As filed with the Securities and Exchange Commission on October 25, 2000
Registration No. ____
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U.S. SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SOSA, Inc.
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(Name of small business issuer in its charter)
Nevada 6770 76-0639886
----------------- ------------------------- ---------------
(State or other (Primary Standard of (IRS Employer
jurisdiction of Industrial Classification Identification
Incorporation or or Code Number) Number)
Organization)
SOSA, Inc.
14601 Bellaire Blvd, Suite 338
Houston, TX 77083
(281)564-6418
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(Address and telephone number of principal executive offices and principal
place of business; and name, address and telephone number of agent for service)
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Copies to:
Thomas C. Cook, Esq.
Thomas C. Cook & Associates, Ltd.
3110 S. Valley View Suite #106
Las Vegas, Nevada 89102
(702) 876-5941
Approximate date of commencement of proposed sale to public:
As soon as practicable after the registration statement becomes effective
Closing date: [Date], 2001 (90 days from the date of this prospectus)
This offering may be extended for an additional 90 days at our sole election.
Funds will be held in an escrow account under Rule 419 until the minimum
required shares are sold. If the minimum has not been raised by the closing
date, all funds will be promptly returned.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS," BEGINNING ON PAGE 9
If this Form is filed to register additional securities for an offering
according to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ___X___
If this Form is a post-effective amendment filed according to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. / /_______
If this Form is a post-effective amendment filed according to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. / /_______
If delivery of the prospectus is expected to be made according to Rule 434,
please check the following box. / /_______
-------------------------------
We may amend this registration statement on such date or dates as may be
necessary to delay its effective date until we file a further amendment which
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or
until the registration statement shall become effective on a date as the SEC,
acting pursuant to said Section 8(A), may determine.
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SEC IS EFFECTIVE. THIS PRELIMINARY 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 OF SALE IS NOT PERMITTED.
Prospectus (Subject to completion): Dated [Date], 2000.
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TITLE OF EACH PROPOSED
CLASS OF PROPOSED MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED RESISTERED SHARE(1) PRICE(1) FEE
[S] [C] [C] [C] [C]
Common Stock
$0.001 par value 3,000,000 $0.025 -
TOTAL 3,000,000 N/A $75,000 $19.80
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Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(A) of The Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the commission, acting
pursuant to said Section 8(A),may determine.
[Note: The following section of cross referenced material is not to appear
in the prospectus itself.]
PART I - INFORMATION REQUIRED IN PROSPECTUS
Cross Reference Sheet showing the location in Prospectus of information
required by items of Form SB-2
Item No. Required item Location of caption in Prospectus
-- ---------------------- ---------------------------
1. Forepart of the Registration Cover Page; Outside
Statement and outside front front page of
cover of Prospectus Prospectus
2. Inside front and outside back Inside Front and
cover pages of Prospectus outside back cover
pages of Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Prospectus Summary -
Determination of Offering
Price; Risk Factors
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Director, Executive Officer, Management
Management, Promoters and
Control Persons
11. Security Ownership of certain Principal Shareholders
Beneficial Owners and Management
12. Description of Securities Description of
Securities
13. Interest of named experts and Legal Matters; Experts
counsel
14. Disclosure of Commission Statement as to
Position on Indemnification Indemnification
for Securities Act Liabilities
15. Organization within last five Management, Certain
years Transactions
16. Description of Business Proposed Business
17. Management's Discussion and
Analysis or Plan of Operation Plan of Operation
18. Description of Property Proposed Business
19. Certain Relationships and Certain Transactions
Related Transactions
20. Market for Common Equity and Prospectus Summary, Market for
Related Stockholder Matters Registrant's Common Stock and
Related Stockholders' Matters;
Shares Eligible for Future
Sale
21. Executive Compensation Management
22. Financial Statements Financial Statements
23. Changes in and Disagreements Not Applicable
with Accountants on Accounting
and Financial Disclosure
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
24. Indemnification of Indemnification of
Officer/Director Officer/Director
25. Other Expenses of Issuance and Other Expenses of
Distribution Issuance and Distribution
26. Recent Sales of Unregistered Recent Sales of Unregistered
Securities Securities
27. Exhibits Exhibits
28. Undertakings Undertakings
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<PAGE>
NOTE: NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------
Offering Information
--------------------
<TABLE>
<CAPTION>
=========================================================================
Shares Price To Selling Proceeds To
Offered Public(1) Commissions(2) Company(3)
<S> <C> <C> <C> <C>
Per share
Min. Share Amount 1,600,000 $0.025 $0.00 $40,000
Max. Share Amount 3,000,000 $0.025 $0.00 $75,000
=========================================================================
</TABLE>
(1) Does not include offering costs, including filing, printing, legal,
accounting, transfer agent and escrow agent fees estimated at
$4,000.
(2) We are offering for sale 3,000,000 shares of common stock, at a purchase
price of $0.025 per share. The shares shall be sold exclusively by us on
a best-efforts basis for a period of ninety days, which may be extended
an additional ninety days. This offering will be conducted directly by
us through our officer/director according to the safe harbor
provisions of Rule 3a4(1) of the Securities Exchange Act of 1934.
(3) The minimum offering or proceeds to be raised is $40,000. The maximum
offering or proceeds to be raised is $75,000.
Our offering is being made in compliance with Rule 419 of SEC Regulation C,
under which the offering proceeds and the securities to be issued to
purchasers will be placed in an escrow account until the offering has been
reconfirmed by our shareholders and a business has been acquired in
accordance with the provisions of that rule. Under SEC Rule 3a51-1(d) under
the Exchange Act, the securities we are offering constitute penny stocks, and
as such, certain sales restrictions apply to them. Up to 80% of the offering
may be purchased by our officer/director, who is also our sole shareholder,
and any of his affiliates or associates. No public market currently exists
for our common stock. No public market may ever develop. Even if a market
develops, you may not be able to sell your shares.
The date of this prospectus is October 25, 2000
2
<PAGE>
TABLE OF CONTENTS
-----------------
PROSPECTUS SUMMARY............................................5
LIMITED STATE REGISTRATION....................................6
SUMMARY FINANCIAL INFORMATION.................................6
RISK FACTORS..................................................9
YOUR RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419........17
DILUTION.....................................................19
USE OF PROCEEDS..............................................20
CAPITALIZATION...............................................23
PLAN OF DISTRIBUTION.........................................23
PROPOSED BUSINESS............................................25
PLAN OF OPERATION............................................31
DESCRIPTION OF CAPITAL STOCK.................................32
SHARES ELIGIBLE FOR FUTURE SALE..............................34
MANAGEMENT...................................................35
CONFLICT OF INTEREST.........................................36
PRINCIPAL SHAREHOLDERS.......................................37
CERTAIN TRANSACTIONS.........................................38
WHERE CAN YOU FIND MORE INFORMATION .........................38
MARKET FOR OUR COMMON STOCK..................................39
REPORTS TO STOCKHOLDERS......................................40
LEGAL PROCEEDINGS............................................40
LEGAL MATTERS................................................40
EXPERTS......................................................40
FINANCIAL STATEMENTS.........................................F-1-7
INDEMNIFICATION OF DIRECTORS AND OFFICERS....................44
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION..................45
RECENT SALES OF UNREGISTERED SECURITIES......................45
EXHIBITS.....................................................46
UNDERTAKINGS.................................................46
Signatures...................................................47
Index to Exhibits............................................48
3
<PAGE>
Dealer Prospectus Delivery Obligation
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and if given or made, such information or representations must
not be relied upon as having been authorized by us. This prospectus does not
constitute an offer to sell or a solicitation of any offer to buy any
securities in any jurisdiction in which such an offer or solicitation would be
unlawful. The delivery of this prospectus shall not under any circumstances
create any implication that there has not been any change in our affairs
since the date of delivery; however, any changes that may have occurred are not
material to an investment decision. In the event there have been any material
changes in our affairs, a post-effective amendment will be filed. We reserve
the right to reject any order, in whole or in part, for the purchase of any
of the shares offered.
Until 90 days after the date when the funds and securities are released
from the escrow account, all dealers effecting transactions in the shares,
whether or not participating in this distribution, may be required to deliver
a prospectus. This is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters to their unsold allotments or
subscriptions.
4
<PAGE>
Prospectus Summary
SOSA, INC.
14601 Bellaire Blvd, Suite 338
Houston, TX 77083
(281)564-6418
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU
SHOULD CONSIDER BEFORE RECEIVING A DISTRIBUTION OF OUR COMMON STOCK. YOU
SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY.
We were organized under the laws of the State of Nevada on March 29, 2000,
under the name SOSA, Inc. We are a development stage entity, and have neither
engaged in any operations nor generated any revenues to date.
We were organized as a vehicle to acquire or merge with an existing business or
company. A company with this purpose and structure is referred to as a "blank
check company" as defined in Rule 419 of Regulation C under the Securities Act
of 1933.
We have not yet identified any specific target business or company
More about Rule 419:
--------------------
The securities purchased by you and other investors and the funds received in
the offering will be deposited and held in an escrow account until an
acquisition meeting specific criteria is completed. Once that agreement has
been executed, we will update the registration statement with a post-effective
amendment. This will give details of the acquisition. You will then have 45
days to reconfirm your investment. Funds and securities will be released once
the escrow agent is satisfied that all provisions have been met and the
transaction has closed. ( See "Your Rights under Rule 419.")
Persons should not purchase shares in the offering if they expect short-term
earnings or appreciation in the value of our company.
The Offering:
-------------
Securities offered 3,000,000 shares of common stock, $0.001
par value, Maximum Offering.
1,600,000 shares of common stock, $0.001
par value, Minimum Offering.
The first 1,600,000 shares are being offered
on a "best efforts all or none" basis, the
remaining 1,400,000 on a "best efforts" basis
$0.025 per share.
(See "Description of Capital Stock".)
5
<PAGE>
Common stock outstanding 2,000,000 shares
prior to the offering
Common stock to be 5,000,000 shares (Maximum Offering)
outstanding after the offering 3,600,000 shares (Minimum Offering)
Dilution: Dilution to the investors in this offering will be approximately
$0.011 (minimum offering per share) and $0.015 (maximum offering).
Dividends: No dividends have yet been paid and none will be paid in the
foreseeable future.
Limited State Registration:
Initially, our securities may be sold in Texas and Nevada only (although we
are considering registering the shares in other states) according to filings
in the States of Texas and Nevada. (See "Special State Law Considerations"
for a discussion of the resale limitations that result from this limited
state registration.)
Use of Proceeds: If the maximum shares are sold, the gross proceeds of this
offering will be $75,000; if the minimum, $40,000. Though we could request
10% of these funds under Rule 419 prior to the reconfirmation, we do not
intend to do so. Less approximately $4000 in escrow and offering expenses,
proceeds will be used to defray the costs of finding and consummating a
business combination.
Plan Of Distribution: Our executive officer, Dorothy Patterson, will sell
all shares. He will receive no compensation or commissions for doing so,
and will limit his activities in the making of this offering to delivering
this prospectus and answering questions from prospective investors. Though
reserving the right to do so, management will not use broker-dealers in the
making of this offering.
Proposed Business:
------------------
SOSA will not restrict its search to any particular business, industry, or
geographical location, and may evaluate and enter into any type of business
in any location. In seeking a business venture, the decision of management
will be based on the business objective of seeking long-term capital
appreciation in the real value of SOSA, Inc.
The analysis of new businesses will be undertaken by or under the supervision
of our officer/director. It is anticipated that the analysis of specific
proposals and the selection of a business will take several months, to which
additional months will be added by the reconfirmation process of Rule 419.
For details of the way in which an acquisition might be structured, see
"Proposed Business: Form and Structure of Acquisition."
6
<PAGE>
Daily Operations: Until an active business is commenced or acquired, we will
have no employees or day-to-day operations.
Plan of Operation: As of September 30, 2000, we have no significant expenses,
with the exception of incorporation fees, SEC filing fees, and escrow
establishment fees. Virtually all of our expenses, to be funded by the money in
our treasury or by management, are attributable to our efforts to identify a
suitable acquisition candidate and close the acquisition. Up to that time, we
anticipate our expenses to be limited to accounting, legal, transfer agent, and
filing fees, plus telephone and mailing expenses.
Management: Dorothy Patterson of Houston, Texas is the sole officer, director,
and shareholder of SOSA, Inc. She has limited business experience, though she
has administered companies in the past formed with the express purpose of
acquiring other businesses, this is his first experience with a 419 company.
She currently receives no salary or other compensation and devotes time to
SOSA, Inc. in and around other employment and activities.
Method of Subscribing:
Prospective investors should make their checks payable to SOSA, Inc., c/o
Southwest Escrow Company (escrow agent) and remit the checks and subscription
agreements to Southwest Escrow Company, 401 North Buffalo Drive, Suite 205,
Las Vegas, Nevada 89128. Subscriptions may not be withdrawn once made except
in accordance with applicable law.
We reserve the right to reject all or part of any subscription at our sole
discretion even if payment is made, and to withdraw this blank check offering
at any time prior to our acceptance of the subscriptions received.
7
<PAGE>
SUMMARY FINANCIAL INFORMATION
-----------------------------
The table below contains certain summary historical financial data for
SOSA, Inc. The historical financial data for the period ended September 30,
2000 has been derived from our audited financial statements appearing
elsewhere in this prospectus and should be read in conjunction with those
financial statements and the notes to them.
<TABLE>
CAPTION>
September 30, 2000
------------------
<S> <C>
INCOME STATEMENT:
Net Sales $0
Net Income ($0)
BALANCE SHEET (at end of period):
Working Capital $2,000
Total Assets $2,000
Total Indebtedness $0
Total Shareholders Equity
(Net Assets) $2,000
PER SHARE(1):
Income per common share $0
Net Income per common share (at end of period) ($0.00)
Net Income per share on a fully dilated basis ($0.00)
</TABLE>
(1) Number of shares of common stock outstanding during period was
2,000,000.
This offering will expire 90 days from the date of this prospectus. The
offering may be extended for an additional 90 days at our sole election.
8
<PAGE>
RISK FACTORS
------------
There is a high degree of risk associated with an investment in our common
stock. You should know that our business, financial condition or results of
operations, and, more importantly, that of any business we acquire, could be
materially and adversely affected by any of the following risks. You should
carefully consider the following factors in addition to the other information
in this prospectus before considering the purchase of shares.
Our lack of an operating history makes an investment in these securities a
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risky & speculative one in which your entire investment may be lost.
--------------------------------------------------------------------
SOSA, Inc. was organized under the laws of the State of Nevada on March 29,
2000, and has no revenues from operations or meaningful assets. We face all of
the risks inherent in a new business, and those risks specifically inherent in
the type of business in which we propose to engage, namely, the investigation
and acquisition of an interest in a business. The purchase of these securities
must be regarded as the placing of funds at a high risk in a new or "start-up"
venture with all of the unforeseen costs, expenses, problems, and difficulties
to which such ventures are subject.
There are possible disadvantages associated with a blank check offering.
------------------------------------------------------------------------
Our business will most likely 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. A company which seeks
our participation in attempting to consolidate operations through a merger,
reorganization, asset acquisition, or some other form of combination may
desire to do so to avoid what they may deem to be the adverse consequences
of undertaking a public offering themselves. Factors considered may
include:
o Time delays
o Significant expense
o Loss of voting control
o The inability or unwillingness to comply with various federal and
state laws enacted for your protection
In making an investment in us, you may be doing so under terms which
may ultimately be less favorable than making an investment directly in a
company with a specific business.
A business reorganization may dilute your investment and reduce your equity
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interest in the company.
------------------------
It is likely that we will issue additional shares of common stock or preferred
stock in connection with our potential merger, consolidation, or other
business reorganization, and that the proceeds of the offering will be used in
the business of the acquisition or merger candidate, though we will not make
loans of the offering's net proceeds. The consequences may be a change of
control of SOSA, Inc., significant dilution to the public shareholders'
investment, and a material decrease in the public shareholders' equity
interest in the company. Since we have not made any determination with respect
to the acquisition of any specific business, we cannot speculate on
the form of any potential business reorganization or on the amount of
securities which we might issue in connection with it. At its sole discretion,
the board of directors may issue additional company securities without seeking
shareholder approval.
There is a substantial possibility that the shareholders of SOSA, Inc.
immediately prior to the transaction would retain less than 50% of the
issued and outstanding shares of the surviving entity. therefore,
regardless of the form of the business acquisition, it may be anticipated
that the investors in this offering will experience a significant reduction
in their percentage of ownership in the company. (See "Acquisition of a
Business," in PROPOSED BUSINESS.)
9
<PAGE>
Shares in this offering are available only to residents of Nevada and Texas
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and will be difficult to resell or transfer.
--------------------------------------------
Initially, these shares are being made available only to residents of the
states of Texas and Nevada because of the simplicity of selling a small
offering under the laws of those states: Registration there is not necessary
if fewer than twenty-five people purchase the shares in a given offering.
Without registering them there, however, the shares cannot be sold or
transferred. As this may never happen, the ability to resell or transfer
these shares is unlikely.
You are subject to dilution which will lower the value of your shares.
----------------------------------------------------------------------
The difference between the initial public offering price per share of common
stock and the net tangible book value per share after this offering
constitutes the dilution to investors in this offering. Net tangible book
value per share of common stock is determined by dividing our net tangible
book value by the number of shares of common stock outstanding.
Assuming the sale of the maximum number of shares based on our financial
statements as of September 30, 2000, new investors will incur an immediate
dilution of approximately $0.024 per share after the offering of the maximum
number of shares is consummated. The existing stockholder of our company
acquired his shares of common stock at a price of $.001 per share which is
$.024 per share lower than the offering price of the shares. Accordingly,
new investors will bear virtually all of the risks inherent in an investment
in this company. (See "Dilution.")
There may not be a public market for the shares you buy.
--------------------------------------------------------
There is no current trading market for the shares, nor can we say for certain
that a trading market will develop, or, if a trading market does develop,
that it will be sustained even after we identify a merger candidate and
consummate a business combination. The shares, to the extent that a market
develops for the shares at all, will likely appear in what is customarily
known as the "pink sheets" or on the NASD's Over-the-Counter Bulletin Board,
which may limit the marketability and liquidity of the shares. (See Risk
Factor, "There are rules for low-priced stocks that may affect your ability
to resell your shares.")
According to Rule 419, all shares issued by a blank check company, must be
placed in the Rule 419 escrow account. These shares will not be released from
the Rule 419 escrow until (1) the consummation of a merger or acquisition as
provided for in Rule 419, or (2) the expiration of 18 months from the date of
this prospectus. There is no present market for our common stock and there is
no likelihood of any active and liquid public trading market developing
following the release of securities from the Rule 419 escrow. Thus,
stockholders may find it difficult to sell their shares.
As a shareholder, you will have limited rights in an acquisition.
-----------------------------------------------------------------
Although investors may request the return of their investment funds in
connection with the reconfirmation offering required by Rule 419, the
shareholders of SOSA, Inc. may not be afforded an opportunity specifically to
approve or disapprove any particular business reorganization or acquisition.
Except under certain circumstances, our officer/director will be able to
consummate an acquisition of or by us without the approval of our
shareholders. Under applicable corporate law, only in the event of a merger,
consolidation, or the sale of all or substantially all of our assets, will
you as a shareholder have the right to object to the merger, consolidation,
or sale and assert your dissenter's right to appraisal of your shares. Similar
restrictions apply if an acquisition is consummated in the form of an exchange
of securities. Though ultimately protected by the reconfirmation, this could
adversely affect the furthering of your interests within the structure of
SOSA, Inc.
10
<PAGE>
There are currently no negotiations in progress regarding an acquisition or
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merger, thus delaying any return on your investment.
----------------------------------------------------
Neither SOSA's officer/director nor any of his affiliates and associates has
had any preliminary contact or discussion, and there are no present plans,
proposals, arrangements or understanding, with any representatives of the
owners of any business or company regarding the possibility of the
acquisition or merger transaction contemplated in the prospectus. Potential
investors are cautioned that this may extend even further the amount of time
before you can hope to see any return on your investment.
We have not yet even identified an acquisition candidate.
---------------------------------------------------------
As of the date of this prospectus, we have not entered into or negotiated any
arrangements for a business combination with an acquisition candidate. Since
we have not yet attempted to seek a business combination, and due to our lack
of experience, there is only a limited basis upon which to evaluate our
prospectus for achieving our intended business objectives. Furthermore
potential investors should know that the process of seeking out and then
qualifying an appropriate acquisition is a lengthy and involved one; thus,
there are "miles to go before we sleep."
Resources could be wasted in researching acquisitions that do not work out.
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It is anticipated that the investigation of specific businesses and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys, and others. If a
decision is made not to participate in a specific business, the costs
incurred up to that point in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business, the failure to consummate that
transaction may result in a loss to us of the related costs incurred which
could materially adversely affect subsequent attempts to locate and
participate in additional businesses.
There can be no assurance of profitability, even once the acquisition has
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been accomplished
-----------------
There can be no assurance that SOSA, Inc. will be able to acquire a favorable
business. Different sorts of risk are entailed whether we ultimately acquire a
new or an old business. Participation in a new business venture entails
greater risks since in many instances management of such a venture will not
have proven its ability, the eventual market for its product or services will
likely not be established, and the profitability of the venture will be
unproven and cannot be predicted accurately. If we participate in a more
established firm with existing financial problems, it may be subjected to risk
because our financial resources may not be adequate to eliminate or reverse
those negative circumstances.
A limitation on acquisitions could hamper our ability to forge the right
------------------------------------------------------------------------
business combination
---------------------
SOSA, Inc. is subject to Rule 419 and certain reporting requirements of the
Securities Exchange Act of 1934. This requires us to furnish certain
information about significant acquisitions, including audited financial
statements for the company(s) acquired for one, two, or three years,
depending on the relative size of the acquisition. Consequently, the
acquisition prospects available to the Company are limited to those
that can provide the required audited financial statements. This further
hampers our ability to acquire desirable going concerns. (See "PROPOSED
BUSINESS: Other Ramifications of Rule 419 on the Selection Process.").
11
<PAGE>
We have extremely limited capitalization.
-----------------------------------------
The offering is a best efforts offering for which the minimum amount is only
$40,000. Management faces the challenge of successfully implementing our
business strategy and plan. We may not be able to successfully manage our
business to achieve our goals if we must proceed having raised only the
minimum offering. Investors could suffer a loss if as a consequence the
amount raised is not enough to fully implement the intended business
strategy. Even if we are successful in raising up to the maximum amount we
seek, $75,000, this might not be enough to successfully identify a merger
candidate and consummate an acquisition.
Inability to secure financing after acquisition may force us to use
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venture capital with exorbitant interest rates.
-----------------------------------------------
It is possible that the Company will not have sufficient funds from the
proceeds of this offering to fully undertake the development, marketing,
and manufacturing of products which may be acquired.
Although there are no specific business combinations or other transactions
contemplated by management, it may be expected any such target business
will present such a level of risk that conventional private or public
offerings of securities or conventional bank financing would not be
available to us once we have acquired the business. In that case the target
company might be forced to rely on venture capital for initial operations,
available only at very high interest rates. The ensuing burden of debt would
further limit its chances for success.
A leveraged buy-out could expose us to a high risk of business failure.
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A leveraged buy-out is one that involves financing the acquisition of a
business by borrowing on the assets of the business to be acquired. This
practice, if it were to be employed by SOSA, Inc. as its strategy for
acquisition, would expose us3/4and by extension your investment3/4to
significant risk.
For one thing, there can be no assurance any business acquired through a
leveraged buy-out would generate sufficient revenues to cover the related
debt and expenses. In that case, the lender could exercise the remedies
provided by law and foreclose on SOSA and all its assets. Furthermore, the
use of leverage to consummate a business combination may reduce our ability
to incur additional debt, make other acquisitions, or declare dividends, and
may subject our operations to strict financial controls and significant
interest expense. It may be expected we will have few, if any, opportunities
to utilize leverage in an acquisition. Even if we were able to identify a
business where leverage may be used, there is no assurance financing will be
available, or if available, on terms we would find acceptable. (See
Acquisition of a Business: "Leverage")
A lack of diversification means we lack the flexibility we may need to
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succeed.
--------
In the event we are successful in identifying and evaluating a suitable
business combination, we will, in all likelihood, be required to issue our
common stock in an acquisition or merger transaction. Because our
capitalization is limited and the issuance of additional common
stock will result in a dilution of interest for present and prospective
shareholders, we will negotiate only one acquisition or merger.
This lack of diversification should be considered a substantial risk of
investing in SOSA, Inc. because it will not permit us to offset potential
losses from one venture against gains from another.
12
<PAGE>
We are dependent on one officer with limited formal business experience.
------------------------------------------------------------------------
SOSA, Inc., is highly dependent of the services of Dorothy Patterson,
the president and sole director of the company. Over-reliance on a
single individual puts the company at risk; should anything happen to
Mrs. Patterson, or if he for unpredictable reasons became disabled or lost
interest in SOSA, the effect on our prospects would be severe. She has
not served as a founder, officer, and director of another companies formed
with the express purpose of seeking available businesses, she does not
have extensive or broad business experience. Her experience involved
owning and managing a day care center (See "MANAGEMENT").
The time to be devoted by management is limited and may be inadequate.
----------------------------------------------------------------------
SOSA's main officer is currently employed full time in other positions or
activities and will devote only what time he can to the affairs of the
company. This will depend on the state of whatever negotiations are in
progress at the time, given the fact that there remain many hurdles to
be overcome before we are in the position to successfully consummate a
business combination. In light of the competing demands for his time, it
should be anticipated that he will grant priority to his full-time position
rather than the business affairs of SOSA, Inc. (See "MANAGEMENT").
A substantial amount of control is held by present management who is also
-------------------------------------------------------------------------
the primary shareholder.
------------------------
Assuming the sale of all the shares offered, the shares of common stock
purchased by the public will represent 54.55% of our outstanding common stock
after the completion of this offering. Therefore, our present stockholder
will own a 45.45% interest in us and will not continue to be able to elect
our directors, appoint our officers, and control our affairs and operations.
Our articles of incorporation do not provide for cumulative voting.
We anticipate a change in control and management.
-------------------------------------------------
We anticipate we will experience a change of control upon the closing of a
business combination. In addition, our current managers and directors will
very probably resign. We cannot assure you of the experience or
qualification of new management either in the operation of our activities or
in the operation of the business, assets, or property being acquired. As
such, despite our intention to negotiate the best possible deal for our
stockholders, no guarantee can be given that new management will be
responsible in that regard.
There is a danger to investors that potential profit will be received by
------------------------------------------------------------------------
management to the exclusion of your interests.
----------------------------------------------
The officer/director of SOSA, Inc. currently owns 100% of the common stock
presently issued and outstanding. She paid $2000 for these shares. She
may, in connection with a proposed merger or acquisition transaction, actively
negotiate or consent to the purchase of his common stock. A premium may be
paid on this stock in connection with such a purchase, but public investors
will neither receive any portion of the premium that may be paid nor be
afforded an opportunity to approve or consent to any particular stock
buy-out. This situation leaves open the possibility that our
officer/director may consider his own personal pecuniary benefit rather than
the best interests of SOSA's other stockholders, thus constituting a
conflict of interest that, despite his essential fair mindedness, could
conceivably compromise his state law fiduciary duties to our other
shareholders.
We have not adopted any policy for resolving these conflicts. Potential
investors should be aware of this contradiction in the structure of this
offering.
13
<PAGE>
Management's discretion in the use of proceeds may conflict with your wishes.
-----------------------------------------------------------------------------
We have some discretion in the use of proceeds.
Of the $40,000-75,000 offering proceeds deposited into the escrow account,
10%, or $4,000-7,500, may be released to us prior to a confirmation offering
in which you reconfirm your investment in accordance with procedures required
by Rule 419. We do not intend to request release of the 10% funds.
Accordingly, we will receive all of the escrowed funds in the event a
business combination is closed under the provisions of Rule 419. We will use
these proceeds as indicated in this document under the section entitled "USE
OF PROCEEDS" but have considerable discretion in deciding how to allocate
funds. Investors should be aware of the fact that their wishes may not be
reflected in the decisions of management in these matters. If we fail to
spend the proceeds effectively, our business and financial condition could be
harmed. (See "USE OF PROCEEDS.")
Selling our shares without a professional underwriter may jeopardize our
ability to adequately research the market.
------------------------------------------
We are selling the shares through our president without the use of a
professional securities underwriting firm. Consequently, there may be less
due diligence performed in conjunction with this offering than would be
performed in an underwritten offering.
Our inability to evaluate investments could lead us into an unwise investment.
------------------------------------------------------------------------------
Our limited funds and the lack of full-time management will likely make it
impracticable to conduct a complete and exclusive investigation and analysis
of a business. Therefore, management decisions will likely be made without
detailed feasibility studies, independent analysis, market surveys, and the
like which, if we had more funds available, would be desirable. SOSA, Inc.
will be particularly dependent in making decisions on information provided by
the promoter, owner, sponsor, or others associated with the businesses seeking
our participation, and which will have a direct economic interest in
completing a transaction with us. In a worse case scenario, this could lead us
to make a poor decision because we might lack the fullest possible knowledge
of the relevant facts.
The failure of a sufficient number of investors to reconfirm their investment
-----------------------------------------------------------------------------
could jeopardize the entire transaction.
----------------------------------------
A business combination with an acquisition candidate cannot be closed unless,
for the reconfirmation offering required by Rule 419, we can successfully
convince you and a sufficient number of investors representing 80% of the
offering proceeds raised to elect to reconfirm your investments. If, after
completion of the reconfirmation offering, a sufficient number of investors do
not reconfirm their investment, the business combination will not be closed.
Given this scenario, none of the securities held in escrow will be issued and
the funds will be returned to you on a proportionate basis. Up to 80% of the
shares may be purchased by our officers, directors, current shareholders and
any of their affiliates or associates. It is likely that these insiders will
elect to reconfirm a proposed business combination reducing or eliminating
your effect on the outcome of the 80% required reconfirmation.
If you invest, you will not be able to transfer your escrowed securities.
-------------------------------------------------------------------------
No transfer or other disposition of the escrowed securities is permitted
other than by will or the laws of descent and distribution, or under a
very specific section of the tax code related to divorce. Potential investors
should be aware that your ability to sell or transfer these securities while
they are in escrow, or any interest in them, is severely limited,
significantly affecting their liquidity and your flexibility.
14
<PAGE>
There are rules for low-priced stocks that may affect your ability to resell
----------------------------------------------------------------------------
your shares
-----------
It is likely that our common stock will be subject to the regulations on
penny stocks; consequently, the market liquidity for our common stock may be
adversely affected by regulations limiting our ability or that of any
broker/dealers we may in the future ultimately engage to sell our common
stock. Additionally, these regulations sometimes depress stock prices.
This, in turn, may affect your ability to resell those shares in the public
market following termination of the Rule 419 escrow.
We have arbitrarily determined the offering price of the shares.
----------------------------------------------------------------
We have arbitrarily determined the offering price of $0.025 per share. This
price bears no relation to our assets, book value, or any other customary
investment criteria, including our prior operating history. Among factors we
considered in determining the offering price were:
o Estimates of our business potential
o Our limited financial resources
o The amount of equity desired to be retained by present shareholders
o The amount of dilution to the public
o The general condition of the securities markets
We face many competing companies with more experience and resources than we.
----------------------------------------------------------------------------
In relation to our competitors, we are and will continue to be an
insignificant participant in the business of seeking business combinations.
A large number of established and well-financed entities, including venture
capital firms, have recently increased their merger and acquisition
activities. Most of these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we and,
consequently, we will be at a competitive disadvantage in identifying
suitable merger or acquisition candidates and successfully consummating a
proposed merger or acquisition. Also, we will be competing with a large
number of other small blank check companies.
Possible tax consequences to our activities may adversely effect us or our
--------------------------------------------------------------------------
investors.
----------
In the course of any acquisition or merger we may undertake, a substantial
amount of attention will be focused upon federal and state tax consequences
both to us and the acquisition candidate. Presently, under the provisions of
federal and various state tax laws, a qualified reorganization between
business entities will generally result in tax-free treatment to the parties
to the reorganization. While we expect to undertake any merger or acquisition
so as to minimize federal and state tax consequences both to us and the
acquisition candidate, such business combination might not meet the statutory
requirements of a reorganization, or the parties might not obtain the intended
tax-free treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state taxes
that may have a substantial adverse effect on us.
15
<PAGE>
FORWARD-LOOKING STATEMENTS
--------------------------
This prospectus contains forward-looking statements. We intend to identify
forward-looking statements in this prospectus using words such as "believes,"
"intends," "expects," "may," "will," "should," "plan," "projected,"
"contemplates," "anticipates," or similar statements. 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, these statements involve risks, uncertainties and
assumptions. Actual future results may differ significantly from the results
discussed in the forward-looking statements. Some, but not all, of the
factors that may cause these differences include those discussed in the Risk
Factors section. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus.
16
<PAGE>
YOUR RIGHTS UNDER RULE 419
--------------------------
It is important that you know that we have had absolutely no preliminary
contact or discussion with any representatives of any business regarding the
possibility or potential for any acquisition or merger. This offering is
being conducted according to Rule 419. You have certain rights and will
receive the substantive protection provided by this Rule. To that end,
the securities purchased by you and other investors and the funds received in
the offering will be deposited and held in the escrow account until an
acquisition meeting specific criteria is completed.
Acquisition criteria
--------------------
Rule 419 requires that, before the funds and the securities can be released,
we must first execute an agreement to acquire a candidate meeting certain
specified criteria. The agreement must provide for the acquisition of a
business or assets for which the fair value of the business represents at
least 80% of the offering proceeds. For purposes of the offering, the fair
value of the business or assets to be acquired must be at least 80% of
$75,000, that is $60,000, if the maximum amount is raised; and 80% of
$40,000, or $32,000, if the minimum amount is raised.
The agreement must also include, as a precondition to its closing, a
requirement that the number of investors representing 80% of the offering
proceeds must elect to reconfirm their investment.
We will not acquire or merge with any business or company to which our
officer/director or any associated person has any relationship. Any merger
or acquisition will be strictly at arm's length. While we do not anticipate
seeking an independent appraisal of any proposed merger or acquisition, we
do intend to fully disclose the nature and terms of any business combination
in a post-effective amendment.
Post-effective amendment
------------------------
Once the agreement governing the acquisition of a business meeting the
required criteria has been executed, Rule 419 requires us to update the
registration statement with a post-effective amendment. The post-effective
amendment must contain information about the proposed acquisition candidate
and its business, including audited financial statements, the results of this
offering, and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation
offer mandated by Rule 419. The reconfirmation offer must include certain
prescribed conditions which must be satisfied before the funds and securities
can be released from escrow.
17
<PAGE>
Reconfirmation of offering
---------------------------
The reconfirmation offer must commence after the effective date of the post-
effective amendment. Under Rule 419, the terms of the reconfirmation offer
must include the following conditions:
o The prospectus contained in the post-effective amendment will be sent
to each investor whose securities are held in the escrow account within
5 business days after the effective date of the post-effective amendment.
o Each investor will have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to notify
us in writing that the investor elects to remain an investor.
o If we do not receive written notification from any investor within 45
business days following the effective date, the proportionate portion
of the funds and any related interest or dividends held in the escrow
account on the respective investor's behalf will be returned to the
investor within 5 business days by first class mail or other equally
prompt means.
o As previously stated, the acquisition will be closed only if investors
representing 80% of the total proceeds from the offering elect to
reconfirm their investment, that is, if the maximum number of shares have
been sold, proceeds equaling $60,000, and if the minimum, $32,000.
o If a closed acquisition has not occurred by [Date], 2002, 18 months
from the date of this prospectus, the funds held in the escrow account
shall be returned to all investors on a proportionate or pro-rata
basis within 5 business days by first class mail or other equally prompt
means.
Release of securities and funds.
--------------------------------
The funds will be released to us, and the securities will be released to you,
only after the escrow agent has received a signed representation from us and any
other evidence acceptable by the escrow agent that:
o We have executed an agreement for the acquisition of an acquisition
candidate.
18
<PAGE>
o The fair market value of the business to be acquired represents at
least 80% of the minimum offering proceeds.
o We have filed the required post-effective amendment.
o The post-effective amendment has been declared effective.
o We have satisfied all of the prescribed conditions of the
reconfirmation offer.
o The transaction to acquire the business has closed.
DILUTION
--------
The dilution to investors in this offering is constituted by the difference
between the public offering price per share and the pro forma net tangible
book value per share, of common stock of SOSA, Inc., after this offering.
Net tangible book value per share is determined by dividing the net tangible
book value of the company by the number of outstanding shares of common stock.
The net tangible book value of the company is equal to the total tangible assets
less the total liabilities.
Dilution arises mainly from the arbitrary decision by us as to the offering
price per share. Dilution of the value of the shares purchased by the public
in this offering will also be due, in part, to the lower book value of the
shares presently outstanding, and in part, to expenses incurred in connection
with the public offering.
Net tangible book value is equal to the net tangible assets of the company.
The net tangible assets of the company are equal to the total assets less the
total liabilities and intangible assets. (See "Financial Statements.")
As of September 30, 2000, SOSA, Inc. had an unaudited net tangible book value
deficit of $2,000. The net tangible book value deficit is equal to the total
tangible assets less the total liabilities. The net tangible book value
deficit per share of common stock is approximately $0. (See "Certain
Transactions.")
The information below sets forth the dilution to persons purchasing shares
in this offering without taking into account any changes in the net tangible
book value of SOSA, Inc. after September 30, 2000, except the sale of the
minimum and maximum number of shares offered at the public offering price and
receipt of the net proceeds from that sale.
<TABLE>
<CAPTION>
DILUTION
Minimum Maximum
------- -------
<S> <C> <C>
Public Offering Price Per Share $0.025 $0.025
Net Tangible Book Value Per Share $0.001 $0.001
Before Offering
Net Tangible Book Value Per Share
After Offering* $0.011 $0.015
Increase Per Share Attributable to
Payment by Public Investors $0.010 $0.014
Dilution Per Share to Public Investors
Percentage 53.3% 38.4%
Numerical* $0.011 $0.015
</TABLE>
19
<PAGE>
USE OF PROCEEDS
---------------
If the maximum shares are sold, the gross proceeds of this offering will be
$75,000. While Rule 419, prior to the reconfirmation of the offering permits
10% of the funds ($7,500) to be released from escrow to us, we do not intend
to request release of these funds. This offering is contingent on the entire
offering being sold and will be sold on a first come, first served basis. If
subscriptions exceed the amount being offered, these excess subscriptions
will be promptly refunded without deductions for commissions or expenses.
Accordingly, we will receive these funds in the event a business combination
is closed in accordance with Rule 419.
Under Rule 419, after the reconfirmation offering and the closing of
the business combination, and assuming the successful completion of this
offering, $75,000, plus any dividends received, but less any amount returned
to investors who did not reconfirm their investment under Rule 419, will be
released to us.
We have considerable discretion over how to use a significant portion of
the net proceeds of this offering. We cannot assure investors that our use
of the net proceeds will not vary substantially due to unforeseen factors.
The proceeds if and when made available to use will be used to pay the
following expenses in the order stated:
20
<PAGE>
<TABLE>
<CAPTION>
USE OF PROCEEDS
MINIMUM MAXIMUM
------- -------
<S> <C> <C>
Offering Expenses(1) 3,500 3,500
Escrow Fees(2) 500 500
TOTAL EXPENSES 4,000 4,000
Working Capital 36,000 71,000
TOTAL EXPENSES+WORKNG CAPITAL(3) 40,000 75,000
</TABLE>
(1) Offering costs include filing, printing, legal, accounting, transfer
agent and escrow agent fees.
(2) The proceeds received in this offering will be put into the escrow
account pending closing of a business combination and
reconfirmation. (See Exhibit 2.1 Escrow Agreement.)
Upon the consummation of a business combination and the reconfirmation of the
investors' purchase of the shares, the balance of the deposited funds will be
released to use. They may be used to offset the expenses of consummating a
business, including legal fees for the preparation and filing of a
post-effective amendment to the registration statement.
No portion of the proceeds of the offering will be paid to officers,
directors and/or their affiliates or associates. Expenses will be paid from
our working capital.
Working capital is expected to include incidental expenses related to the
marketing of our company as a vehicle for a merger candidate seeking to
become fully reporting, as well as for incidental operational expenses
including basic office supplies. To the extent that these funds are not
used, they will be deposited in an interest-bearing money market account
which will be available to the merger candidate upon consummation of a merger
or acquisition.
If this capital is insufficient, the company may seek to obtain additional
financing through offerings of equity and/or debt securities. It is unlikely
that we will seek loan financing as the costs of our operations are
negligible and we do not expect to incur any significant additional costs.
However, if we are able to raise only the minimum amount of $40,000, and no
additional funds are secured, then we face the risk that our company might be
under-funded, placing all investments substantially at risk. Under those
circumstances, we might attempt to borrow funds. Any loan we undertook
would be repaid in lump sum from the proceeds we expect to derive from the
sale of the company to a merger candidate upon receipt of final payment.
Other Arrangements
------------------
SOSA, Inc. has no agreement or understanding, express or implied, with its
officer/director or any of his affiliates or associates regarding employment
with the Company or compensation for services. It has no plan, agreement, or
understanding, express or implied, with her, or any affiliates regarding the
issuing of any shares of authorized and unissued common stock.
21
<PAGE>
The existing officer/director does reserve the right to acquire shares in
this offering. There is no understanding, however, between her and SOSA, Inc.
regarding the sale of all or a portion of the common stock he currently holds
in connection with any future participation by SOSA in a business, or any
other plans, understandings, or arrangements by which he or his affiliates
would receive funds, stock, or other assets in such a connection. Nor have any
advances have been made or contemplated by SOSA to Mrs. Patterson or anyone
connected to her.
Except for reimbursement of offering costs and expenses he may have incurred
on SOSA's behalf, no portion of the net proceeds of the offering may be paid
to our officer/director or any of his associates directly or indirectly, as
consultant fees, officer salaries, director fees, purchase of their shares,
or other payments. No portion of the net proceeds will be used to make loans
to any person. SOSA will not borrow funds and use the proceeds acquired from
the lender to make payments to its officer/director or any of his associates.
SOSA, Inc. has no agreement or understanding with any consultant or advisor
to provide services in connection with any future business acquisition.
Though no concrete plans to do so are currently in place, the possibility
exists that management may find it to be in the company's best interests to
retain the services of such a consultant.
Under no circumstances will SOSA, Inc. retain the services of its
own officer/director or one of his affiliates or associates as a consultant.
Compensation to a consultant may take various forms, including one time cash
payments, payments based on a percentage of revenues or product sales
volume, payments involving issuance of securities (including those of SOSA,
Inc.) or any combination of these or other compensation arrangements.
We estimate that any fees for consultant services paid in cash will not
exceed 10% of the amount of the securities it issues to acquire a business.
We will not have funds to pay a retainer in connection with any consulting
arrangement, and no fee will be paid unless and until an acquisition is
completed in accordance with Rule 419.
The following tables set forth the percentage of equity to be purchased by
public investors in the offering compared to the percentage equity to be
owned by the present stockholder, and the comparative amounts paid for the
shares by the public investors as compared to the total consideration paid by
the present stockholder of SOSA, Inc.
<TABLE>
<CAPTION>
Assuming the Minimum Number of Shares Sold
------------------------------------------
Shares Approx Percent Total Approx. Percent
Purchased of Total Shares Dollars of Total Dollars
--------- --------------- ------- ----------------
<S> <C> <C> <C> <C>
Public
Stockholders 1,600,000 44.4% 40,000 95.2%
Present
Stockholder 2,000,000 55.6% 2,000 4.8%
Total 3,600,000 100.0% 43,000 100.0%
Assuming the Maximum Number of Shares Sold
------------------------------------------
Public
Stockholders 3,000,000 60.0% 75,000 97.4%
Present
Stockholder 2,000,000 40.0% 2,000 2.6%
Total 5,000,000 100.0% 77,000 100.0%
</TABLE>
22
<PAGE>
CAPITALIZATION
--------------
The following table sets forth our capitalization as of September 30, 2000, and
pro-forma as adjusted to give close to the sale of 3,000,000 shares offered
by us.
<TABLE>
<CAPTION>
Capitalization
Actual As Adjusted
------ -----------
<S> <C> <C>
Long-term debt
Stockholders' equity:
Common stock, $.001 par value;
authorized 20,000,000 shares,
issued and outstanding
2,000,000 shares 2,000 5,000
Additional paid-in capital 0 72,000
Deficit accumulated during the
2,000,000 shares 2,000 5,000
Total stockholders equity 2,000 77,000
Total Capitalization 2,000 77,000
</TABLE>
PLAN OF DISTRIBUTION
--------------------
General
We are offering a minimum of 1,600,000 and a maximum of 3,000,000 shares at
the purchase price of $0.025 per share on a "best efforts all or none basis"
as to the first 1,600,000 shares and on a "best efforts" basis with regard to
the remaining 1,400,000 shares. If the minimum number of shares is not sold
during the offering Period, the proceeds received will be promptly returned
to investors with interest. The company may allocate among or reject any
offers to purchase, in whole or in part. Moreover, our officer/director may
purchase shares on the same terms, though not with an intention to resell
such shares shortly thereafter.
The shares will be offered and sold only to residents in the states of
Texas and Nevada. (For details, see "Special State Law Considerations,"
below, especially as to limitations this places on resale or transfer of
shares.)
Our executive officer, Dorothy Patterson, will sell all shares in this
Offering. She will receive no compensation or commissions with respect to
them.
Shares will be sold in reliance upon the safe harbor provisions of Rule 3a4(1)
of the Securities Exchange Act of 1934. SOSA, Inc. has no arrangements or
agreements, verbal or written with any underwriters to help underwrite this
offering.
Our officer/director and board members may purchase shares on the same terms
and conditions as all other investors and any such purchases will not be
included in calculating whether the minimum number of shares have been sold.
Shares purchased by the company's existing stockholders will be included in
determining whether the minimum offering criteria has been satisfied.
23
<PAGE>
This offering is intended to be made solely by the delivery of this
prospectus and the accompanying subscription application to prospective
investors. SOSA's officer/director will not participate in the making of this
offering other than by the delivery of this prospectus or by responding to
inquiries by prospective purchasers. His responses will be limited to the
information contained in the Registration Statement of which this prospectus
is a part.
The Company will pay its own legal and accounting fees and other expenses
incurred in connection with the offering.
Though no plans to do so are in effect, we reserve the right to use broker-
dealer(s) in the sale of these securities. We will amend the registration
statement via post-effective amendment if in fact we do require the services
of a broker-dealer(s) if or when the broker-dealer sells a portion of the
offering. Prior to the involvement of the broker-dealer, we would secure a no
objection position from the NASD.
The proceeds received under this offering will be deposited in an interest
bearing escrow account with Southwest Escrow Company, whose address is 401
North Buffalo Drive, Suite 205, Las Vegas, Nevada 89128 (escrow agent).
Stock certificates will not be issued until funds from the reconfirmed
investments are released to us from the escrow account by the escrow agent.
Until stock certificates are issued to the subscribers, the subscribers will
not be considered shareholders of the Company.
Subscribers will have no right to a return of their subscription
payments held in the escrow account until the Company decides not to accept
such subscription payment.
24
<PAGE>
PROPOSED BUSINESS
-----------------
History and Organization
------------------------
We are a Nevada corporation incorporated on March 29, 2000 for the purpose of
acquiring or merging with an unspecified operating business. We are a blank
check company as defined in Rule 419. SOSA, Inc. was organized for the purpose
of seeking, investigating, and ultimately acquiring an interest in a business
with long-term growth potential. Persons should not purchase shares in the
offering if they expect short-term earnings or appreciation in the value of
our company. It is emphasized that the business objectives discussed here are
extremely general and are not intended to be restrictive on the discretion of
the management of SOSA, Inc.
Persons purchasing shares in the offering will be entrusting their funds
to SOSA's management, subject to the requirements of Rule 419. The net
proceeds of the offering are not specifically allocated to identified
purposes or allocated to the acquisition of any specific type of business
venture. Decisions concerning these matters may be made by management
without shareholder action, except for the right of each investor to recover
his pro rata portion of the deposited funds in accordance with Rule 419. (See
"Use Of Proceeds.")
Management anticipates that it may be able to participate in only one
potential business venture, due primarily to our limited financing.
Selection of a Business
-----------------------
SOSA, Inc. anticipates that businesses for possible acquisition will be
referred by various sources, including its officer/director, professional
advisors, securities broker-dealers, venture capitalists, members of the
financial community, and others who may present unsolicited proposals. SOSA
will seek businesses from all known sources, but will rely principally on
personal contacts of the officer/director and his affiliates, as well as
indirect associations between her and other business and professional people.
While it is not presently anticipated that SOSA will engage unaffiliated
professional firms specializing in business acquisitions or reorganizations,
such firms may be retained if management deems it in the best interest of the
Company. (See "Other Arrangements" under "Use Of Proceeds," above.)
Process of Selection
--------------------
SOSA will not restrict its search to any particular business, industry, or
geographical location, and management reserves the right to evaluate and
enter into any type of business in any location. It may participate in a
newly organized business venture. On the other hand, it may select a more
established company entering a new phase of growth or in need of additional
capital to overcome existing financial problems.
In seeking a business venture, the decision of management will not be
controlled by an attempt to take advantage of any anticipated or perceived
appeal of a specific industry, management group, product, or industry, but
will be based on the business objective of seeking long-term capital
appreciation in the real value of SOSA, Inc.. We will not acquire or merge
with a business or corporation in which our officer/director or any of his
associates has any direct or indirect ownership interest.
25
<PAGE>
Factors To Be Considered in the Selection Process
-------------------------------------------------
The analysis of new businesses will be undertaken by or under the
supervision of our officer/director. In analyzing prospective businesses, he
will consider, to the extent applicable, the available technical, financial,
and managerial resources, working capital and other prospects for
the future, the nature of present and expected competition; the quality and
experience of management services which may be available and the depth of
that management; the potential for further research, development, or
exploration; the potential for growth and expansion; the potential for
profit; the perceived public recognition or acceptance of products, services,
or trade or service marks; name identification; and other relevant factors.
The decision to participate in a specific business may be based on
management's analysis of the quality of the other firm's management and
personnel, the anticipated acceptability of new products or marketing
concepts, the merit of technological changes, and other factors which are
difficult, if not impossible, to analyze through any objective criteria. It
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand
significantly, change product emphasis, change or substantially augment
management, and other factors.
Time Frame of the Selection Process
-----------------------------------
The period within which we may participate in a business on completion of
this offering cannot be predicted and will depend on circumstances beyond our
control, including the availability of businesses, the time required to
complete our investigation and analysis of prospective businesses, the time
required to prepare appropriate documents and agreements providing for our
participation, and other circumstances. It is anticipated that the analysis
of specific proposals and the selection of a business will take several
months. Even after we have located a prospective acquisition target, it will
still have to comply with the reconfirmation mandate of Rule 419, which may
take months. Persons should not purchase shares in this offering if they
expect a short-term appreciation in the value of SOSA, Inc. or its securities.
Other Ramifications of Rule 419 on the Selection Process
--------------------------------------------------------
It is possible that SOSA, Inc. may propose to acquire a business in the
development stage. A business is in the development stage if it is devoting
most of its efforts to establishing a new business, and planned principal
operations have either not commenced or not yet resulted in significant
revenues. Under Rule 419, SOSA must acquire a business or assets for which
the fair value of the business represents at least 80% of the offering
proceeds. Accordingly, SOSA's ability to acquire a business in the
development stage may be limited to the extent it cannot locate such
businesses with fair value high enough to satisfy the requirements of Rule
419.
26
<PAGE>
SOSA will be subject to requirements of Rule 419 and certain reporting
requirements under the Exchange Act and will, therefore, upon effectiveness,
be required to furnish audited financial statements for the company(s)
acquired, covering one, two, or three years, depending on the relative size
of the acquisition. Consequently, acquisition prospects that do not have or
are unable to obtain the audited statements to meet these requirements will
not be appropriate for acquisition. SOSA, Inc. anticipates that it will
voluntarily prepare and file periodic reports under the Exchange Act,
notwithstanding the fact that that obligation may be suspended under sections
15(d) of the Exchange Act.
Acquisition of a Business
-------------------------
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, or other
reorganization with another corporation or entity; joint venture; license;
purchase and sale of assets; or purchase and sale of stock, the exact nature
of which cannot now be predicted. Notwithstanding the above, the Company
does not intend to participate in a business through the purchase of minority
stock positions. On the consummation of a transaction, it is likely that
SOSA's present management and shareholder will not be in control of the
company. In addition, a majority or all of SOSA's directors may, as part of
the terms of the acquisition transaction, resign and be replaced by new
directors without vote of our shareholders.
The possible ramifications of transactions like those mentioned here could
significantly effect investments. See "RISK FACTORS" in connection with these
and other possible effects.
In connection with SOSA's acquisition of a business, for example, its present
shareholder, officer/director may, as a negotiated element of the
acquisition, sell all or a portion of the common stock he holds at a
significant premium over his original investment in SOSA, Inc. As a result
of such sales, affiliates of the entity participating in the business
reorganization with SOSA would acquire a higher percentage of equity
ownership in it.
Although our present shareholder did not acquire his shares of common stock
with a view toward any subsequent sale in connection with a business
reorganization, it is not unusual for affiliates of the entity participating
in the reorganization to negotiate to purchase shares held by the present
shareholders. This reduces the number of restricted securities held by
persons no longer affiliated with the company. This in turn reduces the
adverse impact that might be exerted on the public market in the company's
common stock as a result of substantial sales of those shares once the
restrictions no longer apply.
Public investors will not receive any portion of the premium that may be paid
in those circumstances. Furthermore, our shareholders may not be afforded an
opportunity to approve or consent to any particular stock buy-out transaction.
While the actual terms of a transaction to which we may be a party cannot be
predicted, it may be expected that the parties to the business transaction
will find it desirable to structure the acquisition as a so-called "tax-free"
event under sections 351 or 368(a) of the Internal Revenue Code of 1986. In
order to obtain tax-free treatment under section 351 of the Code, it would be
necessary for the owners of the acquired business to own 80% or more of the
stock of the surviving entity. In that case, SOSA's shareholders, including
investors in this offering, would retain less than 20% of the issued and
outstanding shares of the surviving entity. Section 368(a)(1) of the Code
provides for tax-free treatment of certain business reorganization between
corporate entities where one corporation is merged with or acquires the
securities or assets of another.
Generally, we will be the acquiring corporation in such a business
reorganization, and the tax-free status of the transaction will not depend on
the issuing of any specific amount of stock of the surviving entity.
Consequently, there is a substantial possibility that the shareholders of
SOSA, Inc., immediately prior to the transaction, would retain less than 50%
of the issued and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be anticipated
that the investors in this offering will experience a significant reduction
in their percentage of ownership in the company.
27
<PAGE>
Notwithstanding the fact that the Company is technically the acquiring entity
in these circumstances, generally accepted accounting principles will
ordinarily require that such a transaction be accounted for as if the Company
had been acquired by the other entity owning the business and, therefore,
will not permit a write-up in the carrying value of the assets of the other
company.
The manner in which we participate in a business will depend on the nature
of the business, our needs and desires and those of the other parties
involved in the negotiations , the management of the business, and the
relative negotiating strengths of SOSA and the other management team.
We will participate in a business only after the negotiation and execution of
appropriate written agreements. Although the exact terms of these agreements
cannot be predicted, generally they will:
* require specific representations and warranties by all of the parties
involved,
* specify certain events of default,
* detail the terms of closing and the conditions which must be satisfied
by each of the parties prior to it ,
* outline the manner of bearing costs if the transaction is not closed,
* set forth remedies on default, and
* include miscellaneous other terms.
One of the conditions will most likely be compliance with Rule 419, and
reconfirmation by investors representing at least 80% of the gross proceeds of
the offering.
Evaluation Criteria
-------------------
Despite his lack of deep experience as a professional business analyst,
SOSA's officer/director, Dorothy Patterson, will carefully examine businesses
for acquisition
Management anticipates the selection of an acquired business will be
complex and risky because of the competition for such business opportunities
among all segments of the financial community. The nature of the company's
search for the acquisition of a business requires maximum flexibility since
the company will be required to consider various factors and divergent
circumstances which may preclude meaningful direct comparison among the
various business enterprises, product or services investigated. The management
of the company will have virtually unrestricted flexibility in identifying and
selecting a prospective acquired business. Besides determining its fair market
value, management will consider the following:
o the acquired business' net worth;
o the acquired business' total assets;
o the acquired business' cash flow;
o costs associated with effecting the business combination;
o equity interest in and possible management participation in the
acquired business;
o earnings and financial condition of the acquired business;
o growth potential of the acquired business and the industry in which it
operates;
o experience and skill of management and availability of additional
personnel of the acquired business;
o capital requirements of the acquired business;
o competitive position of the acquired business;
o stage development of the product, process or service of the acquired
business;
o degree of current or potential market acceptance of the product,
process or service of the acquired business; and
o regulatory environment of the industry in which the acquired business
operates.
These criteria are not intended to be exhaustive. As Mrs. Patterson searches
through the candidates for acquisition, other factors she considers relevant
may apply.
28
<PAGE>
Although we believe that locating and investigating specific business
proposals will take several months, the exact duration of the process is
difficult to predict. However, we cannot exceed the 18 month time schedule
set forth in Rule 419. The time and costs required to select and evaluate
an acquired business candidate, including conducting a due diligence review,
and to structure and consummate the business combination, including
negotiating relevant agreements and preparing requisite documents for filing
in keeping with applicable securities laws and state corporate laws, cannot
presently be stated with certainty. See "Investors' Rights and Substantive
Protection Under Rule 419."
Leverage
--------
SOSA may be able to participate in a business involving the use of leverage.
Leveraging a transaction involves the acquisition of a business through
incurring indebtedness for a portion of the purchase price of that business,
which is secured by the assets of the business acquired.
One method by which leverage may be used is to locate an operating business
available for sale and arrange for the financing necessary to purchase it.
Acquisition of a business in this fashion would enable us to participate in a
larger venture than our limited funds would otherwise permit, or use less of
our funds to acquire a business and thus commit our remaining funds to the
operations of the business acquired. (See "A leveraged buy-out could expose
us to a high risk of business failure." under Risk Factors.)
The likelihood that we could obtain a conventional bank loan for a leveraged
transaction would depend largely on the business being acquired and its
perceived ability to generate sufficient revenues to repay the debt.
Generally, businesses suitable for leveraging are limited to those with
income-producing assets that are either in operation or can be placed in
operation relatively quickly. We cannot predict whether it will be able to
locate any such business. As a general matter it may be expected that SOSA,
Inc. will have few, if any, opportunities to examine businesses where
leveraging would be appropriate, or to acquire financing with acceptable
terms.
Tax Considerations
------------------
As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. SOSA, Inc.
will evaluate the possible tax consequences of any prospective business
combination and will endeavor to structure the business combination so as to
achieve the most favorable tax treatment to itself, the acquired business,
and our respective stockholders. The IRS or other appropriate state tax
authorities may, however, attempt to re-characterize the tax treatment of a
particular business combination. (See "There may be tax consequences to our
activities which may adversely effect the company or our investors," under
Risk Factors.)
Form and Structure of Acquisition
---------------------------------
Of the various methods and forms by which we may structure a transaction to
acquire another business, management is likely to use, without limitation,
one of the following forms: (1) a leveraged buyout transaction in which most
of the purchase price is provided by borrowings from one or more lenders or
from the sellers in the form of a deferred purchase price; (2) a merger or
consolidation of the acquired corporation into or with the company; (3) a
merger or consolidation of the acquired business corporation into or with a
subsidiary of the company organized to facilitate the acquisition (a
"subsidiary merger"), or a merger or consolidation of such a subsidiary into
or with the acquired corporation (a "reverse subsidiary merger"); (4) an
acquisition of all or a controlling amount of the stock of the acquired
corporation followed by a merger of the acquired business into us; (5) an
acquisition of the assets of a business by us or a subsidiary organized for
such a purpose; (6) a merger or consolidation of the company with or into the
acquired business or such a subsidiary; or (7) a combination of any of the
above. The actual form and structure for a business combination may also
be dependent upon numerous other factors pertaining to the acquired business
and its stockholders, as well as potential tax accounting treatments afforded
the business combination.
29
<PAGE>
As part of an acquisition, we may choose to issue additional securities that
could add numerous complications depending on whether or not these would need
to be registered. Dilution, change of management, additional costs, time
delays or depressed prices for our stock could result, discussions of which
are included in the Risk Factors section of this prospectus.
We are endeavoring, by the way, to conduct our operations so as not to
require registration under the Investment Company Act of 1940.
Daily Operations
----------------
We expect to use attorneys and accountants as necessary, and do not
anticipate a need to engage any full-time employees during the phase devoted
to seeking and evaluating business opportunities. The need for employees and
their availability will be addressed along with the decisions specific to
acquiring or participating in a specific business opportunity. We have
allocated a portion of the offering proceeds for general overhead. Although
there is no current plan to hire employees on a full-time or part-time basis,
some portion of working capital may be used to pay any part-time employees
hired.
Until an active business is commenced or acquired, we will have no employees
or day-to-day operations. We are unable to make any estimate as to the
future number of employees, which may be necessary. If an existing business is
acquired it is possible that we would hire its existing staff.
Competition
-----------
SOSA, Inc. will be involved in intense competition with other business
entities, many of which will have a competitive edge over us by virtue of
their more substantial financial resources and prior experience in business.
We face as well numerous other smaller blank check companies at the same
stage of development as we are. (See "Competition," in Risk Factors.)
Offices
-------
SOSA, Inc. uses office space at 14601 Bellaire Blvd., Suite 338, Houston,
Texas, 77083, provided by Mrs. Dorothy Patterson, our officer/director and
principal shareholder, at no cost. We will reimburse clerical and office
expenses, such as telephone charges, copy charges, overnight courier service,
travel expenses, and similar costs she incurs on company matters, which are
estimated not to exceed, on average, $500.00 per month.
This arrangement will remain in effect until we enter into a business
combination or the Rule 419 escrow is otherwise terminated
30
<PAGE>
PLAN OF OPERATION
-----------------
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. As of September 30, 2000, we have
no significant expenses, with the exception of incorporation fees, SEC
filing fees, and escrow establishment fees.
Virtually all of the expenses that will be funded from the money in our
treasury---or, if additional funds are required, that may be funded by
management---will derive from our efforts to identify a suitable acquisition
candidate and close the acquisition. Management may agree to fund our cash
requirements until an acquisition is closed. So long as management does so,
we will have sufficient funds to satisfy our cash requirements and do not
expect to have to raise additional funds during the entire Rule 419 escrow
period of up to 18 months from the date of this prospectus. This is primarily
because we do not anticipate incurring any significant expenditures. Before
the conclusion of this offering, we anticipate our expenses to be limited to
accounting fees, legal fees, telephone, mailing, filing fees, and transfer
agent fees.
We may seek additional financing. At this time, however, we believe that the
funds to be provided by management will be sufficient for funding our
operations until we find an acquisition and therefore do not expect to issue
any additional securities before the closing of a business combination.
31
<PAGE>
DESCRIPTION OF CAPITAL STOCK
----------------------------
Authorized Capital Stock Under Our Shares of Capital Stock Outstanding
Articles of Incorporation After offering
---------------------------------- -----------------------------------
20,000,000 shares of common stock 5,000,000 shares of common stock-
assuming successful completion of
maximum offering.
3,600,000 shares of common stock-
assuming successful completion of
minimum offering.
All significant provisions of our capital stock are summarized in this
prospectus. You should note that the following description is governed by
applicable Nevada law and our articles of incorporation and bylaws. We have
filed copies of these documents as exhibits to the registration statement
related to this prospectus. If you wish to obtain more detailed information
regarding this topic, please refer to the Index for Part II on page XX for
a complete list of these exhibits.
Authorized Stock
----------------
SOSA, Inc. is authorized to issue 25,000,000 shares, consisting of
20,000,000 shares of Common Stock, par value $0.001 per share, of which
2,000,000 shares are issued and outstanding, and 5,000,000 shares of
preferred stock, par value $0.001 (the "Preferred Stock"), of which no shares
have been issued.
Common Stock
------------
Holders of common stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of shareholders. Shares of common stock
do not carry cumulative voting rights; and, therefore, holders of a majority
of the outstanding shares of common stock will be able to elect the entire
board of directors, and, if they do so, minority shareholders would not be
able to elect any members to the board of directors. SOSA's board of
directors has authority, without action by our shareholders, to issue all or
any portion of the authorized but unissued shares of common stock, which
would reduce the percentage ownership in the company of its shareholders and
which may dilute the book value of the common stock.
Shareholders of SOSA, Inc. have no pre-emptive rights to acquire additional
shares of common stock. The common stock is not subject to redemption
and carries no subscription or conversion rights. In the event of liquidation
of SOSA, the holders of shares of common stock are entitled to share equally
in corporate assets after satisfaction of all liabilities. The shares of
common stock, when issued, will be fully paid and non-assessable.
32
<PAGE>
Holders of common stock are entitled to receive such dividends as the board
of directors may from time to time declare out of funds legally available for
the payment of dividends.
NOTE: We have not paid dividends on our common stock and do not anticipate
that we will pay dividends anytime soon. This caution is repeated: You
should not expect to receive any dividends on shares in the near future, even
after a merger. This investment is inappropriate for you if you need dividend
income from an investment in
shares.
The common stock is immediately detachable on delivery from the escrow
required by Rule 419, so that the common stock can be separately transfer-
able on issuance. (See "COMMON STOCK" and "WARRANTS," below.)
Preferred Stock
---------------
Our board of directors, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock, with
some or all of the following rights or any other legal rights they think are
appropriate, such as:
o Voting
o Dividends
o Required or optional repurchase by us
o Conversion into common stock, with or
without additional payment
o Payments preferred stockholders will
receive before common stockholders if we go out
of business
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes, but it also could render
your vote meaningless because preferred stockholders could own shares with a
majority of the votes required on any issue. Because we issue preferred
stock, someone interested in buying our company may not follow through with
their plans because they could find it more difficult to acquire, or be
discouraged from acquiring, a majority of our outstanding stock.
Transfer Agent
--------------
Upon the closing of this offering, the transfer agent for SOSA's securities
will be Shelley Godfrey, Pacific Stock Transfer Company, 5844 S. Pecos,
Suite D, Las Vegas, Nevada 89120, (702)-361-3033.
Reports to Stockholders
-----------------------
The company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable after the end
of each fiscal year. The company's fiscal year ends on December 31. In
addition, we intend to issue unaudited interim reports and financial
statements on a quarterly basis.
33
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
-------------------------------
Of the shares outstanding after the offering, the 3,000,000 shares sold
in this offering will have been registered with the SEC and can be freely
resold, except if they are acquired by our officer/director or other persons
or entities that she controls or that control her. Se or others she controls
will be able to sell shares of stock so long as she or they do so without
violating SEC Rule 144. The 2,000,000 remaining outstanding shares may only be
sold under the Rule 144 until such time as they are registered.
Rule 144 provides that our officer/director and persons or entities that he
controls or that control her may sell shares of common stock in any
three-month period in an amount limited to the greater of:
o 1% of our outstanding shares of common stock
o The average weekly trading volume in
our common stock during the four calendar weeks preceding a sale
Sales under the rule also must be made without violating:
o Manner-of-sale provisions - in the market through a broker at
current market prices
o Notice requirements - forms must be filed with the SEC
o Requirement of availability of public information about us - current
in filing required SEC reports
34
<PAGE>
MANAGEMENT
----------
The following table and subsequent discussion sets forth information about
our director and executive officer. Mrs. Patterson was elected to serve as a
director and President at the time of the founding of SOSA, Inc. on its date
of inception, March 29, 2000.
She is currently the sole officer/director of SOSA, Inc.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
<S> <C> <C>
Dorothy Patterson 56 President, CEO, Director, CFO
</TABLE>
SOSA, Inc.'s officer/director is elected annually to serve for one year until
his successor(s) is duly elected and qualified.
Mrs. Patterson will not be compensated for the hours she spends handling SOSA's
affairs; as such, she will devote herself full-time to SOSA only at such time
as that becomes practical and necessary. (See, RISK FACTORS, "The time to be
devoted by management is limited and may be inadequate.")
Biographical Information
------------------------
Set forth below is biographical information for Mrs. Dorothy Patterson. See RISK
FACTORS for further discussion of the possible ramifications of relying
on a sole officer/director with a relative lack of experience: "We are
dependent on one officer with limited formal business experience."
Dorothy Patterson
------------------
Born January 3, 1944 in Conflance, PA. Dorothy Patterson graduated Turkeyfoot
High School in Conflance, PA. She was transferred to Houston, Texas in 1980
when she opened a day care center and continued to operate until 1996 at which
time she retired. Mrs. Patterson, is a widower, who resides at 6119 Portal,
Houston, Texas, 77096.
The sole officer and director of the Company, although retired from owning
Her own day care center is active with community activities
Mrs. Patterson, an officer and director of the Company, has served as a
founder, officer, and director of other companies formed with the express
purpose of seeking available businesses. She is not presently associated with
any blank check issuer other than the Company, nor is she presently seeking
acquisition targets though she will begin to do so once the present offering
has achieved its purpose. She will, in fact, be the primary person involved in
locating an acquisition candidate by speaking to business associates and
acquaintances, searching the New York Times, the Wall Street Journal, other
business publications and the Internet for acquisition candidates, and in all
other ways open to her seeking appropriate leads.
This is the first time that Mrs. Patterson has been involved in a 419 Company.
35
<PAGE>
There are no agreements or understandings for any officer or director to
resign at the request of another person. None of the officers or directors
are acting on behalf of or will act at the direction of any other person.
There are no agreements, arrangements or understandings between management
and anyone else by which other management is to be selected for a particular
office or position.
We reserve the right to engage outside consultants and professionals on an as
needed basis, though we have not done so to this point.
CONFLICTS OF INTEREST
---------------------
Our president, treasurer, chief financial and accounting officer and
director, Dorothy Patterson, does not serve in any capacity for any other
blank check offerings.
In addition, in order to mitigate any potential conflict, the officer/director
of SOSA has promised in writing not to participate as an officer or director in
any blank check company that files a registration statement under the
Securities Act of 1933, prior to the date Company identifies a business it
proposes to acquire which meets the acquisition criteria of Rule 419, or the
date six months following the date of this prospectus, whichever occurs first.
Our director will hold office until the next annual meeting of shareholders
and the election of his successor. Our director receives no compensation for
serving on the board other than reimbursement of reasonable expenses incurred
in attending meetings. Officers are appointed by the board and serve at their
discretion.
Executive Compensation
----------------------
As previously stated, Mrs. Patterson receives no salary for his efforts on
SOSA's behalf, nor will she receive bonuses, stock options, consulting fees,
finder's fees, or in any other form.
Management Control
------------------
SOSA's officer/director has pledged not to divest herself of ownership and/or
control of the company prior to an acquisition or merger transaction.
Statement Concerning Indemnification
------------------------------------
Our director is bound by the general standards for director provisions in
Nevada law. These provisions allow her wide latitude in decision-making,
including consideration of our long-term prospects and interests and the
social, economic, legal or other effects of any proposed action on potential
employees, suppliers, customers, communities in which we may operate and the
economy.
36
<PAGE>
We have agreed to indemnify our director, meaning that we will pay for
damages she incurs for properly acting as director. It is the belief of the
SEC, however, that this indemnification may not be given for violations of
the Securities Act that governs the distribution of our securities, and is
therefore unenforceable.
What happens, therefore, in the event that a claim for indemnification is
asserted by our officer/director for liabilities incurred while acting on our
behalf in connection with the securities being registered?
Simply put, if she incurred or paid the expenses in the successful defense of
a legal action, suit or proceeding, we will pay them. Otherwise, unless
our counsel determines that the matter has been settled by controlling legal
precedent, we will submit to a court of appropriate jurisdiction the question
of whether indemnification by us is against public policy as expressed in the
Act, and will abide by its final adjudication of the issue. (For a fuller
discussion of this issue, see the first item of Part II of this prospectus,
Item 24, Indemnification Of Directors and Officers, which includes references
to the relevant section of Nevada law and to SEC policy.)
PRINCIPAL SHAREHOLDER
---------------------
The following table sets forth information about our current shareholder.
The person named below has sole voting and investment power with respect
to the shares. The numbers in the table reflect shares of common stock held
as of the date of this prospectus. The numbers in this table assume
5,000,000 shares of common stock outstanding (maximum offering) and 3,600,000
shares of common stock outstanding (minimum offering) following the offering:
<TABLE>
<CAPTION>
Name and Address of Shares of Pre Min. Post Max Post
Beneficial Owner Common Stock Offer % Offer % Offer %
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dorothy Patterson(1) 2,000,000 100% 55% 40%
</TABLE>
(1) Dorothy Patterson, 6119 Portal, Houston, Texas, 77096.
None of these shares will be available for resale unless otherwise provided
by Rule 144 of the Act or other relevant provisions until at least July,
2001. (See, "Market for Our Common Shares," below.)
Except for the securities being registered here, these shares are restricted
securities, as that term is defined in the Act. They are subject to
restrictions regarding resale; the certificates issued for them have been
stamped with a restrictive legend and will be subject to stop transfer orders.
Mrs. Patterson may be deemed our promoter, as that term is defined under the
Securities Act.
37
<PAGE>
CERTAIN TRANSACTIONS
--------------------
The following table sets forth information regarding all securities
sold by us since our inception on March 29, 2000.
<TABLE>
<CAPTION>
Name and Address of Shares of Date Amount
Beneficial Owner Common Stock Purchased Paid
---------------------------------------------------------------------------
<S> <C> <C> <C>
Dorothy Patterson(1) 2,000,000 03/29/00 $2,000
</TABLE>
(1) Dorothy Patterson, Founder, 6119 Portal, Houston, Texas, 77096.
All sales were made in reliance on Section 4(2) of the Securities Act.
These sales were made without general solicitation or advertising. Each
purchaser was an accredited investor with access to all relevant information
necessary to evaluate the investment and represented to the Registrant that the
shares were being acquired for investment.
WHERE CAN YOU FIND MORE INFORMATION?
------------------------------------
We have not previously been required to comply with the reporting
requirements of the Exchange Act. We have filed a registration statement
with the SEC on Form SB-2 to register the offer and sale of the shares. This
prospectus is part of that registration statement, and, as permitted by the
SEC's rules, does not contain all of the information in the registration
statement. For further information about us and the shares offered under this
prospectus, you may refer to the registration statement and to the exhibits
and schedules filed as a part of the registration statement. You can review
the registration statement and its exhibits and schedules at the public
reference facility maintained by the SEC at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
SEC at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. The registration statement is also available
electronically on the World Wide Web at http://www.sec.gov. You can also
call or write us at any time with any questions you may have. We would be
pleased to speak with you about any aspect of our business and this offering.
38
<PAGE>
MARKET FOR OUR COMMON STOCK
---------------------------
Prior to now, there has been no trading market for our common stock. Under
the requirements of Rule 15g-8 of the Exchange Act, a trading market will not
develop prior to or after the effectiveness of this prospectus or while the
common stock under this offering is maintained in escrow
SOSA's present management has not and does not anticipate being in contact
with any broker-dealers regarding the making of a market for our common stock
prior to the execution of an acquisition agreement; that task is more
properly to be initiated by the management of the entity that will exist
post-acquisition.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 2,000,000 shares of our common
stock currently outstanding are restricted securities as that term is defined
in the Securities Act. Under Rule 144 of the Securities Act, if all the
shares being offered in this manner are sold, the holders of the restricted
securities may each sell a portion of their shares during any three (3) month
period after July 1, 2001. These holders are entitled to certain piggyback
registration rights which may be exercised only at our election. The exercise
of these rights will enable them to sell their shares prior to that date.
Special State Law Considerations
--------------------------------
The shares have not been registered in the states of Texas or Nevada because
of specific exemptions in their laws relating to the limited availability of
the offering. The shares cannot be sold, transferred or otherwise disposed of
to any person or entity unless subsequently registered in the states of Texas
and Nevada, if that registration is ultimately required. Registration there is
not necessary if fewer than twenty-five people purchase the shares in a given
offering. We may never reach that point. The following paragraphs refer you
to the applicable statutes of those states.
The shares have not been registered under the Texas Uniform Securities Act,
in reliance upon the exemption contained in Section 581-5(T) and Rule
109.13(K) of that Act. These Securities cannot be sold, transferred or
otherwise disposed of to any person or entity unless subsequently registered
under the Securities Act of 1933, as amended, and/or the Texas Securities Act
or an exemption from it.
The shares have not been registered under the Nevada Uniform Securities Act,
in the event that sales are not made to twenty-five (25) or more persons in
the state of Nevada in accordance with the exemption for limited offers or
sales of securities set forth in Nevada Revised Stature Section 90.530(11) of
the Nevada Uniform Securities Act.
39
<PAGE>
REPORTS TO STOCKHOLDERS
-----------------------
We intend to furnish our stockholders with annual reports containing
audited financial statements as soon as practicable at the end of each
fiscal year. Our fiscal year ends on December 31.
Method of Subscribing
---------------------
Prospective investors should make their checks payable to SOSA, Inc., c/o
Southwest Escrow Company, 401 North Buffalo Drive, Suite 205, Las Vegas,
Nevada 89128 (escrow agent). and remit the checks and subscription
agreements to Southwest Escrow at their address listed above. Subscriptions
may not be withdrawn once made except in accordance with applicable law. The
company reserves the right to reject any subscription in whole or in part in
its sole discretion for any reason whatsoever notwithstanding tender of
payment, and to withdraw this blank check offering at any time prior to
acceptance by us for the subscriptions received.
Funds will be held by the escrow agent, as described here.
LEGAL MATTERS
-------------
The validity of the issuing of the shares offered here will be attested
to for SOSA, Inc. by Thomas C Cook, our attorney.
EXPERTS
-------
The financial statements of SOSA, Inc. as of September 30, 2000 are included in
this Prospectus and have been audited by G. Brad Beckstead, CPA, an
independent auditor. Along with his audit, Mr Beckstead has also included
his expert opinion.
40
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
PAGE #
<S> <C>
INDEPENDENT AUDITORS REPORT F-1
BALANCE SHEET F-2
INCOME STATEMENT F-3
STATEMENT OF STOCKHOLDERS' EQUITY F-4
STATEMENT OF CASH FLOWS F-5
FOOTNOTES F-6-8
</TABLE>
41
<PAGE>
PART F/S
Financial Statements
42
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Balance Sheet
as of
September 30, 2000
And
Statements of Income
Stockholders' Equity, and
Cash Flows
for the period
March 29, 2000 (Inception)
To September 30, 2000
43
<PAGE>
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.528.1984
425.928.2877 (efax)
INDEPENDENT AUDITOR'S REPORT
October 6, 2000
Board of Directors
SOSA, Inc.
Las Vegas, NV
I have audited the Balance Sheet of SOSA, Inc.(the "Company") (A
Development Stage Company), as of September 30, 2000, and the related
Statements of Operations, Stockholders' Equity, and Cash Flows for the
period March 29, 1999 (Date of Inception) to September 30, 2000. These
financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements
based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statement presentation. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of SOSA, Inc.,
(A Development Stage Company), as of September 30, 2000, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 5 to
the financial statements, the Company has had limited operations and
have not commenced planned principal operations. This raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are also described in
Note 5. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ G. Brad Beckstead
----------------------
G. Brad Beckstead, CPA
F-1
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Balance Sheet
September 30
<TABLE>
<CAPTION>
BALANCE SHEET
2000
----
<S> <C>
ASSETS $ 2,000
--------
Total Assets $ 2,000
========
Liabilities and Stockholders' Equity
Common stock, $0.001 par value,
20,000,000 shares authorized;
2,000,000 shares issued and
outstanding at 6/30/00 2,000
Deficit accumulated during development stage (0)
--------
Total Stockholders' Equity 2,000
--------
Total Liabilities and Stockholders' Equity $ 2,000
========
</TABLE>
See accompanying "Independent Auditor's Report"
F-2
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Income Statement
For the period
March 29, 2000 (Date of Inception) to
September 30, 2000
<TABLE>
<CAPTION>
INCOME STATEMENT
<S> <C>
Revenue $ -0-
General and administrative expenses (0)
__________
Net loss $ (0)
==========
Weighted average number of
common shares outstanding 2,000,000
Net loss per share $ -0-
==========
</TABLE>
See accompanying "Independent Auditor's Report"
F-3
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the period
March 29, 1999 (Date of Inception)
to September 30, 2000
<TABLE>
<CAPTION>
CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock During Total
------------ Development Stockholders'
Shares Amount Stage Equity
<S> <C> <C> <C> <C>
September 30, 2000
Issued
for cash 2,000,000 2,000 2,000
Net Loss,
March 29, 2000
(inception) to
Sept 30, 2000 (0) (0)
--------------------------------------------------
Balance as of
Sept 30, 2000 2,000,000 $2,000 $ (0) $ 2,000
========= ====== ===== =======
</TABLE>
See accompanying "Independent Auditor's Report"
F-4
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the period
July 1, 1999 (Date of Inception)
to September 30, 2000
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
CASH FLOWS USED BY OPERATING ACTIVITIES
<S> <C>
Net loss (0)
-------
Net cash used by operating activities (0)
-------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by investing activities -0-
-------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock 2,000
Net cash provided by financing activities 2,000
-------
Beginning cash and equivalents -0-
-------
Ending cash and equivalents 2,000
======
NON-CASH TRANSACTIONS
Interest expense -0-
Income taxes -0-
</TABLE>
See accompanying "Independent Auditor's Report"
F-5
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Footnotes
Note 1 - History and organization of the company
The Company was organized March 29, 2000 (Date of Inception) under the
laws of the State of Nevada. The Company has no operations and in
accordance with SFAS #7, the Company is considered a development stage
company. The Company is authorized to issue 20,000,000 shares of
$0.001 par value common stock and 5,000,000 of its $0.001 par value
preferred stock.
Note 2 - Summary of significant accounting policies
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. 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 revenue
and expenses during the reporting period. Actual results could differ
significantly from those estimates.
3. The Company maintains a cash balance in a non-interest-bearing bank
that currently does not exceed federally insured limits. For the
purpose of the statements of cash flows, all highly liquid investments
with the maturity of three months or less are considered to be cash
equivalents. $30,000 has been deposited to a Money Market Account,
and is considered a cash equivalent as of September 30, 2000.
4. Earnings per share (EPS) is computed using the weighted average
number of shares of common stock outstanding during the period.
Diluted EPS is computed by dividing net income by the weighted average
shares outstanding, assuming all dilutive potential common shares were
issued. Since the Company has no common shares that are potentially
issuable, such as stock options, convertible preferred stock and
warrants, basic and diluted EPS are the same. The Company had no
dilutive common stock equivalents such as stock options as of March
31, 2000.
5. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
6. The Company will review its need for a provision for federal income
tax after each operating quarter and each period for which a statement
of operations is issued.
7. The Company has adopted December 31 as its fiscal year end.
F-6
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Footnotes
Note 3 - Income taxes
Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109
(SFAS #109) "Accounting for Income Taxes". A deferred tax asset or
liability is recorded for all temporary differences between financial
and tax reporting. Deferred tax expenses (benefit) results from the
net change during the year of deferred tax assets and liabilities.
There is no provision for income taxes for the year ended December 31,
2000, due to the net loss and no state income tax in Nevada.
Note 4 - Stockholders' Equity
The Company is authorized to issue 20,000,000 shares of its $0.001 par
value common stock and 5,000 shares of its $0.001 par value preferred
stock.
On March 29, 2000, the Company issued 2,000,000 shares of its $.001 par
value common stock for cash of $2,000. There have been no other issuances of
common or preferred stock.
Note 5 - Going concern
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company has not
commenced its planned principal operations. Without realization of
additional capital, it would be unlikely for the Company to continue
as a going concern.
Note 6 - Related party transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to
the financial statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in
other business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.
Note 7 - Warrants and options
There are no warrants or options outstanding to acquire any additional
shares of common stock.
F-7
<PAGE>
SOSA, Inc.
(A Development Stage Company)
Footnotes
Note 7 - Year 2000 issue
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems
may recognize the year 2000 as 1900 or some other date, resulting in
errors when information using year 2000 dates is processed. In
addition, similar problems may arise in systems which use certain
dates in 1999 to represent something other than a date. The effects of
the Year 2000 issue may be experienced before, on, or after January 1,
2000, and if not addressed, the impact on operations and financial
reporting may range from minor errors to significant system failure
which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the
Year 2000 issue affecting the entity, including those related to the
efforts of customers, suppliers, or other third parties will be fully
resolved.
F-8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except as set forth in the following part of this document, there is no
charter provision, bylaw, contract, arrangement or statute under which any
officer or director of the registrant is insured or indemnified in any manner
against any liability which he may incur in his capacity as such.
Nevada Law
----------
Pursuant to the provisions of Nevada Revised Statutes 78.751, the Corporation
shall indemnify its directors, officers and employees as follows:
Every director, officer, or employee of the corporation shall be indemnified
by the corporation against all expenses and liabilities, including counsel
fees, reasonably incurred by or imposed upon her/her in connection with any
proceeding to which he/she may be made a party, or in which he/she may become
involved, by reason of being or having been a director, officer, employee or
agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of the corporation,
partnership, joint venture, trust or enterprise, or any settlement thereof,
whether or not he/she is a director, officer, employee or agent at the time
such expenses are incurred, except in such cases wherein the director,
officer, employee or agent is adjudged guilty of willful misfeasance or
malfeasance in the performance of his/her duties; provided that in the event
of a settlement the indemnification herein shall apply only when the Board of
Directors approves such settlement and reimbursement as being for the best
interests of the Corporation.
The Corporation shall provide to any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise, the indemnity
against expenses of a suit, litigation or other proceedings which is
specifically permissible under applicable law.
The Securities and Exchange Commission's Policy on Indemnification.
-------------------------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to any provisions contained in its Certificate of
Incorporation, or bylaws, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
44
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering are as follows:
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
------- -------
<S> <C> <C>
Offering Expenses(1) 3,500 3,500
Escrow Fees(2) 500 500
TOTAL EXPENSES 4,000 4,000
Working Capital 36,000 71,000
TOTAL EXPENSES+WORKNG CAPITAL(3) 40,000 75,000
</TABLE>
(1) Offering costs include filing, printing, legal, accounting, transfer
agent and escrow agent fees.
(2) The proceeds received in this offering will be put into the escrow
account pending closing of a business combination and
reconfirmation. (See Exhibit 2.1 Escrow Agreement.)
(3) All offering proceeds will be held in escrow pending a business
combination. We will not request a release of 10% of these funds
under Rule 419.
There will be no compensation paid or due or owing to any officer or director.
The law firm of Thomas C. Cook & Associates has agreed to defer payment in
connection with services rendered on behalf of this offering.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During the past year, the registrant has sold securities in the manner set
forth below without registration under the Securities Act of 1933 (the
"Act"). On or about March 29, 2000, the company raised $2,000.00 through the
sale of 2,000,000 shares of common stock at a price of $.001 per share as
follows:
<TABLE>
<CAPTION>
Name and Address of Shares of Date Amount
Beneficial Owner Common Stock Purchased Paid
----------------------------------------------------------------
<S> <C> <C> <C>
Dorothy Patterson(1) 2,000,000 03/29/00 $2,000
</TABLE>
(1) Dorothy Patterson, Founder, 6119 Portal, Houston, Texas, 77096.
These shares are "restricted securities," as that term is defined in the
rules and regulations promulgated under the Securities Act of 1933 and are
subject to certain restrictions regarding resale. Certificates evidencing all
of the above-referenced securities have been stamped with a restrictive
legend and will be subject to stop transfer orders.
45
<PAGE>
ITEM 27. EXHIBITS
The following exhibits are filed with this Registration Statement:
Number Exhibit Name
------ ------------
2.1 Escrow Agreement in Accordance with Rule 419 under the
Securities Act of 1933, as amended
3.1 Articles of Incorporation, as amended
3.2 By-Laws
4.1 Specimen Common Stock Certificate
5.1 Opinion Regarding Legality
23.1 Consent of Counsel (to be included in Opinion Regarding Legality)
23.2 Consent of Expert
27.1 Financial Data Schedule
99.1 Subscription Agreement
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing. Information pertaining to our Common Stock is
contained in our Articles of Incorporation and By-Laws.
ITEM 28. UNDERTAKINGS
(1) To file, during any period in which offers and sales of the securities
offered are made, a post-effective amendment to this Registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 (the "Act"); and
(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) that, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration statement; and
(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 Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of the
offering.
(4) That all such post-effective amendments will comply with the applicable
form, rules and regulations of the Securities and Exchange Commission in
effect at the time of the filing.
(5) In the event any material changes or transactions are not mentioned
arise, we have undertaken the responsibility to amend this prospectus and the
registration statement, of which this prospectus is a part, through the
filing of post-effective amendments, indicating the existence of any such
material changes or transactions which are not reflected or contained
previously, if these changes occurs within 90 days of the effective date.
46
<PAGE>
Signatures
According to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this the
Registration statement to be signed on its behalf by the undersigned hereunto
duly authorized in the City of Houston on this day, October 24, 2000.
SOSA, Inc
------------
(Registrant)
/s/ Dorothy Paterson
---------------------------
Dorothy Paterson
President, CEO, CFO and Director
47
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed as part of this Registration statement with
the Securities and Exchange Commission, following Item 601 of Regulation S-B.
All exhibits refer to SOSA, Inc., unless otherwise indicated.
-------------------------------------------------------------------------
EXHIBITS
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
-------------------------------------------------------------------------
2.1 Escrow Agreement This filing
page
-------------------------------------------------------------------------
3.1 Articles of Incorporation This filing
page
-------------------------------------------------------------------------
3.2 Bylaws This filing
page
-------------------------------------------------------------------------
5 Consent of Thomas C. Cook, Esq. This filing
page
-------------------------------------------------------------------------
10.1 Form of Employment Agreements Not applicable
-------------------------------------------------------------------------
10.4 Voting Trust Agreement - Not applicable
-------------------------------------------------------------------------
23 Consent of G. Brad Beckstead, CPA This Filing
page
-------------------------------------------------------------------------
24 Consent of Thomas C. Cook, Esq., This filing
page
-------------------------------------------------------------------------
99 Subscription Agreement This filing
page
-------------------------------------------------------------------------
48
<PAGE>
