AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 8, 2001
REGISTRATION FILE NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
(AMENDMENT NO. ____)
BBIS.COM, INC.
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(Name of Small Business Issuer in Its Charter)
Delaware 7137 13-4100410
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(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction Industrial Classification Identification No.)
Incorporation Code Number)
or Organization)
c/o Port Motors, 1036 Northern Boulevard, Roslyn, New York 11576
Tel: (516) 484-6633
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(Address and Telephone Number of Principal Executive Offices)
c/o Port Motors, 1036 Northern Boulevard, Roslyn, New York 11576
Tel: (516) 484-6633
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(Address of Principal Place of Business or Intended Principal Place of Business)
Bruce Baron, President
BBIS.com, Inc.
c/o Port Motors
1036 Northern Boulevard
Roslyn, New York 11576
Tel: (516) 484-6633
With Copies to:
Frank J. Hariton, Esq. and Martin S. Siegel, Esq.
1065 Dobbs Ferry Road Berlack Israels & Liberman, LLP
White Plains, New York 10607 120 West 45th Street
Tel: (914) 674-4373 New York, New York 10036
Fax: (914) 693-2963 Tel: (212)704-0100
Fax(212) 704-0196
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(Name, Address and Telephone Number of Agent For Service)
Approximate Date of Proposed Sale to the Public AS SOON AS IS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
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 number of the earlier effective
registration statement for the same offering. [ ]
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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 number of the earlier effective registration statement for the
same offering. [ ]
If this Form is a post-effective amendment pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Title of Securities to Amount to be Proposed Proposed Amount of
be registered Registered Maximum Maximum Registration
Price Aggregate Fee**
Per Share* Offering Price*
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<S> <C> <C> <C> <C>
Units each comprised of 300,000 $6.20 $1,860,000 $ 465.00
one share of Common Stock,
par value $.0001 per
share, and two Warrants
======================================================================================================================
Common Stock issuable upon 600,000 $7.00 $4,200,000 $1,050.00
exercise of Warrants
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Underwriters Unit Options 30,000 $ .001 $ 30 $ .11
======================================================================================================================
Units Comprised of one 30,000 $7.44 $ 223,200 $ 55.80
share of Common Stock and
two Warrants, issuable
upon exercise of
Underwriter's Unit Options
======================================================================================================================
Common Stock issuable upon 60,000 $7.00 $ 420,000 $ 105.00
exercise of Warrants
included in Units issuable
upon exercise of Underwriter's
Unit Option
======================================================================================================================
TOTAL $6,712,300 $1,675.91
======================================================================================================================
</TABLE>
* Based on the offering price of the Units, and based upon the exercise price
of the Options and Warrants registered hereby.
** Calculated pursuant to Rule 457(h).
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective in such date as the Commission, acting pursuant to said Section 8(a)
shall determine.
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CROSS REFERENCE SHEET
UNDER ITEM 501 (C) OF REGULATION S-B
ITEM AND NUMBER LOCATION IN PROSPECTUS
1. Front of Registration Statement Front of Registration Statement
and Outside Front Cover of Prospectus and Outside Front Cover of
Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back
Cover Pages of Prospectus Cover Pages of Prospectus
3. Summary Information and Risk Factors Prospectus Summary and Risk
Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers, Promoters Management
and Control Persons
11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts and Counsel Experts; Counsel
14. Disclosure of Commission Position Not Applicable
on Indemnification For Securities Act
Liabilities
15. Organization Within Last Five Years Not Applicable
16. Description of Business Business of the Company
17. Management's Discussion and Analysis Management's Discussion and
or Plan of Operation Analysis
18. Description of Property Business of the Company -
Property
19. Certain Relationships and Related Certain Transactions
Transactions.
20. Market for Common Equity and Related Market for Common Equity and
Stockholder Matters Related Stockholder Matters
21. Executive Compensation Management - Executive
Compensation
22. Financial Statements Financial Statements
23. Changes in and Disagreements With Not applicable
Accountants on Accounting and
Financial Disclosure
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SUBJECT TO COMPLETION, JANUARY 8, 2001
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
300,000 Units
BBIS.COM, INC.
EACH UNIT CONSISTS OF
ONE SHARE OF COMMON STOCK
AND
TWO REDEEMABLE COMMON STOCK PURCHASE WARRANTS
OFFERING PRICE $6.20 PER UNIT
Minimum 75,000 Units
Maximum 300,000 Units
This is an initial public offering (the "Offering") by BBIS.com, Inc.
('we", "us" or the "Company") and we will be selling a minimum of 75,000 Units
(the "Minimum Units" or "Minimum Offering") on a best efforts "all or none"
basis and a maximum of up to 300,000 Units (the "Maximum Units" or "Maximum
Offering"). Until we have sold at least 75,000 Units, we will not disburse the
funds. We will deposit all proceeds of this offering into a non-interest bearing
escrow account. If we are unable to sell at least 75,000 Units within ___ days,
we will promptly return all funds, without interest or deduction to subscribers.
The return will be effected within 10 days. The Offering will remain open until
all of the Units are sold or until __, 2001. We may decide to cease our selling
efforts at any date.
Each Unit consists of one share of our common stock ("Common Stock")
and two redeemable warrants ("Warrants"). The offering price of each Unit is
$6.20 with $6.00 being the payment for the Common Stock and $.10 being paid for
each Warrant. Each Warrant entitles the holder to purchase one share of our
Common Stock for $7.00 until _____, 2006 (five years from the date of this
Prospectus). The Warrants and Common Stock will trade separately from the first
day of trading and we will not seek a trading symbol for the Units. For a more
complete description of the terms of the Common Stock, the Warrants and the
Units, see "Description of Securities", on page 27.
We have retained Security Capital Trading, Inc. (the "Underwriter") to
assist us in selling the Units. No one has agreed to buy any of our Units, and
there is no assurance that any sales will be made. If 75,000 Units are sold,
neither we nor the Underwriter will refund any payments for the Units. We and
the Underwriter have the right to accept or reject any subscriptions for Units
in whole or in part.
The Underwriter will seek listing for the Common Stock and Warrants on
the Over the Counter Bulletin Board ("OTCBB"), but this might not happen. The
OTCBB is an unorganized, inter-dealer, over the counter market which provides
significantly less liquidity than Nasdaq SmallCap or Nasdaq National Market and
quotes of securities traded on the OTCBB are not listed in financial sections of
newspapers as are those for Nasdaq.
Prior to this offering there has been no public market for the trading
of our Common Stock or Warrants and it is possible that no such market will
develop or trading will not commence for a
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substantial period of time after the closing of this offering. We expect one or
more brokers to trade our securities and to apply for the approval of the Common
Stock and the Warrants for quotation on the OTCBB, but there is no assurance
that we will be able to secure such listing. The price of the Units and their
composition has been determined solely by the Underwriter and us, and does not
bear any direct relationship to our assets, operations, book value or other
established criteria of value.
THE PURCHASE OF THE UNITS INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION. YOU SHOULD CAREFULLY READ AND CONSIDER THE "RISK
FACTORS," COMMENCING ON PAGE 8, AND "DILUTION" COMMENCING ON PAGE 19.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC AND COMMISSIONS (1) US (2)
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Per Unit $6.20 $.62 $5.58
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Total, Minimum Offering (3) $465,000 $46,500 $418,500
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Total, Maximum Offering (3) $1,860,000 $186,000 $1,674,000
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(1) Does not include additional compensation to be received by the Underwriter.
The Company will pay the Underwriter a discount of 10% of the offering price.
The Underwriter will receive a non-accountable expense allowance equal to 3% of
the gross sales price of the Units sold. We have paid the Underwriter $15,000
toward this non-accountable expense allowance in advance. The Underwriter will
receive other forms of compensation with respect to this offering, including an
option to purchase one Unit at $7.44 for each ten Units sold in the Offering. We
have also agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, and granted
the Underwriter a right of first refusal with respect to certain future
financings. See "Underwriting".
(2) Before deducting the non-accountable expense allowance to be paid by the us
to the Underwriter of $13,950 if the Minimum Units are sold and $55,800 if the
Maximum Units are sold and other expenses payable by us including legal,
accounting, printing and filing fees, estimated at $47,500.
(3) The first 75,000 Units are being offered by us on a "best efforts, all or
none" basis. We might not sell any of the Units. Pending the sale of the first
75,000 Units, all monies received from purchasers in the Offering (the
"Investors") will be placed in a non-interest bearing escrow account at
Continental Stock Transfer & Trust Company, 2 Broadway - 19th Floor, New York,
New York 10004 (the "Escrow Agent"). Unless 75,000 Units are sold within 90 days
from the date of this Prospectus, or a 90 day extension period which may be
applied at the option of us and the Underwriter (with an additional 10 days to
allow all funds that are received to clear), the Offering will terminate and all
funds held by the Escrow Agent will be promptly returned to the Investors. If
the funds are returned, Investors will receive a return of all of the money that
they have invested but will not receive any interest. During the time that their
funds are held by the
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Escrow Agent, Investors do not have the right to receive a return of their
subscriptions. If we receive subscriptions for 75,000 Units, the Offering will
continue on a "best efforts" basis for up to a maximum of 300,000 Units.
THE DATE OF THIS PROSPECTUS IS , 2001.
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED
IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, UNITS
ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS,
REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE
COMMON STOCK.
SECURITY CAPITAL TRADING, INC.
111 Broadway
New York, N.Y. 10006
Tel: (212) 406-0500
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission" or the "SEC") a registration statement on Form SB-2 (the
"Registration Statement"), pursuant to the Securities Act of 1933, as amended
(the "Securities Act") covering the Units offered by this Prospectus. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For more information about the Units,
Warrants, Common Stock or the Company, you should read the Registration
Statement and related exhibits, annexes and schedules. The statements contained
in this Prospectus as to the contents of any contract or other document
identified as exhibits in this Prospectus are not necessarily complete, and in
each instance, reference is made to a copy of such contract or document filed as
an exhibit to the Registration Statement, each statement being qualified in any
and all respects by such reference. You may inspect and copy the Registration
Statement and related exhibits, annexes and schedules at the Commission's Public
Reference Room at 450 Fifth Street, NW, Washington, D.C. 20549. Information
about the operation of the Public Reference Room of the Commission may be
obtained by calling the Commission at 1-800-SEC-0330. In addition, the
Commission maintains a site on the World Wide Web that contains reports, proxy
and information statements and other information regarding registrants, like we
will be after this offering, that file electronically with the Commission. The
address of the Web site is: http://www.sec.gov.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AND THE WARRANTS AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL. SUCH STABILIZATION, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
A SIGNIFICANT AMOUNT OF THE UNITS TO BE SOLD IN THIS OFFERING MAY BE SOLD TO
CUSTOMERS OF THE UNDERWRITER. SINCE THE UNDERWRITER WILL NOT MAKE A MARKET IN
OUR SECURITIES, THIS MAY EFFECT THE MARKET FOR AND LIQUIDITY OF THE COMPANY'S
SECURITIES IN THE EVENT THAT ADDITIONAL BROKER-DEALERS DO NOT MAKE A MARKET IN
THE COMPANY'S SECURITIES, WHICH MAY NOT HAPPEN, IT IS POSSIBLE THAT THE MARKET
FOR YOUR COMMON STOCK AND WARRANTS COULD BECOME ILLIQUID. THIS COULD EFFECT YOUR
ABILITY TO TRADE YOUR COMMON STOCK AND WARRANTS.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
EXCEPT FOR HISTORICAL FACTS THIS PROSPECTUS CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS. ANY STATEMENTS IN THIS PROSPECTUS THAT ARE NOT
STATEMENTS OF HISTORICAL FACT MAY BE CONSIDERED TO BE FORWARD- LOOKING
STATEMENTS. WRITTEN WORDS SUCH AS "MAY", "WILL", "EXPECT", "PROJECT", "BELIEVE",
"ANTICIPATE", "ESTIMATE", "CONTINUE", OR OTHER VARIATIONS OF THESE OR SIMILAR
WORDS, IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE
INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER
MATERIALLY, DEPENDING ON A VARIETY OF FACTORS. POTENTIAL RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO:
o COMPETITIVE PRESSURES FROM OTHER COMPANIES OPERATING IN OUR
AREAS OF BUSINESS,
o CHANGING TECHNOLOGIES,
o THE GENERAL INTEREST IN THE SECURITIES MARKET,
o THE LACK OF ADEQUATE CAPITAL TO FUND CONTINUING OPERATIONS,
o ACCEPTANCE OF OUR NEWSLETTER BY INVESTORS AND BY PUBLIC
COMPANIES,
o GENERAL ECONOMIC CONDITIONS AND OTHER UNCERTAINTIES.
NO ASSURANCE CAN BE GIVEN THAT THE COMPANY HAS IDENTIFIED ALL OF SUCH
RISKS OR POTENTIAL RISKS.
WE DISCLAIM ANY OBLIGATION TO UPDATE ANY SUCH FACTORS OR TO PUBLICALLY
ANNOUNCE THE RESULT OF ANY REVISIONS TO ANY OF THESE FORWARD LOOKING STATEMENTS
CONTAINED IN THIS PROSPECTUS BASED ON SUBSEQUENT EVENTS OR DEVELOPMENTS.
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ALL SHARE AND PER SHARE INFORMATION IN THIS PROSPECTUS HAVE
BEEN ADJUSTED TO REFLECT A ONE FOR FOUR REVERSE STOCK SPLIT WHICH
WE EFFECTED IN OCTOBER, 2000.
PROSPECTUS SUMMARY
Because this is only a summary, this section of the Prospectus does not contain
all the information that may be important to you. You should read the entire
prospectus, especially "Risk Factors," beginning on Page 8, and the Consolidated
Financial Statements and Notes, before deciding to invest in our Units.
ABOUT US: BBIS.com, Inc. ("we", "us" or the "Company") was incorporated under
the laws of the State of Delaware in February, 2000 and is not yet operational.
We intend to become a comprehensive source for information on the Internet
regarding companies traded on the Electronic Bulletin Board ("OTCBB"). We are
developing a web based subscriber community at our pay for access web site,
www.botcb.com, to utilize our information services. We expect to publish an
on-line magazine containing information on OTCBB companies. Our web site will
provide links to OTCBB company web sites and market information. Our magazine
will feature research reports on OTCBB companies. We plan to realize revenues
from subscriber fees paid by the users of our web site, as well as fees paid by
companies for articles available on this web site. We hope to distinguish our
web site from other web sites offering advice with respect to OTCBB companies by
engaging in directed print and radio advertising to attract fee paying users to
our web site. A significant portion of the proceeds of this offering are to be
devoted to print and radio advertising to develop name recognition for our web
site. (See "Use of Proceeds"). We expect to construct our web site utilizing the
proceeds of this offering. We expect that our web site will be operational
approximately two months after we receive the proceeds from this Offering. Our
web site is currently operating on a limited basis. We do not expect to realize
any revenues until after our web site is fully operational.
Our offices are located at 1036 Northern Boulevard, Roslyn, New York
11576. Our telephone number is (516) 484-6633. After completion of this
Offering, we intend to move to other offices.
SECURITIES OUTSTANDING
Shares of Common Stock outstanding prior to Offering 987,500
Shares of Common Stock outstanding after Minimum Offering(1) 1,062,500
Shares of Common Stock outstanding after Maximum Offering (1) 1,287,500
(1) The above does not include the shares which may be issued if the Warrants
are exercised. We also anticipate that in order to attract qualified personnel,
we will grant options to new and prospective employees.
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TERMS OF THE WARRANTS: Each Warrant will entitle you to purchase one share of
our Common Stock for $7.00 for a period of five years commencing on the date of
this prospectus. The Warrants will adjust in the event of stock splits,
combinations, stock dividends, recapitalizations and similar events. We have the
right to redeem the Warrants for $.05 per Warrant by sending you a thirty day
notice at a time when the Common Stock has had a closing bid price of at least
$8.40 for twenty consecutive trading days. See "Description of Securities -
Warrants."
USE OF PROCEEDS: We intend to use the net proceeds of approximately $357,050
from the Minimum Offering or $1,570,000 from the Maximum Offering (excluding any
funds that may be raised upon exercise of the Warrants) for the development of
our internet based business, for advertising, to hire qualified personnel and
for working capital. See "Use of Proceeds".
RISK FACTORS: Your investment in our Units involves a high degree of risk. For a
discussion of certain risk factors, including, but not limited to, the risk that
you may lose your entire investment, substantial immediate dilution and the lack
of any trading market for the securities being offered, see "Risk Factors".
SUMMARY FINANCIAL INFORMATION
The following table summarizes certain selected financial information
of the Company as at and for the period ended September 30, 2000, and as
adjusted for the receipt of the proceeds of the Minimum, and the Maximum
Offering, and is qualified in its entirety of the more detailed Financial
Statements and Notes thereto incorporated by reference into this Prospectus.
BALANCE SHEET DATA:
AS AT SEPTEMBER 30, 2000 AS ADJUSTED AS ADJUSTED
(AUDITED) MINIMUM MAXIMUM
OFFERING OFFERING
Total Assets $ 49,381 $ 406,431 $1,620,081
Liabilities $ 0 $ 0 $ 0
Stockholders' Equity $ 49,381 $ 406,431 $1,620,081
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT DATA:
PERIOD FROM FEBRUARY 9, 2000 (INCEPTION)
TO SEPTEMBER 30, 2000
(AUDITED)
Revenues $ 0
Expenses $ 4,569
Net Loss $(4,569)
Net Loss Per Share $ (.00)
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RISK FACTORS
An investment in the Units offered by this Prospectus is speculative
and involves a high degree of risk, including the risk factors described below.
In addition to the other information presented in this Prospectus, each
prospective investor should carefully consider the following risk factors
inherent in and affecting our business and this Offering before making an
investment decision. This Prospectus contains certain forward-looking statements
regarding our business and prospects that are based upon numerous assumptions
about future conditions, which may ultimately prove to be inaccurate and actual
events and results may materially differ from anticipated results described in
such statements. Our ability to achieve such results is subject to certain risks
and uncertainties, such as those risks detailed in this section, and other risks
detailed throughout this Prospectus. These forward-looking statements represent
management's judgment as of the date of the filing of this Prospectus. We
disclaim, however, any intent or obligation to update these forward-looking
statements.
WE ARE A DEVELOPMENT STAGE COMPANY AND WE ANTICIPATE LOSSES. We have not yet
commenced commercial operations and are in the development stage. Consequently,
you may anticipate that our operations will be subject to numerous problems,
delays, expenses and difficulties typically associated with the development of a
new business, many of which may be beyond our control. These include, but are
not limited to, unanticipated problems and additional costs relating to
establishing a web site and hiring qualified personnel. We will incur operating
losses until such time, if ever, that we derive regular and substantial revenues
from our subscribers and from issuers. We might not successfully complete the
transition from a development stage company to profitability, or, if such
transition is successful, that we will be able to maintain profitability. Our
operations to date have been minimal and our costs and expenses have primarily
been related to the costs of this offering. See "Business".
THERE IS A GREAT LIKELIHOOD THAT WE WILL REQUIRE ADDITIONAL FINANCING. If we are
successful in establishing our web-site, we may be required to expand our
operations to take advantage of market opportunities. Unforseen difficulties may
result in an increase in our expenses. We can not assure you that we will be
able to raise additional financing on acceptable terms. If we can not raise
additional financing, our business operations may have to be cut back severely.
WE ARE DEPENDENT ON KEY PERSONNEL AND EMPLOYEES. The success of our business
will continue to be highly dependent upon key members of senior management. The
loss of services of one or more of such employees, particularly Mr. Bruce Baron,
the President and Chief Executive Officer, could have a materially adverse
effect upon our business and development. Mr. Baron is responsible for our
operations and development. We will have an employment agreement with Mr. Baron
when this offering closes and we will also obtain a key-man term $2,000,000 life
insurance policy on Mr. Baron. However, we might not be able to replace Mr.
Baron should we be required to do so. The loss of Mr. Baron's services could
have a substantial negative impact on our business.
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WE WILL NEED TO HIRE ADDITIONAL PERSONNEL. Our future operations will also
depend in part upon our ability to retain current employees and to attract and
retain additional qualified personnel. No assurance can be given that we will be
able to attract and retain such personnel or, if able to do so, on favorable
terms. In addition, after the Offering we will have to hire additional personnel
to operate our business, and competition for qualified personnel, experienced
sales and marketing personnel, qualified web engineers and other employees is
expected to continue to be intense, and there can be no assurance that we will
be successful in attracting and retaining such personnel. See "Business -
Employees" and "Management."
OUR REVENUES MAY FLUCTUATE. We expect that our operating results will fluctuate
significantly in the future as a result of a variety of factors, many of which
are beyond our control. These factors include - fluctuating demand for the
advertising products we offer relative to the state of the capital markets, -
consumers' acceptance of e-commerce, - the level of traffic on our web site, -
the introduction of new or enhanced services by our competitors, - changing
personnel requirements to address changes in technology, - competition and
promotional campaigns by us or any of our competitors, - engineering or
development fees required to be paid in connection with adding new web site
development and publishing tools, - general economic conditions, and economic
conditions specific to the Internet or all or a portion of the technology
market. In response to changes in the competitive environment, we may, from time
to time, make certain pricing, service or marketing decisions or business
combinations that could have a material adverse effect on our financial
condition and operating results. We expect to experience seasonality in our
business, with user traffic on our web site potentially being lower during the
summer and year-end vacation and holiday periods when overall usage of the
Internet may be lower. Because web-based e-commerce is an emerging market,
additional seasonal and other patterns may develop in the future as the market
matures. Any seasonality is likely to cause quarterly fluctuations in our
operating results.
WE WILL FACE INTENSE COMPETITION IN THE E-COMMERCE MARKET. The market for
community based e-commerce on the Internet is new and rapidly evolving and
competition for visitors, advertisers, strategic partners and e-providers is
intense and is expected to increase significantly in the future. The costs of
entering our line of business are not particularly high. Some of the other
companies who are primarily focused on creating a web -based investor
subscription community on the Internet are Stock Research Group, Gigweb,
Stockhouse and Stockscape. All of these competitors are significantly larger
than us and more established and known in the Internet industry. We will likely
also face competition in the future from web directories, search engines,
shareware archives, content sites, commercial online service providers, sites
maintained by Internet service providers and other entities. There can be no
assurance that our competitors and potential competitors will not develop
investor communities that are equal or
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superior to our's or that achieve greater market acceptance than we do.
Accordingly, we will likely face increased competition, resulting in pressure on
our and advertising revenues. We also expect to compete, to some degree, with
other information service providers which have established major financial
sites, such as Quicken, Yahoo Finance, MarketWatch, PCQuote, BigCharts and
others. All of our existing competitors have longer operating histories, greater
name recognition, larger customer bases and significantly greater financial,
technical and marketing resources than us. Entities with which we might in the
future seek to enter into a strategic relationship may have already established
collaborative relationships with our competitors or potential competitors, and
other high-traffic web sites.
THERE ARE TECHNOLOGICAL RISKS IN OUR BUSINESS. The performance of the our web
site will be critical to our ability to attract web users and advertisers. Any
web site system failure that causes an interruption in service or a decrease in
responsiveness or failure of our server and networking systems to handle the
volume of traffic on our web site would negatively impact us. Our business is
also dependent upon our ability to protect our server and network infrastructure
against damage from human error, power loss, telecommunications failure,
sabotage, intentional acts of vandalism and computer viruses.
OUR BUSINESS IS SUBJECT TO TECHNOLOGICAL CHANGES. The market in which we compete
is characterized by rapidly changing technology, evolving industry standards,
frequent new product and service announcements, enhancements, and changing
customer demands. Our success will depend on our ability to adapt to rapidly
changing technologies, industry standards, and our ability to continually
improve the speed, performance, features, ease of use and reliability of our web
site. If we fail to rapidly adapt in a changing environment it will have a
material adverse effect on our business. Introducing new technology into our
systems may require significant amounts of capital, substantial amounts of
personnel resources and could take significant time to complete. We might not be
successful at integrating such technology into our web site on a timely or
effective basis.
WE HAVE NOT CONDUCTED ANY FORMAL MARKET STUDIES. We will establish a Bulletin
Board information web site specializing in OTCBB securities. There are other
companies offering services similar to our's. We believe that we can distinguish
ourselves from other similar web sites through budgeting funds for print and
radio advertising to attract subscribers. We have not conducted and will not
conduct any formal marketing studies regarding the effectiveness of our proposed
operations. If our business fails to attract a sufficient number of subscribers
to distinguish our web site from other similar web sites, then the investors may
lose their entire investment in the Units.
OUR MANAGEMENT LACKS RELEVANT EXPERIENCE AND WE WILL NEED ADDITIONAL PERSONNEL.
While Bruce Baron, our President, has over a decade's experience writing stock
newsletters, including newsletters published on the Internet for paid
subscribers, he has limited experience in marketing such services through other
media. Even after we receive the proceeds of this Offering, we will have limited
resources available with which to hire or retain qualified
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<PAGE>
personnel to operate our business and no assurance is given that we will be able
to do so. If we are not able to hire qualified technical, legal and
administrative personnel, we will not be able to operate our business
effectively and investors may lose their entire investment.
WE COULD BE SUBJECT TO GOVERNMENT REGULATION DIRECTED AT INTERNET COMMERCE. We
do not intend to be subject to direct regulation by any government agency, other
than regulations applicable to businesses generally, and there are currently few
laws or regulations directly applicable to access to or commerce on the
Internet. But, due to the increasing popularity and use of the Internet, a
number of legislative and regulatory proposals are under consideration by
federal, state, local and foreign governmental organizations, and it is possible
that a number of laws or regulations may be adopted with respect to the Internet
on matters including user privacy, user screening, taxation, infringement,
pricing, content regulation and intellectual property ownership and
infringement. The adoption of any such laws or regulations could slow or reverse
the rate of growth in the use of the Internet, which could, in turn, decrease
the demand for our services, and increase our cost of doing business. The
applicability to the Internet of existing laws governing issues such as property
ownership, copyright, trademark, trade secret, obscenity, libel and personal
privacy is uncertain and developing. Any new legislation or regulation, or
application or interpretation of existing laws, could have a material adverse
effect on our results. A number of legislative proposals have been made at the
federal, state, and local level that would impose additional taxes on the sale
of goods and services over the Internet and certain jurisdictions have taken
measures to tax Internet-related activities. It is possible that some type of
taxes will be imposed upon Internet commerce in the future, and such legislation
or other attempts at regulating commerce over the Internet might substantially
impair the growth of commerce on the Internet and, as a result, adversely affect
our opportunity to derive financial benefit from such activities. Due to the
global nature of the Internet, it is possible that, web transmissions by us
originating in the United States might become subject to the jurisdiction of
foreign countries. Violations of local laws might be alleged or charged by state
or foreign governments. We might unintentionally violate such laws. Laws
regulating the Internet may be modified, or new laws enacted, in the future. Any
of the foregoing developments could have a material adverse effect on our
results.
WE COULD BE SUBJECT TO LIABILITY FOR INFORMATION RETRIEVED FROM OR THROUGH OUR
WEB SITE. Because materials may be downloaded by users of our web site and
subsequently distributed to others, there is a possibility that claims will be
made against us for defamation, negligence, copyright or trademark infringement,
personal injury or other theories based on the nature, content, publication and
distribution of such materials. Such claims have been brought, and sometimes
successfully pressed, against web site operators in the past. We could be
exposed to liability with respect to third party content accessible through our
web site. If any third party content provided on our web site contains errors, a
claim could be brought against us for losses incurred in reliance on such
information. We could incur significant costs in investigating and defending
against such claims, regardless of the outcome. We do not carry general
liability insurance intended to protect us from any liability arising out of the
foregoing and insurance may not be available to cover all such potential claims
or may not be adequate to
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<PAGE>
protect us from all liability that may be imposed on us. We do not believe that
we will have sufficient resources after the Offering to purchase insurance and
do not contemplate purchasing insurance. Any imposition of liability on us could
have a material adverse effect on the Company's results.
OUR OPERATIONS WILL BE SUBJECT TO INTERNET SECURITY RISKS. Experienced
programmers or "hackers" may attempt to penetrate our computer network and
effect our operations. A party who is able to penetrate our computer network
security could misappropriate proprietary information or cause interruptions in
our web site. Concerns over the security of Internet transactions and the
privacy of users may also inhibit the growth of the Internet, particularly as a
means of conducting commercial transactions. Security breaches, or the
inadvertent transmission of computer viruses, could expose us to loss,
litigation and possible third party liability. We cannot be certain that any
contractual provisions or legal disclaimers intended to limit our liability in
such areas will be successful or enforceable.
OUR FUTURE IS DEPENDENT ON THE CONTINUED GROWTH AND ACCEPTANCE OF THE INTERNET.
Our future success is in part dependent upon continued growth in the use of the
Internet and the web in general and the continued acceptance of the web as a
source of financial information. We cannot be certain that the number of
Internet users will continue to grow or that e-commerce over the Internet will
become more widespread, or that events will not occur to discredit web sites.
The web infrastructure may not continue to be able to reliably support the
demands placed on it by continued growth.
IF OUR BUSINESS GROWS, WE WILL BE REQUIRED TO MANAGE OUR GROWTH. If we
successfully raise funds in this Offering and successfully achieve market
acceptance for our services, we anticipate a period of rapid growth that will
place a strain on our administrative, financial and operational resources. Our
ability to manage any staff and facilities growth effectively may require us to
continue to improve our operations, financial and management controls, reporting
systems and procedures, install new management information and control systems
and to train, motivate and manage our employees. If we can not successfully do
those things in an efficient and timely manner, we could experience significant
delays or unforeseen costs in its development, which delays or costs could have
a material adverse impact on our results.
SINCE WE HAVE NEVER PAID A DIVIDEND AND ARE UNLIKELY TO DO SO, YOU MAY ONLY
REALIZE A PROFIT ON YOUR INVESTMENT IN THE COMPANY THROUGH A MARKET RISE IN OUR
SECURITIES. We have never paid, and have no intentions in the foreseeable future
to pay, any dividends on our common stock. Therefore, if you purchase any Units
in this offering, you may only realize a profit on your investment if the market
price of our Common Stock or Warrants increases in value. See "Dividend Policy."
YOUR WARRANTS ARE REDEEMABLE AND THIS MAY IMPACT YOU. We may redeem the Warrants
in certain circumstances. Our exercise of this right would force a holder of the
Warrants to exercise the Warrants and pay the exercise price at a time when it
may be disadvantageous for the holder
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<PAGE>
to do so, to sell the Warrants at the then current market price when the holder
might otherwise wish to hold the Warrants for possible additional appreciation
or to accept the redemption price, which is likely to be substantially less than
the market value of the Warrants in the event of a call for redemption. Holders
who do not exercise their Warrants prior to redemption will forfeit their right
to purchase the shares of Common Stock underlying the Warrants. The foregoing
notwithstanding, we may not redeem the Warrants at any time that a current
registration statement under the Act is not then in effect. See "Description of
Securities - Redeemable Warrants."
WE WILL GRANT UNDERWRITER'S OPTIONS WHICH MAY IMPACT YOU. In connection with the
Offering, we will issue up to 30,000 Underwriter's Options each to purchase a
Unit for $7.44. To the extent that the Underwriter's Options and the Warrants
issuable on their exercise are exercised, they would have a dilutive effect on
the percentage of outstanding shares of Common Stock owned by persons investing
in this Offering. The exercise of the Underwriter's Options is likely to occur
at a time when we could probably obtain additional equity capital on terms more
favorable than those provided by the Underwriter's Options. See "Underwriting."
WE ARE AUTHORIZED TO ISSUE PREFERRED STOCK WHICH, IF ISSUED, MAY ADVERSELY
AFFECT YOUR VOTING RIGHTS AND REDUCE THE MARKET PRICE OF OUR COMMON STOCK. Our
board of directors is authorized by our articles of incorporation to issue
shares of preferred stock without the consent of our shareholders. Our preferred
stock, when issued, may rank senior to common stock with respect to voting
rights, payment of dividends and amounts received by shareholders upon
liquidation, dissolution or winding up. Such preferences will be set by our
board of directors. The issuance of such preferred shares and the preferences
given the preferred shares, do not need the approval of our shareholders. The
existence of rights which are senior to common stock may reduce the price of our
common shares. We do not have any plans to issue any shares of preferred stock
at this time. See "Description of Securities".
WE ARE CONTROLLED BY OUR MANAGEMENT AND PURCHASERS IN THIS OFFERING WILL HAVE NO
CONTROL OVER OUR AFFAIRS. Bruce Baron our founder and the only member of
management who owns shares of our Common Stock, owns 500,000 shares, or 50.6%,
of our outstanding Common Stock. After the Minimum Offering Bruce Baron will own
47.1% of our outstanding Common Stock and after the Maximum Offering Bruce Baron
will own 38.9% of our Common Stock of the outstanding stock. Accordingly, he
will be in a position to control our affairs. See "Principal Shareholders".
PENNY STOCK REGULATIONS MAY EFFECT THE VALUE OF YOUR UNITS. The U.S. Securities
and Exchange Commission (the "Commission") recently adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock
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<PAGE>
not otherwise exempt from the rules, to deliver a standardized risk disclosure
document prepared by the Commission that provides information about penny stocks
and the nature and level of risks in the penny stock market. The broker-dealer
also must provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and its sales person in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker-dealer and sales person compensation information, must be given to
the customer orally or in writing before or with the customer's confirmation. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from such rules the broker-dealer must make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Although the Offering's price of our Common Stock has been
set at $6.00, no assurance can be given that prices above $5.00 will be
maintained in any trading market that might develop. If the price of the Common
Stock drops below $5.00 it would be subject to the penny stock rules and
investors in this Offering may find it more difficult to sell their Common Stock
until the Company's Common Stock trades on the Nasdaq and/or sells at a price
greater than $5.00 per share.
THE OFFERING PRICE AND STRUCTURE OF THE UNITS WAS ARBITRARILY DETERMINED. The
price of the Units and the terms of the Warrants have been determined by us and
the Underwriter. In determining the Offering price, we have considered such
matters as our financial condition, estimates of our business potential, the
early stage of development of our business, the general condition of the
securities market, and the "penny stock" rules. The Offering price of the Units
should not, however, be considered an indication of the actual value of the
Company or its securities. The Offering price of the Units does not bear any
relationship to the assets, net worth, results of operations, or other objective
criteria of value applicable to us. Moreover, the Offering price of the Units
should not be viewed as any indication of the future value of the Units.
YOU WILL SUFFER DILUTION WHEN YOU PURCHASE THE UNITS AND YOU MAY SUFFER MORE
DILUTION IN THE FUTURE. This Offering involves immediate substantial dilution
from the Offering price. Subsequent to this Offering, the net tangible book
value of the Common Stock included in the Units offered hereby will be
substantially less than the price at which you will purchase the Units. The book
value of our shares (as at September 30, 2000) as adjusted for the sale of the
Minimum Units will be $406,431 or $0.38 per share. Accordingly, in a Minimum
Offering, purchasers of Units will sustain an immediate substantial dilution of
their investment of $5.62 per share included in the Unit. The book value of our
shares (as at September 30, 2000) as adjusted for the sale of the Maximum Units
will be $1,620,081 or $1.26 per share. Accordingly, in a Maximum Offering,
purchasers of Units will sustain an immediate substantial dilution of their
investment of $4.74 per share included in the Unit.
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<PAGE>
OUR OUTSTANDING COMMON STOCK MAY ADVERSELY AFFECT THE MARKET PRICE OF THE
SHARES, WARRANTS AND UNITS WHICH YOU ARE BUYING. We have 987,500 shares of our
common stock presently issued and outstanding which will not be sold in this
Offering. We cannot predict the effect, if any, that sales of these outstanding
shares or the availability of those shares for sale, will have on the market
prices of our common stock. These shares were all acquired at prices of $.60 as
to 50,000 shares and $.004 as to the balance. All of these shares will become
eligible for sale pursuant to Rule 144 under the Act at various times before May
1, 2001. While each of our present shareholders has agreed that without the
Underwriter's consent they will not sell any of their shares until twelve months
after the first closing hereunder and while each of those persons has further
agreed to sell no more than 50% of their holdings prior to eighteen months from
the first closing date without the consent of the Underwriter, it is impossible
to predict the effect of these sales on any market that may develop. See "Shares
Eligible for Future Sale" on Page __.
NO TRADING MARKET MAY EVER DEVELOP FOR OUR COMMON STOCK AND WARRANTS AND ANY
MARKET THAT DOES DEVELOP MAY BE SPORADIC OR VOLATILE. Prior to this Offering
there is no trading market for our Common Stock or Warrants. Although we intend
to seek inclusion of the Common Stock and the Warrants on the OTCBB, we might
not successfully accomplish this. Even if the Common Stock and the Warrants
trade on the OTCBB, a regular trading market may not develop and, if such market
does develop, it may not be sustained. The OTCBB is an unorganized, inter-dealer
over-the-counter market which provides significantly less liquidity than either
Nasdaq SmallCap or the Nasdaq National Market and quotes for securities traded
on the OTCBB do not appear in the financial sections of newspapers. Therefore
prices for securities traded on the OTCBB may be more difficult to obtain than
securities included in Nasdaq. Furthermore, it is unlikely that lending
institutions will be willing to accept the Common Stock or Warrants as
collateral for loans, even if a trading market does develop.
WE MAY ISSUE A SUBSTANTIAL AMOUNTS OF ADDITIONAL SHARES WITHOUT SHAREHOLDER
APPROVAL. After this Offering, and assuming a sale of the maximum number of
Units in the Offering, we will have an aggregate of approximately 7,000,000
shares of Common Stock authorized but unissued and not reserved for specific
purposes. All of such shares may be issued without any action or approval by our
shareholders. Although there are no other present plans, agreements,
commitments, or undertakings by us with respect to the issuance of additional
shares, or securities convertible into shares, any shares issued would further
dilute the percentage ownership of the Company held by the purchasers in this
Offering. We have agreed that, with certain limited exceptions for stock options
to employees and consultants, we will not issue additional shares of our common
or preferred stock for a period of 24 months from the date of this prospectus at
a price below $6.00 per share without the consent of the Underwriter. See
"Description of Securities" on page 27.
IT WILL BE NECESSARY FOR US TO UPDATE THIS REGISTRATION STATEMENT. So long as
the Warrants or Option Units are exercisable, or in the event that we elect to
reduce the exercise price or exercise period of the Warrants, we will be
required to file one or more Post-Effective Amendments to its Registration
Statement to update the general and financial information contained in this
Prospectus. These obligations could result in substantial expense to us and
could be a hindrance
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<PAGE>
to any future financing. Warrants may not be exercised after _______ ,200_,
unless and until a Post-Effective Amendment has been filed and becomes
effective. We will notify our transfer agent and all Warrant holders if Warrants
may not be exercised due to the absence of an effective Post-Effective
Amendment. Although we have undertaken and intend to keep this Registration
Statement current, we might not keep this Registration Statement current, and,
if for any reason we do not do so, the Warrants will not be exercisable.
THE UNDERWRITER WILL NOT ACT AS A MARKET MAKER. A significant amount of the
Units which are to be sold in this Offering may be sold to customers of the
Underwriter. The Underwriter does not act as market maker in any securities and
will not be making a market in our securities. Broker/dealers other than the
Underwriter might not make a market in our securities. In the event that other
broker/dealers fail to make a market in our securities, the possibility exists
that the market for and the liquidity of your Common Stock and Warrants could be
severely adversely affected. This, in turn, could affect your ability to trade
your Common Stock and your Warrants.
A CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION WILL BE REQUIRED TO
EXERCISE YOUR WARRANTS. We intends to qualify the sale of the Units in a limited
number of states, although certain exemptions under certain state securities
("blue sky") laws may permit the Warrants to be transferred to purchasers in
states other than those in which the Warrants were initially qualified. Although
the Units will not knowingly be sold to purchasers in jurisdictions in which
they are not registered or otherwise qualified for sale, purchasers may buy
Units or Warrants in the aftermarket or may move to jurisdictions in which the
shares of Common Stock issuable upon exercise of the Warrants are not so
registered or qualified during the period that the Warrants are exercisable. We
may decide not to seek, or may not be able to obtain qualification of the
issuance of such Common Stock in all of the states in which the ultimate
purchasers of the Warrants reside. In this event, we would be unable to issue
shares of Common Stock to those persons desiring to exercise their Warrants. We
might not be able to effect any required registration or qualification of the
Common Stock in any jurisdiction. See "Description of Securities - Warrants."
BEST EFFORTS OFFERING; ESCROW OF INVESTOR'S FUNDS. This Offering is being made
on a "best efforts, all-or-none" basis with respect to the first 75,000 Units.
All or none of them will be sold. The remaining 225,000 Units offered will be
made on a "best efforts" basis. Since this Offering is being made on a "best
efforts" basis, there can be no assurance that any of the Units will be sold.
Under the terms of this Offering, the Underwriter is offering the Units for a
period of 90 days which may be extended up to an additional 90 days. Pending the
sale of 75,000 Units, all proceeds will be held in an escrow account. No
commitment exists by anyone to purchase all or any of the Units offered hereby.
Consequently, subscribers' funds may be escrowed for as long as 180 days and
then returned without interest thereon or deduction therefrom in the event
75,000 Units are not sold within the offering period. Investors, therefore, will
not have the use of any subscription funds during the subscription period. See
"Underwriting."
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<PAGE>
OUR CERTIFICATE OF INCORPORATION HAS CERTAIN ANTI-TAKEOVER PROVISIONS. Our
Certificate of Incorporation contains provisions that may discourage acquisition
bids for your stock. After completion of the Offering, we will have substantial
authorized but unissued capital stock available for issuance. Our Certificate of
Incorporation contains provisions which authorize our Board of Directors,
without the consent of stockholders, to issue additional shares of Common Stock
and issue shares of Preferred Stock in series, including establishment of the
voting powers, designation, preferences, limitations, restrictions and relative
rights of each series of Preferred Stock. Preferred Stock, issued in series,
could potentially be utilized to discourage or defeat a take-over bid to control
us. We know of no proposed take-over bid.
WE MAY ISSUE ADDITIONAL SHARES WHICH WOULD FURTHER DILUTE YOUR SHARES We may be
required to issue additional shares of our Common Stock to attract employees and
other personnel. If we do this, the percentage of our shares owned by purchasers
in this Offering could be reduced and their respective voting power diluted.
THIS OFFERING WILL BENEFIT MANAGEMENT. Upon the initial closing in this
Offering, Bruce Baron will enter into an employment agreement with us providing
for compensation to Mr. Baron at the rate of $50,000 per annum with a bonus of
4% of our pretax profits, if any. Until we realize revenues from operations, all
of the monies paid to Mr. Baron will be our existing funds, when those funds
have been expended, Mr. Baron's salary may be paid by funds received from
investors in this Offering.
FOR ALL OF THE FOREGOING REASONS AND OTHERS SET FORTH IN THIS PROSPECTUS, THE
SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY SHOULD BE AWARE OF THESE AND
OTHER FACTORS SET FORTH IN THIS PROSPECTUS. THESE SECURITIES SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD A TOTAL LOSS OF THEIR INVESTMENT IN US.
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HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING
We presently anticipate the net proceeds from the sale of the Units
after payment of commissions and expenses will amount to $357,050 if 75,000
Units are sold (the Minimum Offering) and $1,570,700 if the all 300,000 Units
are sold (the Maximum Offering).
We currently anticipate using the proceeds of this Offering
substantially as follows:
MINIMUM OFFERING MAXIMUM OFFERING
Advertising and Promotion $ 60,000 $ 600,000
Executive and Other Salaries $ 75,000 $ 150,000
Office Expenses $ 50,000 $ 250,000
Development of web site $ 15,000 $ 50,000
Working Capital $ 157,050 $ 520,700
--------- -----------
Total $ 357,050 $ 1,570,700
========= ===========
Pending any such uses of the proceeds of this offering, we will invest
the net proceeds of this offering in short-term, investment grade,
interest-bearing instruments. We believe that the net proceeds from the offering
together with funds generated from operations, will meet our anticipated capital
funding needs for at least the next 18 months.
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CAPITALIZATION
The following table presents our capitalization at of September 30, 2000, and as
adjusted: (i) to give effect to the sale of the minimum of 75,000 Units in this
offering and to the application of the estimated net proceeds of approximately
$357,050 and (ii) to give effect to the sale of maximum of 300,000 Units in this
offering and the application of the estimated net proceeds of approximately
$1,570,700.
<TABLE>
<CAPTION>
September 30, 2000 As Adjusted As Adjusted
Actual Minimum Offering Maximum Offering
------------------ ---------------- ----------------
<S> <C> <C> <C>
Shareholders' equity: Common
stock, $0.0001 par value,
8,750,000 shares authorized;
987,500 shares (actual),
1,062,500 shares (as adjusted
minimum); 1,287,500 shares (as
adjusted maximum) issued and
outstanding $ 395 $ 403 $ 425
Additional paid-in capital $ 53,965 $ 410,597 $ 1,624,225
Retained Earnings (Deficit) $ (4,569) $ (4,569) $ (4,569)
Total shareholders' equity
and capitalization $ 49,381 $ 406,431 $ 1,620,081
</TABLE>
DETERMINATION OF OFFERING PRICE
We and the Underwriter have arbitrarily determined the initial $6.00
offering price of the shares of Common Stock, a $.10 offering price for each of
the two Warrants in the Units, a $6.20 offering price for the Units and a $7.00
exercise price for the Warrants. The offering price and the terms of the
Warrants is not based on the general condition of the equities market or the
valuations of other companies in our market segment.
DILUTION
Dilution is the difference between the $6.00 purchase price you will
pay for a share and the net tangible book value of that share immediately after
you purchase it. In the event of a Minimum Offering you will experience an
immediate and substantial dilution of $5.75 out of the $6.00 you pay for a
share, because the net tangible book value of your shares will immediately be
reduced to $0.25 In the event of a Maximum Offering you will experience an
immediate and substantial dilution of $4.74 out of the $6.00 you pay for a
share, because the net tangible book value of your shares will immediately be
reduced to $1.26. In making these calculations, we have attributed $.10 to each
of the two Warrants in each Unit.
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Our net tangible book value at September 30, 2000, was $ 49,381 or
$0.05 per share of common stock. Net tangible book value per share represents
the amount of total tangible assets less liabilities, divided by 987,500, the
number of shares of common stock outstanding at September 30, 2000. See
"Description of Capital Stock." After giving effect to the sale of the Minimum
Offering of 75,000 Units, the as adjusted net tangible book value at September
30, 2000, would be $406,431 or $38 per share. This represents an immediate
increase in net tangible book value of $.33 per share to the existing
shareholders and an immediate and substantial dilution of $5.62 per share to new
investors. After giving effect to the sale of the Maximum Offering of 300,000
Units, the as adjusted net tangible book value at September 30, 2000, would be
$1,620,081 or $1.26 per share. This represents an immediate increase in net
tangible book value of $1.21 per share to the existing shareholders and an
immediate and substantial dilution of $4.74 per share to new investors. The
following table illustrates this per share dilution:
Public offering price per share of common stock being offered $6.00
Net tangible book value per share - initial $0.05
Increase attributable to new investors (Minimum Shares) $0.33
Adjusted net tangible book value after offering (Minimum Shares) $0.38
Dilution per share to new investors (Minimum Shares) $5.62
Dilution as a percentage of offering price (Minimum Shares) 94%
Increase attributable to new investors (Maximum Shares) $1.21
Adjusted net tangible book value after offering (Maximum Shares) $1.26
Dilution per share to new investors (Maximum Shares) $4.74
Dilution as a percentage of offering price (Maximum Shares) 79%
The following tables summarize the relative investments of investors
pursuant to this offering and our current shareholders, based on a per share
offering price of $6.00 before deduction of offering expenses, and assuming the
sale of the Minimum Offering of 75,000 Units and the Maximum Offering of 300,000
Units.
<TABLE>
<CAPTION>
Number Total Average Price
Shares Consideration Per
Purchased % Amount % Share
<S> <C> <C> <C> <C> <C>
Existing
Shareholders (1) 987,500 92.9% $ 23,950 5.1% $.024
New Investors
Minimum Shares 75,000 4.8% $ 450,000 94.9% $6.00
Total (1) 1,062,500 100.0% $ 323,950 100.0% $ .31
Existing
Shareholders (1) 987,500 76.7% $ 23,950 1.3% $.024
New Investors
Maximum Shares 300,000 24.33% $1,800,000 98.7% $6.00
Total (1) 1,287,500 100.0% $1,823,960 100.0% $1.42
</TABLE>
(1) The foregoing table does not give effect to the exercise of any of the
Warrants, the Underwriter's Unit
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Option or any options issued or which may be issued under any stock
option plan we might adopt.
You should note that in preparing the above tables, we have allocated
$.20 of the purchase price of the Units to the Warrants.
OUR DIVIDEND POLICY
We have not paid, and have no current plans to pay, dividends on our
common stock. Even if we were to elect to pay any dividends, we may incur
indebtedness in the future, the terms of which may prohibit or effectively
restrict dividend payments.
OVERVIEW AND PLAN OF OPERATIONS
We were formed in February, 2000 and are in the early stage of our
development. We will be engaged in the operation of a web site which will
provide information regarding securities traded on the OTCBB. We expect to
realize revenues from subscribers and from fees paid by issuers. To date our
activities have been preparing for this Offering and we have not realized
revenues. Our proposed web site is not yet operational. Our goal will be to
identify both user and issuer customers and to attract those customers through
our web site content and our marketing efforts.
We do not have any revenues and will not generate any meaningful
revenues until after our web site attracts subscribers. We plan to attract and
retain a significant number of subscribers through advertising in print and
other non-web related media. We do not anticipate generating any meaningful
revenue until at least several months following the consummation of this
offering, if at all. Accordingly, a comparison of the quarter ended September
30, 2000 with any prior period is not meaningful.
Since our inception through September 30, 2000 our cumulative net
losses were $(4,569). We might not be able to attract a sufficient number of
subscribers or issuers to achieve profitable
operations.
OUR BUSINESS
BBIS.com, Inc. ("we", "us" or the "Company") was incorporated under the
Laws of the State of Delaware in February, 2000 and is not yet operational. We
intend to become a comprehensive source for information on the Internet
regarding companies traded on the OTCBB. We are developing a web based
subscriber community at our pay for access web site, www.botcb.com, to utilize
our information services and plan to publish an on-line magazine containing
information on OTCBB companies. The web site will provide links to OTCBB company
web sites and market information. Our planned magazine will feature research
reports on OTCBB companies. We plan to realize revenues from subscriber fees
paid by the users of our web site, as well as fees paid by companies for
articles available on this web site. Our hope is to distinguish our web site
from other web sites offering information which is intended to be
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comprehensive with respect to OTCBB companies. The information we will offer
will include a description of the business, current financial position, names
and background of officers and directors, recent press releases, copies of
reports filed by the OTCBB companies. We will also engage in directed print and
radio advertising to attract fee paying users to our web site. A significant
portion of the proceeds of this Offering are to be devoted to print and radio
advertising to develop name recognition for our web site. (See "Use of
Proceeds"). We believe that if we are successful in attracting fee paying
subscribers, we will be able to charge companies higher fees for preparing
reports on their business and prospects. We expect to construct our web site
utilizing the proceeds of this Offering and expect that the web site will be
fully operational approximately two months after we receive the proceeds from
this Offering. We do not expect to realize any revenues until after our web site
is operational. We do not intend to make any buy or sell recommendations with
respect to any OTCBB company.
THE OVER THE COUNTER BULLETIN BOARD "OTCBB"
The OTCBB is a regulated quotation service that displays real-time
quotes, last-sale prices, and volume information in over-the-counter (OTC)
equity securities. An OTC equity security generally is any equity that is not
listed or traded on Nasdaq(R) or a national securities exchange. OTCBB
securities include national, regional, and foreign equity issues, warrants,
units, American Depositary Receipts (ADR's), and Direct Participation Programs
(DPP's).
HISTORY
In June 1990, the OTCBB began operation, on a pilot basis, as part of
important market structure reforms. The Penny Stock Reform Act of 1990 mandated
the U.S. Securities and Exchange Commission (SEC) to establish an electronic
system that met the requirements of Section 17B of the Exchange Act. The system
was designed to facilitate the widespread publication of quotation and last-sale
information. Since December 1993, firms have been required to report trades in
all domestic OTC equity securities through the Automated Confirmation
Transaction Service sm (ACTsm) within 90 seconds of the transaction.
On January 4, 1999, the SEC approved the OTCBB Eligibility Rule.
Securities not quoted on the OTCBB as of that date were required to report their
current financial information to the SEC, banking, or insurance regulators in
order to meet eligibility requirements. Non- reporting companies whose
securities were already quoted on the OTCBB were granted a grace period to
comply with the new requirements. Those companies were phased in beginning in
July 1999 and the phase in was completed in June 2000. Now that the phase in is
completed, current financial information of all domestic companies that are
quoted on the OTCBB is publicly available.
FEATURES OF THE OTCBB:
o access to more than 6,500 securities; includes more than 400
participating market makers;
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o transmits real-time quote, price, and volume information in domestic
securities, foreign securities and ADR's; and
o displays indications of interest and prior-day trading activity in
DPP's.
COMPARISON OF NASDAQ(R) AND OTCBB
The OTCBB is a quotation medium for subscribing members, not an issuer
listing service, and should not be confused with The Nasdaq Stock Markets.
OTCBB securities are traded by a community of Market Makers that enter quotes
and trade reports through a highly sophisticated, closed computer network. The
OTCBB is unlike The Nasdaq Stock Market in that it does not impose listing
standards relating to the size of the listed company and does not impose ongoing
maintenance fees to quoted issuers. As a result of these differences, many OTCBB
securities are in smaller companies than those listed on Nasdaq.
The OTCBB is distinct from the Pink Sheets. The "Pink Sheets"(R) are
operated by the National Quotation Bureau, LLC (NQB) and are a static paper
quotation medium printed weekly and distributed to broker/dealers. An electronic
version of the Pink Sheets is updated once a day and disseminated over market
data vendor terminals. The Pink Sheets are owned and operated by the National
Quotation Bureau, Inc., not The Nasdaq Stock Market, Inc.
OUR ACTIVITIES TO DATE AND PLANNED OPERATIONS
Until now we have been engaged in preparing to provide Internet
investment research and services. We plan to establish and maintain a web site
at WWW.BOTCB.COM with links to other web sites that contain up-to-date
information on the OTCBB maintained by the NASD. Our web site will include
information on specific sectors of the market, and new developments concerning
public companies. We believe that revenues will be derived from subscriptions to
the web site as well as from issuers which subscribe for our services. Our
services for issuers will include presentation in our planned on-line magazine,
and the creation of links between our web site and the issuer's web site. We
hope to be able to charge monthly fees to companies for these links. We will
also seek to realize revenues from our on-line magazine by asking our readers
whether they would like to receive additional information on the company and
charging the company. Our web site will feature a "public relations' column that
will name companies that are initiating public relation campaigns. We will also
seek to establish an OTCBB most active section on our web site with data
regarding such companies as well as an OTCBB index, which will link to any OTCBB
company that has a web site.
Our ability to charge OTCBB issuers fees for our services will be
dependent in large part on the size of our user subscriber base. We intend to
attract users through directed print and radio advertising.
We will seek to organize the content of our web site in a way to
attract additional users. A main attraction of the web site will be the on line
magazine. The magazine will feature articles on Bulletin Board Companies and
will have a Public Relations column that will report on new
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Public Relations campaigns on Bulletin Board Companies. Since few Bulletin Board
companies are followed by analysts on Wall Street we believe that the
information offered in our magazine will attract fee paying users. The Magazine
may have a research site that specializes in the Over The Counter Bulletin Board
Companies. The web site may include an OTCBB most active section with the day's
most active list of Bulletin Board stocks. This section may also feature news
stories on these stocks from various sources. We believe that the monthly hits
for this section of the web site will lead investors to look at our other
features on our web site.
The web site will include a Bulletin Board index where users can link
with any bulletin board trading issuer that has a web site. We intend to give a
brief corporate background on each issuer. We will also do this with
newsletters, brokerage sites, and other financial service companies.
We are aware of the sensitive regulatory climate in which we plan to
operate. In March, 2000, the Securities and Exchange Commission announced that
it had a special operation to target fraudulent and manipulative practices
relating to the promotion of securities on the Internet. Management expects to
observe regulatory/compliance standards, however, no assurance can be given that
the Company will avoid regulatory inquiries, the costs of responding to
regulatory inquiries, or the imposition of sanctions, fines or other penalties
which it may incur.
COMPETITION
The market for community based e-commerce on the Internet is new and
rapidly evolving and competition for visitors, advertisers, strategic partners
and e-providers is intense and is expected to increase significantly in the
future. The costs of entering our line of business are not particularly high.
Some of the other companies who are primarily focused on creating a web - based
investor subscription community on the Internet are Stock Research Group,
Gigweb, Stockhouse and Stockscape. All of these competitors are significantly
larger than us and more established and known in the Internet industry. We will
likely also face competition in the future from web directories, search engines,
shareware archives, content sites, commercial online service providers, sites
maintained by Internet service providers and other entities. There can be no
assurance that our competitors and potential competitors will not develop
investor communities that are equal or superior to our's or that achieve greater
market acceptance than we do. Accordingly, we will likely face increased
competition, resulting in pressure on our and advertising revenues. We also
expect to compete, to some degree, with other information service providers
which have established major financial sites, such as Quicken, Yahoo Finance,
MarketWatch, PCQuote, BigCharts and others. Entities with which we might in the
future seek to enter into a strategic relationship may have already established
collaborative relationships with our competitors or potential competitors, and
other high-traffic web sites. We will compete for issuer clients with other web
sites and public relations firms. On all levels competition will be intense and
many of the competitors will have greater resources than us. We plan to compete
for subscribers through the content of our web site and through print media. We
plan to compete for issuers through establishing a subscriber base. We might not
be successful in these efforts.
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OFFICES
We currently maintains our office at 1036 Northern Boulevard, Roslyn,
New York within the offices of Port Motors, an automobile dealership owned by
Mr. Baron's parents. The arrangement is month to month with no charges to us.
After the completion of the Offering, we intend to rent office space in New York
City at $4,000 per month. We believe that there is sufficient office space
available at such price for our needs in the New York City market.
MANAGEMENT
Our directors and executive officers are as follows:
NAME AGE POSITION(S) HELD
---- --- ----------------
Bruce Baron 45 President and a Director
Frances D'Ippolito 50 Secretary and Treasurer
Lee B. First 72 Director
Victor DiBlasi 52 Director
The directors named above will serve until our first annual meeting of
stockholders. Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of our Board of Directors, absent any employment agreement. Mr. Baron will have
an employment agreement as set forth on page __.
BIOGRAPHICAL INFORMATION
BRUCE BARON was elected our President and a Director upon our
organization. He has been preparing investment newsletters for more than 10
years. He is currently editor and owner of the "Perception Investing" investment
newsletter, which is located at the web site www.botcb.com and for more than 10
years has been the sole shareholder of Perception Investing Corp.
FRANCES D'IPPOLITO has been Secretary and Treasurer since September
2000. Ms. D'Ippolito has been an assistant editor and vice president of
Perception Investing with responsibilities in sales, bookkeeping and financial
public relations for more than the past five years.
LEE B. FIRST was elected a director in September 2000. She has been a
partner in the New York City Law firm of First & First since 1989 and prior
thereto was she had been the Supervising Administrative Law Judge for the New
York State Workers Compensation Board.
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VICTOR DIBLASI was elected a Director in December 2000. He has been
active in the retail sale of furniture for more than ten years. He has operated
the clearance center at the New York Design Center, a designer furniture outlet
in New York City, since 1988. Since 1996, he has also operated Peter Lawrence,
Ltd, New York, New York a sales representative for two country furniture
manufacturers. Mr. DiBlasi received a B.A. from Seton Hall University in 1972.
EMPLOYMENT AGREEMENT
Simultaneously with the first closing hereunder, we will enter into a
three year employment agreement with Bruce Baron which will provide for a base
salary of $50,000 plus a bonus equal to 4% of pre-tax profits, if any, and
contains a restrictive covenant.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of September 30, 2000, and assuming
the sale of the Minimum Offering and the Maximum Offering information with
respect to the beneficial ownership of the Company's outstanding Common Stock by
(i) each director and executive officer of the Company, (ii) all directors and
executive officers of the Company as a group, and (iii) each shareholder who was
known by the Company to be the beneficial owner of more than 5% of the Company's
outstanding Common Stock. Except as otherwise indicated, the persons or entities
listed below have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
PERCENTAGE
OF CLASS
NUMBER BEFORE AFTER MINIMUM AFTER MAXIMUM
NAME OF SHARES OFFERING OFFERING OFFERING
---- --------- -------- -------- --------
Bruce Baron 500,000 50.6% 47.1% 38.9%
Frances D'Ippolito 0 * * *
Victor DiBlasi 0 * *
Lee B. First 0 * * *
Dr. Eugene Stricker 163,125 (1) 16.5% 15.3% 12.7%
The SBS Limited
Partnership 108,125 (1) 10.9% 10.1% 8.4%
RIC Ventures, LLC (2) 62,500 6.3% 5.9% 4.9%
All officers and
directors as a group
(4 persons) 500,000 (1) 50.6% 47.1% 38.9%
* Less than .1%
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(1) Mark Schindler is the general partner of The SBS Limited
Partnership. As to each of Dr. Stricker and The SBS Limited Partnership,
includes one half each (6,250) of the 12,500 shares owned by Madison Venture
Capital II, Inc., a company owned by Dr. Stricker and Mr. Schindler.
(2) The principal owner of RIC Ventures, LLC is Roy Israel.
Management has no plans to issue any additional securities to
management, promoters or their affiliates or associates and will do so only if
such issuance is in the best interests of shareholders of the Company and
complies with all applicable federal and state securities rules and regulations.
CERTAIN TRANSACTIONS
We were organized in February, 2000 and sold an aggregate of 987,500
shares to our founders for $.004. The officers, directors and principal
shareholders of the Company purchased the founders' shares indicated under
"Principal Shareholders" from the Company at such price.
Upon our organization, Bruce Baron invested $20,000 in us as a capital
contribution. In September, 2000, Mr. Baron sold an aggregate of 50,000 of his
shares to two non-affiliated accredited investors for $30,000 and contributed
all of the proceeds of that sale to us.
Madison Venture Capital II, Inc., a company owned by Dr. Eugene
Stricker and Mark Schindler (the general partner of The SBS Limited
Partnership), has entered into a five year business consulting agreement with us
providing for fees of $1,000 per month from October 2000 to January 2001 and
$2,000 thereafter.
DESCRIPTION OF SECURITIES
We are authorized to issue 8,750,000 shares of Common Stock, $.0001 par
value, and 5,000,000 shares of Preferred Stock, $.0001 par value. As of
September 30, 2000 we had 987,500 shares of Common Stock outstanding, which were
held by 15 holders of record, and no shares of preferred stock were designated
or outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders generally, including the election of
directors. Holders of Common Stock do not have cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
directors can elect all of the directors if they chose to do so, and in such
event, the holders of the remaining shares will not be able to elect any persons
to our Board of Directors. The holders of Common Stock have no preemptive or
other subscription or conversion rights with respect to any stock issued by us.
The Common Stock is not subject to redemption, and the holders thereof are not
liable for further calls or assessments. Holders of
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Common Stock are entitled to receive such dividends as may be declared by our
Board of Directors out of funds legally available therefore and to share
pro-rata in any distributions to the holders of Common Stock. There are no
redemption or sinking fund provisions available to the Common Stock. All
outstanding shares of Common Stock are validly authorized and issued and are
fully paid and non-assessable, and the shares of Common Stock to be issued upon
completion of the Offering will be validly authorized and issued, fully paid and
non-assessable. We have agreed that, with certain exceptions for employee stock
options, we will not issue any shares of our capital stock for 24 months from
the date of this prospectus, at a price below $6.00 per share, without the
Underwriter's consent.
PREFERRED STOCK
The Preferred Stock is issuable with such rights, preferences,
privileges and such number of shares constituting each series to be fixed by our
Board of Directors without further action by the holders of Common Stock or
Preferred Stock. Our Board of Directors could, without stockholder approval,
issue Preferred Stock with voting and conversion rights, which could dilute the
voting power of the holders of the Common Stock. The issuance of shares of
Preferred Stock by our Board of Directors could be utilized, under certain
circumstances, as a method of preventing a takeover of the Company. As of the
date of this Prospectus, our Board of Directors has not designated any series of
Preferred Stock and has not issued any Preferred Stock. There are no agreements
or understandings for the issuance of any shares of Preferred Stock.
WARRANTS
The Company is offering up to 300,000 Units, each of which include two
redeemable warrants. Each Warrant entitles the holder to purchase one share of
our Common Stock for $7.00 until __, 2006 (five years from the date of this
prospectus. The Warrants may be redeemed by us for $.05 if our Common Stock
trades at $8.40 or above for twenty consecutive trading days ending within 30
days of the giving of such notice. The Warrants and Common Stock will not trade
separately from the first day of trading and the Company will not seek a trading
symbol for the Units.
The Company has reserved a sufficient number of shares of Common Stock
for issuance upon any exercise of the Warrants and such shares, upon issuance,
will be fully paid and non-assessable. The shares of Common Stock so reserved
are included in the Registration Statement of which this Prospectus forms a
part, and the Company has filed an undertaking with the Securities and Exchange
Commission that it will maintain an effective Registration Statement, by filing
post effective amendments to this Registration Statement, throughout the term of
the Warrants, with respect to the shares of Common Stock issuable upon exercise
of the Warrants.
The number of shares of Common Stock issuable upon exercise of the
Warrants are subject to adjustments upon certain events, including the
declaration by the Company of a stock split, the reclassification, subdivision
or combination of outstanding shares of Common Stock into a greater or lesser
number of shares. In such event, the exercise price of the Warrants shall
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be adjusted accordingly.
Warrant holders are not entitled to vote upon any matters presented to
the holders of the Common Stock or to receive dividends until their Warrants
have been exercised. There is no market for the Warrants, nor is there any
assurance that a market might develop. Because only 600,000 Warrants will be
outstanding in the event of a Maximum Offering and because substantially fewer
Warrants could be outstanding after the Offering, the likelihood of an active
trading market developing in the Warrants, in the opinion of Management, is
uncertain.
For the life of the Warrants, the holders thereof are given the
opportunity to profit from any rise in the market value of the Company's Common
Stock at the expense of the holders of the Common Stock through the dilution of
their equity interest in the Company. The presence of the Warrants might
adversely impact the Company's ability to raise additional capital on favorable
terms.
With respect to the Company, the lapse or non-exercise of any of the
Warrants may result in ordinary income.
The Warrants may be exercised by filling out and signing the
appropriate notice of exercise form attached to the Warrant and mailing or
delivering the same (together with the Warrant) to the Warrant Agent in time to
reach the Warrant Agent prior to the time fixed for termination or redemption of
the Warrants, accompanied by payment of the full warrant exercise price. Payment
of the warrant exercise price must be made in United States currency by check,
cash or bank draft payable to the order of the Company. A certificate
representing the shares of Common Stock issuable upon exercise of the Warrants
will be issued as soon as practicable after receipt of the holder's request.
As compensation for the Underwriter's services in soliciting the
exercise of the Warrants issued herein, we have agreed to pay to the Underwriter
a commission of five percent of the exercise price of all Warrants exercised
beginning one year after the date hereof as the result of a solicitation made by
the Underwriter. A commission for Warrant exercise will not be paid if (i) the
market price of the Common Stock is lower than the exercise price; (ii) the
Warrants are held in a discretionary account; (iii) disclosure of the
compensation arrangements have not been made in documents provided to the holder
of Warrants both as part of this offering and at the time of exercise; or (iv)
the exercise of Warrants is unsolicited. An exercise of warrants will be
presumed to be unsolicited pursuant to (iv) above unless the holder has
indicated in writing that the transaction was not solicited and has designated
the broker/dealer which is to receive compensation for the exercise.
TRANSFER AGENT AND WARRANT AGENT
The Transfer Agent for the Common Stock and the Warrant Agent for the
Warrants is Continental Stock Transfer & Trust Company, 2 Broadway - 19th Floor,
New York, New York 10004.
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POSSIBLE ANTI-TAKEOVER EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
The Company has a large number of authorized but unissued Common Stock
and Preferred Stock. One of the effects of the existence of authorized but
unissued capital stock may be to enable our Board of Directors to render more
difficult or to discourage an attempt to obtain control of the Company by means
of a merger, tender offer, proxy contest or otherwise, and thereby to protect
the continuity of the Company's management. In this regard, the Company's
Articles of Incorporation grant our Board of Directors broad power to establish
the rights and preferences of the authorized and unissued Preferred Stock, one
or more series of which could be issued entitling holders to vote separately as
a class on any proposed merger or share exchange, to convert Preferred Stock
into a large number of shares of Common Stock or other securities, to demand
redemption at a specified price under prescribed circumstances related to a
change in control, or to exercise other rights designed to impede a takeover.
LIMITATION OF LIABILITY
The Company's Certificate of Incorporation and By-laws limit the
liability of directors and officers to the maximum extent permitted by Delaware
law. Delaware law provides that directors of a corporation will not be
personally liable for monetary damages for breach of their fiduciary duties as
directors, including gross negligence, except liability for (i) breach of the
directors' duty of loyalty; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law, (iii) the
unlawful payment of a dividend or unlawful stock purchase or redemption, and
(iv) any transaction from which the director derives an improper personal
benefit. Delaware law does not permit a corporation to eliminate a director's
duty of care, and this provision of the Company's Certificate of Incorporation
has no effect on the availability of equitable remedies, such as injunction or
rescission, based upon a director's breach of the duty of care.
The Company's Certificate of Incorporation authorizes the Company to
purchase and maintain insurance for the purposes of indemnification. At present,
there is no pending litigation or proceeding involving any director, officer,
employee or agent for which indemnification will be required or permitted under
the Company's Certificate of Incorporation, By-laws or indemnification
agreements. The Company is not aware of any threatened litigation or proceeding
which may result in a claim for such indemnification.
CORPORATION TAKEOVER PROVISIONS
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Under Section 203, certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period
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following the date that such stockholder became an interested stockholder,
unless (i) the corporation has elected in our original certificate of
incorporation not to be governed by Section 203 (the Company did not make such
an election), (ii) the business combination was approved by the Board of
Directors of the corporation before the other party to the business combination
became an interested stockholder, (iii) upon consummation of the transaction
that made it an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the commencement
of the transaction (excluding voting stock owned by directors who are also
officers or held in employee benefit plans in which the employees do not have a
confidential right to render or vote stock held by the plan) or, (iv) the
business combination was approved by the Board of Directors of the corporation
and ratified by two-thirds of the voting stock which the interested stockholder
did not own. The three-year prohibition also does not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of certain extraordinary transactions involving the corporation and
a person who had not been an interested stockholder during the previous three
years or who became an interested stockholder with the approval of the majority
of the corporation's directors. The term "business combination" is defined
generally to include mergers or consolidations between a Delaware corporation
and an "interested stockholder," transactions with an "interested stockholder"
involving the assets or stock of the corporation or our majority-owned
subsidiaries and transactions which increase an interested stockholder's
percentage ownership of stock. The term "interested stockholder" is defined
generally as a stockholder who, together with affiliates and associates, owns
(or, within three years prior, did own) 15% or more of a Delaware corporation's
voting stock. Section 203 could prohibit or delay a merger, takeover or other
change in control of the Company and therefore could discourage attempts to
acquire the Company.
STOCKHOLDER MEETINGS AND OTHER PROVISIONS
Under the By-laws, special meetings of the stockholders of the Company
may be called only by the Company's President or by the Company's President and
Secretary at the request of a majority of the members of our Board of Directors.
Stockholders are required to comply with certain advance notice provisions with
respect to any nominations of candidates for election to our Board of Directors
or other proposals submitted for stockholder vote. These provisions may have the
effect of deterring hostile takeovers or delaying changes in control or
management of the Company.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the consummation of this Offering, we will have 1,062,500 shares
of Common Stock outstanding in the event of a Minimum Offering and 1,287,500
shares of Common Stock outstanding in the event of a Maximum Offering. Only
those shares of Common Stock sold in this Offering (75,000 shares if the minimum
number of Units are sold, 300,000 shares if the maximum number of Units are
sold) will be freely tradeable without restriction or further registration under
the Securities Act of 1933, as amended, except for any shares purchased by an
"affiliate" of the Company (in general, a person who has a control relationship
with the Company, including our officers and directors) which will be subject to
the limitations of Rule
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144 adopted under the Securities Act of 1933, as amended. All of the remaining
987,500 shares are deemed to be "restricted securities," as that term is defined
under Rule 144 promulgated under the Securities Act of 1933, as amended, in that
such shares were issued and sold by the Company in private transactions not
involving a public offering. None of such remaining shares will be eligible for
sale under Rule 144 prior to February 2001 as to 937,500 shares and September
2001 as to 50,000 shares.
In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or other persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least one year is entitled
to sell, within any three month period, a number of shares that does not exceed
the greater of one percent of the total number of outstanding shares of the same
class or the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for at
least the three months immediately preceding the sale and who has beneficially
owned shares of Common Stock for at least two years is entitled to sell such
shares under Rule 144 without regard to any of the limitations described above.
Our present shareholders have agreed with the Underwriter not to sell
or otherwise dispose of any of their shares of Common Stock for a period of 12
months from the date of this Prospectus and thereafter not to sell more than 50%
of their shares for an additional six months without the prior written consent
of the Underwriter.
Prior to this Offering, there has been no market for the Common Stock
or Warrants and no prediction can be made as to the effect, if any, that market
sales of shares of Common Stock or the availability of such shares for sale will
have on the market prices prevailing from time to time. Nevertheless, the
possibility that substantial amounts of Common Stock may be sold in the public
market may adversely affect prevailing market prices for the Common Stock and
could impair the our ability to raise capital through the sale of its equity
securities.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, Security Capital Trading, Inc. (the "Underwriter") has agreed to use
its best efforts to offer a minimum of 75,000 Units and a maximum of 300,000
Units to the public. The first 75,000 Units are offered on a best efforts,
"all-or-none" basis at a purchase price of $6.20 per Unit. If the first 75,000
Units are sold, the Offering will continue on a "best efforts" basis, for an
additional 225,000 Units. The Underwriter has made no commitment to purchase or
take down all or any part of the Units offered hereby. The Underwriter has
agreed to use its best efforts to find purchasers for the Units offered hereby
within a period of 90 days from the date of this prospectus, subject to an
extension by mutual agreement of the Underwriter and us for an additional period
of 90 days (and an additional period of 10 business days thereafter to permit
clearance of the funds in escrow). Each subscriber will receive from the
Underwriter confirmation of his subscription to purchase Units with instructions
to forward their funds to Continental Stock Transfer & Trust Company, 2 Broadway
- 19th Floor, New York, New York 10004. All proceeds raised in this offering
will be deposited by noon of the next business day following receipt, in an
escrow
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account maintained at Continental Stock Transfer & Trust Company. All subscriber
checks will be made payable to the "Continental Stock Transfer & Trust Company
as escrow agent for BBIS.com, Inc.". If 75,000 Units are not sold within 90 days
from the date of this Prospectus (which may be extended an additional 90 days)
and the offering is cancelled, all monies received and held in the escrow
account will be promptly returned to the investor without interest thereon
(unless the offering is extended for an additional 90 days). In addition, during
the period of escrow subscribers will not be entitled to a refund of their
subscription.
The Units will be sold on a fully paid basis only. Common Stock and
Warrant certificates will be issued to purchasers only if the proceeds from the
sale of at least 75,000 Units are released to us. Until such time as the funds
have been released by the escrow agent, such purchasers, if any, will be deemed
subscribers and not stockholders. The funds in escrow will be held for the
benefit of those subscribers until released to us, and will not be subject to
our creditors or applied to the expenses of this offering.
In addition to the discounts. set out on the cover page which the
Company has agreed to allow to the Underwriter, we have agreed to pay to the
Underwriter a non-accountable expense allowance equal to three percent of the
aggregate price of all Units sold. We have already paid $15,000 towards this
non-accountable expense allowance.
Upon the completion of this offering, we have also agreed to sell to
the Underwriter for $.001 per option, or an aggregate of from $10 to $30, as
additional compensation, an option for the purchase of up to 30,000 Units on the
basis of one Unit for each ten Units sold to the public (the "Underwriter's
Option"), each exercisable to purchase one Unit at a price equal to $7.44
beginning on the first anniversary and continuing until the fifth anniversary of
the date of this prospectus. The Underwriter's Option may be exercised as to all
or any lesser number of Units and contain provisions which require, under
certain circumstances, that we register the Underwriter's Option and the
underlying securities for sale to the public. The Underwriter's Options are
nontransferable for a period of one year except to officers of the Underwriter,
members of the underwriting group and their respective officers or partners. The
Underwriter's Option's exercise price and the number of Option Units covered by
the Underwriter's Options are subject to adjustment to protect the holders
thereof against dilution in certain events. The Warrants underlying the
Underwriter's Option are intended to be identical to the Warrants offered to the
public hereunder.
We have granted to the Underwriter the right to designate a member of
our Board of Directors for a period of three years or, in the alternative, to
designate a person to attend all Board of Directors meetings and to receive all
notices and communications to Directors during such three year period, all at
our expense.
As compensation for the Underwriter's services in soliciting the
exercise of the Warrants issued herein, we have agreed to pay to the Underwriter
a commission of five percent of the exercise price of all Warrants exercised
beginning one year after the date hereof as the result of a solicitation made by
the Underwriter. A commission for Warrant exercise will not be paid if (i) the
market price of the Common Stock is lower than the exercise price; (ii) the
Warrants are held
33
<PAGE>
in a discretionary account; (iii) disclosure of the compensation arrangements
have not been made in documents provided to the holder of Warrants both as part
of this offering and at the time of exercise; or (iv) the exercise of Warrants
is unsolicited. An exercise of warrants will be presumed to be unsolicited
pursuant to (iv) above unless the holder has indicated in writing that the
transaction was not solicited and has designated the broker/dealer which is to
receive compensation for the exercise.
The Company and the Underwriter have agreed in the Underwriting
Agreement to indemnify each other against certain liabilities, including
liabilities under the Securities Act of 1933. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be provided to
officers, directors or controlling persons of the Company, such indemnification,
in the opinion of the Securities and Exchange Commission, is against public
policy and therefore unenforceable.
Our present shareholders have agreed with the Underwriter not to sell
or otherwise dispose of any of their shares of Common Stock for a period of 12
months from the date of this Prospectus and thereafter not to sell more than 50%
of their shares for an additional six months without the prior written consent
of the Underwriter. The Company has agreed with the Underwriter to refrain from
issuing new shares of common stock or preferred stock below the price to
purchasers under this prospectus ($6.00 per share) for a period of 24 months
from the date of this prospectus (other than shares issued to employees under a
Stock Option Plan) unless it receives the Underwriter's approval for the
issuance.
LEGAL MATTERS
Certain legal matters in connection with the Offering are being passed
upon for the Company by Frank J. Hariton, Esq., 1065 Dobbs Ferry Road, White
Plains, New York 10607. Mr. Hariton owns 18,750 shares of the Company's Common
Stock. Berlack, Israels & Liberman LLP, 120 East 45th Street, New York, New York
10036, has acted as counsel to the Underwriter.
EXPERTS
The financial statements included in this Prospectus have been audited
by Simon Krowitz Bolin & Associates, P.A., 11300 Rockville Pike - Suite 800
Rockville, Maryland 20852, independent certified public accountants, for the
periods and to the extent as set forth in their report appearing elsewhere
herein, and are included in reliance upon such report and upon the authority of
said firm as experts in accounting and auditing.
STATEMENT ON INDEMNIFICATION
The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Act (the "Delaware Act") which eliminates or limits
the personal liability of a director to the Company or our stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company may indemnify
34
<PAGE>
each of our directors and officers against his expenses (including reasonable
costs, disbursements and counsel fees) in connection with any proceeding
involving such person by reason of his having been an officer or director to the
extent he acted in good faith and in a manner reasonably believed to be in, or
not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be determined by our Board of
Directors. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
35
<PAGE>
BBIS.COM, INC.
INDEX TO FINANCIAL STATEMENTS
================================================================================
INDEPENDENT AUDITORS' REPORT F-2
FINANCIAL STATEMENTS
BALANCE SHEET F-3
STATEMENT OF OPERATIONS AND (DEFICIT) ACCUMULATED
DURING DEVELOPMENT STAGE F-4
STATEMENT OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6 to F-8
F-1
<PAGE>
SIMON KROWITZ BOLIN & ASSOCIATES, P.A.
11300 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
ACCOUNTANTS' REPORT
To the Board of Directors of
BBIS.com, Inc.
New York, New York
We have audited the accompanying balance sheet of BBIS.com, Inc. (a development
stage company) as of September 30, 2000 and the related statements of operations
and (deficit) accumulated during development stage and cash flows for the period
from February 9, 2000 (inception) to September 30, 2000. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BBIS.com, Inc. as of September
30, 2000 and the results of its operations and its cash flows for the initial
period then ended in conformity with generally accepted accounting principles.
/s/ SIMON KROWITZ BOLIN & ASSOCIATES, P.A.
-------------------------------------------
Simon Krowitz Bolin & Associates, P.A.
October 15, 2000
F-2
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 2000
================================================================================
ASSETS
CURRENT ASSET
Cash $ 34,381
Prepaid Fees 15,000
--------------------------------------------------------------------------------
TOTAL ASSETS $ 49,381
================================================================================
LIABILITY AND STOCKHOLDERS' EQUITY
LIABILITY
Accounts Payable $ 0
STOCKHOLDERS' EQUITY
Common Stock - $.0001 Par Value; 8,750,000 Shares
Authorized, 987,500 Shares Issued and Outstanding 395
Paid-in Capital 53,555
Retained (Deficit) Accumulated During Development Stage (4,569)
--------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 49,381
--------------------------------------------------------------------------------
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 49,381
================================================================================
F-3
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE
FOR THE PERIODS
================================================================================
February 9,
2000
(inception)
to September
30, 2000
--------------------------------------------------------------------------------
INCOME $ 0
--------------------------------------------------------------------------------
EXPENSES
Accounting Fee 1,500
Miscellaneous Expense 59
Bank Charge 40
Organization Expenses 2,970
--------------------------------------------------------------------------------
TOTAL EXPENSES 4,569
--------------------------------------------------------------------------------
NET (LOSS) (4,569)
ACCUMULATED (DEFICIT) - BEGINNING 0
--------------------------------------------------------------------------------
ACCUMULATED (DEFICIT) - SEPT. 30, 2000 $ (4,569)
================================================================================
NET DEFICIT PER SHARE - BASIC $ (.00)
NET DEFICIT PER SHARE - DILUTED $ (.00)
--------------------------------------------------------------------------------
SHARES USED IN PER SHARE
CALCULATION - BASIC 987,500
SHARES USED IN PER SHARE
CALCULATION - DILUTED 987,500
================================================================================
F-4
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIODS
================================================================================
February 9,
2000
(inception)
to September
30, 2000
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (4,569)
Adjustment to Reconcile Net Deficit to Net
Cash Used by Operating Activities 0
Increase in Prepaid Fee (15,000)
--------------------------------------------------------------------------------
NET CASH (USED) BY OPERATING ACTIVITIES (19,569)
--------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Contributed Paid-in-Capital 30,000
Proceeds from Issuance of Common Stock 23,950
--------------------------------------------------------------------------------
NET CASH FROM FINANCING ACTIVITIES 53,950
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 34,381
CASH - BEGINNING 0
--------------------------------------------------------------------------------
CASH - SEPTEMBER 30, 2000 $ 34,381
================================================================================
F-5
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
SEPTEMBER 30, 2000
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
HISTORY AND BUSINESS ACTIVITY - BBIS.com, Inc. (the Company) was
incorporated under the laws of the State of Delaware in February, 2000.
The Company is in a development stage and is not yet operational. The
Company intends to become a comprehensive source of information on the
internet regarding companies traded on the Electronic Bulletin Board
("OTCBB"). The Company is developing a web-based subscriber community
at its pay for access website, www.botcb.com, to utilize its
information services and will publish an on-line magazine containing
information on OTCBB companies. It will provide links to OTCBB company
websites and market information. The magazine will feature research
reports on OTCBB companies. The Company plans to realize revenue from
subscriber fees paid by users of its website, as well as fees paid by
companies for articles available on this website.
CASH AND CASH EQUIVALENTS - For purposes of reporting cash flow, cash
and cash equivalents include money market accounts and any highly
liquid debt instruments purchased with a maturity of three months or
less.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE - Basic net income (loss)
per share is computed using the weighted average number of common
shares outstanding during the period. Diluted net income (loss) per
share is also computed using the weighted average number of common
shares outstanding during the period, including conversion of any
warrants to its equivalent common stock.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reported period. Actual
results could differ from those estimates.
COMPREHENSIVE INCOME - The Company has no significant components of
other comprehensive income (loss) and accordingly comprehensive income
is the same as net income (loss) for all periods.
F-6
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
SEPTEMBER 30, 2000
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMMON STOCK - All of the Company's outstanding shares of common stock
were issued in February, 2000 and are restricted securities as defined
in Rule 144 under the Securities Act of 1933, as amended. The Company's
Articles of Incorporation contain provisions which authorize the Board
of Directors, without the consent of stockholders, to issue additional
shares of common stock and issue shares of preferred stock with
optional terms. Holders of common stock have non-cumulative voting
rights and no preemptive or other subscription or other rights with
respect to any stock issued by the Company.
PREFERRED STOCK - The Company has 5,000,000 shares authorized, $.001
par value, with 0 shares issued and outstanding. The preferred stock is
issuable with such rights, preferences, privileges and such number of
shares constituting each series to be fixed by the Board of Directors
without further action by the holders of common stock or preferred
stock. The Board of Directors could, without stockholder approval,
issue preferred stock with voting and conversion rights, which could
dilute the voting power of the holders of common stock.
NOTE 2 - INCOME TAXES
Since the Company has not yet realized income as of the date of this
report, no provision for income taxes has been made. At September 30,
2000, a deferred tax asset has not been recorded due to the company's
lack of operations to provide income to use the net operating loss
carryover of $4,569 which expires in 2020.
F-7
<PAGE>
BBIS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
SEPTEMBER 30, 2000
================================================================================
NOTE 3 - CONTINGENCIES
The Company is not currently aware of any other legal proceedings or
claims that the company believes will have, individually or in the
aggregate, a material adverse effect on the company's financial
position or results of operations.
NOTE 4 - SUBSEQUENT EVENT - OFFERING
The Company is currently planning on an offering of a minimum of 50,000
units to a maximum of 300,000 units at $6.20 per unit. Each unit
consists of one share of common stock and two redeemable warrants.
The warrants are immediately detachable from the units and exercisable
at the conclusion of the offering. Each warrant entitles the holder to
purchase one share for $7.00 until expiration or redemption. The
warrants expire five years from the date of the Prospectus and the
Company has the right to redeem the warrants at $.05 per warrant on 30
days written notice to holders provided that the closing price of the
common stock, as reflected in a trading market, has been at least $8.40
for at least twenty consecutive trading days during a period ending
within 20 days of the giving of such notice.
F-8
<PAGE>
(Outside back cover)
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE REPRESENTATIVE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
HEADING PAGE
Where You Can Find More Information ................................... 4
Disclosure Regarding Forward Looking Statements........................ 5
Prospectus Summary..................................................... 6
Risk Factors........................................................... 8
How We Intend to Use the Proceeds From the Offering ................... 18
Capitalization ........................................................ 19
Determination of Offering Price........................................ 19
Dilution............................................................... 19
Our Dividend Policy.................................................... 21
Overview and Plan of Operation......................................... 21
Our Business........................................................... 21
Management............................................................. 25
Principal Shareholders................................................. 26
Certain Transactions................................................... 27
Description of Securities.............................................. 27
Shares Eligible for Future Sale........................................ 31
Underwriting .......................................................... 32
Legal Matters.......................................................... 34
Experts................................................................ 34
Statement on Indemnification .......................................... 34
Index to Financial Statements.......................................... F-1
UNTIL , 2001 ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
36
<PAGE>
================================================================================
BBIS.COM, INC.
PROSPECTUS
300,000 UNITS
, 2001
================================================================================
37
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Company's Certificate of Incorporation provides for
indemnification of the Company's officers and directors to the fullest extent
permitted under the General Corporation Law of the State of Delaware ("DGCL").
SECTION 145 of the DGCL, as amended, applies to the Company and the
relevant portion of the DGCL provides as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
II-1
<PAGE>
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and
(b) of this section, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such
liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officer and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had continued.
II-2
<PAGE>
(i) For purpose of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any
employee benefit plan; and references to "serving at the request of the
corporation" shall include any service as a director, officer, employee
or agent of the corporation which imposes duties on, or involves
services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in
this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
The Company maintains insurance for the benefit of its directors and
officers and the directors and officers of its subsidiaries, insuring such
persons against certain liabilities, including liabilities arising under the
securities laws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable. Furthermore, the Company has given certain
undertakings with respect to indemnification in connection with this
Registration Statement.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission filing fee $ 1,675.91
National Association of Securities Dealers, Inc. filing fee $ 1,112.30
Printing Costs $ 10,000.00*
Blue Sky Fees and Expenses $ 10,000.00*
Legal fees and expenses $ 10,000.00*
Accounting fees and expenses $ 7,500.00*
Miscellaneous $ 7,211.79*
-------------
Total $ 47,500.00*
* All amounts estimated except for Securities and Exchange Commission and
National Association of Securities Dealers, Inc. filing fee.
All of these expenses of issuance and distribution will be paid by the Company.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Upon its organization in February 2000, the Company sold an aggregate of
3,950,500 shares of its common stock to its thirteen founders at $.001 per
share. These sales were exempt from the registration provisions of the
Securities Act of 1933, as amended, by reason of section 4(2) thereof as a
transaction by an issuer no involving any public offering. As a result of a one
for four reverse stock split effected in October 2000, the 3,950,000 shares were
reduced to 987,500 shares.
II-3
<PAGE>
ITEM 27. EXHIBITS.
Exhibit
Number Description
1.1 Form of Underwriting Agreement
1.2 Form of Selected Dealer's Agreement
3.1 Certificate of Incorporation of the Company.
3.2 Certificate of Amendment to the Certificate of Incorporation of the
Company effecting a one for four reverse stock split.
3.3 By-laws of Company
4.1 Specimen Certificate for Common Stock of the Company.*
4.2 Specimen Warrant Certificate.
4.3 Form of Warrant Agreement
4.4 Form of Underwriter's Unit Purchase Option
5.1 Opinion of Frank J. Hariton*
10.1 Form of Employment Contract between the Company and Bruce Baron.
22.1 Subsidiaries of the registrant. None.
23.1 Consent of Simon Krowitz Bolin & Associates, P.A.
23.2 Consent of Frank J. Hariton (to be included in Exhibit 5.1)
24.1 Power of Attorney - included in Part II
* To be filed by amendment
ITEM 29. UNDERTAKINGS.
A. Rule 415 Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
II-4
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement or
the most recent post-effective amendment thereof which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs
(1)(i) and (1)(ii) do not apply if the registration
statement is on Form S-3, Form S-8, and the information
required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by
the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement. (2) That, for the
purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof; and (3) To remove from registration by
means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of
the offering.
B. INDEMNIFICATION UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant 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 Act and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in the Town of Roslyn
and State of New York on January 5, 2001.
BBIS.com, Inc.
By: /S/ BRUCE BARON
----------------------
Bruce Baron, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bruce Baron his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
/S/ BRUCE BARON Director, Chairman of the January 5, 2001
------------------------ Board and President
Bruce Baron (Principal Executive, Accounting
and Financial Officer)
/S/ VICTOR DI BLASI Director January 5, 2001
------------------------
Victor Di Blasi
/S/ LEE B. FIRST Director January 8, 2001
------------------------
Lee B. First
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