UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Post-Effective Amendment No. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FAIRCHILD INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Nevada | 91-18800155 |
Suite 600, 595 Hornby Street
Vancouver, British Columbia V6C 1A4
(Address of Principal Executive Offices and Zip Code)
<R>Stock Option Agreement with Peter Miles
Stock Option Agreement with Byron Cox
Stock Option Agreement with Robert Grace
Stock Option Agreement with Winston Cabell</R>
(Full title of the plan)
Robert Grace, President
Fairchild International Corporation
Suite 600, 595 Hornby Street
Vancouver, British Columbia V6C 1A4
(Name and address of agent for service)
604.669.1040
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<R>
Title of securities to be registered | Amount to be registered | Proposed maximum offering price per share | Proposed maximum aggregate offering price | Amount of registration fee |
Shares of common stock underlying stock option to David Stadnyk | 450,000 | $0.25(2) | $112,500(2) | $28.125 |
Shares of common stock underlying stock option to Peter Miles | 450,000 | $0.25(2) (3) | $112,500(2) | $28.125 |
Shares of common stock underlying stock option to Byron Cox | 250,000 | $0.25(2) (3) | $62,500(2) | $15.625 |
Shares of common stock underlying stock option to Robert Grace | 100,000 | $0.25(2) (3) | $25,000(2) | $6.25 |
Shares of common stock underlying stock option to Winston Cabell | 100,000 | $0.25(2)(3) | $25,000(2) | $6.25 |
Shares of common stock underlying stock option to James Beadle | 100,000 | $0.25(2) | $25,000(2) | $6.25 |
Shares of common stock underlying stock option to David Duval | 50,000 | $0.25(2) | $12,500(2) | $3.125 |
| 1,500,000 |
| $375,000(2) | $93.75 |
(1)Pursuant to Rule 416 under the Securities Act, this Registration Statement shall also cover any additional shares of the common stock of the Company which become issuable by reason of any stock split, stock dividend, recapitalization, or other similar transaction effected without the Registrant's receipt of consideration which results in an increase in the number of the outstanding shares of the Registrant's common stock.
(2)Calculated pursuant to Rule 457(h)(1) under the Securities Act based on the exercise price of the options.
(3)Options were repriced to $0.06 per share pursuant to stock option amendment agreements dated April 30, 2002.
(4)100,000 of these options were repriced to $0.06 per share and will be registered pursuant to this post-effective amendment to our Registration Statement on Form S-8. </R>
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the requirements of Form S-8 under the Securities Act, to register shares of our common stock, $.001 par value per share, issuable pursuant to outstanding stock options. Under cover of this Form S-8 is our reoffer prospectus prepared in accordance with Part I of Form S-3 under the Securities Act. Our reoffer prospectus has been prepared pursuant to Instruction C of Form S-8, in accordance with the requirements of Part I of Form S-3, and may be used for reofferings and resales on a continuous or delayed basis in the future of "control securities" which may be issued, pursuant to outstanding stock options.
<R>Pursuant to stock option agreements entered into between our company and each of Peter Miles, Byron Cox, Robert Grace and Winston Cabell dated September 7, 2001, we granted an aggregate of 750,000 options to purchase shares of our common stock at an exercise price of $0.25 per share, which stock option agreements were registered with our Registration Statement on Form S-8 filed on September 24, 2001. As at April 30, 2002, we entered into stock option amendment agreements with each of Peter Miles, Byron Cox, Robert Grace and Winston Cabell to amend the terms of the stock option agreements provide for an exercise price of $0.06 per share. All other terms and conditions of the stock option agreements shall continue in full force and effect. </R>
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
<R>In accordance with the rules and regulations of the Securities and Exchange Commission, the documents containing the information called for in Part I of Form S-8 will be sent or given to each of Peter Miles, Byron Cox, Robert Grace and Winston Cabell, who are parties to Stock Option Amendment Agreements, copies of which are attached as exhibits to this post-effective amendment to our Form S-8 (Exhibits 4.8 through 4.11).
This post-effective amendment to our Registration Statement relates to 750,000 common shares in the capital of Fairchild International Corporation issuable pursuant to the Stock Option Amendment Agreements between our company and each of Peter Miles, Byron Cox, Robert Grace and Winston Cabell. </R>
Item 2. Company Information and Plan Annual Information.
<R>Upon written or oral request, any of the documents incorporated by reference in Item 3 of Part II of this post effective amendment to the Registration Statement (which documents are also incorporated by reference in Section 10(a) Prospectus) and other documents required to be delivered to each of Peter Miles, Byron Cox, Robert Grace and Winston Cabell pursuant to Rule 428(b), are available without charge by contacting: </R>
Fairchild International Corporation
Suite 600, 595 Hornby Street
Vancouver, British Columbia V6C 1A4
Attention: The President
Telephone: 604.669.1040
REOFFER PROSPECTUS
<R>
200,000 SHARES OF COMMON STOCK
Fairchild International Corporation
595 Hornby Street, Suite 600
Vancouver, British Columbia V6C 1A4 Canada
(604) 669-1040
This reoffer prospectus relates to 200,000 shares of the common stock of Fairchild International Corporation which may be offered and resold from time to time by the selling stockholders identified in this prospectus for their own account. It is anticipated that the selling stockholders will offer shares for sale at prevailing prices on the OTC Bulletin Board on the date of sale. We will receive no part of the proceeds from sales made under this reoffer prospectus. The selling stockholders will bear all sales commissions and similar expenses. Any other expenses incurred by us in connection with the registration and offering and not borne by the selling stockholders will be borne by us.
The selling stockholders and any brokers executing selling orders on their behalf may be deemed to be "underwriters" within the meaning of the Securities Act, in which event commissions received by such brokers may be deemed to be underwriting commissions under the Securities Act.
Our common stock is traded on the OTC Bulletin Board under the symbol "FRCD." On September 7, 2001, the last reported price of our common stock on such market was $0.23 per share. On April 30, 2001, the last reported price of our common stock on such market was $0.05 per share.
This investment involves a high degree of risk. Please see "Risk Factors".
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether this reoffer prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this reoffer prospectus is April 30, 2002. </R>
TABLE OF CONTENTS
PAGE
SUMMARY 5
RISK FACTORS 7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 12
USE OF PROCEEDS 12
SELLING STOCKHOLDERS 12
PLAN OF DISTRIBUTION 12
INDEMNIFICATION OF DIRECTORS AND OFFICER 13
LEGAL MATTERS 13
EXPERTS 13
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 14
WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US 14
You should only rely on the information incorporated by reference or provided in this reoffer prospectus or any supplement. We have not authorized anyone else to provide you with different information. The common stock is not being offered in any state where the offer is not permitted. You should not assume that the information in this reoffer prospectus or any supplement is accurate as of any date other than the date on the front of this reoffer
prospectus.
<R>
Business of the Company
We are currently seeking to either identify a suitable business opportunity or enter into a suitable business combination. Until we secure a suitable business opportunity or combination, we will operate as a "blank check" company. Fairchild is a Nevada corporation with its business offices located at Suite 600, 595 Hornby Street, Vancouver, British Columbia. Our telephone number is (604) 646-5614.
Corporate History
Fairchild was incorporated on June 20, 1997 under the laws of the State of Nevada under the name Goanna Resources, Inc. Since inception, our focus had been on the identification and acquisition of mineral resource properties in Australia. On June 24, 1999 we changed our name to Fairchild International Corporation after it had become apparent that such mining opportunities would not come to fruition.
Effective September 30, 1999, we entered into a Research, Development and Licence Agreement with Praxis Pharmaceuticals, Inc., an affiliate. Under that agreement, Praxis had granted us a worldwide exclusive license for all products and processes developed, and to be developed, relating to arthritis and dermal wrinkles. Praxis had received 2,600,000 shares of our common stock and the right to receive royalty payments based upon revenues earned by us from the sale of any developed products. In addition, Praxis had been engaged to conduct a research program to be funded by us in the amount of $250,000. We paid only $162,500 of the funding and expressed doubt about our ability to continue the funding.
As of February 28, 2001, we terminated the Research, Development and Licence Agreement with Praxis. Under the Termination Agreement, Praxis will retain the 2,600,000 shares of our common stock and has agreed to pay us 30% of the net revenues from sales of the two applications in the field of use up to maximum of $250,000 over the first three years of sales.
Effective January 15, 2002, we entered into a letter agreement with Praxis to amend the terms of the Termination Agreement to provide that Praxis will be entitled to retain our shares of common stock but that the remaining shares shall be placed in a voluntary pooling arrangement under which an amount shall be released every three months to Praxis, being 1% of the total number of our outstanding shares of common stock. The agreement also provides that so long as Praxis pays to us 66.6% of the proceeds from the sale of our shares until US$175,000 has been paid, we shall deem that payment to be in full and complete satisfaction of the royalty obligation described above.
On April 12, 2001, we entered into an agreement with Hunter Exploration Group to acquire a 100% interest in certain lands encompassed by a Special Exploration Permit, located in Northern Manitoba, Canada in consideration for payment of a total of US$30,000 in cash and issue 400,000 shares of our common stock. In addition, we are responsible for a deposit with the Province of Manitoba for the exploration permit and fulfilling work commitment obligations on the property totalling Cdn$500,000 through May 1, 2004. The property is subject to a 2% net smelter royalty and a 2% gross overriding royalty on diamond production.
On June 5, 2001, we entered into an initial option agreement with Indicator Explorations Ltd. for the right to acquire a 100% interest in the Exploration Permit 182 and Special Exploration Permits 99-6, 2001-4 and 2001-9 located in Northeast Manitoba, Canada. In exchange for the initial option, we paid Cdn$2,500 and issued 400,000 shares of our common stock. This option expired on August 15, 2001 and we elected to let the option expire to focus all of our resources on the Coalinga Nose Property, described below.
On June 15, 2001, we entered into a participation agreement with Brothers Oil and Gas Inc. and Dasher Energy Corp. to acquire a 5% working interest in an oil and gas prospect called the Coalinga Nose Property. The property is located in Fresno County, California, and consists of approximately 8,700 acres. In exchange for this interest, we paid Brothers US$50,000 and Dasher US$15,000 and issued 300,000 shares of our common stock to Dasher, and pay 100% of the initial test well to earn a 37% net revenue interest on the initial well, and a 28.125% net revenue interest on all subsequent wells.
On August 23, 2001, we amended our agreement with Brothers Oil and Gas Inc. and purchased an additional 1.85% net revenue interest before payout and 1.40625% net revenue interest after payout for a single one-time payment of $50,000. We now have a 5% working interest and a 3.7% net revenue interest before payout (3.75% working interest and 2.8125% net revenue interest after payout) in the Coalinga Nose Project Block A. In addition, in Block B of the Coalinga Nose Project, our net revenue interest has been increased to 1.875%.
Test results received February 28, 2002 from the operator regarding the Coalinga Nose Well were not favourable and, to date, we have not generated any revenues from mineral exploration.
As a result of poor test results received with the initial test on the Coalinga Nose Well and poor market conditions, we have been unable to obtain adequate financing to proceed with the execution of our plans and have refocused on efforts in seeking new business opportunities.
Our Current Business
We no longer have an active operating business that we can pursue. Accordingly, we are seeking to either identify a suitable business opportunity or enter into a suitable business combination. Until we secure a suitable business opportunity or combination, we will operate as a "blank check" company. Management of our company does not believe that it will be able to generate revenues without finding and completing the acquisition of a suitable business opportunity. In addition, if no suitable business opportunity is identified, shareholders will not realize any further return on their investment in our company, and there will be no market for our shares of common stock.
Once a business opportunity or business combination has been identified, we will investigate and evaluate the business opportunity or business combination. In selecting a suitable business opportunity or business combination, management intends to focus on the potential for future profits and strength of current operating management of the business opportunity or business combination. We have not put industry or geographically specific limitations on the nature of acquisitions or business opportunities to be evaluated. Management believes that the greatest potential lies in technology and goods or products-related industries, rather than principally service industries. Nevertheless, this shall not preclude the investigation or evaluation of any other category of business or industry. We will conduct our own investigation to identify an appropriate business opportunity or business combination, and will seek a potential business opportunity or business combination from all known sources, rel ying principally upon personal contacts of our officers and directors, as well as indirect associations between them and other business and professional people. </R>
RISK FACTORS
<R>Much of the information included in this registration statement includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgement regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".
Our shares of common stock are considered speculative during our search for a new business opportunity. Prospective investors should consider carefully the risk factors set out below.
Scarcity of and Competition for Business Opportunities and Combinations
We are, and will continue to be, an insignificant participant amongst numerous other companies seeking a suitable business opportunity or business combination. A large number of established and well-financed entities, including venture capital firms, are actively seeking suitable business opportunities or business combinations which may also be desirable target candidates for us. Virtually all such entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. We are, consequently, at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. Moreover, we will also compete with numerous other small public companies seeking suitable business opportunities or business combinations.
Governmental Regulation
To the best of our knowledge, we are not currently subject to direct federal, state or local regulation in the United States, other than regulations applicable to businesses generally.
Key Personnel
Although none of our present officers or our sole director are key to our continuing operations, we rely upon the continued service and performance of these officers and our sole director, and our future success depends on the retention of these people, whose knowledge of our business and whose technical expertise would be difficult to replace. At this time, none of our officers or our sole director are bound by employment agreements, and as a result, any of them could leave with little or no prior notice.
If we are unable to hire and retain technical, sales and marketing and operational personnel, any business we acquire could be materially adversely affected. It is likely that we will have to hire a significant number of additional personnel in the future if we identify and complete the acquisition of a business opportunity, or if we enter into a business combination. Competition for qualified individuals is likely to be intense, and we may not be able to attract, assimilate, or retain additional highly qualified personnel in the future. The failure to attract, integrate, motivate and retain these employees could harm our business.
Recent terrorist attacks may have an adverse effect on our Business
The terrorist attacks in New York and Washington, D.C. on September 11, 2001 appear to be having an adverse effect on business, financial and general economic conditions. These effects may, in turn, have an adverse effect on our business and results and operations. At this time, however, we are not able to predict the nature, extent and duration of these effects on overall economic conditions or on our business and operating results.
Going Concern Qualification
There is substantial doubt about our ability to continue as a going concern due to the losses incurred since inception, our stockholders' deficiency, and lack of revenues.
We anticipate that we may require financing from unrelated third parties in order to continue seeking a suitable business opportunity or business combination. We anticipate that we will have sufficient capital to fund our ongoing operations until that time. However, we may be required to raise additional financing for a particular business combination or business opportunity. We would likely seek to secure any additional financing necessary through a private placement of our common stock.
There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us could have a materially adverse effect upon our company. Although we believe that we have funds sufficient to meet our immediate needs, we may require further funds to finance the development of any business opportunity that we acquire. There can be no assurance that such funds will be available or available on terms satisfactory to us. If additional funds are raised by issuing equity securities, further dilution to existing or future shareholders is likely to result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we acquire. Inadequate funding could also impair our ability to compete in the marketplace, whic h may result in the dissolution of our company.
Limited Operating History
We have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies seeking to acquire or establish a new business opportunity. Some of these risks and uncertainties relate to our ability to identify, secure and complete an acquisition of a suitable business opportunity.
We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. In addition, our operating results are dependent to a large degree upon factors outside of our control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business.
It is unlikely that we will generate any or significant revenues while we seek a suitable business opportunity or business combination. Our short and long-term prospects depend upon our ability to select and secure a suitable business opportunity or business combination. In order for us to make a profit, we will need to successfully acquire a new business opportunity in order to generate revenues in an amount sufficient to cover any and all future costs and expenses in connection with any such business opportunity. Even if we become profitable, we may not sustain or increase our profits on a quarterly or annual basis in the future.
We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until we complete a business combination or acquire a business opportunity. This may result in our company incurring a net operating loss which will increase continuously until we complete a business combination or acquire a business opportunity that can generate revenues that result in a net profit to us. There is no assurance that we will identify a suitable business opportunity or complete a business combination.
Ability to Generate Revenues is Uncertain
For the year ended December 31, 2001, we incurred a net loss of $541,777. We do not anticipate generating any significant revenues until we acquire a business opportunity or complete a business combination. We also have an accumulated deficit of $1,561,454 as at December 31, 2001. At this time, our ability to generate any revenues is uncertain. The auditor's report on our December 31, 2001 financial statements included in our Form 10-KSB Annual Report contains an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Speculative Nature of Our Proposed Operations
The success of our proposed plan of operation will depend to a great extent on the operations, financial condition and management of any identified business opportunity. While management intends to seek business opportunities and/or business combinations with entities which have established operating histories, there is no assurance that we will successfully locate business opportunities meeting such criteria. In the event that we complete a business combination or otherwise acquire a business opportunity, the success of our operations may be dependent upon management of the successor firm or venture partner firm, together with a number of other factors beyond our control.
No Agreement for Business Combination or Other Transaction/No Standards for Business Combination
We have no agreement with respect to acquiring a business opportunity or engaging in a business combination with any private entity. There can be no assurance that we will successfully identify and evaluate suitable business opportunities or conclude a business combination. There is no assurance that we will be able to negotiate the acquisition of a business opportunity or a business combination on terms favorable to us. We have not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which we will require a target business opportunity to have achieved, and without which we would not consider a business combination in any form with such business opportunity. Accordingly, we may enter into a business combination with a business opportunity having no significant operating history, losses, limited or no potential for earnings, limited assets, negative net worth or other negative characteristics.
Continued Management Control/Limited Time Availability
We are dependent upon management's personal abilities to evaluate business opportunities that may be presented in the future. While seeking to acquire a business opportunity, management anticipates devoting up to 50% of their time to our business. Management may or may not have prior experience in the technical aspects of the industry or the business within that industry that may be acquired. Our officers have not entered into written employment agreements with us with respect to our proposed plan of operation and are not expected to do so in the foreseeable future. We have not obtained key man life insurance on our officers or our sole director. Notwithstanding the combined limited experience and time commitment of management, loss of the services of any of these individuals would adversely affect development of our business and our likelihood of continuing operations.
Lack of Market Research or Marketing Organization
We have not conducted or received results of market research indicating that there is a demand for the acquisition of a business opportunity or business combination as contemplated by our company. Even if there is demand for the acquisition of a business opportunity or combination as contemplated, there is no assurance we will successfully complete such an acquisition or combination.
Lack of Diversification
In all likelihood, our proposed operations, even if successful, may result in a business combination with only one entity. Consequently, the resulting activities will be limited to that entity's business. Our inability to diversify our activities into a number of areas may subject us to economic fluctuations within a particular business or industry, thereby increasing the risks associated with our operations.
Regulation
Although we will be subject to regulation under theSecurities Exchange Act of 1934, management believes that we will not be subject to regulation under theInvestment Company Act of 1940, insofar as we will not be engaged in the business of investing or trading in securities. In the event that we engage in business combinations which result in us holding passive investment interests in a number of entities, we could be subject to regulation under theInvestment Company Act of 1940, meaning that we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the Securities and Exchange Commission as to the status of our company under theInvestment Company Act of 1940 and, consequently, any violation of such act would subject us to material adverse consequences.
Probable Change in Control and Management
A business combination or acquisition of a business opportunity involving the issuance of our shares of common stock may result in new or incoming shareholders obtaining a controlling interest in our company. Any such business combination or acquisition of a business opportunity may require management of our company to sell or transfer all or a portion of our common stock that they hold or resign as members of our board of directors. The resulting change in our control could result in removal of one or more of our present officers and sole director, and a corresponding reduction in or elimination of their participation in the future affairs of our company.
Reduction of Percentage Share Ownership Following Business Combination
Our primary plan of operation is based upon the acquisition of a business opportunity or a business combination with a private concern, which, in all likelihood, would result in us issuing shares of common stock to shareholders of such private company. Issuing previously authorized and unissued shares of our common stock will reduce the percentage of common stock owned by present and prospective shareholders and may result in a change in our control and/or management.
Taxation
United States and, if applicable, international tax consequences will, in all likelihood, be major considerations in any business acquisition or combination we may undertake. Typically, these transactions may be structured to result in tax-free treatment pursuant to various United States tax provisions. We intend to structure any business combination so as to minimize the tax consequences to both our company, our management, our principal shareholder and the target entity. Management cannot ensure that a business combination will meet the statutory requirements for a tax-free reorganization, or that the parties will obtain the intended tax-free treatment upon a transfer of shares of our common stock or assets. A non-qualifying reorganization could result in the imposition of taxes, which may have an adverse effect on both parties to the transaction.
Requirement of Audited Financial Statements May Disqualify Business Opportunity
Management believes that any potential business opportunity or target company should provide audited financial statements for review and for the protection of all parties to the business acquisition or combination, although management may waive this requirement in appropriate circumstances. One or more attractive business opportunities may forego a business combination with us rather than incur the expenses associated with preparing audited financial statements.
Uncertain Ability to Manage Growth
Our ability to achieve any planned growth upon the acquisition of a suitable business opportunity or business combination will be dependent upon a number of factors including, but not limited to, our ability to hire, train and assimilate management and other employees and the adequacy of our financial resources. In addition, there can be no assurance that we will be able to manage successfully any business opportunity or business combination. Failure to manage anticipated growth effectively and efficiently could have a materially adverse effect on our business.
"Penny Stock" Rules May Restrict the Market for the Company's Shares
Our shares of common stock are subject to rules promulgated by the Securities and Exchange Commission relating to "penny stocks," which apply to companies whose shares are not traded on a national stock exchange or on the NASDAQ system, trade at less than $5.00 per share, or who do not meet certain other financial requirements specified by the Securities and Exchange Commission. These rules require brokers who sell "penny stocks" to persons other than established customers and "accredited investors" to complete certain documentation, make suitability inquiries of investors, and provide investors with certain information concerning the risks of trading in the such penny stocks. These rules may discourage or restrict the ability of brokers to sell our shares of common stock and may affect the secondary market for our shares of common stock. These rules could also hamper our ability to raise funds in the primary market for our shares of common stock.
Possible Volatility of Share Prices
Our shares of common stock are currently publicly traded on the Over-the-Counter Bulletin Board service of the National Association of Securities Dealers, Inc. The trading price of our shares of common stock has been subject to wide fluctuations. Trading prices of our shares of common stock may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our shares of common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our shares of common stock, regardless of our operating performance.
In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.
Indemnification of Directors, Officers and Others
Our by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses (including, without limitation, attorneys' fees, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that the person is one of our officers or directors) incurred by an officer or director in defending any such proceeding to the maximum extent permitted by Nevada law.
Insofar as indemnification for liabilities arising under theSecurities Act of 1933 may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in theSecurities Act of 1933 and is, therefore, unenforceable.
Future Dilution
Our constating documents authorize the issuance of 50,000,000 shares of common stock, each with a par value of $0.001 and 1,000,000 shares of preferred stock, par value $0.01. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.
Anti-Takeover Provisions
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
Reports to Security Holders
Under the securities laws of Nevada, we are not required to deliver an annual report to our shareholders but we intend to send an annual report to our shareholders. </R>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This reoffer prospectus contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "except," "plan," "anticipate," "believe," "estimate," " predict," "potential" or "continue," as well as the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks described above and in other parts of this prospectus. These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
We will not receive any of the proceeds from the sale of shares of common stock by the selling stockholder.
The selling stockholders acquired or will acquire beneficial ownership of all shares to be registered under this reoffer prospectus through stock options granted by us. The selling stockholders are officers and/or directors of our company. The following table shows the number of shares of common stock beneficially owned by them and the number of shares of common stock that they may sell from time to time under this reoffer prospectus:
<R>
Selling Stockholder | Number of Shares Beneficially Owned (1) | Number of Shares Subject to Options (2) | Shares Being Registered | Percentage of Shares Beneficially Owned (3) | |
Before Offering | After Offering | ||||
Robert Grace | 615,000 | 440,000 | 100,000 | 3.5% | 2.9% |
Byron Cox | 469,000 | 250,000 | 100,000 | 2.6% | 2.1% |
(1) Represents shares owned beneficially by Messrs. Grace and Cox, including shares that they have the right to acquire within 60 days of the date of this reoffer prospectus.
(2) Includes shares of our common stock underlying options granted to Messrs. Grace and Cox, whether or not exercisable as of, or within 60 days of, the date of this reoffer prospectus.
(3) Based on 17,419,603 shares outstanding as of March 22, 2002. </R>
Messrs. Grace and Cox may, from time to time, elect to sell all or a portion of the shares offered under this prospectus in the over-the-counter market. Sales are anticipated to be made at market prices prevailing at the times of such sales. Messrs. Grace and Cox may also make private sales directly or through a broker or brokers, who may act as agent or principal. Further, they may choose to dispose of the shares offered under this prospectus by gift to a third party or as a donation to a charitable or other non-profit entity. In connection with any sales, Messrs. Grace and Cox and any brokers participating in such sales may be deemed to be underwriters within the meaning of the Securities Act. The amount of securities to be reoffered or resold by means of this reoffer prospectus, by Messrs. Grace and Cox, and any other person with whom they are acting in concert for the purpose of selling our securities, may not exceed, during any three month period, the amount specified in Rule 144( e) under the Securities Act.
Any broker-dealer participating in such transactions as agent may receive commissions from Messrs. Grace and Cox (and, if such broker acts as agent for the purchaser of such shares, from such purchaser). Messrs. Grace and Cox will pay usual and customary brokerage fees. Broker-dealers may agree with them to sell a specified number of shares at a stipulated price per share, and, to the extent such a broker-dealer is unable to do so acting as agent for Messrs. Grace and Cox, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to them. Broker-dealers who acquire shares as principal may thereafter resell such shares from time to time in transactions (which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market, in negotiated transactions or otherwise at market prices prevailing at the time of sale or at ne gotiated prices, and in connection with such resales may pay to or receive commissions from the purchasers of such shares.
We have advised Messrs. Grace and Cox that the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of shares in the market and to the activities of Messrs. Grace and Cox and their affiliates. In addition, we will make copies of this reoffer prospectus available to Messrs. Grace and Cox and have informed them of the possible need for delivery of copies of this reoffer prospectus to purchasers on or prior to sales of the shares offered under this reoffer prospectus. Messrs. Grace and Cox may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. Any commissions paid or any discounts or concessions allowed to any such broker, and any profits received on the resale of such shares, may be deemed to be underwriting discounts and commissions under the Securities Act if any such broker-dealers purchase shares as principal.
Any securities covered by this reoffer prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under those rules rather than pursuant to this reoffer prospectus.
There can be no assurance that Messrs. Grace and Cox will sell any or all of the shares of common stock offered under this reoffer prospectus.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
<R>Section 78.7502 of the Nevada General Corporation Law and Article VI of the our articles of incorporation permit us to indemnify our officers and directors and certain other persons against expenses in defense of a suit to which they are parties by reason of such office, so long as the persons conducted themselves in good faith and the persons reasonably believed that their conduct was in our best interests or not opposed to our best interests, and with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. Indemnification is not permitted in connection with a proceeding by or in the right of the corporation in which the officer or director was adjudged liable to the corporation or in connection with any other proceeding charging that the officer or director derived an improper personal benefit, whether or not involving action in an official capacity.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that act and is therefore unenforceable. </R>
Dill Dill Carr Stonbraker & Hutchings, P.C., Denver, Colorado will pass upon the validity of the common stock offered hereby for us.
<R>The financial statements as of December 31, 2001 and 2000 and for each of the years in the three-year period ended December 31, 2001, are incorporated by reference in this reoffer prospectus in reliance on the report of Steele & Co., independent accountants, which is also incorporated herein by reference, in reliance upon their authority as experts in accounting and auditing. </R>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange Commission are incorporated herein by reference except to the extent any statement or information therein is modified, superseded or replaced by a statement or information contained in this document or in any other subsequently filed document incorporated herein by reference:
<R>1. The description of our Company's common stock contained in our Registration Statement on Form 10-SB (SEC file number 000-28305), filed with the Securities and Exchange Commission on November 30, 1999, including all amendments and reports for the purpose of updating such description; and
2. Our Annual Report on Form 10-KSB, filed on April 16, 2002; and
3. All reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents.
We will furnish without charge to each person to whom the reoffer prospectus is delivered, upon the oral or written request of such person, a copy of any and all of the documents incorporated by reference (other than exhibits to such documents). Requests should be directed to the attention of Robert Grace at Fairchild International Corporation, 595 Hornby Street, Suite 600, Vancouver, British Columbia V6C 1A4 Canada, telephone number (604) 669-1040.
</R>
WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US
We have filed with the Securities and Exchange Commission a registration statement on Form S-8 under the Securities Act, with respect to the common stock offered by this reoffer prospectus. As permitted by the rules and regulations of the Commission, this reoffer prospectus, which is a part of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further information pertaining to our company and the common stock offered hereby, reference is made to such registration statement and the exhibits and schedules thereto. A copy of the registration statement may be inspected without charge at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices located at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of all or any part of the r egistration statement may be obtained from such offices upon the payment of the fees prescribed by the SEC. For further information, please call the SEC at 1-800-SEC-0330. In addition, registration statements and certain other filings made with the Commission through its Electronic Data Gathering, Analysis and Retrieval system, including our registration statement and all exhibits and amendments to our registration statements, are publicly available through the Commission's website at http://www.sec.gov.
We are subject to the information and reporting requirements of the Exchange Act and, in accordance therewith, will file periodic reports, proxy statements and other information with the Securities and Exchange Commission.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
<R>The following documents filed by our corporation with the United States Securities and Exchange Commission (the "SEC") are incorporated herein by reference:
1. The description of our Company's common stock contained in our Registration Statement on Form 10-SB (SEC file number 000-28305), filed with the Securities and Exchange Commission on November 30, 1999, including all amendments and reports for the purpose of updating such description; and
2. Our Annual Report on Form 10-KSB, filed on April 16, 2002.
In addition to the foregoing, all documents subsequently filed by our corporation pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment indicating that all of the securities offered hereunder have been sold or deregistering all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents. Any statement contained in a document incorporated by reference in this Registration Statement shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document that is also incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
You may read and copy any reports, statements of other information were filed at the SEC's Public Reference Rooms at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Rooms. Our filings are also available to the public from commercial document retrieval services, such as Primark, whose telephone number is 1-800-777-3272, or on the internet at the SEC's website at http\\:www.sec.gov. </R>
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
<R>Section 78.7502 of Nevada Revised Statutes provides as follows with respect to indemnification of directors and officers:
NRS 78.7502 Discretionary and mandatory indemnification of officers, directors, employees and agents: General provisions.
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, except 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 the action, suit or proceeding if he acted 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 no reasonable cause to believe his conduct was unlawful. The termi nation of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does 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 that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
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 amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom , to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
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 1 and 2, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
When indemnification is discretionary, Section 78.751 of Nevada Revised Statutes provides as follows with respect to the authorization required to carry out the indemnification:
NRS 78.751 Authorization required for discretionary indemnification; advancement of expenses; limitation on indemnification and advancement of expenses.
Any discretionary indemnification underNRS 78.7502 unless ordered by a court or advanced pursuant to subsection 2, may 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. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
The articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant toNRS 78.7502 or for the advancement of expenses made pursuant to subsection 2, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
Our Bylaws provide that we must indemnify any director or officer of our corporation to the full extent permitted by applicable law as then in effect, against liability arising out of a proceeding to which the individual was made a party because he or she is or was a director or officer of our corporation. We will advance expenses incurred by a director or officer who is a party to a proceeding in advance of final disposition of the proceeding, as provided by our Bylaws. <R>
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
<R>4.1 Stock Option Agreement with David Stadnyk (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.2 Stock Option Agreement with Peter Miles (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.3 Stock Option Agreement with Byron Cox (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.4 Stock Option Agreement with Robert Grace (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.5 Stock Option Agreement with Winston Cabell (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.6 Stock Option Agreement with James Beadle (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.7 Stock Option Agreement with David Duval (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
4.8 Stock Option Agreement Amendment with Peter Miles dated April 30, 2002
4.9 Stock Option Agreement Amendment with Byron Cox dated April 30, 2002
4.10 Stock Option Agreement Amendment with Robert Grace dated April 30, 2002
4.11 Stock Option Agreement Amendment with Winston Cabell dated April 30, 2002
5 Opinion of Dill Dill Carr Stonbraker & Hutchings, P.C. (incorporated by reference from our Registration Statement on Form S-8 filed on September 24, 2001)
23.1 Consent of Steele & Co
23.2 Consent of Dill Dill Carr Stonbraker & Hutchings, P.C. (incorporated by reference in Exhibit 5) </R>
Item 9. Undertakings.
(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, as amended;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low and high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by our corporation pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this 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 offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) We hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of our annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and persons controlling our corporation pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by our corporation of expenses incurred or paid by a director, officer or controlling person of our corporation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, our corporation will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public p olicy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. 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 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, British Columbia on the 1st day of May, 2002.
FAIRCHILD INTERNATIONAL CORPORATION
By: /s/ Robert Grace
Robert Grace, President and Director
