will not acquire a candidate unless the fair value of the acquisition
candidate represents 80% of the maximum offering proceeds, including the total
exercise price of the warrants. To determine the fair market value of an
acquisition candidate, our management will examine the audited financial
statements, including balance sheets and statements of cash flow and
stockholders' equity, focusing attention on assets, liabilities, sales and net
worth. If we determine that the financial statements of a proposed acquisition
candidate do not clearly indicate that the fair market value test has been
satisfied, we will obtain an opinion from an investment banking firm which is a
member of National Association of Securities Dealers, Inc. to the satisfaction
of such criteria.
Based upon the probable desire on the part of the owners of acquisition
candidates to assume voting control over us in order to avoid tax consequences
or to have complete authority to manage the business, we intend to combine with
just one acquisition candidate. This lack of diversification should be
considered a substantial risk in investing in us because we will not permit us
to offset potential losses from one venture against gains from another.
Upon closing of a business combination, we anticipate that there will be a
change in control which will result in the resignation of our present officer
and director.
Our officers and directors have had no preliminary contact or discussions
with any representative of any other entity regarding a business combination.
Accordingly, any acquisition candidate that is selected may be a financially
unstable company or an entity in an early stage of development or growth,
including entities without established records of sales or earnings.
Accordingly, we may become subjected to numerous risks inherent in the business
and operations of financially unstable and early stage or potential emerging
growth companies. We will not purchase the assets of any company which is
beneficially owned by any of our officers, directors, promoters, affiliates or
associates. Although management will endeavor to evaluate the risks inherent in
an acquisition candidate, there can be no assurance that we will properly
ascertain or assess all significant risks.
We anticipate that the selection of a business combination will be complex
and extremely risky. Management believes that there are numerous firms seeking
even the limited additional capital which we will have and/or the benefit of a
publicly traded corporation because of:
-- general economic conditions,
-- rapid technological advances being made in the Internet industry, or
-- shortages of available capital;
12
<PAGE>
Such perceived benefit of a publicly traded corporation may include:
-- facilitating or improving the terms on which additional equity financing
may be sought;
-- providing liquidity for the principals of a business;
-- creating a means for providing incentive stock options or similar benefit
to key employees; or
-- providing liquidity, subject to restrictions of applicable statutes, for
all shareholders.
Evaluation of business combinations
-----------------------------------
The analysis of business combinations will be undertaken by us under the
supervision of our officers and directors, who are not a professional business
analysts.
Because we will be subject to Section 13 or 15(d) of the Exchange Act, we
will be required to furnish certain information about significant acquisitions,
including audited financial statements for the business acquired, covering one,
two or three years depending upon the relative size of the acquisition.
Consequently, acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition so long as
the reporting requirements of the Exchange Act are applicable. In the event our
obligation to file periodic reports is suspended under Section 15(d), we intend
on voluntarily filing such reports.
Any business combination will present certain risks. Many of these risks
cannot be adequately identified prior to selection, and your must, therefore,
depend on the ability of management to identify and evaluate such risks. In the
case of some of the potential combinations available to us, it is possible that
the promoters of an acquisition candidate have been unable to develop a going
concern or that such business is in our development stage in that it has not
generated significant revenues from its principal business activity prior to our
merger or acquisition. There is a risk, even after the closing of a business
combination and the related expenditure of our funds, that the combined
enterprises will still be unable to become a going concern or advance beyond the
development stage. The combination may involve new and untested products,
processes, or market strategies which may not succeed. Such risks will be
assumed by us and, therefore, our shareholders.
Business combinations
---------------------
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also purchase
stock or assets of an existing business. The manner of the business combination
will depend on:
-- the nature of the acquisition candidate,
-- the respective needs and desires of us and other parties,
-- the management of the acquisition candidate opportunity and
-- the relative negotiating strength of us and such other management
13
<PAGE>
You should note that any merger or acquisition closed by us can be expected
to have a significant dilutive effect on our current shareholders and purchasers
in this offering. On the closing of a business combination, the acquisition
candidate will have significantly more assets than us; therefore, management
plans to offer a controlling interest in us to the acquisition candidate. While
the actual terms of a transaction to which we may be a party cannot be
predicted, we may expect that the parties to the business transaction will find
it desirable to avoid the creation of a taxable event and thereby structure the
acquisition in a so-called tax-free reorganization under Sections 368(a)(1) or
351 of the Internal Revenue Code of 1954. In order to obtain tax-free treatment
under the code, it may be necessary for the owners of the acquired business to
own 80% or more of the voting stock of the surviving entity. In such event, our
shareholders, including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity, which would be
likely to result in significant dilution in the equity of such shareholders.
Management may choose to comply with these provisions. In addition, our
directors and officers may, as part of the terms of the acquisition transaction,
resign as director and officer. Management may retain shares of the common
stock, unless those shares, as part of the terms of the acquisition transaction,
are sought by an acquisition candidate.
Management will not actively negotiate or otherwise consent to the purchase
of any portion of their common stock as a condition to or for a proposed
business combination unless such a purchase is requested by an acquisition
candidate as a condition to a merger or acquisition. Our officer and director
has agreed to comply with this provision. Management is unaware of any
circumstances under which such policy through their own initiative may be
changed.
We anticipate that any securities issued in a reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, we may agree to register such securities either at the time
the transaction is closed, under certain conditions, or at specified times
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in our common stock may
have a depressive effect on such market.
If at any time prior to the completion of this offering we enter
negotiations with a possible merger candidate and such a transaction becomes
probable, then this offering will be suspended so that an amendment can be filed
which will include financial statements (including balance sheets and statements
of cash flow and stockholders' equity) of the proposed target.
We will not enter into a business combination with any company, which is in
any way wholly or partially beneficially owned by any officer, director,
promoter or affiliate or associate of us. Our officer and director have not
approached and have not been approached by any person or entity with regard to
any proposed business ventures to us. We will evaluate all possible business
combinations brought to us. If at any time a business combination is brought to
us by any of our promoters, management, or their affiliates or associates,
disclosure as to this fact will be included in the post-effective amendment,
thereby allowing the investors the opportunity to fully evaluate the business
combination.
14
<PAGE>
We have adopted a policy that we will not pay a finder's fee to any member
of management for locating a merger or acquisition candidate. No member of
management intends to or may seek and negotiate for the payment of finder's
fees.
We will remain an insignificant player among the firms that engage in
business combinations. There are many established venture capital and financial
concerns which have significantly greater financial and personnel resources and
technical expertise than us. In view of our combined limited financial resources
and limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors. Also, we will be competing
with a large number of other small public, blank check companies located
throughout the United States.
Finding a business combination
------------------------------
Our management will actively search for potential acquisition candidates
through internet websites where companies post their intentions to be acquired.
We will also solicit recommendations for possible businesses from friends and
business associates. We may also decide to advertise our intention to acquire a
company through advertisements in financial publications. The cost of
advertising, if any, will be paid by management.
Employees
---------
We presently have no employees. Our officers and directors are engaged in
outside business activities, and the amount of time each will devote to our
business will only be between five (5) and twenty (20) hours per month. Upon
completion of the public offering, it is anticipated that management will devote
the time necessary each month to our affairs or until a successful acquisition
of a business has been completed.
Facilities
-----------
We are presently using the office of our President Edward Reilly at no
cost, as our office, an arrangement which we expect to continue until the
completion of the reconfirmation offering. We presently do not own any
equipment, and do not intend to purchase or lease any equipment prior to or upon
completion of this offering.
PLAN OF OPERATION
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. Our expenses to date which have
been funded by our current shareholders and management, are $23,000 plus the
$1850.00 SEC filing fee paid in April, 2000. We expect all or part of these
obligations to be paid from a portion of the offering proceeds, which will be
released from escrow. Our expenses have included a $10,000 fee to a
non-affiliated management company which has assisted in structuring the
offering, interfacing with auditors and attorneys and performed additional
administrative duties.
Substantially all of our expenses that will be funded from the money in our
treasury or if additional funds are required that may be funded by management
will be from our efforts to identify a suitable acquisition candidate and close
the acquisition. Management has agreed to fund our cash requirements until an
acquisition is closed. No repayment is expected or required by us. [We will have
sufficient funds to satisfy our cash requirements and do not expect to have to
raise additional funds during the entire Rule 419 escrow period of up to 18
months from the date of this prospectus.] This is primarily because we
anticipate incurring no significant expenditures. Before the conclusion of this
offering, we anticipate our expenses to be limited to accounting fees, legal
fees, telephone, mailing, filing fees, occupational license fees, and transfer
agent fees.
15
<PAGE>
In the event the proceeds of this offering are not sufficient to enable us
successfully to fund a business combination, we may seek additional financing.
At this time, we believe that the proceeds of this offering and the possibility
for additional funding through warrant exercise will be sufficient and therefore
do not expect to issue any additional securities before we consummate a business
combination. However, we may issue additional securities, incur debt or procure
other types of financing if needed. We have not entered into any agreements,
plans or proposals for such financing and at present have no plans to do so. We
will not use the escrowed funds as collateral or security for any loan. Further,
the escrowed funds will not be used to pay back any loan incurred by us. If we
require additional financing, there is no guarantee that financing will be
available to us or, if available, that such financing will be on acceptable
terms acceptable.
RELATED PARTY TRANSACTIONS
A conflict of interest may arise between management's personal financial
benefit and management's fiduciary duty to you. Any remedy available under the
laws of Delaware, if management's fiduciary duties are compromised, will most
likely be prohibitively expensive and time consuming.
Neither our officers, director, promoters and or other affiliates of us,
have had any preliminary contact or discussions with any representative of any
other company or business regarding the possibility of an acquisition or merger
with us.
Our directors and officers are or may become, in their individual
capacities, officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses. Edward Reilly and Bridget
Vasile are engaged in business activities outside of us, and the amount of time
they will devote to our business will only be about five (5) to twenty (20)
hours each per month. There exists potential conflicts of interest including
allocation of time between us and such other business entities.
Management is not aware of any circumstances under which the policies
described in this section, or any other section, of this prospectus, through
their own initiative, may be changed.
DESCRIPTION OF SECURITIES
Authorized capital stock under our Shares of capital stock outstanding
certificate of incorporation after successful completion of offering
---------------------------------- ---------------------------------------
50,000,000 shares of common stock 4,550,000 shares of common stock
5,000,000 shares of preferred stock -0- shares of preferred stock
In addition, there will be outstanding 2,000,000 class A warrants,
2,000,000 class B warrants, and 2,000,000 class C warrants after the successful
completion of the offering.
All significant provisions of our capital stock are summarized in this
prospectus. However, the following description is not complete and is governed
by applicable Delaware law and our certificate of incorporation and bylaws. We
have filed copies of these documents as exhibits to the registration statement
related to this prospectus.
16
<PAGE>
Common stock
------------
You have voting rights for your shares.
You and all other common stockholders may cast one vote for each share held
of record on all matters submitted to a vote. You have no cumulative voting
rights in the election of directors. This means, for example, that if there are
three directors up for election, you cannot cast 3 votes for one director and
none for the other two directors.
You have dividend rights for your shares.
You and all other common stockholders are entitled to receive dividends and
other distributions when declared by our board of director out of the assets and
funds available, based upon your percentage ownership of us. Delaware law
prohibits the payment of any dividends where, after payment of the dividend, we
would be unable to pay our debts as they come due in the usual course of
business or our total assets would be less than the sum of our total liabilities
plus any amounts the law requires to be set aside. We will not pay dividends.
You should not expect to receive any dividends on shares in the near future,
even after a merger. This investment is inappropriate for you if you need
dividend income from an investment in shares.
You have rights if we go out of business.
If we go out of business, you and all other holders of our common stock
will be entitled to share in the distribution of assets remaining after payment
of all money we owe to others and any priority payments, if any, required to be
made to our preferred stockholders. Our board of directors, at its discretion,
may authorize our company to borrow funds without your prior approval, which
potentially further reduces the amount you would receive if we go out of
business.
You have no right to acquire shares of stock based upon your percentage
ownership of our shares when we sell more shares of our stock to other people.
We do not provide our stockholders with preemptive rights to subscribe for
or to purchase any additional shares offered by us in the future. The absence of
these rights could, upon our sale of additional shares of our common or
preferred stock, result in a decrease in the percentage ownership that you hold
or percentage of total votes you may cast.
Preferred stock
---------------
Our board of directors can issue preferred stock at any time with any
legally permitted rights and preferences without your approval.
Our board of director, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock, with some
or all of the following rights or any other legal rights they think are
appropriate, such as:
-- voting,
-- dividend,
-- required or optional repurchase by us,
-- conversion into common stock, with or without additional payment and
-- payments preferred stockholders will receive before common stockholders if
we go out of business.
18
<PAGE>
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes, but it also could render
your vote meaningless because preferred stockholders could own shares with a
majority of the votes required on any issue. Someone interested in buying our
company may not follow through with their plans because they could find it more
difficult to acquire, or be discouraged from acquiring, a majority of our
outstanding stock because we have issued preferred stock.
Redeemable common stock purchase warrants
-----------------------------------------
You may exercise the warrants which are part of the units for a period of
two years commencing the date of this prospectus. Each warrant entitles you or a
subsequent holder to purchase one share of our common stock. The class A
Warrants are exercisable at $.20; the class B Warrants at $.30; and the class C
Warrants at $3.00. We may redeem the class A or class B or the class C Warrants,
at any time, for $0.001 per warrant under the following conditions:
-- We must give you 30 days' prior written notice;
-- The closing bid price of our common stock must be greater than the exercise
price of the warrant
+ by $.50 per share
+ for any 20 consecutive trading days
+ ending within ten days prior to the date of the notice of redemption.
You can only exercise your warrants when there is a current effective
registration statement covering the underlying shares of common stock. If we do
not obtain or are unable to maintain a current effective registration statement,
you or a subsequent holder will be unable to exercise your warrants and they may
become valueless. Moreover, if the shares of our common stock underlying your
warrants are not registered or qualified for sale in the state in which a you
reside, you might not be permitted to exercise your warrants. In addition, a
call for redemption could force the you to accept the redemption price, which,
in the event of an increase in the price of the stock, would be substantially
less than the difference between the exercise price and the market value.
Immediately upon their release from escrow, we will deliver to you warrant
certificates representing one class A, one class B, and one class C Warrant for
each unit you purchased You may exchange your warrant certificates for new
certificates of different denominations, and may either exercise or transfer
your warrants. You may sell your warrants if a market exists rather than
exercise them. However, we can offer no assurance that a market will develop or
continue in the warrants. If we are unable to qualify the shares underlying
warrants for sale in certain states, holders of the warrants who reside in those
states will have no choice but to sell their warrants or allow them to expire.
You may exercise your warrants
-- by completing the form of election on the back of the warrant certificate
and
-- by surrendering the warrant certificate together with payment of the
exercise price,
to us or the warrant agent. You may exercise your class A, class B or class C
warrants in whole or from time to time in part. If you exercise fewer than all
of the warrants evidenced by a warrant certificate, we will have a new
certificate issued for the number of unexercised warrants.
As a warrant holder, you are protected against dilution of the equity
interest represented by the underlying shares of common stock upon the
occurrence of certain events, including:
-- issuance of stock dividends,
-- forward split of the common stock,
-- recapitalization and
-- merger into another company.
If we merge, reorganize or are acquired in such a way as to terminate the
warrants, you will receive notice of such an action and you may exercise them at
any time prior our taking such action. If our company is liquidated, or wound
up, you, as a warrant holder may not participate in our assets.
For the life of the warrants, you and any subsequent holder are given the
opportunity to profit from a rise in the market price of our common stock.
However, if you or other holders exercise your warrants,
-- the book value of our common stock will be diluted and
-- the percentage ownership of then existing stockholders.
The terms upon which we may obtain additional capital may be adversely
affected during the warrant exercise period. You and other warrant holders would
exercise them when we might be able to raise capital at higher prices than the
exercise price of the warrants.
Reports to stockholders
-----------------------
We intend to furnish annual reports containing our audited financial
statements to all our stockholders as soon as practicable after the end of each
fiscal year. Our fiscal year ends on December 31st.
Dividends
---------
We have only been recently organized, have no earnings and have paid no
dividends to date. Since we were formed as a blank check company with our only
intended business being the search for an appropriate business combination, we
do not anticipate having earnings or paying dividends at least until a business
combination is reconfirmed by our stockholders. However, we can give no
assurance that even after we consummate a business combination, we will have
earnings or issue dividends.
Transfer agent
--------------
We have appointed Olde Monmouth Stock Transfer Co., Inc., 77 Memorial
Parkway, Suite 101, Atlantic Highlands, New Jersey 07716 as transfer agent for
our shares of common stock and warrants.
20
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Of the shares and warrants outstanding after this offering, the 2,000,000
shares, 2,000,000 class A warrants, 2,000,000 class B warrants and 2,000,000
class C warrants sold in this offering will have been registered with the SEC
and can be freely resold.
Generally, Rule 144 provides that directors, executive officers, and
persons or entities that they control or who control them and other founding
shareholders may sell shares of common stock in any three-month period in a
limited amount. However, the SEC has taken the position that resales cannot be
made pursuant to Rule 144 for blank check companies. Therefore, the 2,550,000
outstanding shares cannot be sold pursuant to Rule 144, but must be registered.
MANAGEMENT
Our officers and directors and further information concerning them are as
Follows:
Name Age Position
------------------ --- --------------------
Edward C. Reilly* 39 President, Treasurer
64-34 79th Street, and a Director
Middle Village, New York
11379
Bridget Vasile 24 Secretary and a
365 Klondike Avenue Director
Staten Island, New York
10314
---------------------
* May be deemed our "Promoter" as that term is defined under the Securities
Act.
Edward Reilly is a Medicare Specialist (Government Programs) for NYL CARE
Health Plans in Astoria, NY since 1998. From 1987-1998, Mr. Reilly was a
District Agent for The Prudential Life Insurance Company where he sold life,
health, home, auto and annuity products. Mr. Reilly holds a B.S. in Finance
degree from St. John's University, Jamaica, NY and is a New York State licensed
insurance agent
Bridget Vasile has been the office manager for Diplomat Strategies in New
York, NY since 1998. From 1996 to 1998, she attended the College of Staten
Island, Staten Island, New York. She received her associates degree from Saint
Vincent's College, Staten which she attended from 1993-1996.
No member of our management has been or is currently affiliated or
associated with any blank check company. Our management does not currently
intend to promote other blank check entities. However, to remove any conflict of
interest, if any member of our management or any of our management becomes
involved with the promotion of another blank check company in the future, each
officer and director has orally agreed that we will first find and acquire a
target company the other blank check company commences searching for an
acquisition.
A member of our management may be a stockholder in an acquired business.
Pursuant to an oral agreement with the members of our management, our management
will introduce any potential acquisition to us and in the event of the
acquisition of a business in which any of our stockholders is an owner, the
shares of the affiliated stockholder will be voted in the same proportion as
shares of non-affiliated investors.
21
<PAGE>
Conflicts of interest
---------------------
No member of our management has been or is currently associated with any
blank check company. Our management does not currently intend to promote other
blank check entities. However, to remove any conflict of interest, if any member
of our management or any of our management becomes involved with the promotion
of another blank check company in the future, each officer and director has
orally agreed that we will first find and acquire a target company before the
other blank check company commences searching for an acquisition.
A member of our management may be a stockholder in an acquired business.
Pursuant to an oral agreement with the members of our management, our management
will introduce any potential acquisition to us and in the event of the
acquisition of a business in which any of our stockholders is an owner, the
shares of the affiliated stockholder will be voted in the same proportion as
shares of non-affiliated investors.
Remuneration
------------
None of our officers or directors has received or will receive remuneration
of any nature. Our management does not intend to receive any compensation from
the owners of the acquired company. We cannot predict the remuneration to be
awarded management or your company after consummation of the acquisition.
We will not pay any of the following types of compensation or other
financial benefit to our management or current stockholders:
-- consulting fees;
-- finders' fees;
-- sales of insiders' stock positions in whole or in part to the private
company, the blank check company and/or principals thereof; and/or
-- any other methods of payments by which management or current shareholders
receive funds, stock, other assets or anything of value whether tangible or
intangible.
Our directors will hold office until the next annual meeting of
stockholders and the election of their successors. Our directors receive no
compensation for serving on the board other than reimbursement of reasonable
expenses incurred in attending meetings. Officers are appointed by the board and
serve at its discretion.
Executive compensation
----------------------
The following table sets forth all compensation awarded to, earned by, or
paid for services rendered to us in all capacities since inception by our
executive officers.
22
<PAGE>
Summary compensation table
Long-term compensation awards
Annual Compensation
Name and 2000 Number of Shares
Principal Position Salary ($) Bonus ($) Underlying Options (#)
------------------ ---------- --------- ----------------------
Edward Reilly,
President and Treasury $ -0- -0- -0-
Bridget Vasile,
Secretary -0- -0- -0-
Management involvement
----------------------
We have conducted no business as of yet, aside from raising initial funding
associated with our offering. After the closing of this offering, our management
intends to contact business associates and acquaintances to search for target
businesses and then will consider and negotiate with target businesses until an
acquisition agreement is entered into.
Prior blank check companies involvement
---------------------------------------
None of our officers, directors, founders, promoters or principal
stockholders have been involved as principals of a blank check company.
Management control
------------------
Our management may not divest themselves of ownership of our shares of
common stock prior to the consummation of an acquisition or merger transaction.
This policy is based on an unwritten agreement among management. Management is
not aware of any circumstances under which such policy, through their own
initiative, may be changed.
STATEMENT AS TO INDEMNIFICATION
Our officers and directors are bound by the general standards for director
provisions in the Delaware General Corporation Law. These provisions allow our
director in making decisions to consider any factors as they deems relevant,
including our long-term prospects and interests and the social, economic, legal
or other effects of any proposed action on the employees, suppliers or our
customers, the community in which the we operate and the economy. Delaware law
limits our director's liability.
We have agreed to indemnify our officers and directors, meaning that we
will pay for damages they incur for properly acting as such. The SEC believes
that this indemnification may not be given for violations of the Securities Act
that governs the distribution of our securities.
23
<PAGE>
PRINCIPAL STOCKHOLDERS
The table on the following page sets forth certain information regarding
the beneficial ownership of our common stock as of the date of the prospectus,
and as adjusted to reflect the sale of the units in the offering, by (i) each
person who is known by us to own beneficially more than 5% of our outstanding
Common Stock; (ii) each of our officers and directors; and (iii) all of our
directors and officers as a group.
Name/Address Shares of Percent of Percent of
Beneficial Common Stock Class Owned Class Owned
Owner Beneficially Before After
Offering Owned Offering Offering
--------------------------------------------------------------------------------
Edward Reilly (1) 25,000 1.0% 0.6%
64-34 79th Street
Middle Village
NY 11379
Bridget Vasile 25,000 1.0% 0.6%
365 Klondike Avenue
Staten Island
NY 10314
Christopher Knight(1)(3) 375,000 14.7% 8.2%
30 Beechknoll Road
Forest Hills, New York
11375
Allied Resources Inc.(1)(2)(5) 500,000 19.6% 11.0%
40 Exchange Place, Suite 1904B
New York, New York
10005
Bridgewater Resources Ltd.(1)(4)(5) 400,000 15.7% 8.8%
Par La Ville Place
14 Par La Ville Road
Hamilton Bermuda
Shorewood Stables Inc.(1)(3)(5) 500,000 19.6% 11.0%
30 Beechknoll Road
Forest Hills, NY 11375
Joseph Fabiilli (1)(2) 375,000 14.7% 8.2%
77-44 66th Rd.
Middle Village, New York
11379
Jerry Stefaniuk (1) 350,000 13.7% 7.7%
3837 Hamber Place
North Vancouver, B.C.
Canada
Total Officers 50,000 2.0% 1.1%
and Directors
(2 Persons)
--------------------------
(1) May be deemed "Promoters" as that term is defined under the Securities Act.
(2) Joseph Fabiilli is President and sole stockholder of Allied Resources Inc.
(3) Christopher Knight is President and sole stockholder of Shorewood Stables
Inc.
(4) Arthur Jones is the sole stockholder of Bridgewater Resources Ltd. Mr.
Jones is not otherwise affiliated with us.
(5) Privately owned companies, without any operating business, which hold
securities for investment purposes.
All sales were made in reliance on Section 4(2) of the Securities Act.
These sales were made without general solicitation or advertising. Each
purchaser was an accredited investor with access to all relevant information
necessary to evaluate the investment and represented to the Registrant that the
shares were being acquired for investment.
The current stockholders have neither received nor will receive any extra or
special benefits that were not or are not shared equally by all holders of
shares of our common stock.
24
<PAGE>
CERTAIN TRANSACTIONS
We were incorporated in the State of Delaware on February 2, 2000. On March
29 2000, we sold 2,550,000 shares of our common stock at $.01 per share, for a
total cash consideration of $25,500.
The following table sets forth information regarding all securities sold by
us since our inception on February 2, 2000.
Aggregate
Class of Date of Title of Number of Purchase Form of
Purchasers Sale Securities Securities Price Consideration
---------------- --------- ---------- ---------- -------- -------------
Edward Reilly 3/29/2000 Common 25,000 $ 250.00 Cash
Bridget Vasile 3/29/2000 Common 25,000 $ 250.00 Cash
Christopher
Knight(1) 3/29/2000 Common 375,000 $3,750.00 Cash
Allied
Resources Inc.(2) 3/29/2000 Common 500,000 $5,000.00 Cash
Bridgewater
Resources Ltd.(3) 3/29/2000 Common 400,000 $4,000.00 Cash
Shorewood
Stables Inc.(1) 3/29/2000 Common 500,000 $5,000.00 Cash
Joseph Fabiilli(2) 3/29/2000 Common 375,000 $3,750.00 Cash
Jerry Stefaniuk 3/29/2000 Common 350,000 $3,500.00 Cash
-------------------------
(1) Christopher Knight is President and sole stockholder of Shorewood Stables
Inc.
(2) Joseph Fabiilli is President and sole stockholder of Allied Resources Inc.
(3) Arthur Jones is the sole stockholder of Bridgewater Resources Ltd.
All sales were made in reliance on Section 4(2) of the Securities Act.
These sales were made without general solicitation or advertising. Each
purchaser was an sophisticated investor with access to all relevant information
necessary to evaluate the investment and represented to the Registrant that the
shares were being acquired for investment.
WHERE YOU CAN FIND MORE INFORMATION
We have not previously been required to comply with the reporting
requirements of the Securities Exchange Act. We have filed a registration
statement with the SEC on Form SB-2 to register the shares of our common stock
and warrants constituting the units and the shares of common stock underlying
the warrants. This prospectus is part of the registration statement, and, as
permitted by the SEC's rules, does not contain all of the information in the
registration statement. For further information about us and the securities
offered under the prospectus, you may refer to the registration statement and to
the exhibits and schedules filed as a part of the registration statement. You
can review the registration statement and its exhibits at public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661.
You may call the Commission at 1-800-SEC-0330 for further information. The
registration statement is also available electronically on the World Wide Web at
http://www.sec.gov.
25
<PAGE>
You can also call or write us at any time with any questions you may have.
We would be pleased to speak with you about any aspect of our business and this
offering.
MARKET FOR OUR COMMON STOCK
Prior to the date of the prospectus, no trading market for our common stock
has existed. Pursuant to the requirements of Rule 15g-8 of the Securities
Exchange Act, a trading market will not develop prior to or after the
effectiveness of the registration statement while certificates representing the
shares of common stock and warrants which constitute the units remain in escrow.
Stock and warrant certificates must remain in escrow until the consummation of a
business combination and its confirmation by our investors pursuant to Rule 419.
We can offer no assurance that a trading market will develop upon the
consummation of a business combination and the subsequent release of the stock
and warrant certificates from escrow. To date, neither we nor anyone acting on
our behalf has taken any affirmative steps to retain or encourage any
broker-dealer to act as a market maker for our common stock. Further, we have
not entered into any discussions, or understandings, preliminary or otherwise,
through our management or through anyone acting on our behalf with any market
maker concerning the participation of a market maker in the possible future
trading market, for our common stock.
Present management does not anticipate that it will undertake or will
employ consultants or advisers to undertake any negotiations or discussions
prior to the execution of an acquisition agreement. Our management expects that
discussions in this area will ultimately be initiated by the party or parties
controlling the entity or assets which we may acquire who may employ consultants
or advisors to obtain market makers.
We have not issued any options or warrants to purchase, or securities
convertible into, our common equity. The 2,550,000 shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act. Generally, Rule 144 provides that director, executive officer,
and persons or entities that they control or who control them may sell shares of
common stock in any three-month period in a limited amount. However, the SEC has
taken the position that resales cannot be made pursuant to Rule 144 for blank
check companies. Therefore, the 2,550,000 outstanding shares held by our
founding stockholders cannot be sold pursuant to Rule 144, but must be
registered. The holders of the restricted securities are entitled to certain
piggyback registration rights which may only be exercised at our election. The
exercise of such rights will enable the holders of the restricted securities to
sell their shares prior to such date.
We are offering 2,000,000 units comprised of shares of our common stock and
two common stock purchase warrants at $0.02 per share. Dilution to the investors
in this offering shall be approximately $0.009 per share.
26
<PAGE>
PLAN OF DISTRIBUTION
Conduct of this offering
------------------------
We offer the right to subscribe for 2,000,000 units at $.02 per unit. This
offering will not close unless the entire offering amount is sold. We will
accept subscriptions on a first come, first served basis. We will not pay any
compensation to any person for the offer and sale of the units.
Edward Reilly our president shall conduct this unit offering. He plans to
distribute prospectuses related to this offering. We estimate that we will
distribute approximately 100 prospectuses to acquaintances, friends and business
associates.
Although Mr. Reilly is an "associated person" as that term is defined in
Rule 3a4-1 under the Securities Exchange Act, he will not be deemed to be a
broker because:
-- he will not be subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Securities Exchange Act at the time of
the sale of our securities;
-- he will not be compensated in connection with the sale
of our units;
-- he will be not an associated person of a broker or dealer at the time of
his participation in the sale of our securities; and
-- he shall restrict his participation to the following activities:
+ preparing written communications or delivering them through the mails
or other means that does not involve his oral solicitation of a
potential purchaser;
+ responding to inquiries of potential purchasers in communications
initiated by potential purchasers, provided however, that the content
of each response is limited to information contained in the
registration statement; or
+ performing ministerial and clerical work involved in effecting any
transaction.
As of the date of this prospectus, we have not retained a broker for the
sale of securities being offered. In the event we retain a broker, who may be
deemed an underwriter, we will file an amendment to our registration statement.
Neither we nor anyone acting on our behalf including our stockholders,
officers, directors, promoters, affiliates or associates will approach a market
maker or take any steps to request or encourage a market in our securities
either prior or subsequent to an acquisition of any business opportunity. There
have been no preliminary discussions or understandings between us or anyone
acting on our behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for our securities, nor
do we have any plans to engage in such discussions. We do not intend to use
consultants to obtain market makers. No member of management, promoter or anyone
acting at their direction will recommend, encourage or advise you to open
brokerage accounts with any broker-dealer that is obtained to make a market in
the shares subsequent to the acquisition of any business opportunity. Investors
in this offering shall make their own decisions regarding whether to hold or
sell their shares. We shall not exercise any influence over your decisions.
27
<PAGE>
Arbitrary determination of offering price
-----------------------------------------
We arbitrarily determined the initial offering price of $.02 per unit, and
it bears no relationship whatsoever to our assets, earnings, book value or any
other objective standard of value. Among the factors we considered were:
-- the lack of operating history;
-- the proceeds to be raised by this offering;
-- the amount of capital to be contributed by the public in proportion to the
amount of stock to be retained by present stockholders; and
-- the current market conditions in the over-the-counter market.
Possible Lack of Market for Your Shares
---------------------------------------
Under Rule 419, all securities purchased in an offering by a blank check
company, as well as securities issued for an offering to underwriters, promoters
or others as compensation or otherwise, if any, must be placed in the Rule 419
escrow account. These securities will not be released from escrow until the
closing of a merger or acquisition as provided for in Rule 419. There is no
present market for our common stock and class A, class B, and class C warrants
and there may not be any active and liquid public trading market developing
following the release of securities from the Rule 419 account. Thus,
securityholders may find it difficult to sell their shares or warrants. To date,
neither we nor anyone acting on our behalf has taken any affirmative steps to
request or encourage any broker dealer to act as a market maker for our common
stock or warrants. Further, there have been no discussions or understandings,
preliminary or otherwise, between us or anyone acting on our behalf and any
market maker regarding the participation of any such market maker in the future
trading market, if any, for our common stock or warrants. Our present management
has no intention of seeking a market maker for our common stock at any time
prior to the reconfirmation offer to be conducted prior to the closing of a
business combination. Our officers, after the closing of a business combination,
may employ consultants or advisors to obtain such market makers. Management
expects that discussions in this area will ultimately be initiated by the
management in control of the entity after a business combination is reconfirmed
by our stockholders.
Method of subscribing
---------------------
Persons may subscribe for units by filling in and signing the subscription
agreement and delivering it to us prior to the expiration date. Subscribers must
pay $0.02 per unit in cash or by check, bank draft or postal express money order
payable in United States dollars to "State Street Corporation on behalf of Blue
Thunder Corp." You may not pay in cash. This offering is being made on a best
efforts, all or none basis. Thus, unless all 2,000,000 units are sold, none will
be sold.
Our officers, directors, current stockholders and any of their affiliates
or associates may purchase up to 50% of the units. These purchases may be made
in order to close this "all or none" offering. Units purchased by our officers,
directors and principal stockholders will be acquired for investment purposes
and not with a view toward distribution.
28
<PAGE>
Expiration date
---------------
The offering will end the earlier of the receipt of subscriptions for
2,000,000 units or 90 days from the effective date of the prospectus.
LEGAL PROCEEDINGS
We not a party to or aware of any existing, pending or threatened lawsuits
or other legal actions.
LEGAL MATTERS
Sheila Corvino Esq., Dorset, Vermont is passing upon the validity of the
shares of common stock and the warrants constituting the units offered by the
prospectus and the shares of common stock underlying the warrants.
EXPERTS
Our financial statements as of the period ended September 30, 2000,
included in this prospectus and in the registration statement, have been so
included in reliance upon the reports of Thomas P. Monahan, independent
certified public accountant, included in this prospectus, and upon the authority
of said firm as experts in accounting and auditing.
FINANCIAL STATEMENTS
The following are our financial statements, with independent auditor's
report, for the period from inception, February 2, 2000, to September 30, 2000.
29
<PAGE>
REPORT OF INDEPENDENT AUDITOR
To The Board of Directors and Shareholders
of Blue Thunder Corp. (a development stage company)
I have audited the accompanying balance sheet of Blue Thunder Corp. (a
development stage company) as of September 30, 2000, and the related statements
of operations, changes in stockholders' equity, and cash flows for the period
from inception, February 2, 2000, through September 30, 2000. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Blue Thunder Corp. (a
development stage company) as of September 30, 2000, and the related statements
of operations, changes in stockholders' equity, and cash flows for the period
from inception, February 2, 2000, through September 30, 2000 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Blue
Thunder Corp. (a development stage company) will continue as a going concern. As
more fully described in Note 2, the Company is a blank check company that is
dependent upon the success of management to successfully complete a self
underwriting and locate and acquire a business and may require additional
capital to enter into any business combination. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans as to these matters are described in Note 2. The financial
statements do not include any adjustments to reflect the possible effects on the
recoverability and classification of assets or the amounts and classifications
of liabilities that may result from the possible inability of Blue Thunder Corp.
(a development stage company) to continue as a going concern.
/s/Thomas Monahan
----------------------------
THOMAS MONAHAN
Certified Public Accountant
Paterson, New Jersey
November 24, 2000
F-1
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
BALANCE SHEET
September 30, 2000
ASSETS
Current assets
Cash $ 7,405
------
Total current assets 7,405
Total $ 7,405
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -0-
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
5,000,000 shares authorized;
-0- shares issued and outstanding
Common stock, $.001 par value;
50,000,000 shares authorized; At September 30,
2000 there are 2,550,000 shares
outstanding $ 2,550
Additional paid-in capital 22,950
Deficit accumulated during the
development stage (18,095)
---------
Total stockholders equity $ 7,405
---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,405
=========
See notes to financial statements.
F-2
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, FEBRUARY 2, 2000, TO September 30, 2000
Income $-0-
Costs of goods sold -0-
------
Gross profit -0-
Operations:
General and administrative 18,095
Depreciation and Amortization -0-
------
Total costs 18,095
Net profit (loss) $(18,095)
========
PER SHARE AMOUNTS:
Net profit (loss) per common
share outstanding - basic $ (0.01)
=======
SHARES OF COMMON STOCK OUTSTANDING 2,550,000
=========
See notes to financial statements.
F-3
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM FEBRUARY 2, 2000 (INCEPTION) THROUGH SEPTEMBER 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (18,095)
Item not affecting cash flow from operations:
Amortization -0-
-------
NET CASH USED IN OPERATING ACTIVITIES (18,095)
CASH USED IN INVESTING ACTIVITIES -0-
CASH FLOWS FROM FINANCING ACTIVITY:
Sales of common stock 25,500
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 25,500
Increase (decrease) in cash 7,405
Cash balance beginning of period -0-
---------
CASH, end of period $ 7,405
=========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -
Cash paid for income taxes $ -
See notes to financial statements.
F-4
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
accumulated
Additional during
Preferred Preferred Common Common paid in development
stock stock stock stock capital stage Total
(shares) ($) (shares) ($) ($) ($) ($)
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sale of 2,550,000
shares of
common stock 0 $ 0 2,550,000 $ 2,550 $ 22,950 $ 25,500
Net profit (loss) $ (18,095) (18,095)
- - ------------------------------------------------------------------------------------------------------
Balance
September 30, 2000 0 $ 0 2,550,000 $ 2,550 $ 22,950 $ (18,095) $ 7,405
</TABLE>
See notes to financial statements.
F-5
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM FEBRUARY 2, 2000 (INCEPTION) THROUGH September 30, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY
Blue Thunder Corp. (the "Company"), was organized in Delaware on February
2, 2000 and is authorized to issue 50,000,000 shares of common stock, $0.001 par
value each and 5,000,000 shares of preferred stock, $0.001 par value each.
The Company is a "blank check" company which plans to search for and
acquire a suitable business to merge with or acquire. Operations since
incorporation have consisted primarily of obtaining capital contributions by the
initial investors and activities regarding the registration of the offering with
the Securities and Exchange Commission.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company is a blank check
company that is dependent upon the success of management to successfully
complete a self underwriting and locate and acquire a business and may require
additional capital to enter into any business combination. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. The Company is dependent upon its ability to have positive cash flows
from operations to sustain any business activity. The Company's future capital
requirements will depend on numerous factors including, but not limited to,
continued progress in completing its self underwritten offering, finding a
business to acquire, completing the process of acquiring the business and
obtaining the needed investment capital and working capital to engage in
profitable operations. The Company plans to engage in such financing efforts on
a continuing basis.
The financial statements presented consist of the balance sheet of the
Company as at September 30, 2000 and the related statements of operations and
cash flows and stockholders' equity for period from inception, February 2, 2000,
to September 30, 2000.
Fiscal Year
The fiscal year of the Company is the calendar year.
Deferred Offering Costs
Deferred offering costs, incurred in anticipation of the Company filing a
registration statement pursuant to Rule 419 under the Securities Act of 1933, as
amended, are being charged to expense as incurred.
Organization Costs, Net
Organization costs are being charged to expense as they occur.
F-6
<PAGE>
Income Taxes
The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," which
requires the recognition of deferred tax liabilities and assets at currently
enacted tax rates for the expected future tax consequences of events that have
been included in the financial statements or tax returns. A valuation allowance
is recognized to reduce the net deferred tax asset to an amount that is more
likely than not to be realized. The tax provision shown on the accompanying
statement of operations is zero since the deferred tax asset generated from the
net operating loss is offset in its entirety by a valuation allowance. State
minimum taxes will be expensed as incurred.
Cash and Cash Equivalents
Cash and cash equivalents, if any, include all highly liquid debt
instruments with an original maturity of three months or less at the date of
purchase.
Fair Value of Financial Instruments
Cash, accounts payable and other current liabilities are recorded in the
financial statements at cost, which approximates fair market value because of
the short-term maturity of those instruments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
Significant Concentration of Credit Risk
At September 30, 2000, the Company has a concentration of its credit risk
by maintaining deposits in one bank. The maximum loss that could have resulted
from this risk totaled $-0- which represents the excess of the deposit
liabilities reported by the banks over the amounts that would have been covered
by the insurance.
NOTE 3 - STOCKHOLDERS' EQUITY
Common Stock
For the period from inception, February 2, 2000, to March 29, 2000, the
Company sold an aggregate of 2,550,000 shares of common stock to its president
investor for an aggregate consideration of $25,500 or $0.01 per share.
Preferred Stock
Up to 5,000,000 shares of preferred stock may be issued from time to time
in one or more series. The Company's board of directors, without further
stockholder approval, is authorized to fix the dividend rights and terms,
conversion rights, voting rights, redemption rights, liquidation preferences and
other rights and restrictions relating to any such series. Issuances of
additional shares of preferred stock, while providing flexibility in connection
with possible financing, acquisitions and other corporate purposes, could, among
other things adversely affect the voting power of the holders of other
securities and may, under certain circumstances, have the effect of deterring
hostile takeovers or delaying changes in control or management.
The number of shares of preferred stock outstanding at September 30, 2000
is - -0-.
F-7
<PAGE>
NOTE 4 - RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds be deposited into an escrow or
trust account (the "Deposited Funds" and "Deposited Securities", respectively)
governed by an agreement which contains certain terms and provisions specified
by that rule. The Company may receive 10% of the escrowed funds for working
capital. The remaining Deposited Funds and the Deposited Securities will be
released to the Company and to the investors, respectively, only after the
Company has met the following three basic conditions. First, the Company must
execute an agreement for an acquisition meeting certain prescribed criteria.
Second, the Company must file a post-effective amendment to its registration
statement which includes the terms of a reconfirmation offer that must contain
conditions prescribed by Rule 419. The post-effective amendment must also
contain information regarding the acquisition candidate and its business,
including audited financial statements. The agreement must include, as a
condition precedent to its consummation, a requirement that the number of
investors who contributed at least 80% of the offering proceeds must elect to
reconfirm their investments. Third, the Company must conduct the reconfirmation
offer and satisfy all of the prescribed conditions. The post-effective amendment
must also include the terms of the reconfirmation offer mandated by Rule 419.
After the Company submits a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition is consummated,
the escrow agent can release the Deposited Funds and Deposited Securities.
Investors who do not reconfirm their investments will receive the return of a
pro rata portion thereof; and in the event investors representing less than 80%
of the Deposited Funds reconfirm their investments, the Deposited Funds will be
returned to all the investors on a pro rata basis.
NOTE 5 - GAIN (LOSS) PER SHARE OF COMMON STOCK
Net gain (loss) per share of common stock outstanding, as shown on the
statement of operations, is based on the number of shares outstanding at each
balance sheet date. Weighted average shares outstanding was not computed since
it would not be meaningful in the circumstances, as all shares issued during the
period from incorporation through September 30, 2000 were for initial capital.
Therefore, the total shares outstanding at the end of each period was deemed to
be the most relevant number of shares to use for purposes of this disclosure.
For future periods, the Company will utilize the treasury stock method for
computing earnings per share, and will compute a weighted average number of
shares outstanding once additional shares of stock are issued to new
stockholders. Under the treasury stock method, the dilutive effect of
outstanding stock options and other convertible securities for determining
primary earnings per share is computed using the average market price during the
fiscal period, whereas the dilutive effect of outstanding stock options and
convertible securities for determining fully diluted earnings per share is
computed using the market price as of the end of the fiscal period, if greater
than the average market price.
F-8
<PAGE>
NOTE 6 - RELATED PARTY TRANSACTIONS
Office Facilities
Rental of office space and use of office, computer and telecommunications
equipment are provided by the President of the Company on a month to month basis
free of charge.
Officer Salaries
For the period from inception, February 2, 2000, to September 30, 2000, no
officer has received any compensation for serving as such.
NOTE 7 - PROPOSED OFFERING
The Company intends to prepare and file a registration statement with the
Securities and Exchange Commission pursuant to Rule 419 (see Note 4). The
offering, on a "best efforts all-or-none basis" will consist of 2,000,000 units
at $.02 per unit or an aggregate offering price of $25,500. Each unit will
consist of one share of common stock and three redeemable common stock purchase
warrants. Each warrant is exercisable into one share of common stock for a
period of two years from the effective date of a registration statement relating
to the underlying shares of common stock, the "A" Warrant at $.20, the "B"
Warrant at $.30, and the "C" Warrant at $3.00. The warrants are redeemable at
any time, upon thirty day's written notice, in the event the average closing
price of the common stock is at least $.50 greater than the exercise price of
any given warrant for a period of twenty consecutive trading days ending within
ten days prior to the notice of redemption.
F-9
<PAGE>
-----------------------------------------
No dealer, salesman or any other person
has been authorized to give any
information or to make any
representations other than those
contained in this Prospectus, and, if
given or made, such information or
representations must not be relied on as Blue Thunder Corp.
having been authorized by Blue Thunder
Corp. This Prospectus does not 2,000,000 Units
constitute an offer to sell or a
solicitation of an offer to buy, by any
person in any jurisdiction in which it
is unlawful for such person to make such
offer or solicitation. Neither the
delivery of this Prospectus nor any
offer, solicitation or sale made
hereunder, shall under any circumstances
create an implication that the
information herein is correct as of any
time subsequent to the date of the
Prospectus.
----------------------------------------
Until ------- ---, 2001 (ninety days after the date funds and securities are
released from the escrow account pursuant to Rule 419), all dealers effecting
transactions in the registered securities, whether or not participating in the
distribution thereof, may be required to deliver a Prospectus. This is in
addition to the obligation of dealers to deliver a Prospectus when acting as
Underwriters and with respect to their unsold allotment or subscriptions.
-----------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Delaware General Corporation Law provides for the indemnification of
the officers, directors and corporate employees and agents of Blue Thunder Corp.
(the "Registrant") under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstance of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or such court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections (a) and (b) of this section,
or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
30
<PAGE>
(d) Any indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a)
and (b) of this section. Such determination shall be made (1) by the board
of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a
quorum is not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(3) by the stockholders.
(e) Expenses incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be
paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the corporation as authorized in this
section. Such expenses including attorneys' fees incurred by other
employees and agents may be so paid upon such terms and conditions, if any,
as the board of directors deems appropriate.
(f) The indemnification and advancement expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers and
employees or agents so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under this section
with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan;
and references to "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation
which imposes duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
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(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of such person.
Articles Ninth and Tenth of the Registrant's certificate of incorporate
provide as follows:
NINTH:
The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the Delaware General Corporation Law, as the
same may be amended and supplemented.
TENTH:
The Corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the Delaware General Corporation Law, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Article XII of the Registrant's by-laws provides as follows:
ARTICLE XII - INDEMNIFICATION OF DIRECTORS AND OFFICERS
1. INDEMNIFICATION. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any 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, trustee, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, trustee,
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. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation, and with
respect to any criminal action or proceeding, had reasonable cause to
believe that such person's conduct was lawful.
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2. DERIVATIVE ACTION. The corporation shall 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 the corporation's favor by reason of the fact that such person
is or was a director, trustee, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of any other 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; provided, however, 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 for gross
negligence or willful misconduct in the performance of such person's duty
to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as such court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation.
3. SUCCESSFUL DEFENSE. To the extent that a director, trustee, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in whole or in part, in defense of any action, suit or
proceeding referred to in paragraphs 1 and 2 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
4. AUTHORIZATION. Any indemnification under paragraph 1 and 2 above (unless
ordered by a court) shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the
director, trustee, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of
conduct set forth in paragraph 1 and 2 above. Such determination shall be
made (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, (b) by independent legal counsel (selected by one or more of
the directors, whether or not a quorum and whether or not disinterested) in
a written opinion, or (c) by the stockholders. Anyone making such a
determination under this paragraph 4 may determine that a person has met
the standards therein set forth as to some claims, issues or matters but
not as to others, and may reasonably prorate amounts to be paid as
indemnification.
5. ADVANCES. Expenses incurred in defending civil or criminal actions, suits
or proceedings shall be paid by the corporation, at any time or from time
to time in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in paragraph 4 above upon
receipt of an undertaking by or on behalf of the director, trustee,
officer, employee or agent to repay such amount unless it shall ultimately
be determined by the corporation that the payment of expenses is authorized
in this Section.
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6. NONEXCLUSIVITY. The indemnification provided in this Section shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any law, by-law, agreement, vote of stockholders or
disinterested director or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee or agent and shall insure to the benefit of the
heirs, executors, and administrators of such a person.
7. INSURANCE. The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, trustee,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or
agent of any corporation, partnership, joint venture, trust or other
enterprise, against any liability assessed against such person in any such
capacity or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such
liability.
8. "CORPORATION" DEFINED. For purpose of this action, references to the
"corporation" shall include, in addition to the corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
directors, trustees, officers, employees or agents, so that any person who
is or was a director, trustee, officer, employee or agent of such of
constituent corporation will be considered as if such person was a
director, trustee, officer, employee or agent of the corporation.
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are estimated as
follows:
Escrow Fee $ 600
Securities and Exchange Commission Registration Fee 1,500
Legal Fees and Consulting Fees 15,000
Accounting Fees 5,000
Printing and Engraving 1,000
Blue Sky Qualification Fees and Expenses 1,000
Miscellaneous 400
Transfer Agent Fee 1,000
---------
TOTAL $ 25,500
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Item 26. Recent Sales of Unregistered Securities
The registrant issued 2,550,000 shares of common stock on March 29, 2000
to its stockholders, for cash consideration of $.01 per share for an aggregate
investment of $25,500. The registrant sold these shares of common stock under
the exemption from registration provided by Section 4(2) of the Securities Act.
All investors represented that they (or in the case of corporate investors that
their management) are sophisticated investors. We have issued no securities for
services.
Neither the registrant nor any person acting on its behalf offered or sold
the securities by means of any form of general solicitation or general
advertising. No services were performed by any purchaser as consideration for
the shares issued.
The purchasers represented in writing that they acquired the securities for
their own accounts. A legend was placed on the stock certificates stating that
the securities have not been registered under the Securities Act and cannot be
sold or otherwise transferred without an effective registration or an exemption
therefrom.
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EXHIBITS
Item 27.
3.1 Certificate of Incorporation*
3.2 By-Laws*
4.1 Specimen Certificate of Common Stock*
4.2 Form of Warrant*
4.3 Form of Warrant Agreement*
4.4 Form of Escrow Agreement with Capital Suisse Securities, Inc.*
4.5 Form of Escrow Agreement with State Street Corporation**
5.1 Opinion of Counsel*
5.2 Revised Opinion of Counsel*
23.1 Accountant's Consent to Use Opinion
23.2 Counsel's Consent to Use Opinion*
27.1 Financial Data Schedule
-------------------
* Previously submitted as exhibits to registration statement on Form SB-2
filed with the Securities and Exchange Commission on September 21, 2000.
** To be submitted by amendment.
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Item 28.
UNDERTAKINGS
The Registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement (the "Registration
Statement"):
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
Effective Date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this registration
statement, including (but not limited to) the addition of an
underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be treated 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 thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) To deposit into the Escrow Account at the closing, certificates in such
denominations and registered in such names as required by the Company to
permit prompt delivery to each purchaser upon release of such securities
from the Escrow Account in accordance with Rule 419 of Regulation C under
the Securities Act. Pursuant to Rule 419, these certificates shall be
deposited into an escrow account, not to be released until a business
combination is consummated.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
B 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 on Form SB-2 and authorized the registration
statement to be signed on its behalf by the undersigned, in the Borough of
Queens, State of New York on December 8, 2000.
BLUE THUNDER CORP.
By: /s/Edward Reilly
------------------------
Edward Reilly, President
In accordance with the requirements of the Securities Act of 1933, the
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/Edward Reilly
-------------------------- Dated: December 8, 2000
Edward Reilly
President, Director
/s/Bridget Vasile
-------------------------- Dated: December 8, 2000
Bridget Vasile
Secretary, Director
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