<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 2000
REGISTRATION NO. 333-36754
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6770 13-4109611
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification Number)
Incorporation or Organization) Classification Code Number)
</TABLE>
245 FIFTH AVENUE--SUITE 1600
NEW YORK, NEW YORK 10016
(212) 696-4282
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
LAWRENCE BURSTEIN, PRESIDENT
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
245 Fifth Avenue--Suite 1600
New York, New York 10016
(212) 696-4282
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
IRA I. ROXLAND, ESQ. DAVID ALAN MILLER, ESQ.
STEPHEN E. FOX, ESQ. BRUCE M. SCHLOSS, ESQ.
SONNENSCHEIN NATH & ROSENTHAL GRAUBARD MOLLEN & MILLER
1221 Avenue of the Americas 600 Third Avenue
New York, New York 10020 New York, New York 10016
(212) 768-6700 (212) 818-8800
Fax: (212) 768-6800 Fax: (212) 818-8881
</TABLE>
--------------------------
Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, NOVEMBER 28, 2000
PROSPECTUS
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
1,250,000 UNITS
------------------
This is an initial public offering of our securities. Each unit consists of:
- one share of our common stock; and
- one class A warrant.
Each class A warrant entitles the holder to purchase at a price of $5.25 one
share of our common stock and one class B warrant.
Each class B warrant entitles the holder to purchase at a price of $7.50 one
share of our common stock and one class C warrant.
Each class C warrant entitles the holder to purchase at a price of $9.75 one
share of our common stock.
Each warrant will become exercisable on the later of the completion of a
business combination or , 2001 [one year from the date of this
prospectus] and will expire on , 2006 [six years from the date of
this prospectus] or earlier upon redemption.
There is presently no public market for our units, common stock or warrants.
We have granted the underwriters a 45-day option to purchase up to 187,500
additional units solely to cover any over-allotments, if any.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
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.
<TABLE>
<CAPTION>
PER UNIT TOTAL
-------- ----------
<S> <C> <C>
Public offering price................................... $6.00 $7,500,000
Underwriting discounts.................................. $0.42 $ 525,000
Proceeds, before expenses, to us........................ $5.58 $6,975,000
</TABLE>
GBI Capital Partners Inc., on behalf of the underwriters, expects to deliver
our securities to purchasers on or about , 2000.
------------------------
GBI CAPITAL PARTNERS INC. GKN SECURITIES CORP.
THE DATE OF THIS PROSPECTUS IS , 2000
<PAGE>
STATE BLUE SKY INFORMATION
We will only offer and sell the units in Delaware, the District of Columbia,
Florida, Hawaii, Illinois, Maryland, New York and Rhode Island. Additionally, we
believe that the units, upon completion of this offering, and the common stock
and class A warrants comprising the units, once they become separately
transferable, will be eligible for sale on a secondary market basis in each such
state and in Iowa and Pennsylvania. Purchasers of such securities either in this
offering or in any subsequent trading market which may develop must be residents
of such states. We will amend this prospectus for the purpose of disclosing
additional states, if any, in which our securities will be eligible for resale
in the secondary trading market.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 7
Forward Looking Statements.................................. 10
Use of Proceeds............................................. 11
Dilution.................................................... 12
Capitalization.............................................. 13
Dividend Policy............................................. 13
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 14
Proposed Business........................................... 15
Management.................................................. 25
Principal Stockholders...................................... 28
Certain Transactions........................................ 30
Description of Securities................................... 32
Underwriting................................................ 36
Legal Matters............................................... 38
Experts..................................................... 38
Where You Can Find Additional Information................... 39
Index to Financial Statements............................... F-1
</TABLE>
i
<PAGE>
PROSPECTUS SUMMARY
FOR A MORE COMPLETE UNDERSTANDING OF THIS OFFERING, YOU SHOULD READ THE
ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE RISK FACTORS AND THE FINANCIAL
STATEMENTS. UNLESS WE TELL YOU OTHERWISE, THE INFORMATION IN THIS PROSPECTUS
ASSUMES THAT THE UNDERWRITERS WILL NOT EXERCISE THEIR OVER-ALLOTMENT OPTION AND
GIVES EFFECT TO AN APPROXIMATELY 0.74-FOR-ONE REVERSE SPLIT OF OUR COMMON STOCK
EFFECTUATED ON OCTOBER 17, 2000.
We are a blank check company formed to effect a merger, exchange of capital
stock, asset acquisition or other similar business combination with an as yet
unidentified operating business which we believe has significant growth
potential. We intend to focus our efforts in identifying a prospective target in
the following industries:
- internet and other new media products and services;
- communications and entertainment; and
- biotechnology.
We intend to utilize cash derived from the proceeds of this offering, our
capital stock, debt or a combination of cash, capital stock and debt in
effecting a business combination. While we may seek to effect business
combinations with more than one target business, our initial business
combination must be with a target business whose fair market value is at least
equal to 80% of our net assets at the time of such acquisition. Consequently, it
is likely that we will have the ability to effect only a single business
combination.
To date, our efforts have been limited to organizational activities. The
implementation of our business plan is wholly contingent upon the successful
sale of the units offered by this prospectus.
We were organized under the laws of the State of Delaware on March 17, 2000.
Our offices are located at 245 Fifth Avenue, Suite 1600, New York, New York
10016, and our telephone number is (212) 696-4282.
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Securities offered........................... 1,250,000 units, at $6.00 per unit, each unit
consisting of:
- one share of common stock; and
- one class A warrant.
The units may commence trading on the date of
this prospectus. The common stock and class A
warrants will begin to trade separately on
the 90th day after the date of this
prospectus unless GBI Capital Partners Inc.
informs us of its decision to allow earlier
separate trading. In no event, however, can
the common stock and class A warrants be
traded separately until we file with the SEC
an audited balance sheet reflecting our
receipt of the proceeds of this offering.
Common stock:
Number outstanding prior to this
offering................................. 551,491 shares
Number to be outstanding after this
offering................................. 1,801,491 shares
Class A Warrants:
Number outstanding prior to this
offering................................. 150,000 warrants
Number to be outstanding after this
offering................................. 1,400,000 warrants
Securities underlying class A warrants..... Each class A warrant is exercisable into one
share of common stock and one class B
warrant.
Exercise price............................. The initial exercise price of each class A
warrant is $5.25.
Exercise period............................ The class A warrants will become exercisable
on the later of:
- the completion of a business combination
with a target business; or
- , 2001 [one year from the date of
this prospectus],
and will expire at 5:00 p.m., New York City
time, on , 2006 [six years from the
date of this prospectus] or earlier upon
redemption.
Redemption................................. We may redeem the outstanding class A
warrants:
- in whole and not in part;
- at our option and with the consent of GBI
Capital Partners Inc.;
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
- at a price of $.05 per class A warrant at
any time after such warrants become
exercisable; and
- upon a minimum of 30 days' prior written
notice.
However, we will be unable to redeem the
class A warrants unless the reported last
sale price of our common stock equals or
exceeds $8.50 per share for the 20
consecutive trading days ending on the third
business day prior to the notice of
redemption.
Class B Warrants:
Number to be outstanding after this No class B warrants will be outstanding until
offering................................. the class A warrants are exercised.
Securities underlying class B warrants..... Each class B warrant will be exercisable into
one share of common stock and one class C
warrant.
Exercise price............................. The initial exercise price of each class B
warrant is $7.50.
Exercise period............................ The class B warrants will become exercisable
on the later of:
- the completion of a business combination
with a target business; or
- , 2001 [one year from the date of
this prospectus],
and will expire at 5:00 p.m., New York City
time, on , 2006 [six years from the
date of this prospectus] or earlier upon
redemption.
Redemption................................. We may redeem the outstanding class B
warrants;
- in whole and not in part;
- at our option and with the consent of GBI
Capital Partners Inc.;
- at a price of $.05 per class B warrant at
any time after such warrants become
exercisable; and
- upon a minimum of 30 days' prior written
notice.
However, we will be unable to redeem the
class B warrants unless the reported last
sale price of our common stock equals or
exceeds $10.50 per share for the 20
consecutive trading days ending on the third
business day prior to the notice of
redemption.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Class C Warrants:
Number to be outstanding after this No class C warrants will be outstanding until
offering................................. the class B warrants are exercised.
Securities underlying class C warrants..... Each class C warrant will be exercisable into
one share of common stock.
Exercise price............................. The initial exercise price of each class C
warrant is $9.75.
Exercise period............................ The class C warrants will become exercisable
on the later of:
- the completion of a business combination
with a target business; or
- , 2001 [one year from the date of
this prospectus]
and will expire at 5:00 p.m., New York City
time, on , 2006 [six years from the
date of this prospectus] or earlier upon
redemption.
Redemption................................. We may redeem the outstanding class C
warrants:
- in whole and not in part;
- at our option and with the consent of GBI
Capital Partners Inc.;
- at a price of $.05 per class C warrant at
any time after such warrants become
exercisable; and
- upon a minimum of 30 days' prior written
notice.
However, we will be unable to redeem the
class C warrants unless the reported last
sale price of our common stock equals or
exceeds $12.00 per share for the 20
consecutive trading days ending on the third
business day prior to the notice of
redemption.
Proposed OTC Bulletin Board symbols for our:
Units...................................... UETVU
Common Stock............................... UETV
Class A Warrants........................... UETVA
Offering proceeds to be held in trust........ $6,362,500 of the proceeds of this offering
will be placed in a trust fund. Such proceeds
will not be released until the earlier of the
completion of a business combination or our
liquidation.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Stockholder approval of business We will seek stockholder approval before we
combination.................................. effect any business combination. We will not
effect a business combination if:
- stockholders purchasing shares in this
offering, I.E., public stockholders, who own
at least a majority of the shares sold in
this offering, vote against the
transaction; or
- public stockholders owning more than 20% of
the shares sold in this offering exercise
their conversion rights.
Conversion rights............................ Each public stockholder presented with the
right to vote on a business combination may,
if he votes no, demand that his stock be
converted into his pro rata share of the
trust fund if the business combination is
approved and completed.
Liquidation if no business combination....... We will dissolve and distribute to our public
stockholders the amount in our trust fund
plus any remaining net assets, if we do not
effect a business combination within:
- 24 months after the completion of this
offering; or
- 30 months after the completion of this
offering if a letter of intent or definitive
agreement relating to a prospective
business combination was entered into prior
to the end of the 24 month period.
However, we may determine to seek stockholder
approval to continue our existence.
Purchase of units by principals.............. Our officers and directors and their
affiliates have agreed with the underwriters
to purchase an aggregate of 125,000 units in
this offering.
</TABLE>
5
<PAGE>
SUMMARY FINANCIAL DATA
The following table summarizes financial data for our business and should be
read with our financial statements, which are included in this prospectus.
<TABLE>
<CAPTION>
AUGUST 31, 2000
-----------------------
ACTUAL AS ADJUSTED
--------- -----------
<S> <C> <C>
Balance Sheet Data:
Total assets........................................ $ 196,359 $6,500,051
Working capital (deficit)........................... (196,432) 6,499,876
Total liabilities................................... 196,483 175
Value of common stock which may be converted into
cash.............................................. -- 1,271,864
Stockholders' equity (deficit)...................... (124) 5,228,012
</TABLE>
The information presented in this table under the "As Adjusted" column gives
effect to the sale of 1,250,000 units and our receipt of the net proceeds in
this offering.
If we effect a business combination, the conversion rights to the public
stockholders may result in the conversion into cash of up to approximately
19.99% of the aggregate number of public shares at a per-share conversion price
equal to the amount in the trust fund as of the record date for the
determination of stockholders entitled to vote on the business combination,
inclusive of any interest, divided by the number of public shares.
6
<PAGE>
RISK FACTORS
AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISKS DESCRIBED BELOW TOGETHER WITH THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS BEFORE MAKING A DECISION TO INVEST IN OUR UNITS.
OUR HISTORICAL FINANCIAL STATEMENTS CONTAIN A GOING CONCERN QUALIFICATION
THAT RAISES DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN
Since we are a development stage enterprise with no significant operating
results to date, our auditors have raised substantial doubt as to our ability to
continue as a going concern. Such going concern qualification has not taken into
consideration the completion of this offering.
YOU WILL NOT BE ENTITLED TO PROTECTIONS, SUCH AS THE RETURN OF YOUR
INVESTMENT AFTER 18 MONTHS UPON FAILURE TO EFFECT A BUSINESS COMBINATION,
NORMALLY AFFORDED TO INVESTORS OF BLANK CHECK COMPANIES
Since the net proceeds of this offering are intended to be used to effect a
business combination with a target business that has not been identified, we may
be deemed to be a blank check company. However, we are exempt from rules
promulgated by the SEC to protect investors of blank check companies since we
will have net tangible assets in excess of $5,000,000 upon the successful
completion of this offering. These rules, among other things, prevent a blank
check company from holding investors' funds for more than 18 months from the
investment date upon failure to effect a business combination as opposed to this
offering in which we generally may hold investors' funds for up to 30 months.
Accordingly, investors will not be afforded the benefits or protections of such
rules. See "Proposed Business--Comparison to Rule 419."
WE WILL NOT GENERATE ANY REVENUE UNTIL, AT THE EARLIEST, THE COMPLETION OF A
BUSINESS COMBINATION
Our resources are limited to the proceeds we receive in this offering. We
have had no revenues to date, nor will we achieve any revenues, other than
interest income on the proceeds of this offering, until, at the earliest, the
completion of a business combination. Moreover, we cannot assure you that any
business we combine with, either at the time of or after the business
combination, will derive any material revenues from its operations or operate on
a profitable basis.
IF WE ARE DEEMED TO BE AN INVESTMENT COMPANY, WE MAY BE REQUIRED TO
INSTITUTE BURDENSOME COMPLIANCE REQUIREMENTS AND OUR ACTIVITIES MAY BE
RESTRICTED, WHICH MAY MAKE IT DIFFICULT FOR US TO EFFECT A BUSINESS
COMBINATION
In the event we are deemed to be an investment company under the Investment
Company Act of 1940, our activities may be restricted, including:
- restrictions on the nature of our investments; and
- restrictions on the issuance of securities,
which may make it difficult for us to effect a business combination.
In addition, we may have imposed upon us burdensome requirements, including:
- registration as an investment company;
- adoption of a specific form of corporate structure; and
- reporting, recordkeeping, voting, proxy and disclosure requirements and
other rules and regulations.
7
<PAGE>
Compliance with such additional regulatory burdens would require additional
expense we have not allotted for such purposes.
IF WE ARE FORCED TO LIQUIDATE PRIOR TO A BUSINESS COMBINATION, OUR PUBLIC
STOCKHOLDERS WILL RECEIVE LESS THAN $6.00 PER SHARE UPON DISTRIBUTION OF THE
TRUST FUND AND OUR REMAINING ASSETS
In the event we liquidate our assets upon our inability to effect a business
combination, the per-share liquidation distribution will be less than $6.00 as a
consequence of the expenses of this offering and our anticipated costs incurred
in seeking a business combination. Furthermore, there will be no distribution
from the trust fund with respect to our outstanding warrants and, accordingly,
the warrants will expire worthless in the event we liquidate prior to the
completion of a business combination. See "Proposed Business--Effecting a
Business Combination--Liquidation If No Business Combination."
SINCE MANAGEMENT IS NOT REQUIRED TO ALLOCATE FULL TIME TO OUR BUSINESS, A
CONFLICT OF INTEREST MAY RESULT IN THE ALLOCATION OF THEIR TIME, WHICH COULD
CAUSE US A DELAY IN OR PREVENT US FROM EFFECTING A BUSINESS COMBINATION
Our officers and directors are not required to commit their full time to our
affairs, which may result in a conflict of interest in allocating management
time between our operations and other businesses. Such conflict may cause a
delay in or prevent us from effecting a business combination. See
"Management--Conflicts of Interest."
SINCE WE HAVE NOT AS YET SELECTED A PARTICULAR INDUSTRY OR ANY TARGET
BUSINESS WITH WHICH TO EFFECT A BUSINESS COMBINATION, WE ARE UNABLE TO
ASCERTAIN THE MERITS OR RISKS OF THE INDUSTRY OR BUSINESS IN WHICH WE MAY
ULTIMATELY OPERATE
We have not selected any particular industry or any target business on which
to concentrate our search for a business combination. Accordingly, there is no
current basis for prospective investors to evaluate the possible merits or risks
of the particular industry or the target business in which we may ultimately
operate. We may be affected by numerous risks inherent to the business
operations of any company with which we effect a business combination. Although
our management will endeavor to evaluate the risks inherent in a particular
industry or target business, we cannot assure you that we will properly
ascertain or assess all such significant risk factors. See "Proposed
Business--Effecting a Business Combination--The Industries We Will Target."
IF MANAGEMENT OF A TARGET BUSINESS IS NOT QUALIFIED TO MANAGE SUCH COMPANY,
IT COULD RESULT IN A MATERIAL ADVERSE EFFECT ON THE DEVELOPMENT AND GROWTH
OF THE TARGET BUSINESS
We cannot assure you that our assessment of the skills, qualifications or
abilities of the management of a prospective target business will prove to be
correct, especially in light of the possible inexperience of our officers and
directors in evaluating many types of businesses. In addition, we cannot assure
you that, despite a positive assessment by our management, the management of a
prospective target business will have the necessary skills, qualifications or
abilities to manage a public company intending to embark on a program of
business development. If management of a target business is not qualified, it
could result in a material adverse effect on the development and growth of the
target business. See "Proposed Business--Effecting a Business
Combination--Limited Ability to Evaluate the Target Business Management."
8
<PAGE>
OUR PROBABLE INABILITY TO EFFECT MORE THAN ONE BUSINESS COMBINATION MAY
SUBJECT US TO ADVERSE ECONOMIC, COMPETITIVE AND REGULATORY DEVELOPMENTS,
INCLUDING THE INABILITY TO DIVERSIFY OUR OPERATIONS OR BENEFIT FROM THE
POSSIBLE SPREADING OF RISKS OR OFFSETTING OF LOSSES
Our initial business combination must be with a business with a fair market
value of at least 80% of our net assets at the time of such acquisition.
Consequently, it is likely that we will have the ability to effect only a single
business combination and be unable to diversify our operations or benefit from
the possible spreading of risks or offsetting of losses. Our probable lack of
diversification may subject us to numerous economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact upon the
particular industry in which we may operate subsequent to a business
combination. Accordingly, our prospects for success will be entirely dependent
upon the future performance of a single business or product. See "Proposed
Business--Effecting a Business Combination--Probable Lack of Business
Diversification."
WE MAY ISSUE SHARES OF OUR COMMON STOCK AND/OR PREFERRED STOCK TO EFFECT A
BUSINESS COMBINATION, WHICH WOULD REDUCE THE EQUITY INTEREST OF OUR
STOCKHOLDERS
We may issue shares of our common stock or preferred stock, or a combination
of common and preferred stock, to effect a business combination. The issuance of
additional shares of our common stock or any number of shares of our preferred
stock may:
- significantly reduce the equity interest of our stockholders;
- possibly cause a change in control if a substantial number of our shares
of common stock are issued which may affect, among other things, our
ability to utilize our net operating loss carryforwards, if any;
- adversely affect prevailing market prices for our common stock; and
- impair our ability to raise additional capital through the sale of our
equity securities.
Additionally, to the extent we issue shares of common stock to effect a business
combination, the potential for the issuance of substantial numbers of additional
shares upon exercise of our warrants could increase our cost of the target
business in terms of number of shares required to be issued.
WE MAY BE UNABLE TO OBTAIN ADDITIONAL FINANCING, IF REQUIRED, TO EFFECT A
BUSINESS COMBINATION OR TO FUND THE OPERATIONS AND GROWTH OF THE TARGET
BUSINESS, WHICH COULD COMPEL US TO RESTRUCTURE THE TRANSACTION OR ABANDON A
PARTICULAR BUSINESS COMBINATION
We may seek additional financing to complete a business combination or to
fund the operations and growth of a target business, which may include assuming
or refinancing the indebtedness of the target business. We cannot assure you
that such financing would be available on acceptable terms, if at all. To the
extent that such additional financing proves to be unavailable when needed to
complete a particular business combination, we would, in all likelihood, be
compelled to restructure the transaction or abandon that particular business
combination and seek an alternative candidate. In addition, our failure to
secure additional financing could have a material adverse effect on the
continued development or growth of the target business.
OUR LOSS OF THE SERVICES OF LAWRENCE BURSTEIN WOULD MAKE IT DIFFICULT TO
FIND A SUITABLE COMPANY FOR A BUSINESS COMBINATION, WHICH MAKES IT MORE
LIKELY THAT WE WILL BE FORCED TO LIQUIDATE OUR TRUST FUND AND DISTRIBUTE TO
OUR STOCKHOLDERS SOMETHING LESS THAN THE AMOUNT PAID FOR THE SECURITIES
PURCHASED IN THIS OFFERING
Our ability to successfully effect a business combination will be largely
dependent upon the efforts of Lawrence Burstein, our president. We have not
entered into an employment agreement with Mr. Burstein or obtained any "key man"
life insurance on his life. The loss of Mr. Burstein's services
9
<PAGE>
could have a material adverse effect on our ability to successfully achieve our
business objectives, including seeking a suitable target business to effect a
business combination.
WE DO NOT HAVE ANY OPERATING HISTORY UPON WHICH YOU MAY EVALUATE OUR FUTURE
PERFORMANCE
As we have no history of operations, investors will be unable to assess our
future performance in effecting a business combination. Our management's record
of effecting business combinations while affiliated with other blank check
companies may not be indicative of its success in effecting a business
combination between us and a target company.
OUR DIRECTORS MAY HAVE A CONFLICT OF INTEREST IN DETERMINING WHETHER A
PARTICULAR BUSINESS IS APPROPRIATE TO EFFECT A BUSINESS COMBINATION, WHICH
MAY NOT BE IN THE BEST INTERESTS OF OUR STOCKHOLDERS
Each of our directors owns stock in our company, which will be held in
escrow until we effect a business combination. Consequently, management's
discretion in determining the fair market value of a target business and the
suitability of a proposed combination may result in a conflict of interest when
determining whether a particular target business is appropriate to effect a
business combination. Such conflict may not be in the best interests of our
stockholders. See "Management--Conflicts of Interest."
WE INTEND TO HAVE OUR SECURITIES QUOTED ON THE OTC BULLETIN BOARD, WHICH MAY
LIMIT THE LIQUIDITY AND PRICE OF OUR SECURITIES MORE THAN IF OUR SECURITIES
WERE QUOTED OR LISTED ON THE NASDAQ STOCK MARKET OR A NATIONAL EXCHANGE.
Our securities will be traded in the over-the-counter market. We anticipate
that they will be quoted on the OTC Bulletin Board, an NASD sponsored and
operated inter-dealer automated quotation system for equity securities not
included in The Nasdaq Stock Market, as well as in the NQB Pink Sheets.
Quotation of our securities on the OTC Bulletin Board and/or the NQB Pink Sheets
may limit the liquidity and price of our securities more than if our securities
were quoted or listed on The Nasdaq Stock Market or a national exchange.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements and information relating
to, among other things, our business strategy and anticipated business
combination. We identify forward-looking statements in this prospectus using
words such as the following and other similar statements:
<TABLE>
<S> <C> <C> <C>
"believes" "intends" "plans" "expects"
"predicts" "may" "will" "would"
"should" "contemplates" "anticipates"
</TABLE>
These statements are based on our beliefs as well as assumptions we made
using information currently available to us. Because these statements reflect
our current views concerning future events as they relate to us, these
statements involve risks, uncertainties and assumptions which may be
significantly more adverse than the results or expectations discussed in the
forward-looking statements.
10
<PAGE>
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the units, after
deducting offering expenses and underwriting discounts, will be approximately
$6,500,000, or $7,512,500 if the underwriters' over-allotment option is
exercised in full.
We intend to allocate the net proceeds as follows:
- $6,362,500, or $7,375,000 if the underwriters' over-allotment option is
exercised in full, will be placed in a trust fund maintained by The Bank
of New York, 51 West 52nd Street, New York, New York, as trustee. Such
proceeds will not be released from the trust fund until the earlier of the
completion of a business combination or our liquidation.
- The net proceeds not held in the trust fund, approximately $137,500, will
be used for:
- the performance of due diligence investigations of prospective
acquisition candidates;
- legal, accounting and other expenses attendant to such due diligence
investigations and to structuring, negotiating and consummating a
business combination;
- legal and accounting fees relating to our obligation to file periodic
reports, proxy statements and other informational material with the
SEC; and
- payment to Unity Venture Capital Associates Ltd. of a monthly fee of
$5,000 for general and administrative expenses.
To the extent that our capital stock is used in whole or in part as
consideration to effect a business combination, the proceeds held in the trust
fund as well as any other net proceeds not expended will be used to finance the
operations of the target business.
Unity Venture has advanced to us approximately $56,000 for payment of part
of our expenses of this offering. Such advances will be repaid out of the gross
proceeds of this offering.
Proceeds of this offering not immediately required for the purposes set
forth above will be invested in United States government securities or other
high-quality, short-term interest-bearing investments, provided, however, that
we will attempt to invest the net proceeds in a manner which does not result in
us being deemed to be an investment company under the Investment Company Act. We
believe that, in the event a business combination is not effected during the
24 month period from the date of the completion of this offering, unless
extended to 30 months as discussed elsewhere in this prospectus, and to the
extent that a significant portion of the net proceeds is not used in evaluating
various prospective target businesses, the interest income derived from
investment of the net proceeds during such period will be sufficient to defray
continuing general and administrative expenses, as well as costs relating to
compliance with securities laws and regulations, including associated
professional fees.
Our public stockholders will be entitled to receive funds from the trust
fund only in the event of our liquidation or if they were to seek to convert
their shares into cash upon a business combination which they voted against. Our
public stockholders will not have any other right or interest in the trust fund.
11
<PAGE>
DILUTION
The difference between the initial public offering price per share of our
common stock, assuming no value is attributed to the class A warrants included
in the units, and the pro forma net tangible book value per share of our common
stock after this offering constitutes the dilution to investors in this
offering. Net tangible book value per share is determined by dividing our net
tangible book value, which is our total tangible assets less total liabilities,
by the number of outstanding shares of our common stock.
As of August 31, 2000, our net tangible book value was $(124), or $0.00 per
share of common stock. After giving effect to the sale of 1,250,000 shares of
common stock included in the units, and the deduction of underwriting discounts
and estimated offering expenses, our pro forma net tangible book value at
August 31, 2000 would have been $5,228,012, or $2.90 per share of common stock,
representing an immediate increase in net tangible book value of $2.90 per share
to existing stockholders and an immediate dilution of $3.10 per share, or 51.7%,
to new investors. The following table illustrates this information as of
August 31, 2000 with respect to dilution to new investors on a per-share basis,
assuming no value is attributed to the class A warrants included in the units:
<TABLE>
<S> <C> <C>
Public offering price per share of common stock............. $6.00
Net tangible book value before this offering.............. $0.00
Increase attributable to new investors.................... 2.90
-----
Pro forma net tangible book value after this offering(1).... 2.90
-----
Dilution to new investors................................... $3.10
=====
</TABLE>
------------------------
(1) This amount is not adjusted for $1,271,864 of the gross proceeds of this
offering because if we effect a business combination, the conversion rights
to the public stockholders may result in the conversion into cash of up to
approximately 19.99% of the aggregate number of the shares sold in this
offering at a per-share conversion price equal to the amount in the trust
fund as of the record date for the determination of stockholders entitled to
vote on the business combination, inclusive of any interest, divided by the
number of shares sold in this offering.
The following table sets forth as of August 31, 2000 information with
respect to our existing stockholders and new investors:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ------------------------ AVERAGE PRICE
AMOUNT PERCENTAGE AMOUNT PERCENTAGE PER SHARE
--------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders................ 551,491 30.6% $ 75 --% $ .0001
New investors........................ 1,250,000 69.4% $ 7,500,000 100.0% $ 6.00
--------- ----- ----------- -----
Total.............................. 1,801,491 100.0% $ 7,500,075 100.0%
========= ===== =========== =====
</TABLE>
12
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of August 31, 2000 and
as adjusted to give effect to the sale of our units in this offering and the
application of the estimated net proceeds derived from the sale of our units:
<TABLE>
<CAPTION>
AS OF AUGUST 31, 2000
-----------------------
ACTUAL AS ADJUSTED
--------- -----------
<S> <C> <C>
Common stock, $.0001 par value, 0 and 249,875 shares which
may be converted, at conversion value(1).................. $ -- $1,271,864
===== ==========
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized;
none issued............................................. $ -- $ --
Common stock, $.0001 par value, 20,000,000 shares
authorized; 551,491 shares issued and outstanding;
1,551,616 shares issued and outstanding (excluding
249,875 shares which may be converted), as adjusted..... 55 155
Additional paid-in capital................................ 20 5,228,056
Deficit accumulated during development stage.............. (199) (199)
----- ----------
Total stockholders' equity (deficit).................... $(124) $5,228,012
===== ==========
</TABLE>
------------------------
(1) Reflects 19.99% of the shares of common stock sold in this offering that may
be converted into cash if we effect a business combination and the holders
of such shares exercise their conversion rights.
DIVIDEND POLICY
We have never paid or declared dividends on our common stock and do not
intend to declare any dividends prior to the completion of a business
combination. Any decision to declare dividends subsequent to a business
combination will be made by the board of directors of the company surviving the
business combination.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We were formed on March 17, 2000 to serve as a vehicle to effect a merger,
exchange of capital stock, asset acquisition or other similar business
combination with an as yet unidentified operating business which we believe has
significant growth potential. We intend to utilize cash derived from the
proceeds of this offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination.
We have neither engaged in any operations nor generated any revenues to
date. Our entire activity since inception has been to prepare for our proposed
fundraising through an offering of our equity securities.
We estimate that the net proceeds from the sale of the units, after
deducting offering expenses and underwriting discounts, will be approximately
$6,500,000, or $7,512,500 if the underwriters' over-allotment option is
exercised in full. We will use substantially all of the net proceeds of this
offering to acquire a target business, including identifying and evaluating
prospective acquisition candidates, selecting the target business, and
structuring, negotiating and consummating the business combination. We will not
acquire a target business unless its fair market value is at least 80% of our
net assets at the time of the acquisition. To the extent that our capital stock
is used in whole or in part as consideration to effect a business combination,
the proceeds held in the trust fund as well as any other net proceeds not
expended will be used to finance the operations of the target business.
We are obligated, commencing on the date of this prospectus, to pay to Unity
Venture a monthly fee of $5,000 for general and administrative expenses. In
addition, since March 31, 2000, approximately $56,000 has been advanced by Unity
Venture, on a non-interest bearing basis, for payment on our behalf of offering
expenses. We intend to repay such loan out of the proceeds of this offering.
The report of independent public accountants on our financial statements
includes an explanatory paragraph with respect to us being in the development
stage, which raises substantial doubt about our ability to continue as a going
concern.
14
<PAGE>
PROPOSED BUSINESS
INTRODUCTION
We were formed to serve as a vehicle for the acquisition of a target
business which we believe has significant growth potential. We intend to utilize
cash derived from the proceeds of this offering, our capital stock, debt or a
combination of these in effecting a business combination. Our management has
broad discretion with respect to the specific application of the net proceeds of
this offering and, as a result, this offering can be characterized as a blank
check offering. Our efforts in identifying a prospective target business will be
limited to the target industries listed below. While we may seek to effect
business combinations with more than one target business, we will, in all
likelihood, have the ability, as a result of our limited resources, to effect
only a single business combination.
EFFECTING A BUSINESS COMBINATION
IN GENERAL
Although substantially all of the net proceeds of this offering are intended
to be generally applied toward effecting a business combination as described in
this prospectus, such proceeds are not otherwise being designated for any more
specific purposes. Accordingly, prospective investors will invest in us without
an opportunity to evaluate the specific merits or risks of any one or more
business combinations. 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 its 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 and compliance with various Federal and state securities laws. In the
alternative, a business combination may involve a company which may be
financially unstable or in its early stages of development or growth.
THE INDUSTRIES WE WILL TARGET
We intend to focus our efforts in identifying a prospective target business
in the following industries:
- internet and other new media products and services;
- communications and entertainment; and
- biotechnology
To date, we have not selected any particular industry from the target
industries or any target business on which to concentrate our search for a
business combination. Accordingly, there is no basis for investors in this
offering to evaluate the possible merits or risks of the target business or the
particular industry in which we may ultimately operate. To the extent we effect
a business combination with a financially unstable company or an entity in its
early stage of development or growth, including entities without established
records of sales or earnings, we may be affected by numerous risks inherent in
the business and operations of financially unstable and early stage or potential
emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk,
we may be affected by the currently unascertainable risks of that industry. An
extremely high level of risk frequently characterizes many industries which
experience rapid growth. In addition, although our management will endeavor to
evaluate the risks inherent in a particular industry or target business, we
cannot assure you that we will properly ascertain or assess all significant risk
factors.
15
<PAGE>
SOURCES OF TARGET BUSINESSES
We anticipate that various target business candidates will be brought to our
attention from various unaffiliated sources, including securities
broker-dealers, investment bankers, venture capitalists, bankers and other
members of the financial community, who may present solicited or unsolicited
proposals. Our officers and directors and their affiliates may also bring to our
attention target business candidates. While we do not presently anticipate
engaging the services of professional firms that specialize in business
acquisitions on any formal basis, we may engage such firms in the future, in
which event we may pay a finder's fee or other compensation. In no event,
however, will we pay a finder's fee or commission to our officers or directors
or any entity with which they are affiliated for such service.
SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION
Except that a target business be within our required target industries, our
management will have virtually unrestricted flexibility in identifying and
selecting a prospective target business. In evaluating a prospective target
business, our management will consider, among other factors, the following:
- financial condition and results of operation;
- growth potential;
- experience and skill of management and availability of additional
personnel;
- capital requirements;
- competitive position;
- stage of development of the products, processes or services;
- degree of current or potential market acceptance of the products,
processes or services;
- proprietary features and degree of intellectual property or other
protection of the products, processes or services;
- regulatory environment of the industry; and
- costs associated with effecting the business combination.
These criteria are not intended to be exhaustive; any evaluation relating to the
merits of a particular business combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by our management in effecting a business combination consistent with our
business objective. In evaluating a prospective target business, our management
anticipates that we will conduct an extensive due diligence review which will
encompass, among other things, meetings with incumbent management and inspection
of facilities, as well as review of financial or other information which will be
made available to us.
We will endeavor to structure a business combination so as to achieve the
most favorable tax treatment to us, the target business and both companies'
stockholders. We cannot assure you, however, that the Internal Revenue Service
or appropriate state tax authority will agree with our tax treatment of the
business combination.
The time and costs required to select and evaluate a target business and to
structure and complete the business combination cannot presently be ascertained
with any degree of certainty. Mr. Burstein, our president and principal
stockholder, intends to devote approximately 40% of his business time to our
affairs and, accordingly, completion of a business combination may require a
greater period of time than if he devoted his full time to our affairs. We do
not have any full time employees who will be devoting 100% of his or her time to
our affairs. Any costs incurred with respect to the identification and
evaluation of a prospective target business with which a business combination is
not ultimately
16
<PAGE>
completed will result in a loss to us and reduce the amount of capital available
to otherwise complete a business combination.
FAIR MARKET VALUE OF TARGET BUSINESS
Although we intend to acquire 100% of the assets or capital stock of a
target business, we will not acquire a target business unless the fair market
value of such business is at least 80% of our net assets at the time of such
acquisition. The fair market value of such business will be determined by our
board of directors based upon standards generally accepted by the financial
community, such as actual and potential sales, earnings and cash flow and book
value. If our board is not able to independently determine that the target
business has a sufficient fair market value, we will obtain an opinion from an
unaffiliated, independent investment banking firm which is a member of the
National Association of Securities Dealers, Inc. with respect to the
satisfaction of such criteria. Since any opinion, if obtained, would merely
state that fair market value meets the 80% of net assets threshold, it is not
anticipated that copies of such opinion would be distributed to our
stockholders, although copies will be provided to stockholders who request it.
We will not be required to obtain an opinion from an investment banking firm as
to the fair market value if our board of directors independently determines that
the target business does have sufficient fair market value.
LIMITED ABILITY TO EVALUATE THE TARGET BUSINESS' MANAGEMENT
Although we intend to closely scrutinize the management of a prospective
target business when evaluating the desirability of effecting a business
combination, we cannot assure you that our assessment of such management will
prove to be correct, especially in light of the possible inexperience of our
officers and directors in evaluating many types of businesses. In addition, we
cannot assure you that such future management will have the necessary skills,
qualifications or abilities to manage a public company intending to embark on a
program of business development. Furthermore, the future role of our directors,
if any, in the target business cannot presently be stated with any certainty.
While it is possible that one or more of our directors will remain associated in
some capacity with us following a business combination, it is unlikely that any
of them will devote their full efforts to our affairs subsequent to a business
combination. Moreover, we cannot assure you that our directors will have
significant experience or knowledge relating to the operations of the particular
target business.
We may seek to recruit additional managers to supplement the incumbent
management of the target business. We cannot assure you that we will have the
ability to recruit such additional managers, or that such additional managers
will have the requisite skills, knowledge or experience necessary to enhance the
incumbent management.
PROBABLE LACK OF BUSINESS DIVERSIFICATION
While we may seek to effect business combinations with more than one target
business, our initial business combination must be with a target business which
satisfies the minimum valuation standard at the time of such acquisition,
discussed above. Consequently, it is likely that we will have the ability to
effect only a single business combination. Accordingly, the prospects for our
success will be entirely dependent upon the future performance of a single
business. Unlike other entities which may have the resources to complete several
business combinations of entities operating in multiple industries or multiple
areas of a single industry, it is highly likely that we will not have the
resources to diversify our operations or benefit from the possible spreading of
risks or offsetting of losses. Our probable lack of diversification may subject
us to numerous economic, competitive and regulatory developments, any or all of
which may have a substantial adverse impact upon the particular industry in
which we may operate subsequent to a business combination. In addition, by
consummating a business combination with only a single entity, the prospects for
our success may become dependent upon the development or market acceptance of a
single or limited number of products, processes or services. Accordingly,
17
<PAGE>
even with our capital investment in and management assistance, if any, to the
target business, we cannot assure you that the target business will prove to be
commercially viable. Prior to the completion of a business combination, we have
no intention of either loaning any of the proceeds of this offering to any
company or purchasing a minority equity interest in any company.
OPPORTUNITY FOR STOCKHOLDER APPROVAL OF BUSINESS COMBINATION
We are under no obligation to provide information to our stockholders
regarding the various potential target businesses being considered by our
management. Consequently, our stockholders will neither receive nor otherwise
have the opportunity to evaluate any financial or other information which will
be made available to us while selecting a potential business combination. As a
result, investors in this offering will be entirely dependent on our
management's judgment in selecting a target business.
Prior to the completion of a business combination, however, we will submit
the transaction to our stockholders for approval, even if the nature of the
acquisition is such as would not ordinarily require stockholder approval under
applicable state law. In connection with seeking stockholder approval of a
business combination, we will furnish our stockholders with proxy solicitation
materials prepared in accordance with the Securities Exchange Act of 1934,
which, among other matters, will include a description of the operations of the
target business and audited historical financial statements of such business.
All of our existing stockholders, including all of our officers and
directors, have agreed to vote their respective shares of common stock owned by
them immediately prior to this offering in accordance with the vote of the
majority of all the other shares of common stock voted on any business
combination. We will proceed with the business combination only if the public
stockholders, who own at least a majority of the shares of common stock sold in
this offering, vote in favor of the business combination and public stockholders
owning less than 20% of the shares sold in this offering exercise their
conversion rights.
CONVERSION RIGHTS
At the time we seek stockholder approval of any business combination, we
will offer each public stockholder, except those discussed below, the right to
have such stockholder's shares of common stock converted to cash if such
stockholder votes against the business combination and the business combination
is approved and completed. The per-share conversion price will be equal to the
amount in the trust fund, inclusive of any interest, as of the record date for
determination of stockholders entitled to vote on such business combination,
divided by the number of shares sold in this offering. Without taking into any
account interest earned on the trust fund, the per-share conversion price would
be $5.09, or $.91 less than the per-unit offering price of $6.00. There will be
no distribution from the trust fund with respect to the warrants included in the
units. An eligible stockholder may request conversion at any time after the
mailing to our stockholders of the proxy statement and prior to the vote taken
with respect to a proposed business combination at a meeting held for that
purpose, but such request will not be granted unless such stockholder votes
against the business combination and the business combination is approved and
completed. Any such request for conversion, once made, may be withdrawn at any
time up to the date of the meeting. It is anticipated that the funds to be
distributed to stockholders entitled to convert their shares who elect such
conversion will be distributed promptly after completion of a business
combination. Our existing stockholders will not have any conversion rights to
the extent such shares of common stock owned by them were purchased immediately
prior to this offering. We will not complete any business combination if public
stockholders, owning 20% or more of the shares sold in this offering, exercise
their conversion rights.
18
<PAGE>
LIQUIDATION IF NO BUSINESS COMBINATION
In the event that we do not complete a business combination within
24 months after the completion of this offering, or within 30 months if the
extension criteria described below have been satisfied, and except as described
below, we will be dissolved and will distribute to all of our public
stockholders, in proportion to their respective equity interests, an aggregate
sum equal to the amount in the trust fund, inclusive of any interest, plus any
remaining net assets. Our existing stockholders have waived their rights to
participate in any liquidation distribution with respect to shares of common
stock owned by them immediately prior to this offering. If we were to expend all
of the net proceeds of this offering, other than the proceeds deposited in the
trust fund, and without taking into account interest, if any, earned on the
trust fund, the per-share liquidation price would be $5.09, or $.91 less than
the per-unit offering price of $6.00. The proceeds deposited in the trust fund
could, however, become subject to the claims of our creditors which could be
prior to the claims of the public stockholders. We cannot assure you that the
per-share liquidation price will not be less than $5.09, plus interest, due to
claims of creditors. There will be no distribution from the trust fund with
respect to the warrants included in the units.
If we enter into either a letter of intent, an agreement in principle or a
definitive agreement to effectuate a business combination prior to the
expiration of 24 months after the completion of this offering, but are unable to
complete such business combination within such 24 month period, then we will
have an additional six months in which to complete that business combination
contemplated by such letter of intent, agreement in principle or definitive
agreement. If we are unable to do so by the expiration of the 30 month period
from the completion of this offering, we will then liquidate. Upon notice from
us, the trustee of the trust fund will commence liquidating the investments
constituting the trust fund and will turn over the proceeds to our transfer
agent for distribution to our stockholders. Except as described below, we
anticipate that our instruction to the trustee would be given promptly after the
expiration of the applicable 24 month or 30 month period.
Our stockholders shall be entitled to receive funds from the trust fund only
in the event of our liquidation or if such stockholders seek to convert their
respective shares into cash upon a business combination which such stockholder
voted against and which is actually completed by us. In no other circumstances
shall a stockholder have any right or interest of any kind to or in the trust
fund.
In the event we do not succeed in effecting a business combination within
the period required, we may seek stockholder approval to continue in existence
by amending our Certificate of Incorporation to provide for a new dissolution
date. If we receive such stockholder approval, we intend to redeem all of our
common stock held by public stockholders voting against such amendment, who
shall receive in return their pro rata share of our total net proceeds.
PRIOR INVOLVEMENT OF PRINCIPALS IN BLANK CHECK COMPANIES
All of our officers and directors have held similar positions in at least
one other blank check company, each of which as of the date of this prospectus
has both publicly sold its equity securities to finance a business combination
with a target business and subsequently completed a business
19
<PAGE>
combination. Information with respect to each such blank check company, initial
public offering and business combination is set forth below:
<TABLE>
<CAPTION>
PERCENTAGE
DATE OF IPO DATE OF OF TARGET
NAME OF BLANK (APPROXIMATE BUSINESS NAME AND NATURE BUSINESS TRADING MARKET
CHECK COMPANY NET PROCEEDS) COMBINATION OF TARGET BUSINESS ACQUIRED (TICKER SYMBOL)
--------------------- -------------------- -------------------- -------------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Unity First November 1996 July 1999 GraphOn Corporation 44% Nasdaq National
Acquisition Corp. ($7,500,000, develops, markets, Market (GOJO)
excluding sells and supports
approximately server-based
$17,000,000 from software for the
subsequently enterprise computing
exercised IPO environment
warrants)
Trinity Americas Inc. February 1994 March 1996 Brazil Fast Food 43% Nasdaq SmallCap
($9,000,000) Corp. owns and Market (BOBS)
operates hamburger
fast food
restaurants in
Brazil
Trinity Six Inc. August 1993 May 1995 USCI Inc. develops 48% OTC Bulletin Board
($9,000,000, exclu- centralized (USCM). A subsidiary
ding approximately automated of USCI has filed
$25,000,000 from computer-based for bankruptcy
subsequently cellular telephone protection(1)
exercised IPO activation systems
warrants)
Trinity Capital May 1992 November 1993 Alliance 20% The company has
Opportunity Corp. ($21,750,000) Entertainment Corp. filed for bankruptcy
distributed pre- protection(2)
recorded music,
accessories and
entertainment
related products
Trinity Capital September 1991 August 1993 SubMicron Systems 37% The company has
Enterprise Corp. ($9,000,000, exclu- Corporation filed for bankruptcy
ding approximately manufactured semi- protection(3)
$6,000,000 from conductor capital
subsequently equipment
exercised IPO
warrants)
Trinity Acquisition August 1990 August 1991 T.H.Q., Inc. designs 50% Nasdaq National
Corp. ($2,250,000, exclu- and markets Market (THQI)
ding approximately Nintendo, Sony and
$10,000,000 from Sega games
subsequently
exercised IPO
warrants)
RT Acquisition September 1988 April 1990 Polyvision 20% AMEX (PLI)
Associates Inc. ($1,525,000) Corporation
manufactures and
sells vision
projection systems,
architectural
building panels,
modular partitions
and office products
RT Associates Inc. April 1987 March 1988 Bloc Development 48% NYSE (SYX)(4)
($2,250,000) Corp. develops
software
</TABLE>
------------------------------
(1) A wholly-owned subsidiary of USCI Inc. filed a voluntary petition under
Chapter 11 of the Federal Bankruptcy Code on October 29, 1999, approximately
4 years after the business combination. None of our officers and directors
were affiliated with USCI at the time of its bankruptcy.
20
<PAGE>
(2) Alliance Entertainment Corp. filed a voluntary petition under Chapter 11 of
the Federal Bankruptcy Code on May 21, 1998, approximately 5 years after the
business combination, and terminated its registration under the Exchange Act
on August 20, 1998. None of our officers and directors were affiliated with
Alliance at the time of its bankruptcy.
(3) SubMicron Systems filed a voluntary petition under Chapter 11 of the Federal
Bankruptcy Code on September 1, 1999, approximately 6 years after the
business combination. It completed the sale of substantially all of its
assets by order of the bankruptcy court in October 1999 and is presently in
liquidation.
(4) Bloc Development Corp., which changed its name to Tiger Direct Inc., was
acquired by Global DirectMail Corp. in 1995. Global DirectMail changed its
name to Systemax Inc. in 1999.
We cannot assure you that we will be able to effect a business combination
or that the type of business or the performance of the target business, if any,
will be similar to that of these other blank check companies.
COMPETITION
In identifying, evaluating and selecting a target business, we expect to
encounter intense competition from other entities having a business objective
similar to ours. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and/or
other resources than us and our financial resources will be relatively limited
when contrasted with those of many of these competitors. This inherent
competitive limitation may give others an advantage in pursuing the acquisition
of a target business. Further, our obligation to seek stockholder approval of a
business combination may delay the completion of a transaction; and our
obligation to convert into cash shares of common stock held by our eligible
stockholders as described under "--Effecting a Business Combination--Conversion
Rights," may reduce the resources available to us for a business combination or
for other corporate purposes. Either of these obligations may place us at a
competitive disadvantage in successfully negotiating a business combination. Our
management believes, however, that our status as a public entity and potential
access to the United States public equity markets may give us competitive
advantage over privately-held entities having a similar business objective as us
in acquiring a target business with significant growth potential on favorable
terms.
UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS
In the event that we succeed in effecting a business combination, there will
be, in all likelihood, intense competition from competitors of the target
business. In particular, certain industries which experience rapid growth
frequently attract an increasingly larger number of competitors, including
competitors with increasingly greater financial, marketing, technical and other
resources than the initial competitors in the industry. The degree of
competition characterizing the industry of any prospective target business
cannot presently be ascertained. We cannot assure you that, subsequent to a
business combination, we will have the resources to compete effectively,
especially to the extent that the target business is in a high-growth industry.
FACILITIES
We presently occupy approximately 500 square feet of office space in
premises occupied by Unity Venture. The cost for such space is included in the
$5,000 per-month fee Unity Venture charges us for general and administrative
services. We believe, based upon rents and fees for similar services in the New
York City metropolitan area, that the fee charged by Unity Venture is at least
as favorable as we could have obtained from an unaffiliated person. We believe
our facilities are adequate for our present purposes.
21
<PAGE>
EMPLOYEES
As of the date of this prospectus, we, in addition to our two officers, have
one part-time employee who is employed in an administrative capacity.
PERIODIC REPORTING AND AUDITED FINANCIAL STATEMENTS
We have registered our securities under the Exchange Act and have reporting
obligations, including the requirement that we file annual and quarterly reports
with the SEC. In accordance with the requirements of the Exchange Act, we intend
to furnish to our stockholders annual reports containing financial statements
audited and reported on by our independent accountants.
We will not acquire a target business if audited financial statements cannot
be obtained for such target business. Additionally, our management will provide
stockholders who acquired their shares of common stock subsequent to the date of
this prospectus with audited financial statements, prepared in accordance with
generally accepted accounting principles, of the prospective target business as
part of the proxy solicitation materials sent such stockholders to assist them
in assessing the target business. Our management believes that the requirement
of having available audited financial statements for the target business will
not materially limit the pool of potential target businesses available for
acquisition.
COMPARISON TO RULE 419
The following table compares and contrasts the terms of our offering and the
terms of an offering under Rule 419 assuming that the gross proceeds,
underwriting discounts and underwriting expenses for the Rule 419 offering are
the same as this offering. None of the terms under a Rule 419 offering will
apply to this offering.
<TABLE>
<CAPTION>
TERMS OF OUR OFFERING TERMS UNDER A RULE 419 OFFERING
----------------------------- --------------------------------
<S> <C> <C>
ESCROW OF OFFERING
PROCEEDS................... $6,362,500 of the offering $6,075,000 of the offering
proceeds will be deposited proceeds would be required to be
into a trust fund maintained deposited into either an escrow
by The Bank of New York. account with an insured
depositary institution or in a
bank in a segregated trust
account established by a
registered broker-dealer.
INVESTMENT OF NET PROCEEDS... Proceeds will be invested in Proceeds could be invested only
U.S. government securities or in specified securities such as
other high-quality, short a money market fund meeting
term interest-bearing conditions of the Investment
investments. Company Act of 1940 or in
securities that are direct
obligations of, or obligations
guaranteed as to principal or
interest by, the United States.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
TERMS OF OUR OFFERING TERMS UNDER A RULE 419 OFFERING
----------------------------- --------------------------------
<S> <C> <C>
TRADING OF SECURITIES
ISSUED..................... The units may commence No trading of the units or the
trading immediately on the underlying common stock and
date of this prospectus. The warrants would be permitted
common stock and class A until the completion of a
warrants comprising the units business combination. During
will begin to trade this period, the securities
separately on the 90th day would be held in the escrow or
after the date of this trust account.
prospectus unless GBI Capital
Partners Inc. informs us of
its decision to allow earlier
separate trading provided we
have filed with the SEC an
audited balance sheet
reflecting our receipt of the
proceeds of this offering.
EXERCISE OF THE WARRANTS..... The warrants cannot be The warrants could be exercised
exercised until the later of prior to the completion of a
the completion of a business business combination, but
combination or one year from securities received and cash
the date of this prospectus. paid in connection with the
exercise would be deposited in
the escrow or trust account.
FAIR MARKET VALUE OF TARGET
BUSINESS................... The target business must have No similar requirement under
a fair market value of at Rule 419. However, upon the
least 80% of our net assets execution of an agreement to
at the time of acquisition, acquire one or more businesses
which would equal $5,200,041 whose fair value represents at
upon completion of this least $6,000,000, we would be
offering. required to file a
post-effective amendment to this
registration statement.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
TERMS OF OUR OFFERING TERMS UNDER A RULE 419 OFFERING
----------------------------- --------------------------------
<S> <C> <C>
ELECTION TO REMAIN AN
INVESTOR................... We will give our stockholders A prospectus containing
the opportunity to vote on information required by the SEC
the business combination. In would be sent to each investor.
connection with seeking such Each investor would be given the
stockholder approval, we will opportunity to notify the
send each stockholder a proxy company whether he or she elects
statement containing to remain a stockholder of the
information required by the company. Such notification would
SEC. A stockholder following have to be in writing within a
the procedures described in specified period. If the company
this prospectus is given the has not received such
right to convert his or her notification by the end of such
shares into his or her pro period, funds and interest, if
rata share of the trust fund. any, held in the trust or escrow
However, a stockholder who account would be returned to
does not follow these such stockholder.
procedures or a stockholder
who does not take any action
would not be entitled to the
return of any funds.
BUSINESS COMBINATION
DEADLINE................... A business combination must If an acquisition has not been
occur within 24 months after consummated within 18 months
the completion of this after the effective date of the
offering or within 30 months initial registration statement,
after the completion of this funds held in the trust or
offering if a letter of escrow account would be returned
intent or definitive to investors.
agreement relating to a
prospective business
combination was entered into
prior to the end of the 24
month period. However, we can
seek stockholder approval to
continue our existence.
RELEASE OF FUNDS............. The proceeds held in the The proceeds held in the escrow
escrow account will not be account would not be released
released until the earlier of until the earlier of the
the completion of a business completion of a business
combination or our combination or the failure to
liquidation upon failure to effect a business combination
effect a business combination within the allotted time.
within the allotted time.
</TABLE>
24
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Our current directors and officers are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- ------------------------------------------
<S> <C> <C>
Lawrence Burstein......................... 57 President, Treasurer and Director
John Cattier.............................. 67 Director
Barry Ridings............................. 47 Director
Norman Leben.............................. 41 Secretary and Director
</TABLE>
LAWRENCE BURSTEIN has served as our president and a director since our
inception. Since March 1996, Mr. Burstein has been president and a principal
stockholder of Unity Venture Capital Associates Ltd., a private investment
banking concern. For approximately ten years prior to 1996, Mr. Burstein was the
president, a director and principal stockholder of Trinity Capital Corporation,
a private investment banking concern. Trinity ceased operations upon the
formation of Unity Venture in 1996. Mr. Burstein is a director of:
- T.H.Q., Inc., which develops and markets video games for Sony, Nintendo
and Sega;
- Brazil Fast Food Corporation, the owner and operator of the second largest
fast food restaurant chain in Brazil;
- CAS Medical Systems, Inc., which manufactures and markets blood pressure
monitors and other disposable products principally for the neonatal
market;
- MNI Group, Inc., which principally manufactures and distributes
nutritional supplements;
- I.D. Systems, Inc., which designs, develops and produces a wireless
monitoring and tracking system which uses radio frequency technology; and
- Quintel Communications, Inc., which is a direct marketing company that
develops and operates Internet-based marketing companies.
Mr. Burstein received an L.L.B. from Columbia Law School.
JOHN CATTIER has been a director since our inception. Since May 1996,
Mr. Cattier has been a director and a shareholder of Unity Venture. Mr. Cattier
has been an independent consultant since January 1985. From 1957 to
December 1984, Mr. Cattier was associated with White Weld & Co. and with Credit
Suisse White Weld, predecessor companies to Credit Suisse First Boston,
investment bankers, in various capacities. Mr. Cattier was a stockholder of
Trinity Capital Corporation prior to its cessation of operations in 1996.
Mr. Cattier is chairman of the board of directors of Heptagon Investments
Limited, an investment company. Mr. Cattier received a B.A. from Yale
University.
BARRY RIDINGS has been a director since our inception. Since July 1999,
Mr. Ridings has been a managing director of Lazard Freres, investment bankers.
Previously and from March 1990, he was a managing director of Alex. Brown &
Sons, investment bankers. From June 1986 to March 1990, Mr. Ridings was a
managing director of Drexel Burnham Lambert, investment bankers. Mr. Ridings was
a stockholder of Trinity Capital Corporation prior to its cessation of
operations in 1996. Mr. Ridings is a director of:
- Furr's/Bishop's, a cafeteria restaurant chain;
- Noodle Kidoodle, an operator of specialty toy stores;
- Seaman's Furniture, a retail furniture store;
- Siem Industries, interests in oil, gas and shipping; and
- New Valley Corp., formerly known as Western Union.
Mr. Ridings was also a director of SubMicron Systems Corporation, which
manufactured semi-conductor capital equipment. SubMicron filed a voluntary
petition under Chapter 11 of the Federal Bankruptcy Code and is currently in
liquidation. Mr. Ridings received an M.B.A. from Cornell University.
25
<PAGE>
NORMAN LEBEN has been our secretary and a director since our inception.
Mr. Leben is, and since 1988 has been, a partner of Dalessio, Millner & Leben,
certified public accountants. Prior to 1998 and from 1985, Mr. Leben was engaged
in the acquisition, management, syndication and operation of real estate and
other emerging marketing businesses. Prior to 1985, Mr. Leben was employed by
Laventhol & Horwath, certified public accountants. Mr. Leben received a B.B.A.
from George Washington University.
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Directors receive no
compensation for serving on our board other than reimbursement of reasonable
expenses incurred in attending meetings. Officers are elected annually by our
board and serve at the discretion of our board. We have not, nor do we intend
to, enter into employment agreements with any of our officers.
EXECUTIVE COMPENSATION
No officer has received any cash compensation from us since inception for
services rendered. Other than the $5,000 monthly administrative fee payable to
Unity Venture commencing on the date of this prospectus and an aggregate of
150,000 class A warrants issued to our officers and directors as of
September 30, 2000, no compensation of any kind, including finders and
consulting fees, will be paid to any of our affiliated existing stockholders,
for services rendered to us prior to or with respect to the business
combination; provided, however, that such persons shall be entitled to receive,
upon completion of the business combination, commissions for monies raised by
them for us with respect to the business combination, at rates that are no less
favorable to us than those which we would pay to unaffiliated third parties. In
addition, our officers and directors will receive reimbursement for any
out-of-pocket expenses incurred for activities on our behalf. There is no limit
on the amount of such reimbursable expenses and there will be no review of the
reasonableness of such expenses by anyone other than our board, which includes
two members who are officers and who may seek reimbursement.
STOCK OPTION PLAN
Our 2000 Stock Option Plan was adopted by both our board of directors and a
majority in interest of our stockholders on March 20, 2000. The plan provides
for the granting of options which are intended to qualify either as incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986 or as options which are not intended to meet the requirements of such
section. The total number of shares of common stock reserved for issuance under
the plan is 255,000. Options to purchase shares may be granted under the plan to
persons who, in the case of incentive stock options, are our employees,
including officers, or, in the case of nonstatutory stock options, are our
employees, including officers, or non-employee directors.
The plan provides for its administration by our board or a committee chosen
by the board, which has discretionary authority, subject to restrictions
contained in the plan and in the tax code, to determine the number of incentive
stock options and nonstatutory stock options granted and the individuals to
whom, the times at which and the exercise price for which options will be
granted.
The exercise price of all incentive stock options granted under the plan
must be at least equal to the fair market value of such shares on the date of
the grant or, in the case of incentive stock options granted to the holder of
more than 10% of our common stock, at least 110% of the fair market value of
such shares on the date of the grant. The maximum exercise period for which
incentive stock options may be granted is ten years from the date of grant or
five years in the case of an individual owning more than 10% of our common
stock. The aggregate fair market value determined at the date of the option
grant, of shares with respect to which incentive stock options are exercisable
for the first time by the holder of the option during any calendar year, shall
not exceed $100,000.
No options may be granted under the plan prior to the completion of a
business combination.
26
<PAGE>
CONFLICTS OF INTEREST
Potential investors should be aware of the following potential conflicts of
interest:
- None of our officers and directors are required to commit their full time
to our affairs and, accordingly, such persons may have conflicts of
interest in allocating management time among various business activities.
- In the course of their other business activities, our officers and
directors may become aware of investment and business opportunities which
may be appropriate for presentation to us as well as the other entities
with which they are affiliated. Such persons may have conflicts of
interest in determining to which entity a particular business opportunity
should be presented.
- Our officers and directors may in the future become affiliated with
entities, including other blank check companies, engaged in business
activities similar to those intended to be conducted by us.
- Messrs. Burstein, Leben and Cattier are each directors and, together with
Mr. Ridings, shareholders of Unity Venture, which is engaged principally
in making investments in privately held companies.
- Since each of our directors owns shares of our common stock which will be
released from escrow only if a business combination is successfully
completed, our board may have a conflict of interest in determining
whether a particular target business is appropriate to effect a business
combination, as it has significant discretion in determining the fair
market value of a target business and whether a target business is
suitable for a proposed business combination.
In general, officers and directors of a corporation incorporated under the
laws of the State of Delaware are required to present business opportunities
meeting the below-listed criteria to such corporation. Under Delaware law,
officers and directors generally are required to bring business opportunities to
the attention of such corporation if:
- such corporation could financially undertake the opportunity;
- the opportunity is within the corporation's line of business; and
- it would not be fair to the corporation and its stockholders for the
opportunity not to be brought to the attention of such corporation.
Accordingly, as a result of multiple business affiliations, our officers and
directors may have similar legal obligations relating to presenting business
opportunities meeting the above-listed criteria to multiple entities. In
addition, conflicts of interest may arise when our board evaluates a particular
business opportunity with respect to the above-listed criteria. We cannot assure
you that any of the above mentioned conflicts will be resolved in our favor.
In order to minimize potential conflicts of interest which may arise from
multiple corporate affiliations, each of Messrs. Burstein, Leben, Ridings and
Cattier have agreed in principle to present to us for our consideration, prior
to presentation to any other entity, any business opportunity which, under
Delaware law, may reasonably be required to be presented to us, until the
earlier of a business combination or our liquidation. To further minimize
potential conflicts of interest, we are restricted from pursuing any
transactions with entities affiliated with any of our officers or directors
without the prior approval of a majority of our disinterested directors.
All of our existing stockholders, including all of our officers and
directors, have agreed to vote their respective shares of common stock in
accordance with the vote of the majority in interest of our other stockholders
upon any stockholder vote relating to approval of a business combination. In
addition, such stockholders have agreed to waive their respective rights to
participate in any liquidation distribution but only with respect to those
shares of common stock acquired by such persons prior to this offering.
27
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of our common stock as of August 31, 2000 and as adjusted to reflect
the sale of our common stock included in the units offered by this prospectus,
by:
- each person known by us to be the owner of more than 5% of the outstanding
shares of common stock;
- each of our officers and directors; and
- all our officers and directors as a group.
The definition of beneficial ownership includes securities which may be
acquired by a person within 60 days from the date on which beneficial ownership
is to be determined upon the exercise of options, warrants or convertible
securities. None of the persons named in the table own any options, warrants, or
convertible securities, except each of such persons owns class A warrants. The
table does not include shares issuable upon exercise of class A warrants since
such warrants are not exercisable until the completion of a business
combination.
Unless otherwise indicated, we believe that all persons named in the table
have sole voting and investment power with respect to all shares of common stock
beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND
PERCENTAGE
OF OUTSTANDING SHARES
-----------------------
AMOUNT OF BENEFICIAL BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OFFERING OFFERING
------------------------------------ -------------------- -------- --------
<S> <C> <C> <C>
Lawrence Burstein.................................... 181,711(1) 32.9% 10.1%
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue--Suite 1600
New York, New York 10016
John Cattier......................................... 150,687(1)(2) 27.3% 8.4%
Forestal El Taruman
Km 51 Ruta #15
Rocha, Uruguay
Norman Leben......................................... 67,557(1) 12.2% 3.8%
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue--Suite 1600
New York, New York 10016
Barry Ridings........................................ 4,964 * *
16 Erwin Park
Montclair, New Jersey 07902
All officers and directors as a group (4 persons).... 294,623(1)(2) 53.4% 16.4%(3)
</TABLE>
------------------------
* Less than 1%
(1) Includes 55,148 shares of common stock owned by Unity Venture, over which
shares Messrs. Burstein, Leben and Cattier share voting and investment
power.
(2) Includes 62,041 shares held by Heptagon Investments Ltd. and 1,236 shares
held by an affiliate of Heptagon. Mr. Cattier is chairman of Heptagon's
board of directors and exercises voting and dispositive control over
approximately 12.4% of Heptagon's shares of capital stock. Mr. Cattier
disclaims any voting or dispositive power over the shares of Unity
Emerging's common stock that
28
<PAGE>
are held by Heptagon and its affiliate. Also includes 32,262 shares owned by
Cricket Services Ltd., over which shares Mr. Cattier exercises voting and
dispositive control. Both Heptagon and Cricket are private investment
companies.
(3) Such officers and directors and their affiliates, collectively, have agreed
to purchase up to 125,000 units in this offering. If 125,000 units are
purchased, the aggregate holdings of such persons will increase to 419,623
shares, or 23.3% of the outstanding shares of common stock upon completion
of this offering.
The shares of our common stock and warrants owned prior to the date of this
prospectus by:
- all of our executive officers and directors and their affiliates; and
- all persons owning 5% or more of our currently outstanding shares of
common stock,
representing in the aggregate approximately 53% of the outstanding common stock
and all of the outstanding warrants immediately prior to this offering, will be
placed in escrow with American Stock Transfer & Trust Company, as escrow agent,
until the earlier of:
- six months following the completion of a business combination; or
- our liquidation.
During the escrow period, such persons will not be able to sell their
securities, but will retain all other rights as our stockholders, including,
without limitation, the right to vote such shares of common stock. All other
existing stockholders have agreed not to sell their respective shares of common
stock until the completion of a business combination. If we are unable to effect
a business combination and liquidate, none of our existing stockholders will
receive any portion of the liquidation proceeds with respect to common stock
owned by such existing stockholders prior to the date of this prospectus.
Our executive officers and directors and their affiliates, collectively,
have agreed to purchase up to 125,000 units in this offering. If 125,000 units
are purchased, the aggregate holdings of our directors and officers will
increase to 419,623 shares, or 23.3% of the outstanding shares of common stock
upon completion of this offering. These 125,000 units may not be sold until the
earlier of six months following the completion of a business combination or our
liquidation. If we are liquidated, the executive officers, directors and their
affiliates who purchase the 125,000 units will receive a portion of such
liquidation proceeds with respect to the common stock which forms a part of such
125,000 units.
Messrs. Burstein, Leben and Cattier, as well as Unity Venture, may be deemed
to be "parents" and "promoters" of the Company, as such terms are defined under
the Federal securities laws.
Upon completion of this offering, our existing stockholders, which includes
our officers and directors, collectively, will beneficially own approximately
37.6% of the then issued and outstanding shares of our common stock taking into
account the 125,000 units that our directors and officers and their affiliates
have agreed to purchase in this offering. These stockholders may be able to
effectively exercise control over all matters requiring approval by our
stockholders, including the election of directors and approval of significant
corporate transactions other than approval of a business combination.
29
<PAGE>
CERTAIN TRANSACTIONS
On March 20, 2000, we issued an aggregate of 294,623 shares of common stock
at a purchase price of $.0001 per share, to the following persons:
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES RELATIONSHIP TO US
---- --------- --------------------------------
<S> <C> <C>
Lawrence Burstein............... 126,563 Our president, treasurer and one
of our directors.
Heptagon Investments Ltd. and
affiliate..................... 63,277 An entity in which John Cattier,
one of our directors, owns an
equity interest.
Unity Venture Capital Associates
Ltd. ......................... 55,148 An affiliate of Messrs.
Burstein, Leben and Cattier.
Cricket Services Ltd............ 32,262 An affiliate of Mr. Cattier.
Norman Leben.................... 12,409 Our secretary and one of our
directors.
Barry Ridings................... 4,964 One of our directors.
</TABLE>
On March 20, 2000, we issued class A warrants to purchase an aggregate of
200,000 shares of common stock to our directors. As of September 30, 2000, such
warrants were cancelled and class A warrants to purchase 150,000 shares of
common stock were issued to the following directors after giving effect to the
reverse split of our common stock:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF COMMON
STOCK UNDERLYING
NAME CLASS A WARRANTS
---- ----------------
<S> <C>
John Cattier................................................ 44,375
Norman Leben................................................ 44,375
Lawrence Burstein........................................... 44,375
Barry Ridings............................................... 16,875
</TABLE>
These warrants were issued in consideration for future services to be rendered
by such persons on our behalf. Such class A warrants and the common stock and
warrants underlying such class A warrants have been registered under the
registration statement of which this prospectus forms a part. Such class A
warrants are identical to the warrants offered in this offering but are not
redeemable by us.
Our executive officers and directors and their affiliates, collectively,
have agreed to purchase up to 125,000 units in this offering at the initial
offering price set forth on the cover page of this prospectus.
We are obligated to pay Unity Venture, commencing on the date of this
prospectus, a monthly fee of $5,000 for general and administrative services
under an agreement which may be canceled by us upon 30 days' prior written
notice. Such fee includes the use of approximately 500 square feet of office
space in premises occupied by Unity Venture. Dalessio, Millner & Leben, an
accounting firm which is an affiliate of Mr. Leben, affords Unity Venture the
use of such space at a monthly rental of $2,000. Messrs. Burstein, Leben and
Cattier are each directors and, together with Mr. Ridings, shareholders of Unity
Venture.
Unity Venture has made advances aggregating approximately $56,000 to us as
of the date of this prospectus to cover expenses related to this offering. We
intend to repay these loans from the proceeds of this offering.
30
<PAGE>
Dalessio, Millner & Leben has performed bookkeeping, tax and accounting
services for some of the blank check companies of which one or more of our
directors have been directors and shareholders, from their dates of inceptions
through the completion of their respective business combinations, and is
expected to perform similar services for us at an aggregate cost of
approximately $12,000 per annum. Dalessio, Millner & Leben may also be paid to
engage in financial due diligence activities for us with respect to our
evaluation of prospective target companies for a business combination.
Other than the $5,000 monthly administrative fee and the class A warrants
described above, no compensation of any kind, including finders and consulting
fees, will be paid to any of our existing stockholders or any affiliate of such
stockholders, for services rendered to us prior to or with respect to the
business combination; provided, however, that such persons shall be entitled to
receive, upon completion of the business combination, commissions for monies
raised by them for us with respect to the business combination, at rates that
are no less favorable to us than those which we would pay to unaffiliated third
parties.
All ongoing transactions between us and any of our officers and directors or
their respective affiliates, as well as any future transactions, will be on
terms believed by us to be no less favorable than are available from
unaffiliated third parties and will require prior approval in each instance by a
majority of the members of our board who do not have an interest in the
transaction.
31
<PAGE>
DESCRIPTION OF SECURITIES
GENERAL
We are authorized to issue 20,000,000 shares of common stock, par value
$.0001, and 5,000 shares of preferred stock, par value $.01. As of the date of
this prospectus, 551,491 shares of common stock are outstanding, held of record
by 32 persons. No shares of preferred stock are currently outstanding.
UNITS
Each unit consists of one share of common stock and one class A warrant.
Each class A warrant entitles the holder to purchase one share of common stock
and one class B warrant. The common stock and class A warrants will begin to
trade separately on the 90th day after the date of this prospectus unless GBI
Capital Partners Inc. informs us of its decision to allow earlier separate
trading, provided that in no event can the common stock and class A warrants be
traded separately until we file with the SEC an audited balance sheet reflecting
our receipt of the proceeds of this offering.
COMMON STOCK
Our stockholders are entitled to one vote for each share held of record on
all matters to be voted on by stockholders. There is no cumulative voting with
respect to the election of directors, with the result that the holders of more
than 50% of the shares voted for the election of directors can elect all of the
directors. Our stockholders are entitled to receive dividends when, as and if
declared by our board out of funds legally available. In the event of our
liquidation, dissolution or winding up, our stockholders, except as noted in the
next sentence, are entitled to share ratably in all assets remaining available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the common
stock. Upon our failure to effect our initial business combination, our existing
stockholders have agreed to waive their rights to share in any such distribution
with respect to common stock owned prior to the offering. Our stockholders have
no conversion, preemptive or other subscription rights and there are no
redemption provisions applicable to the common stock. All of the outstanding
shares of common stock are, and the shares of common stock included in the
units, when issued and paid for as set forth in this prospectus, will be, fully
paid and nonassessable.
PREFERRED STOCK
Our certificate of incorporation authorizes the issuance of 5,000 shares of
a blank check preferred stock with such designation, rights and preferences as
may be determined from time to time by our board of directors. Accordingly, our
board of directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
common stock, although the underwriting agreement prohibits us, prior to a
business combination, from issuing preferred stock which participates in any
manner in the proceeds of the trust fund, or which votes as a class with the
common stock on a business combination. We may issue some or all of such shares
to effect a business combination. In addition, the preferred stock could be
utilized as a method of discouraging, delaying or preventing a change in control
of us. Although we do not currently intend to issue any shares of preferred
stock, we cannot assure you that we will not do so in the future.
32
<PAGE>
WARRANTS
Each class A warrant entitles the registered holder to purchase one share of
our common stock and one class B warrant at a price of $5.25, subject to
adjustment as discussed below, at any time commencing on the later of:
- the completion of a business combination; or
- one year from the date of this prospectus,
and ending at 5:00 p.m., New York City time, six years from the date of this
prospectus, at which time the class A warrants will expire.
Each class B warrant, if and when issued, entitles the registered holder to
purchase one share of our common stock and one class C warrant at a price of
$7.50, subject to adjustment as discussed below, at any time commencing on the
later of:
- the completion of a business combination; or
- one year from the date of this prospectus,
and ending at 5:00 p.m., New York City time, six years from the date of this
prospectus, at which time the class B warrants will expire.
Each class C warrant, if and when issued, entitles the registered holder to
purchase one share of our common stock at a price of $9.75 per share, subject to
adjustment as described below, at any time commencing on the later of:
- the completion of a business combination; or
- one year from the date of this prospectus,
and ending at 5:00 p.m., New York City time, six years from the date of this
prospectus, at which time the class C warrants will expire.
We may call the class A warrants, the class B warrants and the class C
warrants for redemption, each as a class, in whole and not in part, at our
option and with the prior consent of GBI Capital Partners Inc., at a price of
$.05 per warrant at any time after the warrants become exercisable upon not less
than 30 days' prior written notice, provided that the reported last sale price
of the common stock equals or exceeds $8.50 per share with respect to the
class A warrants, $10.50 per share with respect to the class B warrants, and
$12.00 per share with respect to the class C warrants, for the 20 consecutive
trading days ending on the third business day prior to the notice of redemption
to warrantholders. The warrantholders shall have exercise rights until the close
of business on the date fixed for redemption.
The warrants will be issued in registered form under a warrant agreement
between us and American Stock Transfer & Trust Company, as warrant agent.
Reference is made to said warrant agreement, which has been filed as an exhibit
to the registration statement of which this prospectus is a part, for a complete
description of the terms and conditions applicable to the warrants.
The exercise price and number of shares of common stock issuable on exercise
of the warrants may be adjusted in certain circumstances including in the event
of a stock dividend, or our recapitalization, reorganization, merger or
consolidation. However, the warrants will not be adjusted for issuances of
common stock at a price below their respective exercise prices.
We have the right, in our sole discretion, to decrease the exercise price of
the warrants for a period of not less than 30 days on not less than 30 days'
prior written notice to the warrantholders. In addition, we have the right, in
our sole discretion, to extend the expiration date of the warrants on five
business days' prior written notice to the warrantholders.
33
<PAGE>
The warrants may be exercised upon surrender of the warrant certificate on
or prior to the expiration date at the offices of the warrant agent, with the
exercise form on the reverse side of the warrant certificate completed and
executed as indicated, accompanied by full payment of the exercise price, by
certified check payable to us, for the number of warrants being exercised. The
warrantholders do not have the rights or privileges of holders of common stock.
No warrants will be exercisable unless at the time of exercise the
prospectus relating to the securities issuable upon exercise of such warrants is
current and such securities have been registered or qualified or deemed to be
exempt under the securities laws of the state of residence of the holder of such
warrants. We have agreed to meet these conditions and to maintain a current
prospectus relating to securities issuable upon exercise of the warrants until
the expiration of the warrants, under the terms of the warrant agreement.
However, we cannot assure you that we will be able to do so. The warrants may be
deprived of any value and the market for the warrants may be limited if the
prospectus relating to the securities issuable upon the exercise of the warrants
is not current or if such securities are not qualified or exempt from
qualification in the jurisdictions in which the holders of the warrants reside.
No fractional shares will be issued upon exercise of the warrants. However,
if a warrantholder exercises all warrants then owned of record by him, we will
pay to such warrantholder, in lieu of the issuance of any fractional share which
is otherwise issuable to such warrantholder, an amount in cash based on the
market value of the common stock on the last trading day prior to the exercise
date.
DIVIDENDS
We have not paid any dividends on our common stock to date and do not intend
to pay dividends prior to the completion of a business combination. The payment
of dividends in the future will be contingent upon our revenues and earnings, if
any, capital requirements and general financial condition subsequent to
completion of a business combination. The payment of any dividends subsequent to
a business combination will be within the discretion of our then board of
directors. It is the present intention of our board of directors to retain all
earnings, if any, for use in our business operations and, accordingly, our board
does not anticipate declaring any dividends in the foreseeable future.
OUR TRANSFER AGENT AND WARRANT AGENT
The transfer agent for our securities and warrant agent for our warrants is
American Stock Transfer & Trust Company, 40 Wall Street, New York, New York
10005.
SHARES ELIGIBLE FOR FUTURE SALE
GENERAL
Upon the completion of this offering, we will have 1,801,491 shares of
common stock outstanding, or 1,988,991 shares if the underwriters'
over-allotment option is exercised in full. Of these shares, the 1,250,000
shares sold in this offering, or 1,437,500 shares in the event of the exercise
of the over-allotment option, will be freely tradeable without restriction or
further registration under the Securities Act, except for any shares purchased
by one of our affiliates. All of the remaining 551,491 shares are restricted
securities under Rule 144, in that such shares were issued in private
transactions not involving a public offering. None of such shares will be
eligible for sale under Rule 144 prior to March 20, 2001. Notwithstanding this:
- our affiliated existing stockholders have agreed not to sell their
respective shares of common stock acquired prior to the date of this
prospectus prior to six months following the completion of a business
combination; and
34
<PAGE>
- our non-affiliated existing stockholders have agreed not to sell their
respective shares of common stock acquired prior to the date of this
prospectus prior to the occurrence of a business combination.
An additional 150,000 shares of common stock, which have been registered
under the registration statement of which this prospectus forms a part, are
issuable upon the exercise of the class A warrants issued to Messrs. Burstein,
Leben, Cattier and Ridings. Such warrants are identical to the warrants offered
in this offering but are not redeemable by us. The holders have agreed not to
sell the shares underlying these warrants prior to six months following the
completion of a business combination.
RULE 144
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned restricted
shares of our common stock for at least one year would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of either of the following:
- 1% of the number of shares of common stock then outstanding, which will
equal 18,015 shares immediately after this offering; and
- the average weekly trading volume of the common stock on The Nasdaq Stock
Market during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
Sales under Rule 144 are also limited by manner of sale provisions and
notice requirements and to the availability of current public information about
us.
RULE 144(k)
Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at the time of or at any time during the three months preceding a
sale, and who has beneficially owned the restricted shares proposed to be sold
for at least two years, including the holding period of any prior owner other
than an affiliate, is entitled to sell such shares without complying with the
manner of sale, public information, volume limitation or notice provisions of
Rule 144.
35
<PAGE>
UNDERWRITING
In accordance with the terms and conditions contained in the underwriting
agreement, we have agreed to sell to each of the underwriters named below, and
each of the underwriters, for which GBI Capital Partners Inc. is acting as
representative, have severally, and not jointly, agreed to purchase on a firm
commitment basis the number of units offered in this offering set forth opposite
their respective names below:
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF UNITS
------------ ---------------
<S> <C>
GBI Capital Partners Inc....................................
GKN Securities Corp.........................................
---------
Total............................................... 1,250,000
=========
</TABLE>
A copy of the underwriting agreement has been filed as an exhibit to the
registration statement of which this prospectus forms a part.
We have been advised by the representative that the underwriters propose to
offer the units to the public at the initial offering price set forth on the
cover page of this prospectus. They may allow some dealers who are members of
the NASD, and some foreign dealers, concessions not in excess of $ per unit and
such dealers may reallow a concession not in excess of $ per unit to other
dealers who are members of the NASD and to some foreign dealers. Upon completion
of this offering, the offering price, the concession to selected dealers and the
reallowance to other dealers may be changed by the representative. We have been
informed by the representative that it does not expect discretionary sales by
the underwriters to exceed 5% of the units offered by this prospectus.
We have agreed to pay to the representative an expense allowance on a
non-accountable basis equal to 3% of the gross proceeds derived from the sale of
the units offered in this offering. We paid an advance on this allowance in the
amount of $25,000.
We have also granted to the underwriters an option, exercisable during the
45-day period commencing on the date of this prospectus, to purchase from us at
the offering price, less underwriting discounts and the non-accountable expense
allowance, up to an aggregate of 187,500 additional units for the sole purpose
of covering over-allotments, if any. The underwriters may exercise that option
if the underwriters sell more units than the total number set forth in the table
above. If any units underlying the option are purchased, the underwriters will
severally purchase shares in approximately the same proportion as set forth in
the table above.
We have granted GBI Capital Partners Inc. for a period of three years from
the date of this prospectus the right to have its designee present at all
meetings of our board of directors. Such designee will be entitled to the same
notices and communications sent by us to our directors and to attend directors'
meetings, but will not have voting rights. GBI Capital Partners Inc. has not
named such designee as of the date of this prospectus.
We have agreed to sell to the representative, for nominal consideration, an
option to purchase up to an aggregate of 125,000 units. The units issuable upon
exercise of the unit purchase option are identical to those offered by this
prospectus except that the warrants contained in the unit purchase option expire
five years from the date of this prospectus. The unit purchase option is
exercisable initially at $6.60 per unit commencing on the later of the
completion of a business combination with a target business or one year from the
date of this prospectus and expiring five years from the date of this
prospectus. The unit purchase option may not be transferred, sold, assigned or
hypothecated during
36
<PAGE>
the one-year period following the date of this prospectus, except to
underwriters and selected dealers and to officers and partners of the
underwriters or the selected dealers. The unit purchase option grants to holders
demand and "piggy back" rights for periods of five and seven years,
respectively, from the date of this prospectus with respect to the registration
under the Securities Act of the securities directly and indirectly issuable upon
exercise of the unit purchase option. The exercise price and number of units
issuable upon exercise of the unit purchase option may be adjusted in certain
circumstances including in the event of a stock dividend, or our
recapitalization, reorganization, merger or consolidation. However, the unit
purchase option will not be adjusted for issuances of common stock at a price
below its exercise price.
We have engaged GBI Capital Partners Inc., on a non-exclusive basis, as our
agent for the solicitation of the exercise of the warrants. To the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of
the SEC, we have agreed to pay GBI Capital Partners Inc. for bona fide services
rendered a commission equal to 5% of the exercise price for each warrant
exercised more than one year after the date of this prospectus if the exercise
was solicited by the underwriters. In addition to soliciting, either orally or
in writing, the exercise of the warrants, such services may also include
disseminating information, either orally or in writing, to warrantholders about
us or the market for us securities, and assisting in the processing of the
exercise of warrants. No compensation will be paid to GBI Capital Partners Inc.
upon the exercise of the warrants if:
- the market price of the underlying shares of common stock is lower than
the exercise price;
- the holder of the warrants has not confirmed in writing that the
underwriters solicited such exercise;
- the warrants are held in a discretionary account;
- the warrants are exercised in an unsolicited transaction; or
- the arrangement to pay the commission is not disclosed in the prospectus
provided to warrantholders at the time of exercise.
Rules of the Securities and Exchange Commission may limit the ability of the
underwriters to bid for or purchase shares before the distribution of the shares
is completed. However, the underwriters may engage in the following activities
in accordance with the rules:
- STABILIZING TRANSACTIONS. The underwriters may make bids or purchases for
the purpose of pegging, fixing or maintaining the price of the shares, so
long as stabilizing bids do not exceed a specified maximum.
- OVER-ALLOTMENTS AND SYNDICATE COVERAGE TRANSACTIONS. The underwriters may
create a short position in the shares by selling more shares than are set
forth on the cover page of this prospectus. If the underwriters create a
short position during the offering, the representative may engage in
syndicate covering transactions by purchasing shares in the open market.
The representative may also elect to reduce any short position by
exercising all or part of the over-allotment option.
- PENALTY BIDS. If the representative purchases shares in the open market in
a stabilizing transaction or syndicate coverage transaction, it may
reclaim a selling concession from the underwriters and selling group
members who sold those shares as part of this offering.
Stabilization and syndicate covering transactions may cause the price of the
securities to be higher than they would be in the absence of these transactions.
The imposition of a penalty bid might also have an effect on the prices of the
securities if it discourages resales of the securities.
Neither we nor the underwriters makes any representation or prediction as to
the effect that the transactions described above may have on the prices of the
securities. These transactions may occur on
37
<PAGE>
the OTC Bulletin Board, in the over-the-counter market or on any trading market.
If any of these transactions are commenced, they may be discontinued without
notice at any time.
Before this offering there has been no public market for any of our
securities. The public offering price of the units and the terms of the warrants
were negotiated between us and the representatives, and is based upon our
financial and operating history and condition, our prospects for the industry we
are in and prevailing market conditions.
Each of our executive officers and directors and their affiliates has agreed
with the representative that such officers, directors and affiliates,
collectively, will purchase 125,000 units in this offering. Such purchases will
be made to demonstrate the confidence held by our executive officers and
directors of our ultimate ability to effect a business combination.
Although they are not obligated to do so, the underwriters may introduce us
to potential target businesses or assist us in raising additional capital, as
needs may arise in the future. We are not under any contractual obligation to
engage the underwriters to provide any services for us after completion of this
offering, but if we do, we may pay the underwriters a finder's fee or other
compensation.
We have agreed to indemnify the underwriters against some liabilities,
including civil liabilities under the Securities Act, or to contribute to
payments the underwriters may be required to make in this respect.
LEGAL MATTERS
The validity of the securities offered in this prospectus are being passed
upon for us by Sonnenschein Nath & Rosenthal, New York, New York. Graubard
Mollen & Miller, New York, New York, is acting as counsel for the underwriters
in this offering. A member of Sonnenschein beneficially owns 4,964 shares of our
common stock.
EXPERTS
The financial statements included in this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect to such financial statements, and are included in this
prospectus in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report.
38
<PAGE>
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1, which includes exhibits, schedules and amendments, under
the Securities Act of 1933, with respect to this offering of our securities.
Although this prospectus, which forms a part of the registration statement,
contains all material information included in the registration statement, parts
of the registration statement have been omitted as permitted by rules and
regulations of the SEC. We refer you to the registration statement and its
exhibits for further information about us, our securities and this offering. The
registration statement and its exhibits can be inspected and copied at the SEC's
public reference room at:
Room 1024, Judiciary Plaza,
450 Fifth Street, N.W.,
Washington, D.C. 20549-1004,
and at the SEC regional offices located at:
7 World Trade Center,
Suite 1300,
New York, New York 10048,
and
Northwest Atrium Center,
500 West Madison Street, 14th Floor,
Chicago, Illinois 60661.
The public may obtain information about the operation of the public
reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a web site at http://www.sec.gov which contains the Form S-1 and other
reports, proxy and information statements and information regarding issuers that
file electronically with the SEC.
39
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................... F-2
FINANCIAL STATEMENTS:
Balance Sheet as of August 31, 2000....................... F-3
Statement of Operations for the Period from March 17, 2000
(Date of Inception) through August 31, 2000............. F-4
Statement of Changes in Shareholders' Equity (Deficit) for
the Period from March 17, 2000 (Date of Inception)
through August 31, 2000................................. F-5
Statement of Cash Flows for the Period from March 17, 2000
(Date of Inception) through August 31, 2000............. F-6
NOTES TO FINANCIAL STATEMENTS............................... F-7 - F-12
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Unity Emerging Technology Venture One Ltd.:
We have audited the accompanying balance sheet of Unity Emerging Technology
Venture One Ltd. (a Delaware corporation in the development stage) as of
August 31, 2000, and the related statements of operations, changes in
shareholders' equity (deficit) and cash flows for the period from inception
(March 17, 2000) to August 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Unity Emerging Technology
Venture One Ltd. as of August 31, 2000, and the results of its operations and
its cash flows for the period from inception (March 17, 2000) to August 31,
2000, in conformity with accounting principles generally accepted in the United
States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying financial
statements, the Company is a development stage enterprise with no significant
operating results to date. The factors discussed in Note 1 to the financial
statements raise a substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regards to those matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
ARTHUR ANDERSEN LLP
New York, New York
October 6, 2000
F-2
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
BALANCE SHEET
AUGUST 31, 2000
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 51
--------
Total current assets.................................... 51
DEFERRED REGISTRATION COSTS................................. 196,308
--------
Total assets............................................ $196,359
========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accrued expenses.......................................... $140,000
Advances from affiliate................................... 56,483
--------
Total current liabilities............................... 196,483
--------
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 5,000 shares authorized,
no shares issued........................................ --
Common stock, $.0001 par value, 20,000,000 shares
authorized, 551,491 shares issued and outstanding....... 55
Additional paid-in capital................................ 20
Deficit accumulated during the development stage.......... (199)
--------
Total shareholders' equity (deficit).................... (124)
--------
Total liabilities and shareholders' equity (deficit).... $196,359
========
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-3
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH AUGUST 31, 2000
<TABLE>
<S> <C>
REVENUES.................................................... $ --
--------
EXPENSES:...................................................
General and administrative................................ 199
--------
Total expenses.......................................... 199
--------
Net loss................................................ $ (199)
========
NET LOSS PER COMMON SHARE--BASIC AND DILUTED................ $ --
========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING--BASIC
AND DILUTED............................................... 551,471
========
</TABLE>
The accompanying notes are an integral part of this statement.
F-4
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH AUGUST 31, 2000
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE
-------------------- PAID-IN DEVELOPMENT
SHARE PAR VALUE CAPITAL STAGE TOTAL
-------- --------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Issuance of stock to original founders for
cash at par value.......................... 551,491 $55 $ 20 $ -- $ 75
Net loss for the period from March 17, 2000
(date of inception) through August 31,
2000....................................... -- -- -- (199) (199)
------- --- ------ ------ -----
BALANCE, August 31, 2000..................... 551,491 $55 $ 20 $ (199) $(124)
======= === ====== ====== =====
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH AUGUST 31, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (199)
Increase in accrued expenses.............................. 140,000
---------
Net cash provided by operating activities............... 139,801
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.................... 75
Advances from affiliates.................................. 56,483
Deferred registration costs............................... (196,308)
---------
Net cash used in financing activities................... (139,750)
---------
Net increase in cash.................................... 51
CASH, beginning of period................................... --
---------
CASH, end of period......................................... $ 51
=========
</TABLE>
The accompanying notes are an integral part of this statement.
F-6
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
1. ORGANIZATION AND OPERATIONS
Unity Emerging Technology Venture One Ltd. (the "Company") was incorporated
in the State of Delaware on March 17, 2000, for the purpose of raising capital
which is to be used to effect a business combination (the "Business
Combination"). The Company is currently in the development stage. All activity
of the Company to date relates to its formation and proposed fund raising.
The Company's ability to commence operations is contingent upon obtaining
financing through a public offering (the "Proposed Offering") of the Company's
Common Stock. Note 2 discusses the details of the Proposed Offering.
The Proposed Offering can be considered a "blind pool." Blind pool offerings
are inherently characterized by an absence of substantive disclosures relating
to the use of the net proceeds of the offering. Consequently, although
substantially all of the proceeds of the Proposed Offering are intended to be
utilized to effect a Business Combination, the proceeds are not specifically
designated for this purpose. Upon completion of this Proposed Offering,
approximately 90% of the net proceeds, after payment of underwriting discounts
and commissions and the underwriters' nonaccountable expense allowance, will be
held in an interest-bearing trust account ("Trust Account") until the earlier of
(1) the consummation of a Business Combination or (2) the liquidation of the
Company in the event that the Company does not effect a Business Combination
within 24 months from the consummation of the offering. Notwithstanding the
foregoing, if the Company enters into a letter of intent, an agreement in
principle or a definitive agreement to effectuate a Business Combination prior
to the expiration of such 24-month period, the Company's Certificate of
Incorporation provides that the Company will be afforded up to an additional six
months following the expiration of the initial 24-month period to consummate
such Business Transaction. Moreover, since the Company has not yet identified an
acquisition target (the "Target"), investors in the Proposed Offering will have
virtually no substantive information available for advance consideration of any
specified Business Combination.
The Proposed Offering is not being conducted in accordance with Rule 419,
which was adopted by the Securities and Exchange Commission (the "Commission")
to strengthen the regulation of securities offered by "blank check" companies. A
blank check company is defined as (a) a development stage company that has no
specific business plan or has indicated that its business plan is to engage in a
merger or acquisition with an unidentified company and (b) a company which
issues securities that, among other things, (i) are not quoted in the Nasdaq
system or (ii) in the case of a company which has been in continuous operation
for less than three years, has net tangible assets of less than $5,000,000.
Although the Company is a "blank check" company, it does not believe that
Rule 419 will be applicable to it in view of the fact that upon its receipt of
the net proceeds of this offering, the Company's net tangible assets will exceed
$5,000,000. Accordingly, investors in this offering will not receive the
substantive protection provided by Rule 419. Additionally, there can be no
assurances that the United States Congress will not enact legislation which will
prohibit or restrict the sale of securities of "blank check" companies.
As a result of its limited resources, the Company will, in all likelihood,
have the ability to effect only a single Business Combination. Accordingly, the
prospects for the Company's success will be entirely dependent upon the future
performance of a single business.
F-7
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
1. ORGANIZATION AND OPERATIONS (CONTINUED)
The Company will not effect a Business Combination unless the fair market
value of the Target, as determined by the Board of Directors of the Company in
its sole discretion, based upon valuation standards generally accepted by the
financial community including, among others, book value, cash flow, and both
actual and potential earnings, is at least equal to 80% of the net assets
(assets less liabilities) of the Company at the time of such acquisition.
Upon the completion of the Proposed Offering, the Company will not satisfy
the criteria for qualifying its securities in the Nasdaq system. The Company's
securities will be traded in the over-the-counter market. It is anticipated that
they will be quoted on the OTC Bulletin Board, a NASD sponsored and operated
inter-dealer automated quotation system for equity securities not included in
The Nasdaq Stock Market, as well as in the NQB Pink Sheets published by National
Quotation Bureau Incorporated. The OTC Bulletin Board was introduced as an
alternative to "pink sheet" trading of over-the-counter securities. Although the
Company believes that the OTC Bulletin Board has been recognized by the
brokerage community as an acceptable alternative to the NQB Pink Sheets, there
can be no assurance that the liquidity and prices of the Units in the secondary
market will not be adversely affected.
Furthermore, there is no assurance that the Company will be able to
successfully effect a Business Combination. As discussed previously, if the
Company is unable to effect a Business Combination within 24 months of the
consummation of the Proposed Offering, excluding a possible six month extension,
the Company's Certificate of Incorporation provides for the Company's
liquidation unless the Company determines to seek stockholder approval to
continue the Company's existence. If the Company were to expend all of the net
proceeds of the Proposed Offering not held in the Trust Account prior to
liquidation, but recognizing that such net proceeds could become subject to the
claims of creditors of the Company which could be prior to the claims of
stockholders of the Company, it is possible that the Company's liquidation value
may be less than the amount in the Trust Account, inclusive of any net interest
income thereon.
Moreover, all of the Company's present stockholders have agreed to waive
their respective rights to participate in any such liquidation distribution on
shares owned prior to the Proposed Offering.
If the Company is unable to acquire control of an operating business or
businesses, it may be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Act"). The Company is unable to
predict what effect registration under such Act would have, but it believes that
its ability to pursue its current business plan could be adversely affected as a
result. The most significant difference with respect to financial statement
presentation and disclosure requirements for companies registered under the Act
would require the investments held by the Company to be adjusted to market value
at the balance sheet date. The Company believes that its anticipated principal
activities, which will involve acquiring control of an operating company, will
not subject the Company to regulation under the Act.
2. PROPOSED PUBLIC OFFERING OF SECURITIES
The Proposed Offering calls for the Company to offer for public sale up to
1,250,000 units (the "Units") at a price of $6.00 per Unit. Each Unit consists
of one share of the Company's Common
F-8
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
2. PROPOSED PUBLIC OFFERING OF SECURITIES (CONTINUED)
Stock, $.0001 par value, and one Class A Redeemable Warrant. Each Class A
Redeemable Warrant entitles the holder to purchase from the Company one share of
Common Stock and one Class B Redeemable Warrant at an exercise price of $5.25,
subject to adjustment, commencing on the later of (i) the consummation of a
Business Combination, or (ii) one year from the effective date of the Proposed
Offering and ending six years after the effective date of the Proposed Offering
(the "Effective Date"). Each Class B Redeemable Warrant, when issued, will
entitle the holder to purchase from the Company one share of Common Stock and
one Class C Redeemable Warrant at an exercise price of $7.50, subject to
adjustment. Each Class C Redeemable Warrant, when issued, will entitle the
holder to purchase from the Company one share of Common Stock at an exercise
price of $9.75, subject to adjustment. The Class A Redeemable Warrants, Class B
Redeemable Warrants and Class C Redeemable Warrants will be redeemable at the
option of the Company, with the consent of the representative of the
underwriters of the Proposed Offering (the "Representative"), each as a class,
in whole or not in part, upon 30 days' notice at any time after the Redeemable
Warrants become exercisable, only in the event that the last sale price of the
Common Stock is at least $8.50 per share with respect to the Class A Redeemable
Warrants, $10.50 per share with respect to the Class B Redeemable Warrants and
$12.00 per share with respect to the Class C Redeemable Warrants for 20
consecutive trading days ending on the third business day prior to notice of
redemption, at a price of $.05 per Class A Redeemable Warrant, Class B
Redeemable Warrant or Class C Redeemable Warrant. The securities comprising the
Units will not be separately transferable until 90 days after the date of the
Company's Prospectus unless the Representative informs the Company of its
decision to allow separate trading, but in no event will the Representative
allow separate trading of the securities comprising the Units until the
preparation of an audited balance sheet of the Company reflecting receipt by the
Company of the proceeds of the Proposed Offering.
The Company has granted the underwriters an option, exercisable within 45
business days from the Effective Date, to purchase up to 187,500 additional
Units at $6.00 per Unit. This option is solely for the purpose of covering
overallotments.
In connection with the Proposed Offering, the Company will sell to the
Representative and its designees, for nominal consideration, an option (the
"Unit Purchase Option") to purchase up to 125,000 Units. The Unit Purchase
Option is exercisable initially at $6.60 per Unit commencing on the later of the
completion of a Business Combination with a target business or one year from the
Effective Date and expiring five years from the Effective Date.
The Company has granted its executive officers and directors 150,000
Class A Warrants (the "Directors' Warrants") in consideration of future services
to be rendered on behalf of the Company. The Directors' Warrants are not
exercisable until the consummation by the Company of a Business Combination and
are not redeemable by the Company. The Company did not recognize any expense
with regards to these warrants as the value was deemed to be immaterial.
All of the Company's present stockholders have agreed to vote their
respective shares of Common Stock in accordance with the vote of the majority of
all nonaffiliated future stockholders of the Company with respect to a Business
Combination.
F-9
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
2. PROPOSED PUBLIC OFFERING OF SECURITIES (CONTINUED)
In addition, the Common Stock owned by all of the executive officers and
directors of the Company, their affiliates and by all persons owning 5% or more
of the currently outstanding shares of Common Stock has been placed in escrow
until the earlier of (i) the occurrence of a Business Combination, or (ii) the
Liquidation Date. During the escrow period, such stockholders will not be able
to sell or otherwise transfer their respective shares of Common Stock, but
retain all other rights as stockholders of the Company, including, without
limitation, the right to vote such shares of Common Stock.
If the Company effects a business combination, the conversion rights to the
public stockholders may result in the conversion into cash of up to
approximately 19.99% of the aggregate number of public shares at a per-share
conversion price equal to the amount in the trust fund as of the record date for
the determination of stockholders entitled to vote on the business combination,
inclusive of any interest, divided by the number of public shares.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NET INCOME (LOSS) PER COMMON SHARE
The Company computes net income (loss) per common share in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" and SEC Staff Accounting Bulletin No. 98 ("SAB No. 98"). Under the
provisions of SFAS No. 128 and SAB No. 98, basic net income (loss) per common
share ("Basic EPS") is computed by dividing net income (loss) by the weighted
average number of common shares outstanding. Diluted net income (loss) per
common share ("Diluted EPS") is computed by dividing net income (loss) by the
weighted average number of common shares and dilutive common share equivalents
then outstanding. SFAS No. 128 requires the presentation of both Basic EPS and
Diluted EPS on the face of the statements of operations.
Diluted EPS for the period from March 17, 2000 (date of inception) through
August 31, 2000 does not include the impact of warrants then outstanding, as the
effect of their inclusion would be antidilutive.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation under the provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," and elected to continue
the accounting set forth in APB No. 25, "Accounting for Stock Issued to
Employees," and to provide the necessary pro forma disclosures as if the fair
value method has been applied. No pro forma disclosures have been made as
F-10
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the Company has not issued any stock options and the pro forma of all warrants
granted was deemed to be immaterial under the Black-Scholes Valuation Model.
The Company accounts for nonemployee stock-based awards in which goods or
services are the consideration received for the equity instruments issued based
on the fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more readily determinable.
4. CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of Common Stock. The Company's Board of Director's has the
power to issue any or all of the authorized but unissued Common Stock without
stockholder approval. The Company currently has no commitments to issue any
shares of Common Stock other than as described in the Proposed Offering;
however, the Company will, in all likelihood, issue a substantial number of
additional shares in connection with a Business Combination. To the extent that
additional shares of Common Stock are issued, dilution to the interests of the
Company's stockholders participating in the Proposed Offering will occur.
The Board of Directors of the Company is empowered, without stockholder
approval, to issue up to 5,000 shares of "blank check" preferred stock (the
"Preferred Stock") with dividend, liquidation, conversion, voting or other
rights which could adversely affect the voting power or other rights of the
holders of the Company's Common Stock. There are no shares of preferred stock
issued or outstanding.
In September 2000, the Company's Board of Directors approved a
0.735294-for-1 reverse common stock split. All amounts included in the attached
financial statements and footnotes have been retroactively restated.
5. RELATED PARTY TRANSACTIONS
The Chairman of the Board of Directors and the President of the Company are
the principal shareholders, officers and directors of Unity Venture Capital
Associates Ltd. ("Unity") which owns shares in the Company. Beginning with the
effective date of the Proposed Offering, the Company will be obligated to pay
Unity a monthly fee of $5,000 for general and administrative services, including
the use of office space in premises occupied by Unity. Through August 31, 2000,
Unity advanced the Company $56,308 which will be repaid from the proceeds of the
Proposed Offering.
At August 31, 2000, a member of the Company's legal counsel owned 4,964
shares of the Company's Common Stock and whose firm has charged the Company
$105,000 for legal services.
6. STOCK OPTION PLAN
On March 17, 2000, the Company's Board of Directors approved a stock option
plan (the "Plan"). The Plan, which is subject to shareholder approval, provides
for issuance of up to 255,000 options (the "Options") to acquire shares of the
Company's Common Stock.
F-11
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2000
6. STOCK OPTION PLAN (CONTINUED)
The Options are intended to qualify either as incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986 or as options which are not intended to meet the
requirements of such section ("Nonstatutory Stock Options"). The Options may be
granted under the Plan to persons who, in the case of Incentive Stock Options,
are key employees (including officers) of the Company, or, in the case of
Nonstatutory Stock Options, are key employees (including officers) and
nonemployee directors of the Company, except that Nonstatutory Stock Options may
not be granted to a holder of more than 10% of the total voting power of the
Company.
The exercise price of all Incentive Stock Options granted under the Plan
must be at least equal to the fair market value of such shares on the date of
grant or, in the case of Incentive Stock Options granted to the holder of 10% or
more of the Company's Common Stock, at least 110% of the fair market value of
such shares on the date of grant. The exercise price of all Nonstatutory Stock
Options granted under the Plan shall be determined by the Board of Directors of
the Company at the time of grant. The maximum exercise period for which the
Options may be granted is ten years from the date of grant (five years in the
case of Incentive Stock Options granted to an individual owning more than 10% of
the Company's Common Stock). The aggregate fair market value (determined at the
date of the option grant) of such shares with respect to which Incentive Stock
Options are exercisable for the first time by the holder of the option during
any calendar year shall not exceed $100,000.
7. INCOME TAXES
Income taxes are accounted for in accordance with SFAS No. 109, "Accounting
for Income Taxes." Under this method, deferred income taxes are determined based
on differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year-end, and are measured based on enacted
tax rates and laws that will be in effect when the differences are expected to
reverse. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
8. CONTINGENCY
The Company has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act. The Company has
also agreed to pay to the Representative an expense allowance on a
nonaccountable basis equal to 3% of the gross proceeds derived from the sale of
the Units underwritten (including the sale of any Units subject to the
underwriters' overallotment option).
F-12
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
1,250,000 UNITS
---------------------
PROSPECTUS
---------------------
GBI CAPITAL PARTNERS INC.
GKN SECURITIES CORP.
, 2000
You may rely only on the information contained in this prospectus. We have not
authorized anyone to provide information or to make any representations
different from that contained in this prospectus. Neither the delivery of this
prospectus nor the sale of units means that information contained in this
prospectus is correct after the date of this prospectus. This prospectus is an
offer to sell or solicitation of an offer to buy these securities in any
circumstances under which the offer or solicitation is not authorized or is
unlawful.
Until , 2000, all dealers selling these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the obligation of dealers to deliver a prospectus when acting as
an underwriter and with respect to their unsold allotments or subscriptions.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth various expenses, other than underwriting
discounts, which will be incurred in connection with the offering. Other than
the SEC registration fee, NASD filing fee and the non-accountable expense
allowance of GBI Capital Partners Inc., amounts set forth below are estimates:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 12,667
NASD filing fee and counsel fees............................ $ 10,298
Nonaccountable expense allowance*........................... 225,000
Blue sky fees and expenses.................................. 25,000
Printing and engraving expenses............................. 55,000
Legal fees and expenses..................................... 110,000
Accounting fees and expenses................................ 35,000
Transfer and Warrant Agent fees............................. 1,500
Miscellaneous expenses...................................... 535
--------
$475,000
========
</TABLE>
------------------------
* Assumes no exercise of the underwriters' over-allotment option.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of the Certificate of Incorporation of Unity Emerging
Technology Venture One Ltd. ("Registrant") provides with respect to the
indemnification of directors and officers that Registrant shall indemnify to the
fullest extent permitted by Sections 102(b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such Sections
grant Registrant the power to indemnify. Article SEVENTH of the Certificate of
Incorporation of Registrant also provides that no director shall be liable to
the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transaction from which the director derived an improper
personal benefit, it being the intention of the foregoing provision to eliminate
the liability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by Section 102(b)(7) of Delaware
General Corporation Law, as amended from time to time.
Reference is made to Section 5 of the Underwriting Agreement, which provides
for indemnification of the officers and directors of Registrant under certain
circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth information relating to all securities of
Registrant sold by it since March 17, 2000, the date of Registrant's inception.
All of such shares of common stock were purchased
II-1
<PAGE>
on March 20, 2000 at a price of $.0001 per share and gives effect to an
approximately 0.74-for-one reverse split of common stock effectuated on
October 17, 2000.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Lawrence Burstein........................................ 126,563
Unity Venture Capital Associates Ltd..................... 55,148
Jerome Baron............................................. 9,927
Murdock & Company........................................ 24,817
Cricket Services Ltd..................................... 32,262
Richard Kress & Cheryl Kress JTWROS...................... 3,721
Stephen Verchick......................................... 26,839
Richard Braver........................................... 3,721
Dan Brecher IRA/RO....................................... 8,684
Barry Ridings............................................ 4,964
Carl L. Norton........................................... 7,445
Financiera & Inversionista Xana.......................... 9,927
Ian Barnett.............................................. 3,721
Henry Rothman............................................ 4,964
Donald Rabinovitch....................................... 4,339
David Vozick............................................. 4,339
Tarzana Associates....................................... 2,942
Jonathan Rothchild....................................... 1,236
Equity Interest Inc...................................... 1,236
Domaco Venture Capital Fund.............................. 1,236
KGM Associates........................................... 4,177
Sagres Group Ltd......................................... 4,964
Cowen & Company--Custodian for Stanley Hollander IRA..... 24,817
Ronald Koenig............................................ 24,817
Heptagon Investments Ltd................................. 62,041
Jay Haft................................................. 8,684
Ira Roxland.............................................. 4,964
Steven Millner........................................... 12,409
Norman Leben............................................. 12,409
Heptagon Capital Management, Inc......................... 1,236
Michael Karfunkel........................................ 26,471
George Karfunkel......................................... 26,471
-------
TOTAL.................................................. 551,491
=======
</TABLE>
On March 20, 2000, we issued Class A warrants to purchase 200,000 shares of
common stock to the affiliates named below in consideration for future services
to be rendered by such persons on our behalf. As of September 30, 2000, such
warrants were cancelled and Class A warrants to purchase 150,000 shares of
common stock were issued to such affiliates in the following amounts after
giving effect to the reverse split of common stock as described above:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK UNDERLYING
NAME CLASS A WARRANTS
---- -----------------------
<S> <C>
John Cattier.......................................... 44,375
Norman Leben.......................................... 44,375
Lawrence Burstein..................................... 44,375
Barry Ridings......................................... 16,875
</TABLE>
II-2
<PAGE>
Exemption from registration under the Securities Act of 1933, as amended, is
claimed for the sales of common stock referred to above in reliance upon the
exemption afforded by Section 4(2) of the Securities Act for transactions not
involving a public offering. Each purchaser was either an accredited investor or
had sufficient knowledge or experience in financial or business matters that he
was capable of evaluating the merits and risks of the investment. Each
certificate evidencing such shares of Common Stock bears an appropriate
restrictive legend and "stop transfer" orders are maintained on Registrant's
stock transfer records there against. None of these sales involved participation
by an underwriter or a broker-dealer.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a list of Exhibits filed herewith as part of the
Registration Statement:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement between Registrant and the
Underwriters*
3.1 Certificate of Incorporation of Registrant*
3.2 By-laws of Registrant*
3.3 Amendment of Certificate of Incorporation of Registrant*
4.1 Form of certificate evidencing shares of common stock*
4.2 Form of certificate evidencing Class A warrants*
4.3 Form of certificate evidencing Class B warrants*
4.4 Form of certificate evidencing Class C warrants*
4.5 Form of Unit Purchase Option between Registrant and GBI
Capital Partners Inc.*
4.6 Form of Warrant Agreement between Registrant and American
Stock Transfer & Trust Company, as warrant agent*
4.7 Form of certificate evidencing Units
5.1 Opinion of Sonnenschein Nath & Rosenthal
10.1 2000 Stock Option Plan*
10.2 Form of Trust Agreement by and between Registrant and The
Bank of New York*
10.3 Forms of Insider's Letters
10.4 Form of Escrow Agreement by and among Registrant, Lawrence
Burstein, John Cattier, Cricket Services, Ltd., Barry
Ridings, Norman Leben, Unity Venture Capital
Associates Ltd. ("Unity") and American Stock Transfer &
Trust Company*
10.5 General and Administrative Services Agreement, dated as of
March 20, 2000, by and between Registrant and Unity*
10.6 Form of Officer/Director Unit Purchase Agreement with the
Representative of the Underwriters*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Sonnenschein Nath & Rosenthal (included in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of
Part II of this Registration Statement)*
27.1 Financial Data Schedule*
</TABLE>
------------------------
* Previously filed with this Registration Statement.
(b) Financial Statement Schedules.
Financial statement schedules are omitted because the conditions requiring
their filing do not exist or the information required thereby is included in the
financial statements filed, including the notes thereto.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of 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 the registration statement.
(2) That for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed 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 provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to Item 14 of this Part II to the registration statement, or
otherwise, Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or controlling
person of 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, 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 such
indemnification by it is against the public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(6) That for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(7) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 27th day of November, 2000.
<TABLE>
<S> <C> <C>
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By: /s/ LAWRENCE BURSTEIN
-----------------------------------------
Lawrence Burstein, PRESIDENT
</TABLE>
------------------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LAWRENCE BURSTEIN President, Director,
------------------------------------------- Principal Executive November 27, 2000
Lawrence Burstein Officer
* Secretary, Director,
------------------------------------------- Principal Financial and November 27, 2000
Norman Leben Accounting Officer
*
------------------------------------------- Director November 27, 2000
John Cattier
------------------------------------------- Director
Barry Ridings
</TABLE>
------------------------
*Lawrence Burstein, pursuant to Powers of Attorney (executed by each of the
officers and directors listed above and indicated as signing above, and filed
with the Securities and Exchange Commission), by signing his name hereto does
hereby sign and execute this Amendment to the Registration Statement on behalf
of each of the persons referenced above.
<TABLE>
<S> <C> <C>
/s/ LAWRENCE BURSTEIN
-----------------------------------------
Lawrence Burstein
</TABLE>
November 27, 2000
II-5
