As filed with the Securities and Exchange Commission on September 26, 2000
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
ALBION AVIATION, INC.
(Name of registrant as specified in its charter)
Delaware __4512___________ 33-0619254
(State or Jurisdiction of Primary SIC Code (IRS Employer
incorporation or organization) Identification No.)
24351 Pasto Road, #B Jehu Hand, President
Dana Point, California 92629 24351 Pasto Road, #B
(949) 489-2400 Dana Point, California 92629
(Address, including zip code, and telephone number,
including area code (949) 489-2400
of Registrant's principal executive offices) (Name, address, including zip code,
and telephone number, including area
code, of agent for service
COPY TO:
Jehu Hand, Esq.
Hand & Hand
24351 Pasto Road, Suite B
Dana Point, California 92629
(949) 489-2400
Facsimile (949) 489-0034
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the effective date of this registration
statement.
If the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box:[ ]
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CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered Be Registered Per Share(1) Offering Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock offered by the Company.... 50,000 $5.00 $ 250,000 $ 73.75
Total.................................. 50,000 $ 250,000 $ 73.75 (2)
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Minimum fee of $100.00 paid herewith.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION
PROSPECTUS
ALBION AVIATION, INC.
50,000 Shares of Common Stock
(par value $.001)
The 50,000 shares (the "Shares") of Common Stock, par value $.001 (the
"Common Stock") of Albion Aviation, Inc., a Delaware corporation ("Albion") are
offered by the Company. See "Plan of Distribution." The expenses of the
offering, estimated at $10,000, will be paid by Albion.
There is currently no trading market for the Common Stock. Albion has
applied for trading of the Common Stock on the Electronic Bulletin Board under
the proposed symbol "ALAV". There can be no assurance that the Electronic
Bulletin Board will accept the Common Stock for trading nor that there will ever
exist a broad trading market for the Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PURCHASE OF THESE SECURITIES INVOLVES RISKS. See "Risk Factors" on page 4.
<TABLE>
<CAPTION>
Underwriting
Discounts and Proceeds
Price to Public Commissions (1)to Company(2)
<S> <C> <C> <C>
Per Unit $ 5.00 $ .50 $ 4.50
Total(2) $ 250,000 $ 5,000 $ 225,000
</TABLE>
(Footnotes on following page)
(1) Does not reflect additional compensation to be received by the form of
a non-accountable expense allowance
of $15,000 ($.30 per Share). In addition, the Company has agreed to
indemnify the selected broker dealers
against certain civil liabilities, including liabilities under the
Securities Act of 1933. See "Plan of Distribution."
(2) Before deducting approximately $25,000 ($.50 per Unit) in estimated
expenses of the offering payable by the Company, including the
non-accountable expense allowance.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
The date of this Prospectus is Setpember __,
2000.
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No person has been authorized in connection with this offering to give any
information or to make any representation other than as contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by Albion. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities covered by this Prospectus in any state or other jurisdiction to any
person to whom it is unlawful to make such offer or solicitation in such state
or jurisdiction. Neither the delivery of this Prospectus nor any sales made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of Albion since the date hereof.
ADDITIONAL INFORMATION
Albion has filed a Registration Statement under the Securities Act with
respect to the securities offered hereby with the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. This Prospectus, which is a part of the
Registration Statement, does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to Albion and the securities
offered hereby, reference is made to the Registration Statement, including all
exhibits and schedules thereto, which may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at its Regional Offices located at 7
World Trade Center, New York, New York 10048, and at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 at prescribed rates during
regular business hours. Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete, and in
each instance reference is made to the copy of such contract or document filed
as an exhibit to the Registration Statement, each such statement being qualified
in its entirety by such reference. Albion will provide, without charge upon oral
or written request of any person, a copy of any information incorporated by
reference herein. Such request should be directed to Albion at 24351 Pasto Road,
Suite B, Dana Point, California 92629, telephone (949) 489-2400.
Upon effectiveness of the Registration Statement Albion will be required
to file reports and other information with the Commission. All of such reports
and other information may be inspected and copied at the Commission's public
reference facilities described above. The Commission maintains a web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address of
such site is http://www.sec.gov. In addition, Albion intends to make available
to its shareholders annual reports, including audited financial statements and
such other reports as Albion may determine.
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PROSPECTUS SUMMARY
The following is only a summary of the information, financial statements
and the notes included in this Prospectus.
Albion
Albion Aviation, Inc. ("Albion") intends to engage in the business of a
charter air carrier under Part 135 of the Federal Aviation Regulations Part 135.
Part 135 is similar to the rules which scheduled airlines must follow but less
stringent. Albion owns one aircraft, a Cessna 421 B ("Aircraft"). The tail
identification number is N3AJ. This aircraft can carry 8 passengers. The Cessna
421 B is widely used for charter and corporate services. It is pressured to fly
in altitudes over 30,000 feet.
We think we will base the Aircraft at Orange County Airport in Orange
County California. With time we hope to acquire other aircraft if business
grows. Orange County is benefitting from a strong and growing economy. There are
5 other charter airlines operating out of Orange County, as well as 10
commercial airlines and two commuter airlines.
The market for charter services primarily consists of business executives
and wealthy individuals who do not wish to be bound by airline schedules. The
cost of chartering an aircraft similar to the Aircraft is about $500 per hour.
This compares to hourly jet aircraft charter cost of $1,000 or $2,000 or more.
If several passengers are flown the cost per passenger can be less than business
or first class tickets. Although the Aircraft is slower than a jet airliner's
typical speed of over 500 nautical miles per hour, on flights of one or two
hours duration the time differential is not material. The primary flight market
expected to be served is California, (San Diego, Los Angeles, Palm Springs,
Mammoth, San Francisco, Santa Barbara), Arizona (Phoenix) and Nevada (Las
Vegas.)
The Offering
We are seeking to sell 50,000 shares to raise up to $250,000 of which
$25,000 will go for expenses and $25,000 for sales commissions, resulting in
proceeds of $200,000. If we sell less than this amount our president will
provide funding. Later on we will need more funds and expect to sell more shares
or incur debt. We don't know on what terms future sales of shares or debt will
be made, if at all. This would depend on what future investors and the Company
might agree upon. The proceeds from this offering will be used to obtain the
Part 135 license ($20,000) debt service ($27,500) marketing ($4,000) other
operating expenses ($26,000) and the rest (up to $122,500) for working capital.
The corporate offices of Albion are located at 24351 Pasto Road, Suite B,
Dana Point, California 92629, and its telephone number is (949) 489-2400.
Securities Offered:............................ 50,000 shares of Common Stock.
Risk Factors...... The securities offered hereby involve a high degree of risk
and immediate substantial dilution and should not be
purchased by investors who cannot afford the loss of their
entire investment. See "Risk Factors."
Common Stock Outstanding(1) Before Offering:..... 1,000,000(1) shares
Common Stock Outstanding After Offering:......... 1,050,000(1) shares
NASD Electronic Bulletin Board Symbol (proposed)ALAV
(1) Based on shares outstanding as of June 30, 2000.
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Risk Factors
The securities offered hereby are highly speculative and very risky.
Some of these risk factors follow. Before you buy consider the following risk
factors and the rest of this prospectus.
RISK FACTORS
The Common Stock for sale is a speculative investment and very risky.
You should especially consider these risk factors.
Start Up
We have not done any business. Albion's only activity to date is buying
the Aircraft and developing a business plan. There is no operating history for
an investor to evaluate. It might take several months to obtain our 135 permit.
Although we think there will be strong demand for our charter services, no one
really knows for sure. We will try to minimize overhead by hiring pilot and
maintenance people on an as needed basis, similar to other small charter
airlines. Even if we can obtain business, it can't be predicted when we will be
profitable, if ever.
Additional Financing Requirements
We may need significant capital for the expansion of our operations. We
believe that the net proceeds from this offering should be sufficient to fund
operations at least until September 30, 2001. However, we might need additional
funds before then. If additional funds are required, but cannot be raised, it
will have an adverse effect upon operations. To the extent that additional funds
are obtained by the sale of equity securities, the stockholders may sustain
significant dilution. If adequate capital is not available Albion will have to
reduce or eliminate planned activities, which could otherwise ultimately provide
significant revenue to Albion. Even if such additional financing is available on
satisfactory terms, it, nonetheless, could entail significant additional
dilution of the equity ownership of Albion to existing shareholders and the book
value of their outstanding shares.
Competition
The domestic airline industry is fiercely competitive. Currently, any
carrier deemed fit by the U.S. Department of Transportation (DOT) is free to
operate chartered or scheduled passenger service between any two points within
the U.S. and its possessions. To most of its destinations Albion will face
competing service from at least one, and sometimes more than one, major domestic
airline including: America West Airlines, Continental Airlines, Delta Air Lines,
Southwest Airlines, Skywest Airlines, American Airlines and their affiliated
regional carriers as well as innumerable charter operators. There are five
charter operators known to Albion at Orange County Airport and they all are
longer established and might be better financed. The Company also competes,
particularly on shorter segments, with ground transportation.
Government Regulation
The Airline Deregulation Act of 1978, as amended, eliminated most
domestic economic regulation of passenger and freight transportation. However,
the DOT and the Federal Aviation Administration (FAA) still exercise certain
regulatory authority over air carriers. The DOT maintains jurisdiction over the
approval of international codeshare agreements, international route authorities
and certain consumer protection matters, such as advertising, denied boarding
compensation, baggage liability and computer reservations systems.
The FAA regulates flying operations generally, including establishing
personnel, aircraft and security standards. As part of that oversight, the FAA
has implemented a number of requirements that Albion must incorporate into its
business. These matters relate to, among other things, inspection and
maintenance of aircraft, pilot training, and supervision. Albion must prove to
the FAA that it complies with Part 135 and other regulations before it can begin
operations. Noise restrictions exist at many airports including Orange County.
The Aircraft complies with these restrictions if operated correctly.
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Government Regulation
Future results of the Company's operations may vary based upon any
actions which the governmental agencies with jurisdiction over the Company's
operations may take, including the granting and timing of certain governmental
approvals, restrictions on competitive practices, the adoption of regulations
that impact maintenance standards, and the adoption of more restrictive
locally-imposed noise restrictions.
No Cash Dividends
Albion has not paid any cash dividends on its capital stock.
Albion anticipates that its future earnings, if
any, will be retained for use in the business, or for other corporate
purposes, and it is not anticipated that any cash
dividends on the Common Stock will be paid in the foreseeable future.
See "Dividend Policy" and "Description of
Securities."
Nasdaq Stock Market and Market Illiquidity
Albion's Common Stock does not meet the current Nasdaq listing
requirements for the SmallCap(R) Market. Until Albion is able to satisfy
Nasdaq's requirements for listing, trading, if any, of the Common Stock will be
conducted on the NASD's OTC Bulletin Board, established for securities that do
not meet the Nasdaq SmallCap(R) Market listing requirements. Consequently, the
liquidity of Albion's securities could be impaired, not only in the number of
securities which could be bought and sold, but also through delays in the timing
of transactions, reduction in security analysts' and the news media's coverage
of Albion, and lower prices for Albion's securities than might otherwise be
attained.
Potential Future Issuances of Securities
Albion's Board of Directors has the power, without the consent of the
shareholders, to issue additional shares of common stock or preferred stock for
such consideration as may be permitted under the Colorado Business Corporation
Act. Preferred stock may be issued with preferences or rights as to dividends,
voting or liquidation which are superior to those of holders of common stock. In
view of the large number of authorized but unissued shares of common stock
(19,000,000 Shares as of the date of this Prospectus) current shareholders are
subject to significant potential dilution in their ownership interest in Albion.
See "Description of Securities."
Economic and Other Conditions
The airline industry is affected by changes in international, national,
regional and local economic conditions, inflation, war or political instability
(or the threat thereof), consumer preferences and spending patterns, demographic
trends, disruptions to the air traffic control system, consumer perceptions of
airline safety, costs of safety, security and environmental measures, and the
weather.
Dilution
Investors will pay $5.00 per share. However, the net tangible book
value of Albion as of June 30, 2000 was $.02 per share. After giving effect to
the deduction of expenses, and if all the offered Shares are sold, net tangible
book value after the offering will be $.21 per share, or dilution of $4.79 per
share to public investors, and an increase of $.19 per share in tangible book
value attributable to investors. See "Dilution."
Control By Management
Management owns 800,000 shares. Even after the offering is sold
management will be able to elect all the
board of directors and otherwise control Albion and its operations.
See "Management."
Management Expense
Management has very limited experience in managing aviation
enterprises, and is not expected to work full time and will not receive any
compensation for the near future. Instead management intends to hire qualified
personnel. We may not be able to find such personnel, especially in an
expoundary economy.
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Commodity Prices
Due to the competitive nature of the airline industry, in the event of
any increase in the price of fuel, there can be no assurance that the Company
would be able to pass on increased fuel prices to its customers by increasing
charter prices.
Changing Business Strategy
Although it has no current plan to do so, the Company may change its
business strategy in the future and may not pursue some of the goals stated
herein.
Risks Associated with Forward-looking Statements
This Prospectus contains certain forward-looking statements regarding
the plans and objectives of management for future operations, including plans
and objectives relating to Albion's planned marketing efforts and future
economic performance of Albion. The forward-looking statements and associated
risks set forth in this Prospectus include or relate to: (i) the ability of
Albion to obtain and comply with its Part 135 licenses, (ii) the ability of
Albion to market its services at competitive prices, (iii) the ability of Albion
to attract and retain trained personnel, (iv) the ability of Albion to obtain
required financing for its future operations, (v) success of Albion in
forecasting demand for its services, and (vi) the ability of Albion to maintain
pricing and thereby maintain adequate profit margins.
The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on the assumptions described in the preceding paragraph.
The foregoing assumptions are based on judgments with respect to, among other
things, future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond Albion's control. Accordingly, although Albion believes
that the assumptions underlying the forward-looking statements are reasonable,
any such assumption could prove to be inaccurate and therefore there can be no
assurance that the results contemplated in forward-looking statements will be
realized. In addition, as disclosed elsewhere in the "Risk Factors" section of
this Prospectus, there are a number of other risks inherent in Albion's business
and operations which could cause Albion's operating results to vary markedly and
adversely from prior results or the results contemplated by the forward-looking
statements. Growth in maintenance, fuel or labor costs, general and
administrative expenses or the occurrence of extraordinary events could cause
actual results to vary materially from the results contemplated by the
forward-looking statements. Management decisions, including budgeting, are
subjective in many respects and periodic revisions must be made to reflect
actual conditions and business developments, the impact of which may cause
Albion to alter its marketing, capital investment and other expenditures, which
may also materially adversely affect Albion's results of operations. In light of
significant uncertainties inherent in the forward-looking information included
in this Prospectus, the inclusion of such information should not be regarded as
a representation by Albion or any other person that Albion's objectives or plans
will be achieved. See "Management's Discussion and Analysis" and "Business."
DIVIDEND POLICY
Albion has not paid any dividends on its Common Stock. Albion currently
intends to retain any earnings for use in its business, and therefore does not
anticipate paying cash dividends in the foreseeable future.
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MARKET PRICE OF COMMON STOCK
The Company's common stock has never been traded. As of June 30, 2000,
there were approximately 110 record holders of Company common stock.
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BUSINESS AND OPERATING PLAN
We have made a plan of operations for the first 12 months after
receiving funding from the offering. We hope to receive net proceeds of
$200,000. Obtaining the 135 Permit will cost $20,000, primarily for consultants
to write manuals for operating procedures. We plan to market our charter
services primarily to charter brokers or via the internet. Although using
brokers reduces our profitability, its more cost effective than employing our
own marketing department, and most charter operations rely on brokers. However,
$1,000 will be spent on brochures and $4,000 on other marketing expenses. The
remaining $175,000 will be budgeted as follows:
One year's debt service on airplane $ 27,500
Pilot training; initial and recruitment 8,000
Insurance 6,000
Tie down rent 2,000
Marketing 4,000
Maintenance 10,000
Working capital reserve 127,500
If less than the maximum proceeds are received working capital will be
reduced. The president of the Company has agreed to purchase up to 20,000 Shares
which will be invested without sales commissions so that at least $90,000 in net
proceeds are received. The proceeds of the offering will cover the estimated
fixed costs for one year. The variable costs of operation include fuel, oil and
crew labor. The Cessna 421 is widely used for charter work and the hourly
operating costs are widely understood to be as follows:
Crew 2 pilots (only one needed) $ 40
Fuel - 40 gallons per hour at $2.00 per gallon 80
Oil - 2 quarts per hour at $2.00 per quart 4
Airfrance Avionics - Parts reserve 50
Engine Reserve (2 engines) 100
TOTAL $ 274
The price of charter flights are based upon hourly usage. In Southern
California the hourly charter rate for pressurized turbo props such as the
Aircraft is about $500.00, less a brokerage commission of 10%. The resulting
operating profit per hour is $176.00. Since annual fixed costs are estimated to
be $53,500 per year, the projected break even point is 303 hours flown per year.
The above assumptions are based upon current prices. The most volatile
cost is fuel. Fuel prices are at a record high as of March 31, 2000 but they
could go still higher. If they do our profitability could be adversely affected.
Another assumption we have made is on maintenance expenses. These
expenses since the acquisition of the Aircraft have been $19,539. We have
budgeted only $10,000. We think that maintenance expenses were higher than they
will be in the future because in management's experience any used airplane will
incur high maintenance expenses when first purchased, equal to 10-15% of the
purchase price. Its commonly believed the initial high expenses are due to
deferred maintenance items on aircraft. However, we can't forecast future
maintenance expenses.
Other factors can also adversely affect operations. Heretofore there
has been an abundant supply of pilots. However, many airline pilots are near
retirement age and a pilot shortage could develop as commuter airlines hire
qualified pilots. Mechanical problems can delay or ground flights. Waiting for
parts or maintenance personnel can also ground the aircraft. Weather is
generally good in the Company's planned area of operations but bad weather can
delay or cancel flights. Also, currently Orange County Airport is closed to
takeoffs and landings from 11:00 pm to 7:00 am. This could limit flights.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. The Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in or implied by the statements, including, but
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not limited to, the following: Changing economic conditions, interest rate
trends, continued acceptance of the Company's products in the marketplace,
competitive factors, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission.
Employees
Albion has no employees, none of whom are covered by collective
bargaining agreements or employment agreements. The president serves without
compensation at this time and will only devote part time to the business until
warranted by business
MANAGEMENT
Directors and Executive Officers
The member of the Board of Directors of Albion serve until the next
annual meeting of stockholders, or until his successors have been elected. The
officer serves at the pleasure of the Board of Directors. The following is the
director and executive officer of Albion.
Jehu Hand has been President, Chief Financial Officer and Secretary of
the Company since its inception. Mr. Hand has been engaged in corporate and
securities law practice and has been a partner of the law firm of Hand & Hand
since 1992. Hand & Hand incorporated as a law corporation in May 1994. From
January 1992 to December 1992 he was the Vice President-Corporate Counsel and
Secretary of Laser Medical Technology, Inc., which designs, manufactures and
markets dental lasers and endodontics equipment. He was a director of Laser
Medical from February 1992 to February 1993. From January to October, 1992 Mr.
Hand was Of Counsel to the Law Firm of Lewis, D'Amato, Brisbois & Bisgaard. From
January 1991 to January 1992 he was a shareholder of McKittrick, Jackson,
DeMarco & Peckenpaugh, a law corporation. From January to December 1990 he was a
partner of Day, Campbell & Hand, and was an associate of its predecessor law
firm from July 1986 to December 1989. From 1984 to June 1986 Mr. Hand was an
associate attorney with Schwartz, Kelm, Warren & Rubenstein in Columbus, Ohio.
Jehu Hand received a J.D. from New York University School of Law and a B.A. from
Brigham Young University. He is a registered principal (Series 7, 24 and 63) of
SoCal Securities, a broker-dealer and member of the National Association of
Securities Dealers, Inc. SoCal Securities will not participate in the offering
of the Common Stock, does not make a market in the securities of any company and
will not make a market in the Company's Common Stock. Mr. Hand was formerly a
director and president of Las Vegas Airlines, Inc., a Delaware corporation. In
1998 Las Vegas Airlines purchased a controlling interest in Las Vegas Airlines,
Inc., a Nevada corporation, engaged in Part 135 operations in Las Vegas. Shortly
after the acquisition Mr. Hand discovered that significant liabilities of the
Nevada company had not been disclosed and decided it was necessary to
discontinue operations. Mr. Hand was never involved in the day to day operations
of the Nevada subsidiary.
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Executive Compensation
The following table sets forth the cash compensation of Albion's
executive officers and directors during each of the last three fiscal years. The
remuneration described in the table does not include the cost to Albion of
benefits which may be furnished to the named executive officers, including
premiums for health insurance and other benefits provided to such individual
that are extended in connection with the conduct of Albion's business. The value
of such benefits cannot be precisely determined, but the executive officers
named below did not receive such other compensation in the years set forth
below.
<TABLE>
<CAPTION>
Summary Compensation Table
ANNUAL COMPENSATION LONG TERM COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C>
-
-
-
-
-
-
-
-
-
-
Name and Other Annual Awards Payouts All
Principal Position Year Salary Bonus Compensation Other
Restricted Options/ LTIP
Stock ($)SARs(#) Payouts ($)
Jehu Hand 1999 $0 0 0 0 0 0 0
President and CFO 1998 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
</TABLE>
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PRINCIPAL SHAREHOLDERS
The following table sets forth information relating to the beneficial
ownership of Company Common Stock as of the date of this Prospectus by (I) each
person known by Albion to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock (ii) each of Albion's directors and executive
officers, and (iii) the Percentage After Offering assumes the sale of the
maximum offering of 50,000 Shares.
<TABLE>
<CAPTION>
Percentage Percentage
Name and Address(1) Common Stock Before Offering After Offering
<S> <C> <C> <C>
Jehu Hand 800,000 80.0% 76.2%
24351 Pasto Road, #B
Dana Point, California 92629
Kimberly Peterson 93,850 9.4% 9.2%
18776 Fairfax Lane
Huntington Beach, California 92648
All officers and directors
as a group (1 person) 800,000 80.0% 76.2%
</TABLE>
(1) Unless otherwise noted below, Albion believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. For purposes hereof,
a person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options or the conversion of convertible
securities. Each beneficial owner's percentage ownership is determined
by assuming that any warrants, options or convertible securities that
are held by such person (but not those held by any other person) and
which are exercisable within 60 days from the date hereof, have been
exercised.
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CERTAIN TRANSACTIONS
From time to time Mr. Hand has advanced operating expenses of Albion.
Such amounts have either been
accounted for as contributions to capital or as accounts payable-related party.
Mr. Hand has agreed to contribute
all amounts owed to him to capital upon completion of the offering. Mr. Hand
guaranteed the loan which financed
the purchase of the Aircraft. As of March 31, 2000 the amount owed onthe loan
was $124,056.
PLAN OF DISTRIBUTION
The Shares are being offered for sale on a "best efforts," no minimum,
50,000 Share maximum basis, by the Company or selected broker dealers, who will
receive a sales commission of $.50 per Share and a non-accountable expense
allowance of $.30 per Share. Officers and directors may purchase Shares. In the
event Shares are sold on behalf of the Company by its officers and directors,
such commissions will be less and proceeds to the Company will be greater.
Albion may also pay a finders' fee to persons who introduce Albion to
prospective purchasers. The Company anticipates other offering expenses to be
$10,000.
No escrow account will be established to receive offering proceeds. The
offering will close on [four months from date of prospectus] unless sooner
terminated by Albion. The Company has the unconditional right to accept or
reject any subscription. If the Company rejects any subscription, it will
promptly notify the subscriber and return all subscription funds.
The offering price and terms of the Shares has been determined
arbitrarily by the Company. Among the factors considered in determining the
offering price were the Company's financial condition, prospects and conditions
in the aviation industry.
DESCRIPTION OF SECURITIES
Common Stock
Albion's Articles of Incorporation authorizes the issuance of 20,000,000
shares of Common Stock, $.001 par value per share, of which 1,000,000 shares
were outstanding as of March 31, 2000. Albion has no plans to sell additional
shares of common stock at this time, but reserves the right to do so to meet
future operating requirements. Holders of shares of Common Stock are entitled to
one vote for each share on all matters to be voted on by the stockholders.
Holders of Common Stock have no cumulative voting rights. Holders of shares of
Common Stock are entitled to share ratably in dividends, if any, as may be
declared, from time to time by the Board of Directors in its discretion, from
funds legally available therefor. In the event of a liquidation, dissolution or
winding up of Albion, the holders of shares of Common Stock are entitled to
share pro rata all assets remaining after payment in full of all liabilities and
the liquidation preference to holders of Preferred Stock. Holders of Common
Stock have no preemptive rights to purchase Albion's common stock. There are no
conversion rights or redemption or sinking fund provisions with respect to the
common stock. All of the outstanding shares of Common Stock are, and the shares
of Common Stock will be, when issued and delivered, fully paid and
non-assessable, including Shares issuable upon conversion of the Preferred
Stock. The shareholders have already approved a reverse or forward stock spliut
as may be also approved by the board of directors, but no such stock split is
contemplated.
Preferred Stock
Albion's Articles of Incorporation authorize the issuance of 1,000,000
shares of preferred stock, $.001 par value, of which no shares of Preferred
Stock are outstanding.
Albion's Board of Directors has authority, without action by the
shareholders, to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other rights
of such series. Albion considers it desirable to have preferred stock available
to provide increased flexibility in structuring possible future acquisitions and
financings and in meeting corporate needs which may arise. If opportunities
arise that would make desirable the issuance of preferred stock through either
public offering or private placements, the provisions for preferred stock in
Albion's Articles of Incorporation would avoid the possible delay and expense of
a shareholder's meeting, except as may be required by law or regulatory
authorities. Issuance of the preferred stock could result, however, in a series
of securities outstanding that will have certain preferences with respect to
dividends and liquidation over the Common
12
<PAGE>
Stock which would result in dilution of the income per share and net book value
of the Common Stock. Issuance of additional Common Stock pursuant to any
conversion right which may be attached to the terms of any series of preferred
stock may also result in dilution of the net income per share and the net book
value of the Common Stock. The specific terms of any series of preferred stock
will depend primarily on market conditions, terms of a proposed acquisition or
financing, and other factors existing at the time of issuance. Therefore, it is
not possible at this time to determine in what respect a particular series of
preferred stock will be superior to Albion's Common Stock or any other series of
preferred stock which Albion may issue. The Board of Directors may issue
additional preferred stock in future financings, but has no current plans to do
so at this time.
The issuance of Preferred Stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of Albion.
Albion intends to furnish holders of its common stock annual reports
containing audited financial statements and to make public quarterly reports
containing unaudited financial information.
Transfer Agent
The transfer agent for the Common Stock is Colonial Stock Transfer
Corporation, 455 East 400 South, Suite 100, Salt Lake City, Utah 84111 and its
telephone number is (801) 355-5740.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for Albion
by Hand & Hand, a law corporation, Dana Point, California. The principal of Hand
& Hand owns 800,000 shares of common stock.
EXPERTS
The audited financial statements included in this Prospectus as of
December 31, 1999, 1998 and 1997 have been audited by Tanner & Co., independent
certified public accountants, to the extent and for the periods set forth in
their report thereon and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
INDEMNIFICATION
Albion has adopted provisions in its articles of incorporation and bylaws
that limit the liability of its directors and provide for indemnification of its
directors and officers to the full extent permitted under the Delaware General
Corporation Law ("DGCL"). Under Albion's articles of incorporation, and as
permitted under the Delaware General Business Act, directors are not liable to
Albion or its stockholders for monetary damages arising from a breach of their
fiduciary duty of care as directors. Such provisions do not, however, relieve
liability for breach of a director's duty of loyalty to Albion or its
stockholders, liability for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, liability for transactions
in which the director derived as improper personal benefit or liability for the
payment of a dividend in violation of Delaware law. Further, the provisions do
not relieve a director's liability for violation of, or otherwise relieve Albion
or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of equitable remedies such as
injunctive relief or recision.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of Albion where indemnification will be
required or permitted. Albion is not aware of any threatened litigation or
proceeding that may result in a claim for indemnification by any director or
officer.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of Albion pursuant to the foregoing provisions, or otherwise, Albion 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 Albion of expenses incurred or paid by a director,
officer or controlling person of Albion in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities
13
<PAGE>
being registered, Albion will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
14
<PAGE>
ALBION AVIATION, INC.
(A Development Stage Company)
Consolidated Financial Statements
December 31, 1999 and 1998
<PAGE>
<TABLE>
<CAPTION>
ALBION AVIATION, INC.
(A Development Stage Company)
Index
-------------------------------------------------------------------------------------------------------------------
Page
<S> <C>
Independent auditors' report F-2
Consolidated Balance sheet F-3
Consolidated Statement of operations F-4
Consolidated Statement of stockholders' equity F-5
Consolidated Statement of cash flows F-6
Notes to consolidated financial statements F-7
-------------------------------------------------------------------------------------------------------------------
F-1
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Albion Aviation, Inc.
We have audited the accompanying consolidated balance sheet of Albion Aviation,
Inc., (a development stage company) as of December 31, 1999 and 1998, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the years then ended and the cumulative amounts from April
20, 1994 (date of inception) to December 31, 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Albion Aviation,
Inc., (a development stage company) at December 31, 1999 and 1998 and the
results of their operations and their cash flows for the years then ended and
cumulative amounts from April 20, 1994 (date of inception) to December 31, 1999
in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered recurring losses and
has an accumulated deficit. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
TANNER + CO.
Salt Lake City, Utah
June 9, 2000
F-2
<PAGE>
<TABLE>
<CAPTION>
ALBION AVIATION, INC.
(A Development Stage Company)
Consolidated Balance Sheet
-------------------------------------------------------------------------------------------------------------------
June 30,
2000 December 31,
-------------------------------------------
Assets (Unaudited) 1999 1998
-------------------------------------------
<S> <C> <C> <C>
Current assets - cash $ 9,857$ $ -
Aircraft, net of accumulated depreciation of
$47,860 and $34,534, and $4,442, respectively 112,040 125,366 155,458
-------------------------------------------
Total assets $ 121,897$ 125,366$ 155,458
-------------------------------------------
----------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' (Deficit) Equity
Current liabilities:
Related party payables $1,249 $ 1,101$ 468
Current portion of long-term debt 17,896 17,132 15,702
-------------------------------------------
Total current liabilities 19,145 18,233 16,170
-------------------------------------------
Long-term debt 100,676 109,819 126,950
-------------------------------------------
Stockholders' (deficit) equity:
Preferred stock; $.001 par value; 1,000,000 shares
authorized; no shares issued and outstanding - - -
Common stock; $.001 par value; 20,000,000
shares authorized; 1,000,000 shares issued
and outstanding 1,000 1,000 1,000
Additional paid-in capital 98,697 72,694 30,924
Deficit accumulated during the development stage (97,621) (76,380) (19,586)
-------------------------------------------
Total stockholders' (deficit) equity 2,076 (2,686) 12,338
-------------------------------------------
Total liabilities and stockholders'
(deficit) equity $ 121,897$ 125,366$ 155,458
-------------------------------------------
</TABLE>
----------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-3
<TABLE>
<CAPTION>
ALBION AVIATION, INC.
(A Development Stage Company)
Consolidated Statement of Operations
-------------------------------------------------------------------------------------------------------------------
Six
Months Ended June 30, Years Ended Cumulative
---------------------------
2000 1999 December 31, Amounts
---------------------------------------
(Unaudited) (Unaudited) 1999 1998 (Unaudited)
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $ $ - $ - $- $- -
------------------------------------------------------------------
Costs and expenses:
General and administrative expenses 15,149 21,354 44,932 17,076 77,157
Interest expense 6,092 7,086 11,862 1,394 19,348
------------------------------------------------------------------
21,241 28,440 56,794 18,470 96,505
------------------------------------------------------------------
Loss before income taxes (21,241) (28,440) (56,794) (18,470) (96,505)
Income taxes - current - - - - -
------------------------------------------------------------------
Net loss $ (21,241$ (28,440$ (56,794$ (18,470$ (96,505)
------------------------------------------------------------------
Loss per share - basic and diluted $ $(.02) ($03) $(.06) $(.02) (.10)
------------------------------------------------------------------
Weighted average common shares -
basic and diluted 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
------------------------------------------------------------------
</TABLE>
------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
ALBION AVIATION, INC.
(A Development Stage Company)
Consolidated Statement of Stockholders' (Deficit) Equity
April 20, 1994 (Date of Inception)
Through June 30, 2000 (Unaudited)
-------------------------------------------------------------------------------------------------------------------
Additional
Preferred Stock Common Stock Paid-In Accumulated
-------------------------------------------
Shares Amount Shares Amount Capital Deficit Total
--------------------------------------------------------------------------------
Balance,
<S> <C> <C> <C> <C> <C> <C> <C>
April 20, 1994 -$ - -$ $ - $ - $ - -
Shares issued for cash - - 1,000,000 1,000 15 - 1,015
Net loss - - - - - (144) (144)
--------------------------------------------------------------------------------
Balance,
December 31, 1994 - - 1,000,000 1,000 15 (144) 871
Net loss - - - - - (338) (338)
--------------------------------------------------------------------------------
Balance,
December 31, 1995 - - 1,000,000 1,000 15 (482) 533
Net loss - - - - - (320) (320)
--------------------------------------------------------------------------------
Balance,
December 31, 1996 - - 1,000,000 1,000 15 (802) 213
Net loss - - - - - (314) (314)
--------------------------------------------------------------------------------
Balance,
December 31, 1997 - - 1,000,000 1,000 15 (1,116) (101)
Contributions to capital - - - - 30,909 - 30,909
Net loss - - - - - (18,470) (18,470)
--------------------------------------------------------------------------------
Balance,
December 31, 1998 - - 1,000,000 1,000 30,924 (19,586) 12,338
Contributions to capital - - - - 41,770 - 41,770
Net loss - - - - - (56,794) (56,794)
--------------------------------------------------------------------------------
Balance,
December 31, 1999 - - 1,000,000 1,000 72,694 (76,380) (2,686)
Contributions to
capital (unaudited) - - - - 26,003 - 26,003
Net loss (unaudited) - - - - - (21,241) (21,241)
--------------------------------------------------------------------------------
Balance,
June 30, 2000 (unaudited) -$ -1,000,000$ 1,000$ 98,697$ (97,621$ 2,076
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statement of Cash Flows
-------------------------------------------------------------------------------------------------------------------
Six
Months Ended June 30, Years Ended Cumulative
---------------------------
2000 1999 December 31, Amounts
---------------------------------------
(Unaudited) (Unaudited) 1999 1998 (Unaudited)
------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C> <C> <C>
Net loss $ (21,241$ (28,440$ (56,794$ (18,470$ (96,505)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 13,326 15,102 30,092 4,701 48,119
Increase in
related party payables 148 633 633 108 889
------------------------------------------------------------------
Net cash used in
operating activities (7,767) (12,705) (26,069) (13,661) (47,497)
------------------------------------------------------------------
Cash flows from investing activities:
Purchase of aircraft - - - (16,000) (16,000)
Organization costs - - - - (1,015)
------------------------------------------------------------------
Net cash used in
investing activities - - - (16,000) (17,015)
------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on long-term debt (8,379) (8,993) (15,701) (1,248) (25,328)
Contributions to capital 26,003 21,698 41,770 30,909 98,682
Issuance of common stock - - - - 1,015
------------------------------------------------------------------
Net cash provided by
financing activities 17,624 12,705 26,069 29,661 74,369
------------------------------------------------------------------
Net increase in cash 9,857 - - - 9,857
Cash, beginning of period - - - - -
------------------------------------------------------------------
Cash, end of period $ 9,857$ $ - $ - $ - 9,857
------------------------------------------------------------------
</TABLE>
----------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
<PAGE>
ALBION AVIATION, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
-------------------------------------------------------------------------------
1. Organization
and
Summary of
Significant
Accounting
Policies
Organization
The Company was organized under the laws of the state of Delaware on April 18,
1994 (date of inception). The Company has not commenced planned principal
operations and purposes to seek business ventures which will allow for long-term
growth. Further, the Company is considered a development stage company as
defined in SFAS No. 7. Its principal activities since inception have consisted
of the offer and sale of common stock and the purchase of a commercial airplane,
financed by long-term debt. The Company intends to engage in the charter air
carrier business. The Company has, at the present time, not paid any dividends
and any dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.
Unaudited Information
In the opinion of management, the accompanying unaudited financial statements
for the six month period ended June 30, 2000 contain all adjustments (consisting
only of normal recurring items) necessary to present fairly the results of
operations and cash flows for the Company for the six month period ended June
30, 2000.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, and
its consolidated subsidiary. All significant intercompany balances and
transactions have been eliminated.
Cash and Cash Equivalents
Cash equivalents are generally comprised of certain highly liquid investments
with maturities of less than three months.
Aircraft
The Company's aircraft is carried at cost. The aircraft is depreciated on a
straight-line basis over the estimated useful life.
-------------------------------------------------------------------------
F-6
<PAGE>
ALBION AVIATION, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Continued
----------------------------------------------------
1. Organization
and
Summary of
Significant
Accounting
Policies
Continued
Use of Estimates in the Preparation of Financial Statements The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
2. Going
Concern
The accompanying consolidated financial statements have been prepared on a
going-concern basis, which contemplates profitable operations and the
satisfaction of liabilities in the normal course of business. There are
uncertainties that raise substantial doubt about the ability of the Company to
continue as a going concern. As shown in the consolidated statement of
operations, the Company has had no revenues from operations, and reported a net
loss for the year ended December 31, 1999.
The Company's continuation as a going concern is dependent upon its ability to
satisfactorily meet its debt obligations, secure adequate new financing and
generate sufficient cash flows from operations to meet its obligations. The
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
Management has entered into a plan where it is pursuing other financing and
searching for additional business opportunities. It is not known if the Company
will be successful.
3. Long-term
Debt
The Company has a note payable to a financing company, due in monthly
installments of $2,297, including interest at 8.75%, secured by aircraft and
maturing in November 2005. Th balance outstanding at December 31, 1999 and 1998
was $126,951 and $142,652, respectively.
-----------------------------------------------------------------------------
F-7
<PAGE>
ALBION AVIATION, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Continued
------------------------------------------------------------------------------
3. Long-term
Debt
Continued
Future maturities of the note payable are as follows:
Years Ending December 31: Amount
-----------------
2000 $ 17,132
2001 18,693
2002 20,396
2003 22,254
2004 24,281
Thereafter 24,195
-----------------
$ 126,951
-----------------
4. Income
Taxes
The difference between income taxes at statutory rates and the amount presented
in the financial statements is a result of the following:
Years Ended
December 31, Cumulative
-------------------------
1999 1998 Amounts
---------------------------------------
Income tax benefit at statutory
rate $ 8,000$ 3,000$ 14,000
Change in valuation allowance (8,000) (3,000) (14,000)
---------------------------------------
$ $ $ -
---------------------------------------
Deferred tax assets are as follows:
December 31,
-----------------------------------
1999 1998
-----------------------------------
Operating loss carryforwards $ 14,000$ 6,000
Valuation allowance (14,000) (6,000)
-----------------------------------
$ $ - -
-----------------------------------
--------------------------------------------------------------------------
F-8
<PAGE>
ALBION AVIATION, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Continued
----------------------------------------------------------------------------
4. Income
Taxes
Continued
The Company has net operating loss carryforwards of approximately $76,000, which
begin to expire in the year 2009. The amount of net operating loss carryforward
that can be used in any one year will be limited by significant changes in the
ownership of the Company and by the applicable tax laws which are in effect at
the time such carryforwards can be utilized.
5. Related
Party
Transactions
At December 31, 1999 and 1998, the Company owed an officer/shareholder $1,101
and $468, respectively. The advances are unsecured, non-interest bearing and
have no specific repayment terms.
6. Supplemental
Cash Flow
Information
During the year ended December 31, 1998, the Company acquired aircraft in
exchange for long-term debt of $143,900.
Actual amounts paid for interest and income taxes are as follows:
Six
Months Ended June 30, Years Ended
------------------------
2000 1999 December 31, Cumulative
--------------------
(Unaudited) (Unaudited) 1999 1998 Amounts
-------------------------------------------------------
Interest $ 6,092$ 7,086$ 11,862$ 1,394$ 19,348
-------------------------------------------------------
Income taxes $ $ - $ - $- $ - -
-------------------------------------------------------
7. Recent
Accounting
Pronounce-
ments
In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective date of FASB
Statement No. 133." SFAS 133 establishes accounting and reporting standards for
derivative instruments and requires recognition of all derivatives as assets or
liabilities in the statement of financial position and measurement of those
instruments at fair value. SFAS 133 is now effective for fiscal years beginning
after June 15, 2000. The Company believes that the adoption of SFAS 133 will not
have any material effect on the financial statements of the Company.
8. Sale of Stock
The Company is seeking to sell 50,000 shares of common stock for $250,000 of
which $50,000 will be used to pay commissions and expenses of the offering.
----------------------------------------------------------------------------
F-9
<PAGE>
No dealer, salesman or other person is authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by Albion.
This Prospectus does not constitute an offer to sell or a solicitation to an
offer to buy the securities offered hereby to any person in any state or other
jurisdiction in which such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
Additional Information...................... 2
Prospectus Summary.......................... 3
Risk Factors................................ 4
Dividend Policy............................. 8
Market Price of Common Stock................ 9
Management's Discussion and Analysis........ 9
Business and Plan of Operation.............. 10
Management.................................. 15
Principal Shareholders...................... 16
Certain Transactions........................ 16
Selling Shareholders........................ 18
Description of Securities................... 19
Legal Matters............................... 20
Experts..................................... 20
Financial Statements........................ 21
ALBION AVIATION, INC.
50,000 SHARES
PROSPECTUS
September __, 2000
<PAGE>
ALBION AVIATION, INC. PART II
<TABLE>
<CAPTION>
Item 13. Other Expenses of Issuance and Distribution.
<S> <C> <C>
Filing fee under the Securities Act of 1933 $ 100.00
Printing and engraving(1) $ 300.00
Blue Sky Fees $ 1,000.00
Auditing Fees(1) $ 5,000.00
NASD Filing Fees $ 500.00
Non-accountable expenses $ 15,000.00
Miscellaneous(1) $ 3,100.00
TOTAL $ 25,000.00
</TABLE>
(1) Estimates
Item 14. Indemnification of Directors and Officers.
Albion has adopted provisions in its articles of incorporation and
bylaws that limit the liability of its directors and provide for indemnification
of its directors and officers to the full extent permitted under the Delaware
General Corporation Law. Under Albion's articles of incorporation, and as
permitted under the Delaware General Corporation Law, directors are not liable
to Albion or its stockholders for monetary damages arising from a breach of
their fiduciary duty of care as directors. Such provisions do not, however,
relieve liability for breach of a director's duty of loyalty to Albion or its
stockholders, liability for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, liability for transactions
in which the director derived as improper personal benefit or liability for the
payment of a dividend in violation of Delaware law. Further, the provisions do
not relieve a director's liability for violation of, or otherwise relieve Albion
or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of equitable remedies such as
injunctive relief or recision.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of Albion where indemnification will be
required or permitted. Albion is not aware of any threatened litigation or
proceeding that may result in a claim for indemnification by any director or
officer.
Item 15. Recent Sales of Unregistered Securities.
Not Applicable.
Item 16. Exhibits and Financial Schedules
3. Certificate of Incorporation and Bylaws
3.1. Articles of Incorporation(1)
3.2 Articles of Amendment(1)
3.3 Bylaws(1)
<PAGE>
5. Opinion of Hand & Hand as to legality of securities being registered.(1)
10. Material Contracts
21. Subsidiaries of the small business issuer-Svetlana Aviation is
the only subsidiary. It
does business under the name Svetlana Aviation.
23. Consents of Experts and Counsel
23.1 Consent of Tanner & Co.(1)
23.2 Consent of Hand & Hand included in Exhibit 5 hereto
24. Powers of Attorney
24.1 Powers of Attorney are included on signature page(1)
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this
filing.
(b) Financial Statement Schedules
All schedules are omitted because they are not applicable or because
the required information is included in the financial statements or notes
thereto.
(1) Filed herewith.
(2) To be filed by amendment.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such
<PAGE>
information in the registration statement, including (but not limited to) any
addition or election of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities offered at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(g) The undersigned registrant hereby undertakes to provide to the underwriters
at the closing, specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
(h) 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 the foregoing provisions, 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 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 that matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be a part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Item 18. Financial Statements and Schedules.
Not Applicable.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Dana Point,
State of California on September 25, 2000.
ALBION AVIATION, INC.
By: /s/ Jehu Hand
Jehu Hand
President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 25, 2000.
By: /s/ Jehu Hand President, Chief Financial Officer and Director
Jehu Hand (principal executive officer and principal
accounting and financial officer)
