<PAGE> 1
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post Effective No 1 to
FORM S-8 POS
AMENDMENT NO.1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
WASATCH INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 87-0435741
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) I.D. Number)
1301 N. Congress Avenue, Suite 135
Boynton Beach, Florida 33426
(Address, including zip code, of principal executive office)
Common Stock Underlying the Wasatch International
Corporation employee stock grant, option and
award plan
(Full Title of Plan)
Joe Logan Jr., President
Wasatch International Corporation
1301 N. Congress Avenue, Suite 135
Boynton Beach, Florida 33426
(Name, address, including zip code of agent for service)
With copies to:
Frohling, Hudak & McCarthy, P.C.
425 Eagle Rock Avenue, Suite 200
Roseland, New Jersey 07068
<PAGE> 2
This registration statement shall hereafter become effective in accordance with
Rule 462 promulgated under the Securities Act of 1933, as amended.
<PAGE> 3
PART 1
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
The contents of the initial Registration Statement pertaining to the
Wasatch International Corporation employee stock grant, option and award plan
filed on October 28, 1996 are incorporated herein by reference into this Form
S-8 POS, Amendment No. 1 to that Registration Statement. Required opinions and
consents and signatures are included in this Amendment.
The following table sets forth the number of shares of Common Stock
issued pursuant to the Company's Stock Plan and which are to be registered for
resale in accordance with the prospectus attached hereto as Exhibit A, and
incorporated herein by reference.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of covered by this
Selling Shareholder Prospectus
- ------------------- ----------------
<S> <C>
Wallace Giakas
222 Hwy 35 South
Middletown NJ 07748 20,000
Joe Logan Jr.
1301 N. Congress Ave
Suite 135
Boynton Beach FL 33426 550,000
Eli Leibowitz
289 Starling Rd.
Englewood NJ 07631 270,000
John B. M. Frohling
425 Eagle Rock Avenue
Suite 200
Roseland NJ 07068 300,000
Daniel Boyar
8365 SE 21 Avenue
Ocala FL 34480 400,000
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
Charles Edwards
3907 Greenway
Baltimore, Maryland 21218 500,000
Richard Gladstone
2200 Boca Raton Blvd.
Boca Raton FL 33431 26,000
Diran Kaloustian
4605 South Ocean Blvd.
Boca Raton FL 33487 220,000
TOTAL 2,286,000
</TABLE>
Item 2. Registration Information and Employee Plan Annual Information.
See Item 1.
PART 11
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
See Item 1.
Item 4. Description of Securities.
See Item 1.
Item 5. Interests of Named Experts and Counsel.
See Item 1.
Item 6. Indemnification of Directors and Officers.
See Item 1.
Item 7. Exemption from Registration Claimed
4
<PAGE> 5
See Item 1.
Item 8. Exhibits
See Exhibit Index and Exhibits at the end of this Form S-8
POS, Amendment No. 1 to the Registration Statement.
Item 9. Undertakings.
The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Include any additional or changed material information
with respect to the plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, treat each such post-effective amendment as a new
registration statement relating to the securities offered, and the offering of
the securities at that time shall be deemed to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any
securities which remain unsold at the termination of the offering.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 POS, Amendment No. 1, and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 2nd day of June 1997.
WASATCH INTERNATIONAL CORPORATION
By: /s/* Joe Logan Jr.
------------------------------------
Joe Logan Jr., President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on the 2th day of June, 1997.
/s/* Director
- --------------------------------
Eli Leibowitz
/s/* Director
- --------------------------------
Joe Logan Jr.
/s/* Director
- --------------------------------
Diran Kaloustian
By: /s/ John B.M. Frohling
-----------------------------
John B.M. Frohling
Attorney-in-Fact
6
<PAGE> 7
* John B.M. Frohling by signing his name thereto signs this Form S-8 on
behalf of the persons indicated above. An original power of attorney
authorizing John B.M. Frohling to sign this Form S-8 POS, Amendment No.
1, on behalf of Joe Logan Jr., Eli Leibowitz and Diran Kaloustian have
been executed.
7
<PAGE> 8
EXHIBIT INDEX
A. Opinion Re: Legality and Consent of experts.
B. Wasatch International Corporation Prospectus dated June 2,
1997.
1. Incorporated by reference and previously filed with the SEC
the Company's annual report on Form 10-KSB for the fiscal year
ended May 31, 1996.
2. Incorporated by reference and previously filed with the SEC as
the Company's Registration Statement for the Company's
employee stock grant, option and award plan filed on October
28, 1996.
3. Incorporated by reference and previously filed with
the SEC the Company's quarterly Form 10-QSB for the
period ended August 31, 1996.
4. Incorporated by reference and previously filed with
the SEC the Company's quarterly Form 10-QSB for the
period ended November 30, 1996.
5. Incorporated by reference and previously filed with
the SEC the Company's quarterly Form 10-QSB for the
period ended February 28, 1997.
23. Consent of Jones, Jensen & Company.
8
<PAGE> 1
EXHIBIT 23.1
[LOGO] [JONES, JENSEN & COMPANY LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS'
------------------------------------------
May 30, 1997
Wasatch International Corporation
(A Development Stage Company)
We hereby consent to the use of our audit report dated July 16, 1996 relating
to the balance sheet of Wasatch International Corporation as of May 31, 1996
and the related statements of operations, shareholders' equity and cash flows
for the years ended May 31, 1996 and 1995 and from inception on November 4,
1985 through May 31, 1996, in Post-Effective Amendment No.1, dated May 30,
1997, to Registration Statement on Form s-8 originally filed October 28, 1996.
/s/ JONES, JENSEN & COMPANY
- ---------------------------
Jones, Jensen & Company
50 South Main Street, Suite 1450, Salt Lake City, Utah 84144
Telephone (801) 328-4108, Facsimile (801) 328-4461
<PAGE> 1
EXHIBIT A
(OPINION RE: LEGALITY AND CONSENT OF EXPERTS)
<PAGE> 2
FROHLING, HUDAK & MCCARTHY, P.C.
COUNSELLORS AT LAW
425 EAGLE ROCK AVENUE P.O. BOX 22888
SUITE 200 NEWARK, NJ 07101
ROSELAND, NJ 07068 (201) 622-2800
(201) 226-4600
FAX (201) 226-0969 Please Reply to:
X Roseland
---
Newark
---
EXHIBIT A
June 2, 1997
Securities & Exchange Commission
450 Fifth St., NW
Washington, DC 20549
Re: Wasatch International Corporation
Registration on Form S-8 POS, Amendment No: 1.
Dear Sirs:
We are securities counsel to Wasatch International Corporation, a
Nevada corporation (the "Company"). We are rendering this opinion in connection
with the registration under the Securities Act of 1933, as amended, of 5,000,000
shares of Common Stock, $.001 par value, of the Company which may be issued from
time to time pursuant to the terms of the Company's Stock Plan and certain other
individual plans.
We have examined such instruments, documents and records, which we deem
relevant and necessary in order for us to render the opinion below. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 5,000,000
shares of common stock which may be issued are duly authorized shares of the
Company's Common Stock, and when issued shall be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement referred to above and the use of our name wherever it
appears in said registration statement.
Very truly yours,
By: /s/ FROHLING, HUDAK & MCCARTHY, P.C.
--------------------------------------
FROHLING, HUDAK & MCCARTHY, P.C.
11
<PAGE> 1
EXHIBIT B
(WASATCH INTERNATIONAL CORPORATION
PROSPECTUS DATED JUNE 2, 1997)
<PAGE> 2
WASATCH INTERNATIONAL CORPORATION
A NEVADA COMPANY
PROSPECTUS
5,000,000 SHARES OF COMMON STOCK, $0.001 PAR VALUE
Wasatch International Corporation, (the "Company") is a development
stage corporation in the business of acquiring equity positions in operating
companies primarily in the transportation and leisure fields including: a
commercial airline and land development properties in resort areas located
initially in the Bahamas and Florida. See "BUSINESS OF THE COMPANY".
This prospectus covers the issuance of 926,000 shares to consultants
and the resale of 1,360,000 shares, as part of the 5,000,000 shares of the
Common Stock of Wasatch International Corp., (the "Company") which may be issued
from time to time pursuant to the terms of Wasatch International Corp., Stock
Plan (the "Wasatch Stock Plan"). Said shares were previously registered by the
Company on Form S-8 filed on October 28, 1996. All expenses incurred in
connection with the preparation and filing of this prospectus and the related
Registration Statement are being borne by the Company.
Pursuant to the terms of the Wasatch Stock Plan the Company may issue
awards, options or grants to individuals who perform special or extraordinary
services on behalf of the Company. Awards are reserved for individuals who have
been in the employment of the Company as an officer or director of or consultant
to, the Company for six (6) months prior to receiving an Award, except for the
initial award of grants, options and awards. All shares of stock issued as an
award are forfeited in the event employment is terminated prior to the
expiration of one year from the date of the Award. Individuals who are
employees, officers or directors of, or consultants to the Company are eligible
to receive an option to purchase stock pursuant to the terms of the Wasatch
Stock Plan. The exercise price is determined by the Company's Board of Directors
at the time of issuance. The options are exercisable for two years and are
non-transferable. Grants of the Company's common stock are reserved for those
individuals who have made substantial contributions and shown loyal dedication
to the Company as determined by the Company's Board of Directors. Pursuant to
the
<PAGE> 3
Wasatch Stock Plan the Company may grant a maximum of one (1) million shares
of Common Stock as awards, three (3) million options to purchase shares of
common stock and one (1) million shares of Common Stock as grants.
As part of the 5,000,000 shares of Common Stock underlying the Wasatch
Stock Plan, this Prospectus covers shares of the Company's Common Stock which
may be issued to other consultants or advisors from time to time who have
rendered bona fide services to the Company. Such services rendered or to be
rendered pursuant to individual compensation plans (the "Individual Plans") have
been in the area of legal or other advisory services including consulting on
such matters as potential acquisition and/or merger candidates, corporate public
relations, executive searches, marketing and other non capital raising
functions. Said shares will be sold in brokerage transactions on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), at the
prices prevailing at the time of such sales, and the commissions payable will be
the regular commissions of brokers for effecting such sales. The net proceeds to
the Selling Shareholders will be proceeds received by them upon such sales less
brokerage commissions.
The Shares are being offered on a "best efforts" basis by the selling
shareholders through independent broker-dealers which are members of the
National Association of Securities Dealers, Inc. and other non-broker-dealer
transactions. The selling shareholders anticipates that they will pay the
brokers commissions up to ten percent (10%) of the purchase price of a share
sold. The Company will, under certain circumstances, indemnify the brokers from
certain civil liabilities which may arise with respect to this offering,
including liabilities under the Securities Act.
THE SECURITIES OFFERED HEREBY INVOLVE A VERY HIGH DEGREE OF RISK AND
SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT.
THE SECURITIES OFFERED BY THIS PROSPECTUS HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION. HOWEVER, NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES BUREAU, COMMISSION OR OTHER REGULATORY
AUTHORITY HAVE PASSED UPON OR ENDORSED THE MERITS OF THIS PROSPECTUS OR THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
ii
<PAGE> 4
CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, EXCEPT AS IS MADE AVAILABLE BY THE COMPANY PURSUANT TO THE ABOVE
UNDERTAKINGS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF. SINCE THE DATE OF THIS PROSPECTUS, THE
COMPANY MAY HAVE SUPPLEMENTED THIS PROSPECTUS AND, THEREFORE, EACH PROSPECTIVE
INVESTOR SHOULD INQUIRE AS TO WHETHER ANY SUPPLEMENTS HAVE BEEN ISSUED, AND
SHOULD CAREFULLY REVIEW ANY SUCH SUPPLEMENTS.
THIS PROSPECTUS DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT
OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. THIS PROSPECTUS
CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM MAY OR WILL BE
EMPLOYED IN THE OFFERING OF THE SHARES EXCEPT FOR THIS PROSPECTUS AND STATEMENTS
CONTAINED OR DOCUMENTS SUMMARIZED HEREIN AND SUMMARIES OF THIS PROSPECTUS WHICH
ARE DELIVERED TO AN OFFEREE SIMULTANEOUSLY WITH THIS PROSPECTUS. THE PUBLICATION
OR BROADCAST OF ANY ADVERTISEMENT, ARTICLE, NOTICE OR OTHER COMMUNICATION THAT
MIGHT CONSTITUTE AN OFFER OR SALE OR A SOLICITATION OF SHARES, IN ANY NEWSPAPER,
MAGAZINE OR SIMILAR MEDIUM OR OVER TELEVISION OR RADIO IS NOT PERMITTED.
SEMINARS, MEETINGS, LETTERS, CIRCULAR, NOTICES AND ANY OTHER WRITTEN
COMMUNICATIONS THAT MIGHT CONSTITUTE AN OFFER OR SALE OR A SOLICITATION OF
INTEREST IN THE SHARES, ARE NOT PERMITTED OTHER THAN WITH PERSONS AND THEIR
ADVISORS WHOM THE COMPANY AND THOSE ACTING ON ITS BEHALF HAVE REASON TO BELIEVE
AND DO BELIEVE MEET THE MINIMUM STANDARDS FOR INVESTMENT IN THE SHARES REQUIRED
BY LAW AND THE TERMS OF THIS OFFERING.
iii
<PAGE> 5
WASATCH INTERNATIONAL CORPORATION
(A Nevada corporation)
TABLE OF CONTENTS
Page
SUMMARY OF THE OFFERING .................................................. 1
TERMS OF THE OFFERING .................................................... 1
RISK FACTORS ............................................................. 2
BUSINESS OF THE COMPANY .................................................. 6
MANAGEMENT ............................................................... 11
PRINCIPAL SHAREHOLDERS ................................................... 13
CERTAIN TRANSACTIONS ..................................................... 15
PLAN OF DISTRIBUTION ..................................................... 16
DESCRIPTION OF COMMON STOCK .............................................. 16
DIVIDEND POLICY .......................................................... 17
CHARTER DOCUMENTS AND MATERIAL CONTRACTS ................................. 17
<PAGE> 6
SUMMARY OF THE OFFERING
The following information is selective and qualified in its entirety by
the detailed information appearing elsewhere in this Prospectus. This summary of
certain provisions of the Prospectus is intended only for convenient reference
and does not purport to be complete. The entire Prospectus should be read and
carefully considered by prospective investors before making a decision to
purchase Shares.
THE COMPANY
The Company is a development stage company in the business of acquiring
equity positions in operating companies primarily in the transportation and
leisure fields. The Company has acquired certain rights in a commercial airline
and in real property to be developed in resort areas located in the Bahamas and
Florida.
The Company's principal office is located at 1301 North Congress
Avenue, Boynton Beach, Florida 33126.
THE OFFERING
These shares are being offered at the "market price" per Share on the
date of the sale.
TERMS OF THE OFFERING
Shares of Common Stock outstanding
before Offering 35,162,820
The authorized Common Stock of the Company is 50,000,000 Common Shares (Par
Value of One Mil [$0.001]).
TERMS OF THE OFFERING
SECURITIES OFFERED
The selling shareholders are offering up to 1,360,000 Shares presently
at a purchase price of the market price on the date of
1
<PAGE> 7
sale. All shares of Common Stock have one vote per share on all matters to be
voted upon by the stockholders. The holders of Common Stock have no preemptive,
subscription, conversion or redemption rights. Upon liquidation, dissolution or
winding-up of the Company, the holders of Common Stock are entitled to
participate ratably in all of the assets of the Company that are legally
available for distribution after payment in full to creditors.
RISK FACTORS
The Shares offered hereby are subject to the risks inherent in a
speculative venture. A purchase of Shares involves a very high degree of risk.
Prior to making an investment decision, prospective investors should carefully
consider the following risk factors, along with other information in this
Prospectus. The number and nature of all possible risks cannot be ascertained;
prospective investors must recognize that almost any kind of adversity may
preclude the achievement of stated objectives of the Company, preclude positive
operating results and/or result in a total loss of investment. Prospective
investors unable or unwilling to assume a very high degree of risk must not
consider a purchase of Shares.
1. Dependence upon Offering - Burden on Private Investors Insignificant
Working Capital. The Company presently has minimum working capital. Its ability
to continue its proposed operations and operate as a going concern with its
various business interests is contingent upon the successful conclusion of the
Company's intended Offerings and the receipt of the net proceeds therefrom and
its ability to raise additional funds as needed.
2. New Management and Operations. The Company has only recently been
under the control of the present management and ownership which acquired its
interest in the Company in July 1996. Prior to that acquisition, the Company was
an inactive public company. Since that time, the Company has acquired various
interests in a real estate development contract in the Bahamas and the exclusive
rights to present a plan of arrangement for Kiwi International Airlines ("Kiwi")
an airline company in reorganization pursuant to Chapter 11 of the National Bank
Act. There is no assurance that the Company will be successful in its intended
plan of operation.
2
<PAGE> 8
3. No Record of Earnings. To date the Company has not realized any
significant revenues from operations and has been involved in identifying
potential acquisitions, negotiating with said targets and entering into certain
agreements none of which has resulted in any income, but all of which have
required significant investment of time and capital. There is no significant
information available upon which to base any assumption that the Company's plans
will either materialize or prove successful. If the Company's plans prove to be
unsuccessful, Investors will lose all or a substantial part of their investment.
4. Additional Financing Will be Required. The Company's business
opportunities require the investment of substantial additional funds in order to
complete development and/or to reorganize and operate the particular entity.
Accordingly, the success of the Company will depend upon its ability to arrange
for substantial financing on favorable terms. There is no assurance that such
funds will be available from any source, and if available that the rate of
interest for such funds, or the terms and conditions of obtaining such funds
will be acceptable to the Company. The absence of such additional funds could
cause the Company to lose all or part of its investment in its business ventures
and could cause investors to lose all or part of their investment in the
Company.
5. Lack of Capital Will Result in Loss of Control Over Investments.
Concerning one of the Company's major investments Kiwi International Airlines
("Kiwi"), the Company was required to give up a significant part of it's rights
to a third party in order to raise the funds necessary to satisfy it's
obligations under an agreement to provide DIP financing to Kiwi. The Company
anticipates that it may be required to do so again in order to meet additional
funding requirements of Kiwi's reorganization of operations in the future,
unless it realizes the proceeds of the sale of all or a substantial portion of
the Shares being offered hereby, and is successful in raising additional funds.
Further, even if the reorganization of Kiwi is successful with the Company as
one of it's major fund suppliers there is no assurance that the Company will be
in a control position because it may be forced to transfer to others significant
portions of its holdings in order to raise needed funds.
6. Competition. The Company has and will continue to have
3
<PAGE> 9
numerous competitors and potential competitors in the various businesses in
which it invests which competitors will have considerably greater financial
resources than the Company. The Airline industry, for example, is highly
competitive, dominated by several much larger carriers than Kiwi, which possess
much larger staffs, greater financial resources and longer histories than Kiwi.
The Company on its own may not be able to compete in the markets in which it
intends to do business as its competition is better established and has greater
assets and stronger financial reserves than the Company. In the airline
business, for example, other airlines have long established frequent flier
programs and marketing programs which are superior to that of the Company which
will add to the difficult task of attracting sufficient passengers to attain and
maintain profitable operations.
7. Dependence Upon Inexperienced Management. None of the Company's
present officers or directors have any experience in the operations or financing
of airlines and thus the Company must rely on the existing Kiwi management team
or hire additional experienced executives and management personnel who may not
be available at affordable costs when needed.
8. Governmental Regulation. The airline industry is highly regulated
and subject to abrupt government directed cut backs or cessation in service if
violations of Federal Aviation Administration (FAA) regulations are believed or
are determined to exist. This situation has occurred twice previously in Kiwi's
past, (which infractions were corrected) and in both instances caused
substantial disruption in service and loss of revenues. With respect to the
Company's real estate properties, any development will be subject to securing
all necessary zoning, environmental and other applicable governmental permits
the absence of which could adversely effect this Company's profitability and the
successful probate of the grantor's will.
9. Difficulties in Reestablishing Kiwi's Good Will. Flight operations
of Kiwi have only recently be re-instituted in January 1997. Kiwi, in order to
re-establish it's former good will, must provide superior services at an
attractive cost to the public. There can be no assurance that Kiwi will succeed
in the endeavor so as to attract sufficient passengers to make it's operations
profitable. Kiwi must maintain operations despite the facts that its fleet size
is one half of it's former complement of equipment,
4
<PAGE> 10
the flight attendants have elected to be represented by a Union and all
employees are required to accept substantial pay reductions. Further, at present
Kiwi has no capital available to it to expand it's limited fleet or to increase
penetration of it's present route or to expand its routes.
10. Company's Business Subject to Contingencies. The Company's ability
to continue to exploit its business plans is subject to various contingencies
such as Kiwi's ability to obtain contracts with airport authorities, terminal
operators or other governmental or private entities so as to continue to permit
it to operate, of which there can be no assurance. Also, the Company will be
required to comply with all relevant federal, local, state laws and regulations
in conducting its various business.
11. No Cumulative Voting. The Company's Articles of Incorporation do
not authorize cumulative voting for the election of directors. The current
shareholders will continue to own or control almost all of the outstanding
shares of the Common Stock of the Company upon completion of this offering, and
thus will be in a position to elect a majority of the Company's Board of
Directors who in turn appoint all Company Officers.
12. Benefits to be Realized by Current Shareholders. If the future
operations of the Company are successful, the present controlling shareholders
will realize substantial benefits from growth of the Company. If future
operations are unsuccessful, investors may sustain a material loss of their
investment in the Shares.
13. Limited Liability of the Company's Officers and Directors. Under
the By-Laws of the Company, the liability of its officers and directors is
limited. In certain circumstances, the officers and directors may be entitled to
certain indemnification. Therefore, there is a risk that Company assets could be
used to satisfy liabilities of, or indemnify its officers and directors. In the
view of the Securities and Exchange Commission, indemnification for liabilities
arising under the Federal Securities laws is against public policy.
14. No Dividends Anticipated. The Company has not paid any dividends
upon its Common Stock since its inception and, by reason of its present
financial status and its contemplated financial
5
<PAGE> 11
requirements, does not anticipate paying any dividends upon its Common Stock in
the foreseeable future. In this regard, the Company intends to retain earnings
for the foreseeable future for use in the operation and expansion of its
business. See "DIVIDEND POLICY."
15. Lack of Registration Under Securities Laws. The Shares are not
being registered under applicable state securities laws. Purchasers of Shares
may have difficulty selling the Shares should they desire to do so, and may be
prohibited by applicable state law from doing so for a period of time.
BUSINESS OF THE COMPANY
THE COMPANY
Wasatch International Corporation (the "Company") was organized under
the laws of the State of Nevada on November 4, 1985, under the name Java, Inc.
In 1986, the Company acquired a company, which became a wholly owned subsidiary,
in the business of manufacturing and marketing consumer information and the sale
of computer terminals for commercial use. These operations proved to be
unsuccessful and the subsidiary was subsequently dissolved. The Company ceased
all operations in 1989, except for maintaining and restoring its good standing
status in the State of Nevada, seeking prospective businesses or assets to
acquire and the limited operations of a subsidiary that the Company caused to be
incorporated in the State of Utah in 1995. In 1995, the Company experienced a
name change to Wasatch International Corporation and relocated to Salt Lake
City, Utah. On July 17, 1996, LaSalle Group, Ltd. ("LaSalle"), a Cayman Island
Corporation, purchased all of the common stock held by Steven D. Moulton,
representing the majority of all shares outstanding, in consideration for
$125,000. LaSalle is wholly owned by Anne Greyling, a resident of the United
Kingdom. LaSalle currently owns approximately fifty-four (54%) of the Company's
outstanding common stock.
Commencing in July 1996 the Company relocated its headquarters to
Boynton Beach Florida and commenced a search for strategic opportunities. Since
July 1996 three significant transactions have been evaluated.
First, in September 1996 the Company acquired from LaSalle 100% of the
outstanding common stock of Caribbean Holdings
6
<PAGE> 12
International Inc. ("Caribbean") a Florida corporation in exchange for
25,000,000 shares of common stock of the Company. At the time of the
acquisition, the principal asset of Caribbean was certain ownership and
development rights to approximately 15,000 acres of land in the Bahamas.
Pursuant to the acquisition agreement between the Company and Caribbean,
Caribbean is to provide the Company with a real estate appraisal establishing
the value of the land at not less than $12,000,000 and a fairness opinion from
an investment banking firm establishing a fair market value of Caribbean in
excess of $12,000,000 or the Company can adjust the purchase consideration. As
of this date, no appraisal has been completed on the land. The Company has not
received a fairness opinion and the time specified in the agreement for delivery
of same has expired. The Company is also to receive an opinion that title to the
land is marketable which has not yet been received.
Caribbean acquired its ownership and development rights pursuant to a
Joint Venture Agreement it entered in July of 1996 with Merrill W. MacDonald and
Raymond W. MacDonald (hereinafter the "MacDonalds"). The land is presently owned
by the Estate of Effie Knowles, a deceased Florida lawyer who by will devised
the property to the MacDonalds. Pursuant to the terms of the Joint Venture
Agreement, the MacDonalds are obligated to cooperate in facilitating the probate
of the Effie Knowles Estate so as to ultimately transfer ownership of the
property to the Joint Venture while the Company agreed to develop the land and
market the project. Net profits of the Joint Venture are to be divided equally
between the MacDonalds (50%) and Caribbean (50%). Currently, the Company intends
to build hotel/casino projects and luxury housing. As of this date the Estate of
Ms. Knowles is still being probated and the Company has not expended any
significant funds on this project. The Company does not intend to commence
development until the estate is fully probated and title to the land has been
transferred to the Company, except that a portion of the proceeds of this
offering will be used to defray legal expenses, and consultants, and
governmental approvals. The costs of probating the will are being borne by the
Estate and/or LaSalle and not by the Company.
The second opportunity reviewed by the Company was the proposed
acquisition of the assets of the Palm Beach Cruise Lines, Inc. ("Palm Beach") a
Palm Beach casino/cruise ship operating out of Palm Beach, Florida and the
Bahamas. Palm Beach was at the time
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in reorganization pursuant to Chapter 11 of the National Bankruptcy Code.
Pursuant to an agreement, the Company advanced $312,000 as Debtor-In-Possession
("DIP") financing to Palm Beach as working capital and in return received a
super priority lien on this non-interest bearing loan. Subsequent to advancing
this money, and following extensive court proceedings and a hearing, the
Bankruptcy Court accepted as the best and highest bid a competing bid for the
purchase of all the assets of Palm Beach. As a result, the Company lost its
original right to offer a plan of arrangement, but the Court confirmed its right
to receive the return of its $312,000. The Company transferred its right to the
money to a third party in exchange for the advancement of $200,000 and the
cancellation of a $100,000 obligation of LaSalle, its largest shareholder.
The third and largest transaction in which the Company is involved is
the advancement of DIP financing to Kiwi a commercial air carrier which had
filed for reorganization pursuant to Chapter 11 of the National Bankruptcy Code.
The Company, in October of 1996, agreed to provide a total of $5,000,000 in DIP
financing to Kiwi. In November of 1996, the Company along with a Baltimore
individual, (hereinafter referred to as "Edwards") a former director of the
Company, for several months, agreed to form a Limited Liability Company,
Edwards-Wasatch Enterprises (hereinafter "EWE") to which the Company assigned
its right to provide Kiwi the DIP financing and for the exclusive right to
present a plan of arrangement in the bankruptcy proceedings. Pursuant to the
agreement (the "EWE Agreement"), Edwards agreed to loan up to $5,000,000 as
required to fund Kiwi's operations and the Company agreed to provide up to an
additional $1,000,000. (As of this date the Company has provided Kiwi with
$1,350,000 of the DIP financing.) The Company's assignment of its right to
provide the DIP financing to Kiwi was approved by the Bankruptcy Court on
November 26, 1996, as of which date the Company was in default of its financing
obligations to Kiwi. This default was waived by Kiwi and approved by the Court.
Three orders were entered by the Bankruptcy Court at hearings which resulted in
a total of DIP financing of $10,200,000 in cash and letters of credit.
The EWE Agreement has been amended on several occasions since November
of 1996. EWE is currently owned 18% by the Company and 82% by Edwards. The
Company has an option to acquire Edwards interest in EWE by converting said
interest into shares of the stock of the Company which shares are to be
convertible into shares of Kiwi.
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Said conversion is to be based on the value of Wasatch which value is to be
determined upon reliance on an appraisal of land in the Bahamas.
Management of the Company believes that it will take substantial
additional investment to provide the capital necessary to pay the cost and
expenses of the Chapter 11 proceeding and to compromise the various claims of
Kiwi. As of yet no such funds are available. In total there are approximately
five classes of creditors, in addition to administrative claims, which are
required to be satisfied in order for Kiwi to be discharged from the present
reorganization proceedings.
On January 20, 1997, Kiwi resumed scheduled service and flies between
Newark to Chicago, Atlanta and West Palm with returns. Kiwi's ability to
continue to operate depends upon it obtaining sufficient working capital to
sustain its operations. Since Kiwi is in reorganization, its ability to
negotiate favorable contracts at market or below market rates is severely
hampered. In addition, the airline business is highly competitive and subject to
abrupt price and benefit changes by the major carriers all of which have
financial resources superior to those of Kiwi. Since commencing operations in
January, 1997, Kiwi has experienced operating losses in excess of $4,000,000
through April 1997. While losses were expected, the actual losses incurred
greatly exceeded expectations by approximately thirty-five percent. Ridership
has continued to improve, but has not yet reached satisfactory levels. Kiwi's
ability to return to profitable operations depends upon its ability to improve
ridership, maintain an excellent safety record and secure the capital necessary
to compete with the major airline carriers. Kiwi continues to engage in
negotiations with new destination airports in order to seek advantageous markets
and will seek to secure financial assistance from said sites. At present, Kiwi
has satisfactory landing rights at all airports except Newark, which
arrangements the Company seeks to improve.
The Company's relationship with Kiwi is that of debtor/creditor and it
expects to be repaid, in full, its DIP loans but is not responsible for any of
Kiwi's debts. However, it also expects to be able to raise the capital needed to
fund Kiwi's reorganization, expenses estimated at $10 to $15 million.
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<PAGE> 15
PROPERTIES
The Company does not own any real property but utilizes, at no cost to
the Company, approximately 1,000 square feet as corporate office at 1301 N.
Congress Ave., Suite #135, Boynton Beach, Florida 33426 leased by an affiliated
person.
EMPLOYEES
The Company is an emerging growth company and as such currently has no
employees other than its officers, consultants and administrative assistants.
(See "Management"). The Company's management intends to use consultants,
attorneys and accountants as it deems appropriate.
CONSULTANTS
The Company may from time to time during the course of its business
operations hire consultants with which it may consult on various matters
relating to the business of the Company. Consultants may not be officers or
directors of the Company although they may be shareholders. The establishment of
a consulting team is not intended to be a delegation by the Company's officers
and directors of their power of management and control of the Company, it being
the intention of management of the Company that the management and control of
the Company shall at all times be retained by the Company's officers and
directors. The Company intends to compensate such consultants, if acceptable,
with issuance of Common Stock.
LEGAL PROCEEDINGS
A law suit has been instituted by an investor to recover $500,000 and
expenses in connection with a stock purchase. The company believes that it has
valid defenses to this action but will endeavor to resolve the matter amicably.
On or about December, 1996, the company was named in a lawsuit along
with four other defendants to recover an alleged loan in the amount of
approximately $50,000. Said matter has been settled in principle and the terms
are confidential. Management does not believe that this amount is material.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are set forth
below. None of the directors and executive officers are related to one another.
NAME POSITION(S) HELD
- ---- ----------------
Diran M. Kaloustian Director,
Chairman of the Board
Joe Logan, Jr. President, Director
Eli Leibowitz Chief Financial Officer,
Director
Mary Duncan Secretary
Set forth below are the backgrounds of the officers and directors of
the Company.
DIRAN M. KALOUSTIAN, is an attorney and member of the bars of Florida, New York
and Texas. Mr. Kaloustian served as the President and Director of Depository
Trust Company in New York, which is one of the world's largest global financial
institutions with deposited asset value of 10 trillion dollars. Mr. Kaloustian
assumed full executive and financial control of Depository Trust Company in 1970
when it had reported losses and deposited asset value of only $25 billion and
expanded it into a profitable company with deposited asset value exceeding $600
billion. Prior to his tenure at the Depository Trust Company, Mr. Kaloustian
used his experience as the President and Director of Singer & Co, an
underwriting and investment firm, to reorganize and revitalize The New York
Stock Exchange Inc., Stock Clearing Corporation, where he also served as
Executive Vice-President. Mr. Kaloustian oversaw 1500 full-time employees in
making the Stock Clearing Corporation the largest profit center of the New York
Stock Exchange. Mr. Kaloustian is a graduate of Duke University and New York
University Law School.
JOE LOGAN JR. attended the University of Florida where he obtained
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a Bachelor of Arts Degree in Marketing. He is also a licensed real estate agent
and Certified National Housing Counselor. Mr. Logan is a partner with Daye,
Inc., a national marketing firm with offices throughout the United States and is
the owner of Logan Inc., which specializes in the acquisition, financing and
development of national and international real estate. Mr. Logan has also has
extensive experience in acquisitions of recreational resort facilities. Mr.
Logan will devote substantially all his professional time to the Company's
activities.
ELI LEIBOWITZ is a Certified Public Accountant and received a Bachelor of
Business Administration Degree in Public Accounting granted in 1966 from Baruch
College and a Masters of Science, Taxation Degree in 1975 from Long Island
University. Mr. Leibowitz has been a financial and operations executive with
over twenty years of experience including: Financial reporting and control,
Budgets, Cash Management, Cost Accounting, Credit and Collection, Corporate Tax,
Management Informational Services, including PC's and mainframes, and Strategic
Planning. From 1991 until 1996 he was associated with Inventive Industries,
Inc., Englewood, New Jersey, a financial consulting firm, providing temporary
Chief Financial Officers, Controllers servicing clients as well as providing
services to clients as CFO/Controllers, systems work, preparing documents for
financing, negotiating with banks, lenders/investors and dealing with IPO's,
Asset Based Loans, Mortgages, mergers and acquisitions and due diligence
assignments. From 1989 to 1991, Mr. Leibowitz was associated with LMT Steel
Products Inc., Hoboken, New Jersey as Controller. From 1985 to 1988 he was Chief
Financial Officer for Masco Industries, Inc. (NYSE), Atlas Door Corporate
Division, Edison, New Jersey. From 1979 to 1985, Mr. Leibowitz was Controller of
Kerns Manufacturing Corporation, Queens, New York, a manufacturer of jet engine
assemblies and rocket components. From 1969 to 1979. Mr. Leibowitz was a Senior
Accountant with Grant Thornton CPA's, Small Business Department and a Staff
accountant with Richard A. Eisner and Company CPA's.
MARY F. DUNCAN has served as Secretary since the inception of the Company. Over
the last ten (10) years, She has served in similar administrative capacities for
several public companies.
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EXECUTIVE COMPENSATION
Executive remuneration is set by the Board of Directors of the Corporation.
Officers and Directors are reimbursed for expenses, if any, incurred from time
to time on behalf of the Company, but no such expenses shall be reimbursed
relative to this Offering. Officers and Directors are to be paid reasonable
compensation, including, but not limited to, salaries and bonuses, in
consideration of their employment with the Company or any of its operating
subsidiaries, consistent with their experience and performance. The Board of
Directors has established a stock option plan, stock grant and stock award plan
and may, in the future, establish employee stock ownership plans, pension and
profit sharing plans, etc., which plans inure to the benefit of the current and
future officers and directors of the Company. A total of 5,000,000 shares of
Common Stock have been registered for issue to officers, directors, consultants
and attorneys under this plan.
The Company has entered into five year employment agreements with its
President, Joe Logan, at a base salary of $250,000 per annum and its Chief
Financial Officer, Eli Leibowitz, at a base salary of $150,00 per annum
respectively with annual increases of $10,000. The agreements also provide
bonuses of one percent of earnings before Income Tax, depreciation and
amortization. In addition, the Company granted Mr. Logan an option to purchase
500,000 Shares of Common Stock and Mr. Leibowitz an option to purchase 250,000
shares of the Company at par.
The Company has also granted its Director, and Chairman of the Board of
Directors, Diran M. Kaloustian an option to purchase 500,000 shares of the
Company's Common Stock at par value, exercisable over a three year period.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the date hereof, information
regarding ownership of the Company's Common Stock by each person known by the
Company to be the beneficial owner of more than 5% of the Company's outstanding
Common Stock, by each director, by certain related shareholders, and by all
executive officers and directors of the Company as a group. All persons named
have sole voting and investment power over their share except as
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<PAGE> 19
otherwise noted.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER OR NUMBER OF PERCENTAGE OWNED
IDENTITY OF GROUP SHARES OWNED BEFORE OFFERING
- ----------------- ------------ ---------------
<S> <C> <C>
Diran M. Kaloustian (1) 220,000 .626%
1301 N. Congress Ave
Boynton Beach, Florida
Joe Logan, Jr. (2) 550,000 1.564%
1301 N. Congress Ave
Boynton Beach, Florida
Eli Leibowitz (3) 270,000 .768%
289 Starling Road
Englewood, New Jersey
Charles Edwards 500,000 1.422%
3907 Greenway
Baltimore, Maryland
Mary Duncan 20,000 .057%
1301 N. Congress Ave
Boynton Beach, Florida
LaSalle Group, Ltd. 18,966,050 53.938%
c/o Anne M.E. Greyling
44 Grove Hill Rd.
Tunbridge Wells, Kent
United Kingdom
</TABLE>
- ----------
(1) Excludes 300,000 Shares of Common Stock at $0.001, the par
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<PAGE> 20
value issued pursuant the to terms of an employment agreement. See
"Management-Executive Compensation".
(2) Includes 500,000 Shares of Common Stock at $0.001, the par value issued
pursuant the to terms of an employment agreement. See "Management-
Executive Compensation".
(3) Includes 250,000 Shares of Common Stock at $0.001, the par value issued
pursuant the to terms of an employment agreement. See "Management-
Executive Compensation".
(4) 10,000,000 of shares are being held by the Company's attorneys to
protect against Edwards nonperformance by Kiwi of its obligations to
EWE.
CERTAIN TRANSACTIONS
LaSalle Group, Ltd., the Company's largest stockholder, acquired
25,000,000 shares of Common Stock in September of 1996 in exchange for all the
outstanding stock of Caribbean Holdings International, Inc. (See "BUSINESS OF
THE COMPANY") Subsequent to that transaction, LaSalle has advanced funds
totaling $855,000 on behalf of the Company to defray the Company's contractual
commitments, administrative, legal and accounting expenses. It also has pledged
10,000,000 shares of Common Stock to secure Dr. Edward's advances to EWE.
LaSalle has agreed to the issuance of shares of common stock at $1.00 per share
in consideration for said advances. To date 755,000 shares of common stock have
been or are issuable pursuant to the agreement. In addition, LaSalle received
the benefit of the forgiveness of a $100,000 obligation as part of the Palm
Beach transaction.
In November of 1996, the Company entered into an agreement with Dr.
Edwards, a director of the Company, to form a Limited Liability Company, EWE, to
which the Company assigned its right to provide Kiwi the DIP financing and for
the exclusive right to present a plan of arrangement in the bankruptcy
proceedings. Pursuant to the EWE Agreement Edwards agreed to loan up to
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<PAGE> 21
$5,000,000 to fund Kiwi operations and the Company agreed to provide up to an
additional $1,000,000. The EWE Agreement has been amended on two occasions since
November of 1996. EWE is currently owned 41.3% by the Company and 58.7% by
Edwards.(See "BUSINESS OF THE COMPANY").
PLAN OF DISTRIBUTION
The Shares are being offered on a best efforts basis by the selling
shareholders. The selling shareholders may also engage Selected Dealers to sell
the Shares. The Company will pay selling commissions to participating Selected
Dealers up to ten percent (10%) of the purchase of Shares sold by them and under
certain circumstances, indemnify participating Selected Dealers against certain
civil liabilities, including liabilities arising under the Securities Act, which
may arise in connection with this offering as a result of disclosures for which
the Company is responsible.
PRICE OF THE OFFERING.
The offering price will be at the market price on the day of sale from
time to time.
The Company's common stock is traded on the NASDAQ Bulletin Board,
under the symbol "WITD". On March 29, 1997, the Company's stock closed at $3.50
per share. The stock has traded at a high of $6.00 per share and low of $1.90
for the fiscal quarter ended March 31, 1997.
DESCRIPTION OF COMMON STOCK
The authorized capital common stock of the Company consists of
50,000,000 shares of Common Stock with Par Value of One Mil ($0.001). The
Holders of Common Stock (1) have equal ratable rights to dividends from funds
legally available thereto, when, as and if declared by the Board of Directors of
the Company; (2) are entitled to share ratably in all assets of the Company
available for distribution to holders of Common Stock upon liquidation,
dissolution or winding up of the affairs of the Company; (3) do not have
preemptive, subscription or conversion rights and there being no redemption or
sinking fund provisions applicable thereto; and (4) are entitled to one
non-cumulative vote per share on all matters which stockholders may vote on at
all shareholder meetings.
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All shares of Common Stock now outstanding are fully paid for and
non-assessable; all shares of Common Stock which are the subject of this
Offering, when issued, will be fully paid for and non-assessable.
The Company has a class of Preferred Stock authorized, but no such
shares are outstanding as of this date.
DIVIDEND POLICY
The payment by the Company of dividends, if any, in the future rests within the
discretion of its Board of Directors and will depend, among other things, upon
the Company's earnings, capital requirements and financial condition, as well as
other relevant factors. No dividend has been declared or paid by the Company
since its inception and none is contemplated at any time in the foreseeable
future.
CHARTER DOCUMENTS AND MATERIAL CONTRACTS
The Company's Articles of Incorporation, Bylaws and all material contracts
are contained in the files of the Company and will be made available to
prospective investors or their representatives upon request.
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