<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 2001
REGISTRATION NO.333-46544
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------
PATHFINDER BUSINESS RESOURCES, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 7390 11-3521230
-------- ---- ----------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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) 421-8494
FAX (631) 423-2220
(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 (Fax)
<PAGE> 2
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. [ ]
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
TITLE OF SECURITIES TO BE AMOUNT TO BE PRICE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
---------- ---------- ------------ -------- --------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share 300,000 $2.50 $ 750,000 $ 198.00(4)
Common Stock, par value
$.001 per share (2) 624,000 2.50 1,560,000 411.84(4)
Common Stock, par value
$.001 per share(2) 156,200 2.50 390,000 97.50(5)
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 3.75 112,500 29.39(6)
--------
Total Registration Fee $ 736.73(7)
========
</TABLE>
-------------
(1) Estimated solely for purposes of calculating the 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).
(4) Calculated by multiplying the proposed maximum aggregate offering price by
$.000264.
(5) Calculated by multiplying the proposed maximum aggregate offering price by
$.000250.
(6) $90,000 of the fee calculated at $.000264 and $22,500 calculated at
$.000250.
(7) Previously paid $667.20, $69.53 paid with this filing.
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.
<PAGE> 3
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 JANUARY 12, 2001
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. on a "best efforts" basis. If a
minimum number of 100,000 shares is not sold, all monies will be promptly
returned to investors without interest or deduction therefrom. The offering
period will expire on March 15, 2001 and it may be extended by us until May 15,
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 Alexander
Securities, Inc., 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. BEFORE YOU DECIDE TO INVEST IN OUR COMMON
STOCK, CAREFULLY READ THE PROSPECTUS, ESPECIALLY THE RISK FACTORS BEGINNING ON
PAGE 6.
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.
<TABLE>
<CAPTION>
===================================================================================================================
Proceeds to
Price to Underwriting Pathfinder Business
Public Commissions Resources
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $2.50 $.25 $2.25
-------------------------------------------------------------------------------------------------------------------
Minimum $250,000 $25,000 $ 225,000
-------------------------------------------------------------------------------------------------------------------
Maximum $750,000 $75,000 $ 675,000
===================================================================================================================
</TABLE>
Under this prospectus, the nine selling security holders named herein
are offering to sell up to 780,000 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 JANUARY __, 2001
<PAGE> 4
TABLE OF CONTENTS
Page
----
Prospectus Summary .....................................................
Summary Financial Data .................................................
Risk Factors ...........................................................
Forward Looking Statement ..............................................
Use of Proceeds ........................................................
Dividend Policy ........................................................
Dilution ...............................................................
Capitalization .........................................................
Management's Discussion and Analysis
of Financial Condition and Results
of Operations........................................................
Business................................................................
Management..............................................................
Principal Stockholders..................................................
Certain Transactions....................................................
Description of Securities...............................................
Shares Eligible for Future Sale.........................................
Plan of Distribution....................................................
Selling Security Holders................................................
Legal Matters...........................................................
Experts.................................................................
Financial Statements....................................................
<PAGE> 5
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
Overview
--------
Pathfinder Business Resources, Inc., formerly named 800Pet.Com, Inc.,
is a New York development stage holding corporation. Through our ownership of a
wholly-owned operating subsidiary, Pathfinder International Group, Inc., we make
available business and management consulting services to small and medium-sized
companies primarily through the services of our chief executive officer and the
use of a limited number of retired business executives not employed by us. These
executives are obtained by us through an independent company which has a
database of approximately 10,000 persons, any of whom could be made available to
provide to us the types of services needed on a project by project basis.Most
projects are anticipated to require the services of between three and five
consultants. Pursuant to oral arrangement, we pay the independent database
company for providing the services of the consultants. From our inception
through October 31, 2000, we have completed four projects realizing revenues of
$179,106 and used the services of eight different independent consultants who
are paid directly by the database company.
We are currently engaged in targeting and soliciting potential business
opportunities through the use of direct mailings and client referrals. Although
we currently have no backlog or pending new projects as of December 31, 2000, we
have had discussions with several anticipated new clients with respect to
potential business opportunities. We have no active consultants except when
projects are ongoing. The purpose of this offering is to raise additional monies
to finance our operations and to become a reporting company under the Exchange
Act of 1934. Management believes that through proper public relations and sales
promotional efforts, we will be able to expand our client base and potential
revenues. Since our development stage, revenues have been limited and are
sporadic, we can provide no assurances that these marketing efforts will be
successful. Our executive offices are located at 33 Eleventh Avenue, Huntington
Station, New York 11746 and our phone number is (631) 421-8494.
Corporate History of Pathfinder
-------------------------------
Pathfinder International Group, our operating subsidiary, was
incorporated as a New York corporation on April 29, 1993 and it was an inactive
corporation prior to December 1, 1999. Pathfinder Business Resources, Inc. was
formed as a New York corporation under the name 800 Pet.com, Inc. on December 1,
1999. Between December 1999 and March 2000, we raised $780,000 in gross proceeds
from the sale of 780,000 shares of series A preferred stock to nine investors to
develop a website under 800 Pet.com and to sell pet supplies over the Internet.
Subsequent to the completion of this financing, our executive officers
determined that the competition in this area of business was too extensive for
us to successfully compete with our limited available working capital and we
discontinued these business efforts. Effective July 28, 2000, we acquired
Pathfinder International Group, Inc. from Mr. Nicholas J. Seccafico, Jr., one of
our founders, as a capital contribution by him and changed our name to
Pathfinder Business Resources, Inc.
3
<PAGE> 6
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
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 There will be between 5,874,000
shares (minimum) and 6,230,000
shares (maximum) after the offering
depending upon the number of shares
sold in the offering and the number
of shares issued upon the conversion
of the series A preferred stock.
Conversion rights of Series A
Preferred Stock At any time prior to the
closing of the minimum, each share
of series A preferred stock is
convertible, at the option of the
holder, into 1.0 share of common
stock. Upon the completion of the
minimum offering, each outstanding
share of series A preferred stock
automatically converts into 0.8
share of common stock.
Risk factors You should read the "Risk Factors"
section beginning on page 6, as
well as the other cautionary
statements throughout the entire
prospectus, so that you understand
the risks associated with an
investment in our stock.
</TABLE>
4
<PAGE> 7
SUMMARY FINANCIAL DATA
The summary financial data is derived from the historical audited
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 OCTOBER 31, 2000
----------------------------
STATEMENT OF OPERATIONAL DATA:
Revenues $ 179,106
Net (Loss) (219,230)
Basic Net (Loss) per common share (.04)
Weighted average number of shares 5,150,000
outstanding during the period
OCTOBER 31, 2000
----------------
BALANCE SHEET DATA:
Total Assets $378,130
Working Capital 377,380
Total Liabilities 750
Stockholders' Equity 377,380
5
<PAGE> 8
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 $377,380 at October 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. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
We are a development stage company, which makes it difficult to evaluate our
business and future prospects.
We were formed as a New York corporation on December 1, 1999 and we are
currently a development stage enterprise. We investigated the feasibility of
selling a limited number of select pet products over an Internet website
developed by us and determined that the competition in this area of business was
too extensive for us to successfully compete with our limited available working
capital and we discontinued these business efforts. Effective July 28, 2000, we
acquired Pathfinder International Group 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, was an inactive corporation between its
inception in 1993 through November 30, 2000 and has a limited history of
development stage operations since December 1, 1999. Our combined operations
will 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. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."
We have minimal consolidated revenues from prior operations and no assurances of
future profitable operations
During the period December 1, 1999 through October 31, 2000, we had
consolidated revenues from operations of $179,106 and a net loss of $219,230.
6
<PAGE> 9
We can provide no assurances that our operations will be profitable in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
We may not be able to recruit and retain new management personnel to replace
Nicholas J. Seccafico, our chief executive officer, should the need arise.
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., our chief
executive officer, 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.See "Management."
We may not be able to obtain as consultants experienced retired executives
needed for our consulting services. Our current arrangements with an independent
company could be terminated at any time by either party.
Our primary business is the delivery of professional services and is
highly labor intensive. Our future success depends on our ability to obtain
highly skilled professionals as consultants for our business. When a team of
professionals is needed for a new project, our chief executive officer, Mr.
Seccafico, contracts an independent company to hire a team of consultants who
have the industry background for the specific project. We pay the database
company to both provide the number of required skilled professionals on a
job-by-job basis and to directly pay the consultants through the database
company. No written agreements have been entered into with the database company
and these arrangements are subject to change or cancellation by either party at
any time without prior notice to the other. Any such change or cancellation of
these arrangements could result in us not being able to obtain the experienced
consultants needed for our operations. See "Business."
7
<PAGE> 10
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:
- specialized consulting firms;
- general management consulting firms;
- "Big 5" accounting and consulting firms;
- website development and design firms;
- specialized e-business consulting firms; and
- 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. See "Business."
We may need additional capital and may not be able to obtain it.
We believe that the proceeds from this offering if the minimum is sold
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, and respond
to anticipated requirements. We cannot assure you that additional financing will
be available if needed on terms favorable to us. See "Use of Proceeds."
Mr. Seccafico will have voting control of Pathfinder given his equity ownership
and be able to unilaterally approve the election of directors and corporate
transactions.
Following the offering, Nicholas J. Seccafico, Jr., an executive
officer, director and founder of Pathfinder, will own at least 66% of our
outstanding common stock. As a result thereof, Mr. Seccafico will have voting
control of Pathfinder given his equity ownership and will be in a position to
unilaterally approve the election of directors and corporate transactions. See
"Principal Stockholders."
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 J. Alexander Securities, Inc., 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.
8
<PAGE> 11
The possible sale of shares of common stock by our nine selling security holders
could have a significant adverse effect on the market price, if any, of our
common stock.
A maximum number of 780,000 shares of our common stock is issuable upon
conversion of our series A preferred stock. These shares of common stock have
been registered for sale on behalf of nine selling security holders with a range
of between 62,400 and 78,000 shares first becoming saleable during the 150 days
after the date of this prospectus and the remaining balance of between 561,000
and 702,000 shares first becoming saleable at any time thereafter so long as
there is a current prospectus. In the event a public market for our common stock
does develop, of which there can be no assurances, the possible sale of shares
of common stock by our selling security holders could have a significant adverse
effect on the market price of our common stock. See "Selling Security Holders."
Our public offering price, which was arbitrarily determined, is not based upon
any established criteria of value and is not indicative of the price at which it
may trade in the future.
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. See "Plan of Distribution.
One of our two directors is also an executive officer and majority shareholder,
which may lead to conflicts of interest with respect to decisions made by our
board of directors.
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.See "Management."
The consideration to be paid by the public for our common stock is substantially
higher than the consideration recently paid by our existing shareholders for
their common stock.
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
approximately $.14 per share previously paid by current common and preferred
stockholders. See "Dilution."
You will experience immediate and substantial dilution.
The initial public offering price of $2.50 per share is expected to be
substantially higher than our net tangible book value of each outstanding share
of our common stock. Purchasers of our common stock in this offering will suffer
immediate and substantial dilution. The dilution will be approximately $2.42 per
share, or 97% if the minimum number of shares is sold, in the net tangible book
value of the common stock from the initial offering price. The dilution will be
9
<PAGE> 12
approximately $2.36 per share, or 94% if the maximum number of shares is sold,
in the net tangible book value of the common stock from the initial offering
price. See "Dilution."
"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 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.
A substantial portion of the aggregate gross proceeds of our offering will be
used to pay various expenses and underwriter's fees relating to the offering.
The gross proceeds to be received from the sale of our shares will
range from between $250,000 (minimum) and $750,000 (maximum) with the exact
amount dependent upon the number of shares sold in the offering. We will pay
various expenses and underwriter's fees relating to the offering ranging from
$183,500 (minimum) which represents approximately 73% of the gross proceeds of
the offering to $258,500 (maximum) which represents approximately 34% of the
gross proceeds of the offering. See "Use of Proceeds."
If the minimum is not sold during the offering period, investors will be repaid
without interest or deduction therefrom.
Our offering period, which will commence on the date of this
prospectus, may extend until the close of business on May 15, 2001. During the
offering period, as extended, investors will not have the opportunity to request
a refund of their funds, unless state law dictates otherwise. Further, if the
minimum is not sold during the offering period, investors will be repaid without
interest or deduction therefrom. See "Plan of Distribution."
Our management will maintain broad discretion with respect to the use of the
offering proceeds.
The net proceeds of our offering have been primarily allocated to sales
and marketing, payment of series A preferred stock dividends and working
capital. 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 categories described in "Use of
Proceeds," use proceeds for other purposes, seek additional financing or curtail
our operations. Accordingly, management will maintain broad discretion with
respect to the use of the net offering proceeds. See "Use of Proceeds."
10
<PAGE> 13
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 anticipated net proceeds to be received by us from the sale of the
shares offered herein, after payment of estimated offering expenses, will be
approximately $66,500 if the minimum number of shares is sold and $491,500 if
the maximum number of shares is sold. The following table sets forth our
intended use of the net proceeds.
<TABLE>
<CAPTION>
Minimum Percentage Maximum Percentage
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Sales and marketing, including,
without limitation, advertising,
direct mail, brochures,
telemarketing and facsimile
transmissions $50,000 75% $220,500 45%
Hire additional business
manager, sales and office
personnel -0- ---- 136,000 28
Reimbursement ofselling
expenses, transportation,
travel and entertainment 5,000 8 35,000 7
Payment of series A
preferred stock dividends -0- ---- 50,000 10
Working capital, including
without limitation, leasing
of office space, legal,
accounting and other
expenses of a public company
and public relations 11,500 17 50,000 10
------ ---- -------- ----
TOTAL $ 66,500 100% $491,500 100%
======== ==== ======== ====
</TABLE>
11
<PAGE> 14
Based on currently proposed plans and assumptions relating to the
implementation of its business plans, we believe that the proceeds from the sale
of at least the minimum offering together with our working capital of $377,380
as of October 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.
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 is convertible into a maximum of 780,000 shares of common stock
before the consummation of the minimum offering. However, each outstanding share
of series A preferred stock on the closing date ofthe minimum offering will
automatically convert into 0.8 share of common stock, for a total of 624,000
shares of common stock. All of the foregoing shares of common stock have been
registered for the sale in this prospectus on behalf of certain selling security
holders named herein under "Selling Security Holders."
DIVIDEND POLICY
Upon the completion of this offering, we will pay out of current
working capital if the minimum number of shares is sold or out of the proceeds
of this offering if the maximum number of shares is sold, accrued and unpaid
dividends on our series A preferred stock which will be converted into common
stock no later than the closing of the minimum offering. Other than the
foregoing one time dividend payment on our series A preferred stock, we do not
anticipate paying any cash dividends on our capital stock in the foreseeable
future. We currently intend to retain any earnings to finance the development
and expansion of our business. 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.
DILUTION
Our net tangible book value per share as of October 31, 2000 was
approximately $.07 per share of common stock after giving effect to the assumed
conversation of the series A preferred stock into 624,000 shares 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
12
<PAGE> 15
number of outstanding shares of common stock. After giving effect to the sale by
us of 100,000 shares (minimum), our adjusted net tangible book value per share
as of October 31, 2000 would have been approximately $.08. 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 $2.42 per share of common stock (representing a
dilution percentage of approximately 97%) to new investorsAfter giving effect to
the sale by us of 300,000 Shares (maximum), our adjusted net tangible book value
per share as of October 31, 2000 would have been approximately $.14. This
represents an immediate increase in the adjusted net tangible book value per
share of $.07 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 $2.36 per share of common stock
(representing a dilution percentage of approximately 94%) to new investors. The
following table illustrates this per share of common stock dilution:
<TABLE>
<CAPTION>
Minimum Maximum
------- -------
<S> <C> <C> <C> <C>
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 $.07 $.07
Increase in adjusted net tangible book
value per share of common stock
attributable to new investors .01 .07
Adjusted net tangible book value per
share of common stock after the offering .08 $ .14
Dilution in adjusted net tangible book
value per share of common stock to
new investors $2.42 $2.36
</TABLE>
The table above does not take into account the possible conversion of
series A preferred stock prior to the closing of the minimum offering into a
maximum of 780,000 shares of common stock, an increase of 156,000 shares over
the automatic conversion described above. In the event that all shares of series
A preferred stock are converted into 780,000 shares of common stock between the
date of this prospectus and the day preceding the closing of the minimum
offering, the following table illustrates this per share of common stock
dilution.
13
<PAGE> 16
<TABLE>
<CAPTION>
Minimum Maximum
------- -------
<S> <C> <C> <C> <C>
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 $.06 $.06
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 .07 .14
---
Dilution in adjusted net tangible book
value per share of common stock to
new investors $2.43 $2.36
===== =====
</TABLE>
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 assumes that the series A preferred stock is
converted into common stock on the closing of the minimum offering and Table II
assumes that the series A preferred stock is converted into common stock between
the date of this prospectus and the day preceding the closing date of the
minimum offering.
14
<PAGE> 17
<TABLE>
<CAPTION>
TABLE I (Minimum)
-----------------
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>
<CAPTION>
TABLE II (Maximum)
------------------
Approx.-
mate Approximate Average
Percentage Percentage Price
Shares of Total Total Cash of Total Per
Purchased Shares Consideration $ Consideration % Share $
--------- ------- --------------- --------------- --------
<S> <C> <C> <C> <C> <C>
Public
Stockholders 300,000 5 $ 500,000 39 $2.50
Present
Stockholders 5,930,000 95 792,650 61 .13
--------- --- --------- ---
Total 6,230,000 100 1,292,650 100
========= === ========= ===
</TABLE>
15
<PAGE> 18
CAPITALIZATION
The following table sets forth, as of October 31, 2000, (i) our actual
capitalization and (ii) our pro forma capitalization, including the issuance of
100,000 shares of common stock in the offering plus 624,000 shares issued
through the automatic conversion of series A preferred stock (minimum) and
300,000 shares of common stock in the offering plus 780,000 shares issued
through the possible optional conversion of series A preferred stock into common
stock prior to the closing of the minimum offering (maximum).
The table below should be read in conjunction with our financial
statements 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
30,000 shares of common stock.
<TABLE>
<CAPTION>
OCTOBER 31, 2000
--------------------------------------
PRO
FORMA PRO 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 6,230,000 shares
issued and outstanding pro form
maximum 5,150 5,874 6,230
Additional Paid-in capital 590,680 657,236 1,081,880
Retained Earnings (deficit) (219,230) (219,230) (219,230)
-------- -------- ---------
Total Stockholders' Equity $377,380 $443,880 $ 868,880
======== ======== =========
</TABLE>
16
<PAGE> 19
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 were incorporated on December 1, 1999. Our subsidiary, Pathfinder
International Group was incorporated in April 1993. It was inactive for the
period from April 1993 through November 30, 1999.
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 October 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.
Between December, 1999 and March, 2000, we completed a private
placement of our shares of series A preferred stock and then developed a website
and investigated the feasibility of selling a limited number of select pet
products over our Internet website. Thereafter, our management determined that
it was not feasible to pursue this line of business due to the limited capital
available to us and intense competition.
Effective July 28, 2000, our Chief Executive Officer contributed to our
capital his 100% capital interest in Pathfinder International Group, a
development stage company which provides business development and management
consulting services to small and medium sized corporations.
Pathfinder International Group was incorporated in 1993 but it did not
commence any development stage activities until after November 30, 1999.
Thereafter, we completed four consulting projects which resulted in consolidated
revenues of $179,106 for the period December 1, 1999 through October 31, 2000.
For the period December 1, 1999 through October 31, 2000, we incurred expenses
of $397,652 and realized a consolidated net loss of $(219,230). Comparative
information for prior periods is not supplied herein because our development
stage operations, including those of our subsidiary, did not commence until on
or after December 1, 2000. Future revenues from operations may be sporadic and
inconsistent from one reporting quarter or fiscal year to another.
17
<PAGE> 20
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 October 31, 2000, we have working capital of $377,380. We believe
that since our business is not a capital intensive business and our fixed
overhead is relatively low, our existing limited working capital combined with
the relatively small amount of additional proceeds that will be received at the
completion of the minimum 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 October 31, 2000, net cash was
used in operating activities for our development stage operations. This included
a net loss of $(219,230). During this time period, net cash of $596,610 was
provided by financing activities through the issuance and sale of common stock
and preferred stock.
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. In the event that the maximum
number of shares is sold, we anticipate hiring a business manager and up to
three additional sales and office personnel. We will continue to outsource all
of our professional consultants required for our consulting services. The amount
of money paid by us to an independent company for professional consultants
depends upon the anticipated hours of the consultants, the duration of the
project and the level of expertise of the consultants. Between an estimated 52%
and 83% of the net proceeds received from this offering will be utilized for
sales and marketing and related activities to develop new business opportunities
for us. We will also pay from our existing working capital or the maximum net
proceeds of this offering, a one time cash dividend payment of approximately
$50,000 on our outstanding series A preferred stock which will convert into
common stock no later than the completion of the minimum offering.
18
<PAGE> 21
BUSINESS
OVERVIEW
We are engaged in the providing of business development and management
consulting services to small to medium-sized businesses primarily through the
services of our chief executive officer and the use of a limited number of
retired business executives not employed by us. We assist prospective clients in
analyzing their businesses in the areas of:
- mergers and acquisitions;
- divestitures and reorganizations;
- general financial transactions;
- capital source location;
- capital structure formation;
- due diligence studies; and
- guidance and assistance in available alternatives to maximize
shareholder value.
Our primary focus is to help our client's business succeed. As an
additional marketing tool for our clients, we also offer website design and
development services. 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 between three and five consulting professionals
headed by a project manager who is responsible for the delivery and quality of
our services.
Reference is made to "Prospectus Summary" for a brief description of
the development of our business. Our development stage revenues have been
limited and are sporadic. We are currently engaged in targeting and soliciting
potential business opportunities through the use of direct mailings and client
referrals. Although we currently have no backlog or pending new projects as of
December 31, 2000, we have had discussions with several anticipated new clients
with respect to potential business opportunities. The purpose of this offering
is to raise additional monies to finance our operations and to become a
reporting company under the Exchange Act of 1934. Management believes that
through proper public relations and sales promotional efforts, we will be able
to expand our client base and potential revenues. We can provide no assurances
that these efforts will be successful.
19
<PAGE> 22
CONSULTING SERVICES
In order to evaluate our client's specific needs, we have developed a
business development process pursuant to which our chief executive officer
conducts 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,
obtain 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 client's
business.
Following this conference, we then proceed to evaluate the client's
business utilizing the services of retired executives, many of whom have
distinguished records of accomplishment in their various fields, who are hired
and are paid for by an independent databank company retained by us pursuant to
oral arrangements. 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 client, 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 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.
We work with our clients to help implement our strategic plans designed
to strengthen our clients business and increase its profits. The business
development process endeavors to provide the concise, predictive analysis that
assists 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.
20
<PAGE> 23
We provide our clients with a full range of services required to help
them achieve the strategies and goals recommended in our strategic plan. Our
services include:
- Company turn-around- the ability to develop and implement
proven and marketable solutions that improve profits;
- Company reorganization - analyze, develop and implement the
organizational structure best suited to the client's goals;
- 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;
- 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;
- Review collection and billing procedures;
- Strategic planning - development of and guidance in
implementing medium to long-term goals designed to maximize
the return of the client's investment;
- Marketing strategies - design and implementation of marketing
and sales strategies that address the client's needs and
objectives;
- Management training and development - management training in
the areas of decision-making, team building, communications
and employee performance; and
- 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 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
21
<PAGE> 24
components of a successful consulting engagement. The personal needs and
financial goals of our clients form the basis for the business development
process.
Fee Structure of Clients
------------------------
We set our fees based on an estimate of time involvement of our
executive officer(s) and outside consultants, the duration of the contract and
the level of expertise of the consultant. Generally, we encourage the client to
agree to pay on a flat fee basis rather than on an hourly basis. In addition to
cash compensation, we may, in the future, seek to obtain client's stock as part
of our fee. In the event that we receive stock and such stock would subject us
to the Investment Company Act of 1940, then we would anticipate divesting
ourselves of such stock as we do not wish to become subject to the 1940 Act. In
no event do we anticipate receiving an interest of 10% or more of our client's
stock.
Outsourcing of Consultants
--------------------------
Our consultants are obtained by us through an independent company that
has a data base of approximately 10,000 persons, any of whom can be made
available to provide the types of services needed on a project-to-project basis.
We have no written contract with the independent company and the arrangement can
be terminated at any tine by either party. The amount of money paid by us for
outsourcing the professional consultants depends upon the anticipated hours of
the consultant, the duration of the project and the level of expertise of the
consultants. Management believes that the aforementioned arrangement helps keep
our fixed overhead relatively low.
PROPOSED WEBSITE DEVELOPMENT SERVICES
As an adjunct to our consulting services, we intend to introduce
website design and development services for those clients who seek to capitalize
on the opportunities presented by the Internet. The services would be entirely
outsourced and performed by independent consultants. 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 anticipate providing web design and web content services. These clients could
retain us to design, improve and implement the processes used to facilitate the
establishment of an e-commerce website for their business. With our intended
website design and development services, we also will provide search engine
placement and meta tag creation and insertion. To date, we have not realized any
revenues as a result of our proposed website development services.
22
<PAGE> 25
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 will be 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:
- specialized consulting firms;
- general management consulting firms;
- "Big 5" accounting and consulting firms;
- website development and design firms;
- specialized e-business consulting firms; and
- 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 and experience, 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:
- hands-on approach;
- broad based expertise;
- availability of appropriate resources; and
- focus on achieving results.
23
<PAGE> 26
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 comparable services and our
competitors' responsiveness. There is a risk that increased competition will
adversely affect our future financial results.
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.
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.
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 dispose of securities as
compensation for our services to avoid having to register as an investment
company.
EMPLOYEES
As of December 1, 2000, we had three employees employed on a full-time
basis, including one executive officer, one secretary and one administrative
assistant. 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 temporary
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.
24
<PAGE> 27
LEGAL PROCEEDINGS
We are not a party to any legal proceeding.
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) 423-8494
(631) 423-2220/fax
Our fiscal year ends on October 31. We intend to furnish our
shareholders annual reports containing audited financial statements and other
appropriate reports. In addition, on the date of this prospectus, we became a
reporting company under Section 15(d) of the Securities Exchange Act of 1934 and
will be required to file annual, quarterly and other reports and 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.
25
<PAGE> 28
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. 61 President, Chief
Executive Officer,
Treasurer, Director
and Founder
Alan Ghidaleson 49 Executive Vice
President, Secretary
and Founder
Otto Weber 75 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
26
<PAGE> 29
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.
27
<PAGE> 30
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. Such
salary will not change for the first one year after the completion of the
minimum offering, except that Mr. Seccafico will be entitled to bonuses as
determined by the Board of Directors. Thereafter, Mr. Seccafico's salary and
other compensation will also be determined by the Board of Directors. 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 $100,000 or more in salaries and bonuses.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Annual Compensation
---------------------------- ----------- ----------------- ---------------- -----------------
(a) (b) (c) (d) (e)
Other
Name Annual
and Compen-
Principal sation
Position Year Salary ($)(1) Bonus ($) ($)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nicholas J. 2000 81,000 -0- -0-
Seccafico, Jr., ----------- ----------------- ---------------- -----------------
Chief Executive 1999 59,411 -0- -0-
Officer ----------- ----------------- ---------------- -----------------
1998 -0- -0- -0-
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------===
Long Term Compensation
---------------------------------- ---------------
Awards Payouts
---------------------------- ------------------ --------------- ---------------
(a) (f) (g) (h) (i)
All
Name Restricted Number Other
and Stock of LTIP Compen-
Principal Award(s) Options / Payouts sation
Position ($) Warrants ($) ($)
--------------------------------------------------------------------------------------------===
<S> <C> <C> <C> <C>
Nicholas J. -0- (2) -0- -0- -0-
Seccafico, Jr., ------------------ --------------- --------------- --------------
Chief Executive -0- -0- -0- -0-
Officer ------------------ --------------- --------------- --------------
-0- -0- -0- -0-
--------------------------------------------------------------------------------------------===
</TABLE>
---------------
(1) Since the inception of Pathfinder International Group, Inc., Mr.
Seccafico has received from our subsidiary total compensation of
$98,411, which sum of money is included in the table above.
(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. The 5,000,000 shares were issued to Mr. Seccafico
immediately after our incorporation at a time when we had no
assets or business operations. Accordingly, Management believes
that the payment of an amount equal to our par value per share
represented the fair market value of the common stock at the time
of grant.
28
<PAGE> 31
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,
29
<PAGE> 32
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. 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, 6,230,000 shares maximum outstanding
after the offering. For the purpose of determining the percentage of ownership
in this table for the minimum offering, we assume that the series A preferred
stock is converted into common stock at the closing date of the minimum
offering.
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<PAGE> 33
For purposes of determining the percentage of ownership in this table
for the maximum offering, we assume that the series A preferred stock is
converted into 780,000 shares of common stock prior to the completion of the
minimum offering.
<TABLE>
<CAPTION>
Percentage Beneficial Ownership
Shares of Common
Stock
Beneficially After After
Name and Address Owned Before Before Offering Offering
----------------- Offering Offering Minimum Maximum
------------------- ------------- ------------------- ------------
<S> <C> <C> <C> <C>
Nicholas J. Seccafico, Jr. 4,125,000 80.1 70.2 66.2
Drew Seccafico and
Elke Seccafico 200,000 3.9 3.4 3.2
Drew Seccafico as Trustee
for Cole Seccafico 200,000 3..9 3.4 3.2
Todd Seccafico and
Julie Seccafico 200,000 3.9 3.4 3.2
Todd Seccafico as Trustee
for Tyler Seccafico 200,000 3.9 3.4 3.2
Alan Ghidaleson 150,000 2.9 2.6 2.4
Otto Weber -0- -0- -0- -0-
All three officers and
directors as a group 4,275,000 82.5 72.8 68.6
</TABLE>
Nicholas J. Seccafico will control at least 66% of our common stock
after the offering and he 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) Immediately after our incorporation in December 1999, we sold
5,000,000 shares of common stock to Nicholas J. Seccafico, Jr. and 150,000
shares to Alan Ghidaleson at a price of $.001 per share. Subsequently, Mr.
Seccafico gifted 850,000 shares to his children and trusts established for the
benefit of his grandchildren and he gifted 25,000 shares to one of his
associates. Mr. Seccafico also contributed to capital an additional $7,500. Mr.
Seccafico did not receive any
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<PAGE> 34
additional shares in exchange for such contribution. Management believes that
our shares of common stock were sold at a price of at least the then fair market
value per share of our common stock, after due consideration being given to our
lack of business and assets at the time of sale.
(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 will 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.
However, prior to the completion of the minimum offering, holders of series A
preferred stock may, at their option, convert each preferred share into 1.0
share of common stock for a total of 780,000 shares of common stock.
(iii) On July 28, 2000, Mr. Seccafico contributed his 100% ownership
interest in Pathfinder International Group to us as a capital contribution and
he did not receive any additional shares for such contribution. On July 28,
2000, Pathfinder International Group had no assets or liabilities and the
acquisition of the entity cost was $-0-. Management believes that the fair
market value of Pathfinder International Group on July 28, 2000 was negligible.
(iv) We maintain approximately 200 square feet of office space at 33
Eleventh Avenue, Huntington Station, New York 11746 pursuant to a temporary
rent-free month-to-month arrangement with our Chief Executive Officer.
Management believes that the fair market value of the current space and services
utilized is approximately $300 per month. The financial statements, which
accompany this prospectus for the period December 1, 1999 through October 31,
2000, reflect Mr. Seccafico's capital contribution of the fair value of rental
services of $3,300. Upon completion of this offering, we intend to either pay
rent based upon the fair value of the space and services then 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> 35
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 and we have seven common stockholders of record.
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. Before the offering, the holders of the
series A preferred stock currently have the rights, preferences and privileges
set forth below. On or before the completion of the minimum offering, all
outstanding shares of series A preferred stock will convert into shares of our
common stock:
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. Between the date of the issuance of each shares of
series A preferred stock and the day preceding the closing date of the minimum
number of shares offered hereby, the holders of each share of series A preferred
stock have the option to convert each share of series A preferred stock into 1.0
share of our common stock. Thereafter, upon the completion of the
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<PAGE> 36
minimum number of shares offered hereby, each then 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.
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 $3.75 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
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<PAGE> 37
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 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.
35
<PAGE> 38
SHARES ELIGIBLE FOR FUTURE SALE
There will be between 5,874,000 and 6,230,000 shares of our common
stock outstanding after the offering. The exact number will depend upon the
number of shares sold in the offering and the number of shares of common stock
issued upon conversion of our outstanding series A preferred stock. 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.
PLAN OF DISTRIBUTION
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 March 15, 2001 unless extended by
us and the underwriter for an additional period until the close of business on
May 15, 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
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<PAGE> 39
100,000 shares are not sold during the offering period, all funds received will
be promptly repaid in full without interest or deduction therefrom. Prior to the
initial closing, the escrow agent will confirm that at least 100,000 shares have
been sold, and cleared funds have been received in full payment for the purchase
of the shares before releasing the funds from escrow.
During the offering period, as extended, investors will not have the
opportunity to request a refund of their funds, unless state law dictates
otherwise.
Upon receipt of checks in this offering, the underwriter and other
participating broker/dealers, if any, will transmit checks directly to the
escrow agent by noon of the next business day after receipt. The escrow
agreement provides that the escrow agent will only be able to invest the
escrowed funds in investments permissible under SEC Rule 15c2-4.
We have agreed to pay the underwriter a commission of 10% of the price
of the shares sold ($.25 per share) upon the closing. Such commissions would
total $25,000 if the minimum number of shares is sold and $75,000 if the maximum
number of shares is sold. 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 $15,000 has been paid toward this expense allowance. If less than all
shares offered hereby are sold, any overpayment of the expense allowance will be
credited in full against the aforementioned consulting fee.
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. None of the foregoing
expenses will be paid by our nine selling security holders.
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.
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<PAGE> 40
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 of $100, 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 $3.75 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,
combinations, 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.
Officers, directors and employees of Pathfinder will not purchase
shares of the offering to close out the minimum. The underwriter does not intend
to sell any of these shares to accounts for which it exercises discretionary
authority.
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<PAGE> 41
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 between 624,000 shares and 780,000
shares of our common stock beneficially owned by the nine selling security
holders named in the table below. These shares are issuable 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 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. The percentages
owned prior to the offering assume that the shares of series A preferred stock
are converted automatically on the closing of the minimum offering into shares
of common stock at a ratio of 0.8 share of common stock for each outstanding
share of series A preferred stock. Under this scenario, a total of 624,000
shares of common stock would be issued upon conversion of the outstanding
780,000 shares of series A preferred stock.All addresses are c/o Pathfinder
Business Resources, Inc., 33 Eleventh Avenue, Huntington Station, NY 11746.
<TABLE>
<CAPTION>
--------------------------------------------------- --------------------------------- ------------------------------
Common Stock Percentage of Common
Name and Address of Beneficial Owner Owned Stock Owned %
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Prior to After Prior to After
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>
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<PAGE> 42
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. For purposes of
this table, we have assumed that the shares of series A preferred stock are
converted between the date of this prospectus and the date preceding the closing
of the minimum offering. In connection with such conversion, each holder of an
outstanding share of series A preferred stock would receive 1.0 share of common
stock. Under this scenario, a total of 780,000 shares of common stock would be
issued upon conversion of the outstanding 780,000 shares of series A preferred
stock. All addresses are c/o Pathfinder Business Resources, Inc., 33 Eleventh
Avenue, Huntington Station, NY 11746.
<TABLE>
<CAPTION>
--------------------------------------------------- --------------------------------- ------------------------------
Common Stock Percentage of Common
Name and Address of Beneficial Owner Owned Stock Owned %
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Prior to After Prior to After
Offering Offering Offering Offering
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
Moshe and Cheryl Lifshitz 360,000 -0- 6.1 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Jeffrey Barnes 30,000 -0- .5 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Lennart Dahlgren 90,000 -0- 1.5 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Joseph Acosta 10,000 -0- .2 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Samuel & Stella Skura 40,000 -0- .7 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Clarin Howe 70,000 -0- 1.2 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
John D. Hodel 110,000 -0- 1.9 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Trung Vo 20,000 -0- .3 -0-
--------------------------------------------------- ---------------- ---------------- -------------- ---------------
Pavlik Investments LLC 50,000 -0- .8 -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.
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 form of commissions from
selling security holders at its normal commission rate, which would not exceed
the maximum amount
40
<PAGE> 43
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.
EXPERTS
Our consolidated financial statements 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.
41
<PAGE> 44
PATHFINDER BUSINESS RESOURCES, INC.
TABLE OF CONTENTS
DECEMBER 1, 1999 (INCEPTION) TO OCTOBER 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 6-10
<PAGE> 45
BARON & BARON
Certified Public Accountants
250 West 57th Street, Suite 724
New York, NY 10019
Tel (212) 586-8070 - Fax (212) 265-0059
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 October 31, 2000 and the related consolidated
statements of operations, stockholders' equity and cash flows for the period
from December 1, 1999 (inception) to October 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 October 31, 2000 and the results of their operations and
their cash flows for the period from December 1, 1999 (inception) to October 31,
2000, in conformity with generally accepted accounting principles.
New York, NY
November 27, 2000
<PAGE> 46
Page 2
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED BALANCE SHEET
OCTOBER 31, 2000
A S S E T S
Current assets:
Cash and cash equivalents $378,130
--------
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
Convertible preferred stock, series A, .001 par value;
1,000,000 shares authorized; and 780,000 shares
issued and outstanding 780
Paid-in capital 590,680
Accumulated deficit (219,230)
--------
377,380
--------
$378,130
========
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 47
Page 3
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO OCTOBER 31, 2000
Revenues $ 179,106
---------
Expenses:
Director's fees and officers' compensation $ 164,411
Professional and consulting fees 97,516
Insurance 11,532
Computer costs 37,350
Organization expenses 12,650
Marketing and promotion 36,907
Entertainment 22,488
Rent 3,300
Other operating expenses 11,498
----------
397,652
Loss from operations (218,546)
---------
Other income (expenses):
Interest and dividend income 15,308
Loss from sale of marketable securities (15,992)
----------
(684)
----------
Net loss $(219,230)
==========
Basic net loss per share $(0.04)
==========
Shares used in computing basic net loss per share 5,150,000
==========
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 48
Page 4
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO OCTOBER 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 5,150 5,150 - - -
Capital contribution by founder 7,500 - - 7,500 -
Issuance of preferred stock 580,660 - 780 579,880 -
Capital contribution - rent
free office space 3,300 - - 3,300 -
Net loss (219,230) - - - (219,230)
--------- --------- -------- ----------- ----------
October 31, 2000 $377,380 $5,150 $780 $590,680 $219,230)
========== ========== ======== ============ ==========
</TABLE>
The accompanying notes are an integral part
of consolidated the financial statements.
<PAGE> 49
Page 5
PATHFINDER BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 1, 1999
(INCEPTION) TO OCTOBER 31, 2000
Cash flows from operating activities:
Net loss $(219,230)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
Accounts payable 750
---------
Net cash used by operating activities (218,480)
---------
Cash flows from financing activities:
Issuance of common stock 15,950
Issuance of preferred stock, net 580,660
---------
Net cash provided by financing activities 596,610
---------
Net increase in cash and cash equivalents 378,130
Cash and cash equivalents, beginning of period -
---------
Cash and cash equivalents, end of period $ 378,130
=========
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 50
Page 6
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 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; Pathfinder International Group, Inc.
On July 28, 2000 the Company's president contributed 100% of the
outstanding stock of Pathfinder International Group, Inc. (PIG); a
developer of business resources to the Company. Pathfinder International
Group, Inc. was incorporated in the state of New York on April 29, 1993.
PIG was inactive until it began operations in December, 1999. On July 28,
2000, PIG had no assets or liabilities and the acquisition of the entity
cost was $-0-.
The financial statements have been prepared to reflect the operations of
Pathfinder Business Resources, Inc. and Pathfinder International Group,
Inc. from inception. The Companies began operations during December 1999
and have a fiscal year-end of October 31, 2000.
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 October 31, 2000, the Company has spent $397,652 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.
<PAGE> 51
Page 7
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2000
3. Summary of significant accounting policies: (Continued)
c. Revenue recognition:
Revenues from business and consulting services are recognized as
services are performed over the term of the specific contracts.
d. 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.
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 services provided. 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 evaluated and
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 business and management consulting services
business.
i. Earnings per share:
The computation of earnings per share is based on the average number
of outstanding common shares.
<PAGE> 52
Page 8
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2000
4. Stockholders' equity:
Convertible preferred stock - series A:
At October 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 prior to a public offering at
a one for one conversion or automatically
converted into common stock at a 0.8 for 1 upon
completion of a public offering.
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 to
Directors, consultants and employees, which shall include officers'. The
Plan provides that all options granted will be exercisable during a period
not to exceed ten years.
At October 31, 2000, no stock options have been granted.
<PAGE> 53
Page 9
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 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.
Net loss $ (219,230)
==========
Basic:
Weighted average shares of
common stock outstanding 5,150,000
=========
Basic net loss per share $(.04)
=====
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 $(.04)
=====
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> 54
Page 10
PATHFINDER BUSINESS RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2000
8. Related party transactions:
a. Business combinations:
On July 28, 2000, the Company's president contributed 100% of the
outstanding stock of Pathfinder International Group, Inc. to the
Company. On July 28, 2000, this Company had no assets or liabilities.
b. Rent:
The Company utilizes office space pursuant to a rent-free month-to-
month arrangement with the Company's president. The financial
statements reflect the officer's capital contribution of the fair
value of rental services as $3,300.
c. Directors and consulting fees:
The Company utilizes the professional services of two stockholders.
Directors' fees and officers' compensation of $164,411 and consulting
fees of $26,400 were paid to these related parties.
9. Income taxes:
The Company accounts for income taxes according to the provisions of the
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes".
Deferred income taxes reflect the effect of temporary differences between
the tax basis of assets and liabilities and the reported amounts of those
assets and liabilities for financial reporting purposes. Deferred income
taxes also reflect the value of net operating losses and an offsetting
valuation allowance. The Company's total deferred tax assets and
corresponding valuation allowance at October 31, 2000 consist of the
following:
Tax effects of carryforwards benefits:
U.S. Federal net operating loss
carryforward, expiring 2015 $75,000
Less valuation allowance (75,000)
-------
$ -
=======
SFAS No. 109 requires that a valuation allowance be recorded against tax
assets which are not likely to be realized. Specifically, the Company's
carryforwards expire at specific future dates and utilization is limited
to specific amounts each year. Due to the uncertain nature of their
ultimate realization based upon past performance and expiration dates, the
Company has established a full valuation allowance against these
carryforward benefits and is recognizing the benefits only as reassessment
demonstrates they are realizable. Realization is entirely dependent upon
future earnings.
<PAGE> 55
================================================================================
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 _________, 2001.
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.
____________, 2001
================================================================================
<PAGE> 56
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:
SEC filing fees $ 703.13
NASD fees ............................................781.26
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......................................7,015.61
---------
TOTAL.............................$146,000.00
===========
----------
* Estimated
II-1
<PAGE> 57
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 and Exchange Commission
in December 1999 and amended twice in February 2000. All
II-2
<PAGE> 58
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 Revised Underwriting Agreement*
1.1 Financial Consulting Agreement
1.2 Revised 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 Revised 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.
ITEM 28. UNDERTAKINGS.
(a) Rule 415 Offering
Pathfinder Business Resources undertakes to:
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;
II-3
<PAGE> 59
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.
II-4
<PAGE> 60
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 11th day ___ of January
2001.
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 January 11, 2001
------------------------------ Officer, Treasurer, Director
Nicholas J. Seccafico, Jr.
/s/ Otto Weber Director January 11, 2001
-------------------------------
Otto Weber
</TABLE>
II-5
<PAGE> 61
EXHIBIT INDEX
All exhibits were previously filed unless otherwise noted.
Exhibit 1.0 Revised Underwriting Agreement*
1.1 Financial Consulting Agreement
1.2 Revised 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 Revised 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.
