AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 25, 2000
REGISTRATION NO. 333-____
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------
PATHFINDER BUSINESS RESOURCES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
NEW YORK 7390 11-3521230
---------- ------ ----------
<S> <C> <C>
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
PATHFINDER BUSINESS RESOURCES, INC.
33 ELEVENTH AVENUE
HUNTINGTON STATION, NY 11746
(Address of principal place of business)
NICHOLAS J. SECCAFICO, JR., CHIEF EXECUTIVE OFFICER
PATHFINDER BUSINESS RESOURCES, INC.
33 ELEVENTH AVENUE
HUNTINGTON STATION, NY 11746
(631) 423-8280
FAX (631) 423-8286
(Name, address, and telephone number of principal executive offices
and agent for service)
COPIES TO:
Steven Morse, Esq. Joseph L. Pittera, Esq.
Lester Morse P.C. 2214 Torrance Boulevard
111 Great Neck Road Suite 101
Great Neck, New York 11021 Torrance, California 90501
(516) 487-1446 (310) 328-3588
(516) 487-1452 (Fax) (310) 328-3063
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER
THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT: From time to time after the
effective date of this Registration Statement, as determined by the Registrant.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
<PAGE>
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
Common stock, par value
$.001 per share 300,000 $2.50 $ 750,000 $ 208.50
Common Stock, par value
$.001 per share (2) 624,000 2.50 1,560,000 433.68
Underwriter's Common
Stock Warrants, each to
purchase one share of
Common Stock 30,000 .005 100 (3)
Common Stock underlying
Underwriter's Warrants 30,000 3.00 90,000 25.02
--------
Total Registration Fee $ 667.20
<FN>
-------------
(1) Estimated solely for purposes of calculating th registration fee pursuant to
Rule 457(a) under the Securities Act of 1933, as amended.
(2) Represents the number of shares of Common stock par value $.001 per share,
which are to be sold by Selling Security Holders.
(3) None pursuant to Rule 457(g).
</FN>
</TABLE>
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 SECTION 8(A), MAY
DETERMINE.
ii
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 2000
PATHFINDER BUSINESS RESOURCES, INC.
COMMON STOCK
This is an initial public offering of up to 300,000 shares of common stock of
Pathfinder Business Resources, Inc. If a minimum of 100,000 shares are not sold,
all monies will be promptly returned to investors without deductions or
interest. The offering period will expire on ________, 2001 and it may be
extended by us until _______, 2001. Arrangements have been made to place the
funds of the offering in escrow.
Before the offering, there has been no public market for the common
stock. Should a public market develop, the offering price of $2.50 per share may
not reflect the market price of the shares after the offering. We plan to seek
to list the common stock on the OTC Electronic Bulletin Board through
__________________, a market maker unrelated to the underwriter.
THE PURCHASE OF OUR COMMON STOCK INVOLVES THE PURCHASE OF SPECULATIVE
SECURITIES AND A HIGH DEGREE OF RISK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUATELY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
===============================================================================
Proceeds to
Price to Underwriting Pathfinder Business
Public Commissions Resources
-------------------------------------------------------------------------------
Per Share $2.50 $.25 $2.25
-------------------------------------------------------------------------------
Minimum $250,000 $25,000 $225,000
-------------------------------------------------------------------------------
Maximum $750,000 $75,000 $675,000
===============================================================================
Under this prospectus, the nine selling security holders named herein
are offering to sell up to 624,000 shares of our common stock issuable upon
conversion of series A preferred stock owned by them. Their plan of distribution
is described under "Selling Security Holders." We are paying all expenses of
this offering.
CREATIVE CAPITAL MANAGEMENT CORP.
Prospectus dated ________, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
Prospectus Summary....................................................... 3
Summary Financial Data................................................... 4
Risk Factors............................................................. 5
Forward Looking Statement................................................ 8
Use of Proceeds.......................................................... 8
Dividend Policy.......................................................... 9
Dilution................................................................. 10
Capitalization........................................................... 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations......................................................... 13
Business................................................................. 15
Management............................................................... 21
Principal Stockholders................................................... 25
Certain Transactions..................................................... 26
Description of Securities................................................ 27
Shares Eligible for Future Sale.......................................... 29
Underwriting............................................................. 30
Selling Security Holders................................................. 32
Legal Matters............................................................ 33
Experts.................................................................. 33
Financial Statements..................................................... F-1
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. Because this is a
summary, it does not contain all the information that may be important to you.
You should read the entire prospectus before you decide to invest.
PATHFINDER BUSINESS RESOURCES
Pathfinder Business Resources, Inc., formerly named 800Pet.Com, Inc., a
New York corporation, through our recently acquired wholly-owned subsidiary,
Pathfinder International Group, Inc., provides business development and
management consulting services to small and medium-sized companies. As a
marketing tool for our clients, we intend to engage in the design and
development of websites for our customers. Our executive offices are located at
33 Eleventh Avenue, Huntington Station, New York 11746 and our phone number is
(631) 423-8280.
THE OFFERING
Securities offered
by Pathfinder Business Resources 300,000 shares (maximum)
100,000 shares (minimum)
Offering price $2.50 per share
Escrow agent Continental Stock Transfer &
Trust Company
Series A preferred stock
outstanding before offering 780,000 shares
Series A preferred stock
outstanding after offering -0- shares
Common stock outstanding
prior to the offering 5,150,000 shares
Common stock to be
outstanding after the
offering 5,874,000 shares (minimum), after
giving effect to the automatic
conversion of series A preferred
stock into common stock upon the
completion of this offering.
6,074,000 shares (maximum), after
giving effect to the automatic
conversion of series A preferred
stock into common stock upon the
completion of this offering
Risk factors You should read the "Risk Factors"
section beginning on page 5,
as well as the other cautionary
statements throughout the entire
prospectus, so that you understand
the risks associated with an
investment in our stock.
3
<PAGE>
SUMMARY FINANCIAL DATA
The summary financial data is derived from the historical consolidated
financial statements of Pathfinder Business Resources, Inc. This summary
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" as well as our
historical consolidated financial statements and the related notes thereto,
included elsewhere in the prospectus.
FOR THE PERIOD
DECEMBER 1, 1999 (INCEPTION)
TO JULY 31, 2000
----------------------------
STATEMENT OF OPERATIONAL DATA:
Revenues $ -0-
Net (Loss) 121,556
Basic Net (Loss) per common share .02
Weighted average number of shares
outstanding during the period 5,150,000
JULY 31, 2000
-------------
BALANCE SHEET DATA:
Total Assets $ 472,504
Working Capital 449,104
Total Liabilities 750
Stockholders' Equity 471,754
4
<PAGE>
RISK FACTORS
Before you invest in our common stock, you should be aware that there
are various risks, including those described below. You should carefully
consider these risk factors together with all of the other information included
in this prospectus before you decide to purchase shares of our common stock.
We have limited working capital and may encounter future liquidity problems.
We have limited working capital of $449,104 at July 31, 2000. We expect
the proceeds of this offering if the minimum number of shares is sold, will
provide us with minimal additional working capital of $66,500 and additional
working capital of $491,500 if all shares are sold in this offering. Our
operations may encounter capital resource and liquidity problems in the future.
We are a development stage company, which makes it difficult to evaluate our
business and future prospects.
We were formed as a corporation under the laws of the State of New York
on December 1, 1999 and we are currently a development stage enterprise. We
completed a private placement of $780,000 in gross proceeds in the first quarter
of calendar 2000, recently developed a website and investigated the feasibility
of selling a limited number of select pet products over our Internet website
and, effective July 28, 2000, acquired Pathfinder International Group, Inc. from
our founder, Nicholas J. Seccafico, Jr., as a capital contribution by him. Prior
to July 28, 2000, we did not conduct any other material activities since our
inception. Our subsidiary, Pathfinder International Group, has a limited history
of operations and we may face various risks, expenses and difficulties
associated with early stage companies. You should carefully consider the risks,
expenses and difficulties that we may encounter as an early stage company with
an unproven business model that operates in highly competitive markets such as
ours. We may not be able to successfully address any or all of these risks.
Failure to adequately do so could cause our business to suffer. In light of the
developing nature of our business and our marketing plans, we may incur
substantial operating expenses without generating significant revenue or any
profit from operations for the foreseeable future.
We have minimal pro forma revenues from prior operations and no assurances of
future profitable operations
During the period December 1, 1999 through July 31, 2000, we had no
revenues from operations and a net loss of $121,556. Effective July 28, 2000,
our President contributed 100% of the outstanding stock of Pathfinder
International Group to us and it became a wholly-owned subsidiary. Had the
contribution to our capital occurred on December 1, 1999, we would have had
consolidated revenues of $179,106. We can provide no assurances that our
operations will be profitable in the future.
5
<PAGE>
Dependence upon Nicholas J. Seccafico, key man life insurance may be inadequate
to compensate for the loss of their services.
We believe that our ability to successfully operate our existing
operations, implement business plans and to operate profitably depends on the
continued employment and experience of Nicholas J. Seccafico, Jr. and his
contacts with a consortium of retired business executives who serve as
consultants to us. If he becomes unable or unwilling to continue in his present
position, our business and financial results could be materially adversely
effected. We will attempt to obtain a $1 million key man life insurance policy
on the life of Mr. Seccafico. We can provide no assurances that such insurance
would adequately compensate us for the loss of his services or that we would be
able to recruit and retain new management personnel should the need arise.
Our success is primarily dependent on our ability to retain experienced
consultants at a time when the consulting industry is generally experiencing a
shortage of skilled professionals.
Our primary business is the delivery of professional services and is
highly labor intensive. Our success depends on our ability to retain highly
skilled professionals. Although we utilize a databank of retired executive as
independent consultants for our business, we have no written agreement with the
databank regarding the use of these services. The loss of the use of these
independent consultants or our inability to retain other professional
consultants could have a negative effect on our business, including our ability
to operate. Qualified consultants are in great demand, especially in the high
tech and communications industries and the market is very competitive.
Accordingly, we may not be able to retain such professionals if we are unable to
use the professionals in our current databank.
If we are unable to compete effectively with our competitors, most of whom have
been in existence longer than us, have a more established market presence and
have substantially greater resources than us, we will not be able to increase
revenues or generate profits.
We operate in a highly competitive market and compete with a variety of
organizations that offer services similar to those we offer. The market includes
intense competition from the following types of participants:
o specialized consulting firms;
o general management consulting firms;
o "Big 5" accounting and consulting firms;
o website development and design firms;
o specialized e-business consulting firms; and
o systems consulting and implementation firms.
Increased competition could diminish our ability to be profitable. Many
of our competitors are larger, better established and have greater financial,
marketing and other resources than us, which will inhibit our ability to
increase revenues and generate profits.
6
<PAGE>
We may need additional capital and may not be able to obtain it.
We believe that the proceeds from this offering together with our
current cash balances and anticipated cash to be generated from operations will
be sufficient to meet our expected operating and capital requirements for about
one year. However, we may need to raise additional funds in order to support
further expansion, meet competitive pressures, or respond to anticipated
requirements. We cannot assure you that additional financing will be available
if needed on terms favorable to us.
Our common stock has never been publicly traded, so we cannot predict the extent
to which a trading market will develop for our common stock.
There has not been a public market for our common stock. We cannot
predict the extent to which a trading market will develop or how liquid that
market might become. We plan to list the common stock for trading on the OTC
Electronic Bulletin Board through ______________, a firm unrelated to our
underwriter who does not plan to make a market in our common stock. We can
provide no assurance that such listing will be obtained.
Our public offering price was arbitrarily determined and not based upon any
established criteria of value.
Our initial public offering price for our shares of common stock was
arbitrarily determined through negotiations between the underwriter and us. Our
initial public offering price is not necessarily related to our assets, book
value or other established criterion of value and is not indicative of the price
at which it may trade in the future.
Lack of at least two independent directors and committees could result in less
objectivity and conflicts of interest.
Our board of directors consists of two directors. One of the directors
also serves as an executive officer. The absence of at least two outside or
disinterested directors and committees composed of such disinterested directors,
could result in less objectivity and an increased risk for conflicts of interest
with respect to decisions made by our board of directors.
Disparity between consideration paid for our common stock by existing
shareholders and the consideration paid by the public.
The investors in this offering will pay $2.50 per share for shares of
our common stock which is substantially higher than the average price of $.14
per share previously paid by current common and preferred stockholders.
"Penny Stock" regulations might in the future adversely affect the purchasers'
resale of common stock.
The SEC has adopted "penny stock" regulations which apply to certain
securities with a market price of under $5.00. These regulations could adversely
impact the ability of the
7
<PAGE>
purchasers in the offering to resell the shares of common stock purchased if the
market price of common stock is below $5.00. See "Description of Securities" for
a discussion of some of these rules.
FORWARD LOOKING STATEMENTS
Some of the information in this prospectus may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "anticipate," "estimate,"
"continue" or other similar words. These statements discuss future expectations,
contain projections of results of operations or of financial condition or state
other "forward-looking" information. When considering such forward-looking
statements, you should keep in mind the risk factors and other cautionary
statements in this prospectus. The risk factors noted in the prior section and
other factors noted throughout this prospectus, including certain risks and
uncertainties, could cause our actual results to differ materially from those
contained in any forward-looking statement.
USE OF PROCEEDS
The net proceeds to be received from the sale of the shares offered by
Pathfinder Business Resources (after payment of estimated offering expenses)
will be approximately $66,500 (minimum) and $491,500 (maximum). The following
table sets forth the Company's intended use of the net proceeds:
Minimum Maximum
------- --------
Sales and Marketing $50,000 $210,000
Working Capital 16,500 281,500
------- --------
TOTAL $66,500 $491,500
======= ========
Based on currently proposed plans and assumptions relating to the
implementation of its business plans, we believe that the proceeds from the sale
of the minimum offering together with our cash assets of $449,854 as of July 31,
2000, will be sufficient to satisfy our contemplated cash requirements for at
least 12 months following the consummation of such offering. In the event that
our plans and assumptions change or prove to be inaccurate or if the proceeds of
the offering otherwise prove to be insufficient to implement our business plan,
we may find it necessary or desirable to reallocate a portion of the proceeds
within the above described categories, use proceeds for other purposes, seek
additional financing or curtail our operations. There can be no assurance that
any additional financing will be available to us on acceptable terms, or at all.
Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest bearing
investments.
8
<PAGE>
RECENT FINANCING
In the first quarter of calendar 2000, we sold 780,000 shares of series
A preferred stock to nine investors at a purchase price of $1.00 per share. The
preferred stock automatically converts into a total of 624,000 shares of common
stock upon the consummation of this offering. These 624,000 shares have been
registered for the sale in this prospectus on behalf of certain selling security
holders named herein under "Selling Security Holders."
DIVIDEND POLICY
We currently intend to retain any earnings to finance the development
and expansion of our business and do not anticipate paying any cash dividends on
our common stock in the foreseeable future. The declaration and payment of cash
dividends by us are subject to the discretion of our board of directors. Any
future determination to pay cash dividends will depend on our results of
operations, financial condition, capital requirements, contractual restrictions
and other factors deemed relevant at the time by the board of directors. We are
not currently subject to any contractual arrangements which restricts our
ability to pay cash dividends.
9
<PAGE>
DILUTION
Our net tangible book value per share as of July 31, 2000 was
approximately $.08 per share of common stock. Net tangible book value per share
is determined by dividing our tangible net worth (tangible assets less all
liabilities) by the total number of outstanding shares of common stock. Our
tangible assets consists of all of our assets as shown on its balance sheet,
except for intangible assets consisting of $12,650 as of July 31, 2000. After
giving effect to the sale by us of 100,000 shares (minimum), our adjusted net
tangible book value per share as of July 31, 2000 would have been approximately
$.09. This represents an immediate increase in the adjusted net tangible book
value per share of $.01 to existing common stockholders and an immediate
dilution (the difference between the $2.50 price to the public per share of
common stock and the adjusted net tangible book value per share of common stock
after the offering) in the adjusted tangible book value of $2.41 per share of
common stock (representing a dilution percentage of approximately 96.4%) to new
investors. After giving effect to the sale by us of 300,000 Shares (maximum),
our adjusted net tangible book value per share as of July 31, 2000 would have
been approximately $.16. This represents an immediate increase in the adjusted
net tangible book value per share of $.08 to existing common stockholders and an
immediate dilution (the difference between the $2.50 price to the public per
share of common stock and the adjusted net tangible book value per share of
common stock after the offering) in the adjusted tangible book value of $2.34
per share of common stock (representing a dilution percentage of approximately
93.6%) to new investors. For the purpose of this Dilution section, the terms
"existing common stockholders" and "present stockholders" include holders of
series A preferred stock which will be automatically converted into 624,000
shares of common stock upon the completion of the offering and the net tangible
book value both before and after the offering has been adjusted to include the
value of the series A preferred stock which will automatically convert into
common stock upon the consummation of the offering.
The following table illustrates this per share of common stock
dilution:
Minimum Maximum
------------- -------------
The initial price of a share of common
stock paid by new investors $2.50 $2.50
Adjusted net tangible book value per share
of common stock before the Offering $.08 $.08
Increase in adjusted net tangible book
value per share of common stock
attributable to new investors .01 .08
----- -----
Adjusted net tangible book value per
share of common stock after the offering .09 .16
----- -----
Dilution in adjusted net tangible book
value per share of common stock to
new investors $2.41 $2.34
===== =====
10
<PAGE>
The following tables summarize, as of the completion of the offering,
the differences between existing common stockholders and new investors with
respect to the number of shares of common stock purchased from us and the total
and average cash consideration paid per share. (Cash consideration includes cash
and cost basis of property contributed to us by a principal stockholder,
Nicholas J. Seccafico, Jr.)
TABLE I (Minimum)
<TABLE>
<CAPTION>
Approx.- Approximate Average
mate Percentage Price
Shares Percentage of Total Cash of Total Per
Purchased Total Shares Consideration $ Consideration % Share $
--------- ------------ --------------- --------------- -------
<S> <C> <C> <C> <C> <C>
Public
Stockholders 100,000 2 250,000 24 $2.50
Present
Stockholders 5,774,000 98 792,650 76 .14
--------- --- --------- ---
Total 5,874,000 100 1,042,650 100
========= === ========= ===
</TABLE>
TABLE II (Maximum)
<TABLE>
<CAPTION>
Approx.- Approximate Average
mate Percentage Price
Shares Percentage of Total Cash of Total Per
Purchased Total Shares Consideration $ Consideration % Share $
--------- ------------ --------------- --------------- -------
<S> <C> <C> <C> <C> <C>
Public
Stockholders 300,000 3 500,000 39 $2.50
Present
Stockholders 5,774,000 97 792,650 61 .14
--------- --- --------- ---
Total 5,974,000 100 1,292,650 100
========= === ========= ===
</TABLE>
11
<PAGE>
CAPITALIZATION
The following table sets forth, as of July 31, 2000, (i) the actual
capitalization of Pathfinder Business Resources and (ii) the pro forma
capitalization of Pathfinder Business Resources, including the issuance of
100,000 shares of common stock (minimum) and 300,000 shares (maximum).
The table below should be read in conjunction with the financial
statements of Pathfinder Business Resources and notes thereto. The table does
not reflect options which may be granted under our Stock Option Plan and
underwriter's warrants to purchase up to 20,000 shares of common stock.
<TABLE>
<CAPTION>
JULY 31, 2000
----------------------------------------
PRO PRO
FORMA FORMA
ACTUAL MINIMUM MAXIMUM
-------- ------- -------
<S> <C> <C> <C>
Stockholders' Equity:
Preferred Stock, $.001 par value,
1,000,000 shares authorized,
780,000 shares of Series A
Preferred Stock outstanding and
zero shares issued and
outstanding pro forma
minimum and maximum 780 -0- -0-
Common Stock, $.001 par value
20,000,000 shares authorized,
5,150,000 shares issued,
5,874,000 shares issued and
outstanding pro forma minimum
and 6,074,000 shares issued and
outstanding pro form maximum 5,150 5,874 6,074
Additional Paid-in capital 587,380 653,936 1,078,736
Retained Earnings (deficit) (121,556) (121,556) (121,556)
-------- -------- ---------
Total Stockholders' Equity 471,754 538,254 963,254
======== ======== =========
</TABLE>
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
This discussion should be read in conjunction with the information in
our consolidated financial statements and notes thereto appearing elsewhere in
this prospectus.
RESULTS OF OPERATIONS
We incorporated under the laws of the State of New York on December 1,
1999. Between December, 1999 and March, 2000, we completed a private placement
of our shares of Series A Preferred Stock and received net proceeds of $580,660.
Following the completion of our private placement, we developed a website and
investigated the feasibility of selling a limited number of select pet products
over our Internet website. Effective July 28, 2000, our Chief Executive Officer
contributed to our capital his 100% capital interest in Pathfinder International
Group, Inc., a development stage company which provides business development and
management consulting services to small and medium sized corporations. For the
period December 1, 1999 through July 31, 2000, we had no revenues, we spent
$108,961 to develop our business and realized a consolidated net loss of
$121,556.
Prior to July 28, 2000, we did not conduct any other material
activities since our inception. Further, our recently acquired wholly-owned
subsidiary, Pathfinder International Group, has a limited history of operations
and derived $179,106 in revenues and had $179,106 in expenses for the period
December 1, 1999 through July 31, 2000. Our pro forma combined net loss for the
same period was $121,556. In June 1975, the Financial Accounting Standards
Board, in its Statement No. 7, set forth guidelines for identifying an
enterprise in the development stage and the standards of financial accounting
and reporting applicable to such an enterprise. In our opinion, our activities
from our inception through July 31, 2000 fall within the referenced guidelines.
Accordingly, we have reported our activities in accordance with the aforesaid
Statement of Financial Accounting Standards No. 7.
LIQUIDITY AND CAPITAL RESOURCES
Shortly after our inception December, 1999, we sold an aggregate of
5,150,000 shares of our Common Stock at a purchase price of $5,150 to our
officers and directors and received a capital contribution of an additional
$7,500. Between December, 1999 and March, 2000, we completed a private placement
of our shares of Series A Preferred Stock and received net proceeds of $580,660.
At July 31, 2000, we have working capital of $449,104. We believe that
our existing working capital combined with the additional proceeds that will be
received at the completion of this offering, together with cash derived from
operations will provide us sufficient cash resources and liquidity for our
operations for a period of an estimated 12 to 15 months, following this
offering.
For the period December 1, 1999 through July 31, 2000, net cash was
used in operating activities in order to develop our business. This included a
net loss of $121,560. During this time
13
<PAGE>
period, net cash was provided by financing activities through the issuance and
sale of common stock and preferred stock. Upon the completion of the offering,
our outstanding 780,000 shares of series A preferred stock will automatically
convert into 624,000 common shares.
PLAN OF OPERATIONS
After the completion of this offering, we intend to lease approximately
500 square feet of office space at either our existing facility in Huntington
Station, New York or at a nearby location on Long Island. We do not anticipate
any material purchases of property and equipment or any significant changes in
the number of our employees. We will continue to outsource all of our
professional consultants required for our consulting services. The net proceeds
received from this offering will be utilized primarily for sales and marketing
activities to develop our business.
14
<PAGE>
BUSINESS
OVERVIEW
Through our wholly-owned subsidiary, Pathfinder International Group,
Inc., we are engaged in the providing of business development and management
consulting services primarily to small to medium-sized businesses. Utilizing the
combined talents of a consortium of retired business executives, we bring
experience and expertise to our clients.
We assist prospective clients in analyzing their businesses in the
areas of:
o mergers and acquisitions;
o divestitures and reorganizations;
o general financial transactions;
o capital source location;
o capital structure formation;
o due diligence studies; and
o guidance and assistance in available alternatives
to maximize shareholder value.
Our primary focus is to help our client's business succeed. It is our
intent to assist business owners in growing and realizing the value of their
companies and capitalizing on it. Each client is typically assigned a team of
three - five consulting professionals headed by a project manager who is
responsible for the delivery and quality of our services.
As an additional marketing tool for our clients, we also offer website
design and development services.
CONSULTING SERVICES
In order to evaluate our client's specific needs, we have developed a
business development process pursuant to which we conduct an in-depth analysis
of the client's business in order to formulate a strategic plan for each
specific client. We begin the business development process with an opening
conference with the principals of the company. The purpose of this meeting is to
learn the history and evolution of the client, get the principal's impressions
of the areas with which they are concerned and identify short term and long term
goals of the principals and the company's business.
Following this conference, we then proceed to evaluate the client's
business utilizing a databank of retired executives, many of whom have
distinguished records of accomplishment in their various fields. We bring in
industry - specialized consultants to deliver solutions tailored to the specific
industries in which our clients operate. We believe that this approach maximizes
the quality of the services we provide to our clients as we understand the
specific needs of each of our clients and implement more tailored solutions.
Utilizing our team of industry-specific experts, we will observe the operations
of every department. We examine the organization and structure of the company,
the duties and responsibilities of the personnel, the decision making process
and the process for measuring accountability of personnel. We study the client's
sales and marketing
15
<PAGE>
approach and strategy, market planning and sales process. We interview sales
representatives and other sales personnel. We identify profit and cash flow
problems. Additional areas examined include financial control, management
information, credit and collections, cash management and cash flow, bookkeeping
and accounting practices. We will bring in outside accountants, attorneys and
other professionals if we believe the study warrants such representation on our
analysis team.
At the conclusion of the study, we will present our findings and
recommend actions in the form of a strategic plan. We specify steps we believe
should be taken to improve the client's business and we describe how our
recommendations may be implemented. The business development process is
completed only when the client is completely satisfied that all areas of concern
have been examined and all problems defined.
We work with our clients to implement our strategic plans designed to
strengthen our clients business and increase its profits. The business
development process provides the concise, predictive analysis that allows the
client to make the next move. We work with the client not only to identify areas
of concern in the business, but to design and implement management plans and
strategies structured to strengthen the client's business, increase its profits
and help it grow. Our outlook is strongly influenced by the marketing discipline
and oriented toward growth. Our highly collaborative, improvisational approach
reflects the fast-pace and efficiency of the new economy.
We provide our clients with a full range of services required to enable
them to achieve the strategies and goals recommended in our strategic plan.
Our services include:
o Company turn-around- the ability to develop and implement proven and
marketable solutions that improve profits;
o Company reorganization - analyze, develop and implement the
organizational structure best suited to the client's goals;
o Acquisitions, mergers and divestitures - we help in evaluating,
negotiating and structuring the acquisition of a client, the merger
with another or the divestiture of no-longer needed assets;
o Financing - assistance in the preparation of finance packages and
introductions to entities involved in raising needed capital in
public and private companies;
o Budgeting - assistance in the preparation and implementation of
income and expense budgets designed to control a client's business
activities and profits, establish specific operating standards and
set clearly defined income and performance goals and expense limits;
o Review collection and billing procedures;
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<PAGE>
o Strategic planning - development of and guidance in implementing
medium to long-term goals designed to maximize the return of the
client's investment;
o Marketing strategies - design and implementation of marketing and
sales strategies that address the client's needs and objectives;
o Management training and development - management training in the
areas of decision-making, team building, communications and employee
performance; and
o Data processing strategies - the evaluation of budget controls, as
well as the monitoring and installation of financial software
packages needed to control business operations on a day-to-day basis.
Working directly with a client by providing all of the above services,
we attempt to uncover business problems, develop solutions and work with the
client to teach its management to implement our recommendations.
We believe this integrated approach differs from that of many other
consulting firms which do not provide comprehensive solutions but instead focus
on only a few of the required components of a successful consulting engagement.
The personal needs and financial goals of our clients form the basis for the
business development process.
WEBSITE DEVELOPMENT SERVICES
As an adjunct to our consulting services, we have introduced website
design and development services for those clients who seek to capitalize on the
opportunities presented by the Internet. The Internet's broad acceptance has
prompted the creation of new business models and the revision of traditional
business models, creating new opportunities for revenue generation and cost
efficiencies. Businesses can use the Internet to enhance or provide key elements
such as sales, marketing, product distribution, customer interaction, finance
and accounting. For those clients interested in, or whose business our business
development process indicates would merit from an e-commerce solution, we
provide web design and web content services. These clients would retain us to
design, improve and implement the processes used to facilitate the establishment
of an e-commerce website for their business. With our website design and
development services, we also provide search engine placement and meta tag
creation and insertion.
PET SUPPLIES
We are the owner of the domain name "www.800Pet.com" and have
established a website with that name which will, when operational, sell and
market a limited number of specialized pet supplies. We intend to own no
inventory for this site and will drop ship all products ordered through this
site. Although this site is up and running as a beta site, the e-commerce aspect
of the site has not been established and no sales have been generated to date.
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<PAGE>
MARKETS AND MARKETING
The market for our business and consulting services is primarily small
to medium sized companies. Because of the diverse backgrounds and experience of
our consulting professionals, we are not limited to any particular industry or
genre. We have recently represented clients in the e-commerce, automotive parts
and pet supplies industries.
Our Internet development and design services are offered to our
business consulting clients as an added service for their marketing needs. As
these services become more developed, we may market them independent of our
consulting services.
We market our consulting services utilizing prospect databases which
provide us with names of small to medium sized companies that may be interested
or which we believe could utilize our services based on their financial
information provided in the database. We proactively establish contact with
these targeted prospects to identify potential opportunities and work to
establish awareness and preference for our services. In addition, we identify
opportunities through direct mail, advertising and client referrals.
COMPETITION
We operate in a highly competitive market and compete with a variety of
organizations that offer services similar to those we offer. The market includes
the following types of participants:
o specialized consulting firms;
o general management consulting firms;
o "Big 5" accounting and consulting firms;
o website development and design firms;
o specialized e-business consulting firms; and
o systems consulting and implementation firms.
We believe that we offer a hands-on consulting service with experience
and expertise that many other consulting firms lack. However, many of our
competitors have significantly greater financial, technical and marketing
resources, generate greater revenues and have greater name recognition than we
do. Our client market is primarily small to medium-sized companies. There are an
increasing number of professional service firms seeking consulting engagements
with these companies. We believe that our principal competitive factors include:
o hands-on approach;
o broad based expertise;
o availability of appropriate resources; and
o focus on achieving results.
Our ability to compete also depends in part on factors beyond our
control, including the ability of our competitors to hire and retain skilled
professionals, the price at which others offer
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<PAGE>
comparable services and our competitors' responsiveness. There is a risk that
increased competition will adversely affect our future financial results.
The competition for our pet products website is intense. There are
numerous other websites offering strictly pet products at competitive prices, as
well as retail establishments offering similar products. There can be no
assurance that we will be able to effectively compete in this arena.
GOVERNMENTAL REGULATION
We believe that our services are not subject to direct regulation by
any governmental agency, other than regulations applicable to businesses
generally. To date, the Federal Trade Commission has not sought to regulate the
providing of Internet related services, such as web design and development or
the sale of pet products via an e-commerce website. Whether the Federal Trade
Commission will, in the future, assert regulatory authority over the Internet
and the level of such regulation, if asserted, are pending issues currently
being considered by regulators and law makers at many levels of government. We
cannot predict whether regulations may be imposed in the future, what form such
regulations may take or whether any such regulation will adversely affect our
business, financial condition or results of operations.
In addition, depending upon the compensation arrangements we make with
our consulting clients, we may become subject to the regulations underlying the
Investment Company Act of 1940 and may have to register as an investment
company.
EMPLOYEES
As of July 2000, we had three employees on a full-time basis, one
executive, one secretarial and one administrative/website development. We
outsource all of our professional consultants required for our consulting
services as well as other professional entities, such as accountants and
attorneys, which we may utilize in connection with our consulting services. Our
employees have no union and we believe that our relationship with our employees
is good.
FACILITIES
We maintain approximately 200 square feet of office space at 33
Eleventh Avenue, Huntington Station, New York 11746 pursuant to a rent-free
month-to-month arrangement with our Chief Executive Officer. Upon completion of
this offering, we intend to either pay rent based upon the fair value of the
space and services utilized by us as determined by our independent member(s) of
the board of directors or seek to lease approximately 500 square feet of office
space in or around the area where we are currently located to utilize as our
offices.
LEGAL PROCEEDINGS
We are not a party to any legal proceeding.
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<PAGE>
ADDITIONAL INFORMATION
At your request, we will provide you, without charge, a copy of any
exhibits to our registration statement. If you want more information, write or
call us at:
Pathfinder Business Resources, Inc.
33 Eleventh Avenue
Huntington Station, NY 11746
(631) 423-8280
(631) 423-8286/fax
Our fiscal year ends on October 31. We intend to furnish its
shareholders annual reports containing audited financial statements and other
appropriate reports. In addition, we intend to become a reporting company and
file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information that we file at the SEC's public
reference room in Washington, D.C. You can receive copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC Internet site
at http://www.sec.gov.
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<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The names, ages and principal occupations of our present officers,
directors and employment histories are as follows:
NAME AGE POSITION
---- --- --------
Nicholas J. Seccafico, Jr. 60 President, Chief
Executive Officer,
Treasurer, Director
and Founder
Alan Ghidaleson 48 Executive Vice
President, Secretary
and Founder
Otto Weber 74 Director
The term of office for each of our directors is one year until their
respective successors are elected and shall qualify. Executive officers serve at
the pleasure of the Board of Directors.
Nicholas J. Seccafico, Jr. has been an officer and a director of
Pathfinder Business Resources, Inc. since our inception on December 1, 1999. Mr.
Seccafico has been an officer and director of Pathfinder International Group,
Inc. since its inception on April 29, 1993. Recently, Mr. Seccafico transferred
his ownership of Pathfinder International Group to us as a wholly- owned
subsidiary effective July 28, 2000. Mr. Seccafico served as President and Chief
Executive Officer of Kiwi Holdings International from January 1995 to November
1998. Kiwi Holdings was a publicly traded holding company which owned a minority
interest in a domestic airline and a 100% interest in an NASD registered broker
dealer. Mr. Seccafico joined Kiwi Holdings after founding CPC Group Corp. in
1982 where he held a number of senior executive positions. CPC Group is an
office supply business selling to federal, state and local governments. Mr.
Seccafico is a member of the Board of Trustees of Dowling College and he was
recently their honoree at its Fourteenth Annual Invitational Golf & Tennis
Tournament.
Alan Ghidaleson has been an officer of Pathfinder Business Resources,
Inc. since our inception on December 1, 1999. He served as a director of our
company from December 1999 through July 2000. Mr. Ghidaleson is currently the
sole owner of four locations of Feasts for Beasts, specializing in pet food,
supplies, grooming and dog obedience. In 1978, Mr. Ghidaleson opened his first
Feasts for Beasts business in Mt. Sinai, New York. In 1978, he opened his second
Feasts for Beasts in St. James, New York, his third location opened in 1984 in
Selden, New York, his fourth location opened in 1988 in Shoreham, New York, his
fifth location opened in 1990 in Nesconset, New York and his sixth location
opened in 1995 in Farmingville, New York. Between 1994 and 1996, he owned and
operated Club Canine in Middle Island, New
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<PAGE>
York, which was a 2-1/2 acre boarding hotel for cats and dogs. Mr.
Ghidaleson will devote to us such amount of time as is necessary for the
performance of his duties.
Otto Weber has been a director of Pathfinder Business Resources, Inc.
since July 2000. From 1958 to the present time, Mr. Weber has been a regional
sales manager in the New York metropolitan area for Sport Obermeyer Ltd., Aspen,
Colorado, a distributor of ski fashions and equipment. From 1972 to the present
time, he has also been in charge of national sales for Borvig Corp., Pine
Island, New York. Mr. Weber is responsible for United States sales and marketing
as well as installation of ski lift equipment, such as ski lifts, chair lifts,
gondolas and cable cars. Mr. Weber has a diploma of the Banking Association of
Switzerland after three years of banking apprenticeship and a diploma of the
Schweiz Kaufmaennische Verein (Business Trade School of Switzerland). Mr. Weber
was born in Lucerne, Switzerland and is a United States citizen. Mr. Weber
intends to devote a minimal amount of his time to our affairs.
At such time that we have two outside directors after the completion of
the offering, of which no assurances can be given in this regard, the board of
directors will establish a compensation committee and an audit committee, each
consisting of at least a majority of outside directors. If established, the
audit committee will among other things, make recommendations to the board of
directors regarding our independent auditors, approve the scope of the annual
audit activities of the independent auditors and review audit results and have
general responsibility for all auditing related matters. If established, the
compensation committee will review and recommend to the board of directors the
compensation structure for our officers and other management personnel,
including salary rates, participation in incentive compensation and benefit
plans, fringe benefits, non-cash perquisites and other forms of compensation.
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<PAGE>
EXECUTIVE COMPENSATION
We were incorporated on December 1, 1999 and completed a private
placement of series A preferred Stock during the first quarter of calendar 2000.
In January 2000, our Chief Executive Officer named herein commenced receiving a
monthly salary of $6,000 and reimbursed expenses on an accountable basis. No
other cash or other compensation has been paid to our Chief Executive Officer by
us except that 5,000,000 shares were issued to h im as a founder in December
1999 in exchange for $5,000 and he made an additional capital contribution of
$7,500.
The following table sets forth the total compensation paid by us and
our 100% owned subsidiary to the named Chief Executive Officer for the 12 months
ended July 31, 2000, 1999 and 1998. During the aforesaid periods, we did not
have any executive officers earning $100,000 or more in salaries and bonuses.
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------- ------------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted Number Other
and Compen- Stock of LTIP Compen-
Principal sation Award(s) Options / Payouts sation
Position Year Salary ($)(1) Bonus ($) ($) ($) Warrants ($) ($)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nicholas J. 2000 42,000 -0- -0- -0- (2) -0- -0- -0-
Seccafico, Jr.,
Chief Executive 1999 -0- -0- -0- -0- -0- -0- -0-
Officer
1998 -0- -0- -0- -0- -0- -0- -0-
--------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Since the inception of Pathfinder International Group, Inc., Mr. Seccafico
has received total compensation of $98,411, including $44,000 paid for the
period December 1, 1999 through July 31, 2000 and $54,411 paid between
January 1, 1999 and November 30, 1999. The aforesaid sums of money are not
reflected in the above table.
(2) Does not include 5,000,000 shares of our common stock issued to Mr.
Seccafico in December 1999 as founder stock in exchange for $5,000.
</FN>
</TABLE>
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<PAGE>
STOCK OPTION PLAN
We have a 1999 Stock Option Plan covering 400,000 shares of common
stock (the "plan"). These shares are subject to adjustment to cover stock
splits, stock dividends, recapitalizations and other capital adjustments for
employees, including officers and directors and consultants of us and our
subsidiary. The plan provides that options to be granted under the plan will be
designated as incentive stock options or non-incentive stock options by the
board of directors or a committee thereof, which also will have discretion as to
the persons to be granted options, the number of shares subject to the options
and the terms of the options. Options designated as incentive stock options are
intended to receive incentive stock option tax treatment pursuant to Section 422
of the Internal Revenue Code of 1986, as amended.
The plan provides that all options granted thereunder shall be
exercisable during a period of no more than 10 years from the date of grant
(five years for incentive stock options granted to holders of 10% or more of the
outstanding shares of common stock), depending upon the specific stock option
agreement and that the option exercise price for incentive stock options shall
be at least equal to 100% of the fair market value of common stock on the date
of grant (110% for options granted to holders of 10% or more of the outstanding
shares of common stock). Pursuant to the provisions of the plan, the aggregate
fair market value (determined on the date of grant) of the shares of the common
stock for which incentive stock options are first exercisable under the terms of
the plan by an option holder during any one calendar year cannot exceed
$100,000.
Currently, the plan provides that if the employment of an optionee is
terminated other than by reason of death, disability or retirement at age 65,
any incentive stock options granted to the optionee will immediately terminate.
If employment is terminated by reason of disability or retirement at age 65, the
optionee may, within one year from the date of termination, in the event of
termination by reason of disability, or three months from the date of
termination, in the event of termination by reason of retirement at age 65,
exercise the incentive stock option (but not after the normal termination date
of the option). If employment is terminated by death, the person or persons to
whom the optionee's rights under the incentive stock option are transferred by
will or the laws of descent and distribution have similar rights of exercise
within three months after such death (but not after the normal termination date
of the option). Any termination provisions of non-statutory stock options will
be fixed by the board of directors or a committee thereof.
Options are not transferable otherwise than by will or the laws of
descent and distribution and during the optionee's lifetime are exercisable only
by the optionee. Shares subject to options which expire or terminate may be the
subject of future options. The plan provides that no new options may be granted
by our board of directors after ten years from the establishment of the plan by
the board of directors. As of the date of this prospectus, no options were
issued and outstanding under the plan.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Our certificate of incorporation contains a provision eliminating the
personal monetary liability of directors to the extent allowed under the
Business Corporation Law of the State of New York. Under the provision, a
stockholder is able to prosecute an action against a director for monetary
damages only if he can show a breach of the duty of loyalty, a failure to act in
good faith, intentional misconduct, a knowing violation of law, an improper
personal benefit or an illegal dividend or stock repurchase, as referred to in
the provision, and not "negligence" or "gross negligence" in satisfying his duty
of care. In addition, the provision applies only to claims against a director
arising out of his role as a director or not, if he is also an officer, his role
as an officer or in any other capacity or to his responsibilities under any
other law, such as the federal securities laws.
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<PAGE>
In addition, our Certificate of Incorporation provides that we will indemnify
our directors, officers, employees and other agents to the fullest extent
permitted by New York law. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of us pursuant to the foregoing provisions, or otherwise, we have been
advised that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
DIRECTORS COMPENSATION
We intend to pay our directors who are not also employees of us $300
for each meeting attended and will reimburse such directors for travel and other
expenses incurred by them in connection with attending board of directors
meetings. All of our directors are eligible to receive the grant of options to
purchase shares of our common stock pursuant to the plan.
ANTI-TAKEOVER MEASURES
The certificate of incorporation allows us to issue preferred stock
without stockholder approval. The issuance of shares of Preferred Stock under
certain circumstances could make it more difficult for a third party to acquire
control of us even if such change in control would be beneficial to
stockholders.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of the date of this prospectus
certain information with respect to the record and beneficial ownership of
common stock by each person or entity known by us to be the beneficial owner of
5% or more of our shares, each officer and director of us and all our officers
and directors as a group. Beneficial ownership as reported in the table above
has been determined in accordance with Rule 13d-3 of the Exchange Act. All
addresses for the officers and directors are c/o Pathfinder Business Resources,
Inc., 33 Eleventh Avenue, Huntington Station, NY 11746. The percentages are
calculated based upon 5,150,000 shares of common stock outstanding before the
offering and 5,874,000 shares minimum, 6,074,000 shares maximum outstanding
after the offering. For the purpose of determining the percentage of ownership
in this table, we assume that the Series A Preferred Stock is not converted into
Common Stock until the closing date of the offering.
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<PAGE>
<TABLE>
<CAPTION>
Percentage Beneficial Ownership
Shares of
Common Stock
Beneficially After After
Owned Before Before Offering Offering
Name and Address Offering Offering Minimum Maximum
----------------- -------------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Nicholas J. Seccafico, Jr. 4,125,000 80.1 70.2 67.9
Alan Ghidaleson 150,000 2.9 2.6 2.5
Otto Weber -0- -0- -0- -0-
All three officers and
directors as a group 4,275,000 82.5 72.8 70.4
</TABLE>
Our officers and directors will control approximately 73% of our common
stock after the offering and will have the power to elect a majority of the
directors, appoint management and approve actions requiring the approval of a
majority of stockholders.
CERTAIN TRANSACTIONS
(i) In December 1999, the Company sold 5,000,000 shares to Nicholas J.
Seccafico, Jr. and 150,000 shares to Alan Ghidaleson at a price of $.001 per
share. Mr. Seccafico also contributed to capital an additional $7,500. Mr.
Seccafico did not receive any additional shares in exchange for such
contribution.
(ii) Between December 1999 and March 2000, we sold 780,000 shares of
series A preferred stock at a purchase price of $1.00 per share to the following
persons: Moshe and Cheryl Lifshitz (360,000 shares), Jeffrey Barnes (30,000
shares), Lennart Dahlgren (90,000 shares), Joseph Acosta (10,000 shares), Samuel
& Stella Skura JTWROS (40,000 shares), Clarin Howe (70,000 shares), John Hodel
(110,000 shares), Trung Vo (20,000 shares) and Pavlik Investments LLC (50,000
shares). Upon the consummation of the offering, each outstanding share of series
A preferred stock shall automatically convert into 0.8 of a share of our common
stock with all amounts rounded up to the nearest whole number. A total of
624,000 shares of our common stock will be issued to the aforementioned persons.
(iii) On July 28, 2000, Mr. Seccafico contributed his 100% ownership
interest in Pathfinder Business Resources International Group, Inc. to us as a
capital contribution and he did not receive any additional shares for such
contribution.
(iv) We maintain approximately 200 square feet of office space at 33
Eleventh Avenue, Huntington Station, New York 11746 pursuant to a rent-free
month-to-month arrangement with our Chief Executive Officer. Upon completion of
this offering, we intend to either pay rent based upon the fair value of the
space and services utilized by us as determined by our independent member(s) of
the board of directors or seek to lease approximately 500 square feet of office
space in or around the area where we are currently located to utilize as our
offices.
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<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
We have 20,000,000 shares of authorized common stock, $.001 par value.
Immediately prior to the offering, 5,150,000 shares of common stock were issued
and outstanding.
Holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Stockholders do not
have non-cumulative voting rights. Subject to preferences that may be applicable
to any then outstanding preferred stock, holders of our common stock are
entitled to receive ratably such dividends as may be declared from time to time
by the board of directors out of funds legally available therefor. In the event
of a dissolution, liquidation or winding-up, holders of our common stock are
entitled to share ratably in all assets remaining after payment of liabilities
and the liquidation preference of any then outstanding preferred stock. Holders
of our common stock have no right to convert their common stock into any other
securities. The common stock has no preemptive or other subscription rights.
There are no redemption or sinking fund provisions applicable to the common
stock. All outstanding shares of our common stock are, and the common stock to
be outstanding upon completion of the offering will be, duly authorized, validly
issued, fully paid and nonassessable.
PREFERRED STOCK
The certificate of incorporation provides our board of directors with
the authority, without further action by the stockholders, to issue up to
1,000,000 shares of preferred stock, $.001 par value, in one or more series and
to fix the rights, preferences, privileges and restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences and the number of shares constituting any series or the
designation of such series. The issuance of preferred stock could adversely
affect the voting power of holders of common stock and could have the effect of
delaying, deferring or preventing a change in control of us. We have no present
plans to issue any shares of preferred stock, except for our outstanding 780,000
shares of series A preferred stock which will automatically convert into a total
of 624,000 shares of our common stock upon the completion of the offering.
Before the offering, the holders of the series A Preferred Stock currently has
the following rights, preferences and privileges:
Dividends. Each share of series A preferred stock is entitled to
cumulative annual dividends of $.06 (i.e. 6% of the liquidation preference)
payable on the last business day of April of each year commencing April 2001
with a record date to be fixed annually by our Board of Directors. The first
dividend payment shall be pro rated for the period from the date of issuance
until December 31, 2000. Unpaid dividends will accumulate and be payable before
payment of dividends on the common stock.
Conversion Features. Upon the completion of the offering, each
outstanding share of series A preferred stock shall automatically convert into
0.8 of a share of common stock. No fractional shares shall be issued upon
conversion of the series A preferred stock and all amounts will be rounded to
the nearest whole share. At the time of conversion, accrued and unpaid dividends
must be paid within ten business days of the conversion date.
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<PAGE>
Redemption Rights. Commencing January 1, 2001, the series A preferred
stock is redeemable at $1.25 per share plus accrued and unpaid dividends,
subject to the holder's right to convert the series A preferred stock into
common stock at any time up to the close of business on the day preceding the
redemption date.
Voting Rights. Preferred shares are not entitled to vote, except as
otherwise provided by the New York Corporation Law.
Preference on Liquidation. Each share of series A preferred stock will
be entitled to a preference on liquidation equal to $1.00 per share plus accrued
and unpaid dividends.
Non-Transferable. The shares of series A preferred stock are subject to
restrictions on transferability and resale and may not be transferred or sold
except in compliance with applicable federal and state securities laws. In the
event that we complete the offering, the investors' shares of common stock
issuable upon conversion of the series A preferred stock have been registered
for sale as described herein under "Selling Security Holders," subject to the
limitation that each selling security holder may only sell an amount equal to up
to 10% of his common stock ownership during the first 150 days after the date of
this prospectus and the remaining shares may be sold at any time thereafter so
long as there is a current prospectus.
The conversion ratio, redemption rights and liquidation preference are
subject to adjustment by the Board of Directors due to stock splits, stock
dividends, combinations, recapitalizations and the like.
UNDERWRITER'S WARRANTS
In connection with the offering, we have agreed to sell to the
underwriter, for a purchase price of $.001 per warrant, the underwriter's
warrants, which entitle the holders to purchase one share of our common stock
for each ten shares sold in the offering at an exercise price of $3.00 per
share. The underwriter's warrants are exercisable for a period of five years
from the date of this prospectus.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is Continental
Stock Transfer & Trust Company, Two Broadway, 19th Floor, New York, NY 10004.
"PENNY STOCK" REGULATIONS
The SEC has adopted penny stock regulations which apply to securities
traded over-the- counter. These regulations generally define penny stock to be
any equity security that has a market price of less than $5.00 per share or an
equity security of an issuer with net tangible assets of less than $5,000,000 as
indicated in audited financial statements, if the corporation has been in
continuous operations for less than three years. Subject to certain limited
exceptions, the rules for any transaction involving a penny stock require the
delivery, prior to the transaction, of a risk disclosure document prepared by
the SEC that contains certain information describing the nature and level of
risk associated with investments in the penny stock market. The broker-dealer
also must
28
<PAGE>
disclose the commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Monthly account
statements must be sent by the broker-dealer disclosing the estimated market
value of each penny stock held in the account or indicating that the estimated
market value cannot be determined because of the unavailability of firm quotes.
In addition, the rules impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and institutional accredited investors (generally institutions with
assets in excess of $5,000,000). These practices require that, prior to the
purchase, the broker-dealer determined that transactions in penny stocks were
suitable for the purchaser and obtained the purchaser's written consent to the
transaction. The aforementioned regulations apply to the sale of shares of our
common stock at $2.50 per share in this offering since our common stock will be
deemed a penny stock. If a market for our common stock does develop after the
offering and our shares trade below $5.00 per share after the offering, it will
continue to be a penny stock. Consequently, the penny stock rules will likely
restrict the ability of broker-dealers to sell the shares and will likely affect
the ability of purchasers in the offering to sell our shares in the secondary
market.
SHARES ELIGIBLE FOR FUTURE SALE
There will be between 5,874,000 and 6,074,000 shares of our common
stock outstanding after the offering. The exact number will depend upon the
number of shares sold in the offering. After the offering, a total of 5,150,000
shares are restricted securities as that term is defined by Rule 144 of the
Securities Act of 1933. These shares may be sold commencing 90 days after the
date of this prospectus without registration under the Securities Act of 1933 to
the extent permitted by Rule 144 of the Act. Pursuant to Rule 144 as currently
in effect, a stockholder, including an affiliate, who has beneficially owned his
or her restricted shares for at least one year from the date they were acquired
from us or an affiliate of us may sell, within any three-month period, a number
of such shares that does not exceed certain volume restrictions, provided that
certain requirements concerning availability of public information, manner of
sale and notice of sale are satisfied. In addition, under Rule 144(k), if a
period of at least two years has elapsed from the date any restricted shares
were acquired from us or an affiliate, a stockholder that is not an affiliate of
us at the time of sale and that has not been an affiliate for at least three
months prior to the sale is entitled to sell those shares without compliance
with the requirements of Rule 144 set forth above. An affiliate of us, however,
must comply with the volume restrictions and the other requirements referred to
above. As defined in Rule 144, an affiliate of an issuer is a person who,
directly or indirectly, through one or more intermediaries controls or is
controlled by, or is common control with, such issuer. The possible or actual
future sales of our common stock pursuant to Rule 144 or by the selling security
holders named herein may negatively impact the market price for our common
stock.
If a market for our common stock should develop in the future, the
market price of our common stock could drop as a result of sales of a large
number of shares of common stock in the market after the offering, or the
perception that such sales could occur. These factors also could make it more
difficult for us to raise funds through future offerings of common stock.
29
<PAGE>
UNDERWRITING
Creative Capital Management Corp., as underwriter of the offering, has
agreed to offer the shares to the public, as agent for us. The shares are
offered by us on a "best efforts 100,000 shares minimum, 300,000 shares maximum"
basis, subject to prior sale, when, as and if received and accepted by it,
subject to approval of certain legal matters by counsel for us and the
underwriter, and subject to certain other conditions. The underwriter and us
reserve the right to withdraw, cancel or modify the offering and to reject any
order in whole or in part.
The offering period will terminate on _______, 2001 unless extended by
us and the underwriter for an additional 60-day period until the close of
business on _________, 2001. If at least 100,000 shares are sold, we may have an
initial closing on the sale of such shares and continue offering the balance of
the shares through the end of the offering period unless the offering is earlier
terminated by us and the underwriter. We will have one or more additional
closings on the sale of any additional shares. Until the closing on the sale of
100,000 shares, the proceeds from the sale of shares will be held in an escrow
account with Continental Stock Transfer & Trust Company, Two Broadway, 19th
Floor, New York, NY 10004. All checks shall be made payable to "Continental
Stock Transfer & Trust Company f/b/o Pathfinder Business Resources." If at least
100,000 are not sold during the offering period, all funds received will be
promptly repaid in full without interest thereon or deduction therefrom. Prior
to the initial closing, the escrow agent will confirm that at least 100,000
shares have been sold, and cash or cleared funds have been received in full
payment for the purchase of the shares before releasing the funds from escrow.
We have agreed to pay the underwriter a commission of 10% of the price
of the shares sold ($.25 per share) upon the closing. The underwriter may
authorize selected securities brokers who are members of the National
Association of Securities Dealers, Inc. to offer the shares for sale and allow a
concession to them. Such dealers may reallow to other members. In any event,
such concessions and reallowances will not exceed the commission the underwriter
is to receive.
We have agreed to enter into a one-year consulting agreement with the
underwriter. Such agreement provides that the underwriter will render consulting
services to us. The aggregate fee due to the underwriter for such consulting
services will be an amount equal to two (2%) percent of the gross proceeds of
the offering and shall be paid in full upon the closing date of the offering.
The underwriting agreement provides that we will pay to the underwriter
a non-accountable expense allowance of three percent (3%) of the proceeds of
this offering (or $7,500 to the underwriter if the minimum is sold and $15,000
if the maximum is sold), which amount will be used to reimburse the underwriter
for its expenses, including fees and disbursements of counsel and such other due
diligence and customary expenses as are normally incurred by an underwriter. A
total of $______ has been paid toward this expense allowance.
In addition to the underwriter's commissions, non-accountable expense
allowance and financial consulting fee, we are required to pay the costs of
qualifying this offering under federal and state securities laws, together with
legal and accounting fees, printing and other costs in connection with this
offering, estimated to total approximately $146,000.
30
<PAGE>
We and the underwriter have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933. To
the extent that the underwriting agreement may purport to provide exculpation
from possible liabilities arising under the federal securities laws, it is the
opinion of the Securities and Exchange Commission that such indemnification is
contrary to public policy and therefore unenforceable.
Subject to the sale of the minimum number of shares offered hereby and
closing of this offering, we have agreed to sell to the underwriter, for a
nominal consideration, warrants to acquire one share of common stock for each
ten shares sold in he offering, or a total of 10,000 shares of common stock if
the minimum is sold, and 30,000 shares if the maximum is sold. The underwriter's
warrants are exercisable at a price of $3.00 per share and for a period of five
years commencing on the date of this prospectus. Each of the underwriter's
warrants shall represent the right to purchase one share of our common stock.
The underwriter's warrants may not be sold, assigned, transferred,
pledged, hypothecated or delivered except to officers of the underwriter,
selected dealers and their officers and/or partners, for a period of twelve
months from the date of this prospectus, and, in no event will such
underwriter's warrants (or the underlying shares of common stock issuable upon
exercise thereof) be offered or sold except in compliance with the Securities
Act of 1933. Accordingly, no public offering of the underwriter's warrants or
the underlying shares will be made until a new registration statement or
post-effective amendment to this registration statement covering the
underwriter's warrants or underlying shares has become effective. The
underwriter's warrants provide for certain registration rights for the
underwriter's warrants and/or underlying shares thereof. Such registration
rights may be exercised at any time during the four-year period commencing one
year after the date of this prospectus upon written request of the holders of
not less than 50% of the underwriter's warrants or underlying shares. In no
event shall we bear the expense of registration of the underwriter's warrants
and underlying shares more than once for any registration initiated by the
holders of the underwriter's warrants. Under certain conditions, we may also be
required to include, at our sole expense, the underwriter's warrants or
underlying shares in any post-effective amendment to the registration statement
and any other registration statement (except on Form S-8 or any other
inappropriate form) filed by us, occurring during the four-year period
commencing one year from the date of this prospectus. Any profits realized by
the underwriter upon the sale of the underwriter's warrants or the underlying
shares may be deemed to be additional compensation.
The underwriter's warrants contain anti-dilution provisions regarding
certain events, including but not limited to, stock dividends, split-ups, and
reclassifications. Holders of the underwriter's warrants will have no voting
power and will not be entitled to any dividends. In the event of our dissolution
or winding up, the holders of the underwriter's warrants will not be entitled to
any dividends. In the event of any dissolution or winding up, the holders of the
underwriter's warrants will not be entitled to participate in a distribution of
our assets. For the life of the underwriter's warrants, the underwriter is
given, at a nominal cost, the opportunity to profit from a rise in the market
price of the common stock with a resulting dilution in the interest of existing
security holders. The terms upon which we could obtain additional capital during
that period may be adversely affected. The underwriter might be expected to
exercise the underwriter's warrants at a time when we would, in all likelihood,
be able to obtain any needed capital by a new offering of securities on terms
more favorable than those provided for by the underwriter's warrants.
31
<PAGE>
Arbitrary public offering price
Our initial public offering price for our shares of common stock was
arbitrarily determined through negotiations between the underwriter and us. Our
initial public offering price is not necessarily related to our assets, book
value or other established criterion of value and is not indicative of the price
at which it may trade in the future.
SELLING SECURITY HOLDERS
This prospectus includes the sale of up to 624,000 shares of our common
stock by the nine selling security holders named in the table below. The
aforesaid 624,000 shares are issuable automatically upon completion of this
offering upon conversion of outstanding shares of series A preferred stock,
which were purchased from us between December 1999 and March 2000 pursuant to
Rule 506 of the Securities Act of 1933, as amended. None of the nine selling
security holders have any pre-investment affiliation or association with us, our
officers, directors and/or affiliated persons. Sales, or even the potential for
sales, of all or a portion of the 624,000 shares of common stock to be offered
by selling security holders may have an adverse effect on the market price of
the shares offered hereby in the event that a public market develops for our
common stock. The following table sets forth the beneficial ownership of our
common stock held by the selling security holders prior to the offering and
after the offering, and the percentage of ownership held by each of them. All
addresses are c/o Pathfinder Business Resources, Inc., 33 Eleventh Avenue,
Huntington Station, NY 11746. The percentages owned prior to the offering assume
that the shares of common stock into which the series A preferred stock shall
automatically convert on the closing date of our initial public offering were
outstanding prior to the offering.
<TABLE>
<CAPTION>
Common Stock Percentage of Common
Owned Stock Owned %
-------------------------- -------------------------
Prior to After Prior to After
Name and Address of Beneficial Owner Offering Offering Offering Offering
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Moshe and Cheryl Lifshitz 288,000 -0- 4.9 -0-
Jeffrey Barnes 24,000 -0- .4 -0-
Lennart Dahlgren 72,000 -0- 1.2 -0-
Joseph Acosta 8,000 -0- .1 -0-
Samuel & Stella Skura 32,000 -0- .6 -0-
Clarin Howe 56,000 -0- 1.0 -0-
John D. Hodel 88,000 -0- 1.5 -0-
Trung Vo 16,000 -0- .3 -0-
Pavlik Investments LLC 40,000 -0- .7 -0-
----------------------------------------------------------------------------------------------------------
</TABLE>
Each selling security holder named in the table above has entered into
an agreement with us that the selling security holder may sell an amount equal
to up to 10% of his common stock ownership during the first 150 days after the
date of this prospectus and the balance at any time thereafter so long as there
is a current prospectus.
32
<PAGE>
The selling security holders have advised us that their shares may be
sold from time to time in one or more transactions, which may involve
transactions in the over-the-counter market or in privately negotiated
transactions. Sales may be affected at market prices prevailing at the time of
sale, at prices related to market prices or at negotiated prices. In the event
that sales take place in the over-the-counter market, the selling security
holders have agreed to sell the shares, on an agency basis, through Creative
Capital Management Corp. or another broker-dealer approved or selected by us.
Such broker-dealer may receive compensation in the from of commissions from
selling security holders at its normal commission rate, which would not exceed
the maximum amount permitted by the NASD guidelines and in no event more than 5%
of the gross proceeds of the sale. Broker- dealers participating in the
distribution of the shares may be deemed to be underwriters under the Securities
Act of 1933, as amended, and any commissions received by the broker-dealers and
any profit on the sale of the shares may be deemed underwriting compensation
under the Securities Act. The selling security holders have been advised that
Regulation M of the Securities Exchange Act of 1934, as amended, will apply to
them, that the rules and regulations contained thereunder have various
prohibitions against trading by persons interested in a distribution of
securities and against so-called "stabilization" activities. The sale by the
selling security holders of shares will constitute a distribution of securities.
Among these prohibitions is the prohibition which in effect states that it is
unlawful for the selling security holders, either alone or with other, to bid or
purchase, for any account in which they have beneficial interest, any of our
securities or to attempt to induce any person to purchase our securities until
after the selling security holders have completed the sale of shares.
LEGAL MATTERS
The validity of the sale of common stock in this offering will be
passed upon for us by Lester Morse P.C., Suite 420, 111 Great Neck Road, Great
Neck, NY 11021. Certain legal matters will be passed upon for the underwriter by
Joseph L. Pittera, Esq. Lester Morse P.C. has in the past represented the
underwriter in connection with matters unrelated to the offering.
EXPERTS
Our consolidated financial statements and the separate financial
statements of Pathfinder International Group, Inc., appearing in this
prospectus, have been audited by Baron & Baron, independent auditors, 250 West
57th Street, Suite 724, New York, NY 10019 and are included herein in reliance
upon the authority of said firm as experts in auditing and accounting.
33
<PAGE>
PATHFINDER
BUSINESS RESOURCES, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
JULY 31, 2000
<PAGE>
PATHFINDER BUSINESS RESOURCES, INC.
TABLE OF CONTENTS
DECEMBER 1, 1999 (INCEPTION) TO JULY 31, 2000
Page
----
Independent Auditors' Report 1
Consolidated Balance Sheet 2
Consolidated Statement of Operations 3
Consolidated Statement of Stockholders' Equity 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6-9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Pathfinder Business Resources, Inc.
Huntington Station, New York
We have audited the accompanying consolidated balance sheet of Pathfinder
Business Resources, Inc. as of July 31, 2000 and the related consolidated
statements of operations, stockholders' equity and cash flows for the period
from December 1, 1999 (inception) to July 31, 2000. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Pathfinder Business
Resources, Inc. as of July 31, 2000 and the results of their operations and
their cash flows for the period from December 1, 1999 (inception) to July 31,
2000, in conformity with generally accepted accounting principles.
/s/ Baron & Baron
New York, NY
August 18, 2000
<PAGE>
Page 2
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED BALANCE SHEET
JULY 31, 2000
A S S E T S
<TABLE>
<S> <C>
Current assets:
Cash and cash equivalents $ 449,854
Other assets 10,000
Organization costs 12,650
---------
$ 472,504
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 750
---------
Commitments and contingencies
Stockholders' equity:
Common stock, .001 par value 20,000,000 shares
authorized; 5,150,000 issued and outstanding $ 5,150
Preferred stock, series A, .001 par value 1,000,000
shares authorized; and 780,000 shares issued
and outstanding 780
Paid-in capital 587,380
Accumulated deficit (121,556)
---------
471,754
---------
$ 472,504
=========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
Page 3
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
Revenues $ --
----------
Expenses:
Director's fees $ 42,000
Professional and consulting fees 38,953
Insurance 3,828
Computer costs 22,500
Other operating expenses 1,680
----------
108,961
----------
Loss from operations (108,961)
Other income (expenses) (12,595)
----------
Net loss $ (121,556)
==========
Basic net loss per share $ (0.02)
==========
Shares used in computing basic net loss per share $5,150,000
==========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
Page 4
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO JULY 31, 2000
<TABLE>
<CAPTION>
Common Preferred Paid-in Accumulated
Total stock stock capital deficit
---------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Inception, December 1, 1999 $ -- $ -- $ -- $ -- $ --
Issuance of common stock 12,650 5,150 -- 7,500 --
Issuance of preferred stock 580,660 -- 780 579,880 --
Net loss (121,556) -- -- -- (121,556)
-------- ------ ---- -------- ---------
July 31, 2000 $471,754 $5,150 $780 $587,380 $ 121,556)
======== ====== ==== ======== =========
</TABLE>
The accompanying notes are an integral part
of consolidated the financial statements.
<PAGE>
Page 5
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $(121,556)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
Other assets (10,000)
Organization costs (12,650)
Accounts payable 750
---------
Net cash used by operating activities (143,456)
---------
Cash flows from financing activities:
Issuance of common stock 12,650
Issuance of preferred stock, net 580,660
---------
Net cash provided by financing activities 593,310
---------
Net increase in cash and cash equivalents 449,854
Cash and cash equivalents, beginning of period --
---------
Cash and cash equivalents, end of period $ 449,854
=========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
Page 6
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
1. Organization:
Pathfinder Business Resources, Inc., formerly named 800 Pet.Com, Inc. (the
"Company") was incorporated in the State of New York on December 1, 1999.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary.
The Company's main objective is to provide business development and
management consulting services to small and medium sized companies.
2. Development stage enterprise:
The Company is in the process of developing a new business which will
provide business development and management consulting services to small
and medium sized corporations.
At July 31, 2000, the Company has spent $108,961 to develop this
enterprise.
3. Summary of significant accounting policies:
a. Cash and cash equivalents:
Cash and cash equivalents include time deposits, certificates of
deposit and all highly liquid debt instruments with original
maturities of three months or less.
b. Property and equipment:
Property and equipment are stated at cost. Depreciation is computed
over the useful lives of the assets using the straight-line method.
Leasehold improvements are amortized over the remaining lease term.
Expenditures for repairs and maintenance are charged to operations in
the period incurred.
c. Income taxes:
The provision for income taxes is computed on the pre-tax income of
the Company. Deferred taxes result from the future tax consequences
associated with temporary differences between the amount of assets
and liabilities recorded for tax and financial accounting purposes.
<PAGE>
Page 7
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
3. Summary of significant accounting policies: (Continued)
d. Inventories:
Inventories are stated at the lower of cost (first-in, first-out) or
market.
e. Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
f. Concentrations of credit risk:
The Company routinely extends credit for the sale of its merchandise.
This credit risk may be affected by changes in economic or other
conditions and may, accordingly, impact the Company's overall credit
risk. Management believes that the credit risk is mitigated by the
strict credit evaluation of those customers to which it extends
credit. Reserves for potential credit losses are maintained and such
losses have been immaterial to the Company's financial position and
within management's expectations.
g. Advertising:
The Company expenses advertising costs when incurred.
h. Start-up costs:
The Company expensed all start-up costs associated with the
development of its retail on- line website (note 2).
i. Earnings per share:
The computation of earnings per share is based on the average number
of outstanding common shares.
<PAGE>
Page 8
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
4. Stockholders' equity:
Preferred stock - series A:
At July 31, 2000, the Company has 1,000,000 shares authorized to be issued
as preferred stock. At that date, 780,000 shares are issued and
outstanding.
The preferred stock has the following characteristics:
Dividends - Cumulative annual dividends at a rate of $.06 per
share. The first dividend shall be pro-rated for the
period from issuance until December 31, 2000.
Conversion features - Each preferred share is convertible into common
stock at a one for one conversion.
Liquidation rights - $1.00 per share, plus accrued and unpaid dividends.
Redemption rights - $1.25 per share, beginning January 1, 2001,
subject to preferred stockholders conversion
features.
5. Stock options:
The Company has established a stock option plan covering 400,000 shares of
common stock. The options can be granted by the Board of Directors. The
Plan provides that all options granted will be exercisable during a period
not to exceed ten years.
At July 31, 2000, no stock options have been granted.
<PAGE>
Page 8
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
6. Net loss per share:
The Company follows the provisions of Statement of Financial Accounting
Standards No. 128, earnings per share (SFAS 128).
The following table presents the calculation.
<TABLE>
<CAPTION>
<S> <C>
Net loss $ (121,556)
===========
Basic:
Weighted average shares of
common stock outstanding 5,150,000
===========
Basic net loss per share $ (.02)
===========
Pro forma:
Shares used above 5,150,000
Pro forma adjustment to reflect
weighted effect of assumed
conversion of preferred stock 780,000
-----------
Shares used in computing pro forma
basic net loss per share 5,930,000
===========
Pro forma basic net loss per share $ (.02)
===========
</TABLE>
7. Business combinations:
Effective July 28, 2000, the Company's president contributed 100% of the
outstanding stock of Pathfinder International Group, Inc., a developer of
business resources to the Company. At July 28, 2000, this company had no
assets or liabilities and the acquisition of this entity cost the Company
$-0-.
<PAGE>
Page 9
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
7. Business combinations: (Continued)
The unaudited pro forma combined results of operations for the period
ended July 31, 2000 are as follows:
Revenues $ 179,106
---------
Operating loss $(108,961)
---------
Net loss $(121,556)
---------
Basic net loss per share $ (0.02)
---------
The unaudited pro forma results are not necessarily indicative of the
actual results of operations that would have occurred had the acquisition
occurred on December 1, 1999 or of future results.
<PAGE>
================================================================================
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful. The information in this
prospectus is current as of _________, 2000.
Until , 2001 (90 days after the date of this prospectus), all dealers that
buy , sell or trade these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
================================================================================
300,000 SHARES
PATHFINDER BUSINESS
RESOURCES, INC.
PROSPECTUS
CREATIVE CAPITAL
MANAGEMENT CORP.
____________, 2000
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Business Corporation Law of the State of New York provides for
indemnification of officers and directors under certain circumstances against
reasonable expenses, including attorney fees, actually and necessarily incurred
in connection with the defense of an action brought against him by reason of his
being a director or officer. The Registrant's Certificate of Incorporation
provides that the Registrant shall, to the fullest extent permitted by Article 7
of the Business Corporation Law, as the same may be amended and supplemented,
indemnify any and all persons whom it shall have power to indemnify under said
Article from and against any and all of the expenses, liabilities, or other
matters referred to in or covered by said Article, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
any person may be entitled under any By-Law, resolution of shareholders,
resolution of directors, agreement, or otherwise, as permitted by said Article,
as to action in any capacity in which he served at the request of the
corporation.
The Certificate of Incorporation also contains a provision eliminating
the liability of a director to the Registrants or its stockholders for monetary
damages for any breach of duty in such capacity, provided that this provision
shall not eliminate or limit liability of any director if a judgment or other
final adjudication adverse to him establishes that his acts or omissions were
made in bad faith or involved intentional misconduct or a knowing violation of
law or that he personally gained in fact a financial profit or other advantage
to which he was not legally entitled or that his acts violated Section 719 of
the New York Business Corporation Law.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering, other than
underwriting commissions, non-accountable expense allowance and financial
consulting fee are being paid by the Registrant and are as follows:
<TABLE>
<S> <C>
SEC filing fees............................... $ 667.20
NASD fees..................................... 740.01
Escrow and transfer agent fees................ 7,500.00
Accounting fees and expenses.................. 15,000.00*
Legal fees.................................... 60,000.00
Blue Sky fees and expenses.................... 30,000.00*
Edgar charges, printing and engraving......... 25,000.00*
Miscellaneous expenses........................ 7,092.79
-----------
TOTAL.......... $146,000.00
===========
<FN>
----------
* Estimated
</FN>
</TABLE>
II-1
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The following shares of unregistered securities have been issued by the
Registrant since its incorporation on December 1, 1999 under the laws of the
State of New York.
(i) In December 1999, the Registrant sold 5,000,000 shares of its
common stock and 150,000 shares of its common stock to Nicholas J. Seccafico,
Jr. and Alan Ghidaleson, respectively, at a purchase price of .001 per share.
Mr. Seccafico also contributed $7,500 to paid- in capital for which he did not
receive any additional shares. Exemption is claimed under Section 4(2) of the
Securities Act of 1933, as amended, inasmuch as the transactions did not involve
a public offering within the meaning of Section 4(2) of the Act. All purchasers
were directors of the Registrant and were afforded access to information and had
knowledge and experience in financial and business matters that they were
capable of evaluation of the merits and risks of such investment and were able
to bear the economic risk thereof. All stock certificates were legended with an
appropriate restrictive legend.
(ii) Between December 27, 1999 and March 6, 2000, the Registrant sold
780,000 shares of its series A preferred stock to the persons named below:
<TABLE>
<CAPTION>
Date of Number Dollar Amount
Investment Name of Shares Invested
---------- ------------- --------- -------------
<S> <C> <C> <C>
12/27/99 Cheryl & Moshe Lifshitz 66,000 $ 66,000
12/27/99 Cheryl & Moshe Lifshitz 174,000 174,000
12/27/99 Cheryl & Moshe Lifshitz 60,000 60,000
01/21/00 Lennart Dahlgren 25,000 25,000
01/21/00 Jeff M. Barnes 30,000 30,000
01/21/00 John D. Hodel 10,000 10,000
02/11/00 Lennart Dahlgren 25,000 25,000
02/11/00 Samuel & Stella Skura 40,000 40,000
02/11/00 Cheryl & Moshe Lifshitz 60,000 60,000
02/11/00 Joseph Acosta 10,000 10,000
02/11/00 Clarin F. Howe 10,000 10,000
02/24/00 Trung Vo 20,000 20,000
02/28/00 Lennart Dahlgren 40,000 40,000
02/29/00 Clarin F. Howe 60,000 60,000
03/06/00 John D. Hodel 66,000 66,000
03/06/00 Pavlik Investments LLC 50,000 50,000
03/06/00 John D. Hodel 34,000 34,000
</TABLE>
Exemption is claimed for the aforesaid sales under Rule 506 promulgated under
Section 4(2) of the Securities Act of 1933, as amended, inasmuch as the
transactions did not involve a public offering within the meaning of Section
4(2) of the Act. A Form D was filed with the Securities
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<PAGE>
and Exchange Commission in December 1999 and amended twice in February 2000. All
investors were accredited investors within the meaning of Rule 501 of the Act.
All stock certificates were legended with an appropriate restrictive legend.
ITEM 27. EXHIBITS.
All Exhibits have been previously filed herewith unless otherwise
noted.
Exhibit 1.0 Underwriting Agreement*
1.1 Financial Consulting Agreement*
1.2 Escrow Agreement*
3.0 Certificate of Incorporation*
3.1 First Certificate of Amendment*
3.2 Second Certificate of Amendment*
3.3 By-Laws*
4.0 Specimen of Common Stock**
4.1 Form of Underwriter's Warrant*
5.0 Opinion of Lester Morse P.C.**
23.0 Consent of Baron & Baron*
23.1 Consent of Lester Morse P.C. (included in Exhibit 5.0)*
27.0 Selected Financial Data*
99.0 Stock Option Plan*
99.1 Form of Selling Security Holder Representation Letter*
-------------
* Filed herewith.
** Filed by amendment.
ITEM 28. UNDERTAKINGS.
(a) Rule 415 Offering
Pathfinder Business Resources will:
1. File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which, individually
or in the aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) Include any additional or changed material information on the plan
of distribution;
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<PAGE>
2. For determining liability under the Securities Act, treat each such
post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering.
3. File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) Equity Offerings of Nonreporting Small Business Issuers
The Registrant will provide to the Underwriter at the closing specified in
the Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriter to permit prompt delivery to each
purchaser.
(c) Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the provisions referred to in Item 24 of this
Registration Statement 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 Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suite 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 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.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form SB-2, and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Huntington Station, State of New York, on this 25th day of September,
2000.
PATHFINDER BUSINESS RESOURCES, INC.
By: /s/ Nicholas J. Seccafico, Jr.
------------------------------
President and Chief
Executive Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Nicholas J. Seccafico, Jr. President, Chief Executive September 25, 2000
------------------------------ Officer, Treasurer, Director
Nicholas J. Seccafico, Jr.
/s/ Otto Weber Director September 25, 2000
------------------------------
Otto Weber
</TABLE>
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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
EXHIBITS
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------
PATHFINDER BUSINESS
RESOURCES, INC.
<PAGE>
EXHIBIT INDEX
Exhibit 1.0 Underwriting Agreement*
1.1 Financial Consulting Agreement*
1.2 Escrow Agreement*
3.0 Certificate of Incorporation*
3.1 First Certificate of Amendment*
3.2 Second Certificate of Amendment*
3.3 By-Laws*
4.0 Specimen of Common Stock**
4.1 Form of Underwriter's Warrant*
5.0 Opinion of Lester Morse P.C.**
23.0 Consent of Baron & Baron*
23.1 Consent of Lester Morse P.C. (included in Exhibit 5.0)*
27.0 Selected Financial Data*
99.0 Stock Option Plan*
99.1 Form of Selling Security Holder Representation Letter*
-------------
* Filed herewith.
** Filed by amendment.
