As Filed with the Securities and Exchange Commission on March 3, 2003 Registration No.:_______
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________________________________________________________________________
FORM SB-2
Registration Statement under the Securities Act of 1933
_______________________________________________________________________________________________________
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 02-0646259
(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
Tel. (561) 659-9054
_______________________________________________________________________________________________________
(Address and telephone number of principal executive offices)
Amal Rampadaruth
292 South County Road, Suite 109, Palm Beach, Florida 33480
Tel. (561) 659-9054
_______________________________________________________________________________________________________
(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 $283.15
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Minimum: 10,000 $2.50 $25,000
--------------------------- ------------------------ ------------------------
Selling Stockholders 3,760,000 $2.50 $9,400,000 $760.46
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
Total $1,043.61(1)
- --------------------------- --------------------------- ------------------------ ------------------------ ---------------
(1) This registration fee is calculated at $.00008090 for the shares offered
based on the maximum aggregate offering price of the securities being
registered in accordance with Rule 457(c).
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 THEEAFTER 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 February ___, 2003
2
PRELIMINARY PROSPECTUS
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
We are offering up to 1,400,000 shares of our common stock and 3,760,000 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 the Grand Bank &
Trust of Florida, Palm Beach, Florida, until 10,000 shares have been 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.
We are offering our shares of common stock at $2.50 per share on a
self-underwritten basis. The CEO, Directors and Officers of the corporation will
be responsible for selling the securities.
Proceeds per share $ 2.50
Proceeds from the minimum sale $ 25,000.00
Proceeds from the maximum sale $3,500,000.00
The selling shareholders will sell at a fixed price which is our offering price
of $2.50 until the securities are quoted on the OTC Bulletin Board. Once there
is a market for our securities, the selling stockholders will sell at market
prices.
Sales made on behalf of ARTI will be made on a subscription basis in order to
avoid any confusion with sales by selling shareholders.
_______________________________________________________________________________________________________
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.
_______________________________________________________________________________________________________
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 February ___, 2003
3
TABLE OF CONTENTS PAGE
1. PROSPECTUS SUMMARY.........................................................1
2. RISK FACTORS...............................................................3
2.1 RISKS RELATED TO OUR BUSINESS.....................................6
2.2 RISKS RELATED TO OUR INDUSTRY.....................................7
2.3 RISKS RELATED TO THIS OFFERING....................................9
3. USE OF PROCEEDS...........................................................11
4. DETERMINATION OF OFFERING PRICE...........................................17
5. DILUTION..................................................................17
6. DIVIDEND POLICY...........................................................18
7. SELLING SECURITY HOLDERS..................................................18
8. PLAN OF DISTRIBUTION......................................................21
9. LEGAL PROCEEDINGS.........................................................23
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS.............23
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............25
12. DESCRIPTION OF SECURITIES.................................................26
13. INTEREST OF NAMED EXPERTS AND COUNSEL.....................................27
14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES...........................................................27
15. DESCRIPTION OF BUSINESS...................................................27
16. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.............................................................40
17. DESCRIPTION OF PROPERTY...................................................41
18. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................41
19. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..................41
20. SUMMARY COMPENSATION TABLE................................................42
21. FINANCIAL STATEMENTS ....................................................42
22. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.....................................................45
23. LEGAL MATTERS.............................................................45
24. EXPERTS...................................................................45
25. INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................48
26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...............................48
27. RECENT SALES OF UNREGISTERED SECURITIES...................................48
28. EXHIBITS..................................................................49
29. SIGNATURES................................................................49
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.
4
1. PROSPECTUS SUMMARY
About Amalgamated Resources Technologies, Inc.
Amalgamated Resources Technologies Inc., hereinafter referred to as ARTI, is a
company organized under the Laws of the State of Florida.
Its main objective is to seek new and/or existing technologies, industries and
other businesses in Europe, Russia and throughout the World and perform a market
study for underlying products sale in the US. If the market study reveals a
satisfactory potential, then and only then, ARTI enters into an agreement with
the owner of the new or existing technology. Said agreement will stipulate that
ARTI will:
o Incorporate a new US corporation that will either acquire the
existing foreign company, or become the subsidiary of the foreign
company, whichever is applicable.
o Establish a new US base for the corporation.
o Help newly established corporation to manufacture (if applicable),
import, market, sell its products.
o Provide managerial services on a monthly basis, but leaving
day-to-day running of the corporation to its officers.
o Locate key personnel in order to run the corporation (if need be) -
being established that the owner of the business will either come
himself to the US in order to implement the new business' foundation
and/or send appropriate engineers/scientists or other qualified
personnel in order to help establish this new business on US soil.
For providing the aforementioned services, ARTI is remunerated by monthly
payments (amount to be agreed to) and a number of shares of the new corporation,
to be agreed to - thus entitling ARTI to both a monthly payment and to dividends
at year end. All these new companies will be associated to ARTI as evidenced by
the number of shares held by it. ARTI will also be entitled to a number of seats
(to be agreed to) on the Board of Directors.
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. We have reached agreement with
two companies:
o International Motion Book Corp. (IMB), where we shall hold 13.33% of
all issued and outstanding stock and;
o Industrie Caribeenne de Boulangerie Corp. (ICBC), where we shall
hold 16.6% of the voting rights.
In both companies ARTI will monitor the disbursement of funds (see "Use of
Proceeds"). Upon completion of the Offering, we intend to fund operations in the
two companies against the shares allocated to ARTI and begin to receive revenues
for managerial and organizational services. We anticipate that our revenue will
be derived from providing a variety of services and also from dividends. ARTI
will also get revenues from its own activities. The size of the revenues will
depend on the number of new companies incorporated in order to transfer patented
technologies and other types of businesses in North America and help the
companies go into production and sales.
International Motion Book Corp, (IMB) has been incorporated with the objective
of penetrating three different markets for services requiring the same
competence. viz; software wizards.
There is a growing market for the protection of Internet data and during their
transmission from one user to the other. Companies require similar services
where an internal database is shared among employees. The persons providing the
services must possess the required academic qualifications and relevant
experience.
The second related objective is the creation of animation software.
Responsibilities for both functions will devolve on the same group. The
personnel may be posted to one division or the other depending on the workload
and skill of the employee.
Income will be generated during the first semester after start of operations by
the division of network security system. The animation software will generate
cash flows by the end of the first year of operations.
5
The third related activity is the production of Real Time Strategy gaming
software. The international market for computer games (computer, consoles and
now on internet) is 18 billion Dollars. The growth rate over a period of 25
years, taking into account cyclical changes, is 13% per annum. The growth factor
based on technological breakthroughs and innovations weakens the producers of
the games, as they cannot rely on demand for existing games. Also the consoles
are improved, modified or significantly altered every six years. The result is
that the market for software for games must follow the same pattern. This is the
market targeted by IMB. The four major world producers of computer games are:
Nintendo, Electronic arts, Sony and Microsoft. Games generate a cultural
influence and develop a computer sense in users of all ages.
Industrie Caribienne De Boulangerie Corp (ICBC), a Florida based company having
for object the production of quality breads and pastries based on traditional
methods in use in France and some Mediterranean countries and using natural
ingredients. Besides quality, all the items offered will be taste oriented. All
commercial activities will be carried out under the fictitious name of "The King
David's French Bakery"; fresh products made daily with a difference; All Kosher
Products.
The King David's French Bakery is a revolutionary concept based on enhancement
of Kosher food's taste by incorporating traditional French taste and products
(all products used are Kosher and organic). The preparation of the biological
Kosher bread will follow the guidelines of the French organization NATURE ET
PROGRES, one of the most ancient methods of production.
The company's incorporator, a French Baker residing in Guadeloupe, is in the
process of opening two simultaneous points of presence located in Guadeloupe and
in Palm Beach, Florida on top of "La Baguette Doree" already operating in
Guadeloupe.
The exclusive new taste of his products will be exclusively offered at these two
locations with plans to open additional locations in South Florida, Los Angeles,
New York and Montreal in the near future.
ARTI has its own activities of providing services. It acts as a facilitator for
transfer of technologies from around the World to the US. It generates its own
revenues.
Our executive offices are located at 292 South County Road, Suite 109, Palm
Beach, Florida 33480 and our telephone number is (561) 659-9054. Our web site
can be found at: WWW.ARGROUP.WS
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.
Common stock offered by ARTI: 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: 3,760,000 common shares
Common stock outstanding prior to this offering: 28,600,000 common shares
Common stock outstanding after this offering: 30,000,000 common shares
6
Primary offering: The primary offering of
28,600,000 shares was
allocated to the founders of
this company at par value
($0.0001 per share)
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
Corporation 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 shares at $2.50 per
share for a total amount of
$3,500,000.
Selling Shareholders The selling shareholders, who
are the founders, are selling
3,760,000 shares out of their
28,600,000 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 January 15, 2003.
The company has received $2,860 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 ARTI carries a certain number of risks that are inherent to the
software industry, to the manufacture and marketing of goods and the provision
of organizational and managerial services. The development stage of our company
implies risks of uncertainty and dependence on many outside factors such as the
availability of funds, and our dependence on our hired experts, foreign States'
laws and regulations, obsolescence of the patented technologies by new
inventions. The inside factors are more related to our own capacity to achieve
our objective by selecting and retaining key personnel and managing effectively
the risk of obsolescence of material and equipment by new technologies. Less
costly and more efficient equipments have become a regular feature of
technological companies.
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 ARTI 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 2002 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. 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.
7
You may be unable to effectively evaluate our Company for investment purposes
because we have no operating history. Since we were founded in 2002, we have
focused on the target companies with which ARTI has agreements to purchase a
significant portion of their stock and where we would exert an influence on the
management by exercising a degree of control on disbursement of funds and by
holding some seats on the Board of Directors. Although our decision to get
involved in a company is the result of our own research and evaluation, which
usually takes more than a year, we must stress that it is above all a business
decision. As in all business decisions, ours, also, carries a risk of bad
judgment. 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
Besides our operations in the US together with those companies which we are
helping to get established in the US, we intend to be engaged in the Caribbean
islands, France, Russia, Canada, other European countries as might be applicable
and also in some other places around the World, where there might be political
instability but with business opportunities with higher than normal returns. 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.
Secondary Risks
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. 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.
No assurance that offering will we 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.
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.
Limitations on transferability
It is unlikely that investors will be able to liquidate their investments in the
shares in the event of an emergency or for any other reason. A public market for
the shares does not currently exist.
8
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 the software and Internet
security's segments, control of disbursement of funds in each target companies,
as well as the enhancements of market opportunities.
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.
Reliance on public acceptance
Our success is dependent on public acceptance and support of our products and
services. There are no assurances that duplicating production lines of
successful products in foreign countries will meet public acceptance here. 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 each venture are favorable, there are no assurances that the actual
operating results will reach the levels indicated by management.
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 technical
innovations. The software written by our computer specialists for animation and
games will require adequate protection. A pirated copy may put a stop to
earnings and endanger all the investments in that project. 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 technology or software. 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 and/or used 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.
Receipt of less than maximum offering proceeds
It is possible that the Company will sell less than the maximum amount of shares
being offered. Receipt of proceeds which are less than the amount from the
maximum offering amount will cause the Company to delay and/or modify its
current plan and would impair the Company's business operations.
Funds will not be returned to investors
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 funds invested. You should be aware that receipt of only
the minimum offering amount would severely impair our business operations.
9
General 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 products
and services will be offered such as recession, inflation, unemployment
increases, and interest rates among its own operations, or the operations of the
associated companies. Specifically, greater unemployment could indicate that
fewer paying customers for personalized products or quality goods. 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 will
reduce the profitability of our operations. ARTI will, as a result of
unfavorable economic conditions in the target countries, have fewer clients
willing to get established in the US. We have no control over any of these
changes or conditions.
2.1 RISKS RELATED TO OUR BUSINESS
We commenced operations in 2002. Accordingly, we do not have any operating
history upon which you can evaluate our business and prospects. An investor in
our shares must consider the risks, expenses and difficulties frequently
encountered by early stage companies in new and rapidly evolving markets,
including software and high tech companies. The likelihood of our success must
be considered in light of the expenses, problems and delays frequently
encountered by businesses in the early stages of development, the competitive
environment in which we operate and the frequent failure rate of other companies
whose businesses are principally focused on software, innovative technology and
franchise.
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 relevant experience by management
The Company believes that it has ample experience to monitor the financial
operations and the provision of management and organizational services to its
subsidiaries or associated companies. 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 of
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.
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 to offer any of our products based on
patented technologies to the public;
o Increased competition by both established and startup companies who
provide similar products and services;
o Fluctuations in general economic conditions causing a decrease in
consumer spending; and
o Fluctuations in the general demand for some of our products and or
affiliated companies' products.
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.
10
Our business depends upon the continued service of our key management personnel,
including Amal Rampadaruth, our president and chief executive; and Jadoomanee
Rampadaruth, executive vice president and chief financial officer. We cannot
assure you that we will be able to retain the services of any of our key
executives. If any of our key executives were to leave us, our business, results
of operations and financial condition could be materially adversely affected, as
these two officers have been involved in all the stages of development to date.
We do not currently have "key man" insurance policies on any of our executives.
You must consider our business and prospects given the risks, expenses and
challenges we might encounter because we are at an early stage of development in
a new and rapidly evolving market. We hope to proceed with the recruitment of
already identified and entered into Agreement with key personnel for
International Motion Book - Gaming Department (Mr. David Brunot and Mr. Stephane
Sommer), Internet security and for the operations of ARTI per se. ARTI has
developed a professional relationship with Richard P. Greene PA, Holyfied and
Thomas (CPA), and Mr. Henri Sousseing, a French professional traditional bread
and pastry maker based in Guadeloupe. We shall also consult with independent
professionals in each field as and when required. As we have not yet experienced
one full calendar year of operations and the executive personnel is not yet in
place, although identified and letters of intent signed, we are not in a
position to guarantee the quality of our services and products. Due to our short
operating history, our future financial performance is not predictable and may
disappoint investors and result in a significant decline in our stock price.
Our failure to penetrate the competitive markets with our innovative products or
services would reduce future revenues and increase our expenses
A significant portion of our sales together with those of our associated
companies will be influenced by the initial reaction of the consumer market
targets and the initial reaction of the target industry as appropriate. We shall
need significant marketing skill and adequate time to demonstrate our superior
product and their affordable price. Our ability to penetrate the markets which
in certain cases will imply for the consumer to shift from a traditional
supplier, will determine the success of our ventures for ARTI, per se, or the
related companies. Resistance by the target companies or consumers would
negatively affect our revenues.
2.2 RISKS RELATED TO INDUSTRY
Competition in our markets is intense and could reduce our sales and prevent us
from achieving profitability
ARTI and our associated companies intend to offer products and services of a
higher standard than those offered by our competitors. The market for our
service is intensely competitive and subject to rapid technological change. We
expect the intensity of competition to increase in the future. Increased
competition is likely to result in price reductions, reduced gross margins and
loss of our target market share, any one of which could reduce our future
revenues or earnings. Competition exists in each sector of our involvement:
- - Internet security:
There are a few companies, which actually provide secured data transmission over
the Internet. Demand for services exist as the key issue is the quality of the
personnel and its willingness to work for long hours and also during weekends.
It must always be taken into account the fact that hackers are using more
elaborate schemes to penetrate data bases and the personnel required to keep
these schemes from being successful, must always keep abreast of new
technologies or be able to minimize the risk at most.
- - Animation Software
World competition exists in this field as can be ascertained from movies and
advertisements made around the world. However, we intend to produce a tool,
which will make 3-D animation accessible to a greater number of persons. Risk of
our software being pirated exists. All software producers are facing the same
problem. Although we have identified the team that will work on this project and
will take all precautions to avoid being hacked, We cannot guarantee 100 %
immunity.
11
- - Games
Completion is fierce and some companies like Microsoft, Sony, and Electronic
Arts etc have superior means of production at their disposal. The market is open
and any company that comes up with superior software should succeed. If our
software wizards are unable to come up with a superior game or if the game does
not appeal to the public we might loose our investment. Competitors are defined
as those entities with deep financial resources, control of physical assets and
experienced, knowledgeable personnel.
In general, we believe that competition could ultimately assist us in building
product awareness and act as an incentive to bring in new patented technologies,
which will be beneficial to our objectives.
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.
As we are involved in diverse activities directly or through our associated
companies we will experience competition from different sources. Nonetheless,
due to the enormous potential for profit existing in the animation business,
franchising production of traditional French bread and pastries and Internet
security there are and will continue to be numerous other business entities
seeking to profit from any one of these markets. 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.
As far as the operations of ARTI are concerned there are no trade secrets
involved. Our success depends on the quality of our service at an affordable
price and the referrals of overseas clients involved in high tech products or
having patents for an innovative product, by our representative offices in
France and Russia and by our associates in Switzerland, Luxembourg etc. Failure
on our part to locate the right business or technology will entail a loss of
money.
Failure of our associated companies to receive the necessary funding could harm
our business
Our targeted customers include industrial, commercial and individual users
depending on the product target. If these companies do not receive the funding
necessary either to start the cycle of production or for their expansion our
revenues will be reduced.
Although time is of the essence, it can have an adverse effect and delay our
streams of revenue
The time required may have an adverse effect on our financial resources and
jeopardize the whole business. Also the production time of the software may be
delayed for a host of technical reasons.
If IMB were unable to meet the rapid changes in technology, the animation
product could become obsolete. The market for the products targeted by ARTI is
marked by rapid technological change, frequent new product introductions,
technology enhancements, uncertain product life cycles, changes in client
demands and evolving industry standards. It is not certain that these companies
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, our associated companies need to
enhance their current product and develop new products on a timely basis to keep
pace with developments related to technology affecting the different products
and consequently to satisfy the increasingly sophisticated requirements of the
clients.
Recent terrorist attacks have contributed to economic instability in the USA;
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. 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.
12
2.3 RISKS RELATED TO THIS OFFERING
Control by principal stockholders, officers and directors could adversely affect
our stockholders
Upon completion of this offering, our officers, directors and
greater-than-five-percent stockholders (and their affiliates) will, in the
aggregate, beneficially own approximately 79% 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 January 15, 2003, there were no outstanding warrants to acquire shares of
our common stock but there were 500,000 Options to acquire shares of our common
stock.
We anticipate that the initial offering price of the shares will be
substantially higher than the net tangible book value per share of our common
stock after this offering. If we sell the shares at $2.50 per share, you will
incur immediate dilution of approximately 95.00% in net tangible book value for
each share of our common stock included in the shares you purchase. If currently
outstanding options or warrants to purchase our common stock were exercised,
your investment may be further diluted.
We do not intend to pay cash dividends
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain any future earnings for funding our operations and,
therefore, do not expect to pay any cash dividends in the foreseeable future.
Our bylaws provide for indemnification of our board of directors
Our bylaws provide us to indemnify the members of our board of directors against
any loss or liability incurred in connection with our affairs (including
breaches of fiduciary obligations) so long as the loss or liability arises from
acts performed in good faith and which do not involve fraud or gross negligence
on the part of the members of the board of directors. Therefore, a stockholder
suing on behalf of ARTI may have a more limited right of action against our
board of directors than he would have in the absence of this indemnification
provision.
13
Investment Risk
Since we have do not have an operating history, it is difficult to evaluate our
business or our future prospects. Our revenue and income potential is unproven
and our business model is still emerging. If our business model does not prove
to be profitable, investors may lose their investment. To date, we have not
earned any revenue from operations. Our historical financial information is of
limited value in projecting our future operating results because of our lack of
operating history and the emerging nature of our business model. The investment
capital refers to private placement funds received from the sale of common
stock. We plan to invest heavily in evaluation of new technologies of target
companies, sales of our services, marketing and advertising. As a result, we
expect that we will continue to lose money through 2003. We may never achieve or
sustain profitability.
We cannot assure you that you will realize a positive return on your investment
or that you will not lose your entire investment in the shares. You should read
this prospectus and all exhibits carefully, and should consult with your own
personal legal and financial advisors prior to making any investment decision.
There has been no negotiation concerning the initial offering price of the
shares with third parties or any determination of the value of the common stock
by an independent appraiser
Our management has determined the initial offering price and other terms of the
shares of common stock. The offering price of the shares does not necessarily
reflect the price at which these securities may be sold at a later date or their
current fair market value.
There has been no prior market for our shares and the market price of these
securities may fluctuate
There has been no market for our shares prior to this offering. The price of our
shares after the offering may fluctuate widely and the shares may trade at
prices significantly below the initial offering price. Although we plan to apply
for trading privileges on the National Bureau Daily Quotation Pink Sheets, we
cannot guarantee that a trading market for our securities will develop or, if a
market does develop, the depth of the trading market for the securities or the
prices at which the securities will trade. Should a trading market for our
securities develop, the market price could decline as a result of sales by our
existing stockholders of shares of common stock or the perception that these
sales could occur.
If the market price of our shares falls below $5.00 per security, the
transactions in our securities could become subject to penny stock regulations,
which could inhibit the marketability of our securities.
The Securities and Exchange Commission has adopted regulations which generally
define a "penny stock" to be any equity security that has a market price (as
defined) of less than $5.00 per share or an exercise price of less than $5.00
per share, subject to certain exceptions. As a result, our securities may become
subject to rules that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a risk
disclosure document mandated by the Commission relating to the penny stock
market. The broker-dealer must also disclose the commission payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, were our securities to become
subject to the "penny stock" rules, these rules could restrict the ability of
broker-dealers to facilitate transactions in our securities and could affect the
ability of investors to sell our securities in the secondary market and the
price at which our securities could be sold.
14
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
ARTI 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
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 30,000,000 shares of our common stock outstanding. Of these shares, the
5,160,000 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.
3. USE OF PROCEEDS
The net proceeds to ARTI range from $25,000 (the "Minimum") to $3,500,000 (the
"Maximum). If Minimum were raised, we anticipate operating capital for three
months. Assuming 100% of the offering is successfully sold, we anticipate 12
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.
15
Use of proceeds from the initial public offering:
1. One Million and Three Hundred Thousand Dollars (1,300,000) will be
allocated to ARTI. These funds will be used for research of new
companies meeting our selection criteria and public demand for the
products to be manufactured. The breakdown is as follows:
- ------------------------------------------------------- --------------------
Item $
- ------------------------------------------------------- --------------------
Operating expenses 400,000
- ------------------------------------------------------- --------------------
Establishment costs for 5 companies 500,000
- ------------------------------------------------------- --------------------
Travel 100,000
- ------------------------------------------------------- --------------------
Per diem and entertainment 100,000
- ------------------------------------------------------- --------------------
Accounting fees 30,000
- ------------------------------------------------------- --------------------
Legal fees, validation of patents,
and market studies 150,000
- ------------------------------------------------------- --------------------
Miscellaneous expenses 20,000
- ------------------------------------------------------- --------------------
TOTAL 1,300,000
- ------------------------------------------------------- --------------------
2. IMB will be allocated One Million Two Hundred Thousand Dollars
(1,200,000) to provide cash flow to pay for the initial setting up
costs. This includes rent, salary, equipment and normal running
expenses of this department. As sales proceeds are received during
the first year no additional outside funds will be necessary. Also
part of the equipment necessary for this business will be leased.
This will not affect our performance but will help our cash flows.
The breakdown among the three divisions is as follows:
- ------------------------------------------------------- --------------------
Item $
- ------------------------------------------------------- --------------------
Animation 300,000
- ------------------------------------------------------- --------------------
Internet Security 325,000
- ------------------------------------------------------- --------------------
Games 575,000
- ------------------------------------------------------- --------------------
TOTAL 1,200,000
- ------------------------------------------------------- --------------------
3. One Million Dollars (1,000,000) will be earmarked for the two
bakeries in Palm Beach and Guadeloupe. Each unit will require
$500,000 for equipments, setting up costs and salaries and running
costs for the first year of operation.
- ------------------------------------------------------- --------------------
Item $
- ------------------------------------------------------- --------------------
Bakery Guadeloupe (equipment) 500,000
- ------------------------------------------------------- --------------------
Bakery Palm Beach (equipment) 500,000
- ------------------------------------------------------- --------------------
TOTAL 1,000,000
- ------------------------------------------------------- --------------------
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 receives 100% of the offering or $3,500,000:
- ----------------------------- ------------------------ --------------------
Description of Expenses Dollar Amount Percentage
- ----------------------------- ------------------------ --------------------
ARTI 1,300,000 37.1
- ----------------------------- ------------------------ --------------------
IMB 1,200,000 34.2
- ----------------------------- ------------------------ --------------------
ICBC 1,000,000 28.5
- ----------------------------- ------------------------ --------------------
TOTAL 3,500,000 100.00
- ----------------------------- ------------------------ --------------------
16
If we receive 100% of the offering, we shall be able to fund all the activities
described in our plan. Briefly the following actions will be taken:
ARTI
We shall initiate action to establish five foreign companies in the US. This
operation in itself will provide immediate revenues in the form of management
fees. All the expenses related to this operation viz; evaluation of the
technology, legal, accounting fees and related fees will be paid. Funds will be
available for travel to seek new, innovative -patented technologies so that this
type of operations can be repeated each year with new companies.
IMB
Besides administrative expenses, the funds will be used to pay the salaries of
the computer engineers, purchase of computers, software and peripherals.
$345,000 will be spent on computers and related equipments and software for the
three divisions. The available funds will be allocated to the three divisions.
ICBC
The funds will be used to buy machines, fixtures and fittings, ingredients for
making breads and pastries and provide salaries for the staff in the initial
period. 50% of the funds will be used for machines, equipments and goodwill
wherever applicable.
The following table shows our projected use of funds if we raise 100% of the offering
Disbursement Plan
- ----------------------------------------------------------------------------------
ARTI
- ------------------------------------------------------------ ---------------------
Operating expense 400,000
- ------------------------------------------------------------ ---------------------
Establishment of 5 companies 500,000
- ------------------------------------------------------------ ---------------------
Accounting 30,000
- ------------------------------------------------------------ ---------------------
Legal fees 150,000
- ------------------------------------------------------------ ---------------------
Travel 100,000
- ------------------------------------------------------------ ---------------------
Entertainment and traveling expenses 100,000
- ------------------------------------------------------------ ---------------------
Miscellaneous expenses 20,000
- ------------------------------------------------------------ ---------------------
Total for the activities of ARTI 1,300,000
- ------------------------------------------------------------ ---------------------
- ----------------------------------------------------------------------------------
IMB
- ----------------------------------------------------------------------------------
Division of animation 300,000
- ------------------------------------------------------------ ---------------------
Internet security 325,000
- ------------------------------------------------------------ ---------------------
Games 575,000
- ------------------------------------------------------------ ---------------------
Total for all the activities of IMB 1,200,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
ICBC (2 units)
- ----------------------------------------------------------------------------------
Machines and equipment 500,000
- ------------------------------------------------------------ ---------------------
Working capital, Payroll and miscellaneous expenses 500,000
- ------------------------------------------------------------ ---------------------
Total for all activities of ICBC 1,000,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
TOTAL allocation of funds 3,500,000
- ------------------------------------------------------------ ---------------------
17
The following table shows our projected use of funds if we raise 75% of the offering
Disbursement Plan
- ----------------------------------------------------------------------------------
ARTI
- ------------------------------------------------------------ ---------------------
Operating expenses 300,000
- ------------------------------------------------------------ ---------------------
Establishment of 4 companies 400,000
- ------------------------------------------------------------ ---------------------
Accounting 25,000
- ------------------------------------------------------------ ---------------------
Legal fees 120,000
- ------------------------------------------------------------ ---------------------
Travel 40,000
- ------------------------------------------------------------ ---------------------
Entertainment and traveling expenses 40,000
- ------------------------------------------------------------ ---------------------
Miscellaneous expenses
- ------------------------------------------------------------ ---------------------
Total for activities of ARTI 925,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
IMB
- ----------------------------------------------------------------------------------
Division of animation 300,000
- ------------------------------------------------------------ ---------------------
Internet security 325,000
- ------------------------------------------------------------ ---------------------
Games 575,000
- ------------------------------------------------------------ ---------------------
Total for all activities of IMB 1,200,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
ICBC (1 unit)
- ------------------------------------------------------------ ---------------------
Machines and equipment 250,000
- ------------------------------------------------------------ ---------------------
Working capital, Payroll and miscellaneous expenses 250,000
- ------------------------------------------------------------ ---------------------
Total for all activities of ICBC 500,000
- ------------------------------------------------------------ ---------------------
TOTAL allocation of funds 2,625,000
- ------------------------------------------------------------ ---------------------
Schedule assumes we receives 75% of the offering or $2,625,000:
- ----------------------------- ------------------------ --------------------
Description of Expenses Dollar Amount Percentage
- ----------------------------- ------------------------ --------------------
ARTI 925,000 35.2
- ----------------------------- ------------------------ --------------------
IMB 1,200,000 45.7
- ----------------------------- ------------------------ --------------------
ICBC 500,000 19.0
- ----------------------------- ------------------------ --------------------
TOTAL 2,625,000 100.00
- ----------------------------- ------------------------ --------------------
If we receive 75% of the funds our business will be adapted as follows:
ARTI will establish only four companies and proprate the expenses on the related
items. Travel and consequently traveling expenses will be reduced by 60%. As the
item "establishment of companies" brings immediate cash flows, we shall attempt
the maximum possible, which should be four companies.
As far as International Motion Book is concerned we shall not make any change on
the allocation of $1,200,000.
The allocation for the two bakeries will be halved. We shall start our
operations with only one bakery.
18
The following table shows our projected use of funds if we raise 50% of the offering.
Disbursement Plan
- ----------------------------------------------------------------------------------
ARTI
- ------------------------------------------------------------ ---------------------
Operating expense 192,000
- ------------------------------------------------------------ ---------------------
Establishment of 3 companies 300,000
- ------------------------------------------------------------ ---------------------
Accounting 18,000
- ------------------------------------------------------------ ---------------------
Legal fees 90,000
- ------------------------------------------------------------ ---------------------
Travel 25,000
- ------------------------------------------------------------ ---------------------
Entertainment and traveling expenses 25,000
- ------------------------------------------------------------ ---------------------
Miscellaneous expenses
- ------------------------------------------------------------ ---------------------
Total for the activities of ARTI 650,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
IMB
- ----------------------------------------------------------------------------------
Division of animation 0
- ------------------------------------------------------------ ---------------------
Internet security 25,000
- ------------------------------------------------------------ ---------------------
Games 575,000
- ------------------------------------------------------------ ---------------------
Total for all the activities of IMB 600,000
- ------------------------------------------------------------ ---------------------
- ------------------------------------------------------------ ---------------------
ICBC (1 unit)
- ------------------------------------------------------------ ---------------------
Machines and equipment 250,000
- ------------------------------------------------------------ ---------------------
Working capital, Payroll and miscellaneous expenses 250,000
- ------------------------------------------------------------ ---------------------
Total for all activities of the bakery 500,000
- ------------------------------------------------------------ ---------------------
TOTAL allocation of funds 1,750,000
- ------------------------------------------------------------ ---------------------
Schedule assumes we receives 50% of the offering or $1,750,000:
- ----------------------------- ------------------------ --------------------
Description of Expenses Dollar Amount Percentage
- ----------------------------- ------------------------ --------------------
ARTI 650,000 37.1
- ----------------------------- ------------------------ --------------------
IMB 600,000 34.2
- ----------------------------- ------------------------ --------------------
ICBC 500,000 28.5
- ----------------------------- ------------------------ --------------------
TOTAL 1,750,000 100.00
- ----------------------------- ------------------------ --------------------
With 50% of funds received we shall target only three companies, which we shall
establish here. Traveling costs will be drastically reduced. This might impair
our strategy to establish more companies the following year. Still we shall
generate income from the three companies established.
In the International Motion Book we shall have to sacrifice the division of
animation. Our decision is oriented by the immediate return on investment
together with rapid in flows of cash derived from the transactions. The Internet
security will receive only $25,000. This amount will be used for marketing. We
shall still be able to start one bakery.
19
The following table shows our projected use of funds if we raise 25% of the offering
Disbursement Plan
- ----------------------------------------------------------------------------------
ARTI
- ------------------------------------------------------------- --------------------
Operating expense 50,000
- ------------------------------------------------------------- --------------------
Establishment of 2 companies 200,000
- ------------------------------------------------------------- --------------------
Accounting 6,000
- ------------------------------------------------------------- --------------------
Legal fees 60,000
- ------------------------------------------------------------- --------------------
Travel 5,000
- ------------------------------------------------------------- --------------------
Entertainment and traveling expenses 4,000
- ------------------------------------------------------------- --------------------
Miscellaneous expenses
- ------------------------------------------------------------- --------------------
Total for the activities of ARTI 325,000
- ------------------------------------------------------------- --------------------
- ------------------------------------------------------------- --------------------
IMB
- ------------------------------------------------------------- --------------------
Division of animation 0
- ------------------------------------------------------------- --------------------
Internet security 25,000
- ------------------------------------------------------------- --------------------
Games 275,000
- ------------------------------------------------------------- --------------------
Total for all the activities of IMB 300,000
- ------------------------------------------------------------- --------------------
- ------------------------------------------------------------- --------------------
ICBC (1 unit)
- ------------------------------------------------------------- --------------------
Machines and equipment 125,000
- ------------------------------------------------------------- --------------------
Working capital, Payroll and miscellaneous expenses 125,000
- ------------------------------------------------------------- --------------------
Total for all activities of the bakery 250,000
- ------------------------------------------------------------- --------------------
- ------------------------------------------------------------- --------------------
TOTAL allocation of funds 875,000
- ------------------------------------------------------------- --------------------
Schedule assumes we receives 25% of the offering or $875,000:
- ----------------------------- ------------------------ --------------------
Description of Expenses Dollar Amount Percentage
- ----------------------------- ------------------------ --------------------
ARTI 325,000 37.1
- ----------------------------- ------------------------ --------------------
IMB 300,000 34.2
- ----------------------------- ------------------------ --------------------
ICBC 250,000 28.5
- ----------------------------- ------------------------ --------------------
TOTAL 875,000 100.00
- ----------------------------- ------------------------ --------------------
With 25 % of the funds received ARTI can only establish two companies.
IMB: We shall allocate $25,000 for the marketing of our Internet security
program. When we shall have orders to fulfill we shall divert some of our staff
from the games division in order to provide the services. It should be noted
that the qualifications and experience of the computer engineers are practically
the same for all the divisions.
ICBC: As for the bakeries we shall still be limited to one provided that we can
obtain all the equipments on lease and negotiate credit terms with our
suppliers.
20
The following table shows our projected use of funds if we raise 10% of the offering
Disbursement Plan
- ----------------------------------------------------------------------------------------
ARTI
- ------------------------------------------------------------ ---------------------------
Operating expense * 10,000
- ------------------------------------------------------------ ---------------------------
Establishment of 1 company 90,000
- ------------------------------------------------------------ ---------------------------
Accounting 3,000
- ------------------------------------------------------------ ---------------------------
Legal fees 27,000
- ------------------------------------------------------------ ---------------------------
Travel 0
- ------------------------------------------------------------ ---------------------------
Entertainment and traveling expenses 0
- ------------------------------------------------------------ ---------------------------
Miscellaneous expenses
- ------------------------------------------------------------ ---------------------------
Total for the activities of ARTI 130,000
- ------------------------------------------------------------ ---------------------------
- ----------------------------------------------------------------------------------------
IMB
- ------------------------------------------------------------ ---------------------------
Division of animation 0
- ------------------------------------------------------------ ---------------------------
Internet security 20,000
- ------------------------------------------------------------ ---------------------------
Games 100,000
- ------------------------------------------------------------ ---------------------------
Total for all the activities of IMB 120,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
ICBC (1 unit)
- ------------------------------------------------------------ ---------------------------
Machines and equipment 50,000
- ------------------------------------------------------------ ---------------------------
Working capital, Payroll and miscellaneous expenses 50,000
- ------------------------------------------------------------ ---------------------------
Total for all activities of the bakery 100,000
- ------------------------------------------------------------ ---------------------------
- ------------------------------------------------------------ ---------------------------
TOTAL allocation of funds 350,000
- ------------------------------------------------------------ ---------------------------
Schedule assumes we receives 10% of the offering or $350,000:
- ----------------------------- ------------------------ --------------------
Description of Expenses Dollar Amount Percentage
- ----------------------------- ------------------------ --------------------
ARTI 130,000 37.1
- ----------------------------- ------------------------ --------------------
IMB 120,000 34.2
- ----------------------------- ------------------------ --------------------
ICBC 100,000 28.5
- ----------------------------- ------------------------ --------------------
TOTAL 350,000 100.00
- ----------------------------- ------------------------ --------------------
With only 10% of the funds it shall become more difficult to achieve the goals
set. However, we shall follow allocate the funds in such a way so that we can
obtain the optimal cash flow.
ARTI will target only one company with a greatly reduced staff. This single
company will generate cash within six months, which will be used to market our
services in a limited number of countries.
In International Motion Book the funds will be predominantly affected to the
games and $20,000 for marketing the Internet security. Here also, staff from the
games department will deal with all orders received. This activity also will
provide rapid cash flows.
As far as the bakeries are concerned we shall start with only one bakery.
Working with a minimum staff, renting a sales point and getting the equipment on
lease together with credit facilities from our suppliers we shall be able to
produce the type of breads. This will establish the quality of the breads and
pastries and will help build a clientele base.
21
ARTI`s Use of proceeds if only the minimum is raised: $25,000, which represents
0.714% of the funds:
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 year 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 an A+ rated Insurance/Bank Company. As part of the
monies raised will be used to secure ten-year zero coupon bonds from an A+ rated
Insurance/Bank Company or other secured and rated institutions in order to
secure the Capital of our Bonds. 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 process of the issue of our capital
guaranteed ten year bonds.
* The item "Operating Expense" includes the following payments as duly resolved
by the Board:
"The following gross monthly remuneration for the under mentioned 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. Amal Rampadaruth will be paid a gross amount of Seven Thousand
Dollars (7,000) per month as CEO. The contract will be signed
after successful completion of the initial public offering.
2. Mr. Jadoomanee Rampadaruth will be paid a gross amount of Seven
Thousand Dollars (7,000) per month as CFO. The contract will be
signed after successful completion of the initial public offering.
Note: All the above remunerations 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."
4. 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 ARTI 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 ARTI.
5. DILUTION
As of January 15, 2003, ARTI had a net book value of $2,860 ($.0001 per share
based on 28,600,000 shares). The net tangible book value per share is equal to
our total tangible assets (2,860), less total liabilities (0) and divided by
total number of shares of common stock outstanding (28,600,000) i.e. 2,860
divided by 28,600,000 which equals to $0.0001. 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 $3,502,860. The net tangible book value per share
would be $0.1168.
As a result of the public subscription the 28,600,000 founders who purchased
their shares at $0.0001 per share will get an immediate increase of $0.1167
($0.1168-$0.0001) per share. The public shareholders who will buy their shares
at $2.50 will have an immediate loss of value or a dilution of $2.5 less
$0.1168, which equals to $2.3832 per share.
22
Table showing different levels of dilution according to different levels of
sales of the public offering
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
% of sales of Existing New Shares Total Sales Proceeds Total Assets Assets Offering Dilution
offering Shares per share Price
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
28,600,000 0 28,600,000 2,860.00 2,860.00 0.0001
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
0.71 10,000 28,610,000 25,000.00 27,860.000 0.0010 2.50 2.4990
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
10 140,000 28,740,000 350,000.00 352,860.00 0.0123 2.50 2.4877
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
25 350,000 28,950,000 875,000.00 877,860.00 0.0303 2.50 2.4697
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
50 700,000 29,300,000 1,750,000.00 1,752,860.00 0.0598 2.50 2.4402
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
75 1,050,000 29,650,000 2,625,000.00 2,627,860.00 0.0886 2.50 2.4114
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
100 1,400,000 30,000,000 3,500,000.00 3,502,860.00 0.1168 2.50 2.3832
- -------------- ----------- ------------ ---------- --------------- ------------- ---------- ---------- ------------
Appreciation of stock of existing shareholders as a result of public offering
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
Item 0.71% 10% 25% 50% 75% 100%
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
Existing Net Value/ Share 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
Before Public Offering
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
Subscription 10,000 140,000 350,000 700,000 1,050,000 1,400,000
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
Net Value per share after 0.0010 0.123 0.0303 0.0598 0.0886 0.1168
public offering
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
Appreciation 0.0009 0.1229 0.0302 0.0597 0.0885 0.1167
- --------------------------- ------------ ----------- ------------ ----------- ------------- -------------
The information set forth above regarding dilution assumes the sale of 0.714%,
10%, 25%, 50%, 75% and 100% of the 1,400,000 shares being offered. The 3,760,000
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.
6. 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.
7. SELLING SECURITY HOLDERS
The following table sets forth information as of January 15, 2003 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 28,600,000 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.
23
The following table shows the number of shares and percentage before and after public offering:
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
Name No of shares Percentage No of Shares Percentage after
before public before public after public public offering
No offering offering (1) offering (2)
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
1 Alexanco Serge 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
2 Alps Resources Bankers Inc 500,000 1.7 450,000 1.6
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
3 Amalgamated Resources Holding 500,000 1.7 450,000 1.6
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
4 Amalgamated Resources Investments
Corp. 7,700,000 26.9 6,930,000 25.6
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
5 Amalgamated Resources Marketing Corp 500,000 1.7 450,000 1.6
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
6 Angus Associates 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
7 Berbeyer Karine 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
8 Bertoud Claude 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
9 Bialade Regine 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
10 Billon Alain 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
11 Boudoux-d`Hautefeuille Eymeric 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
12 Boudoux-d`Hautefeuille Wulfran 1,010 * 909 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
13 Bourgeon Ludovic 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
14 Bouvet SARL 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
15 Branger Rene 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
16 Brottier Daniel 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
17 Cases-Trincq Josiane 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
18 Chamoux Sylvian 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
19 Chassard Philippe 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
20 Covili Frederic 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
21 Cruypenning Laurent 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
22 D.P.Morton&Associates 250,000 * 0 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
23 De Lenclos Alain 75,010 * 67,509 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
24 Debaecker Michel 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
25 Dias Louis 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
26 Doury Fabienne 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
27 Dreyfus Sarah 110 * 99 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
28 Dujardin Philippe 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
29 Durocher Jean-Luc 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
30 Farys Rolland 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
31 Gallin Francois 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
32 Greene Richard P. 250,000 * 0 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
33 Haussy Vauche Daniel 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
34 Hoffmann Ginette 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
35 Humbert Jean-Marie 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
36 Kieffer Serge 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
37 Knecht Yasmine 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
38 Kremer Joseph 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
39 Lacous Olivier 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
24
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
40 LDV Inc 250,000 * 0 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
41 Ledroit Alain 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
42 Levy Michele 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
43 Lux Providence 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
44 Maillet Patrick 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
45 Maude Ressources 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
46 Mogeon Philippe 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
47 Molko Albert 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
48 Monin Didier 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
49 Montant Jean-Pierre 1,010 * 909 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
50 Naros Portfolio 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
51 Parnalland Patrick 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
52 Parrot Jean-Francois 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
53 Paul Schmidt 250,000 * 0 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
54 Perdrix Georges 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
55 Perdrix Jean-Claude 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
56 Perdrix Thierry 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
57 Perron Jean-Pierre 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
58 Pioger Berangere 10,000 * 9,000 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
59 Plassard Robert 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
60 Rampadaruth Amal 10,000,000 34.9 9,000,000 33.3
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
61 Rampadaruth Aruna 738,140 2.58 664,326 2.4
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
62 Rampadaruth Jadoomanee 6,100,000 21.32 5,490,000 20.3
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
63 Rampadaruth Maya 700,000 2.44 630,000 2.3
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
64 Rampadaruth Natalia 738,140 2.58 664,326 2.4
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
65 Robin Catherine 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
66 Roulin Pascal 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
67 Roux-Bognier Claudine 1,010 * 909 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
68 Souhard Eric 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
69 Steiner Charles 25,000 * 22,500 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
70 Strina Gerard 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
71 Teuf Alexandre 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
72 Toque Dauphinoise 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
71 Vauche Francis 10,000 * 9,000 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
72 Vauche Francis 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
73 Vauche Franck 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
74 Vedere Guy 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
75 Vedere Paul 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
76 Wechtler Patrick 10 * 9 *
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
77 Public offering 1,400,000 4.6
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
78 New shareholders (3) 3,760,000 12.5
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
TOTAL 28,600,000 100% 30,000,000 100%
- ---------- -------------------------------------- ------------------- ------------------ ------------------- ------------------
Note: * means less than 1% of shares
1. Percentages were based on the number of shares issued and outstanding
as of Jan 15, 2003
25
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 30,000,000 common
shares issued and outstanding
- The Company's officers and directors control approximately
58.3% of the Company's common stock.
- Jadoomanee Rampadaruth and Amal Rampadaruth are officers and
directors of the Company.
3. New Shareholders - those who have purchased shares from selling
shareholders.
8. 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 3,760,000 common shares. 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. ARTI 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 or other compensation, except for
reimbursement of expenses actually incurred on behalf of ARTI for such
activities. 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 ARTI, 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. Amal Rampadaruth, President, Chairman, Director and CEO and Mr. Jadoomanee
Rampadaruth, Executive Vice President, Director, COO and CFO are responsible for
the sale of the securities on behalf of ARTI. 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 loans 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 loans 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.
The Officers meet all of the following conditions:
o They primarily perform, or is intended primarily to perform at the
end of the offering, substantial duties for or on behalf of the
issuer otherwise than in connection with transaction in securities;
and
o They were not a broker or dealer, or an associated person of a
broker or dealer, within the preceding twelve months; and
o The Officers do not participate in selling and offering of
securities for any issuer more than once every twelve months other
than in reliance on paragraphs a4i or a4iii, except that for
securities issued persuant to Rule 415 under the Securities Act
1933, the twelve 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;
26
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 ARTI have violated section 15a
of the act solely by reason of their participation in the sale of securities of
ARTI 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 established an escrow account at Bank of America 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 ARTI 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.
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 ARTI. 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 ARTI 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.
27
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.
9. LEGAL PROCEEDINGS
As of the date of this prospectus, neither ARTI 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 ARTI or
any of its' officers or directors.
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Set forth below is certain information concerning our directors and executive
directors.
Name Age Position
Jadoomanee Rampadaruth 60 Chief Financial Officer, Chief Operating
Officer, Executive Vice President,
Secretary and Director currently,
resides in Europe
Amal Rampadaruth 37 Chairman of the Board of Directors,
President, Chief Executive Officer
currently resides in the US
The Directors shall be elected at 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 appointed but will only assume duty after successful
completion of this offering.
None of our Officers and Directors currently holds such responsibilities in any
reporting company at present time.
Biographies:
Jadoomanee RAMPADARUTH, currently serves as Chief Financial Officer, Chief
Operating Officer, Executive Vice President, Secretary and Director of the
Company
Since 1999, Mr. Rampadaruth has been the Chairman and CFO of the
following companies:
o 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.
o Palm Beach Life, Merrion Holdings Inc. - equity participation in
European companies and others in Las Vegas, NV.
o 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.
28
Since January 2002 he has been the Executive President, Director and
Chief Financial Officer of Space Telecom Inc. - a company duly organized
under Florida laws providing telephone services in emerging countries.
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 businesspersons 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 hotels telephone.
From 1995 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.
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.
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.
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.
Amal RAMPADARUTH, currently serves as President, Chairman, CEO and Director of
the Company.
Since 1995, 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.
Since 1999, Mr. Rampadaruth is 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; and Palm Beach Life / Merrion
Holdings Inc., equity participation in European companies and others.
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.
29
He is the Chairman of the Board of Directors and Director of Space
Telecom Inc. - a Florida orporation providing telephone services in
emerging countries.
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 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 businesspersons 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 1995 to date, he is the President/CEO of Amalgamated Resources
Group of Companies; Amalgamated Resources International Fund Corp.;
Amalgamated Resources Holding SA; Amalgamated Resources Corp.; and
Amalgamated Resources Financial Marketing Corp.
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.
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 15, 2003, 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.
- ---------------------------------------- --------------------------------- -------------------------------------------------
Name and address of beneficial owner Shares of common stock Percentage of outstanding common stock
beneficially owned
- ---------------------------------------- --------------------------------- -------------------------------------------------
Before offering After offering
of all shares
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Amal Rampadaruth
292, South County Rd, #109, Palm 10,738,140 (1) 37.4 35.7
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Jadoomanee Rampadaruth
292, South County Rd, #109, Palm 6,800,000 (2) 23.7 22.6
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Amalgamated Resources
Investments Corp. 7,700,000 (3) 26.9 25.6
292, South County Rd, #109, Palm
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Alps Resources Bankers Inc.
292, South County Rd, #109, Palm 500,000 1.7 1.6
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
30
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Amalgamated Resources
Holdings, Inc. 500,000 1.7 1.6
292, South County Rd, #109, Palm
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
Amalgamated Resources
Financial Marketing Corp. 500,000 1.7 1.6
292, South County Rd, #109, Palm
Beach, FL - 33480
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
All directors and executive
officers as a group (2 persons) 17,538,140 61.1 58.3
- ---------------------------------------- --------------------------------- --------------------------- ---------------------
(1) Includes 738,140 shares owned by Natalia Rampadaruth, who is the wife of
Amal Rampadaruth. Share ownership does not include 250,000 options
exercisable at $2.50 per share for a period of 24 months from the
effective date of the Offering.
(2) Includes 700,000 shares owned by Maya Rampadaruth, who is the wife of
Jadoomanee Rampadaruth. Share ownership does not include 250,000 options
exercisable at $2.50 per share for a period of 24 months from the
effective date of the Offering.
(3) Amal Rampadaruth is also a beneficial owner of Alps Resources Bankers Inc,
Amalgamated Resources Holdings Inc, Amalgamated Resources Investments
Corp, and Amalgamated Resources Financial Marketing Corp.
If the owners of the options exercised their rights the percentages of shares
held immediately after offering would be modified as follows:
- ---------------------------------- ---------------------------- --------------------- ------------------------------------------
Name and address of beneficial Shares beneficially owned No of options Percentage of outstanding
owner before options
- ---------------------------------- ---------------------------- --------------------- ------------------------------------------
Before offering After offering
- ---------------------------------- ---------------------------- --------------------- --------------------- --------------------
Amal Rampadaruth
292, South County Rd, #109, Palm
Beach, FL - 33480 10,738,140 250,000 37.4 35.2
- ---------------------------------- ---------------------------- --------------------- --------------------- --------------------
Jadoomanee Rampadaruth
292, South County Rd, #109, Palm
Beach, FL - 33480 6,800,000 250,000 23.7 22.2
- ---------------------------------- ---------------------------- --------------------- --------------------- --------------------
All directors and executive
officers as a group (2 persons) 17,538,140 500,000 61.1 57.4
- ---------------------------------- ---------------------------- --------------------- --------------------- --------------------
Note: In order to calculate percentage ownership of each director after
completion of 100 % of offering and exercise of option rights by the directors
we have included. Thus the percentages have been calculated on the basis of
30,500,000 shares issued and outstanding.
Class A common stock
The class A common stock outstanding does not rank for dividends. It carries
voting rights only when there is an attempt for a hostile takeover. It has no
influence on the normal management of the company. There are 5,000,000 shares of
common stock having 10 votes per share. Mr. Amal Rampadaruth and Mr. Jadoomanee
Rampadaruth have been allocated 2,500,000 shares each.
12. DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized common stock consists of 100,000,000 shares of common stock,
$.0001 par value per share, and 5,000,000 shares of Class A common stock, $.0001
par value per share. As of January 15, 2003, there were 28,600,000 common shares
issued and outstanding. There were approximately 20 holders of common stock as
of January 15,2003.
31
All the class A common stock has already been allocated. There are only two
shareholders. We are offering shares of common stock
solely for sale to the public.
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 ARTI, 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.
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.
13. 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.
14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
ARTI'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.
15. DESCRIPTION OF BUSINESS
Amalgamated Resources Technologies Inc., hereinafter referred to as ARTI, is a
company organized under the Laws of the State of Florida.
32
Its main objective is to seek new and/or existing technologies, industries and
other businesses in Europe, Russia and the rest of the World and perform a
market study for underlined products' sale in the US.
If the market study reveals a huge potential, then and only then, ARTI enters
into an agreement with the owner of the new/existing technology. Said agreement
will stipulate that ARTI will:
- Incorporate a new US Corporation that will either acquire the
existing foreign Company, or, become the subsidiary of the foreign
Company, whichever applicable.
- Help new established Corporation to manufacture (if applicable),
import, market, sell its products,
- Provide managerial services on a monthly basis, but leaving day to
day running of the Corporation to its officers,
- Locate key personnel in order to run the Corporation (if need be) -
being established that the owner of the business will either come
himself to the US in order to implement the new business' foundation
and or send appropriate engineers/scientists or other qualified
personnel in order to help establish this new business on US soil,
For providing the aforementioned services ARTI is remunerated by monthly
payments (amount to be agreed to) and a number of Shares of the new Corporation
to be agreed to thus entitling ARTI to dividends at year-end. All these new
companies will be associated to ARTI as evidenced by the number of shares held
by it. ARTI will also be entitled to a number of seats (to be agreed to) on the
Board of Directors of the various Companies.
As of the date of this Prospectus, we have reached agreement with two companies
i.e. International Motion Book Corp. (IMB), where we hold 13.33% of the voting
stock, and Industrie Caribeenne de Boulangerie Corp (ICBC), where we hold 16.6
%. We also hold 33.33 % of Imeris Inc. Upon completion of the Offering, we
intend to fund operations in two of the three companies against the shares
allocated to ARTI and begin to receive revenues. We anticipate that our revenue
will be derived from a variety of sources, including, but not limited to:
dividends, remuneration for services, sales commissions (in some cases), etc. It
should be noted that the revenues in the form of remuneration would start
immediately for services rendered to the targeted companies. The balance of the
funds will be used to target other companies, to carry out our due diligence and
establish them in the US as US companies if we are satisfied with their
potential of growth, profitability and cash flows.
The Companies
International Motion Book Corp. (IMB) has been incorporated with the object of
penetrating three different markets for services requiring practically the same
competence. viz. software wizards.
There is a growing market for the protection of Internet data and during their
transmission from one user to the other. Companies require similar services
where an internal database is shared among employees. The persons providing the
services must not only possess the required academic qualifications and relevant
experience but must also have some in-born traits of computer ingeniousity.
The second related objective is the creation of software for animation.
Responsibilities for both functions will devolve on the same group. The
personnel may be posted to one division or the other depending on the workload
and expertise of the employee.
Income will be generated during the first semester after start of operations by
the division of network security system. The animation software will generate
cash flows by the end of the first year of operation.
The third related objective is the creation of gaming software. The industry for
games software is as important as the movie industry. It is expanding and
generating more and more revenues.
Some countries have taken a lead in this market and produce top quality experts
in this field. Montreal in Canada has emerged as a leader. We shall have our
back office in Montreal while our marketing and management functions will be
carried out from our office in Palm Beach Florida.
33
Industrie Caribienne De Boulangerie Corp (ICBC), a Florida based company having
for object the production of quality breads and pastries based on traditional
methods in use in France and some Mediterranean countries and using natural
ingredients. Besides quality, all the items offered will be taste oriented
according. All commercial activities will be carried out under the fictitious
name of "The King David's French Bakery"; Fresh produce made daily with a
difference; All Kosher Products.
The King David's French Bakery is a revolutionary concept based on enhancement
of kosher food's taste by incorporating traditional French taste and products
(all products used are Kosher and organic). The preparation of the biological
kosher bread will follow the guidelines of the French organization NATURE ET
PROGRES, one of the most ancient methods of production.
The Company's incorporator, a French Baker residing in Guadeloupe, is in the
process of opening two simultaneous points of presence located in Guadeloupe and
in Palm Beach, Florida on top of "La Baguette Doree" already operating in
Guadeloupe.
The exclusive new taste of his products will be exclusively offered at these two
locations with plans to open additional locations in South Florida, Los Angeles,
New York and Montreal in the near future.
Organization of the Companies
1. International Motion Book Corp.
Division 1 - Graphics
This division will be responsible for the production of software for animation
purposes. There is a substantial demand for services geared toward animation in
advertising, multimedia and in other various fields.
Division 2- Gaming
This division will be responsible to write and develop software for real time
strategy games (RTS Games).
These two divisions will produce software for two different markets. Animation
is in high demand by multimedia while the games are written primarily for an
ever-expanding market. Our target is the Internet surfer irrespective of his
age.
The game industry is competing with the film industry as far as sales proceeds
are concerned.
The management team:
David Brunot
He will be responsible for the gaming Division. He has 5 years experience in
creative jobs, two of which in gaming. He worked as a designer in the gaming
company (DSI-Game). He has studied architecture as well as furniture design. He
is the co-manager of a multi-media company. He is zealous in creativity, very
systematic and coherent in his work. Tentative agreement has been reached with
him and this will be formalized by a binding contract after receipts of funds.
Stephane Sommer
He will be another key employee of the Gaming Division in the capacity of Lead
Programmer. He has 9 years of experience in artistic creation and 4 years in
video gaming. He has been the artistic director of a video gaming company for
two years (DSI). As such he is able to face a growing and industrialized market.
He has worked as a Free-lance for 4 years in several video gaming companies and
post-production for advertisement and movie industry (Ex-Machina, Psygnosis). He
is a designer and is qualified in automotive styling. He has worked for 1 year
with Renault. He is very creative, good in management and methodical in
production and the art of creativity.
34
As lead programmer, he will be in charge of the technological expansion, as well
as the 3D drive builder, the technical document design, the middleware,
hardware, and software study (among others).
Additional staff hiring for the pre-production (1 year)
- - Graphic artists
- - Programmers
We are planning to take 12 months to succeed in this performance. The following
tasks will be achieved as well:
- A complete game-design
- The graphic creation of the company as well as the product (logo...)
- The creation and artwork to be used in the production and communication
process
- The production's planning
- The production's funding planning
- The technical document design (production's chain)
- The hardware, software and middleware...studies
- Creation of the game to be used for the presentation in order to obtain
the adequate funding for its production
The second step is the production's funding by a game editing company, the
communication and tests to be done on time:
We are planning to achieve the production in 12 months instead of 24 months, in
order to beat any competition:
- The game-design department
- The tools department
- The graphic department
- The programming department
- The music and sound department
- Corporate department
The third step (6 months with 12 persons):
This is the last phase in which the beta and gold version will be done. The
testing phases are the most important for a hit, communication and the product's
corporate image:
- The game and Internet know-how
- The web site
- The durability of the game (possibility of group gaming)
- The testing department
- The communication strategy
- Beta and gold version of the game
- Game distribution, sales, exhibition...
- Creation and preparation of the 2nd level...
----------------------------------------------------------------------------
Phases Time required Staff
----------------------------------------------------------------------------
Elaboration 2 months 4
----------------------------------------------------------------------------
Pre-production 12 months 7
----------------------------------------------------------------------------
Production 12 months Estimate: 20
----------------------------------------------------------------------------
Test /communication 6 months Estimate: 16
----------------------------------------------------------------------------
The number of persons to be hired for the last two phases will be decided during
the pre production stage.
35
A new and modern development policy
This specific market is very competitive and does not allow any mediocrity. The
manufacturing process is almost the same. There are less persons involved but of
higher quality and there is more involvement at every level. The result is a
high quality work. In order to achieve success at this level we need to have
adequate funds and costs must be carefully monitored to avoid any cost overrun.
The employees must be given room for creativity as well as a methodic work. The
reduction of the staff implies less cost as well as a high performance team as
such the product improves in quality as well as in its innovation aspect on the
market.
Equipment
a) Computers for all the employees
b) A server for the management and the back-up of the data
c) Graphic spreadsheet, printer and scanner
d) The software for pre production for all employees
e) The middleware and kit development
To be determined during pre production for the production with the programmer
f) Office equipment
Management has decided to manufacture games for pc, which is more profitable for
all those involved. The most important savings comes from royalties. In fact no
royalties are payable to console manufacturers. It is better for us to make an
expansion on a PC base. Also the marketing is done through Internet. The market
is active for six months during which period we can make a double hit. Sales via
Internet are very important to the editors as well as the project's makers in
order to increase their profits margin.
Analysis of the Video Game Market
The video market game is worth 18 billion euros through out the world. The
growth rate on a 25 years basis is approximately of 13%. This market's expansion
is due to technological progress. The editors are unable to amortize the
investment due to new game consoles every 6 years.
The market for games is divided between consoles and computers in the ratio of
two to one. About 40 % of all games are edited by the 4 international leaders
(Nintendo, Electronic Arts, Sony and Microsoft).
50% of the staff within these companies are graphic artists, musicians;
interactive scriptwriters and the other half are computer scientists. The
creators are very important to the added value so that the end product is an
original.
In 30 years these multi media products have attracted many consumers. The
production and distribution levels are well developed on an international basis.
The new products are almost the same and released almost at the same time in
every country.
Only 4 countries have a real game industry: USA, Japan, France and Great
Britain. There are a few studios elsewhere (Canada, Sweden, Spain.).
The Editors' main activity is production (initiative, funding, copyrights),
marketing, promotion, manufacture (package), wholesale. There are about 10 big
editors throughout the world. They employ hundreds and thousands of persons in
several developed countries: Electronic Arts as well as Infogrames have
subsidiaries in over 20 countries. The consoles' manufacturers are also active
in editing. Nintendo create and edit titles such as Mario, Zelda and Pokemon.
The graphic companies, web agencies and research companies are now the main
users of these tools, which were made for video games.
The consoles and PC manufacturers are electronic conglomerates. They create a
computer system designed for videogame, have it manufactured (Microsoft) or
manufacture it. The American marketing institute NPD states that during
September a new game named `Madden NFL 2003' became a hit with 1 million copies
sold during two months of sale in the USA. `Kingdom Hearts', released mid
September is the second in this top 10 chart with 342 000 units sold. `Super
Mario sunshine' is not very competitive on the market whereas Super Mario 64 was
the most popular game from 1995-2002 in the United States with nearly 6 million
units sold.
- ------------------------------------------------------------------------------------
Title Sales Total
- ------------------------------------------------------------------------------------
Madden NFL 2003 371.000 1.301.000
- ------------------------------------------------------------------------------------
Kingdom Hearts 342.000 342.000
- ------------------------------------------------------------------------------------
Super Mario Sunshine 267.000 618.000
- ------------------------------------------------------------------------------------
Socom: U Navy Seals 236.000 397.000
- ------------------------------------------------------------------------------------
Tekken 4 202.000 202.000
- ------------------------------------------------------------------------------------
Star Fox Adventures 168.000 168.000
- ------------------------------------------------------------------------------------
Yu-Gi-Oh! Dark Duel Stories 123.000 235.000
- ------------------------------------------------------------------------------------
Animal Crossing 105.000 105.000
- ------------------------------------------------------------------------------------
Grand Theft Auto III 101.000 4.162.000
- ------------------------------------------------------------------------------------
Onimusha 2: Samurai's Destiny 97.000 181.000
- ------------------------------------------------------------------------------------
Management games on computer have increased and are very popular since Sim city
the first of this kind. Nowadays the second version of Zoo Tycoon i.e. Marine
Mania is among the best sales with 1 million copies sold but still far away from
Sims, which has been sold at 6.3 billion unit.
Internet Market
The Internet market is expanding daily and the average time spent by a surfer is
on the rise.
Resumes of the management team:
Stephane Sommer
Education:
- - Bac E and BTS mechanic and industrial automation
- - Studies at ESDI (Ecole Superieure de Design Industriel) With a specialization
in motor vehicle (Bac +5)
Experience:
- - June 1995- Oct 1995
Peugeot-Citroen (Poissy) : Automotive designer with an advanced styling
- - January 1996- June 1996
Renault : 6 months spent at the advanced styling office
- - July 1996 - Oct. 1997
SHEN (Psygnosis) : artist, infographist and 3D game video illustrator
- - Jan 1998 - May 1998
AD'HOC Design : Free-lance designer, various creation in product design.
- - June 1998 - April 1999
POST-PRODUCTION
Ex-Machina (Thomson): 3D infographist artist in ad and leisure
- - May 1999 - August 1999
PARTICUL-SYSTEM : 3D infographist, British company in Sheffield
- - Sept 1999 - Oct 2000
VISIWARE : graphist designer of various pre production
- - Dec 2000 - Oct 2002
DELPHINE SOFTWARE International: Artist director, production management of a
17 persons team.
SOFTWARE
Photoshop, Lightwave, 3DS Max, Softimage 3.8, Premiere.
36
David Brunot
Education:
Ecole d`Art Applique
Graduated at E.A.A Poitiers
Specialized in architecture and interior decoration (Bac + 4)
Professional Experience:
MULTIMEDIA AND TECHNOLOGY
- - May 2001 - Oct 2002
Designer within the video game company Delphine Software
- - Sept. 2000 - Jan 2001
D.A junior in Umanis (SSII) (web agency)
- - Nov. 1999 - Aug 2000
Co-manager of Chromo graphics (Multimedia company)
Expansion of the architecture and Web sections: pre sale, public relation,
work on various bases (CDRoms, tablets)
ANIMATED ARTIST
- - Jan - Sept 1999
Shaping and mapping of the Xcalibur character's faces, a TV serial realized
by Gribouille and broadcasted on Canal +
DESIGNER
- - Since Jan. 1999
- - Images and synthesis conception for architects
- - Creation and realization of furniture for cabinet-makers and creators
SOFTWARE
- - Photoshop, 3DS Max, Lightwave, Deep Paint, After Effects, Premiere.
Xavier Marquis
Education:
- - Bac specialized in literature
- - Deug B History at the Faculte des Lettres d'Angers ( France)
Professional Experience:
- - March 1999 - June 1999
Web designer and 2D/3D illustrator, Canal+
37
- - June 1999- Dec. 2000
VISIOGRAPH, Web designer and illustrator 2D/3D, Bronze dolphin at the
Communica festival held in June 1999
- - Dec. 2000-march 2002
CadM, lead artist 3D and Web designer illustrator
- - April 2002 - today
Delphine Software DSI
- - Infographist 3D at Studio Max
SOFTWARE
- - Shaping : 3d Studio MAX 4 & 5, Maya 4.5
- - Texture drawings : Photoshop 7, Painter 7, Deep Paint 3D
- - Web design: Dream weaver MX, Front page, Flash 5
- - Broadcast setting : Premiere, Combustion 2
GAME BACKGROUND
- - Speedball 2 ( Atari ST 520 )
- - Turrican 2 ( amiga)
- - Alien Breed ( amiga)
- - Duke Nukem
- - Command & Conquer
- - Tomb Raider
- - Half Life
- - Mankind
- - Asheron' call ( Darktide pk server)
- - Ghost reckon
- - Return to Castle Wolfenstein
- - Silent Hunter II
Division 3- Network security
This division will be the one generating income to sustain the development meet
all expenses for a period of six months is necessary before income can be
generated. Besides the salaries of the experts and the equipments - mostly
computers and related software, the funds will be used to market the services.
Origin of the demand for Internet security
The number of persons using a personal computer is increasing at an
unprecedented rate. The price of a PC is going down and it is becoming easier to
use and more consumer friendly day by day. Old people are learning how to use
the computer and at the same time very young kids are using pc for games and to
do their homework. At this rate, the use of the computer will become a natural
instinct as watching TV. At the same time e-commerce is blooming with sensitive
data traveling from one site to the other. This creates a necessity to secure
private and personal data.
Small businesses are using the same networking techniques as big companies. It
is within the reach of all small companies to network all their computers so
that information stored in one computer may be accessed by another in real time.
This has proved to be really an indispensable tool associated with cost
reduction and improved profitability.
Unfortunately the system is vulnerable to outside intrusion including commercial
and industrial espionage and also expose the business to worldwide hackers. This
is where we provide services.
38
Networking has also triggered demand for both Internet security and intranet
security.
There is not a single network, which can boast of being immune to an attack on
its security system. Sometimes the attack is accidental but most of the times it
is warranted by a third party for a host of reasons - a disgruntled employee, a
competitor or simply a hacker showing his penetration skill for his amusement
but at your expense.
There is a growing market for ensuring safe transmission of data from one user
to the other either over the Internet or on a corporate network. The persons
providing the services must not only possess the required academic
qualifications and relevant experience but must also have some in-born traits of
computer ingenuity and fully aware of the different methods used by intruders in
order to prevent access to the system.
The installation of a security software commonly known as a firewall in order to
protect the network from external attacks has proved to be inadequate.
According to statistics 60% of the intrusion result from internal sources, of
which 20 % is accidental and 40% non-accidental. 40% of intrusion and attack on
the network come from outside sources. Consequently any security system must be
established in order to provide protection both from inside unauthorized
penetration and from outside sources.
There is a dire need for companies that have the right technical know how to
tackle this problem. As the hackers are becoming more and more sophisticated and
their numbers are increasing, it has become imperative for managers of networks
to have appropriate tools to protect their data. As a result, the system has to
be regularly updated and monitored by highly competent people who are all the
times up to date with modern trends and techniques.
According to professional sources and press releases, there are not enough
companies with the right people to tackle this problem. Besides, people with the
right mind set for this type of work are not numerous as the work is very
demanding and involves high skills, long hours of work and adaptability to
changing computer technology. Personnel should be on call and accessible even
during their private time.
Companies are prepared to invest for protecting their sensitive data. The loss
of data can be so detrimental that it can cause some companies to go out of
business or to be exposed to numerous lawsuits (examples: banks, insurance
companies, research facilities, vital statistics, State files etc). Companies
with sensitive data, and they are numerous, are prepared not only to have proper
security installed in their network but to enter into contract with the right
companies for regular assessment and improvement of their network security
system and above all accessibility in case of intrusion. A 100% safe security
system does not exist. However, in case of intrusion by someone with a new
hacking technique, the company must be able to react in real time.
The problem of security has become a key issue and affects all computer users
around the world. As a result Microsoft has given itself a new mission to make
cyberspace safer.
Newspapers have been reporting regularly about hackers cracking network security
systems and accessing sensitive data.
The following extract from US NEWS illustrates the growing awareness of
companies regarding Internet security issue.
`The world's expanding connectivity, coupled with the availability of automated
hacking tools, caused network cyber attacks to jump 79 percent worldwide in the
last six months of 2001. Such breaches are increasingly expensive. Cleaning up
after calamities like the Code Red and Nimda assaults, which targeted servers
running Microsoft software, cost $13.2 Billion last year. And with the nation on
high alert after September 11, security is the new rainmaker. Corporations will
boost information technology security spending by 18 percent this year, and the
federal government will more than triple its IT security budget from $1.3
billion to over $ 4.1 billion by 2006.
39
Even critics agree Microsoft can't be expected to shoulder all the
responsibility for Cyberspace safety. `They happen to have the majority platform
out there,' says Eugene Spafford, director of the Center for Education and
Research in Information Assurance and Security at Purdue University. `But
they're not the only ones (who are) guilty. 'Spafford points to the historical
reluctance of software customers to pay extra for secure systems and a dearth of
academic research funding for the sorry state of Cyber security... `There's a
reason 14-year-olds can take down CNN,' says Al Huger, vice president of
engineering at security consulting firm Security Focus. `Building security into
the system simply hasn't been a priority.
Bug protection has become a complicated affair. `Lots of people think a firewall
provides them with all the protection they need,' says security consultant
Daniel Lewkovitzt. Network administrators, already hard pressed to keep up with
the constant barrage of patches and threats, often have scant chance to assess
additional security needs, such as anti-virus, intrusion detection, and
encryption tools. Research firm IDC predicts the overload will spur the growth
of the out-sourced-IT-Security industry, which is expected to rake in $2.2
billion in 2005, up from $720 million in 2000."
In order to provide companies with the right people we have decided to put at
their disposal all the services relating to security and networking under one
roof. This homogeneous team consists of professionals who have a wide experience
in security networking and are very sensitive to computer programming and
changing technology. Highly competent experts from different parts of the world
have accepted to join hands with our American staff to provide the professional
services required.
The following describes our procedural approach to install a security system:
1. Identification of the parts requiring security (hardware, software,
data, personnel etc).
2. Identification of likely attacks by hackers. These attacks usually
result in the following losses:
- Degradation of the network through use of viruses, Trojan
horse, worm;
- Alteration of data: during transmission, before transmission
or when it crosses certain part of the network;
- Interception of messages.
3. Designing a security system which will include both the local area
network (LAN) and the Wide area network (WAN):
- To block entry by pirates at the level of the "port"
alteration of data during transmission, before transmission
or when it crosses certain parts of the network;
- Interception of messages.
4. Designing a security system, which will include both the local area
network (LAN) and the Wide area network (WAN).
5. Designing a system, which will give optimal protection at the "port"
of the computer. The hackers use these entries predominantly to
access the server. Their techniques consist of:
- Adjoining an application on the server that is not
authorized or asking the server to perform a certain number
of operations beyond the capacity of the server,
- Use the weaknesses of certain protocols which allow them to
access the hard disc,
- Getting control of the system.
6. Perform an audit of the client's existing system in order to locate
the weaknesses of the system. This consists of an analysis of a
mass of data, e.g. login, logout, attempt to usurp the rights of
the Administrator, access to the "ports", alteration of rights,
verification by "listening" to the procedures and the connections.
7. Provide an adequate back up system, which will allow the
reconstruction of the system. The back up system must be able not
only to safeguard the data but also to allow complete recovery.
40
8. The network security does not stop with the installation of an
appropriate system. It requires constant updating, look out for
new tools, lookout for new methods used by hackers. We take care of
the follow-up.
9. We provide guidelines of measures to be taken in case of any
incident. These guidelines contain contact numbers.
10. We take all appropriate measures; we make an evaluation of the
damages, reconstruct the system and pinpoint responsibility.
11. We also provide a security system through which all incoming emails
are filtered. If a mail is infected, the server will block access
to it immediately so that the user's system is not infected. The
illustration below shows how the system works.
A simple illustration regarding emails
All the incoming mails transit in our server where they are automatically
verified and those containing a virus is eliminated. At the client's option,
almost all publicity can be eliminated. Our system does not involve any
manipulation. The machine treats all the documents directly and these incoming
messages can only be accessed by the recipient who will login his own passwords
(5 auto generated levels). Thus assuring total confidentiality.
When the server detects a problem (virus, Worm etc) on an Internet site, it will
block access to this site by all the workstations by sending an alert mail on
the browser.
When the server detects a virus or any anomaly, it will withdraw the workstation
that generates the virus from the network or it will not transmit the mail.
This particular service is in addition to the normal procedures described above.
We are going to charge a fixed amount per month per batch of email accounts for
the same user. The targeted users range from Corporations with at least one
computer to private users.
2. ICBC - King David's French Bakery
The concept
It will cater for the growing needs of people who are looking for breads and
pastries prepared by using natural ingredients and where the taste is a major
component and in some cases where products used as well as end products bearing
the "kosher" label being important.
The US has a national health problem identified as obesity and now recognized as
an illness. People are more and more conscious that their health depends mainly
on their life styles where eating habits play a major role. As a result there is
a growing awareness to eat natural products as opposed to industrially prepared
foods. Mature people want to enjoy life by selecting their foods and parents are
sensitive to what they are giving as foods to their kids. Plenty of these same
people also prefer foods with the "kosher" label.
These considerations are the motivating force behind the concept for this
venture. Besides fresh and natural ingredients we shall be using traditional
methods and appropriate equipments.
Under the commercial name of King David's French Bakery, Industrie Caribienne De
Bolangerie Corp (ICBC) will establish two pilot production units for bread using
traditional ingredients and according to preferred tastes of the target markets.
One pilot unit will be located in Palm Beach and the other in Guadeloupe. Both
units will be organized as model ventures to be developed as a franchise in a
near future.
The pilot units respond to popular demand. The market orientation for food is
leaning more and more toward natural ingredients and traditional manufacture as
opposed to mass industrial outputs.
41
Fresh produce daily with a difference
Each pilot bakery and subsequently each unit in the franchise will orient
production according to demand for specific tastes and low calorie foods. Thus
the unit in Palm Beach will target a mature segment of the population
(predominant in this area) who is leaning more and more on natural foods in
order to enjoy a healthy life style. Also, this segment of the population is
prepared even to pay a premium for guaranteed quality products with the "kosher"
label.
The preparation of the biological bread will follow the guidelines depicted by
the French organization NATURE ET PROGRES, one of the most ancient methods of
production. Demand for ancient and traditional bread is increasing in France,
Belgium, United Kingdom and the US, countries known for the consumption of
industrial breads. This demand has spurred traditional methods of production,
use of natural yeast and millstone flour.
Prospects
There are good prospects for ordinary breads, special breads such as unleavened
breads, farmhouse loaf, whole meal bread, ginger bread and bio breads. The
production of these breads requires modern equipments and high level of hygienic
conditions and above all a technical know how. However, the key to produce the
taste, besides the quality, rests with the baker and the quality of the
ingredients used.
The production will be based on a successful unit in Guadeloupe - LA BAGUETTE
DOREE. The baker-in- chief Mr. Sousseing has proved his craftsmanship as
evidenced by the success of this unit and its growing reputation. The Guadeloupe
unit will follow this pattern although more rigorous in the application of norms
of quality. Besides breads and pastries, a convenient and attractive space will
be earmarked for the clients wishing to consume the pastries or sandwiches on
the spot or simply tastes first grade coffee or afternoon tea. The unit will
also cater for groups.
Revenues will be earned from each of the production lines: traditional breads,
special breads, pastries, sandwiches, coffee and tea. This strategy will allow
the unit to remain open the whole day and seven days a week. Use of part time
workers is a key element to reduce the costs.
Both units will generate revenues within six months. The delays are due to the
lag time between order of equipments and their installation. Sales will grow
over time as customers become convinced of the recurring nature of the quality
and the use of natural ingredients
Key personnel of the Bakeries
Fabien Yannick Leibnitz
Mr. Fabien Yannick Leibnitz is the President of Industrie Caribeenne de
Boulangerie Corp. (IC BC). He specializes in projects from conception to
realization.
Education: 1991 to 2001:
Universite de Fouillole in Guadeloupe. This course is offered as a continuing
course for working students. Obtained a master's degree: Maitrise de
l'environnement physique ecologique et socioculturel Universite Antilles
Guyane, Dioploma in Structure touristique Universite Paris 13 (France) Diploma
in Psychologie appliquee
Professional Experience:
Manager of the construction projects of the [CHAMBRE DES METIERS de la MARTINIQUE]
1. Construction of green space along highway 972 in LA MARTINIQUE
2. SOGIM SARL financing and construction of houses in LA MARTINIQUE
3. LE TON EN HARMONIE, Builder, monitoring of suppliers' accounts, and
bridge financing. Construction site in GUADELOUPE, Management
42
4. ARCHIPEL ESCAPADE, Conception and management of original tourist
routes
5. SAPL SARL -Conception and realization of Luna Park (leisure park)
6. OFFICE NATIONAL DES EAUX ET FORETS, wrote a research paper in
Entomology
7. GSI SARL - organization of trade fairs
8. Organization of martial arts tournaments. Mr. Leibnitz is a martial
arts champion.
9. ARCHIPEL ESCAPADE - management, sales of tourist packages.
10. SOGIM LOISIRS - Management of short term rentals
11. 11 CARAIBE NEGOCE SARL - Sales department: Organization of sales
throughout the Caribbean islands, quality control and marketing.
Julien, Henri Sousseing
Mr. Henri Sousseing will be the COO of Industrie Caribeenne de Boulangerie Corp.
He will be responsible for both units of production. He is a qualified and
experienced bread and pastries maker. His experience and qualifications together
with his achievements in "la Baguette D'Oree", a highly successful bakery in
Guadeloupe, will ensure not only the quality of the production but mainly the
taste based on organic ingredients, (all kosher) and traditional methods of
production. His objective is to develop a unique line of Bread and pastry that
will then be franchised.
Education: 1980 - 1982 :
Institut National de la Boulangerie (INPB) Paris
C A P Boulanger patissier : Diplome en viennoiserie et glace, Diplome en Pains
Speciaux, Diplome en Pain de Tradition Francaise, Diplome sur les Produits et
Procedes de Fabrication (Diploma in Bread and Pastry)
Professional experience
- - 1998 - 2003 "Baguette doree"
His responsibilities:
As Manager of the bakery, which he established himself, he sky rocketed
sales from 3, 500 Dollars to 550,000 US Dollars. Sales by category increased
by 100%. He invented three new recipes, which increased sales by 12%.
- - 1986 to 1998 - PATISSERIE DE CAPESTERRE, he was employed as a pastry maker.
Sales went up during that period by 22%.
- - 1982 - 1986 Chez Larisse Pointe Noire, Chef Patissier:
He managed the unit with a turnover of more than 300,000 Dollars
1982 Chez Coudray, Chef Patissier:
Harmonization of all productions, conception and production of a new line of
pastries
Competition in the different markets targeted by IMB Corp. and King David's French Bakery.
Competition exists in the business providing computer security. This is a market
for professional services. It depends on the quality of the service. The IT
experts must be dedicated and be able to provide the services efficiently and
rapidly. A prompt quality service is the key to success. In order to give the
level of satisfaction required by customers, the company needs to have the right
people. WE HAVE THE RIGHT PEOPLE.
Demand far exceeds offer of right services in this field. An inadequate service
is as bad or even worse than no service at all. At least in this case the
company has not invested in the service but still looses valuable data and
related business.
43
Any implemented security system must detect an attack against it immediately and
provide a remedial action INSTANTLY. However, in cases where the attacks are
based on new ingenious methods a prompt reaction is warranted and the problem
solved or the damages halted in the next three hours. To achieve this level of
protection we make ourselves available in "up time" which means a quasi presence
of almost 99% of the time.
As far as the King David's French bakery is concerned, we do not know of any
bakery, which has the same concept.
Mission Statement:
IMB
Our aims are:
- To provide a safe environment for the storage of data;
- To provide state of the art service to prevent hacking;
- To provide an in house diagnosis and remedial action;
- To constantly monitor a client's system with a view to block access
to unauthorized persons;
- To verify the client's security system regularly in order to
protect confidentiality although a 100 % risk free system does
not exist;
- To be available practically all the time and to intervene either
remotely or on site.
ICBC
- To provide the freshest products possible,
- To provide Kosher products with taste,
- To provide a clean environment for on site consumption.
ARTI
- To target as many Companies as possible in Europe, Russia and the
Rest of the World,
- To effectively establish at least five companies during the fiscal
year on US soil,
- To help finance (if need be) some of the newly established
Companies,
- To generate enough income from these Companies in order to ensure a
high level of profitability in the form of monthly administrative
costs payments and yearend revenues derived from dividends paid
from these Companies.
PATENTS AND TRADEMARKS
At the present time, we do not own any patents or trademarks.
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.
16. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Both officers of the company are experienced in this type of business. Demand
for this type of services is high and at present ARTI has already completed
pre-evaluation of a dozen companies operating with new technologies in France
and Russia. These companies deal with industrial 3-D Decoration, Houses based on
a new process that is affordable to low income group, wireless broadband
Internet, etc. Our primary focus at this point is developing our marketing
efforts to locate the new and innovative technologies for which there is a huge
demand in the US.
Our 12 months plan of operation requires the receipt of $3,500,000 and will be
utilized as follows:
ARTI $ 1,300,000
IMB $ 1,200,000
ICBC $ 1,000,000
ARTI will continue to locate and establish new and innovative technologies in
North America. Besides monthly management fees, ARTI will be allocated a certain
number of shares in each company and a few seats on the Board of Directors; this
is negotiated on a case-by-case basis. ARTI, though not involved in the
day-to-day running of the operations of these companies, controls the
disbursement of funds. Thus, each company established here by ARTI results into
management fees and dividends.
ARTI via its Directors and associates networks in Haute Savoie, France, Geneva,
Switzerland and Samara, Russia and via its own networks that will be developed
in a near future, will conduct the preliminary analysis of potential clients. A
first selection is made and the business plans are then transferred to ARTI'S
headquarters. At that stage, the ultimate decision will be made after a careful
review of the various Companies products' potential success in North America.
Management believes that the line of business of ARTI makes it profitable in the
long run without any positive cash flows from any of the companies it has helped
establish in the US. The following forward-looking table illustrates this point.
ARTI's PROJECTED STREAM OF INCOME FROM ITS OWN ACTIVITIES
- ------------------------------ ------------------------------ -------------
Year Net Income ARTI Return
- ------------------------------ ------------------------------ -------------
Year 1 208,000 5.94%
- ------------------------------ ------------------------------ -------------
Year 2 338,000 9.66%
- ------------------------------ ------------------------------ -------------
Year 3 728,000 20.8%
- ------------------------------ ------------------------------ -------------
Year 4 1,118,000 31.94%
- ------------------------------ ------------------------------ -------------
Year 5 1,508,000 43.08%
- ------------------------------ ------------------------------ -------------
Average 780,000 22.28%
- ------------------------------ ------------------------------ -------------
The company would not require additional financing during the first twelve month
period as it expects a stream of revenues to cover whatever fluctuation in the
costs of equipments etc. It has no plan to sell additional stock to raise more
money during the twelve months following start of operations.
LIQUIDITY AND CAPITAL RESOURCES
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 of product and services that will sustain our operating expenses.
There can be no assurance that any shares of this offering will be successfully
sold, and if sold, whether 100% 0f the offering will be sold. 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 are affordable as can be judged by the numerous inquiries received by
our Officers' extensive networks in France, Switzerland and Russia.
Our management has experience in the financial management arena. Building on
this experience, we intend to offer our services to a growing number of
countries. We shall contract with experts for evaluation of technologies
proposed to us. The prior operations in which management has been involved have
no affiliation with ARTI.
Pricing will be structured to provide our services at a relatively low cost in
order to broaden the size of the industry segment targeted by us. If a
technology has a higher potential of growth and profitability we may decide to
take a bigger participation via an investment and get more involved in the
business in the US.
EMPLOYEES
We presently have no employees. A certain number of employees have been
identified for International Motion Book and KDFB. As far as the activities of
ARTI are concerned we shall work with experts on a contractual basis on a
case-by-case basis.
The level of recruitment in both IMB and ICBC is contingent upon the level of
funding received.
Both our Officers' Employment Contracts 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.
17. DESCRIPTION OF PROPERTY
We will lease office space at South County Road, Palm Beach, Florida for $4,000
per month. Upon funding, we intend to lease space to accommodate the
administrative staff of each new established company while their manufacturing
sites will be located according to their needs either in West Palm Beach or
wherever appropriate.
18. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Jadoomanee Rampadaruth, the Company's Executive Vice President, CFO, COO and
Director, is the father of Amal Rampadaruth, the Company's CEO, President.
Chairman and Director.
19. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prior to this offering, there has been no public market for the common stock of
the Company. At the present time neither any National Securities Exchange nor
the NASDAQ stock market lists the securities offered. There is no public trading
market for our common stock. There are outstanding 28,600,000 common shares as
of January 15,2003. We are currently offering 1,400,000 common shares through
this offering. We have also agreed to register an additional 3,760,000 for
selling shareholders. Since its inception, no dividends have been paid on our
common stock. We intend to retain any earnings for use in the business
activities, so it is not expected that any dividends on the common stock will be
declared and paid in the foreseeable future.
20. SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the aggregate compensation
paid or to be paid by ARTI to its Chief Executive Officer and each of the other
executive officers for services rendered in all capacities to the Company for
the fiscal year ended December 31, 2002.
44
Annual Long-Term All Other
Compensation Compensation Awards Compensation
-------------------- -------------------------------- -----------------------
Restricted
Name and Stock Stock Securities Group
Principal Fiscal Awards Awards Underlying Matching Life Ins.
Position Year Salary Bonus ($) (#) Options 401K Premium
- ----------- ----- ------ ----- ------------------------------------- ------- -------
Amal Rampadaruth 2002 $-0- -0- -0- -0- -0- -0- -0-
CEO/President
Jadoomanee
Rampadaruth 2002 $-0- -0- -0- -0- -0- -0- -0-
CFO/VP
STOCK OPTIONS
Our Board of Directors has not granted any stock options or stock appreciation
rights during our prior fiscal year or the current year to any person
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.
21. FINANCIAL STATEMENTS
Projections for IMB:
Revenues
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Security 460,000 800,000 1,215,000 2,010,000 4,020,000
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Animation 0 50,000 625,000 1,250,000 4,250,000
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Subscription 0 37,500 75,000 375,000 750,000
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Games 100,000 500,000 1,000,000 2,000,000 4,000,000
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
TOTAL 560,000 1,387,500 2,915,000 5,615,000 13,020,000
- ------------------------ --------------- ----------------- ------------------ ------------------ -------------
Expenses
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Capital Expenditure
345,000 25,000 50,000 50,000 50,000
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Payroll-Tech 900,000 990,000 1,089,000 1,197,900 1,317,690
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Payroll-Mgt 180,000 180,000 180,000 180,000 180,000
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Payroll-Adm 134,400 147,840 162,264 178,886 196,775
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Management Fees 60,000 66,000 72,600 79,860 84,847
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Depreciation 70,000 70,000 70,000 70,000 70,000
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
Operating Expenses
283,000 311,300 342,430 376,573 414,400
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
TOTAL 1,972,400 1,790,140 1,966,294 2,133,219 2,313,712
- ---------------------------- ---------------- --------------- ----------------- --------------- --------------
45
Income Statement For The Next 5 Years
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Revenues 560,000 1,387,500 2,915,000 5,615,000 13,020,000
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Operating Expenses 1,972,400 1,790,140 1,966,294 2,133,219 2,313,712
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
EBIT -1,412,400 -402,640 918,776 3,481,781 10,706,288
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Tax 0 0 0 261,787 3,747,200
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Net Profit after -1,412,400 -402,640 1,077,448 3,219,994 6,959,088
tax
- -------------------- -------------------- ------------------ ------------------ ------------------ -----------
Tax year 4 based on profits less accumulated losses and write off of allowance
on purchase of equipment.
Our provisional income statements are as follows:
1. The projections for the Palm Beach unit
These projections include sales from points of sales located in Boca Raton, Palm
Beach Gardens, Fort Lauderdale, Hollywood and Aventura - Miami.
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Turnover 600,000 690,000 745,000 795,000 825,000
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Less Cost of Sales 350,000 370,000 395,000 420,000 430,000
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Gross Profit 250,000 320,000 350,000 375,000 395,000
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Selling & Administration
99,180 115,710 119,180 122,245 126,440
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
EBITDA 150,820 204,290 230,820 252,755 268,560
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Amortization 25,000 25,000 25,000 25,000 25,000
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Earnings before Tax
125,820 179,290 205,820 227,755 243,560
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Tax 45,295 64,544 74,095 81,991 87,682
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
Earnings after Tax 80,525 114,746 131,725 145,764 155,878
- ------------------------------ ---------------- ------------------ ------------------ ------------------ -------------------
2. Guadeloupe
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Turnover 499,800 552,100 616,600 688,618 769,050
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Less Cost of Sales 256,860 292,100 327,650 382,020 454,610
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Gross Profit 242,940 260,000 288,950 306,598 314,440
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Selling and administration 149,180 165,710 169,180 172,755 176,440
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
EBITDA 93,760 94,290 119,770 133,843 138,000
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Provisions 5,000
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Amortization 30,000 30,000 30,000 30,000 30,000
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Earnings before Tax 58,760 64,290 89,770 103,843 108,000
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Tax 21,154 23,144 32,317 37,383 38,880
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Earnings after Tax 37,606 41,146 57,453 66,460 69,120
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Gov. Subsidy 25,000
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
TOTAL Earnings after Tax 62,606 41,146 57,453 66,460 69,120
- ------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
46
Combined Earnings for Bakeries
- -------------------------- ------------------ ------------------- ------------------ ------------------- -------------------
Year 1 Year 2 Year 3 Year 4 Year 5
- -------------------------- ------------------ ------------------- ------------------ ------------------- -------------------
Guadeloupe 62, 606 41,146 57,453 66,460 69,120
- -------------------------- ------------------ ------------------- ------------------ ------------------- -------------------
Palm Beach 80,525 114,746 131,725 145,764 155,878
- -------------------------- ------------------ ------------------- ------------------ ------------------- -------------------
TOTAL 143,131 155,892 189,178 212,224 224,998
- -------------------------- ------------------ ------------------- ------------------ ------------------- -------------------
Combined Earnings for all the projects after tax
- -------------------------- ------------------- ------------------ ------------------ ------------------- -------------------
Project Year 1 Year 2 Year 4 Year 4 Year 5
- -------------------------- ------------------- ------------------ ------------------ ------------------- -------------------
IMB -1,412,400 -402,640 1,077,448 3,219,994 6,959,088
- -------------------------- ------------------- ------------------ ------------------ ------------------- -------------------
Bakery 143,131 155,892 189,178 212,224 224,998
- -------------------------- ------------------- ------------------ ------------------ ------------------- -------------------
Total -1,269,269 -246,748 1,266,626 3,432,218 7,184,086
- -------------------------- ------------------- ------------------ ------------------ ------------------- -------------------
Projections for ARTI:
Revenues
- -------------------------- ---------------- ------------------- ------------------- ------------------- --------------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- -------------------------- ---------------- ------------------- ------------------- ------------------- --------------------
Establishment of
Companies - 5 per year; 750,000 750,000 750,000 750,000 750,000
3 for first yr.
- -------------------------- ---------------- ------------------- ------------------- ------------------- --------------------
Services 150,000 750,000 1,350,000 1,950,000 2,550,000
- -------------------------- ---------------- ------------------- ------------------- ------------------- --------------------
TOTAL 900,000 1,500,000 2,100,000 2,700,000 3,300,000
- -------------------------- ---------------- ------------------- ------------------- ------------------- --------------------
Expenses
- ---------------------------- -------------- ------------------- ------------------- ------------------- --------------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ---------------------------- -------------- ------------------- ------------------- ------------------- --------------------
Operating Expenses
120,000 480,000 480,000 480,000 480,000
- ---------------------------- -------------- ------------------- ------------------- ------------------- --------------------
Establishment Costs
(5x100,000) 500,000 500,000 500,000 500,000 500,000
- ---------------------------- -------------- ------------------- ------------------- ------------------- --------------------
TOTAL 620,000 980,000 980,000 980,000 980,000
- ---------------------------- -------------- ------------------- ------------------- ------------------- --------------------
Income Statement
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
Item Year 1 Year 2 Year 3 Year 4 Year 5
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
Revenues 900,000 1,500,000 2,100,000 2,700,000 3,300,000
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
Operating Costs 620,000 980,000 980,000 980,000 980,000
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
EBITDA 320,000 520,000 1,120,000 1,720,000 2,320,000
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
Tax 112,000 182,000 392,000 602,000 812,000
- ------------------------- ---------------- ------------------- ------------------- -------------------- --------------------
ARTI's share of after tax profits
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Profits after Profits after Net Income ARTI Total Profits Return
tax IMB tax Bakeries after tax
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Percentage of shares held 13.33% 16.6% 100%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Year 1 0 23,760 208,000 231,760 6.62%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Year 2 0 22,817 338,000 360,817 10.3%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Year 3 143,624 28,651 728,000 900,275 25.72%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Year 4 429,225 32,418 1,118,000 1,579,643 45.13%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Year 5 927,646 38,504 1,508,000 2,474,150 70.69%
- -------------------------- ----------------- ------------------ ------------------- ------------------- --------------------
Average yearly return on 5 years: 31.69 % not taking into consideration the
followings:
o Capital Gains derived from the sale of some of the shares of the
established companies,
o Income generated by each and every one of the other companies
established,
o Based on above, 7.91 % of net income is generated annually by the
established companies (IMBC & Bakeries). As such, we can extrapolate
and estimate net income of the other establishes companies as being:
19.75 % for 2nd year, 40 % for 3rd year, 60% for 4th year and 80%
for 5th year, {(7.91 %/2)*5 each year}
47
ARTI's anticipated returns excluding share of profits from the related companies
- ------------------------ ------------------ -------------------
Net Income ARTI Return
- ------------------------ ------------------ -------------------
Year 1 208,000 5.94%
- ------------------------ ------------------ -------------------
Year 2 338,000 9.66%
- ------------------------ ------------------ -------------------
Year 3 728,000 20.8%
- ------------------------ ------------------ -------------------
Year 4 1,118,000 31.94%
- ------------------------ ------------------ -------------------
Year 5 1,508,000 43.08%
- ------------------------ ------------------ -------------------
Average 780,000 22.28%
- ------------------------ ------------------ -------------------
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
EXAMINATION OF FINANCIAL STATEMENTS
JANUARY 22, 2003
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT.................................................F-1
FINANCIAL STATEMENTS:
Balance Sheet........................................................F-2
Statement of Operations..............................................F-3
Statement of Cash Flows..............................................F-4
NOTES TO FINANCIAL STATEMENTS..........................................F-5 - F-6
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Amalgamated Resources Technologies, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of Amalgamated Resources
Technologies, Inc. (a Florida corporation and a development stage company) as of
January 22, 2003 and the related statements of operations and cash flows from
the date of inception (February 7, 2002) to January 22, 2003. 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 Amalgamated Resources
Technologies, Inc. as of January 22, 2003 and it's operations and cash flows
from the date of inception (February 7, 2002) to January 22, 2003 in conformity
with accounting principles generally accepted in the United States of America.
/s/ Holyfield & Thomas, LLC
West Palm Beach, Florida
February 18, 2003
F-1
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF JANUARY 22, 2003
ASSETS
CURRENT ASSETS:
Cash $6,948
TOTAL ASSETS $6,948
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable to stockholders 18,473
STOCKHOLDERS' EQUITY:
Common stock; $.0001 par value,
100,000,000 shares authorized,
28,600,000 shares issued and outstanding 2,860
Class A Common stock; $.0001 par value,
having 10 votes per share, 5,000,000
shares authorized, 5,000,000 issued and
outstanding 500
Deficit incurred during the development stage (14,885)
Total stockholders' equity (deficit) (11,525)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,948
See Independent Auditor's Report and Accompanying Notes to Financial Statements.
F-2
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 7, 2002 (date of inception)
TO JANUARY 22, 2003
Revenues $
Expenses
Audit fees 2,500
Filing fees 105
Legal fees 10,000
Office expenses 2,280
Total expenses 14,885
Deficit incurred during the development stage $(14,885)
See Independent Auditor's Report and Accompanying Notes to Financial Statements.
F-3
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FEBRUARY 7, 2002 (date of inception)
TO JANUARY 22, 2003
Cash flows from operating activities $(14,885)
Cash flows from investing activities 0
Cash flows from financing activities
Issuance of common stock 3,360
Borrowing from stockholder 26,473
Repayment of loan (8,000)
Net cash provided by financing activities 21,833
Increase in cash 6,948
Cash, beginning of period 0
Cash, end of period $ 6,948
See Independent Auditor's Report and Accompanying Notes to Financial Statements.
F-4
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF JANUARY 22, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Amalgamated Resources Technologies, Inc. ("the Company") is a development stage
enterprise incorporated under the laws of the State of Florida in February 2002.
The Company's offices are in Palm Beach, Florida, its only location.
Amalgamated Resources Technologies, 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 100,000,000 shares of
$0.0001 par value common stock in February 2002. The Company has issued
28,600,000 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.
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. The Class A common stock
was issued at January 2003.
See Independent Auditor's Report.
F-5
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
AS OF JANUARY 22, 2003
3. Development Stage Operations
The Company was formed in February 2002. The Company is in the process of
raising capital, and financing for its future operations. As of January 22,
2003, the Company had 76 stockholders.
4. Note Payable to Stockholder
The Company borrowed $26,473 from Alps Resources Bankers, Inc. (a stockholder).
The note bears interest at 10% and is due in on demand.
See Independent Auditor's Report.
F-6
22. 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.
23. LEGAL MATTERS
Richard P. Greene, P.A., located in Fort Lauderdale, Florida, has passed upon
the validity of the issuance of our shares of common stock being offered.
The audited financial statements as of January 15, 2003, 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
You can find additional information about our company at WWW.ARGROUP.WS 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 ARTI 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 the Midwest Regional Office location
at Northwest Atrium Center, 500 Madison Street, Chicago, Illinois 60661-2511 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.
48
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 1,400,000 shares
jurisdictions where offers and sales
are permitted. The information contained
in this prospectus is accurate only as
of the date of this prospectus, regardless
of the time of delivery of this prospectus
or of any sale of our common stock.
Amalgamated Resources Technologies Inc.
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
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 Prospectus
a 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.
February __, 2003
49
INFORMATION NOT REQUIRED IN PROSPECTUS
ARTI'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 ARTI 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.
ARTI'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 ARTI 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.
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 ARTI:
- --------------------------------------------------- ---------------------
Item Amount
- --------------------------------------------------- ---------------------
Accounting 8,000.00*
- --------------------------------------------------- ---------------------
Attorney fees 30,000.00*
- --------------------------------------------------- ---------------------
Printing expenses - Final prospectus 5,000.00*
- --------------------------------------------------- ---------------------
Standard & Poors 4,000.00*
- --------------------------------------------------- ---------------------
Registration fees - SEC (1) 474.72
- --------------------------------------------------- ---------------------
Transfer agent 2,375.00*
- --------------------------------------------------- ---------------------
TOTAL offering expenses 50,000.00*
- --------------------------------------------------- ---------------------
* These figures represent estimations by management.
Note: ARTI is offering 1,400,000 common shares through this offering has
incurred $128.80 in registration fees; while, the selling shareholders are
offering 3,760,000 common shares, incurred $345.92 in registration fees,
that we have paid on their behalf.
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 28,600,000 shares of its common stock to the founders at $.0001
per share. The use of amount received is not considered material for disclosure.
The company has not sold any registered share.
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:
50
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
The Company sold 28,600,000 shares of its common stock at a price of $.0001 per
share to investors who are not officers, directors or affiliates of the Company.
The shares were sold pursuant to Rule 504 of Regulation D of the Securities Act
of 1933, as amended.
28. EXHIBITS
Exhibit #
3.1 Articles of Incorporation and Amendments
3.2 By-Laws
4 Instruments defining the rights of holders (refer to exhibit 3)
9 Voting Trust agreement (not applicable)
10 Material contracts
11 Statement: Computation of per share earnings (not applicable)
21 Subsidiary of the Registrant (not applicable)
23.1 Opinion Re: Legality and Consent of Experts & Counsel
23.2 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
51
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 registration
statement to be signed on its behalf by the undersigned, in the City of Palm
Beach, Florida on 20th day of February, 2003.
AMALGAMATED RESOURCES TECHNOLOGIES, INC.
/s/ Amal Rampadaruth
---------------------------
Amal Rampadaruth, CEO and President/Chairman
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, the following
persons in the capacities and on the dates stated signed this registration
statement:
/s/ Jadoomanee Rampadaruth
----------------------------
Jadoomanee Rampadaruth, CFO, COO, VP and Secretary
(Principal Accounting Officer)
