As filed with the Securities and Exchange Commission on September 8, 1999
REGISTRATION No. 333-75717
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 To
Form SB-2
Registration Statement Under the Securities Act of 1933
ENERGY LIBERTY UNLIMITED, INC.
(Name of small business issuer in its charter)
Florida 8712 59-3544104
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization Classification Code Number) Identification No.)
Charles E. Harder, Chairman
P.O. Box U
White Springs, Florida 32096
904-303-2200
(Address and telephone of principal
executive offices and principal place of business)
Lawrence A. Lempert
1601 West Sligh Ave.
Tampa, Fl. 33604
813-935-2162 FAX 813-932-4221
(Name, address and telephone of agent for service)
Approximate Date of Proposed Sales to the Public: As soon as practicable
after the 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, check the following box. /X/
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
Amount Proposed Proposed
Title of Each Class of To be Maximum Maximum Amount of
Securities to be Registered Registered Offering Price Aggregate Registration Fee (1)
Per Unit Offering Price
- --------------------------------------------------------------------------------------------------
Common Stock, no par value. 3,000,000 $ 17.00 $ 51,000,000 $ 14,178.00
- --------------------------------------------------------------------------------------------------
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 the registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
[LOGO OF ENERGY LIBERTY UNLIMITED, INC. APPEARS HERE]
3,000,000 Shares Of Common Stock
This is our initial public offering of common stock. The offering price is
$17 per share and a minimum of 100 shares must be purchased. No public market
currently exists for the shares of Energy Liberty Unlimited, Inc. (ELU) common
stock.
Investing in the common stock involves a high degree of risk. See "Risk Factors"
on page 3.
- ----------------------------------------------------------------------------------------------
Pricing Table Price Sales Proceeds To
To Public Commission ELU
- ----------------------------------------------------------------------------------------------
Per Share ..................................... $ 17.00 $ 1.70 $ 15.30
Minimum Purchase 100 Shares ................... $ 1700.00 $ 170.00 $ 1530.00
Total Maximum ................................. $ 51,000,000 $ 5,100,000 $ 45,900,000
ELU officers and directors are selling the shares without compensation.
However, the sales commission column in the above table reflects the fact that
ELU may engage one or more licensed broker dealers as selling agents for agreed
upon commissions not to exceed ten percent. The proceeds column reflects
proceeds to ELU before deducting offering expenses estimated to total $255,000
which is .5% of gross proceeds in the case of the maximum offering. There are no
arrangements to place the funds in an escrow, trust, or similar account. These
securities are being sold on a direct participation, no minimum amount basis.
The offering will end March 8, 2000 if not updated by amendment or terminated
sooner.
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.
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 the prospectus. Any representation to the contrary is a
criminal offense.
Prospectus Subject To Completion Dated September 8, 1999
Table Of Contents
Risk Factors 1
Dilution 2
Plan Of Distribution 3
Use Of Proceeds 4
Plan Of Operation 5
Description Of Business 6
More Information 10
Management 11
Remuneration Of Management 12
Security Ownership Of Management 13
Interest Of Management And Others In Certain Transactions 14
Securities Description 14
Transfer Agent 15
Legal Matters 15
Financial Statements F-1
Subscription Agreement A-1
Risk Factors
An investment in our common stock involves a high degree of risk. In
addition to the other information contained in this prospectus, you should
carefully consider the following risk factors and other information in this
prospectus before investing in our common stock.
Because we have a very limited history, we may not be able to successfully
manage our business or achieve profitability.
ELU is newly organized and dependent on the proceeds of this offering to
market its products. Limited sales started in May 1999 but may not be sufficient
to generate the funds necessary for continued operations. Accordingly, an
investment in ELU's shares is highly speculative and is only suitable for an
investor who recognizes the high risks involved, has no need for liquidity, and
who can afford a total loss of the investment.
Our success depends on our ability to retain Chuck Harder because of access to
customers.
ELU is dependent on the services of it's principal officers and directors
particularly Charles E. Harder, Chairman. Charles (Chuck) Harder hosts,
produces, and distributes a recognized consumer oriented talk radio program
whose audience is, in management's opinion, uniquely responsive to the need for
ELU's products. Since ELU is in the development stage, any loss of this key
manager and thereby loss of access to important potential customers in the
listening audience would have a materially adverse impact on ELU.
Strong likelihood that we will not receive the maximum proceeds so our equipment
purchases will be below plan.
ELU's lack of operating activity will very likely preclude the receipt of
the maximum proceeds of the offering. These proceeds are necessary to fund the
planned purchase and resale of power equipment. Since limited sales of ELU's
information package have started but are not sufficient and are not expected to
be sufficient to fund the purchase of energy independent equipment, a reduced
level of equipment purchases from planned levels is likely to occur.
No minimum offering amount may result in inadequate funding even for minimal ELU
purchases and promotion.
There is no minimum amount of offering proceeds in connection with this
offering of common stock. As a result, the total proceeds may not be sufficient
to even fund ELU's minimal plan to purchase equipment for resale to it's
customers nor fund the promotion of its current products.
This is a direct participation offering which likely will take longer and incur
more risk than an underwritten offering.
Since the offering is being made by officers of ELU rather than
underwritten by established underwriters, the offering will require additional
time and effort and may result in less success than otherwise would result.
1
We may need additional financing but it may not be available for ELU's needs.
Sufficient funding may not be available from this offering for ELU's
development and operational needs. If ELU requires additional financing, it may
seek it through bank borrowing, debt, or other equity financing, or otherwise.
Financing may not be available on acceptable terms, if at all. ELU does not
presently have a credit line available with any lending institution or equipment
supplier. Any additional equity financing may involve the sale of additional
shares of common stock on terms that have not yet been established. These terms
may or may not be more favorable than those in this offering and any future
sales of securities may or may not result in dilution to the investors in this
offering.
All of our outstanding shares are restricted from immediate resale but may be
sold into the market in the future. This could cause the market price of our
common stock to drop significantly, even if our business is doing well.
After this offering, we will have outstanding 8,000,000 shares of common
stock assuming all shares are sold. This includes the 3,000,000 we are selling
in this offering, which may be resold in the public market immediately. The
remaining 62.5%, or 5,000,000 shares, of our total outstanding shares as of June
30, 1999 will become available for resale in the public market beginning in
March, 2000. Assuming that a public market does develop, as the restriction on
resale ends, the market price could drop significantly if the holders of those
restricted shares sell them or are perceived by the market as intending to sell
them.
Dilution
As of June 30,1999, the aggregate net tangible book value (deficit) of
ELU's common stock was $(53,651). The net tangible book value (deficit) per
share as of June 30, 1999 was $(0.01). Net tangible book value per share is
calculated by dividing the tangible net worth of ELU, which is total tangible
assets less total liabilities, by the number of shares of common stock
outstanding.
Giving effect to the sale by ELU of 3,000,000 shares of common stock in
this offering at the offering price of $17.00 per share and after deducting
offering expenses, the pro forma net tangible ELU book value as of June 30,
1999, would have been $45,591,349 or $5.70 per share. This represents an
immediate increase in the net tangible book value of $5.71 to existing
stockholders and an immediate dilution of $11.30 per share to the new investors
purchasing the shares offered at the public offering price.
The following table illustrates the per share dilution to the new investors:
Maximum Subscriptions Amount
Offering price per share. $ 17.00
Net tangible book value (deficit) before offering. $(53,651.00)
Net tangible book value (deficit) per share before the offering. $ 0.01)
2
Increase in net tangible book value per share attributable to
the cash payment by new investors. $ 5.71
Pro forma net tangible book value per share after offering $ 5.70
Dilution per share to new investors. $ 11.30
The following table summarizes on a pro forma basis as of June 30, 1999, the
number of shares of common stock purchased from ELU and the total consideration
paid by existing stockholders and by new investors in this offering based on, in
the case of new investors, an offering price of $17.00 per share.
Outstanding Shares Of Total Authorized 100,000,000
At Maximum Subscription Shares Purchased Consideration
Number Percent Amount Percent
- ------------------------------------------------------------------------------------------------
Officers, & Directors: 5,000,000. 62.5% $ 500. 0%
New Investors: 3,000,000. 37.5% $45,900,000. 100%
- ------------------------------------------------------------------------------------------------
Total: 8,000,000. 100% $45,900,500. 100%
Plan Of Distribution
The shares are being offered at an offering price of $17 per share and an
investor must purchase a minimum of 100 shares. The shares are being sold on a
direct participation basis, subject to no minimum offering proceeds, up to a
maximum of 3,000,000 shares. The offering expires on March 8, 2000, unless
terminated sooner. A current prospectus will be available so long as the
offering is continued, which will be at ELU's discretion. The shares are being
offered by ELU through its Chairman, Charles Harder and President, Mark Warner
who will not receive compensation therefor.
The price at which the shares are offered has been arbitrarily set by ELU's
management, and has no relationship to the book value per share, current
earnings of ELU, or other generally accepted measurement of value. No securities
are to be offered for the account of any existing shareholder.
ELU plans to seek the support of NASD member firms which are recognized
market makers with the intention of obtaining their assistance in the creation
of a viable market in ELU's securities for the benefit of its shareholders. In
this regard, ELU may employ one or more finders to assist with introductions to
appropriate market makers, for which such finders would be paid finders fees
commensurate with current market practices. No such finders have been
identified, nor have any proposed terms of their engagement been determined.
3
Under Rule 15c2-11 under the Securities Exchange Act of 1934, broker-
dealers acting as market makers are required to have certain current information
about ELU before they can make a market and thereafter as they continue making a
market in its common stock. ELU will furnish periodically to broker-dealers the
information specified in Rule 15c2-11 if not contained in reports filed with the
Securities and Exchange Commission in order to enhance such firms' ability to
make a market in ELU's stock.
The purchase price paid by investors must be wired or mailed directly to
ELU by check or money order payable only to: "Energy Liberty Unlimited, Inc." as
stated in the enclosed subscription agreement. The proceeds from the sale of the
shares will be transmitted to an ELU bank account by noon of the business day
following receipt. The shares are offered subject to prior sale and ELU reserves
the right to reject any offer in whole or in part, or to accept subscriptions in
any order, for any reason. Within thirty days, ELU will send to subscribers by
U.S. mail signed copies of the subscription agreement and common stock
certificates.
Use Of Proceeds
ELU will use the proceeds primarily for the volume purchase and resale to
individuals of alternative energy related equipment. In light of the fact that
this is a direct participation offering and the lack of an ELU operating
history, it is likely that ELU will not receive all of the proceeds of the
offering. Therefor, the following table illustrates the use of proceeds assuming
25%, 50%, 75%, and 100% of offering proceeds are received. Dollar amounts are in
thousands.
25% of 50% of 75% of 100% of
Category Offering % Offering % Offering % Offering %
- ------------------------------------------------------------------------------------------
Offering Proceeds 12,750 25,500 38,250 51,000
- ------------------------------------------------------------------------------------------
Equipment Inventory 7,782 61 16,395 64 25,088 66 35,033 69
Administration 1,338 11 2,040 8 2,542 7 2,542 5
Commissions 1,275 10 2,550 10 3,825 10 5,100 10
Management Salaries 1,080 8 1,710 7 1,950 5 1,950 4
Sales and Promotion 456 4 1,020 4 1,530 4 2,040 4
Fulfillment Expansion 437 3 1,020 4 2,295 6 3,060 6
Offering Expenses 255 2 255 1 255 0 255 0
Engineering 127 1 510 2 765 2 1,020 2
------ --- ------ --- ------ --- ------ ---
Total 12,750 100 25,500 100 38,250 100 51,000 100
4
Additional information about the preceding table is as follows:
. Equipment inventory requirements include, for example, stocks of solar
panels, inverters, generators, batteries, water pumps, etc.
. Administration relates to middle management and clerical support for three
years and includes finance, accounting and employee benefits. It includes,
for example, three senior administrators if 25% of the offering is received
and up to five if 100% is received. No determination has been made
regarding ELU's current employee and independent contractor, and ELU has no
current plans, arrangements, commitments or understandings regarding the
future compensation of anyone.
. Commissions relates to sales commissions if ELU engages licensed broker
dealers as selling agents for the offering.
. Management salaries are executive and senior management salaries for three
years including, for example, an addition of two executive managers if 25%
of the offering is received and up to four executive managers if 100% is
received.
. Sales and promotion includes advertising, sales promotions, trade shows,
and related activities.
. Fulfillment expansion relates to increased fulfillment capability
including, for example, storage and warehouse capacity, order processing
communications equipment, phone center operators, etc.
. Offering expenses include expenses totaling approximately $255,000 for
filing, accounting and legal fees, printing, travel, postage, delivery,
miscellaneous, lodging, phone, promotion, blue sky, internet promotional
development.
. Engineering includes system design, help desk support, and new feature
development.
To the extent revenues may cover certain of the expenses shown, then such
amounts will be utilized to increase marketing and order fulfillment capability.
Pending the actual use of proceeds for the stated purposes, the proceeds will be
invested in short term, investment grade securities.
Plan Of Operation
ELU has developed an information package which describes what is involved
in making a single family residence function independently from outside
utilities. ELU has also developed house plans which incorporate independent
operation features at low cost. The plan over the next twelve months is to
promote the sale of the information package, the house plans, and the equipment
necessary for energy independent homes primarily by radio advertising. This
includes advertising on the Talk America Radio Network (Talk America) and the
American Community Oriented Radio Network (ACORN) which is a subsidiary of
Peoples Network, Inc.(PNI). ELU Chairman Chuck Harder is a founder of PNI and
hosts and produces the For The People(R) radio program which is furnished to
these radio networks in exchange for advertising time. While other promotion
methods will be used and may include print, television, and the internet, it is
management's opinion based on listener response that the audience for Talk
America and PNI is quite receptive to the products offered by ELU for energy
independent residences because the programming is extensively consumer issue and
news oriented rather than entertainment oriented.
5
It is expected that some of the purchasers of ELU's information package
will subsequently purchase house plans while others will use the information to
modify their existing residences. In both instances, ELU also plans to make
available the power equipment and components typically necessary to achieve
independence from outside utilities regardless of whether used for new
construction or existing homes.
The primary use of the proceeds of this offering is to enable ELU to buy
power related equipment and components for resale. If the maximum offering is
achieved, it is not expected that further funding will be required in the next
twelve months. However, if the maximum offering is not achieved, ELU's ability
to deliver merchandise will be restricted because less funding will be available
to buy equipment for resale. ELU operations can and are expected to be scaled up
only to the level allowed by the amount of funding received. Additional funding
may be necessary in the next twelve months depending on the results of this
offering. Revenue from the initial sales level for information packages and
house plans is expected to be sufficient to allow ELU to continue operations but
only at the current very minimal level of activity. This level will not likely
be sufficient to eliminate ELU's going concern qualification contained in its
financial statements. However, by utilizing proceeds from the offering for
advertising as well as equipment, sales are expected to increase thereby
relieving the going concern qualification.
Initially, ELU sales are being processed and filled using the services of
ACORN which has an established order processing capability in addition to its
radio network. Equipment orders also will be processed by ACORN using both their
order processing and warehouse capabilities for the equipment which ELU must
purchase in quantity. For equipment which can be shipped directly to the
customer, such as domestically manufactured equipment, only the order processing
service would be used.
In the next twelve months, management plans to:
. promote the sale of its information package, residential plans, and
equipment primarily through radio,
. negotiate equipment contracts in sufficient volume and do so promptly in
order to take advantage of the increasing demand for alternative energy
equipment,
. continue to research, through contacts in the solar alternative energy
industry, equipment components and innovations to be tested in a facility
available to ELU, with the intent of offering them to both new and existing
customers,
. when it becomes necessary, invest in increased order fulfillment capacity
such as more storage and warehouse space, order processing communications
equipment and services, computers, phones, etc.
. as necessary and feasible, increase the number of employees commensurate
with specific growth in the operations of ELU, such as order center
operators. It is anticipated that, based initially on percent of funding
received, there will be additional employees in marketing, research and
testing, and administrative support.
6
Description Of Business
Energy Liberty Unlimited, Inc. (ELU)
ELU is a new company formed to offer
. an information package about building and operating alternative energy
source homes,
. sets of engineered house plans in various styles for building such homes,
and
. the related equipment and components to enable ELU customers to construct
and equip homes which operate without dependence on commercially available
utilities including electricity and water.
ELU is a development stage company with no operating history and no
revenues through it's fiscal year ended March 31, 1999. Limited sales of the
information package started in May and through June, 357 packages had been sold.
While ELU does not yet have offices, the address is P.O. Box U, White Springs,
Fl. 32096, the telephone number is 904-303-2200, and web address is
energyliberty.com. Information contained in our web site is not part of this
prospectus.
ELU History
ELU was incorporated in Florida on December 17, 1998. Earlier in 1998, two
of ELU's founders constructed a test and demonstration facility at no cost to
ELU. The facility was used to test the basic performance of a variety of items
of power and water equipment and components made by others, coordinate the
equipment operation, and create residential designs incorporating the equipment
as well as achieve minimum cost for all components. While not designed to
generate laboratory level performance data across comprehensive samples of each
manufacturers product lines, the facility was employed to check for basic
performance, in accordance with manufacturers designed use, in order that useful
information could be gathered for inclusion in the ELU book and video
information package. Limited sales of ELU's soft cover book and video
information package started in May, 1999. The $49.95 information package
describes ELU's designs for energy self-sufficient residences and describes the
equipment necessary for achieving such self sufficiency.
Demand For Energy Self -Sufficient Affordable Residences
In the opinion of management, a substantial market exists for relatively
affordable single family residences which provide for the energy self sufficient
operation of the residences. While market data is not readily available at
reasonable cost or otherwise, it is management's experience that there exists a
significant demand for home plans and integrated utility systems which insulate
the owner from expected substantial increases in energy costs and potentially
questionable energy availability. The market includes a substantial number of
baby boomers for whom affordable retirement is becoming a significant concern
particularly given the decline in savings rates for many families and
individuals.
In addition, affordable housing is an important concern for those affected
by the significant downsizing trends experienced by numerous categories of
workers in the labor market.
7
The trends in utility costs and particularly those resulting in increases in
electricity costs are expected to contribute significantly toward increased
demand for residences which operate independently of the established power
distribution system. ELU's plans to meet the expected demand by expanding its
operation to the maximum extent allowed by the proceeds of the offering. If the
maximum offering is achieved, ELU will be able to significantly scale up its
level of operation providing information to its customers about the nature and
cost of energy self sufficient homes, sale of plans which the customer can use
to build the home, and sale of equipment needed to make the residence energy
independent.
Product
The ELU information package includes both home design information and
information about equipment manufactured by others whereby the customer may
. become informed about a diverse body of knowledge regarding the basic
function and expected cost of the essential elements of alternative utility
systems for low cost residential use,
. order plans to build a cost effective residence which functions
independently of all public and private utilities,
. use the information to modify an existing residence to function
independently, and
. contact ELU regarding availability of the equipment including, for example,
solar panels and generators.
Engineered ELU house plans are $299.95 per set. In the opinion of
management, ELU's home designs have significant economic, security and
reliability advantages over traditionally designed and equipped single family
residences. In addition to energy efficient residential designs, the ability to
operate the residence without connection to any electric, water, or other
utility provides a security and reliability advantage over traditional design
whereby the home is typically totally dependent upon the uninterrupted provision
by others of electricity, water and other utilities.
In addition to offering residential plans and related equipment
information, ELU plans to obtain for resale at competitive prices the related
equipment manufactured by others which is needed by ELU's customers for energy
independence but which may not be locally available. The equipment includes
solar panels, inverters, and batteries as well as propane powered electric
generators, wind powered generators, and elevated gravity fed water storage
equipment, as examples. In light of the large number of suppliers and the
variety of equipment and components, ELU is not dependent on one or a small
number of suppliers, and raw materials are readily available.
Competition
The industries in which ELU plans to compete include energy independent
residential living, residential home plans, and the alternative power equipment
industries - each is highly competitive. There are numerous other companies
which have substantially more resources and experience. This includes regional
and local developers, home builders, equipment suppliers, and existing energy
independent living information suppliers. While ELU is not selling building
8
materials because these materials are expected to be purchased locally by ELU
customers, the power and water equipment is available to them directly from the
manufacturers and through established distributors. A number of companies
manufacture and sell the variety of alternative energy equipment and components
ELU plans to sell to its customers, and ELU may not be able to successfully
compete based on price and availability.
However, we are not aware of any direct competitors who integrate the
systems into a complete package of information whereby the customer avoids the
extensive research required to independently obtain the information necessary to
build an energy independent residence. ELU intends to compete by offering a
unique product to an existing market of individuals and their families reached
by means of established radio networks. ELU is the only source we are aware of
which provides ready to build solar and energy efficient house plans for
$299.95.
Marketing
ELU's marketing efforts include use of the established advertising
capabilities of ACORN and it's distribution of Chuck Harder's For The People(R)
radio program both directly and by means of over one hundred radio stations
utilizing Talk America. Talk America offers talk programming twenty four hours
per day seven days per week and was founded in 1992. Mr. Harder broadcasts
consumer advocacy programming and over a number of years has established a
significant listening audience. Advertising time is utilized to reach a sizeable
and well established audience which, in the opinion of management, is an
audience particularly interested in both a cost effective and a secure
residential environment for themselves and their families.
In addition to radio, ELU plans to expand its internet web site to provide
information and methodologies whereby alternative energy equipment, components
and supplies may be efficiently purchased by means of the internet. In light of
the expected nature and sources of ELU's customers, it is not expected that ELU
will be dependent on one or a few major customers.
Distribution
ELU is utilizing the established fulfillment services of ACORN to process
orders for ELU's products. Services include providing toll-free in-bound
telephone service for the United States and Canada, order processing including
telephone, mail and fax, phone center representatives to answer questions,
credit card processing, warehousing, shipment by USPS, UPS and FedEx, and sales
tax collection and remittance.
In exchange for such services, ACORN receives a publishing industry standard 40%
of the retail price of ELU's information package which in the opinion of
management is comparable to services otherwise available. It is expected that
the initial sale of alternative energy equipment and components will also
utilize the services of ACORN. However, ACORN services and compensation for
equipment fulfillment services will be negotiated on a case-by-case basis
because of
. the variety of types of equipment,
. the numerous manufacturers, and
. the fact that in some instances the equipment may be shipped directly from
the manufacturer to the customer.
9
Intellectual Property
ELU has integrated existing residential construction technology and
alternative energy technology to create the design of the residential plans
offered to its customers. ELU owns all intellectual property created and
business and technical solutions developed are being treated as proprietary.
ELU does not hold any patents or own any licenses. ELU has a trademark
application pending for the Energy Liberty mark which was filed on April 12,
1999.
Regulatory Affairs
ELU's products are subject to regulatory review for safety, performance and
other requirements applicable to the manufacturer of the individual equipment
item. Since ELU does not modify any equipment item and each is used in the
manner intended by the manufacturer, no further regulatory review applicable to
ELU is necessary and the manufacturer's warranty, if any, continues on to the
end user. Regarding environmental laws, ELU does not anticipate significant
compliance costs or effects on its operations. However, to the extent that ELU
sales promote the use of solar power equipment, which is an integral part of the
energy independent design, the environmental effect could be beneficial to the
extent that such use diminishes any adverse effects of fossil fuel consumption.
Employees
ELU has one employee and one of the founders working on an independent
contractor basis.
Description Of Property
ELU's property consists of office equipment, and in order to conserve
limited resources, ELU does not yet have offices; however, a minimal office
facility is provided by a stockholder at no cost to ELU.
More Information
ELU has filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act with respect to this offering.
The prospectus does not contain all the information set forth in the
registration statement and the exhibits and schedules, as permitted by the rules
and regulations of the Commission. For further information about us and the
securities offered, reference is made to the registration statement. The
registration statement and exhibits and schedules may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Information on
the operation of the Public Reference Room may be obtained by calling 1-800-SEC-
0330. Copies of materials may be obtained at prescribed rates by writing to the
Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Our registration statement as well as any reports to be
filed under the Exchange Act can also be obtained electronically after we have
filed these documents with the Commission through a variety of databases,
including among others, the Commission's Electronic Data Gathering, Analysis and
Retrieval program, Knight-Ridder Information, Inc., Federal Filing/Dow Jones,
Lexis/Nexis and the Commission's web site (http://www.sec.gov).
10
Prior to this offering, ELU has not been a reporting company under the
Securities Exchange Act of 1934. After this offering, ELU intends to furnish to
its stockholders annual reports, which will include financial statements audited
by independent accountants, and other periodic reports as ELU may determine to
provide or as may be required by law.
Management
Directors
At the present time, the ELU board of directors consists of seven members:
Charles E. (Chuck) Harder, age 55, is a founder and Chairman of ELU. He started
his career in radio broadcasting at age 14 and later worked at commercial radio
stations in Chicago, Tampa, and New York. He worked on-air for NBC Talknet and
founded the Sun Radio Network and PNI. Mr. Harder also has a background in
franchising, retailing and distribution as a result of his relationship with
Freedom Satellite Systems of Tampa, Florida which had owned or franchised 16
retail stores in the mid 1980's. He has worked with consulting engineers to
design, build and rebuild radio broadcast stations. He oversaw the rebuilding of
WNSI, a 50,000 watt four tower AM station in Jacksonville, Alabama, has rebuilt
WFVR, a 5,000 watt station in Valdosta, Georgia, and built a 2,100 watt facility
in the Orlando, Florida area. Further, he planned and supervised construction of
a satellite uplink licensed in 1998. Mr. Harder has also hosted a national TV
show and currently produces and hosts the For The People(R) daily radio talk
show syndicated by PNI on Talk America and to ACORN for distribution to other
affiliated radio stations. Mr. Harder also spent much of his time in the study
of alternative and solar energy starting with the time period during which
President Carter began an initiative for the development and implementation of
alternative energy. Mr. Harder founded the non-profit PNI in 1987 and has been
President of PNI since 1987.
Mark V. Warner, age 54, is a founder and President of ELU. From 1996 to 1998,
Mr. Warner was Controller for the United Broadcasting Network, and from 1989 to
1996 was a financial consultant to small businesses. From 1984 to 1989 he was
Vice President, Finance for Mnemonics, Inc. a computer systems government
contractor. Mr. Warner was a Branch Chief with the National Aeronautics & Space
Administration (NASA) at the Kennedy Space Center from 1980 to 1984. From 1977
to 1980 he was Vice President, Finance for the Rovac Corporation, a publicly
held research and development company. From 1967 to 1968, Mr. Warner was a
financial analyst with the Securities & Exchange Commission (SEC). On military
leave from the SEC, Mr. Warner served from 1968 to 1970 with the U.S. Army
Finance Corps as a data processing instructor, and returned to the SEC as a
senior financial analyst from 1970 to 1977. Mr. Warner received his B.S. in
Business Administration from the University of Florida, Gainesville, Florida and
his MBA in Finance and Investments from the George Washington University,
Washington, D.C.
Douglas 0. Perreault, CPA, age 36, is a founder and director of ELU. In April
1997, Mr. Perreault began serving as the chief executive officer and the chief
financial officer of ACORN, a wholly-owned subsidiary of PNI. From April 1995 to
April 1997, Mr. Perreault served as chief financial officer of TRADEex
Electronic Commerce Systems, Inc., a multi-national provider of commerce
management solutions software.
11
From November 1987 to April of 1995, Mr. Perreault was employed in the public
practice of accounting. Mr. Perreault has been a certified public accountant
since October 1984 and has been a member of both the American Institute of CPA's
and the Florida Institute of CPA's for over ten years. Mr. Perreault received
his B.S. in Accounting from the State University of New York, College of Arts
and Science, Plattsburgh, and is currently following the MBA program at the
University of South Florida.
Dianne Mayfield-Harder, age 54, is a founder, board member and Secretary
Treasurer of the company and has been Secretary Treasurer of PNI since 1987.
Mrs. Mayfield-Harder was educated in accounting and worked for years for the
Tampa Sports Authority which operates the Tampa Stadium in Florida. Mrs.
Mayfield-Harder had several duties including the accounting for three
municipally owned golf courses. In 1987 she became comptroller for Sun Radio
Network.
In 1989 she was financial manager for PNI, which grew from a garage in Cedar
Key, Florida to operating the historic three story 40 room Telford hotel which
housed the PNI broadcast center in White Springs, Florida. Her duties included
oversight of a 4.9 million dollar yearly budget and approximately 100 employees.
Dianne Mayfield-Harder is the wife of Charles Harder and they have been married
for 16 years.
Daniel Donaldson, age 44, is a founder and director of ELU and is responsible
for the construction and testing of the test facility used by ELU. He served in
the U.S. Army Corps of Engineers, and for the last 25 years has worked in all
phases of the construction industry from residential to commercial. For 4 1/2
years he was the building construction manager at the Telford Hotel in White
Springs, Fl. of which two years were also devoted to hosting the Helpful
Handyman radio talk show. In 1988 Mr. Donaldson established The Creative
Carpenter interior trim and cabinet business and is currently taking classes to
acquire his state certified builders contractors license.
Darlene Stewart, age 36, is a board member and since 1997 has been in charge of
graphic design and production with ACORN. From 1990 to 1996 she was employed by
PNI as general manager at the Telford Hotel. She has completed college graphics
and art courses and was in charge of start-up of several departments at PNI
including a national newspaper, hotel, and dining operations. Subsequently she
worked for other firms including Super-Cuts haircutting system and located and
opened retail hair salons for Super-Cuts. Her skills are in graphics and
presentation of products and services for retailing and presentation to the
public. Darlene Stewart is the daughter of Dianne Mayfield-Harder.
Noel Jacoby, age 57, is a board member and a Professor of Economics at Lake City
Community College, Lake City, Florida. He has taught for twenty five years and
also has had many other positions in the private sector in real estate,
insurance, production, publication and purchasing.
Executive Officers
At present, the ELU executive officers consist of its directors, mentioned
above, Charles E. Harder, Chairman, Mark V. Warner, President, and Dianne
Mayfield-Harder, Secretary Treasurer. It is anticipated that additional officers
will be added.
12
Remuneration Of Management
The ELU current policy is that directors serve without compensation.
However, in the future, it may be in ELU's best interests to compensate
directors in a manner that will attract the most qualified people to serve on
the board. To date the officers have served without compensation and none is
being accrued. ELU's management will determine when it is in the best interest
of the company to compensate officers.
Persons Nominated Or Chosen To Become Directors
At the present time, no other person, other than those listed above, has
been chosen or nominated to become a director of ELU.
Certain Legal Proceedings
ELU is not aware of any legal proceedings within the last five years
against any director, officer, significant employee, or candidate for any such
position involving a petition under the Bankruptcy Act or any State insolvency
law or of any receiver, fiscal agent or similar officer appointed by a court for
the business or property of such person or any partnership in which he was
general partner or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing; nor is ELU aware of any of the
above-mentioned persons being convicted in a criminal proceeding.
Security Ownership Of Management
The following table sets forth certain information regarding beneficial
ownership of ELU's common stock as of June 30,1999 with respect to each director
and officer and any person who is known to ELU to be the beneficial owner of
five percent or more of ELU's outstanding common stock. Also set forth in the
table is the beneficial ownership of all shares held by all directors and
officers, individually and as a group.
- ---------------------------------------------------------------------------------------
Name And Address Shares Owned Percent Percent After
Of Owner Before Offering Maximum Offering
- ---------------------------------------------------------------------------------------
Charles E. Harder 1,000,000 20.0% 12.5%
Director, Chairman
P.O. Box U
White Springs, Fl 32096
Dianne Mayfield-Harder 1,000,000 20.0% 12.5%
Director, Secretary, Treasurer
P.O. Box U
White Springs, Fl 32096
Mark V. Warner 1,000,000 20.0% 12.5%
Director, President
P.O. Box U
White Springs, Fl 32096 13
13
Douglas Perreault 1,000,000 20.0% 12.5%
Director
P.O. Box U
White Springs, Fl 32096
Dan Donaldson 1,000,000 20.0% 12.5%
Director
P.O. Box U
White Springs, Fl 32096
- ---------------------------------------------------------------------------
Subtotal (5 officers and directors) 5,000,000 100.0% 62.5%
New Shareholders 3,000,000 -- 37.5%
From Offering
- ---------------------------------------------------------------------------
Total 8,000,000 100.0% 100.0%
Within the knowledge of ELU, no other person holds or shares the power to
vote or direct the voting of securities described. No other person holds shares
or the power to vote 5% or more of ELU's voting securities.
Interest Of Management And Others In Certain Transactions
All transactions during the previous two years and any presently proposed
transaction to which ELU is a party in which any person having a relationship
with ELU has a direct or indirect material interest are the following
transactions, and no others: ELU's fulfillment services are initially being
provided by ACORN which is a wholly owned subsidiary of PNI. ACORN provides
telephone and mail order support services to PNI and others as well as owns
radio stations and satellite uplinks to distribute the For The People(R) program
produced by PNI. PNI is a not-for-profit organization founded by Charles
Harder, Chairman of ELU. In the opinion of management, the services provided ELU
by ACORN are comparable to those provided by others in the fulfillment services
industry as well as comparable to service provided to other customers of ACORN.
ELU expects to establish policies including related party transaction policies
the material terms of which have not yet been determined: however, such policies
are expected to include provision for the avoidance of any conflict of interest.
Securities Description
Common Stock
ELU is authorized to issue up to 100,000,000 shares of common stock with no
par value. 5,025,000 shares have been issued to seven record and beneficial
holders as of the date of this prospectus. Each holder of common stock is
entitled to one vote for each share held of record on each matter to be voted on
by stockholders, except as otherwise may be provided by law.
14
Subject to any preferences which may be granted to the holders of preferred
stock, if ever authorized by the shareholders, which ELU could choose to issue
in the future, each holder of common stock is entitled to receive ratably
dividends as may be declared by the board of directors from funds legally
available. No dividends have been paid to date.
Upon liquidation or dissolution of ELU, the holders of common stock are
entitled to share ratability in all the assets after payment of all creditors,
subject to the rights of any preferred stock then outstanding. The common stock
does not have cumulative voting rights or preemptive purchase rights.
The shares hereby offered, when paid for, will be fully paid and non-
assessable.
Preferred Stock
ELU is not currently authorized to issue preferred stock and currently has
no plans to issue shares of preferred stock.
Shares Available For Future Sale
On completion of this offering and assuming all shares are sold, we will
have 8,025,000 shares of common stock outstanding. The 3,000,000 shares sold in
this offering will be freely tradable if a market for our stock develops by
persons other than our officers, directors or other affiliated parties. All of
the remaining 5,025,000 shares are "restricted securities" under Rule 144 of the
Securities Act of 1933. Ordinarily, under Rule 144, a person holding restricted
securities for a period of one year may, every three months, sell in ordinary
brokerage transactions an amount equal to the greater of one percent of a
company's then outstanding common stock or the average weekly trading volume
during the four calendar weeks prior to the person's sales. Rule 144 also
permits sales by a person who is not an affiliate of the company and who has
held the shares for two years without any quantity limitation. .
Any substantial future sales of our common stock under Rule 144 or any
other applicable exemption under the Securities Act of 1933 could have a
depressive effect on the market price of our stock and could impair our ability
to raise additional capital through the sale of our equity securities.
Transfer Agent And Registrar
ELU currently acts as its own transfer agent and registrar for its common
stock.
Legal Matters
Lawrence A. Lempert has provided a legal opinion as to certain matters
relating to the issuance of the shares pursuant to applicable securities laws.
This prospectus has been prepared by ELU's management and its advisers.
15
INDEX TO FINANCIAL STATEMENTS
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
March 31, 1999
Report of Independent Certified Public Accountants F-2
Financial statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
FINANCIAL STATEMENTS (Unaudited)
Financial statements:
Balance Sheet (Unaudited) F-9
Statement of Operations (Unaudited) F-10
Statement of Changes in Stockholders' (Deficit) (Unaudited) F-11
Statement of Cash Flows (Unaudited) F-12
Notes to Financial Statements (Unaudited) F-13
F-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Energy Liberty Unlimited, Inc.
White Springs, Florida
We have audited the accompanying balance sheet of Energy Liberty Unlimited, Inc.
(a development-stage company) as of March 31, 1999 and the related statements of
operations, stockholders' (deficit) and cash flows for the period from December
17, 1998 (date of inception) through March 31, 1999. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Energy Liberty Unlimited, Inc.
(a development-stage company) as of March 31, 1999; and the results of its
operations, changes in its stockholders' (deficit) and its cash flows for the
period from December 17, 1998 (date of inception) through March 31, 1999; in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has a net capital deficiency as of March 31,
1999 and has no ongoing revenue producing business operations. These factors
raise substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 1. The
financial statements do not include any adjustments that may result from the
outcome of this uncertainty.
Schumacher and Associates, Inc.
Certified Public Accountants
12,835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
May 6, 1999
F-2
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
BALANCE SHEET
March 31, 1999
ASSETS
Current Assets
Cash $ 231
Other 500
--------
Total Current Assets 731
Computer equipment net of accumulated
depreciation of $129 1,418
Deferred offering costs 12,500
Other 250
--------
TOTAL ASSETS $ 14,899
========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses $ 7,865
Due to related party 33,846
--------
Total Current Liabilities 41,711
--------
TOTAL LIABILITES 41,711
--------
Commitments and contingencies (Notes 1,2, and 4) -
Stockholders' (Deficit):
Common stock, no par value,
100,000,000 shares authorized
7,000,000 shares issued and 5,000,000 shares outstanding 500
(Deficit) accumulated during development-stage (27,312)
--------
TOTAL STOCKHOLDERS' (DEFICIT) (26,812)
--------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ 14,899
========
The accompanying notes are an integral part of the financial statements.
F-3
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF OPERATIONS
From December 17, 1998 (date of inception) through March 31, 1999
Revenue $ -
----------
Expenses
Depreciation 129
Contract services 16,066
Salaries and payroll taxes 7,792
Other 3,325
----------
27,312
----------
Net (Loss) $ (27,312)
==========
Per Share $ ( .01)
==========
Weighted Average Shares Outstanding 5,000.000
==========
The accompanying notes are an integral part of the financial statements.
F-4
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
From December 17, 1998 (date of inception) through March 31, 1999
Common Stock Common Stock Accumulated Total
-----
No./Shares Amount (Deficit)
---------- ------ ---------
Balance at
December 17, 1998 - $ - $ - $ -
Common stock issued
for cash, at
$.0001 per share 5,000,000 500 - 500
Net loss for the
period ended
March 31, 1999 - - (27,312) (27,312)
--------- ----------- ---------- --------
Balance 5,000,000 $ 500 $ (27,312) (26,812)
========= =========== ========== ========
F-5
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CASH FLOW
Cash flows from Operating Activities:
Net (loss) $(27,312)
Depreciation 129
Increase in accounts payable and
other accrued expenses 7,865
Net Cash (Used In) Operating Activities (750)
--------
(20,068)
--------
Cash Flows from Investing Activities:
Acquisition of computer equipment (1,547)
--------
Net Cash (used in) Investing Activities (1,547)
--------
Cash Flows from Financing Activities:
Common stock issued 500
Advances from related parties 33,846
Deferred offering costs incurred (12,500)
--------
Net Cash Provided by Financing Activities 21,846
--------
Increase in Cash 231
Cash, Beginning of Period -
--------
Cash, End of Period $ 231
--------
Interest Paid $ -
========
Income Taxes Paid $ -
========
The accompanying notes are an integral part of the financial statements.
F-6
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(1) Summary of Accounting Policies
------------------------------
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying financial statements follows:
(a) Organization and Description of Business
----------------------------------------
Energy Liberty Unlimited, Inc. (Company) was incorporated
under the laws of Florida on December 17, 1998.
The Company was formed for the purpose of marketing a book,
video and construction plans for single family residences,
incorporating a design and equipment which allows the
facility to function without connection to the electrical
power grid or utility.
The Company is considered to be a development-stage company
since principal planned operation has not yet commenced.
The Company has selected March 31 as its fiscal year end.
(b) Per Share Information
---------------------
Per share, information is based upon the weighted average
number of shares outstanding during the period.
(c) Use of Estimates in Preparation of Financial the Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could
differ from those estimates.
(d) Going Concern
-------------
As of March 31, 1999, the Company has a net capital
deficiency and has no ongoing revenue producing business
operation. These factors raise substantial doubt about its
ability to continue as a going concern. If the Company does
not establish revenue producing business operations or
obtain additional financing, the Company may be unable to
continue as a going concern. The financial statements do not
include any adjustments that may result from the outcome of
this uncertainty. Management as disclosed below, is
attempting to raise additional capital through a public
stock offering.
(e) Deferred Offering Costs
-----------------------
Costs related to the proposed public offering of stock,
described below, are being capitalized. If the offering is
successful, the costs will be charged against the proceeds
of the offering. If the offering is not successful, the
costs will be charged to operations.
F-7
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(1) Summary of Accounting Policies
------------------------------
(f) Treasury Stock
--------------
The Company has issued 2,000,000 shares of its stock to
itself for no consideration. The Company's Board of
Directors may issue these shares to employees or independent
contractors at their discretion for future services that may
be provided to the Company. The shares are accounted for as
treasury stock and are not considered to be outstanding at
March 31, 1999.
(g) Computer Equipment
------------------
Computer equipment is carried at cost. Depreciation is
provided on a straight-line basis over the three year
estimated useful life of the equipment.
(2) Related Party Transactions
--------------------------
As of March 31, 1999, the Company had $33,846 payable to a related
party for advances received. The balance bears interest at 1% over the
prime rate, is uncollateralized, and is due in January 2000.
The Company uses office facilities provided by a stockholder at no
cost to the Company. No expense related to this use of an office has
been provided in the financial statements since it was determined to
be immaterial.
(3) Income Taxes
------------
As of March 31, 1999, the Company has approximately 27,000 of net
operating loss carryovers expiring in year 2018; available to offset
future taxable income, if any. As of March 31, 1999, the Company had
deferred tax assets of approximately $5,400 related to the net
operating loss carryovers. A valuation allowance has been provided for
the total amount since the amounts, if any, of future revenues
necessary to be able to utilize the carryovers are uncertain.
(4) Proposed Public Offering
------------------------
The Company is proposing to offer 3,000,000 shares of its common stock
to the public at $17.00 per share.
F-8
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
BALANCE SHEET (Unaudited)
June 30, 1999
ASSETS
Current Assets
Cash $ 1,200
Inventory 12,019
--------
Total Current Assets 13,219
Computer equipment net of accumulated
depreciation of $258 1,289
Deferred offering costs 14,178
Other 250
--------
TOTAL ASSETS $ 28,936
========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses $ 14,875
Due to related party 53,534
--------
Total Current Liabilities 68,409
--------
TOTAL LIABILITES 68,409
--------
Stockholders' (Deficit):
Common stock, no par value,
100,000,000 shares authorized
7,000,000 shares issued and 5,000,000 shares outstanding 500
(Deficit) accumulated during development-stage (39,973)
--------
TOTAL STOCKHOLDERS' (DEFICIT) (39,473)
--------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ 28,936
========
F-9
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended June 30, 1999
Sales $ 7,406
Cost of Sales 924
---------
6,482
Expenses
Depreciation 129
Contract services 900
Salaries and payroll taxes 11,924
Other 6,190
---------
19,143
Net (Loss) $ (12,661)
=========
Per Share $ (.002)
=========
Weighted Average Shares Outstanding 5,000.000
=========
F-10
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT) (Unaudited)
Three Months Ended June 30, 1999
Common Stock Common Stock Accumulated
No./Shares Amount (Deficit) Total
---------- ------ --------- -----
Balance at
March 31, 1999 5,000,000 $ 500 $ (27,312) $ (26,812)
Net loss for the
period ended
June 30, 1999 - - (12,661) (12,661)
--------- -------- --------- ---------
Balance 5,000,000 $ 500 $ (39,973) (39,973)
========= ======== ========= =========
F-11
ENERGY LIBERTY UNLIMITED, INC.
(a development-stage company)
STATEMENT OF CASH FLOW (Unaudited)
Cash flows from Operating Activities:
Net (loss) $(12,661)
Depreciation 129
Increase in accounts payable and
other accrued expenses 7,010
Inventory and other (11,519)
--------
Net Cash (Used In) Operating Activities (17,041)
--------
Cash Flows from Financing Activities:
Advances from related parties 19,688
Deferred offering costs incurred (1,678)
--------
Net Cash Provided by Financing Activities 18,010
--------
Increase in Cash 969
Cash, Beginning of Period 231
--------
Cash, End of Period $ 1,200
========
Interest Paid $ -
========
Income Taxes Paid $ -
========
F-12
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1999
(1) Basis of Presentation
---------------------
The interim financial statements presented have been prepared by the
Company without audit and, in the opinion of the management, reflect all
adjustments of a normal recurring nature necessary for a fair statement of
the results of operations for the three months ended June 30, 1999, the
financial position at June 30,1999 and the cash flows for the three months
ended June 30, 1999. Interim results are not necessarily indicative of
results for a full year.
The interim financial statements and notes are condensed and do not contain
certain information included in the annual financial statements and notes
of the Company. The interim financial statements and notes included herein
should be read in conjunction with the year-end financial statements and
notes included herein.
(2) Revenue Recognition
-------------------
The Company recognizes revenue upon shipment of product.
(3) Inventories
------------
Inventory at June 30, 1999 consists of finished books.
F-13
SUBSCRIPTION AGREEMENT
INVESTOR SUBSCRIPTION AGREEMENT FOR ENERGY LIBERTY UNLIMITED, INC.
Persons interested in purchasing shares of the Common Stock of Energy Liberty
Unlimited, Inc. must return this completed Subscription Agreement along with
their wire transfer, check or money order for their total payment, payable only
to: ENERGY LIBERTY UNLIMITED, INC., P.O. Box U, White Springs, Florida 32096. If
and when accepted by Energy Liberty Unlimited, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is $1,700
(100 shares). An accepted copy of this Agreement will be returned to you as your
receipt, and a stock certificate will be issued to you shortly thereafter.
Method of Payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "ENERGY LIBERTY UNLIMITED, INC.".
I hereby irrevocably tender this Subscription Agreement for the purchase of
_________ shares at seventeen dollars ($17.00) per share. With this subscription
Agreement, I tender payment in the amount of $__________ ($17.00 per share) for
the shares subscribed.
In connection with this investment in the Company, I represent and warrant as
follows:
(a) Prior to tendering payment for the shares, I received the Company's final
Prospectus dated ( ).
(b) I am a bona fide resident of the state of ________________________.
Please issue the shares which I am purchasing as follows:
1. INDIVIDUAL(S)--if more than one owner, please issue as follows:
- - --- Tenants-in-Common (all parties must sign--each investor has an undivided
interest)
- - --- Joint Tenants with Right of Survivorship (all parties must sign joint
ownership)
- - --- Minor with adult custodian under the Uniform Gift to Minors Act in your
state (the minor will have sole beneficial ownership)
_________________________________ _________________________________
INVESTOR NO. 1 (PRINT NAME ABOVE) INVESTOR NO. 2 (PRINT NAME ABOVE)
Street (residence address) Street (residence address)
__________________________________ _________________________________
__________________________________ _________________________________
City State Zip City State Zip
__________________________________ _________________________________
Home Tele. Business Tele. Home Tele. Business Tele.
__________________________________ _________________________________
FAX e-mail FAX e-mail
__________________________________ _________________________________
Social Security Number Social Security Number
__________________________________ _________________________________
Signature Date Signature Date
ACCEPTED BY: ENERGY LIBERTY UNLIMITED, INC.
___________________________________________________________________
Name, Title Date.
A-1
SUBSCRIPTION FORM FOR OTHER THAN INDIVIDUAL
Purchasers of shares of the Common Stock of Energy Liberty Unlimited, Inc. for
other than individuals must complete this form for the proper entity that will
hold title to the shares. Send this completed Subscription Agreement along with
the proper wire transfer, check or money order for the total payment, payable
only to: ENERGY LIBERTY UNLIMITED, INC., P.O. Box U, White Springs, Florida
32096. If and when accepted by Energy Liberty Unlimited, Inc., (the "Company"),
this Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is
seventeen hundred dollars ($1700.) (100 shares). An accepted copy of this
Agreement will be returned to you as your receipt, and a stock certificate will
be issued to you shortly thereafter.
Method of payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "Energy Liberty Unlimited, Inc".
Entity:
[ ] Corporation (authorized agent of corporation must sign)
[ ] Existing Partnership (at least one partner must sign)
[ ] Trust (all trustees must sign)
______________________________________________
Name of Entity
______________________________________________
Authorized Agent (print name above)
______________________________________________
Title of Authorized Agent
______________________________________________
Social Security or Federal Identification Number of Entity
______________________________________________
Street (business address) or address of Registered Agent
______________________________________________
City State Zip
______________________________________________
Business Tele. or Home Tele. of Registered Agent of Entity
______________________________________________
FAX e-mail
The undersigned acknowledges under the penalties of perjury that the foregoing
information is true, accurate, and complete.
______________________________________________
Signature Date
______________________________________________
For a Trust, all Trustees must sign. Add a line for each to the Right of form.
ACCEPTED BY: ENERGY LIBERTY UNLIMITED, INC.
______________________________________________
Name, Title Date.
A-2
- --------------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to provide any
information or make any representations about Energy Liberty except the
information or representations contained in this prospectus. You should not
rely on any additional information or representations if made.
This prospectus does not constitute an offer to sell, or a solicitation to
buy any securities:
- except the common stock offered by this prospectus;
- in any jurisdiction in which the offer or solicitation is not authorized;
- in any jurisdiction where the dealer or other salesperson is not
qualified to make the offer or solicitation;
- to any person to whom it is unlawful to make the offer or solicitation;
or stock
- to any person who is not a United States resident or who is outside the
jurisdiction of the United States.
The delivery of this prospectus or any accompanying sale does not imply
that:
- there have been no changes in the affairs of Energy Liberty after the
date of this prospectus; or
- the information contained in this prospectus is correct after the date of
this prospectus.
Investment in small businesses involves a high degree of risk, and investors
should not invest any funds in this offering unless they can afford to lose
their entire investment. See "Risk Factors" for certain substantial risks to
investors. In making an investment decision investors must rely on their own
examination of the issuer and the terms of the offering, including the merits
and risks involved.
ELU is a development stage company.
- --------------------------------------------------------------------------------
3,000,000 shares
[LOGO OF ENERGY LIBERTY]
common stock
______________
prospectus
______________
September 8, 1999
-------------------------------------
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Company's Articles of Incorporation and Bylaws contain provisions
indemnifying its directors and officers to the extent permitted by the Act.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act"), as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution
Filing Fee - SEC $ 14,178.00
Listing Fee -- Stock Exchange, If Qualified 5,000.00
Transfer Agent & Registrar's Fees 5,000.00
Accounting Fees 20,000.00
Legal Fees 25,000.00
Printing Expense 30,000.00
Indemnification Insurance Premium 10,000.00
Miscellaneous 15,000.00
Travel 20,000.00
Postage & Delivery 10,000.00
Lodging 10,000.00
Telephone 10,000.00
Internet Development 28,000.00
State Blue Sky Preparation and Filing Fees 30,000.00
Promotion and Advertising 22,822.00
Total $255,000.00
Item 26. Recent Sales of Unregistered Securities
In the past three (3) years the Company's sales of securities not registered
under the Securities Act of 1933 were as follows:
(a)
DATE SHARES/Common Stock $/SH TOTAL
3/15/99 5,000,000 $.0001 $ 500.00
8/4/99 12,500 $ 1.00 $12,500.00
8/11/99 12,500 $ 1.00 $12,500.00
TOTAL 5,025,000 $25,500.00
(b) March 1999, five officers and directors in connection with formation of
the company. August 1999, Acclaim Publishing Company, 12,500 shares and Alan
Ferris, 12,500 shares.
(c) March 1999, cash $500.00. August 1999, cash $25,000. No underwriting
discounts or commissions.
(d) March 1999, shares issued in connection with formation of the company.
August 1999, shares issued upon acceptance of offer to purchase made by two
accredited investors. These issuances were effected without registration under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
the exemption from registration contained in Section 4(2) of the Securities Act.
II-1
Item 27. Exhibits
+3i. Articles of Incorporation
+3ii. Bylaws
+4. Common Stock voting rights per Articles of Incorporation Page 1,
incorporated by reference from Exhibit 3i
+5. Opinion of Lawrence A. Lempert as to the legality and non-accessibility
of the securities being distributed
23a(2). Consent of Schumacher & Associates, Inc.
+23b. Consent of Lawrence A. Lempert (filed as part of Exhibit 5)
+27. Financial Data Schedule
+ Previously Filed
Item 28. Undertakings
(A) To the extent the registrant is registering securities under Rule 415 under
the Securities Act of 1933, the registrant will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement; and notwithstanding the forgoing, 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 a
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the plan
of distribution.
(2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(B) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act"), as amended, may be permitted to Directors, Officers
and controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that
claims for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a Director, Officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such Director, Officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
II-2
Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned in the Town of White
Springs, State of Florida on September 8, 1999.
ENERGY LIBERTY UNLIMITED, INC.
/s/ Charles E. Harder
-------------------------------------
BY: Charles E. Harder
Chairman, Chief Executive Officer
Pursuant to the Securities Act of 1933, this Registration Statement was signed
by the following persons in the capacities and on the dates stated.
- -------------------------------------------------------------------------------
Signature Title Date
- -------------------------------------------------------------------------------
/s/ Charles E. Harder Director, Chairman, September 8, 1999
- --------------------------------
Charles E. Harder Chief Executive
Officer
/s/ Mark V. Warner Director, President, September 8, 1999
- ---------------------------------
Mark V. Warner Chief Financial and
Principal Accounting
Officer
/s/ Douglas O. Perreault Director. September 8, 1999
- ---------------------------------
Douglas O. Perreault
/s/ Dianne A. Mayfield-Harder Director, Secretary, September 8, 1999
- ---------------------------------
Dianne A. Mayfield-Harder Treasurer
/s/ Daniel Donaldson Director. September 8, 1999
- ---------------------------------
Daniel Donaldson
/s/ Darlene Stewart Director. September 8, 1999
- ---------------------------------
Darlene Stewart
/s/ Noel Jacoby Director September 8, 1999
- ---------------------------------
Noel Jacoby
II-3
INDEX TO EXHIBITS
Exhibit Title of Exhibit
Number
3i. Articles of Incorporation.......................................... B/
3ii. By Laws, as amended................................................ B/
23a(2). Consent of Schumacher & Associates, Inc............................ A/
5. Opinion and Consent of Lawrence A. Lempert as to the legality and
non-assessability of the securities being distributed........................ B/
Footnotes:
A/ Filed herewith
B/ Previously filed
II-4