AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 23, 2003
REGISTRATION NO.: 333-86581
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NUMBER TWO TO
FORM SB-2
Registration Statement under the Securities Act of 1933
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SPACE TELECOM, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 01-0710239
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(State or Other Jurisdiction (Primary Standard Industrial (IRS Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
292 South County Road, Suite 109, Palm Beach, Florida 33480 (561) 659-9054
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(Address and telephone number of principal executive offices)
RICHARD P. GREENE, ESQ.
2455 East Sunrise Boulevard, Suite 905, Ft. Lauderdale, Florida 33304 (954) 564-6616
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(Name, address and telephone Number of Agent for Service)
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act , check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [X]
CALCULATION OF REGISTRATION FEE
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Title of each class of Dollar Proposed maximum Proposed maximum Amount of
securities amount offering price aggregate offering registration
to be registered to be Registered per Share price fee
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Common stock, par value
$.0001 Maximum - 1,400,000 $2.50 $3,500,000 $322.00
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Minimum - 10,000 $2.50 $ 25,000
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Selling Stockholders 1,542,100 $2.50 $3,855,250 $354.68
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Total $676.68(1)
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(1) This registration fee is calculated at $.000092 for the shares offered based
on the maximum aggregate offering price of the securities being registered
in accordance with Rule 457(o).
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a), of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion, dated ________________
PRELIMINARY PROSPECTUS
SPACE TELECOM, INC.
We are offering up to 1,400,000 shares of our common stock and
1,542,100 are being registered for the benefit of the selling stockholders. Prior
to this offering, there has been no public trading market for our securities.
The public offering price will be $2.50 per share. This offering will expire one
year from the effective date of this prospectus. We must sell a minimum of
10,000 shares in order to receive proceeds from the Offering. The proceeds from
the sale of the securities will be placed in an escrow account opened at First
Union Bank, Palm Beach, Florida, until the 10,000 shares are completely sold.
This offer is being made on a 10,000 share minimum, 1,400,000 share
maximum basis. In the event that the minimum amount of 10,000 shares is not sold
by the end of the 12 month period commencing on the effective date of the
registration statement (the "Termination Date"), all funds shall be promptly
returned to the investors, without interest. Once the minimum offering amount
has been raised, the proceeds will be utilized by management as set forth herein
(see "Use of Proceeds.")
We are offering our shares of common stock at $2.50 per share on a
self-underwritten basis.
The selling shareholders will sell at a fixed price until the
securities are quoted on the OTC Bulletin Board. Once there is a market for our
securities, the selling stockholders will sell at prevailing market prices.
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The common stock being offered involves a high degree of risk.
See "Risk Factors" beginning on page 3 for a discussion
of certain factors that should be considered by prospective investors. The
common stock being offered is not listed on any national securities market.
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Neither the Securities and Exchange Commission nor any state securities commission
has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
The date of this preliminary prospectus is January 23, 2003
TABLE OF CONTENTS
Prospectus Summary.............................................................1
Risk Factors...................................................................3
Risks Related to Our Business...........................................5
Risks Related to Our Industry...........................................6
Risks Related to this Offering..........................................7
Use of Proceeds................................................................9
Determination of Offering Price...............................................12
Dilution......................................................................12
Dividend Policy ..............................................................13
Selling Security Holders......................................................13
Plan of Distribution..........................................................15
Legal Proceedings.............................................................17
Directors, Executive Officers, Promoters, and Control Persons.................18
Security Ownership of Certain Beneficial Owners and Management................20
Description of Securities.....................................................21
Interest of Named Experts and Counsel.........................................22
Disclosure of Commission Position on Indemnification for Securities
Act Liabilities.......................................................22
Description of Business.......................................................23
Management's Discussion and Analysis of Financial Condition and Results
of Operations.........................................................29
Description of Property.......................................................30
Certain Relationships and Related Transactions................................30
Market for Common Equity and Related Stockholder Matters......................30
Summary Compensation Table.................................................... 31
Financial Statements..........................................................32
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.................................................33
Legal Matters.................................................................33
Experts.......................................................................33
Indemnification of Directors and Officers.....................................35
Other Expenses of Issuance and Distribution...................................35
Recent Sales of Unregistered Securities.......................................36
Exhibits......................................................................37
Signatures....................................................................38
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information provided by this prospectus is accurate as of any date other than
the date on the front of this prospectus.
PROSPECTUS SUMMARY
About Space Telecom, Inc.
We are a Florida corporation incorporated on December 10, 2001. We intend
to design, build and operate state-of-the-art Internet Provider ("IP") backbone
between the United States and the rest of the world with specific targeting to
emerging market countries. Those networks will also allow us to provide in-bound
and out-bound traffic between each point of our network, to provide convergent
telecommunications solutions and to develop connectivity with the most remote
areas of the third world countries. We intend to build five IP networks linking
up to 19 countries to the US and interconnecting them to each other and the rest
of the world. Our senior management and associates have experience in business
and the telecommunications industry, with special emphasis in financial,
technical and commercial fields and in the convergent telephony services.
We intend to seek licensing, registration or regulatory approval, where
applicable, from the Federal Communications Commissions (FCC) as well as the
regulatory agencies in the target countries, to be determined.
As of the date of this Prospectus, we have not yet commenced business
operations. We have very limited cash resources and are in need of substantial
additional capital to execute our business plan. Upon completion of the
Offering, we intend to fund operations and begin to receive revenues. We
anticipate that our revenue will be derived from a variety of sources,
including, but not limited to:
o voice and fax traffic
o lease of Internet and satellite bandwidth
o lease of local loop bandwidth
o lease of submarine fiber optic bandwidth
o video conference service
o network security consulting
o Web hosting through third party subcontractor
o network design, build-out and management for other companies.
We believe the bulk of revenue will come from the voice and faxes inbound
and outbound traffic, Internet bandwidth lease and satellite bandwidth lease.
Volumes will be significantly affected by the quality and by the availability of
these services. (See "Business of the Company.")
Our executive offices are located at 292 S County Road, Suite 109, Palm
Beach, Florida 33480 and our telephone number is (561) 659-9054.
About The Offering
We are offering our shares of common stock at $2.50 per share on a
self-underwritten basis. At such time as the minimum offering amount has been
received and accepted, the funds may be paid and used by us in accordance with
the use of proceeds table set forth herein (see "Use of Proceeds.") In the event
that the minimum amount of 10,000 shares is not sold by the end of the 12 month
period commencing on the effective date of the registration statement (the
"Termination Date"), all funds shall be promptly returned to the investors,
without interest, within 10 days of the Termination Date.
Affiliates of our Company may not purchase shares of our stock in order to
achieve the minimum amount of our offering.
1
Common stock offered by Space Telecom 1,400,000 common shares
Termination Date This Offering will begin upon
effectiveness and will terminate
whenever all of the shares are
sold, or 12 months after the
date of effectiveness, whichever
comes first.
Common stock offered by Selling Stockholders 1,542,100 common shares
Common stock outstanding prior to this offering 6,421,000 common shares
Common stock outstanding after this offering 7,821,000 common shares
Primary offering The primary offering of
6,421,000 shares was
allocated to the founders of
this Company at par value
($.0001 per share)
The secondary offering of
1,400,000 shares are being
offered to the public at
market price. The opening
price has been fixed at $2.50
per share. This offering is
self underwritten and the
CEO, Directors and Officers
of the Company are
responsible for sale.
We are offering a minimum of
10,000 shares at $2.50 per
share for a total amount of
$25,000.
We are offering a maximum of
1,400,000 at $2.50 per share
for a total amount of
$3,500,000.
Selling shareholders The selling shareholders who
are the founders are selling
1,542,100 shares out of their
6,421,000 shares held by them
at $2.50 per share.
Summary of financial data
Our company is a development stage enterprise and does not conduct
business operations. Consequently, this company has no income statement and has
produced an opening balance sheet as of May 31, 2002. The financial statements
at August 31, 2002 are annexed hereto.
The company has received a loan of $5,000 from Alps Resources Bankers
in order to pay some expenses connected with this offering. It has also received
$642.10 from the founders as their contribution to the share capital of the company.
Our fiscal year end is December 31st.
2
RISK FACTORS
Primary risks
Investing in Space Telecom carries a certain number of risks that are
inherent to the telecommunications industry particularly in Third World
countries. The risks can be divided into two main categories: Internal factors
and External factors.
1. Internal Factors
Our capacity to achieve our objective by selecting and retaining key
personnel and managing effectively the risk of obsolescence of material and
equipment. New technologies and less costly equipment have become a regular
feature of the telecommunications industry.
2. External Factors
• The development stage of our company implies risks of dependence
on availability of funds
• Political stability of the foreign states where our products will
be sold
• Nationalization risks of local company that we will create in the
foreign countries.
If any of the following risks occur, our business financial condition or
results of operations could be materially harmed. In such case, the trading
price of our common stock could decline, and you may lose all or part of your
investment.
You could lose all of your investment if Space Telecom does not remain a
going concern. To achieve a going concern basis, a company must have adequate
liquidity to pay its creditors in a timely manner and dispose of sufficient
positive cash flows to finance its current operations whether of a capital
nature or of a current nature.
Development stage company
We were formed in 2001 and have yet to generate any revenue. There have not
been operations since inception and we are in the process of raising capital and
financing for our future operations. Therefore, we are subject to all the risks
inherent in the establishment of this new operating venture, including the
likelihood of operating losses.
In order to carry out our operating plans, we must obtain additional
funding from outside sources. We are relying, in part, on the success of this
offering in order to implement our plans to develop the Company. Presently, we
are relying on our ability to raise the necessary capital through borrowing to
fund the day-to-day operations. Due to our limited assets and resources, there
can be no assurance that we will be successful in obtaining the necessary
financing either from this offering or other sources including debt.
You may be unable to effectively evaluate our Company for investment
purposes because we have no operating history. Since we were founded in
2001, we have focused on the development of improved Internet Provider networks
which would link the U.S. and Europe to the African continent and some Asian
countries. The networks would allow us to provide inbound and outbound
telecommunications traffic. Our prospects for success must be considered in
light of the risks and difficulties encountered by a company in its development
stage.
Risks associated with operating in foreign countries
1. Workers compensation
We intend to be engaged in the build-out and installation of
telecommunications equipment on the African continent and in some Asian
countries. The potential for employee injury could subject us to litigation and
potential liability for settlement, cancellation and/or judgment awards. We
intend to carry a full range of appropriate liability and other insurance. There
are no assurances that the amount of liability insurance and other coverage we
will secure will adequately cover all potential liability and/or other claims
and that any such liability and/or other claims will not exceed the coverage
limits of such a policy and that such insurance will continue to be available on
commercially reasonable terms or at all. Consequently, a liability claim or
other such claim with respect to uninsured liabilities or in excess of insured
liabilities would have a material adverse effect on our business, financial
condition and results of operation.
3
2. Expropriation/cancellation of license and civil unrest
The political instability in our target countries poses a major risk of
expropriation by a new government. Our operating license may be withdrawn as
telephone communication is a key element in the development of a country and a
succeeding government may decide to exercise control and our local subsidiary
company may be nationalized. This will adversely effect our profitability and we
may lose the equipment installed in that particular country. We may also face
the consequences of civil unrest which is a common feature in some countries in
Africa and Asia. This can be detrimental to our infrastructure built in those
countries.
3. Amendments to existing tax laws
When a foreign company brings a new business to a developing country (our
target), it gets tax breaks and exemptions from custom duties for equipment and
machines. These fiscal advantages may be withdrawn by a new government. This
will have an adverse effect on our profitability and may even affect our
continued existence in that country.
Secondary Risks
1. No assurance of a public market
Our common stock is not presently traded on any established market. There
is no prior trading market for our common stock and there can be no assurance
that a trading market for the common stock will develop, or if developed, that
it will continue. If no market develops, it may be difficult or impossible for
holders of the common stock to sell their shares if they should so desire. In
addition, there are substantial restrictions on the sale or transfer of the
common stock imposed by Federal and State securities laws. There are no
assurances that holders will be able to sell their offering of the common stock
or that sufficient shares will be sold to create a public market for the common
stock.
2. No assurance that offering will be successful
There can be no assurance that our offering will raise operating capital
for our initial 12 months of operations. Should the minimum amount of the
offering be the only amount raised in the offering, we could not operate for our
initial 12 months and amounts contributed by investors in reaching the minimum
would not be returned to the investors. Failure by the Company to raise
additional equity or debt financing would impair our operations and investors
may lose the total amount of their investment.
3. Selling shareholder effect on market
When our selling shareholders sell their respective shares, the market
price of our stock could be potentially depressed and as a result you may not be
able to sell your shares at the previously higher market price. Selling a large
volume of shares in a short period of time will create downward pressure on the
price of our common stock unless there is buying in the market. Without a
balanced market in our stock, all of our shareholders are at risk of selling
their shares at depressed prices, thus realizing a reduced gain, if any.
4. Dependence on management
Management believes that its success will largely depend on implementation
of the business plan. Management is experienced in the area of operation in
which the Company will function. The focus of our operations will require
management's ability to master certain aspects in the running of this
telecommunications segment, as well as the enhancements of market opportunities
and competitive variables. We are unaware of any other organization that
provides state-of-the-art Internet Provider services to the African Continent.
Failure on our part resulting from prolonged illness of key personnel or
our inability, whether technical or financial, to catch up with new technology
may result in loss of business and profits.
5. Arbitrary offering price
We have determined the number of shares to be offered based upon our
estimate of the amount of proceeds necessary for planned uses. The offering
price is not based on our assets, book value, or earnings. Accordingly, the
offering price should not be considered an indication of the actual fair market
value of the common stock as if appraised by a qualified third party.
6. Reliance on public acceptance
Our success is dependent on public acceptance and support of our services.
There are no assurances that the telecommunications trends will continue in the
direction that management forecasts and even if such trends continue, there are
no assurances that we will be able to derive the income and/or value from these
areas as projected. While the conclusions of our management on the prospects of
African and Asian telecommunications markets might be favorable, there are no
assurances that the actual operating results will reach the levels indicated by
management.
4
7. Proprietary know-how
Our success depends and will continue to depend on certain trade secrets,
on proprietary "know-how," and on its ongoing endeavors involving our proposed
networks. Any leak to outside parties may result in new competitors and loss of
business and our profitability will not meet our expectations. Our management is
bound by employment agreements which include non-disclosure clauses that are
structured to protect the Company's proprietary information and know-how. There
can be no assurance that these agreements and clauses will protect the Company
or provide adequate remedies for the Company in the event of unauthorized use or
disclosure of such information, or that others will not be able to develop
similar networks or competing networks independently. There can be no assurance
that allegations of infringement of proprietary rights will not be made or that,
if made, such allegations would not be sustained if litigated. Litigation may be
necessary by the Company to enforce proprietary know-how owned by the Company to
defend the Company against claimed infringement of the rights of others or to
determine the ownership, scope or viability of substantial litigation expenses
and to divert time and effort of management personnel. The occurrence of such
litigation or the effect of an adverse determination in any such litigation
could have a material adverse effect on our business, financial condition and
results of operation.
8. Minimum subscription
We are offering a minimum amount of common stock which will result in
proceeds of $25,000 to the Company. Once the minimum offering amount has been
subscribed for, we will utilize those funds for our business operations and
investors will not receive a return of their investment. You should be aware
that receipt of the minimum offering amount would severely impair our business
operations.
9. Unfavorable economic conditions
The financial success of the Company may be sensitive to adverse changes in
general economic conditions in the markets and/or regions in which its networks
will be utilized. Specifically, greater unemployment could indicate that fewer
paying customers could or would subscribe to our services. These changes could
cause the cost of talent, labor, capital and other expenses to rise faster than
the Company could absorb or respond to. Such changing conditions could reduce
the profitability of the networks.
RISKS RELATED TO OUR BUSINESS
We may require substantial amounts of additional financing that may not be
available to us
The proceeds from the sale of the shares together with our existing sources
of capital may not be sufficient to meet our ultimate financial needs, and may
not be substantial in relationship to the operations or business in which we
intend to engage. It may be necessary for us to secure significant amounts of
additional financing. While we have various alternative plans to secure such
financing, there can be no assurance that any of such plans will be successful.
Lack of relavent experience by management.
The Company believes that it has ample experience to design and refine its
products. However, marketing and general operations requires management
experience of a different nature. The Company expects that it will generally
have little or no direct experience in the management operations and marketing
of the types of products and services the Company intends to market. Because of
the Company's lack of experience, it may be more vulnerable than others to
certain risks. The Company also may be more vulnerable to errors in judgment
that could have been prevented by more experienced management. As a result, lack
of previous experience could materially and adversely affect future operations
and prospects.
5
Our quarterly revenues and operating results may not be indicative of future
performance, are difficult to forecast and are likely to continue to fluctuate
Our quarterly revenues and operating results are likely to fluctuate
significantly from quarter to quarter as a result of several factors, many of
which are outside our control, and any of which could adversely affect our
business. These factors include:
o Inability to obtain license partner who offers our technology to
their subscribers;
o Increased competition by both established and startup companies who
provide similar services;
o Fluctuations in general economic conditions causing a decrease in
consumer spending; and
o Fluctuations in the general demand for telecommunications.
As a result of these fluctuations, period-to-period comparisons of our
quarterly results may not be meaningful and should not be relied upon as
indicators of future performance.
Our failure to develop and maintain strong relationships with license partners
would harm our ability to market our products, which would reduce future
revenues and increase our expenses
A significant portion of our sales will be influenced by the recommendation
of our product by telecommunication service companies. Losing the support of
these third parties may limit our ability to penetrate our target or potential
markets. These third parties are under no obligation to recommend or support our
product and could recommend or give higher priority to the products and services
of other companies or to their own products. A significant shift by these
companies toward favoring competing products could negatively affect our license
revenues.
RISKS RELATED TO OUR INDUSTRY
The market for our telecommunication service is intensely competitive.
We expect the intensity of competition to increase in the future as a
result of rapid technological change and lower priced equipment. Increased
competition is likely to result in price reductions, reduced gross margins and
loss of our market share, any one of which could reduce our future revenues or
earnings.
There are many telecommunications service providers active in the U.S,
Europe and other marketplaces. However, the Company is aware of only one which
will be in direct competition - ITXC, a publicly traded company which targets
the prepaid market of PC-to-phone international and domestic long distance.
Competitors are defined as those entities with deep financial resources,
control of physical assets in telecommunications, and experienced, knowledgeable
personnel.
In general, we believe that competition could ultimately assist us in
building product awareness and thus, in the short term, will be beneficial to
our objectives.
There can be no assurance that our current and future competitors will not
succeed in developing products, services and pricing that are more widely
accepted in the marketplace or that will render our products or services
noncompetitive. In addition, certain current and future competitors will have
the resources required to respond effectively to market changes or to compete
successfully with more aggressive pricing policies. There can be no assurance
that we will be able to successfully compete with current or future competitors
or that competitive pressures will not have a material adverse effect on our
business, financial condition and results of operations.
The telecommunications industry has only recently been opened up to
competition among private suppliers. Nonetheless, due to the enormous potential
for profit existing in this industry, there are and will continue to be numerous
other business entities seeking to profit from the carrier services and the
resellers market. Therefore, we will be competing against numerous other
businesses which market the same or similar products and/or services as those we
intend to market, many of which have or may have substantially greater capital
resources.
The principal factors of competition in the industry include product
quality, brand advertising (corporate recognition), trade and consumer
promotions and pricing.
Our prospective licensed partners must generate adequate sales to stay in
business. Failure to achieve this level of sales will put them out of business
and adversely affect our own profitability which depends on their sales.
6
Our targeted customers include industrial, commercial and residential
users. To the extent additional funding is less available for communications
companies as a result of a stock market decline or other factors, demand for our
product may decline significantly and thereby reduce our revenues.
Increasing government regulation of the communications industry and imposition
of sales and other taxes on our products sold by our license partners could
reduce our clientele base and harm our business
Federal, state or foreign agencies may adopt laws or regulations affecting
the telecommunications service providers. Although many of these laws or
regulations may not apply to our business directly, we expect that laws and
regulations relating to user pricing and quality of products and services could
indirectly affect our business.
Rapid changes in telecommunications technology can cause our products to
become obsolete
The marketfor our products is marked by rapid technological change,
frequent new product introductions, technology enhancements, uncertain product
life cycles, changes in client demands and evolving industry standards. We
cannot be certain that we will successfully develop and market new products, new
product enhancements or new products compliant with present or emerging
technology standards. New products based on new technologies or new industry
standards can render existing products obsolete and unmarketable. To succeed, we
will need to enhance our current product and develop new products on a timely
basis to keep pace with developments related to communications technology and to
satisfy the increasingly sophisticated requirements of our clients.
Failure on our part to adapt our products to changes and to update our
technology will have an adverse effect on our profitability.
Recent terrorist attacks have contributed to economic instability in the United
States; continued terrorist attacks, war or other civil disturbances could lead
to further economic instability adversely affecting our business
On September 11, 2001, the United States was the target of terrorist
attacks of unprecedented scope. These attacks have caused instability in the
global financial markets and other industries including the energy industry.
These attacks and the subsequent U.S. military campaign may lead to substantial
armed hostilities or to further acts of terrorism and civil disturbances in the
United States or elsewhere, which may contribute further to economic instability
in the United States and could have a material adverse effect on our business,
financial condition and operating results. Furthermore, as many of the
African and Asian countries are Muslim and as such becoming more and more
anti-American, we risk, as a U.S. company, being the target of fanatics in some
of the countries where we plan our future development. Such conditions will have
an adverse effect on our results and might also result in loss of equipment and
sales. These and other developments arising out of the attacks may make the
occurrence of one or more of the factors discussed under "Risk Factors" in this
prospectus more likely to occur.
RISKS RELATED TO THIS OFFERING
Control by principal stockholders, officers and directors could adversely affect
our stockholders
7
Upon completion of this offering, our officers, directors and
greater-than-five-percent stockholders (and their affiliates) will, in the
aggregate, beneficially own approximately 57% of our outstanding common stock,
assuming that they do not purchase shares in this offering. As a result, these
persons, acting together, will have the ability to control substantially all
matters submitted to our stockholders for approval (including the election and
removal of directors and any merger, consolidation or sale of all or
substantially all of our assets) and to control our management and affairs.
Although none of our officers, directors or large stockholders have committed to
purchase shares in this offering, it is possible that they may do so, thereby
increasing management's control.
We may issue additional securities which would dilute the value of the shares of
our common stock
Certain events over which you will have no control could result in the
issuance of additional shares of our common stock, which could dilute the value
of your shares of common stock. We may issue additional shares of common stock:
o to raise additional capital;
o upon the exercise of outstanding options and stock purchase warrants or
o additional options and warrants issued in the future;
o in connection with loans or other capital raising transactions; and
o in connection with acquisitions of other businesses or assets.
As of August 31, 2002, there were outstanding warrants and options to
acquire up to 530,000 additional shares of our common stock. If exercised, these
securities would dilute the value of the shares of common stock.
Anti-takeover provisions in our articles of incorporation may adversely affect
the value of our outstanding securities
Pursuant to our articles of incorporation, our board of directors may
issue, without stockholder approval, up to 5,000,000 shares of Class B common
stock in the future with such preferences, limitations and relative rights as
the board may determine. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of Class B stock,
while providing flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of delaying or preventing a change in
control of Space Telecom without further action by the stockholders.
Future sales of our common stock by our existing stockholders could
decrease the trading price of the common stock
FUTURE SALES OF OUR COMMON STOCK BY OUR EXISTING STOCKHOLDERS COULD DECREASE THE
TRADING PRICE OF THE COMMON STOCK
Sales of a large number of shares of our common stock in the public
markets after this offering, or the potential for such sales, could decrease the
trading price of our common stock and could impair our ability to raise capital
through future sales of our common stock. Upon completion of this offering,
there will be 7,821,000 shares of our common stock outstanding. Of these shares,
the 2,942,100 shares of common stock included in the shares sold in this
offering will be freely tradable without restrictions or further registration
under the Securities Act of 1933, unless such shares are purchased by our
"affiliates," as that term is defined in Rule 144 of the Securities Act of l933.
All of the rest of our outstanding shares and shares issuable upon the
exercise of outstanding options and warrants will be "restricted securities" for
purposes of Rule 144 of the Securities Act and may not be resold unless
registered under the Securities Act or sold pursuant to an applicable exemption
from registration, including the exemption contained in Rule 144. All of these
securities are eligible for sale on the open market under Rule 144 (subject to
the volume, holding period and manner of sale limitations of that rule), except
for shares which are subject to lockup agreements which prohibit their sale for
periods of between six months and 18 months after the closing date of this
offering, unless the sale is consented to by us and the representative of the
underwriters.
FORWARD-LOOKING STATEMENTS
Some of the information contained in this prospectus involves forward-
looking statements. These statements include, but are not limited to, statements
about our industry, plans, objectives, expectations and other statements that
are not historical facts. Forward-looking statements by their nature involve
risks and uncertainties. Therefore, actual results may differ materially from
those implied or expressed by these statements. Accordingly, you should not
place undue reliance on these forward-looking statements.
8
USE OF PROCEEDS
The net proceeds to Space Telecom range from $25,000 (the "Minimum") to
$3,500,000 (the "Maximum").If the Minimum be raised, we anticipate operating
capital for three months. Assuming 100% of the offering is successfully sold, we
anticipate 24 months of capital requirements. More detailed tables indicating
the proposed use of funds are listed on the following pages.
It is possible that no proceeds may be raised from this offering. If fewer
than all of the shares are sold, we will have to delay or modify our current
plans. There can be no assurance that any delay or modification will not
adversely affect our development. If we require additional funds to develop our
plan, such funds may not be available on terms acceptable to us. In the event
that less than 10% of this offering is sold, we intend to focus our efforts and
capital on marketing. While there can be no assurance of success, it is our goal
to invest heavily in our marketing efforts in an attempt to take us out of the
development stage and begin recognizing transactional revenue. We will not
pursue any further development until additional funds either from sales or
investment capital can be secured.
Use of proceeds summary table
The foregoing represents our best estimate of allocation of the proceeds of
this offering, based upon the current state of our business operations and our
current plans. Pending application of the net proceeds of this offering, we may
temporarily invest such funds in interest-bearing accounts, certificates of
deposit, government obligations, short-term interest bearing obligations, and
similar short-term investments.
Schedule assumes we receive 100% of the offering or $3,500,000:
Monthly
Percentage Description of Expense (where applicable) Amount
- ------------- ------------------------------------ ------------------ ----------
HARDWARE:
- ------------- ------------------------------------ ------------------ ----------
17.2 10 Voice Over IP access servers N/A $600,000
- ------------- ------------------------------------ ------------------ ----------
14.3 6 SS7/C7 Signaling Platforms N/A 500,000
- ------------- ------------------------------------ ------------------ ----------
14.3 5 Satellite Earth Station 4.5 Metres N/A 500,000
- ------------- ------------------------------------ ------------------ ----------
2.9 1 Complete set of Network Management
software N/A 100,000
- ------------- ------------------------------------ ------------------ ----------
2.4 3 Compaq Server for billing software N/A 85,000
- ------------- ------------------------------------ ------------------ ----------
0.1 5 Desktop workstations for Miami
office N/A 5,000
- ------------- ------------------------------------ ------------------ ----------
0.2 5 Office furniture sets N/A 10,000
- ------------- ------------------------------------ ------------------ ----------
51.4 Subtotal hardware $1,800,000
- ------------- ------------------------------------ ------------------ ----------
OTHER EXPENSES:
- ------------- ------------------------------------ ------------------ ----------
10.8 General Administration 379,000
- ------------- ------------------------------------ ------------------ ----------
11.3 Salaries of CEO, CFO, CTO and
associates $33,000 396,000
- ------------- ------------------------------------ ------------------ ----------
11.4 Refundable Deposit N/A 400,000
- ------------- ------------------------------------ ------------------ ----------
3.2 International Private Circuit N/A 110,000
- ------------- ------------------------------------ ------------------ ----------
10.5 Working Capital $30,416 365,000
- ------------- ------------------------------------ ------------------ ----------
1.4 Offering expenses 50,000
- ------------- ------------------------------------ ------------------ ----------
48.6 Subtotal other expenses $1,700,000
- ------------- ------------------------------------ ------------------ ----------
100% TOTAL $3,500,000
- ------------- ------------------------------------ ------------------ ----------
9
If we receive 100% of the offering, more than 50% of the proceeds will
be used to purchase computers, equipment and software necessary for our project.
Besides obtaining the signatures of pre-intercommunication agreements, we shall
have to make a deposit of $100,000.00 in each country.
To be able to implement and operate our own networks, Space Telecom
must, after the signature of the interconnection agreement with the major
telecommunication services provider in each country, pay a refundable deposit of
$100,000. This deposit is kept as a security bond in the event that Space
Telecom shall not fulfill its payment on a timely manner as described in each
interconnection agreement. The total amount for four countries is $100,000 x 4
= $400,000.
Initial deposit for the bandwidth leasing from satellite and submarine cable providers
International private circuit from the US to Senegal 1 Mbps full-duplex $ 22,000
International private circuit from the US to Mali 1 Mbps full-duplex 22,000
International private circuit from the US to Cameroon 1 Mbps full-duplex 22,000
International private circuit from the US to Ghana 1 Mbps full-duplex 22,000
International private circuit from the US to Benin 1 Mbps full-duplex 22,000
Total $110,000
The disbursement of funds will be effected in order of priority as follows :
Step I Offering expenses $ 50,000
Step II Initial deposits for bandwidth leasing from
satellite and submarine cable providers 110,000
Step III Refundable deposit for the interconnection with
the major carrier in each country (4x100,000) 400,000
Step IV Hardware and equipment to build the backbone 1,800,000
Step V General and Administrative - spread over 1 year
Personnel (Officers, directors and associates) 775,000
Working capital 365,000
----------------
Total $3,500,000
================
Schedule shows use of funds if only 75% of the offering is raised:
Disbursement Plan
Monthly
Percentage Description of Expense (where applicable) Amount
- ------------- ------------------------------------ ------------------ ----------
HARDWARE:
- ------------- ------------------------------------ ------------------ ----------
19.1 8 Voice Over IP access servers N/A $500,000
- ------------- ------------------------------------ ------------------ ----------
9.5 3 SS7/C7 Signaling Platforms N/A 250,000
- ------------- ------------------------------------ ------------------ ----------
15.2 4 Satellite Earth Station 4.5 Metres N/A 400,000
- ------------- ------------------------------------ ------------------ ----------
3.8 1 Complete set of Network management
software N/A 100,000
- ------------- ------------------------------------ ------------------ ----------
3.2 3 Compaq Server for billing software N/A 85,000
- ------------- ------------------------------------ ------------------ ----------
0.2 5 Desktop workstations for Miami
office N/A 5,000
- ------------- ------------------------------------ ------------------ ----------
0.4 5 Office furniture sets N/A 10,000
- ------------- ------------------------------------ ------------------ ----------
51.4 Subtotal hardware $1,350,000
- ------------- ------------------------------------ ------------------ ----------
OTHER EXPENSES:
- ------------- ------------------------------------ ------------------ ----------
9.1 General Administration 240,000
- ------------- ------------------------------------ ------------------ ----------
11.3 Salaries of CEO, CFO, CTO and
associates $24,750 297,000
- ------------- ------------------------------------ ------------------ ----------
15.3 Refundable Deposit N/A 400,000
- ------------- ------------------------------------ ------------------ ----------
3.4 International Private Circuit N/A 88,000
- ------------- ------------------------------------ ------------------ ----------
7.6 Working Capital $16,666 200,000
- ------------- ------------------------------------ ------------------ ----------
1.9 Offering expenses 50,000
- ------------- ------------------------------------ ------------------ ----------
48.6 Subtotal other expenses $1,275,000
- ------------- ------------------------------------ ------------------ ----------
100% TOTAL $2,625,000
- ------------- ------------------------------------ ------------------ ----------
If we receive 75% of the offering, more than 50% of the proceeds will
be used to purchase computers, equipment and software necessary for our project.
Besides obtaining the signatures of pre-intercommunication agreements we shall
have to make a deposit of $100,000 in each country with the major
telecommunication service provider. We shall target four countries.
10
To be able to implement and operate our own networks, we must, after
the signature of the interconnection agreement with the major telecommunication
services provider in each country, pay a refundable deposit of $100,000. This
deposit is kept as a security bond in the event that we do not fulfill our
payment on a timely manner as described in each interconnection agreement. The
total amount for four countries is $100,000 x 4 = $400,000.
Initial deposit for the bandwidth leasing from satellite and submarine cable providers
We shall work with only four countries: Senegal, Mali, Benin and Ghana.
We may, for technical reasons, replace one of these countries with Cameroun.
The disbursement of funds will be effected in order of priority as follows :
Step I Offering expenses $ 50,000
Step II Initial deposits for bandwidth leasing from
satellite and submarine cable providers 88,000
Step III Refundable deposit for the interconnection with the
major carrier in each country (4x100,000) 400,000
Step IV Hardware and equipment to build the backbone 1,350,000
Step V General and Administrative - spread over 1 year
Personnel (Officers, directors and associates) 537,000
Working capital 200,000
------------
Total $2,625,000
============
The following table shows our projected use of funds if we raise 50% of the offering
Disbursement Plan
- ------------- ------------------------------------ ------------------ ----------
Monthly
Percentage Description of Expense (where applicable) Amount
- ------------- ------------------------------------ ------------------ ----------
HARDWARE:
- ------------- ------------------------------------ ------------------ ----------
17.1 5 Voice Over IP access servers N/A $300,000
- ------------- ------------------------------------ ------------------ ----------
9.5 2 SS7/C7 Signaling Platforms N/A 166,000
- ------------- ------------------------------------ ------------------ ----------
11.4 2 Satellite Earth Station 4.5 Metres N/A 200,000
- ------------- ------------------------------------ ------------------ ----------
5.7 1 Complete set of Network management N/A 100,000
software
- ------------- ------------------------------------ ------------------ ----------
4.9 3 Compaq Server for billing software N/A 85,000
- ------------- ------------------------------------ ------------------ ----------
0.3 5 Desktop workstations for Miami N/A 5,000
office
- ------------- ------------------------------------ ------------------ ----------
0.6 5 Office furniture sets N/A 10,000
- ------------- ------------------------------------ ------------------ ----------
49.5 Subtotal hardware $866,000
- ------------- ------------------------------------ ------------------ ----------
OTHER EXPENSES:
- ------------- ------------------------------------ ------------------ ----------
11.0 General Administration 192,000
- ------------- ------------------------------------ ------------------ ----------
11.3 Salaries of CEO, CFO, CTO and $16,500 198,000
associates
- ------------- ------------------------------------ ------------------ ----------
11.4 Refundable Deposit N/A 200,000
- ------------- ------------------------------------ ------------------ ----------
2.5 International Private Circuit N/A 44,000
- ------------- ------------------------------------ ------------------ ----------
11.4 Working Capital $16,666 200,000
- ------------- ------------------------------------ ------------------ ----------
2.9 Offering expenses 50,000
- ------------- ------------------------------------ ------------------ ----------
50.5 Subtotal other expenses $884,000
- ------------- ------------------------------------ ------------------ ----------
100% TOTAL $1,750,000
- ------------- ------------------------------------ ------------------ ----------
If we received 50% of the offering, 49.5% of the proceeds will be used
to purchase computers, equipment and software necessary for our project. Besides
obtaining the signatures of pre-intercommunication agreements, we shall have to
make a deposit of $100,000 in each country with the major telecommunication
service provider.
To be able to implement and operate our own networks, we must, after the
signature of the interconnection agreement with the major telecommunication
services provider in each country, pay a refundable deposit of $100,000. This
deposit is kept as a security bond in the event that we do not fulfill our
payment on a timely manner as described in each interconnection agreement. The
total amount for two countries is $100,000 x 2 = $200,000.
Initial deposit for the bandwidth leasing from satellite and submarine cable providers
We shall limit our connection to two countries: Senegal and Mali. As a
matter of practicality we may substitute these two countries by the following:
Benin, Ghana and Cameroun. The cost involved will be $44,000 for any of these
two countries.
The disbursement of funds will be effected in order of priority as follows :
Step I Offering expenses $ 50,000
Step II Initial deposits for bandwidth leasing from
satellite and submarine cable providers 44,000
Step III Refundable deposit for the interconnection with
the major carrier in each country (4x100,000) 200,000
Step IV Hardware and equipment to build the backbone 866,000
Step V General and Administrative - spread over 1 year
Personnel (Officers, directors and associates) 390,000
Working capital 200,000
------------
Total $1,750,000
============
11
If we receive 50% of the offering, we shall target less countries. We
shall sign only two pre-intercommunication agreements and we shall have to limit
the international private circuit to two.
The following table shows our projected use of funds if we raise 10% of the
offering.
Disbursement Plan
- ------------- ------------------------------------ ------------------ ----------
Monthly
Percentage Description of Expense (where applicable) Amount
- ------------- ------------------------------------ ------------------ ----------
LICENSE AGREEMENTS:
- ------------- ------------------------------------ ------------------ ----------
14.3 Formal agreements with host countries
and main telecommunication services
providers - token non-refundable
deposit plus US license N/A $50,000
- ------------- ------------------------------------ ------------------ ----------
14.3 Formal agreements with equipment
suppliers - token non-refundable
deposit N/A 50,000
- ------------- ------------------------------------ ------------------ ----------
14.3 Formal agreements with bandwidth
leasing companies and submarine
cable providers - token
non-refundable deposit 150,000
- ------------- ------------------------------------ ------------------ ----------
42.9 Subtotal licensing agreements $150,000
- ------------- ------------------------------------ ------------------ ----------
OTHER EXPENSES:
- ------------- ------------------------------------ ------------------ ----------
14.3 Working Capital $4,166 50,000
- ------------- ------------------------------------ ------------------ ----------
14.3 Offering expenses 50,000
- ------------- ------------------------------------ ------------------ ----------
57.2 Subtotal other expenses $200,000
- ------------- ------------------------------------ ------------------ ----------
100% TOTAL $350,000
- ------------- ------------------------------------ ------------------ ----------
Besides paying for the expenses related to the offering, the funds will be used in priority as follows:
a. Licensing process in the U.S.
b. Start the licensing process in the target countries.
c. Start the negotiations with the companies for the bandwidth leasing
from satellite and submarine cable providers and make a down
payment.
d. Issuance costs for the rated and insured bonds as described below
on the hypothesis of minimum subscription of $25,000
e. Salary for the Chief Technical Officer.
Use of proceeds if only the minimum is raised, $25,000:
Obviously if we only raise such a small amount, our capacity to operate
will be greatly diminished. In such case, we will need additional funding very
quickly. In order to secure said funding we will be obliged to issue ten years
Corporate Bonds with an interest coupon.
Said bonds, apart from having a CUSIP number and being visible on
Bloomberg/Reuter, will also have a Standard & Poors Rating. Said rating will be
based on the Company and a 3A rated insurance company. Given that part of the
monies raised will be used to secure a ten year zero coupon bond from a 3A rated
insurance company, our bonds will thus be secured by said insurance policy for
its capital. The debt burden of our Company will only be the annually recurring
interest payments made against redemption of annual interest coupons.
The $25,000 will thus be used to start the licensing process in the U.S.
and some of the targeted countries as well as start the process of the issue of
our capital guaranteed ten years bonds.
The item "General and Administrative" includes the following payments as
duly resolved by the Board:
•The following gross monthly remuneration for the undermentioned
be and is approved to be effective as from the completion of the
initial public offering for an initial period of three years
1. Mr. Alain de Lenclos will be paid $7,000 gross per month for
his responsibilities as Chief Executive Officer. The contract
will be signed after completion of initial public offering.
2. COO/CTO recruitment will be confirmed after subscription is
complete. Salary will be $7,000 gross per month for COO and
$6,000 per month for CTO. The gross salary of Chief Technical
Officer has been provided for under the item "General and
Administrative" separately from those of Officers, Directors
and associates.
3. Mr. Jadoomanee Rampadaruth will be paid a gross amount of
$7,000 per month as CFO. The contract will be signed after
successful completion of the initial public offering.
4. Amalgamated Resources Financial Marketing Corp. will be paid
a gross amount of $7,000 per month for providing marketing
services.
5. Alps Resources Bankers, Inc will be paid a gross amount of
$5,000 per month for providing managerial services.
Note: With the exception of the CTO, all the above remuneration will be prorated
in accordance with the level of subscription. Thus the remuneration will be
reduced to 75% of the above amounts if only 75% of the funds are raised. At 50%
of subscription the remuneration will be reduced to 50 % of above. At 10% no
such payment will be effected.
DETERMINATION OF OFFERING PRICE
The offering price of the 1,400,000 common shares being offered on a
"direct participation" basis has been determined primarily by the capital
requirements of Space Telecom and has no relationship to any established
criteria of value, such as book value or earnings per share. Additionally,
because we have no operating history and have not generated any revenues to
date, the price of the shares is not based on past earnings nor is it indicative
of current market value for the assets owned by Space Telecom.
DILUTION
As of June 30, 2002, Space Telecom had a net book value of $630.00 or
$.0001 per share (based on 6,300,000 shares outstanding) which excludes an
additional 121,000 shares to the founders at $.0001 per share during the month
of June. The is a readjustment to compensate one of the founders in order to
bring him to the same level as originally agreed. A new resolution has been
passed to authorize this additional allocation of shares. The net tangible book
value per share is equal to our total tangible assets, less total liabilities
and divided by total number of shares of common stock outstanding. After giving
effect to the sale of 100% of the shares at the public offering price of $2.50
per share, our net tangible book value would be $0.4476 per share obtained by
dividing $3,500,642.10 by the number of shares outstanding, i.e.: 7,821,000
(6,300,000 + 121,000 + 1,400,000).
12
The net tangible value represents an increase of $0.4475 per share to
each founder ($0.4476 less $.0001). As far as the new investors who paid $2.50
per share, the net tangible book value represents a dilution of $2.0524 ($2.50
less $0.4476).
The following table illustrates the per share dilution in net tangible
book value per share to new investors assuming different levels of success in
the sale of this offering of common stock. Dilution is the difference between
the public offering price per share and the net tangible book value per share of
common stock after giving effect to the public offering.
Definition of terms
Increase per share attributable to payment for shares by new investors.
The reference for comparison is the par value of the stock which is $.0001 per
share. The increase per share is the difference between the par value per share
($.0001) and the book value of the share obtained by dividing net assets by the
total number of shares outstanding. (In the case of 100% success, this number
will be 3,500,642.10/7,821,000 = 0.4475.) Thus the increase will be $0.4476 less
$.0001 = $0.4475.
Pro forma net tangible value after offering
This value is obtained by dividing net assets after offering by the
number of shares outstanding. In the case of 100% success the net assets will be
3,500,642.10 divided by 7,821,000 which equals to $0.4476
Net tangible book value dilution per share to new subscribers
The new subscribers are buying the share at $2.50. The dilution suffered
is the difference between the cost price ($2.50) and the average value of the
share after offering. This number is obtained by dividing net assets after
offering by number of shares outstanding. Thus, in the case of a 100% success
the average value is 3,500,642.10 divided by 7,821,000 which equals to $0.4476.
Consequently the dilution to new subscribers will be $2.50 less $0.4476 which
equals $2.0524.
Per share dilution in net tangible value to new investors
according to level of funding
Details 10% 50% 75% 100%
- ----------------------------------- -------- -------- -------- ---------
Public offering price $2.50 $2.50 $2.50 $2.50
Net tangible value after offering $0.0534 $0.2458 $0.3514 $0.4476
Dilution to new investors $2.4466 $2.2542 $2.1486 $2.0524
Increase per share (par value) attributable to payment for shares
purchased by new investors according to level of funding
Details 10% 50% 75% 100%
- ----------------------------------- -------- -------- -------- ---------
Par value $0.0001 $0.0001 $0.0001 $0.0001
Net tangible value after offering $0.0534 $0.2458 $0.3514 $0.4476
Increase per share to existing
shareholders (founders investors) $0.0533 $0.2457 $0.3513 $0.4475
The 1,542,100 shares being offered by the selling stockholders are
outstanding shares of common stock and, therefore, do not contribute to
dilution, however, may contribute to depressing the market price for investors
based on the timing and amount of shares sold.
DIVIDEND POLICY
We have not paid cash dividends on our common stock since our inception.
We currently intend to retain any future earnings for use in the expansion of
the business, and therefore do not anticipate declaring any cash dividends in
the foreseeable future. The declaration and payment of cash dividends, if any,
will be at the discretion of the Board of Directors of the Company and will
depend, among other things, upon our earnings, capital requirements, and
financial condition.
SELLING SECURITY HOLDERS
The following table sets forth information as of August 31, 2002 with
respect to the beneficial ownership of our common stock both before and
immediately following the offering. The table includes those who beneficially
own more than 5% of our outstanding common stock, the selling security holders
in this offering, and each of the Directors and Executive Officers in the
summary compensation table.
The percentages determined in these calculations are based upon
6,421,000 of our common shares that are issued and outstanding as of the date of
this Prospectus. The percentages determined in calculations after this offering
were determined by adding the 1,400,000 common shares that may be issued and
outstanding if 100% of the shares offered are sold. The Securities and Exchange
Commission's rules were followed in determining beneficial ownership. Therefore,
we have included shares over which a person has voting or investment power. We
have followed the Securities and Exchange Commission Rule 13d-3(d)(i) in
calculating percentage of ownership.
13
Shares Beneficially Number of Shares Beneficially
Owned Prior to Offering(1) Shares Being Owned After Offering(2)
Number Percent Offered Number Percent
------ ------- ----------------- ------ -------
Alexanco, Serge 50,000 * 5,000 45,000 *
Alps Resources Bankers 500,000 7.8% 50,000 450,000 6.0%
Amalgamated Resources Holdings 500,000 7.8% 50,000 450,000 6.0%
Amalgamated Resources Investments 500,000 7.8% 50,000 450,000 6.0%
Amalgamated Resources Marketing 400,000 6.2% 40,000 360,000 5.0%
Angus Associates 25,300 * 2,530 22,770 *
Berthoud, Claude 2,600 * 260 2,340 *
Bialade, Regine 2,000 * 200 1,800 *
Boudoux-d'Hatefeuille, Wulfran 454,000 7.1% 45,400 408,600 5.2%
Boudoux-d'Hatefeuille, Eymeric 1,000 * 100 900 *
Bourgeon, Ludovic 900 * 90 810 *
Bouvet, SARL 3,000 * 300 2,700 *
Brottier, Daniel 2,000 * 200 1,800 *
Cases-Trincq, Josiane 2,000 * 200 1,800 *
Chamoux, Sylvian 17,000 * 1,700 15,300 *
Chassard, Philippe 184,000 2.9% 18,400 165,600 2.1%
Covili, Frederic 2,600 * 260 2,340 *
Cruypenning, Laurent 400 * 40 360 *
De Lenclos, Alain 668,500 10.4% 66,850 601,200 7.7%
Debaecker, Michel 2,000 * 200 1,800 *
Dias, Louis 13,500 * 1,350 12,150 *
Doury, Fabienne 1,400 * 140 1,260 *
Dreyfus, Sarha 200,000 3.1% 20,000 180,000 2.3%
Dujardin, Philippe 2,600 * 260 2,340 *
Durocher, Jean-Luc 4,000 * 400 3,600 *
Farys, Roland 22,400 * 2,240 20,160 *
Galin, Francois 8,000 * 800 7,200 *
Greene, Richard P. 250,000 3.9% 250,000 0 *
Haussy, Vauche Daniel 5,000 * 500 4,500 *
Hoffman, Ginette 20,000 * 2,000 18,000 *
Humbert, Jean-Marie 10,600 * 1,060 9,540 *
Kieffer, Serge 1,100 * 110 990 *
Kremer, Joseph 1,000 * 100 900 *
Lacoua, Oliver 3,000 * 300 2,700 *
LDV, Inc. 250,000 3.9% 250,000 0 *
Levy, Michele 10,000 * 1,000 9,000 *
Lux Providence S.A. 7,400 * 740 6,660 *
Mageur, Joel 2,900 * 290 2,610 *
Maude Resources, Inc. 62,800 1.0% 6,280 56,520 *
Mogeon, Philippe 1,300 * 130 1,170 *
Molko, Albert 121,000 1.9% 12,100 108,900 1.4%
Monin, Didier 1,700 * 170 1,530 *
Montant, Jean Pierre 465,000 7.2% 46,500 418,500 5.4%
D.P. Morton & Associates, LLC 250,000 3.9% 250,000 0 *
Narcos Portfolio 4,000 * 400 3,600 *
Panalland, Patrick 600 * 60 540 *
Parrot, Jean-Francois 2,400 * 240 2,160 *
Perdrix, Georges 4,500 * 450 4,050 *
Perdrix, Jean-Claude 1,800 * 180 1,620 *
14
Perdrix, Thierry` 1,800 * 180 1,620 *
Perlotto, Alvero 3,300 * 330 2,970 *
Perron, Jean-Pierre 1,300 * 130 1,170 *
Plassard, Robert 1,400 * 140 1,260 *
Rampadaruth, Amal 725,000 11.3% 72,500 652,500 8.3%
Rampadaruth, Aruna 25,000 * 2,500 22,500 *
Rampadaruth, Jadoomanee 202,500 3.2% 20,250 182,250 2.3%
Rampadaruth, Maya 25,000 * 2,500 22,500 *
Rampadaruth, Natalia 25,000 * 2,500 22,500 *
Remy, Claire 1,500 * 150 1,350 *
Remy, Jean-Francois 1,600 * 160 1,440 *
Remy, Michel 6,100 * 610 5,490 *
Robin, Catherine 1,300 * 130 1,170 *
Roux-Bognier, Claudine 2,300 * 230 2,070 *
Schmidt, Paul 250,000 3.9% 250,000 0 *
Souhard, Eric 2,000 * 200 1,800 *
Teuf, Alex 10,000 * 1,000 9,000 *
Toque, Dauphinoise 2,200 * 220 1,980 *
Vauche, Francis 43,000 * 4,300 38,700 *
Vauche, Frank 43,000 * 4,300 38,700 *
Vedere, Guy 1,000 * 100 900 *
Vedere, Paul 1,000 * 100 900 *
Wagenheim, Olivier 400 * 40 360 *
____________________________
* Indicates less than 1% beneficial ownership
1. Percentages were based on the number of shares issued and outstanding as of
June 30, 2002, which equaled 6,421,000 common shares.
2. Percentages were based on the number of shares issued and outstanding
assuming that 100% of the 1,400,000 common shares being Offered are
successfully sold, which would equal a total of 7,821,000 common shares
issued and outstanding. Also, in the last column it is assumed that the
selling shareholders have sold the number of share they have been authorized
to sell.
PLAN OF DISTRIBUTION
We are offering 1,400,000 shares of common stock through officers and
directors on a "direct participation" basis at a purchase price of $2.50 per
share. This offering will begin upon effectiveness and will expire whenever all
of the shares are sold, or 12 months after the date of effectiveness, whichever
comes first. The Selling Stockholders will be selling 1,542,100 common shares
only after the Minimum offering amount has been sold. This offering will be
conducted beginning from the effective date and will expire whenever all of the
shares are sold or 12 months after the date of effectiveness, whichever comes
first. Space Telecom is managing this offering without an underwriter. The
shares will be offered and sold by our officers. These officers will not receive
a sales commission nor other compensation, except for reimbursement of expenses
actually incurred on behalf of Space Telecom for such activities. No expenses
will be paid by the Company on behalf of the Selling Stockholders. In connection
with their efforts, they will rely on the safe harbor provisions of Rule 3a4-1
of the Securities and Exchange Act of 1934. Generally speaking, Rule 3a4-1
provides an exemption from the broker/dealer registration requirements of the
1934 act for associated persons of an issuer. No one, including Space Telecom,
has made any commitment to purchase any or all of the shares. Rather, the
officers and directors will use their best efforts to find purchasers for the
shares. We cannot state how many shares will successfully be sold.
Mr. Alain de Lenclos, CEO, Mr.Amal Rampadaruth, Chairman, Mr. Boudoux
D'Hautefeuille, Director, Mr. Jadoomanee Rampadaruth, CFO and, Mr.
Montant, Director are responsible for the sale of the securities on behalf of
Space Telecom. They are not compensated in connection with their participation
by the payment of commissions or other remuneration based either directly or
indirectly on transactions in securities. These officers are not, at the time of
their participation, an associated person of a broker or a dealer. These
officers do not restrict their participation to transactions involving offers
and sales of securities to a registered broker or dealer, a registered
investment company or registered separate account, an insurance company, a bank,
a savings and loan association, a trust company or similar institution
supervised by a State or Federal Banking Authority or a Trust for which a bank,
a savings and loan association, a trust company or a registered investment
advisor either is the trustee or is authorized in writing to make investment
decisions or that are exempted by Section 3a-7, 3a-9 or 3a-10 of the Securities
Act of 1933 from registration provisions of that Act or that are made pursuant
to a plan or agreement submitted over vote or consent of the security holders
who will receive securities of the issuer in connection with a reclassification
of securities of the issuer, a merger or consolidation or a similar plan of
acquisition involving an exchange of securities or a transfer of assets of any
other person to the issuer in exchange for securities of the issuer, or that are
made pursuant to a bonus, profit sharing, pension, retirement, thrift, savings,
incentive, stock purchase, stock ownership, stock appreciation, stock option,
dividend reinvestment or similar plan for employees of an issuer or a subsidiary
of the issuer.
15
The Officers meet all of the following conditions:
• They primarily perform, or is intended primarily to perform at the
end of the offering, substantial duties for or on behalf of the
issuer other than in connection with transaction in securities; and
• They were not a broker or dealer, or an associated person of a
broker or dealer, within the preceding 12 months; and
• The Officers do not participate in selling and offering of
securities for any issuer more than once every 12 months other than
in reliance on paragraphs a4i or a4iii , except that for securities
issued pursuant to Rule 415 under the Securities Act 1933, the 12
months shall begin with the last sale of any security included
within one Rule 415 Registration. The Officers restrict their
participation to any one or more of the following activities;
a) Preparing any written communication or delivering
such communication through the mail or other means
that does not involve oral solicitation by the
officers of a potential purchaser, provided,
however, that the content of such communication is
approved by a partner, officer or director of
issuer,
b) Responding to enquiries of a potential purchaser in
a communication initiated by the potential
purchaser, provided, however, that the content of
such responses are limited to information contained
in a registration statement filed under the
Securities Act of 1933 or other offering document;
c) Performing ministerial and clerical work.
• No presumption shall arise that the Officers of Space Telecom have
violated Section 15a of the act solely by reason of their
participation in the sale of securities of Space Telecom if they do
not meet the conditions specified in paragraph (a) of this section.
We anticipate selling the shares to persons whom we believe may be
interested or who have contacted us with interest in purchasing the securities.
We may sell shares to such persons if they reside in a state in which the shares
legally may be sold and in which we are permitted to sell the shares. We are not
obligated to sell shares to any such persons.
We have agreed to establish an escrow account at Grand Bank & Trust of
Florida wherein funds will be held until such time as the Minimum offering
amount has been subscribed for. At that time, the funds will be dispersed to be
used for our business operations.
We reserve the right to reject any subscription in full or in part and to
terminate this offering at any time. Officers, directors, present stockholders
of Space Telecom and persons associated with them may purchase some of the
shares. However, officers, directors, and their affiliates shall not be
permitted to purchase more than 20% of the shares being sold and such purchases
will be held for investment and not for resale. In addition, no proceeds from
this offering will be used to finance any such purchases.
To avoid confusion, an official subscription document will be used for the
sale of the shares belonging to the company as opposed to selling shareholders.
A copy of the subscription agreement is herewith annexed. The company will not
pay for expenses incurred by a selling shareholder to sell his personal shares.
16
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this prospectus and if given or made, that information or representation must
not be relied on as having been authorized by Space Telecom. This prospectus is
not an offer to sell or a solicitation of an offer to buy any of the securities
to any person in any jurisdiction in which that offer or solicitation is
unlawful. Neither the delivery of this prospectus nor any sale hereunder shall
under any circumstances, create any implication that the information in this
prospectus is correct as of any date later than the date of this prospectus.
Purchasers of shares either in this offering or in any subsequent trading
market that may develop must be residents of states in which the securities are
registered or exempt from registration. Some of the exemptions are self-
executing, that is to say that there are no notice or filing requirements, and
compliance with the conditions of the exemption render exemption applicable.
We have filed the registration statement, of which this prospectus forms a
part, with respect to the sale of the shares. There can be no assurance that the
Selling Stockholders will sell any or all of the shares they desire to sell, or
that we will sell any of the shares we desire to sell.
Under the Securities Exchange Act of 1934 and the regulations there under,
any person engaged in a distribution of the shares offered by this Prospectus
may not simultaneously engage in market making activities with respect to the
common stock of Space Telecom during the applicable "cooling off" periods prior
to the commencement of such distribution. In addition, and without limiting the
foregoing, the Selling Stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations there under, which provisions may
limit the timing of purchases and sales of common stock by the Selling
Stockholders. We will pay all of the expenses incident to this offering and sale
of the Shares, other than commissions, discounts and fees of underwriters,
dealers, or agents.
We have advised the selling stockholders that, during such time as they may
be engaged in a distribution of any of the shares we are registering by this
Registration Statement, they are required to comply with Regulation M
promulgated under the Securities Exchange Act of 1934. In general, Regulation M
precludes any Selling Stockholder, any affiliated purchasers and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase,
any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a "distribution" as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a "distribution participant" as an
underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution. Our officers
and directors, along with affiliates, will not engage in any hedging, short, or
any other type of transaction covered by Regulation M.
Regulation M prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security, except
as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of the common stock to be higher than it would
otherwise be in the absence of those transactions. We have advised the Selling
Stockholders that stabilizing transactions permitted by Regulation M allow bids
to purchase our common stock so long as the stabilizing bids do not exceed a
specified maximum, and that Regulation M specifically prohibits stabilizing that
is the result of fraudulent, manipulative, or deceptive practices. Selling
Stockholders and distribution participants will be required to consult with
their own legal counsel to ensure compliance with Regulation M.
LEGAL PROCEEDINGS
As of the date of this prospectus, neither Space Telecom nor any of its'
officers or directors are involved in any litigation either as plaintiffs or
defendants. As of this date, there is not any threatened or pending litigation
against Space Telecom or any of its' officers or directors.
17
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Set forth below is certain information concerning the our directors and
executive directors.
Name Age Position
---- --- --------
Alain de Lenclos 57 Chief Executive Officer, President
and Director
(Currently resides in Europe)
Jadoomanee Rampadaruth 60 Chief Financial Officer, Executive
Vice President, Secretary
and Director
(Currently resides in Europe)
Amal Rampadaruth 36 Chairman of the Board of Directors
(Currently resides in the U.S.)
Jean-Pierre Montant 51 Director
(Currently resides in Europe)
Wulfran Boudoux 57 Director
(Currently resides in Europe)
The Directors shall be elected to each annual general meeting and shall
hold office until the next annual meeting of shareholders and until the
Director's successor has been elected and qualified or until the Director's
resignation or removal from office.
The Directors have been named but will serve in only a limited capacity
until after successful completion of this offering which is defined as closing
on 50% of the offering amount. They will be involved in a significant way only
after 50% of the offering has been subscribed for. It will be considered
appropriate to remunerate them on a pro-rata basis after the 50% level.
None of our Officers and Directors currently hold such responsibilities in
any reporting company and have never been affiliated with a blank check
company.
The named directors are currently serving and will hold office until the
next annual meeting of shareholders and a vote of the shareholders (1,400,000 -
maximum offering) is not considered appropriate as the first year's operations
will be mostly of an organizational nature. The organization committee was held
on October 27, 2001. The Chairman, CEO and CFO/Secretary are actually serving
without any remuneration.
Biographies
Alain De Lenclos, Chief Executive Officer, President and Director
Mr. De Lenclos, age 56, will primarily be responsible for research of new
markets, contracts follow-up and general management. He will also handle
negotiations with overseas governments in order to have all authorizations
necessary for the development and expansion of our business. Since January 2002,
Mr. De Lenclos serves as a director of ALPS Resources Bankers, Inc. of Palm
Beach, Florida. He is paid 50% of all earned profits in Europe solely and/or in
any business where he is involved. He does not have any share ownership in Alps
Resources Bankers, Inc. (USA) and will not have in the future. He acquired his
knowledge in telecommunications with Circlenet Communications from 2000 to 2001
during which time he was responsible for work done in African countries to
establish the telecommunication network and obtain the required permits. For the
period 1985 to 2000, he was the Chief Administrator of a company located in
Haute Savoie, France, which specialized in insurance and investment. From 1982
to 1985, he was responsible for all the P.F.A insurance companies in Haute
Savoie Insurance and investment opportunities. From 1979 to 1981, he was an
agent at the Lloyd Insurance company in Haute-Savoie, France. In France, Mr. De
Lenclos received a Diploma as an Accountant and Diploma as an Optician and
studied law for two years. He was in the marine corps Jeanne d'Arc and Colbert
from 1965 to 1967.
18
Jadoomanee Rampadaruth, Chief Financial Officer, Executive Vice President,
Secretary and Director
Jadoomanee Rampadaruth, FCCA, age 60, will be responsible for the company's
financial operations, accounts payable and receivable, interaction with auditors
and investor relations.
From 199 5 to date he is the Chairman and CFO of: Amalgamated Resources
Group of Companies; Amalgamated Resources International Fund Corp.; Amalgamated
Resources Holding SA; Amalgamated Resources Corp.; and Amalgamated Resources
Financial Marketing Corp.
Since 1999 to date: Chairman and CFO of the following companies:
Terra Holdings Inc., a holding company of technological companies in Palm
Beach, Florida. The main technology was sold to a Euro-Japanese group and
the company ceased its activity in 2001.
Palm Beach Life, Merrion Holdings Inc. - equity participation in European
companies and others in Las Vegas, NV. Activity will cease when Space
Telecom's activity starts.
Alps Resources Bankers Inc, Palm Beach, FL - a company organized to help
domestic and foreign companies with their IPOS; help them secure
Governmental, Municipal and State Loans and Grants and help them with their
financing needs.
Alps Resources Bankers Inc, Palm Beach, FL - a company organized to help
domestic and foreign companies with their IPOS; help them secure
Governmental, Municipal and State Loans and Grants and help them with their
financing needs.
Amalgamated Resources Technologies, Inc. - a company having interests in
technological companies, located in Palm Beach, FL. Amalgamated Resources
Technologies works in conjunction with Alps Resources Bankers Inc. and
helps manage targeted technological companies.
From May 1998 to September 1998, he was the Executive VP and Director of
the following companies: First Anglo-Swiss (FAS) Holding Inc., Las Vegas, NV,
a holding company of all other FAS companies. This company was sold to US
Bridge Construction of New York (USBR -NASDAQ NSM symbol); FAS Marketing
Corp., used to market FAS bonds, Las Vegas, NV; FAS Mergers & Acquisitions,
Las Vegas; FAS Eastern European Financial Equities Corp., holding company of all
Eastern European Real Estate, Las Vegas; Eastern European Real Estate Fund
Corp., Las Vegas; FAS Mining Corp., a holding company of mining
companies, Las Vegas; FAS International Builders Corp., a holding company
of European construction companies, Las Vegas; COVIPRO, parent company of a
French real estate company, Las Vegas; Texas Turbo Jet Inc., jet engine parts,
Texas, USA; and Arbinson Mining Inc., Gold Mining, Nevada.
From 1992 to 1995, he was a Director and a shareowner (sold) of Commercial
& Fiduciary Bank Ltd., located in Rome, Italy with a back office in Geneva,
Switzerland. The bank mainly focused on money management. All of his shares and
other interests were sold in 1995.
From 1992 to 1993, he was a Director and shareowner (sold) of Interglobe
Plc, a British Telecom company located in London, England. Interglobe Plc
(listed on the British stock market) used to market a telephone card for
business persons traveling abroad and having to call their business contacts
from hotel rooms. The card contained toll free access numbers which enabled the
user to call anybody around the world at a fraction of the cost that he would
have normally paid using the hotel`s telephone.
From 1982 to 1992 he was employed as Chief Accountant of the Agence de
Cooperation Culturelle et Technique, an international organization based in
Paris.
From 1986 to 1996, he was a part-time lecturer in Anglo-Saxon Accounting
and Financial Management at the Universite Paris IX Dauphine, France. The
lectures were delivered to students preparing the MAGISTERE DE SCIENCES ET DE
GESTION (Master Level), with emphasis on the comparative aspects of accounting
techniques used in France, England and the US. Mr. Rampadaruth is an F.C.C.A.
Fellow of the Chartered Association of Certified Accountants. The Chartered
Association of Certified Accountants is based in London and has recently been
awarded the Royal Charter. It is the equivalent of the American CPA.
In 1990, he created Brama Corp., a company incorporated in the US with
representative offices in Paris and Geneva, which provided services for the
management and control of the day-to-day running of small companies
Amal Rampadaruth, Chairman of the Board of Directors
Amal Rampadaruth, age 37, along with Mr. De Lenclos, will be involved in
all negotiations with overseas governments and relevant agencies.
Since 1995 to date , he is the President and CEO of The Amalgamated
Resources Group of Companies, which was created to take over and continue all of
the activities of Commercial and Fiduciary Bancorp, Inc., in the US, Bahamas,
France, Luxembourg, Switzerland and others; Amalgamated Resources Financial
Marketing Corp., which is used to promote all our financial products and
instruments; and Amalgamated Resources Holdings, Inc., a US holding company.
He is also the President/CEO of Alps Resources Bankers Inc, a company
organized to help domestic and foreign companies with their IPOS; help them
secure Governmental, Municipal and State Loans and Grants and help them with
their financing needs. He is also President of Amalgamated Resources
Technologies, Inc., located in Palm Beach, Florida, a company having interests
in technological companies. Amalgamated Resources Technologies works in
conjunction with Alps Resources Bankers and helps manage targeted technological
companies.
From May 1998 to September 1998, he was the Chairman/CEO and Director of
the following companies: First Anglo-Swiss (FAS) Holding Inc., Las Vegas, NV, a
holding company of all other FAS companies. This company was sold to US Bridge
Construction of New York (USBR -NASDAQ NSM symbol); FAS Marketing Corp., used to
market FAS bonds, Las Vegas, NV; FAS Mergers & Acquisitions, Las Vegas; FAS
Eastern European Financial Equities Corp., holding company of all Eastern
European Real Estate, Las Vegas; Eastern European Real Estate Fund Corp., Las
Vegas; FAS Mining Corp., a holding company of mining companies, Las Vegas; FAS
International Builders Corp., a holding company of European construction
companies, Las Vegas; COVIPRO, parent company of a French real estate company,
Las Vegas; Texas Turbo Jet Inc., jet engine parts, Texas, USA; and Arbinson
Mining Inc., Gold Mining, Nevada.
From 1999 to 2002, Mr. Rampadaruth was the President and CEO of Terra
Holdings, Inc., a holding company of technological companies; in Palm Beach,
Florida whose main technology was sold to a Euro-Japanese group and the company
ceased its activity in 2001; He was also the President and CEOand Palm Beach
Life / Merrion Holdings Inc., equity participation in European companies and
others.
From 1992 to 1995, he was a Director and the Chairman/CEO and a shareowner
(sold) of Commercial & Fiduciary Bank Ltd., located in Rome, Italy, with a back
office in Geneva, Switzerland. The bank mainly focused on money management. All
of his shares and other interests were sold in 1995.
From 1992 to 1993, he was also a Director and shareowner (sold) of
Interglobe Plc, a British Telecom company located in London, England. Interglobe
Plc (listed on the British stock market) used to market a telephone card for
businesspeople traveling abroad and having to call their business contacts from
hotel rooms. The card contained toll free access numbers, which enabled the user
to call anybody around the world at a fraction of the cost that he would have
normally paid using the hotel's telephone.
19
Jean-Pierre Montant, Director
Jean-Pierre Montant, age 51, is a member of the administrative council of
Space Telecom. From 1989-2002, he was an Advisor and administrator of S.A Espace
Conseil Synergie in Lons, France. His responsibilities included giving advice to
companies; audit and analysis reports; create and validate a network of
partners; in charge of teams to build up projects; and recruit employees. From
1986 to 1988, he was executive officer in distribution for Carrefour (Pau and
Echirolles Pau France). He was in charge of a team of 20 to 60 persons and was
also responsible for negotiating with suppliers. From 1976 to 1978, he was
responsible for a team of 11 persons to serve a restaurant of 200 persons at the
Treves casino in Germany.
Wulfran Boudoux-D'Hautefeuille, Director
Wulfran Boudoux-D`Hautefeuille, age 57, is a member of the administrative
council of Space Telecom. Since 1968, he has been an insurance agent with Group
AXA. He has experience in many areas of insurance including, but not limited to,
risk prevention, damage insurance, Civil responsibility, I.A.R.D., personal,
life and investment insurance. Also responsible for creating contracts, opening
and closing files on disasters; handled accounting, including movement of funds.
From 1985 to present, President of P.A.C.T. in Hautes Pyrenees. From 1980 to
present, Administrator of Caisse d'Allocations Familiales in the Haute Pyrenees.
Mr. Jack Zeimantz, Chief Operating Officer
Jack Zeimantz, age 60, will be responsible for all the operations of the
company. He is a qualified engineer and has a wide experience in
telecommunications. He occupied senior technical positions in companies like
Nextel, Metricom, San Jose, CA. He has been a senior staff manager/director in
sales, service, engineering and operations. Acknowledged leader with hands on
experience in project management, budgeting, customer service, sales,
application engineering, site construction and operations, he has also expertise
in building highly motivated teams, surpassing budget objectives and deadlines
in every project undertaken.
From August 2001 to present time Mr. Zeimantz provides consultancy services
through his company "Jack Zeimantz & Associates". His clients are
telecommunications service companies. His work includes:
- Preparation of business plans, acquiring funding for a new startup
company
- Establishing marketing, sales, and service plans to capture high
usage customers
- Development of a network design using microwave, satellite and fiber
connections between customers and World distribution
- Negotiation in order to obtain licenses/concessions with government
and military personnel
- Provision of project management time lines for the upgrading of
services for the Thai military installations.
From May 1996 to July 2001 Mr. Zeimantz worked for Metricom, Inc., San
Jose, CA. He was a consultant from May 1996 to November 1996 and then assumed
full time employment. Metricom, Inc. is a $1 billion NASDAQ company specializing
in national high-speed mobile data
In his capacity of Senior Staff Manager / Director of Engineering,
Operations and Sales, Southwestern Region, he executed the following functions:
- Managed strategic construction of four GSA's in the western region
(San Francisco, Los Angeles etc.) by systematically building teams,
tracking systems, putting together budgets and objectives, hiring
staff and having the network operational in eighteen months.
- Trained Field Engineers to produce quality installations while
maintaining a high safety standard. Increased sales bringing the Los
Angeles area, within six months, from 8th place to 3rd place in
total market revenue, by training channel partners' sales staffs.
- Provided technical sales and implementation support to major
companies in the health care, entertainment, municipal and other
industries.
- Facilitated marketing, sales and service programs for four years in
Los Angeles including a national test with the LAPD in field data
capture providing mobile data links for crime scenes etc.
- Constructed and managed 400+ sites in the southwestern region, with
a budget in excess of $30,000,000.
- Directed site acquisition and zoning to acquire proper locations
eliminating continuous RF changes and saving time and costly
redesign expenditures.
- Saved 18 percent of site construction costs by negotiations and job
clarity with the contractors. Reduced expenditures $150,000 annually
by co-designing RF footprints to prevent over-builds.
From June 1995 to May 1996 full time employee of Nextel Communications, Los
Angeles, CA. Nextel is a wireless telecommunications company, specializing in
multi functional digital voice and data transmission.
As Network Interconnect Manager / Project Manager he executed the following
functions:
- Project managed power and data installations for over 300 sites.
- Redesigned high-speed digital transmission by changing facility
types and suppliers thus saving 26 percent in costs and giving 40
percent better reliability.
- Designed innovative power and telco runs, reducing field cost by
$120,000 for 150 sites
From June 1989 to June 1995 he worked for the California Hardware, City of
Industry, CA:
- As Regional Sales Manager, he rebuilt sales region that had lost
83% of its customer base due to major industries moving out of the
area or closing from lack of support work caused by down sizing
- Changed the focus from automotive and aviation to government (city,
county, state, federal) and entertainment along with their support
industries
- Tripled the customer base in less then five years
- Implemented tracking systems, databases that forecast sales and
buying patterns of customers
- Established procedures to handle customers, customer service and
bid proposals
- Prepared studies of the competition to evaluate how they operated
allowing us to provide better products, pricing, service and
delivery
- Developed the highest grossing area and most profitable to the
company.
From 1986 to June 1989 he worked for Tele-America Communications, Inc.,
Glendale, CA, the largest privately owned pay phone company. He was the Founder/
Vice President of Operations / Sales:
- Directed and project managed daily operations of a 100+ employee
nine states company
- Guided company's growth from only a few pay phones to the largest
pay phone company in the United States within 14 months
- Started with three phones installed expanding the company to 2700+
phones installed by the second year
- Acquired $105,000,000 in funding from a large insurance company
- Built the database to track collections, troubles and installations
- Secured 23% of Centel's payphone locations and 50% of the revenue
in Las Vegas
- Provided service, service, and service to the customer and location
owners.
Mr. Jack Zeimantz has worked for Hughes Communications, Inc. / Hughes
Microwave, Inc., El Segundo, CA as Manager of ground facilities, Network
Sales/Engineering
Mr. Jack Zeimantz obtained his degree in Engineering in June 1972: AA/AS,
Engineering and Technology, Pasadena City College, Pasadena, CA
Besides this degree, Mr. Zeimantz was trained by Harris Microwave,
Microsoft Office Suite, Microsoft Project, Visio, Lotus, Map Info, etc.
He has successfully completed the following certificate courses:
- Electronic Switching, Installation, Western Electric Training
School, Dublin, OH
- Cable Terminations Preparation and Handling, CommScope Training
School, Houston, TX
- Sales Training and Presentation, IBM Training School, Reston, VA
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of June 30, 2002,
with respect to the beneficial ownership of our common stock by each beneficial
owner of more than 5% of the outstanding shares, each director, each executive
officer named in the Summary Compensation Table and all executive officers and
directors as a group, and sets forth the number of shares of our common stock
owned by each such person and group. Unless otherwise indicated, the owners have
sole voting and investment power with respect to their respective shares.
Percentage of Outstanding
Common Stock Owned
-------------------------
Name and Address Shares of Common Stock Before After Offering
of Beneficial Owner Beneficially Owned Offering of All Shares
--------------------- --------------------------- -------- -------------
Alain De Lenclos 918,500 (1) 14.3% 11.7%
5, Rue Emile Favre
74300 Cluses, France
Wulfran Boudoux-d'Hautefeuille 455,000 (2) 7.1% 5.8%
65500 Pujo, France
Jean Pierre Montant 465,000 7.2% 6.0%
16, Rue des Pervenches
64140 Lons, France
Amal Rampadaruth 1,000,000 (3) 15.6% 12.8%
292 South County Road, #109
Palm Beach, FL 33480
20
Jadoomanee Rampadaruth 237,500 (4) 3.7% 3.0%
292 South County Road, #109
Palm Beach, FL 33480
Alps Resources Bankers (5) 500,000 7.8% 6.4%
292 South County Road, #109
Palm Beach, FL 33480
Amalgamated Resources Holdings (5) 500,000 7.8% 6.4%
292 South County Road, #109
Palm Beach, FL 33480
Amalgamated Resources Investments (5) 500,000 7.8% 6.4%
292 South County Road, #109
Palm Beach, FL 33480
Amalgamated Resources Marketing (5) 400,000 6.2% 5.1%
292 South County Road, #109
Palm Beach, FL 33480
All directors and executive
officers as a group (5 persons) 3,076,000 72.6% 39.3%
All directors, executive officers
and affiliates as a group 4,976,000 77.5% 63.6%
- ------------------------
NOTE: The Board of Directors has decided to cancel the allotment of shares to
the COO and has reallocated the shares as follows:
(a) Alain de Lenclos 500,000
(b) Amal Rampadaruth 500,000
(c) Wulfran Boudoux d'Hautefeuille 100,000
(d) Jean-Pierre Montant 100,000
(e) Sarha Freyfus (president of the Advisory Board) 200,000
----------
Total 1,400,000
The number of shares allocated to each of the above-named beneficiaries
has been adjusted accordingly. The 10,000 option allocated to the COO was
equally cancelled. These options are reserved for the CTO to be recruited.
(1) Share ownership includes 250,000 options exercisable at $2.50 per share
for a period of 24 months from the effective date of the Offering.
(2) The shares have been re-allocated as described above. The 10,000 options
are reserved for the CTO.
(3) Includes 1,000 shares owned by Eymeric Boudoux-d'Hautefeuille.
(4) Includes 25,000 shares owned by Natalia Rampadaruth, who is the wife of
Amal Rampadaruth. Share ownership includes 250,000 options exercisable at
$2.50 per share for a period of 24 months from the effective date of the
Offering.
(5) Includes 25,000 shares owned by Maya Rampadaruth, who is the wife of
Jadoomanee Rampadaruth. Share ownership includes 10,000 options
exercisable at $2.50 per share for a period of 24 months from the
effective date of the Offering.
(6) Amal Rampadaruth is also a beneficial owner of Alps Resources Bankers;
Amalgamated Resources Holdings; Amalgamated Resources Investments; and
Amalgamated Resources Marketing
DESCRIPTION OF SECURITIES
Common Stock
Our authorized common stock consists of 100,000,000 shares of common stock,
$.0001 par value per share. As of June 30, 2002, there were 6,421,000 common
shares issued and outstanding. There were approximately 69 holders of common
stock as of June 30, 2002.
Holders of common stock are entitled to one vote per share on all matters
submitted to a vote of shareholders and may not cumulate votes for the election
of directors. Holders of the common stock have the right to receive dividends
when, as, and if declared by the board of directors from funds legally
available. Upon liquidation of Space Telecom, holders of the common stock are
entitled to share pro rata in any assets available for distribution to
shareholders after payment of all obligations of the Company. Holders of common
stock have no preemptive rights and have no rights to convert their common stock
into any other securities. All shares of common stock have equal rights and
preferences. All shares of common stock now outstanding are fully paid for and
non-assessable.
Holders of Class A common stock are entitled to 10 votes per share on all
matters submitted to a vote of shareholders and may not cumulate votes for the
election of directors.
The amendment to Articles of Incorporation of Space Telecom were filed on
May 16, 2002. The first item amended articles IV of the Articles of
Incorporation as follows:
This corporation is authorized to issue an aggregate of One Hundred Five
Million shares as follows:
- One Hundred Million (100,000,000) shares of common stock, $.0001 par
value per share; and
- Five Million (5,000,000) shares of Class A common stock, $.0001 par
value, having 10 votes per share."
Space Telecom is offering 1,400,000 shares of common stock out of
100,000,000 authorized shares.
As the Class A shares have been authorized in order to counter any hostile
takeover, there are no plans, arrangements or understanding, preliminary or
otherwise, to issue additional Class A shares.
21
Class A common stock
We have 5,000,000 shares of Class A common stock authorized, $.0001 par
value. Holders of Class A common stock are entitled to 10 votes per share. Amal
Rampadaruth and Alain de Lenclos have been allocated 2,500,000 shares each.
We have never paid a cash dividend on the common stock. We currently intend
to retain all earnings, if any, to increase our capital to effect planned
development activities and to pay dividends only when it is prudent to do so and
our performance justifies such action. Holders of common stock are entitled to
receive dividends out of funds legally available when, as, and if declared by
our board of directors.
Other securities
There are currently no preferred shares or other debt or equity
securities issued, outstanding, or authorized.
Transfer Agent and Registrar
We are acting as our own transfer agent and registrar.
INTEREST OF NAMED EXPERTS AND COUNSEL
Richard P. Greene, P.A. shall opine as to the validity of the shares
registered in this registration statement. Mr. Greene owns 250,000 shares of the
Company's common stock, all of which will be registered in the Registration
Statement. Mr. Greene also has 10,000 options to acquire shares at an exercise
price of $2.50 per share for 24 months from the effective date of the Offering.
Mr. Greene will be paid $30,000 to complete this registration statement.
This amount will become due after completion of registration and will be payable
out of proceeds of the offering.
The certifying accountant has been paid out of the loan granted by Alps
Resources Bankers Inc. The loan will be repaid out of the proceeds from the
offering. In fact, the certifying accountant is being paid from the proceeds of
this offering. The advanced from Alps Resources Bankers, Inc., provided the
advance fees required to this effect.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Space Telecom's articles of incorporation provide that it will indemnify
any officer, director, or former officer or director, to the full extent
permitted by law. This could include indemnification for liabilities under
securities laws enacted for shareholder protection.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
small business issuer pursuant to the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer 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, the small
business issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
22
DESCRIPTION OF BUSINESS
Space Telecom was incorporated on December 1, 2001 in the state of Florida.
Space Telecom intends to use the Internet Protocol (IP) to transport interactive
voice communications in real time voice, (Voice Over Internet Protocol (VOIP)
and other related services, such as, fax, voice messages, and video, to retail
national telephone carriers, private and public corporations. These conventional
services will be carried and/or transported in the domestic and international
markets utilizing Internet Protocol technology, Data networking technology,
conventional telephone standards and the Public Internet, a system of globally
connected computer based on the use of the Internet Protocol standards.
Essentially, these conventional services, voice, fax, video, voice messaging
will be converted to data packets, specifically, Internet Protocol packets. Data
packets are simply information organized in a specific manner for transmission.
These data packets are transmitted from an originating location, i.e.
transmitting gateway or entry point, and received at a designation location,
receiving gateway or exit points. The two gateways, the entrance and exit points
for the transmission of data, use a communication medium to connect the
destinations. The communication medium is typically fiber, wire, satellite or
cable. The data packets will be transmitted using Internet Protocol packet
technology. The Internet Protocol is the technology used for addressing the
routes for the destination and reception of data. These mediums of
communications are usually defined in terms of bandwidth. Bandwidth is the
capacity or amount of information that can be carried, i.e., the amount of
capacity to carry the data signals or in this case Internet Protocol packets.
The gateways serve as the access points, points of entry and exit for processing
these Internet Protocol packets. The transmitting or receiving gateways either
assemble data signals into the Internet Protocol packets for transmission, if it
is the transmitting gateway or de-assemble the Internet Protocol packets for
reception if it is the destination gateway. The gateways can either serve as a
transmitting gateway or a receiving gateway. The gateways, Internet Protocol
technology, systems of connected computers and the underlying transmission
medium(s) are often referred to as Networks.
It is in the opinion of management that networks are typically designed and
implemented according to the quality of standard industry practices set by
various standard bodies, such as the International Telecommunication Union
(ITU), Federal Communications Commissions, American National Standard Institute
(ANSI), European Telecommunication Standard Institute (ETSI), and numerous other
industry related technology specifications. The proliferation of the Internet
Protocol, multitude of services available, and the standards for
interoperability with existing conventional telephone networks provides the
framework which Space Telecom plans to develop its business.
It is in the opinion of management that the cost to to implement Voice Over
Internet Protocol (VOIP), a specific application to transmit voice
communications using the Internet Protocol and related services are typically
lower in cost to implement, offer greater flexibility of services, and ease of
access to markets because of the global acceptance of the technology standards.
It is in the opinion of management that the global proliferation of
Internet Protocol technology, common practice among current telecommunication
operators and vendors to adhere to standards., and the widely accepted level of
international standards of interoperability with traditional voice, fax, video,
and voice messaging services provide the fundamental basis for Space Telecom to
successfully develop and implement its overall business objectives.
According to various research (Probe Research) and an article published by
America's Network (article by Jan Scale, October 1, 2002 issue) Internet
telephony traffic is doubling every year. The growth rate will start to flatten
but by 2007 IP telephony, the science of transmitting voice, data packets, or
video over greater distance than capable by human speech, will comprise half of
all voice international traffic. In 2002, worldwide penetration is 13% of all
international traffic. It is in the international wholesale role rather than in
national long distance or access that IP telephony is currently proving itself.
By developing low cost networks based on Internet Protocol technology in
strategically selected locations globally, Space Telecom will have the
opportunity to offer services of the same quality and service as a traditional
telephone services, voice and other related services. The standard for quality
of service termed "toll quality" is the quality of service which traditional
telephony services operate. Standards have been set to define "toll quality" for
VOIP and other related telephony services over the Internet Protocol.
It is the opinion of management that the networks Space Telecom plans to
deploy will be specifically designed as privately owned and controlled IP
network with interoperability to traditional network and the Internet, thus
giving Space Telecom greater flexibility for its overall business objectives.
The ability to either use traditional networks or utilize its own IP network
will allow Space Telecom to make a determination on the best and least cost
method to offer its services to the market.
Space Telecom intends to enter into strategic markets based on market
analysis from the FCC documentation Section 43.61 International Traffic Data
Reports, published documentation from the ITU on profitability according to
industry standard published rates from selected markets, status of target market
liberalization, availability of public tenders or licenses, established
positions with prospective joint ventures with private corporation or national
public telephone and telegraph carriers, favorable market conditions for new
technology implementation and strategic market relationships from members of
Space Telecom. It is in the opinion of management that if we use these methods,
we will have a greater degree of success as a market entry strategy. As of the
date hereof, management has had no discussions with any prospective acquisition
or merger candidate.
Point of presence
23
In order to facilitate the overall plan and objective of Space Telecom, it
is in the opinion of management that strategic facilities must be deployed to
conduct the necessary business activities. The criteria for the facilities will
require the following:
1) Co-located with international and domestic high speed (bandwidth)
communications providers
2) Secured facilities
3) Proximity with traditional national and international telephony
carriers,
4) Industry Standard Power conditioning
5) Skilled workforce
In each targeted location, we will provide the necessary hardware,
software, operations to support our products and services. These locations are
referred to as Points of Presence (POP's) and are essentially telecommunications
facilities which support equipment, services, network, monitoring activities,
bandwidth connections, and network operation functions. Generally, these
facilities also serve as point of distribution for numerous telecommunications
providers to buy and sell their respective services. Example of such are:
• Technology Center of the Americas (TECOTA) which hosts the
National Access Point of the Americas (ANAP) in Miami, FL
• Band-X and Arbinet which are trading centers for telephony
products and services, where bids and offers are posted for sale to
prospective buyers or sellers.
* Note: Both of the above descriptions are also referred to as Carrier Hotels.
Carrier Hotels typically provide all of the basic facilities to operate
telecommunications services, such as: power requirements, access to various
wired and wireless communications mediums, access to various other telecom
providers networks, etc.
The exchange of services and the use of facilities are bound contractually
by service agreements in order to ensure various facets of operational
consistency and quality of service. This provides some level of contractual
guarantee of services. Each location will be designed and monitored similarly.
Sufficient training and documentation based on industry standards will be
developed and adhered to in order to effectively operate, manage and maintain
the Points of Presence.
As we are a start-up company and have not generated any sales, the purpose
of the initial round of funding is to implement 5 major points of presence.
These five major points of presence will serve as the central Hub Sites,
locations where many different connections are aggregated, for the points of
presence. They will be designed to support additional points of presence as we
develop access to specific target markets. The five major points of presence
will be located in Miami, New York, Los Angeles, London and Luxembourg.
Space Telecom has selected Miami, Florida as the base to build our primary
Point of Presence and network operations center (NOC). In industry terms, this
is referred to a Super Hub or Super POP. The network operation center will be
the primary control center and headquarters for our services.
The location of the main Point of Presence and the Network Operation Center
for our services was based on the following considerations.
The National Access Point of the Americas (ANAP) is located and hosted in
Miami, FL at Technology Center of the Americas (TECOTA). ANAP is the fifth
Tier-1 Network Access Point (NAP) in the United States, i.e., one of the primary
points of connection that comprise the backbone of the Internet. ANAP is the
premier technology facility providing interconnection between global carriers,
ISPs and connecting fiber networks in Latin America, Europe and Africa to those
in the U.S. of the Americas which is a new state-of-the-art telecommunications
co-location building. It is in the opinion of management that establishing a
presence in this facility will provide Space Telecom with speed to market,
access to the core communication of the Internet, and provide better operational
efficiency for Space Telecom's services.
The NAP of the Americas also hosts Global Crossing, Level 3, Metromedia
Fiber, Qwest, AOL Time Warner Communications, EPIK Communications, FPL Fibernet
and XO Communications
(http://www.carrierhotels.net/news/July2001/terremark0709.shtml) national and
international traditional multi-year signatories. Space telecom will have the
ability to interconnect to the major carriers for the exchange of
telecommunications services. The building was opened for business in 2001. It is
designed according to the industry standards for all facets of the
Telecommunications Standard, such as, backup power supply, generators, fire
protection, secure access, monitoring., etc.
It is the opinion of management, the location and overall benefits of ANAP
in Miami, FL, will provide the framework for Space Telecom to successfully
implement the targeted foreign points of presence. Space Telecom plans to
develop the targeted markets and utilize its locations in Miami, FL as the
central control center for managing the remote foreign destination or POP's .
ANAP provides connectivity through fiber optic links and submarine cables
to Europe, South America and the other NAP of the U.S. The proximity of the
operations from this main hub reduces the cost for private lines called local
loop provided by BellSouth. The cost of local connections is based on the
bandwidth and the mileage between the origination point and the interconnection
point.
The satellite providers we plan to work with viz; Panamasat and Intelsat
teleport facilities, are in a radius of 20 miles from the NAP of the Americas.
We will just need to lease a local loop from BellSouth to be interconnected with
these facilities.
In the opinion of management, the choice of ANAP will effectively enhance
our business goals as well as provides for lower costs for access to necessary
communications lines (access), and increase operational efficiency. The network
operating center we plan to establish in Miami will be equipped to permit the
most efficient use of the communications mediums, Fiber and Satellite bandwidth.
The five major points of presence and the additional 19 will be connected
to one another, i.e., each point of presence will be accessible to the other
depending on the specific product or services targeted for the market.
The points of presence will use industry Standard Security for the Points
of Presence. The primary service for this network will be for the carrying of
private and public voice communications.
The use of proceeds of the funds includes lease and purchase of equipment,
software, lease of facilities, engineering and monitoring support, training, and
deposit for Internet Protocol connections, administration and operation and
miscellaneous expenses directly associated with the deployment of these
services.
In each country we plan to go, we will install the same type of point of
presence. This will include a cabinet with lock. In the cabinet will be
installed all the technical equipment required for our business.
We will also provide training and documentation on all parts of the network
on site. To be sure of the commitment of the engineer of the Tier 1 carrier
where our equipment will be located, we shall pay the salary of each engineer in
charge of the maintenance of our equipment locally.
We are a start-up company and have not generated any sales. Management
thinks that the first round of funding will allow us to build the core five
Points of Presence and subsequently deploy target markets as we conclude the
activities to acquire access to the targeted market. Space Telecom's effort is
to deploy remote Points of Presence in 19 countries, all connected to the U.S.
Point of Presence at ANAP.
The main reason for this amount is to shorten the time between the
investment and the income generated by those networks to a maximum of 6 months
after the first calls are generated. The use of proceeds of the funds includes
lease of equipments, lease of satellite links, lease of fiber optic
point-to-point connections, lease internet bandwidth, extensive travel to deploy
in each country of our points of presence, maintaining the networks and
customers support 24 hours per day, 7 days per week, 365(6) days per year. It is
the opinion of management that this requirement will have to be satisfied at a
minimum in order to successfully implement and operate in the current
telecommunications, specifically the international VOIP and other related
services environment.
Business
It is the intent of Space Telecom to provide a complete array of telecommunication
24
services including voice, fax, video, audio, data, and Internet. Space telecom
will use the most advanced generation of equipment based on the industry
standards and specifications for implementing its networks. Although we have not
signed any specific vendor agreements, we have conducted product research from
numerous trade publications and shows as well as general research on the
specific products from the manufacturer's literature. It is in the opinion of
management, based on current assessments and the ability to consult with subject
matter experts, if deemed necessary Space Telecom will be able to select the
manufacturers which will allow the best overall benefit for our business
objectives. Some of the manufacturers which Space Telecom has reviewed for
consideration include well established manufacturers such as, Cisco, Clarent,
Nortel Network, Sun Microsystems, Lucent, Sonus Networks and Mockingbird. The
end result of this effort is to select a product(s) that will serve as our
central platform that will allow for the array of services we plan to offer.
It is the intent of Space Telecom to offer the following telephony services
based on an Internet Protocol Network:
• Voice Over Internet Protocol (VOIP)- The transmission of real time
voice communication of over an Internet Protocol based networks. It
is the intent of management to build a private Internet Protocol
network with connections as deemed necessary for the business to the
public Internet and traditional telephone carrier networks. Space
Telecom plans to wholesale these services to other telephony
carriers and various resellers.
• Fax Over Internet Protocol (FaxOIP) Real time and delayed Fax-over-IP:
Facsimile transmission over an Internet Protocol based network is
similar to the transmission of VOIP, however, a facsimile is
information and can be transmitted in real time or in a store and
forward method. The store and forward method of transmitting
facsimile allows for greater efficiency of use of the network
because the Facsimile can be transmitted during the time when there
is less usage on the network. As stated earlier, an IP based
network allows for the transport of various media, voice, video,
data, audio, and facsimile. The real time and delayed fax-over-IP
services allow any corporation to reduce its costs drastically.
• International Private Line (IPL): It is the intent of Space Telecom
to purchase bandwidth not for the use of its services but also for
the resale of bandwidth to other carriers and specifically
multinational corporation in emerging countries. It is the intent
of Space Telecom to design the Points of Presence to a specification
that will accommodate the resale of international Private Lines
(bandwidth) to potential customers. The International Private Lines
will be transported over satellite earth station facilities or fiber
optics depending on the availability, cost and competitive market
price point.
• High bandwidth Internet dedicated access on wire lines and wireless:
It is the intent of Space Telecom to resell Internet services to
emerging markets. As discussed previously, Space Telecom intends to
locate it facilities at ANAP. ANAP is directly connected to the
core of the Public Internet. It is the opinion of management that a
strategic location such as this will provide Space Telecom with
quality service. To provide this service, we will help the local
operator by implementing wireless point to multipoint connections
with a bandwidth from 2.048 Mbps and up to 45 Mbps.
• Video Conference: The video conference services are easy to
implement, especially since videoconferencing devices are becoming
more and more affordable.
• Prepaid Calling Card features will include: Audio Text, Conference
Calling, Message Store and Forward, Selective Call Blocking,
Verified and Non-verified Account Codes, Speed Dialing, Virtual
Office, Polling of Client Demographics, ANI Fraud Blocking,
Automatic Recharging and/or replenishment capabilities, Point of
Sale Recharge/Activation, Variable Expiration Dates, Flexible
Rating, Report Generation, Custom Voice Prompts and Promotions,
International Direct Dial service, and 24-hour Multi-lingual
Operator Service.
• Wireless Prepaid Services: It is the intent of Space Telecom to
provide Prepaid Cellular and Paging: Despite the wireless
industry's rapid growth, a significant percentage of those applying
for service are rejected due to credit issues. Accordingly, the
concept of prepaid wireless service presents a considerable
opportunity throughout the markets we intend to target worldwide.
25
Competition
In the United States and Europe, there is significant competition due to
open competition, however, Space Telecom overall business objective is to
utilize the United States, United Kingdom, and Europe as the primary
distribution centers for our telephony services. It is the intent of Space
Telecom to focus on the development of emerging markets in Africa, the Middle
East and Asia as markets for development.
In western Africa the ratio of penetration of the GSM phone has
overcome the total amount of fixed lines. The profit margin in the French
African countries is almost 1000% by minute of air time. In Senegal alone the
amount of GSM phones grew from 15,000 in 1999 to 420,000 today. The demand for
fixed lines is 750,000 fixed lines with a waiting list of three years. People
are willing to pay up to $500 to have telephone service in their home. This can
be done with the help of a company specialized in wireless local loop technology
who is willing to close a deal that will give five to ten years concession on
the entire network to be built and managed in a joint venture. Senegal and other
ex-French colonies currencies are fully convertible and guaranteed by the French
national bank and now by the European Union. This means that all profit
generated by those networks can be transferred to the U.S. or to Europe, without
limitations of any kind.
Space Telecom is a start-up company and has not yet gained a competitive
position in the industry.
Competitive advantages
The distinctive competitive advantages which Space Telecom Inc. will bring
to this market are:
• Our management team is experienced in the financial, technical and
commercial fields and convergent telephony services.
• In the opinion of management, Space Telecom will seek services from
selected expertise from individuals and or organizations to assess
its deficiencies in order to increase the probability of success in
all facets of is business objectives.
• It is the opinion of management that Space Telecom has good
relationship for the ability to develop the key business
relationships with the various telecommunications regulatory bodies
in the markets it plans to target for services. Most of these key
relations are at a personal level and they have already helped us to
prepare the way to expedite the legal process attached to the
development of the markets.
• Due to our proactive policy to help our local partner's staff will
include a fully trained member and up to date with our equipment and
with all the aspects of the origination of traffic from those
countries to Europe and the US through IP networks. This commitment
guarantees Space Telecom of the full cooperation of the local
telecommunications services provider and the strength of our
partnership.
26
• In the opinion of management, Space Telecom can significantly
reduce its time to market by utilizing a defined set of repetitive
and replicative action plans. In the opinion of management, if such
policies are implemented the time to market can be reduced to within
40 days. This will have a positive effect on initial return on
investment significantly.
• Space Telecom intends to locate its points of presence so that
access to the Major National and International Telecommunication
providers is easy. Space Telecom will target the major locations of
distribution for the sale of its services.
• Space Telecom intends to keep operating overheads to a minimum
by outsourcing its services to organization that have specialties in
areas not deemed necessary to develop within the organization.
• A level and policy of capitalization that will allow us to fully
address the needs to keep up to date our state-of-the-art network,
are scheduled to be reviewed on a quarterly basis by the board of
directors.
• In the opinion of management, keeping a close control over the
cost of operations, will able it to auto finance new investments
needed.
In the opinion of management, Space Telecom expects advances to be made
and competitors to arise and offer similar services. It is the intent of Space
Telecom to meet this challenge as follows:
1. By signing new interconnections agreements with major foreign
national carriers not yet targeted by the competition.
2. Hiring staff specialized in new value added services areas and
web based services.
3. Increasing our continuing education and training expense.
4. Adding complementary bandwidth to our networks in operation to
reduce our operating costs and increase our revenues and profit
margin.
5. Remaining at par with new technology via constant updates.
6. Provide an alternative, cost effectively way for them to
realize a similar goal.
Being a private network and working with the major local companies, we
can provide our services at a lower cost. Also, the personal contacts of members
of our team with the diffeent governments in the target countries and their
declared readiness to sign the necessary agreements with us, give Space Telecom
an edge over its competition.
We have opted for a minimum / maximum proceeds from this offering. We
have planned our business in such a way as to adapt ourselves to the level of
funding received.
27
The number of networks, intercommunications agreements and
international private circuits depend on the amount of money raised. The more
money we are able to raise, the easier it will be for us to reach our target.
The maximum proceeds will ensure that we shall be able to achieve
profitability and positive cash flows in a short period of time. Any alternate
amount will have the effect of retarding the achievement of the goals fixed. The
alternate amounts will not put our business in jeopardy although it will provide
more time for competition to pick up.
Patents and Trademarks
At the present time, we do not own any patents or trademarks.
Government regulations
The Company's international telecommunications services will be subject to
the jurisdiction of many regulators and will require both US and foreign approval.
The U.S. Federal Communications Commission
("FCC") has imposed certain restrictions on international telecommunications
providers, including the requirement that authorized carriers provide service in
a manner consistent with the laws of the countries in which they operate. Local
laws and regulations differ significantly among the jurisdictions in which we
intend to operate, and the interpretation and enforcement of such laws and
regulations vary and are often based on the informal views of the local
ministries which, in some case, are subject to influence by government owned or
sanctioned local telephone companies. In addition, failure to interpret
accurately the applicable laws and regulations and the mode of their enforcement
in particular jurisdictions could result in significant monetary penalties
imposed against us . We intend to generate a significant portion of our revenues
from customers originating calls in Africa and Europe. There can be no assurance
that foreign regulations will not have a material adverse effect on our
business, results of operations and financial condition.
Employees
We presently have no full time employees. Staffing levels will be
determined as we progress and grow. As many independent contractors as possible
will be used to keep payroll expenses to a minimum. Areas such as sales and
marketing will be assigned to outside agencies, eliminating the need for inside
positions to handle such areas. As travel needs dictate, several independent
contractors could be moved to full time employees to facilitate travel to and
from various network sites around the country. We do not anticipate this
occurring for at least six months.
28
MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS
We intend to build an improved IP networks linking the U.S. and Europe to
the African continent, the Middle-east and some Asian countries. Those networks
would allow us to provide in-bound and out-bound traffic between each point of
our proposed network, to provide convergent telecommunications solutions and to
develop connectivity with the most remote area of the third world countries. Our
primary focus at this point is developing our marketing efforts in the most
effective and efficient manner possible.
Our 12 month plan of operation requires the receipt of $3,500,000 and
will be utilized as follows:
Step 1 - The initial $110,000 received will be used as the initial
deposit for bandwidth leasing from satellite and submarine cable providers.
Step 2 - An additional receipt of $400,000 will cover the refundable
deposit for the interconnection with the major carrier in four countries.
To be able to implement and operate our own networks, after signature of
an interconnection agreement with the major telecommunication service
provider in each country, we must pay a refundable deposit of $100,000.
The deposit is kept as a security bond in the event we cannot fulfill
payment in a timely basis.
Step 3 - An additional $1,800,000 would cover expenses involving
hardware and equipment to build the backbone. The hardware and equipment
may be financed through a leasing company or financed through a financial
institution. Generally, financial institutions would require 40% up front
to do this type of financing.
Step 4 - An additional $775,000 would be used to cover expenses for
office and administrative expenses such as rent, office equipment,
salaries.
The company would not require additional financing during the first
twelve months period as it expects a stream of revenue to cover whatever
fluctuations in the cost of equipment, etc. We have no plans to sell additional
stock to raise more money during the twelve months following the start of
operations.
Liquidity and capital resources
We are presently relying on our ability to borrow to funds for our
day-to-day operations. We are relying, in part on the success of this offering
to provide us with the necessary capital to subsidize the day-to-day operations
until we can reach a level of sales that will sustain our operating expenses.
There can be no assurance that we will be able to borrow capital to continue
operations. There also can be no assurance that any shares of this offering will
be successfully sold, and if sold, the capital received will be adequate to
continue operations. The financial statements made part hereof have been
presented on the basis of the continuation of the Company as a going concern and
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or amounts and classification of liabilities that
might be necessary should we be unable to continue as a going concern.
Marketing
Most of our marketing and promotion will be accomplished through our
officers who will be part of the sales organization. The services we can offer
our customers is one of the best sales tools we have. While we intend to hire a
person to be responsible for marketing, follow up and promotion, we believe it
is critical that any marketing program include all of our officers as sales
resources. Our main channel of distribution will be direct to our customer as
the result of direct interconnection with their networks. By close follow up, we
will stay in touch with their special needs or comments to make our services
better.
Our management has experience in telecommunications. Building on this
experience, we intend to develop networks using our own personnel. The prior
operations in which management has been involved have no affiliation with Space
Telecom.
Pricing will be structured to provide telecommunications at a relatively
low cost. While exact prices have yet to be established, we intend to offer
lower rates than our companies. Discounts and special offers will be established
with and offered by various vendors in the various markets in which we have
networks.
29
With our minimum offering of only $25,000, we may not be able to fund our
operations for the initial 12 months without alternative financing sources. We
believe $3,500,000 would be required to implement and operate our own networks,
therefore should only the minimum offering be raised, money contributed by
investors may be insufficient to carry out the contemplated business plan and
such funds would not be returned to investors. We have stated in the Use of
Proceeds section that the minimum offering amount would sustain our operations
for approximately three months wherein we would travel and secure agreements to
offer our services. Should additional funds not be raised in the offering, we
would restructure the current plan and seek additional private equity or debt
financing.
Employees
We presently plan to add six employees to our staff. The level of employees
is primarily contingent on the level of success of this offering. We anticipate
paying these employees at a rate of $240,000 per annum.
All our Officers have signed Employment Contracts that will become
effective when the Company is funded. All contracts are for a period of five
years and all have a non-compete clause included in the Agreement. All
Agreements require full time devotion to the Company.
DESCRIPTION OF PROPERTY
We will lease office space at South County Road, Palm Beach, Florida for
$4,000 per month. Upon funding, we intend to lease space to accommodate the
administrative staff while our technical office will be located in Miami for
reasons of convenience.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Jadoomanee Rampadaruth, the Company's Executive Vice President, CFO and
Director, is the father of Amal Rampadaruth, the Company's Chairman of the Board.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prior to this offering, there has been no public market for the common
stock of the Company. At the present time neither any National Securities
Exchange nor the NASDAQ stock market lists the securities offered. There is no
public trading market for our common stock. There are outstanding 6,421,000
common shares as of June 30, 2002. These are deemed restricted securities and
may be sold only pursuant to Rule 144 unless otherwise registered in an
effective registration statement. We are currently offering 1,400,000 common
shares through this offering. We have also agreed to register an additional
1,542,100 for selling shareholders.
Since its inception, no dividends have been paid on our common stock. We
intend to retain any earnings for use in the business activities, so it is not
expected that any dividends on the common stock will be declared and paid in the
foreseeable future.
30
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the aggregate
compensation paid or to be paid by Space Telecom to its Chief Executive Officer
and each of the other executive officers for services rendered in all capacities
to the Company for the fiscal year ended December 31, 2001.
Annual Long-Term All Other
Compensation Compensation Awards Compensation
Restricted
Name and Stock Stock Securities Group
Principal Fiscal Awards Awards Underlying Matching Life Ins.
Position Year Salary Bonus ($) (#) Options 401K Premium
Alain De Lenclos 2001 $-0- -0- -0- -0- -0- -0- -0-
CEO/President
Jadoomanee
Rampadaruth 2001 $-0- -0- -0- -0- -0- -0- -0-
CFO/VP
Amal Rampadaruth 2001 $-0- -0- -0- -0- -0- -0- -0-
Chairman
Jean-Pierre
Montant 2001 $-0- -0- -0- -0- -0- -0- -0-
Director
Wulfran Boudoux-
d'Hautefeuille 2001 $-0- -0- -0- -0- -0- -0- -0-
Director
Stock options
Our Board of Directors has granted stock options exercisable during 24
months after this offering.
Benefit plans
Currently we have no benefit plans. When the funding is completed, we
intend to offer a 401k plan for our employees and officers. Additionally, we
intend to add a group health plan for employees which will pay the monthly
premiums for the employee only. Family members of the employee can be added to
the plan but at their own expense. We feel that it will be important to be able
to offer these minimal benefits in order to attract and retain talented employees.
Future compensation
We do not have plans to increase the current levels of compensation to
its employees, officers, or directors either through the use of additional wages,
incentive programs, restricted stock awards, or otherwise.
31
SPACE TELECOM, INC.
(A DEVELOPMENT STAGE COMPANY)
EXAMINATION OF FINANCIAL STATEMENTS
MAY 31, 2002
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT.................................................F-1
FINANCIAL STATEMENTS:
Balance Sheet........................................................F-2
Statement of Cash Flows..............................................F-3
NOTES TO FINANCIAL STATEMENTS............................................F-4-F-5
32
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Space Telecom, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of Space Telecom, Inc. (a Florida
corporation and a development stage company) as of May 31, 2002 and the related
statement of cash flows from the date of inception (December 10, 2001) to May
31, 2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Space Telecom, Inc. as of May
31, 2002 and it's cash flows from the date of inception (December 10, 2001) to
May 31, 2002 in conformity with accounting principles generally accepted in the
United States of America.
/s/ Holyfield & Thomas, LLC
West Palm Beach, Florida
June 17, 2002
F-1
SPACE TELECOM, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF May 31, 2002
ASSETS
CURRENT ASSETS:
Cash $5,630
TOTAL ASSETS $5,630
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable to stockholder $5,000
STOCKHOLDERS' EQUITY:
Common stock; $.0001 par value,
105,000,000 shares authorized,
6,300,000 shares issued and outstanding 630
Class A Common stock; $.0001 par value,
having 10 votes per share, 5,000,000
shares authorized, none issued and
outstanding
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,630
See Independent Auditor's Report and Accompanying Notes to Financial Statement.
F-2
SPACE TELECOM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 10, 2001 (date of inception)
TO MAY 31, 2002
Cash flows from operating activities $ 0
Cash flows from investing activities 0
Cash flows from financing activities
Issuance of common stock 630
Borrowing from stockholder 5,000
Net cash provided by financing activities 5,630
Increase in cash 5,630
Cash, beginning of period 0
Cash, end of period $ 5,630
See Independent Auditor's Report and Accompanying Notes to Financial Statement.
F-3
SPACE TELECOM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF MAY 31, 2002
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Space Telecom, Inc. ("the Company") is a development stage enterprise
incorporated under the laws of the State of Florida in December 2001. The
Company's offices are in Palm Beach, Florida, its only location.
Space Telecom, Inc. does not presently conduct business operations.
Method of Accounting
The Company will report the results of its operations using the accrual method
of accounting for both financial statement and income tax purposes. Under this
method, income is recognized when earned and expenses are deducted when
incurred. The accounting policies of the Company are in accordance with
generally accepted accounting principles and conform to the standards applicable
to development stage companies.
Income Taxes
The Company has no taxable income to date; therefore, no provision for federal
or state taxes has been made.
2. Common Stock and Class A Common Stock
The Company was incorporated with an authorized capital of 25,000,000 shares of
$0.001 par value common stock in December 2001. An article of amendment was
filed in May 2002 modifying the capital structure of the Company to an
authorized capital of 105,000,000 shares of $0.0001 par value common stock. The
Company has issued 6,300,000 shares to founder shareholders. It has earmarked
1,400,000 shares to be offered to the public after the completion of the
required filings with the Securities and Exchange Commission. Options for
530,000 shares exercisable at $2.50 per share within a period of two years from
the effective date of the public offering have been granted to key officers of
the Company.
The Company is also authorized to issue 5,000,000 shares of Class A common stock
having a par value of $0.0001 with 10 votes per share. No Class A common stock
has been issued at May 31, 2002.
See Independent Auditor's Report.
F-4
SPACE TELECOM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF MAY 31, 2002
3. Development Stage Operations
The Company was formed in December, 2001. There have not been operations since
inception and the Company is in the process of raising capital, and financing
for its future operations. As of May 31, 2002, the Company had sixty-nine
stockholders.
4. Note Payable to Stockholder
The Company borrowed $5,000 from Alps Resources Bankers, Inc. (a stockholder) on
May 28, 2002. The note bears interest at 10% and is due in six months.
See Independent Auditor's Report.
F-5
SPACE TELECOM, INC.
(A DEVELOPMENT STAGE COMPANY)
EXAMINATION OF FINANCIAL STATEMENTS
AUGUST 31, 2002
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT.................................................F-1
FINANCIAL STATEMENTS:
Balance Sheet.......................................................F-2
Statement of Cash Flows.............................................F-3
NOTES TO FINANCIAL STATEMENTS............................................F-4-F-5
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Space Telecom, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of Space Telecom, Inc. (a Florida
corporation and a development stage company) as of August 31, 2002 and the
related statement of cash flows from the date of inception (December 10, 2001)
to August 31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Space Telecom, Inc. as of
August 31, 2002 and it's cash flows from the date of inception (December 10,
2001) to August 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.
/s/ Holyfield & Thomas, LLC
West Palm Beach, Florida
January 27, 2003
F-1
SPACE TELECOM, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF AUGUST 31, 2002
ASSETS
CURRENT ASSETS:
Cash $5,630
TOTAL ASSETS $5,630
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable to stockholder $5,000
STOCKHOLDERS' EQUITY:
Common stock; $.0001 par value,
105,000,000 shares authorized,
6,300,000 shares issued and outstanding 630
Class A Common stock; $.0001 par value,
having 10 votes per share, 5,000,000
shares authorized, none issued and
outstanding
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,630
See Independent Auditor's Report and Accompanying Notes to Financial Statement.
F-2
SPACE TELECOM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 10, 2001 (date of inception)
TO AUGUST 31, 2002
Cash flows from operating activities $ 0
Cash flows from investing activities 0
Cash flows from financing activities
Issuance of common stock 630
Borrowing from stockholder 5,000
Net cash provided by financing activities 5,630
Increase in cash 5,630
Cash, beginning of period 0
Cash, end of period $ 5,630
See Independent Auditor's Report and Accompanying Notes to Financial Statement.
F-3
SPACE TELECOM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF AUGUST 31, 2002
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Space Telecom, Inc. ("the Company") is a development stage enterprise
incorporated under the laws of the State of Florida in December 2001. The
Company's offices are in Palm Beach, Florida, its only location.
Space Telecom, Inc. does not presently conduct business operations.
Method of Accounting
The Company will report the results of its operations using the accrual method of accounting for both financial
statement and income tax purposes. Under this method, income is recognized when earned and expenses are deducted
when incurred. The accounting policies of the Company are in accordance with generally accepted accounting
principles and conform to the standards applicable to development stage companies.
Income Taxes
The Company has no taxable income to date; therefore, no provision for federal
or state taxes has been made.
2. Common Stock and Class A Common Stock
The Company was incorporated with an authorized capital of 25,000,000 shares of
$0.001 par value common stock in December 2001. An article of amendment was
filed in May 2002 modifying the capital structure of the Company to an
authorized capital of 105,000,000 shares of $0.0001 par value common stock. The
Company has issued 6,300,000 shares to founder shareholders. It has earmarked
1,400,000 shares to be offered to the public after the completion of the
required filings with the Securities and Exchange Commission. Options for
530,000 shares exercisable at $2.50 per share within a period of two years from
the effective date of the public offering have been granted to key officers of
the Company.
The Company is also authorized to issue 5,000,000 shares of Class A common stock
having a par value of $0.0001 with 10 votes per share. No Class A common stock
has been issued at August 31, 2002.
See Independent Auditor's Report.
F-4
SPACE TELECOM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF AUGUST 31, 2002
3. Development Stage Operations
The Company was formed in December, 2001. There have not been operations since
inception and the Company is in the process of raising capital, and financing
for its future operations. As of August 31, 2002, the Company had sixty-nine
stockholders.
4. Note Payable to Stockholder
The Company borrowed $5,000 from Alps Resources Bankers, Inc. (a stockholder) on
May 28, 2002. The note bears interest at 10% and is due in six months.
See Independent Auditor's Report.
F-5
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There have been no changes in or disagreements with our accountants
since the inception as required to be disclosed pursuant to Item 304 of
Regulation SB.
LEGAL MATTERS
The validity of the issuance of our shares of common stock being
offered has been passed upon by Richard P. Greene, P.A., located in Fort
Lauderdale, Florida.
EXPERTS
The audited financial statements as of May 31, 2002, appearing in this
prospectus and registration statement have been audited by Holyfield & Thomas,
LLC, Certified Public Accountants and Advisors, and are included in reliance
upon such reports given upon the authority of Holyfield & Thomas, LLC, as
experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
A registration statement on Form SB-2, including amendments thereto,
relating to the shares offered hereby has been filed with the Securities and
Exchange Commission. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules thereto.
Statements contained in the prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference. For further information with respect to Space
Telecom and the shares offered hereby, reference is made to such registration
statement, exhibits and schedules. A copy of the registration statement may be
inspected by anyone without charge at the Commission's principal office location
at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Public Reference Branch of the Commission upon
the payment of certain fees prescribed by the Commission. You may also obtain
information on the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains information regarding registrants that file electronically with
the Commission.
33
You should rely only on information contained
in this prospectus. We have not authorized
anyone to provide you with information different
from that contained in this prospectus. We are
offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions
where offers and sales are permitted. The
information contained in this prospectus is
accurate only as of the date of this prospectus,
regardless of the time of delivery of 1,400,000 shares
this prospectus or of any sale of our common stock.
No action is being taken in any jurisdiction
outside the United States to permit a public
offering of the common stock or possession or
distribution of this prospectus in any such
jurisdiction. Persons who come into possession
of this prospectus in jurisdictions outside
the United States are required to inform
themselves about and to observe any SPACE TELECOM INC
restrictions as to this offering and
the distribution of this prospectus applicable
to that jurisdiction. Until the effective date
all dealers that buy, sell or trade in our ----------------------
common stock, whether or not participating
in this offering, may be required to deliver
a prospectus.
Prospectus
Until ____________, all dealers effecting
transactions in registered securities,
whether or not participating in this ----------------------
distribution, may be required to deliver
a prospectus. This is in addition to the
obligation of dealers to deliver a prospectus
when acting as underwriters and with respect
to their unsold allotments or subscriptions.
March ___ , 2003
34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Space Telecom's Certificate of Incorporation eliminates, subject to certain
exceptions, directors' personal liability to the Company or its stockholders for
monetary damages and for breaches of fiduciary duties. The articles of
incorporation does not, however, eliminate or limit the personal liability of a
director for (i) any breach of the director's duty of loyalty to Space Telecom
or its stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided FOR UNDER the
Florida General Corporation Law or (iv) from any transaction from which the
director derived an improper personal benefit.
Space Telecom's Bylaws provide that the Company shall indemnify its
directors, officers, and employees, to the full extent permitted under the
General Corporation Law of Florida. In addition, we have entered or will enter
into indemnification agreements with our directors, and officers that provide
for indemnification in addition to the indemnification provided in our By Laws.
The indemnification agreements contain provisions that may require us, among
other things, to indemnify our directors and executive officers against certain
liabilities (other than liabilities arising from intentional or knowing and
culpable violations of law) that may arise by reason of their status or service
as directors or executive officers of Space Telecom or other entities to which
they provide service at the request of the Company and to advance expenses they
may incur as a result of any proceeding against them as to which they could be
indemnified. We believe that these provisions and agreements are necessary to
attract and retain qualified directors and officers. We will obtain an insurance
policy covering directors and officers for claims that such directors and
officers may otherwise be required to pay.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
It is estimated that the expenses incurred in connection with
distribution of the shares of common stock being offered will be as follows:
Expenses to be paid by
Item Space Telecom
-------- -------------------------
Printing Expense - Final Prospectus $ 5,000.00 *
Standard & Poor's $ 4,000.00 *
Transfer Agent $ 2,375.00 *
-------------
Total offering expense $ 11,375.00 *
* These figures represent estimations by management.
35
RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth information concerning unregistered sales of our
common stock. These were unsolicited transactions and did not involve any public
solicitation or advertisement in any way.
The Company sold 6,421,000 shares of its common stock to the founders at a
price of $.0001 per share and 5,000,000 shares of Class A common for par value
pursuant to Section 4(2) of the Securities Act of 1933, as amended, as being
sold not in connection with a public distribution of securities. The use of
amount received is not considered material for disclosure. The Company has not
sold any registered shares.
Undertakings
This offering is being conducted on a continuous basis pursuant to Rule
415 of the Securities Act of 1933.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. 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 or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20%
change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective registration statement.
iii. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
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
that time shall be deemed to be the initial bona fide offering
thereof.
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.
36
EXHIBITS
Exhibit #
3.1 Articles of Incorporation and Amendments(1)
3.2 By-Laws(1)
4 Instruments defining the rights of holders (refer to exhibit 3)
9 Voting Trust agreement (not applicable)
10 Material contracts
11 Statement re: Computation of per share earnings (not applicable)
21 Subsidiary of the Registrant (not applicable)
23.1 Consent of Holyfield & Thomas, LLC, Certified Public Accountants
24 Power of Attorney (not applicable)
99 Additional Exhibits
99.1 Subscription Agreement
99.2 Escrow Agreement and Indemnification Agreement
_____________________
1. Incorporated by reference to our Registration Statement on Form SB-2 filed
July 17, 2002, file number 333-96581
2. Incorporated by reference to our Registration Statement on Form SB-2
Amendment One filed September 27, 2002, file number 333-96581
37
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Amendment Number
Two to the registration statement to be signed on its behalf by the undersigned
in the City of Palm Beach, Florida on the 22nd day of January, 2003.
SPACE TELECOM, INC.
/s/ Alain De Lenclos
__________________________
Alain De Lenclos, CEO and President
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
Date: January 22, 2003 /s/ Alain De Lenclos
__________________________
Alain De Lenclos, CEO, President and Director
(Principal Executive Officer)
Date: January 22, 2003 /s/ Jadoomanee Rampadaruth
___________________________
Jadoomanee Rampadaruth, CFO, VP, Secretary and Director
(Principal Accounting Officer)
Date: January 22, 2003 /s/ Amal Rampadaruth
___________________________
Amal Rampadaruth, Chairman of the
Board of Directors
