As filed with the Securities and Exchange Commission on May 28, 2004
REGISTRATION NO. 333-XXXXX
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMENDMENT NO.
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INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(Name of Small Business Issuer in its Charter)
Delaware 6770 20-0369985
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(State or jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or Classification Code Number) Identification Number)
organization)
33 Easton Avenue, Waterbury, Connecticut 06704
(203) 753-9500
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(Address and telephone number of principal executive offices)
33 Easton Avenue, Waterbury, Connecticut 06704
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(Address of principal place of business or intended principal place of business)
Kenneth V. Holloway, President
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
33 Easton Avenue, Waterbury, Connecticut 06704
(203) 753-9500
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(Name, address and telephone number of agent for service)
Copies of communications to:
SHUSTAK JALIL AND HELLER
Attention: Richard S. Heller, Esq.
400 Park Avenue, New York, NY 10022
Telephone: (212) 688-5900
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
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 the delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of shares to be Amount to be offering price aggregate offering Amount of
registered registered per share (1) price registration fee
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Common stock, par value
$.001 per share to be
sold by us 2,800,000 $1.00 $2,800,000.00 $354.76
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Class A Common stock, to
be sold by certain
selling stockholders 210,000 $1.00 $210,000.00 $26.61
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TOTALS 3,010,000 $3,010,000.00 $381.37
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(1) Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
2
SUBJECT TO COMPLETION, DATED MAY 28, 2004
INITIAL PUBLIC OFFERING
PROSPECTUS
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
2,800,000 SHARES OF COMMON STOCK TO BE SOLD BY US
210,000 SHARES OF COMMON STOCK TO BE SOLD BY SELLING STOCKHOLDERS
$1.00 PER SHARE
INTERNATIONAL COMMERCE DEVELOPMENT CORP. is a development stage company
organized in the State of Delaware to pursue a business combination in the
mining industry.
This is our initial public offering, and no public market currently
exists for our shares. The offering price may not reflect the market price of
our shares after the offering.
We are offering these shares through our officers and directors who
must sell a minimum of 400,000 shares and up to a maximum of 2,800,000 shares.
We will not pay commissions on stock sales. Current shareholders are registering
210,000 shares for resale to the public. We will not receive any proceeds from
the sale of the selling stockholders' shares.
This offering will expire 180 days from the date of this prospectus.
The offering may be extended for an additional 90 days at our sole election.
There is no closing date for the selling shareholders.
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THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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Offering Information
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UNDERWRITING
DISCOUNTS AND PROCEEDS TO PROCEEDS TO SELLING
PRICE TO PUBLIC COMMISSIONS COMPANY (1) STOCKHOLDERS (2)
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Common stock per share $1.00 $0.00 $2,725,000.00 $210,000.00
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Total $1.00 $0.00 $ 2,725,000.00 $210,000.00
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(1) Reflects deductions for offering costs, including printing, filing, legal,
accounting and transfer fees estimated at $75,000.00 to be paid from the
proceeds of the offering.
(2) Proceeds to be obtained by the selling stockholders will not inure to our
benefit. Selling stockholders will be responsible for any related
commissions, taxes, attorney's fees and related charges in connection with
the offer and sale of their shares. The selling stockholders may sell their
common stock through one or more brokers/dealers, and such brokers/dealers
may receive compensation in the form of commissions.
The date of this prospectus is May , 2004
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TABLE OF CONTENTS
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Page
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PART I
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PROSPECTUS SUMMARY ......................................................... 2
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The Offering ............................................................... 2
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Limited state registration ................................................. 3
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Summary financial information .............................................. 3
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RISK FACTORS ............................................................... 4
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YOUR RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419 .................................................. 8
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USE OF PROCEEDS ............................................................ 10
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DETERMINATION OF OFFERING PRICE ............................................ 11
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DILUTION ................................................................... 11
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SELLING SECURITY HOLDERS ................................................... 12
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PLAN OF DISTRIBUTION ....................................................... 13
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LEGAL PROCEEDINGS .......................................................... 17
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS ............... 17
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ............. 18
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DESCRIPTION OF SECURITIES .................................................. 19
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INTEREST OF NAMED EXPERTS AND COUNSEL ...................................... 20
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DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES .......................................................... 21
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ORGANIZATION WITHIN LAST FIVE YEARS ........................................ 21
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DESCRIPTION OF BUSINESS .................................................... 21
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION .................. 27
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DESCRIPTION OF PROPERTY .................................................... 28
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ............................. 28
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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ................... 28
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EXECUTIVE COMPENSATION ..................................................... 30
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FINANCIAL STATEMENTS ....................................................... F-1
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES ................................................... 31
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PART II
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INDEMNIFICATION OF DIRECTORS AND OFFICERS .................................. 32
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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION ................................ 32
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RECENT SALES OF UNREGISTERED SECURITIES .................................... 32
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EXHIBITS ................................................................... 33
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UNDERTAKINGS ............................................................... 33
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SIGNATURES ................................................................. 34
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN OUR AFFAIRS SINCE THE DATE
HEREOF; HOWEVER, ANY CHANGES THAT MAY HAVE OCCURRED ARE NOT MATERIAL TO AN
INVESTMENT DECISION. IN THE EVENT THERE HAVE BEEN ANY MATERIAL CHANGES IN OUR
AFFAIRS, A POST-EFFECTIVE AMENDMENT WILL BE FILED. WE RESERVE THE RIGHT TO
REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SHARES
OFFERED.
UNTIL 90 DAYS AFTER THE DATE WHEN THE FUNDS AND SECURITIES ARE RELEASED
FROM THE ESCROW ACCOUNT, ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES,
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 TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
PROSPECTUS SUMMARY
We are a blank check company subject to Rule 419 of Regulation C under
the Securities Act of 1933, as amended. The net offering proceeds, after
deduction for offering expenses and the securities to be issued to investors
must be deposited in an escrow account. While held in the escrow account, the
deposited securities may not be traded or transferred. Except for an amount up
to 10% of the deposited funds otherwise releasable under Rule 419, the deposited
funds and the deposited securities may not be released until an acquisition
meeting certain specific criteria has been consummated and a sufficient number
of investors reconfirm their investment in accordance with the procedures set
forth in Rule 419.
We were organized as a vehicle to acquire or merge with a business or
company operating in the mining industry. We have no present plans, proposals,
agreements, arrangements or understandings to acquire or merge with any specific
business or company nor have we identified any specific company for
investigation and evaluation for a merger with us.
Since our organization, our activities have been limited to the sale of
initial shares for our organization and preparation in producing a registration
statement and prospectus for our initial public offering. We intend to have the
acquired business entity become the operational core of our company following
the offering. We maintain our office at 33 Easton Avenue, Waterbury, Connecticut
06704. Our phone number is (203) 753-9500.
2
THE OFFERING
Securities offered 2,800,000 shares of common
stock, $.001 par value, being
offered at $1.00 per share.
Common stock outstanding 210,000 shares
prior to the offering
This offering will expire 180 days from the
date of this prospectus. The offering may be
extended for an additional 90 days at our
sole election.
LIMITED STATE REGISTRATION
Initially, our securities may be sold in a limited number of states
pursuant to registration filings in those states. Therefore, you may only resell
your shares in those states where the securities have registered or are eligible
for and exemption from registration.
SUMMARY FINANCIAL INFORMATION
The table below contains certain summary historical financial data for
the Company. The historical financial data for the period from inception on
October 30, 2003 through March 31, 2004 has been derived from our audited
financial statements appearing elsewhere in this prospectus and should be read
in conjunction with those financial statements and notes thereto.
March 31, 2004
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INCOME STATEMENT:
Revenue $ --
Net Income (loss) $ (12,730)
BALANCE SHEET (at end of period):
Total Current Assets $ 22,270
Total Assets $ 42,270
Total Liabilities $ 2,500
Total Shareholders Equity $ 39,770
PER SHARE:
Net Loss per share -- basic and fully dilated $ (0.10)
Weighted average number of shares of
common stock outstanding during period 127,403
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RISK FACTORS
THE SECURITIES OFFERED ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK.
The securities offered should be purchased only by persons who can
afford to lose their entire investment. Each prospective investor should, prior
to purchase, consider very carefully the following risk factors among other
things, as well as all other information set forth in this prospectus.
YOU MAY NOT HAVE ACCESS TO YOUR FUNDS FOR UP TO 12 MONTHS FROM THE DATE OF THIS
PROSPECTUS; IF RETURNED YOU WILL NOT GET INTEREST ON YOUR FUNDS.
If we are unable to locate an acquisition candidate meeting these
acquisition criteria, you will have to wait 12 months from the date of this
prospectus before a proportionate portion of your funds are returned, without
interest. You will be offered return of your proportionate portion of the funds
held in escrow only upon the reconfirmation offering required to be conducted
upon execution of an agreement to acquire an acquisition candidate which
represents 80% of the maximum offering proceeds.
IF A SUFFICIENT NUMBER OF INVESTORS DO NOT RECONFIRM THEIR INVESTMENT, THE
BUSINESS COMBINATION WILL NOT BE CLOSED AND YOU WILL NOT BE ISSUED YOUR
SECURITIES.
A business combination with an acquisition candidate cannot be closed
unless, for the reconfirmation offering required by Rule 419, we can
successfully convince you and a sufficient number of investors representing 80%
of the maximum offering proceeds elect to reconfirm your investments. If, after
completion of the reconfirmation offering, a sufficient number of investors do
not reconfirm their investment, the business combination will not be closed. In
such event, none of the securities held in escrow will be issued and the funds
will be returned promptly to you on a proportionate basis.
We will not purchase the assets of any company which is beneficially
owned by any of our officers, directors, promoters, affiliates or associates.
DUE TO A LACK OF FINANCING, THE COMPANY WILL BE AT A COMPETITIVE DISADVANTAGE.
The Company is and will continue to be an insignificant participant in
the business of seeking mergers or joint ventures with and acquisitions of small
private entities. A large number of established and well-financed entities,
including venture capital firms, are active in mergers and acquisitions of
companies that may be desirable target candidates for the Company. Nearly all
such entities have significantly greater financial resources. In addition, the
Company will compete in seeking merger or acquisition candidates with numerous
other small public companies.
IF THE OFFERING CLOSES AT THE MINIMUM LEVEL, WE MAY BE REQUIRED TO SEEK
ADDITIONAL FUNDING.
If this offering yields only the minimum level of investment, we may
need to seek additional funding. Such funding may be in the form of debt or
equity, if obtainable, and may not be available on terms favorable to the
Company.
4
THE COMPANY HAS NOT IDENTIFIED A POTENTIAL MERGER CANDIDATE AS OF YET.
Investors in the Company's securities will not be able to evaluate the
merits or risks of a potential merger candidate before they invest, nor can they
be certain that a merger candidate will be found. The Company has no
arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, any entity, and has had no
discussions of any kind with any potential merger, joint venture or acquisition
candidate. The Company may not be successful in identifying and evaluating
suitable business opportunities or in concluding a business combination.
The Company has entered into a consulting agreement with a company in
Ghana to assist in identifying potential acquisition candidates, coordinating
the re-licensing and permit process and hiring experienced professionals to run
the mine.
THE COMPANY HAS BEEN IN THE DEVELOPMENT STAGE SINCE INCEPTION AND HAS NO
OPERATIONS TO DATE.
Other than issuing shares to our officers and directors and conducting
a limited private placement pursuant to Regulation D, Rule 506 under the
Securities Act of 1933, as amended, the Company never commenced any operational
activities. The Company may not be able to negotiate a business combination on
terms favorable to the Company. Investors will, however, have a chance to
evaluate a merger candidate before a proposed merger occurs pursuant to Rule
419. At this time, investors will determine whether they wish to leave their
investment or receive their investment back. If they choose not to invest, they
may still loose ten percent (10%) of their initial investment.
POTENTIAL DETERMINATION BY THE SEC THAT THE COMPANY IS AN INVESTMENT COMPANY
COULD CAUSE SIGNIFICANT REGISTRATION AND COMPLIANCE COSTS UNDER THE INVESTMENT
COMPANY ACT OF 1940.
In the event the Company engages in business combinations that result
in the Company holding passive investment interests in a number of entities, the
Company could be under regulation of the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment company and
could be expected to incur significant registration and compliance costs. The
Company has obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject the Company to
material adverse consequences.
A SUCCESSFUL MERGER OR ACQUISITION OF THE COMPANY WITH ANOTHER BUSINESS ENTITY
MAY RESULT IN A SIGNIFICANT SHIFT IN CONTROL FROM THE COMPANY'S MANAGEMENT TO
THE MERGING COMPANY'S MANAGEMENT.
A business combination involving the issuance of the Company's common
stock may result in shareholders of a private company or foreign company
obtaining a controlling interest in the Company. Any such business combination
may require Mr. Holloway to sell or transfer a portion of the Company's common
stock held by him. A change in control of the Company
5
ultimately could result in removal of Mr. Holloway and a corresponding reduction
in or elimination of his participation in the future affairs of the Company.
WE MAY EXPERIENCE MANAGEMENT ISSUES BECAUSE OF GEOGRAPHICAL CHALLENGES.
Our president and director, Kenneth V. Holloway, is based in the United
States. Our chief financial officer and director, Kwabena Mensah and our
director, Amponsah Tawiah, are both located in Ghana. While the Company's
operations are expected to benefit from Messrs. Mensah and Tawiah's proximity to
the target acquisition, their distance from Mr. Holloway may prove problematic.
If so, we will need to address management and personnel changes at that time.
Such disruptions may have a negative impact on conducting the acquisition and
facilitating any transfer of authority from the target company to us as well as
the smooth operation of the acquisition.
MANY BUSINESS DECISIONS MADE BY THE COMPANY CAN HAVE MAJOR TAX CONSEQUENCES AND
ASSOCIATED RISKS THAT COULD HURT THE VALUE OF AN INVESTMENT IN THE COMPANY.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination the Company may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the target entity.
However, there can be no assurance that such business combination will meet the
statutory requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes that may have an adverse effect on both parties to the transaction.
THE COMPANY'S SECURITIES MAY BE LIMITED TO ONLY A FEW MARKETS BECAUSE OF STATE
BLUE SKY LAWS.
Because the securities registered hereunder have not been registered
for resale under the blue sky laws of any state, and the Company currently plans
to register or qualify its shares only in Connecticut and New York, the holders
of such shares and persons who desire to purchase them in any trading market
that might develop in the future, should be aware that there may be significant
state blue sky restrictions upon the ability of new investors to purchase the
securities which could reduce the size of the potential market. As a result of
recent changes in federal law, non-issuer trading or resale of the Company's
securities is exempt from state registration or qualification requirements in
most states. However, some states may continue to attempt to restrict the
trading or resale of blind-pool or blank-check securities. Accordingly,
investors should consider any potential secondary market for the Company's
securities to be a limited one.
THE COMPANY'S OFFERING PRICE IS ARBITRARY AND THE VALUE OF THE COMPANY'S
SECURITIES MAY NEVER ACTUALLY REACH THE OFFERING PRICE.
The offering price of the shares bears no relation to book value,
assets, earnings, or any other objective criteria of value. It was arbitrarily
determined by the Company. There can be no assurance that, even if a public
trading market develops for the Company's securities, the shares will attain
market values commensurate with the offering price. The shares are offered by
the
6
Company on a direct participation offering basis. No individual, firm or
corporation has agreed to purchase or take down any of the offered shares. The
Company cannot and does not make any statement guaranteeing that shares will be
sold. If the minimum number of shares are not sold, the Company's offering will
be nullified resulting in the return of the investors' money.
WE MAY FAIL IN OUR EFFORTS TO IDENTIFY AN ACQUISITION THAT FALLS WITHIN THE
GUIDELINES SET FORTH BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") FOR
PROVABLE AND PROBABLE RESOURCES.
The SEC has established strict guidelines for what constitutes "Proven
and Probable" reserves. Management has determined to follow those parameters in
identifying suitable acquisition candidates. The target entities will have to
demonstrate proven reserves. This standard will diminish the field of eligible
candidates as well as increase the costs of acquisition.
WE MAY CONFRONT GREATER THAN EXPECTED ACQUISITION COSTS.
We will only consider acquisition targets that have probable or proven
reserves as set forth in the Securities Act Industry Guide number 7. This may
increase the cost of entry into the industry. Our capital base from our private
placement and this public offering may be insufficient to cover the costs of
acquisition plus start-up until the revenue base from mining operations
commences. We may need to seek additional sources of funding or methods of
financing and at terms that are not favorable to the company.
WE MAY EXPERIENCE PROBLEMS WITH FOREIGN GOVERNMENTS IN TRANSFERRING LEASE RIGHTS
OR OBTAINING LICENSING OR PERMITS FOR THE COMPANY.
While the consulting company we engaged in Ghana has assured us that we
will have limited or no trouble transferring the necessary licensing, rights and
permits to our company, we have no guarantee of such success. We may ultimately
need to expend additional monies beyond those budgeted for that purpose. This
will delay our progress in commencing operations and impinge on our working
capital.
PURCHASING A MINE THAT HAS PROVEN OR PROBABLE RESERVES IS NOT A GUARANTOR OF THE
MINERAL CONTENT WITHIN SUCH MINE.
We have instructed the consulting company in Ghana to assist in
identifying an acquisition target that has Proven or Probable reserves as set
forth in the Securities Act Industry Guide number 7 for registrants engaged in
mining operations. However, we have no assurance that the consulting company
will be able to identify an acquisition candidate that meets our criteria or, if
successful, the mine will actually yield measurable results.
7
YOUR RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
DEPOSIT OF OFFERING PROCEEDS AND SECURITIES
Rule 419 requires that offering proceeds, after deduction for
underwriting commissions, underwriting expenses and dealer allowances, if any,
and the securities purchased by you and other investors in this offering, be
deposited into an escrow or trust account governed by an agreement which
contains certain terms and provisions specified by Rule 419. Under Rule 419, the
funds will be released to us and the securities will be released to you only
after we have met the following three basic conditions:
o First, we must execute an agreement for an acquisition of a
business or asset that will constitute our business and for which
the fair value of the business or net assets to be acquired
represents at least 80% of the maximum offering proceeds, but
excluding underwriting commissions, underwriting expenses and
dealer allowances, if any.
o Second, we must file a post-effective amendment to the registration
statement which includes the results of this offering including,
but not limited to, the gross offering proceeds raised to date, the
amounts paid for underwriting commissions, underwriting expenses
and dealer allowances, if any, amounts disbursed to us and amounts
remaining in the escrow account. In addition, we must disclose the
specific amount, use and appropriation of funds dispersed to us to
date, including, payments to officers, directors, controlling
shareholders or affiliates, specifying the amounts and purposes of
these payments, and the terms of a reconfirmation offer that must
contain conditions prescribed by the rules. The post-effective
amendment must also contain information regarding the acquisition
candidate and business, including audited financial statements.
o Third, we will mail to each investor within five business days of a
post-effective amendment, a copy of the prospectus together with
all amendments.
After we submit a signed representation to the escrow agent that the
requirements of Rule 419 have been met and, after the acquisition is closed, the
escrow agent can release the funds and securities.
Accordingly, we have entered into an escrow agreement with Jersey
Transfer & Trust Company, 201 Bloomfield Avenue, Verona, New Jersey 07044, which
provides that the proceeds are to be deposited into the escrow account
maintained by the escrow agent promptly upon receipt. While Rule 419 permits 10%
of the funds to be released to us prior to the reconfirmation offering, we do
not intend to release these funds. The funds and any dividends or interest
thereon, if any, are to be held for the sole benefit of the investors and can
only be invested in bank deposit, money market mutual funds or federal
government securities or securities for which the principal or interest is
guaranteed by the federal government.
Prescribed Acquisition Criteria
Rule 419 requires that, before the funds and the securities can be
released, we must first execute an agreement to acquire a candidate meeting
certain specified criteria. The agreement must provide for the acquisition of a
business or assets for which the fair value of the business
8
represents at least 80% of the maximum offering proceeds. The agreement must
include, as a precondition to its closing, a requirement that the number of
investors representing 80% of the maximum offering proceeds must elect to
reconfirm their investment. For purposes of the offering, the fair value of the
business or assets to be acquired must be at least $2,240,000 (80% of
$2,800,000).
Post-Effective Amendment
Once the agreement governing the acquisition of a business meeting the
required criteria has been executed, Rule 419 requires us to update the
registration statement with a post-effective amendment. The post-effective
amendment must contain information about the proposed acquisition candidate and
their business, including audited financial statements, the results of this
offering and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The reconfirmation offer must include certain prescribed
conditions which must be satisfied before the funds and securities can be
released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Under Rule 419, the terms of the reconfirmation offer
must include the following conditions:
o The prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the escrow account within 5
business days after the effective date of the post-effective amendment.
o Each investor will have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to notify
us in writing that the investor elects to remain an investor.
o If we do not receive written notification from any investor within 45
business days following the effective date, the proportionate portion
of the funds and any related interest or dividends held in the escrow
account on such investor's behalf will be returned to the investor
within 5 business days by first class mail or other equally prompt
means.
o The acquisition will be closed only if a minimum number of investors
representing 80% of the maximum offering proceeds equaling $2,240,000
elect to reconfirm their investment.
o If a closed acquisition has not occurred by __________ ___, 2005 (12
months from the effective date of this initial prospectus), the funds
held in the escrow account shall be returned to all investors on a
proportionate basis within 5 business days by first class mail or
other equally prompt means.
Release of Securities and Funds
The funds will be released to us, and the securities will be released
to you, only after:
9
o The escrow agent has received a signed representation from us and any
other evidence acceptable by the escrow agent that:
o We have executed an agreement for the acquisition of an
acquisition candidate for which the fair market value of the
business represents at least 80% of the maximum offering proceeds
and has filed the required post-effective amendment.
o The post-effective amendment has been declared effective.
o We have satisfied all of the prescribed conditions of the
reconfirmation offer.
o The closing of the acquisition of the business with a fair value
of at least 80% of the maximum proceeds.
USE OF PROCEEDS
The gross proceeds of this offering will be at least $400,000 and at
most $2,800,000. While Rule 419, prior to the reconfirmation of the offering
permits 10% of the funds ($40,000 -- $280,000) to be released from escrow to us,
we do not intend to request release of these funds. This offering is contingent
on our officers and directors selling a minimum of 400,000 shares within 180
days of the date of this prospectus. The Company, in its sole discretion, may
extend the offer for an additional 90 days to reach that goal. If subscriptions
exceed the amount being offered, these excess subscriptions will be promptly
refunded without deductions for commissions or expenses. Accordingly, we will
receive these funds in the event a business combination is closed in accordance
with Rule 419.
Under Rule 419, after the reconfirmation offering and the closing of
the business combination, and assuming the successful completion of this
offering, at least $400,000 and up to $2,800,000, plus any dividends received,
but less any amount returned to investors who did not reconfirm their investment
under Rule 419, will be released to us.
Amount Percent
Offering Expenses(1) $75,000 2.68%
Other acquisition costs (2) $1,500,000 53.57%
Working Capital(3) $1,225,000 43.75%
Total(4) $2,800,000 100%
(1) Offering costs include filing, printing, legal, accounting, transfer agent
and escrow agent fees. The offering expenses will be paid from the proceeds
of the offering.
(2) We will need to purchase mining equipment upon our successful completion of
an acquisition. We anticipate an allocation of funds for this purpose.
10
(3) The proceeds for working capital will be devoted to the acquisition and any
remaining balance will be used for operating expenses.
(4) All offering proceeds will be held in escrow pending a business
combination. We will not request a release of 10% of these funds under Rule
419.
The proceeds received in this offering will be put into the escrow
account pending closing of a business combination and reconfirmation. Such funds
will be in an insured depository institution account in either a certificate of
deposit, interest bearing savings account or in short term government securities
as placed by Jersey Transfer & Trust Company as escrow agent.
DETERMINATION OF OFFERING PRICE
The offering price is not based on the Company's net worth, total asset
value, or any other objective measure of value based upon accounting
measurements. The offering price was determined by the Company and is based upon
the amount of funds needed by the Company to start-up the business, and the
number of shares that the initial stockholders were willing to sell.
DILUTION
The difference between the initial public offering price per share of
common stock and the net tangible book value per share after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share of common stock is determined by dividing our net tangible book value
(total tangible assets less total liabilities) by the number of shares of common
stock outstanding.
As of March 31, 2004, our net tangible book value was $19,770 or $0.09
per share of common stock. Net tangible book value represents the amount of our
total assets, less any intangible assets and total liabilities. After giving
effect to the sale of the 2,800,000 shares of common stock offered through this
prospectus (at an initial public offering price of $1.00 per share), and after
deducting estimated expenses of the offering, our adjusted pro forma net
tangible book value as of March 31, 2004, would have been $2,744,770 or $0.91
per share. This represents an immediate increase in net tangible book value of
$0.82 per share to existing shareholders and an immediate dilution of ($0.09)
per share to investors in this offering. The following table illustrates this
per share dilution:
Public offering price per share $1.00
Net tangible book value per share before offering $19,770
Pro-forma net tangible book value per share after offering $2,744,770
Increase per share attributable to new investors $0.82
Pro-forma dilution per share to new investors ($0.09)
11
Number of Shares Before Money Received For Shares Net Tangible Book Value Per
Offering Before Offering Share Before Offering
-------- --------------- ---------------------
210,000 $52,500 $0.09
Total Number of Shares After Total Amount Of Money
Offering* Received For Shares
--------- -------------------
3,010,000 $2,852,500
Pro-Forma
Pro-Forma Net Tangible Book Value Per Net Tangible Book Value Per Increase Per Share Attributed To
Share After Offering Share Before Offering Shares Offered Hereby
-------------------- --------------------- ---------------------
$0.91 $0.09
$0.82
Public Offering Price Per Pro-Forma Net Tangible Book Value Per Pro-Forma Dilution to Public
Share Share After Offering (Your Dilution)
----- -------------------- ---------------
$1.00 $0.91 ($0.09)
* Used to reflect full dilution to new shareholders upon immediate completion
of this offering.
As of the date of this prospectus, the following table sets forth the
percentage of equity to be purchased by investors in this offering compared to
the percentage of equity to be owned by the present stockholders, and the
comparative amounts paid for the shares by the investors in this offering as
compared to the total consideration paid by our present stockholders.
- --------------------------------------------------------------------------------
Percentage of Total
Shares Purchased Equity Consideration
- --------------------------------------------------------------------------------
New Investors 2,800,000 93% $2,800,000
- --------------------------------------------------------------------------------
Existing shareholders 210,000 7% $52,500
- --------------------------------------------------------------------------------
SELLING SECURITY HOLDERS
The following table sets forth (i) the number of outstanding shares
beneficially owned by the selling stockholders prior to the offering; (ii) the
aggregate number of shares offered by each such stockholder pursuant to this
prospectus; and (iii) the amount and the percentage of the class to be owned by
such security holder after the offering is complete.
- ------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
NAME OF BENEFICIAL OWNER OF BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED OWNED AFTER THE
COMMON STOCK OFFERED * BEFORE THE OFFERING SHARES OFFERED AFTER THE OFFERING OFFERING
- ------------------------------------------------------------------------------------------------------------------
Kenneth Holloway 10,000 0 10,000 0**
- ------------------------------------------------------------------------------------------------------------------
Jerry Stefaniuk 100,000 100,000 0 0
- ------------------------------------------------------------------------------------------------------------------
Darrell Sullivan 100,000 100,000 0 0
- ------------------------------------------------------------------------------------------------------------------
Total 210,000 210,000 10,000 0
- ------------------------------------------------------------------------------------------------------------------
* All stockholders' addresses are care of International Commerce Development
Corp. 33 Easton Avenue, Waterbury, Connecticut 06704.
** Less than one percent (1%).
The selling stockholders are offering up to a total of 210,000 shares
of common stock. We issued 200,000 of the shares of common stock offered herein
and covered by this prospectus to the selling stockholders in a private
placement pursuant to Rule 506 of Regulation D under the Securities Act of 1933,
as amended. We issued 10,000 shares to Mr. Holloway pursuant to Section 4(2) of
the Securities Act.
We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may not sell any or all of the shares
offered by this prospectus. Because the selling stockholders may offer all or
some of the shares pursuant to this offering, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the shares, we cannot estimate the number of the shares that will be held by the
selling stockholders after completion of the offering. However, for purposes of
this table, we have assumed that, after completion of the offering, only Mr.
Holloway will continue to own the shares covered by this prospectus.
12
PLAN OF DISTRIBUTION
We offer the right to subscribe for at least 400,000 and up to
2,800,000 shares at $1.00 per share. If we do not receive subscriptions for the
minimum number of shares within 180 days of this prospectus, or up to an
additional 90 days at our sole election, we will return your investments. No
compensation is to be paid to any person for the offer and sale of the shares.
Our officers and directors will distribute prospectuses related to this
offering. We estimate approximately 200 to 300 prospectuses shall be distributed
in such a manner.
The offering shall be conducted by our president and director, Kenneth
V. Holloway, our chief financial officer and director, Kwabena Mensah and our
director, Amponsah Tawiah. Although they are associated persons of us as that
term is defined in Rule 3a4-1 under the Exchange Act, they are deemed not to be
a broker for the following reasons:
o They are not subject to a statutory disqualification as that term
is defined in Section 3(a)(39) of the Exchange Act at the time of
their participation in the sale of our securities.
o They will not be compensated for their participation in the sale of
our securities by the payment of commission or other remuneration
based either directly or indirectly on transactions in securities.
o They are not an associated person of a broker or dealers at the
time of their participation in the sale of our securities.
o They will restrict their participation to the following activities:
1. Preparing any written communication or delivering such
communication through the mails or other means that does not
involve oral solicitation by them of a potential purchaser;
2. Responding to inquiries of potential purchasers in a
communication initiated by the potential purchasers, provided
however, that the content of such responses
13
are limited to information contained in a registration
statement filed under the Securities Act or other offering
document;
3. Performing ministerial and clerical work involved in effecting
any transaction.
As of the date of this prospectus, no broker has been retained by us
for the sale of securities being offered. In the event a broker who may be
deemed an underwriter is retained by us, an amendment to our registration
statement will be filed.
Neither we nor anyone acting on our behalf including our shareholders,
officers, director, promoters, affiliates or associates will approach a market
maker or take any steps to request or encourage a market in these securities
either prior or subsequent to an acquisition of any business opportunity. There
have been no preliminary discussions or understandings between us or anyone
acting on our behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for our securities, nor
do we have any plans to engage in such discussions. We do not intend to use
consultants to obtain market makers. No member of management, promoter or anyone
acting at their direction will recommend, encourage or advise you to open
brokerage accounts with any broker-dealer that is obtained to make a market in
the shares subsequent to the acquisition of any business opportunity. Investors
in this offering shall make their own decisions regarding whether to hold or
sell their shares. We shall not exercise any influence over your decisions.
Arbitrary Determination of Offering Price
The initial offering price of $1.00 per share has been arbitrarily
determined by us, and bears no relationship whatsoever to our assets, earnings,
book value or any other objective standard of value.
Possible Lack of Market for Your Shares
Under Rule 419, all securities purchased in an offering by a blank
check company, as well as securities issued for an offering to underwriters,
promoters or others as compensation or otherwise, must be placed in the Rule 419
escrow account. These securities will not be released from escrow until the
closing of a merger or acquisition as provided for in Rule 419. There is no
present market for our common stock of us and there may not be any active and
liquid public trading market developing following the release of securities from
the Rule 419 account. Thus, shareholders may find it difficult to sell their
shares. To date, neither we nor anyone acting on our behalf has taken any
affirmative steps to request or encourage any broker dealer to act as a market
maker for our common stock. Further, there have been no discussions or
understandings, preliminary or otherwise, between us or anyone acting on our
behalf and any market maker regarding the participation of any such market maker
in the future trading market, if any, for our common stock. Our present
management has no intention of seeking a market maker for our common stock at
any time prior to the reconfirmation offer to be conducted prior to the closing
of a business combination. Our officers after the closing of a business
combination may employ consultants or advisors to obtain such market makers.
Management expects that discussions in this area will ultimately be initiated by
the management in control of the entity after a business combination is
reconfirmed by the stockholders.
14
Method of Subscribing
Persons may subscribe by filling in and signing the subscription
agreement and delivering it, prior to the expiration date, to us. The
subscription price of $1.00 per share must be paid in cash or by check, bank
draft or postal express money order payable in United States dollars to the
order of "Jersey Transfer and Trust Co., Escrow Agent". You may not pay in cash.
Selling Stockholders
The shares covered by this prospectus may be offered and sold from time to time
by the selling stockholders. This prospectus also covers sales by permitted
transferees of the selling stockholders. A permitted transferee is a family
member who has acquired the shares of common stock from a selling stockholder
through a gift or domestic relations order and without paying value for the
shares. A family member includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
employee's household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in
which these persons (or a selling stockholder) control the management of assets,
and any other entity in which these persons (or a selling stockholder) own more
than fifty percent of the voting interests. The term "selling stockholder"
hereafter includes permitted transferees.
The selling stockholders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. Such sales
may be made on one or more exchanges or in the over-the-counter market or
otherwise, at prices and under terms then prevailing or at prices related to the
then current market price or in negotiated transactions. The selling
stockholders may sell their shares by one or more of, or a combination of, the
following methods:
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o block trades in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o an over-the-counter distribution in accordance with the rules of
the Nasdaq National Market;
o in privately negotiated transactions; and
o in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 of
the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction). The selling stockholders may also pledge shares to
a broker-dealer or other financial institution, and, upon a default, such
broker-dealer or
15
other financial institution may effect sales of the pledged shares pursuant to
this prospectus (as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling
stockholders and any broker-dealers who execute sales for the selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any profits realized by the
selling stockholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders. In addition, we will
make copies of this prospectus available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities
Act. The selling stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth:
o the number of shares being offered;
o the terms of the offering, including the name of any underwriter,
dealer or agent;
o the purchase price paid by any underwriter;
o any discount, commission and other item constituting compensation;
o any discount, commission or concession allowed or paid to any
dealer; and
o the proposed selling price to the public.
16
LEGAL PROCEEDINGS
We not a party to or aware of any pending or threatened lawsuits or
other legal actions.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
The following table and subsequent discussion sets forth information
about our directors and executive officers, who will serve in the same capacity
with us upon completion of the offering.
Name Age Title
- ---- --- -----
Kenneth V. Holloway 50 President, Secretary
and Director
Kwabena Mensah 35 Chief Financial Officer
and Director
Amponsah Tawiah 44 Director
KENNETH V. HOLLOWAY serves as our president, secretary and a member of
the board of directors since inception in October 2003. Mr. Holloway's
responsibilities will include management of our operations as well as our
administrative and financial activities. Mr. Holloway has been the Senior Vice
President of Operations and Collections for National Recovery Service,
Waterbury, Connecticut, since 1994. From 1973 through his current position, he
has held collection positions with GMAC, Citytrust Bank, Affiliated Collection
Bureau, Kay Jewelers and American Adjustment Bureau. Prior to that, he was an
elementary school teacher in Chicago, Illinois. Mr. Holloway received his B.S.
in Elementary Education from Loyola University in 1970, and his Certificate of
Management in Credit Collections from Sacred Heart University in 1978.
KWABENA MENSAH has been our chief financial officer and a director
since December, 2003. Mr. Mensah currently serves as a project manager for
Canadian Mineral Exploration Consultants, and he is a managing consultant,
director and partner of KAM Associates Limited, Ghana, where he is engaged in
project appraisal and management, mineral exploration programs, community
relations and strategic and marketing management. He has extensive experience as
a geologist specializing in field exploration projects for gold for various
firms including Johannesburg Consolidated investments (GH) Limited, Ghana, JCI
(GH) Limited, Ghana, and Ashanti Goldfields Limited. Mr. Mensah holds a BSc. in
Geology 1993 and an MBA in Finance 2001 from the University of Ghana.
AMPONSAH TAWIAH has been a member of the board of directors since
December , 2003. He currently serves as the Director of Monitoring & Evaluation
for the Minerals Commission of Ghana, where he advises the Chief Executive on
all technical, development and other pertinent matters affecting existing and
prospective mining companies in the country. He was previously the principal
mining engineer and managed US$ 13.7 million World Bank Credit and US$ 5.0
million Nordic Development Fund credit for the mining sector of Ghana. He began
his career at Ashanti Goldfields (GH) Ltd. He holds a BSc. in Mining Engineering
1984 and a postgraduate
17
diploma in Mine Management and Mineral Economics 1985 from Kwame Nkrumah
University of Science and Technology. He also holds an MSc. in Mineral Economics
from the University of Zambia 1988.
Our directors will hold office until the next annual meeting of
shareholders and the election of their successors. Our directors receive no
compensation for serving on the board other than reimbursement of reasonable
expenses incurred in attending meetings. Officers are appointed by the board and
serve at their discretion.
Blank Check Companies
Neither Mr. Holloway nor any other directors, or officers have served
in any capacity for any blank check offering in the past.
Management Control
Management does not plan to divest themselves of ownership and control
of us prior to or after the closing of an acquisition or merger transaction.
This policy is based on an unwritten agreement among management. Management is
not aware of any circumstances under which such policy through their own
initiative may be changed.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information about our current
shareholders. The persons named below have sole voting and investment power with
respect to the shares. The numbers in the table reflect shares of common stock
held as of the date of this prospectus. The numbers in this table assume
3,010,000 shares of common stock outstanding following the offering:
Before offering After offering Before offering After offering
--------------- -------------- --------------- --------------
Kenneth V. Holloway 10,000 10,000 4.8% 0%*
Kwabena Mensah 0 0 0% 0%
Amponsah Tawiah 0 0 0% 0%
Jerry Stefaniuk 100,000 0 47.6% 0%
Darrell P. Sullivan 100,000 0 47.6% 0%
All directors and 10,000 10,000 4.8% 0%*
officers as a group
(3) persons
* Less than one percent (1%).
** The address for all officers, directors and beneficial owners is care of
the Company at 33 Easton Avenue, Waterbury, CT 06704.
Messrs. Holloway, Mensah and Tawiah may be deemed our promoters, as
that term is defined under the Securities Act.
18
DESCRIPTION OF SECURITIES
The securities being offered are shares of common stock. Our Articles
of Incorporation authorize the issuance of 50,000,000 shares of common stock
with a par value of $.001.
All significant provisions of our capital stock are summarized in this
prospectus. However, the following description is not complete and is governed
by applicable Delaware law and our articles of incorporation and bylaws. We have
filed copies of these documents as exhibits to the registration statement
related to this prospectus.
Common Stock
You have voting rights for your shares.
You and all other common stockholders may cast one vote for each share
held of record on all matters submitted to a vote. You have no cumulative voting
rights in the election of directors.
You have dividend rights for your shares.
You and all other common stockholders are entitled to receive dividends
and other distributions when declared by our board of director out of the assets
and funds available, based upon your percentage ownership of us. Delaware law
prohibits the payment of any dividends where, after payment of the dividend, we
would be unable to pay our debts as they come due in the usual course of
business or our total assets would be less than the sum of our total liabilities
plus any amounts the law requires to be set aside. We will not pay dividends.
You should not expect to receive any dividends on shares in the near future,
even after a merger. This investment is inappropriate for you if you need
dividend income from an investment in shares.
You have rights if we go out of business.
If we go out of business, you and all other common stockholders will be
entitled to share in the distribution of assets remaining after payment of all
money we owe to others and any priority payment required to be made to our
preferred stockholders. Our directors, at their discretion, may borrow funds
without your prior approval, which potentially further reduces the amount you
would receive if we go out of business.
You have no right to acquire shares of stock based upon your percentage
ownership of our shares when we sell more shares of our stock to other people.
We do not provide our stockholders with preemptive rights to subscribe
for or to purchase any additional shares offered by us in the future. The
absence of these rights could, upon our sale of additional shares of common or
preferred stock, result in a decrease in the percentage ownership that you hold
or percentage of total votes you may cast.
19
Preferred Stock
Our board of directors can issue preferred stock at any time with any
legally permitted rights and preferences without your approval.
Our board of directors, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock, with some
or all of the following rights or any other legal rights they think are
appropriate, such as:
o Voting
o Dividend
o Required or optional repurchase by us
o Conversion into common stock, with or without additional payment
o Payments preferred stockholders will receive before common
stockholders if we go out of business
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes, but it also could render
your vote meaningless because preferred stockholders could own shares with a
majority of the votes required on any issue. Someone interested in buying our
company may not follow through with their plans because they could find it more
difficult to acquire, or be discouraged from acquiring, a majority of our
outstanding stock because we issue preferred stock.
Shares Eligible for Future Sale
Of the shares outstanding after the offering, the 2,800,000 shares sold
in this offering will have been registered with the SEC and can be freely
resold, except if they are acquired by our directors, executive officers or
other persons or entities that they control or who control them. Our directors,
executive officers, and persons or entities that they control or who control
them will not be able to sell shares of stock unless they are registered. The
remaining 210,000 outstanding shares have been registered in this offering and
may be sold in compliance with Rule 144.
Generally, Rule 144 provides that directors, executive officers, and
persons or entities that they control or who control them may sell shares of
common stock in any three-month period in a limited amount. However, the SEC has
taken the position that resales cannot be made pursuant to Rule 144 for blank
check companies. Therefore, the 10,000 outstanding shares held by an executive
officer and director and his affiliates cannot be sold pursuant to Rule 144, and
are registered for resale pursuant to this offering.
Transfer Agent and Registrar
Jersey Transfer and Trust, 201 Bloomfield Avenue, Verona, New Jersey
07044 has been engaged as the transfer agent and registrar for our stock.
INTEREST OF NAMED EXPERTS AND COUNSEL
Our financial statements as of the period ended March 31, 2004,
included in this prospectus and in the registration statement, have been so
included in reliance upon the report of Weinick Sanders Leventhal & Co., LLP,
1375 Broadway, New York, New York 10018, independent certified public
accountants, and upon the authority of said firm as experts in
20
accounting and auditing.
The validity of the shares offered under this prospectus is being
passed upon for us by Shustak Jalil & Heller, 400 Park Avenue, New York, New
York 10022.
We have engaged Jersey Transfer & Trust Company, 201 Bloomfield Avenue,
Verona, New Jersey 07044 to act as our transfer agent and escrow agent .
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Registrant under its Certificate of Incorporation or
provisions of Delaware law, or otherwise, the Registrant 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.
If a claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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 Registrant 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 Act and
will be governed by the final adjudication of such issue.
ORGANIZATION WITHIN LAST FIVE YEARS
There were no transactions since inception between the company and any
of our officers, directors or promoters.
DESCRIPTION OF BUSINESS
History and Organization
We were organized under the laws of the State of Delaware on October
30, 2003. Since inception, our primary activity has been directed to
organizational efforts and obtaining initial financing. We were formed as a
vehicle to pursue a business combination to acquire a mine with mining rights.
To date, we have engaged Appankran Mining Consultants Ltd, a limited liability
company registered under the laws of the Republic of Ghana ("Appankran"), to
assist Kenneth Holloway in locating an acquisition candidate. Appankran is in
the business of offering expertise in the mining industry and is based in Ghana
which is the area we have selected for identifying potential acquisition
targets. We have neither conducted negotiations concerning nor entered into a
letter of intent concerning any potential acquisition candidate. In addition,
Mr. Holloway will confer with business associates and acquaintances and search
the New York Times, the Wall Street Journal, other business publications and
consult with finders in Ghana for acquisition candidates.
21
Our initial public offering will comprise 2,800,000 shares of common
stock at a purchase price of $1.00 per share.
We are filing this registration statement in order to initiate a public
offering for our securities.
Operations
We were organized for the purposes of creating a corporate vehicle to
seek, investigate and, if such investigation warrants, engage in business
combinations presented to us by persons or firms who or which desire to employ
our funds in their business or who seek the perceived advantages of a
publicly-held corporation. Our principal business objective will be to seek
long-term growth potential in a business combination in the mining industry
rather than to pursue immediate, short-term earnings.
We do not currently engage in any business activities that provide any
cash flow. Persons purchasing shares in this offering and other shareholders
will most likely not have the opportunity to participate in the decision making
process for selecting potential combination candidates. Our proposed business is
sometimes referred to as a "blank check" company because you will entrust your
investment monies to our management before they have a chance to analyze any
ultimate use to which this money may be put. Although substantially all of the
funds of this offering are intended to be utilized generally to close a business
combination, such proceeds are not otherwise being designated for any specific
purposes. Under Rule 419, as a prospective investor you will have an opportunity
to evaluate the specific merits or risks of only the business combination that
management decides to enter into. Cost overruns may be borne by management.
We may seek a business combination in the mining industry in the form
of entities that:
o Have actively operating mines with transferable mining rights
o Are established businesses which may be experiencing financial or
operating difficulties and are in need of additional capital
o Have met the SEC guidelines for Proven or Probable reserves as set
forth in the Securities Act Industry Guide number 7.
A business combination may involve the acquisition of, or merger with,
a company which does not need substantial additional capital but which desires
to establish a public trading market for our shares, while avoiding what they
may deem to be adverse consequences of undertaking a public offering itself,
such as:
o Time delays
o Significant expense
o Loss of voting control
o Compliance with various federal and state securities laws
We will not acquire a candidate unless the fair value of the
acquisition candidate represents 80% of the maximum offering proceeds. To
determine the fair market value of an acquisition candidate, our management will
examine the audited financial statements, including balance sheets and
statements of cash flow and stockholders' equity, focusing attention on assets,
22
liabilities, sales and net worth. If we determine that the financial statements
of a proposed acquisition candidate do not clearly indicate that the fair market
value test has been satisfied, we will obtain an opinion from an investment
banking firm which is a member of National Association of Securities Dealers,
Inc. to the satisfaction of such criteria.
We will only consider combination candidates that we can gain or share
control over. Upon closing of a business combination, there will not be a change
in control that results in the resignation of our present officers and
directors.
Our officers or directors have had no preliminary contact or
discussions with any representative of any other entity regarding a business
combination. Accordingly, any acquisition candidate that is selected may be a
financially unstable company or an entity in an early stage of development or
growth, including entities without established records of sales or earnings.
Accordingly, we may become subjected to numerous risks inherent in the business
and operations of financially unstable and early stage or potential emerging
growth companies. In addition, we may effect a business combination with an
entity in the mining industry which is an industry characterized by a high level
of risk. Although management will endeavor to evaluate the risks inherent in an
acquisition candidate, there can be no assurance that we will properly ascertain
or assess all significant risks.
We anticipate that the selection of a business combination will be
complex and extremely risky. Management believes that there are numerous firms
seeking even the limited additional capital which we will have and/or the
benefit of a publicly traded corporation because of:
o General economic conditions.
o Shortages of available capital.
Such perceived benefit of a publicly traded corporation may include:
o Facilitating or improving the terms on which additional equity
financing may be sought.
o Providing liquidity for the principals of a business.
o Creating a means for providing incentive stock options or similar
benefit to key employees.
o Providing liquidity, subject to restrictions of applicable
statutes, for all shareholders.
Evaluation of Business Combinations
The analysis of business combinations will be undertaken by us under
the supervision of our officers and directors. Kwabena Mensah and Amponsah
Tawiah have prior expertise in mining exploration and he will coordinate the
identification and selection of an acquisition candidate together with our
consultants in Ghana, Appankran Mining Consultants Ltd., under the supervision
of and in consultation with Messrs. Holloway, Mensah and Tawiah. Appankran will
provide assistance in several pivotal areas:
o consult on the acquisition of a gold mine within the Republic of
Ghana;
o serve as a liason to the government of Ghana in connection with
securing the necessary permits and licensing;
o coordinate and secure staffing for the mining operation; and
23
o select, hire and advise a geological firm if needed for field and
analytical work on the proposed concession site.
Because we will be subject to Section 13 or 15(d) of the Exchange Act,
we will be required to furnish certain information about significant
acquisitions, including audited financial statements for the business acquired,
covering one, two or three years depending upon the relative size of the
acquisition. Consequently, acquisition prospects that do not have or are unable
to obtain the required audited statements may not be appropriate for acquisition
so long as the reporting requirements of the Exchange Act are applicable. In the
event our obligation to file periodic reports is suspended under Section 15(d),
we intend on voluntarily filing such reports.
Any business combination will present certain risks. Many of these
risks cannot be adequately identified prior to selection, and you must,
therefore, depend on the ability of management to identify and evaluate such
risks. In the case of some of the potential combinations available to us, it is
possible that the promoters of an acquisition candidate have been unable to
develop a going concern or that such business is in its development stage in
that it has not generated significant revenues from its principal business
activity prior to our merger or acquisition. There is a risk, even after the
closing of a business combination and the related expenditure of our funds, that
the combined enterprises will still be unable to become a going concern or
advance beyond the development stage. Such risks will be assumed by us and,
therefore, our shareholders.
Business Combinations
In implementing a structure for a particular business acquisition, we
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also purchase
stock or assets of an existing business. The manner of the business combination
will depend on:
o The nature of the acquisition candidate
o The respective needs and desires of us and other parties
o The management of the acquisition candidate opportunity
o The relative negotiating strength of us and such other management
You should note that any merger or acquisition closed by us can be
expected to have a significant dilutive effect on our current shareholders and
purchasers in this offering. On the closing of a business combination, the
acquisition candidate will have significantly more assets than us; therefore,
management plans to offer a controlling interest in us to the acquisition
candidate. While the actual terms of a transaction to which we may be a party
cannot be predicted, we may expect that the parties to the business transaction
will find it desirable to avoid the creation of a taxable event and thereby
structure the acquisition in a so-called tax-free reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code of 1954. In order to obtain
tax-free treatment under the code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, our shareholders, including investors in this offering,
would retain less than 20% of the issued and outstanding shares of the surviving
entity, which would be likely to result in significant dilution in the equity of
such shareholders. Management may choose to comply with these provisions.
Management will not actively negotiate or otherwise consent to the
purchase of any portion
24
of their common stock as a condition to or for a proposed business combination
unless such a purchase is requested by an acquisition candidate as a condition
to a merger or acquisition. Our officers and directors have agreed to comply
with this provision. Management is unaware of any circumstances under which such
policy through their own initiative may be changed.
We anticipate that any securities issued in a reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, we may agree to register such securities either at the time
the transaction is closed, under certain conditions, or at specified times
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in our common stock may
have a depressive effect on such market.
If at any time prior to the completion of this offering we enter
negotiations with a possible merger candidate and such a transaction becomes
probable, then this offering will be suspended so that an amendment can be filed
which will include financial statements (including balance sheets and statements
of cash flow and stockholders' equity) of the proposed target.
We will not enter into a business combination with any company, which
is in any way wholly or partially beneficially owned by any officer, director,
promoter or affiliate or associate of us. Our officers and directors have not
approached and have not been approached by any person or entity with regard to
any proposed business ventures to us. We will evaluate all possible business
combinations brought to us.
Targeted Business Combination in the Mining Industry
We have targeted the mining industry for our acquisition which will
become the business entity within the corporation. Today's present economic
environment with growing trade deficits, a sagging dollar, inflation and
terrorism, lends itself to a positive exposure towards investments in gold. Gold
has languished in the area of $300 an ounce for many years and has not seen the
high prices of 15 years ago when it was $850 an ounce. At present gold is
trading near $400 an ounce. Gold is a scarce commodity, which should retain its
value. The falling US dollar also strengthens the prospect for gold. Other
circumstances in the current world markets that strengthen the prospects for
gold include: gold supplies, geopolitical uncertainties, still low or negative
inflation adjusted interest rates, financial market volatility, suspicions China
will convert more of its rising foreign-exchange reserves to gold, and mining
industry consolidation.
Our management believes all of these factors point to a profitable
environment for the gold industry. Gold exploration and mining has picked up its
pace. There are currently many opportunities that lie in countries outside of
the US, which lend themselves to lucrative milling concessions and ultimately
gold mining. Ghana has been the focus of several publicly traded US companies
and is ranked second in the world for mining investment. The government of Ghana
grants permits and licenses for mining concessions throughout the country and
receives back royalties of between 3% to 12% once the mining operation has
begun. Due to the fact that poverty is a critical factor in the country of
Ghana, management believes that there will be an ability to purchase mining
concessions for some combination of debt, equity and cash.
We are actively looking for mining concession acquisitions within
Ghana, specifically within the Ashanti region of Ghana. The Ashanti region is
also the area of the recent merger
25
between Anglo Gold Lit, a New York Stock Exchange Company, and Ashanti
Goldfields, Co. Anglo Gold Lit is now the biggest gold mining concern in the
world. Newmont Mining, a Denver based gold mining corporation currently ranked
number two in the world, also has a presence in the Ashanti region of Ghana and
has recently declared a find of over 5,000,000 ounces in proven reserves in the
region. Due to the large presence of the world's major gold mining corporations
there is also the possibility that major consolidations including smaller mining
concessions will take place in Ghana. This notion also is a major contributing
factor in management's decision to focus their attention on Ghana. The large
US-based corporations are consolidating worldwide, as well as in this region.
There will be niche opportunities for smaller mining concerns that explore and
locate gold reserves that can increase the amount of reserves for the larger
mining companies. Our management believes that they will be successful in
locating, purchasing and funding a mining operation in the Ashanti region of
Ghana that will yield a profitable, revenue-based operation.
There are two types of mining concessions that we will target in its
acquisition mode. Those concessions that have proven reserves and those
concessions that have probable reserves but show exceptional promise for large
amounts of gold ore. While both proven and probable reserves are desirable, it
is the intent of management to focus primarily on proven reserves for its
initial acquisition. Stated mineral resources provide the guidelines for proven
gold reserves and are the equivalent to mineralized material as defined by the
US Securities and Exchange Commission. We are committed to be bound by the
Proven and Probable reserves criteria as defined by the SEC to govern our
acquisition criteria. In other words we limit our focus on acquisitions that
meet the strict guidelines set up by the SEC defining proven and probable
reserves. Consequently, we will only consider those mining concessions that have
utilized extensive drilling in order to determine gold ore abundance and are
within the category of "Proven reserves".
Our management will actively search for potential acquisition
candidates through Appankran Mining Consultants Ltd. Appankran will shepherd us
through the process from identifying potential target mine, through the license
and permit requirements, to selection of a workforce and any other necessary
experts to complete the acquisition of a mine and commence operations. We may
also decide to advertise our intention to acquire a company in the mining
industry in the form of ads in legal or other publications. The cost of such
advertising will be paid by management.
Due to the extreme poverty that engulfs most of Ghana, management
believes that it will acquire a mining concession that can be structured as a
joint venture There are certainly opportunities that exist which allow for
entities with financial backing to provide the capital to extend the mining
concession into the mining stage. We are seeking a joint venture with a Ghana
partner who owns the government lease on the mining concession and has all the
appropriate permits and licensing. There are opportunities for profitable mining
operations that lack capital to extract the gold ore from the ground. With
working capital gained from this offering, we can target opportunities that will
have minimal up front acquisition costs. It is our objective to utilize
staggered payments into the future for our entry into the mining industry. The
planned acquisition will provide a revenue base from the future extraction and
sale of gold ore. We will need to raise the appropriate capital necessary from
private placement and this registration to fund the mining operation.
Our board of directors has discussed and plans on implementing an
employee stock
26
incentive program. We desire to spread goodwill in the area and to the citizens
of Ghana. Management believes that there will be a need for a large workforce
and one that is also loyal. An employee stock incentive plan will offer the
opportunity to implement this strategy. We plan to offer to each resident of the
area between 25 and 50 shares of the Company stock us an incentive together with
payroll to work for the company at the proposed mining operation. Our plan would
involve issuing shares pursuant to Rule 144 of the Securities Act of 1933, as
amended. The stock would become vested once the employee has served six months
of employment for us. This would spread goodwill and offer lucrative incentive
to potential employees. It is a priority for us to retain employees and offering
a positive work environment through this incentive program.
Management will also contemplate implementing a similar stock option or
profit sharing plan for valuable employees once the operation has commenced.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. Our expenses to date totaling
$12,730 have been funded by the sale of the founder's shares and the private
placement.
In November 2003 we commenced an offering of 200,000 shares pursuant to
Regulation D, Rule 506 under the Securities Act of 1933, as amended. We raised a
total of $50,000 through private offerings to accredited investors as that term
is defined in Regulation D, Rule 501 under the Securities Act.
In February 2004 we sold 10,000 shares to Kenneth Holloway for proceeds
of $2,500 pursuant to Section 4(2) of the Securities Act of 1933, as amended.
We anticipate having sufficient funds to satisfy our cash requirements
and do not expect to have to raise additional funds during the entire Rule 419
escrow period of up to 12 months from the date of this prospectus. This is
primarily because we anticipate incurring no significant expenditures. Before
the conclusion of this offering, we anticipate our expenses to be limited to
accounting fees, legal fees, telephone, mailing, and filing fees.
At this time we believe that the funds from our private offering plus
funds provided by management will be sufficient for funding our operations until
we find an acquisition and therefore do not expect to issue any additional
securities before the closing of a business combination. However, we may issue
additional securities, incur debt or procure other types of financing if needed.
We have not entered into any agreements, plans or proposals for such financing
and as of present have no plans to do so. We will not use the offering funds as
collateral or security for any loan or debt incurred. Further, the offering
funds will not be used to pay back any loan or debts incurred by us. If we do
require additional financing, this financing may not be available to us, or if
available, it may be on terms unacceptable to us.
27
DESCRIPTION OF PROPERTY
We currently do not have any rent expense. We are presently using the
office of Kenneth V. Holloway, 33 Easton Avenue, Waterbury, Connecticut 06704,
(203) 753-9500, at no cost to the Company. Such arrangement is expected to
continue after completion of this offering only until a business combination is
closed, although there is currently no written agreement between us and Mr.
Holloway. We presently own no equipment, and do not intend to own any upon
completion of this offering. Mr. Holloway has provided the use of office
equipment, including a computer, printer and fax, but he is not charging the
Company for such usage and has stated no intention of doing so in the future.
The present office space is 1500 square feet and is enough space for
five employees. There is no anticipated move until after we complete the
offering and close a business combination.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships, transactions or proposed transactions to
which the Company was or is to be a party, in which any of the officers,
directors or beneficial owners of the Company have a direct or indirect material
interest.
A conflict of interest may arise between management's personal
financial benefit and management's fiduciary duty to you. Any remedy available
under the laws of Delaware, if management's fiduciary duties are compromised,
will most likely be prohibitively expensive and time consuming.
Neither our officer, directors, promoters and or other affiliates of
us, have had any preliminary contact or discussions with any representative of
any other company or business regarding the possibility of an acquisition or
merger with us.
We have established a policy that prohibits transactions with or
payment of anything of value to any present officer, director, promoter or
affiliate or associate or any company that is in any way or in any amount
beneficially owned by any such officer, director, promoter or affiliate or
associate.
Our directors and officer are or may become, in their individual
capacity, an officer, director, controlling shareholder and/or partner of other
entities engaged in a variety of businesses.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prior to the date hereof, there has been no trading market for our
common stock. Under the requirements of Rule 15g-8 of the Exchange Act, a
trading market will not develop prior to or after the effectiveness of this
prospectus or while the common stock under this offering is maintained in
escrow. The common stock under this offering will remain in escrow until our
closing of a business combination under the requirements of Rule 419. There are
currently three
28
holders of our outstanding common stock. The outstanding common stock was sold
in reliance upon an exemption from registration contained in Sections 4(2) and
Regulation D, Rule 506 of the Securities Act. There can be no assurance that a
trading market will develop upon the closing of a business combination and the
subsequent release of the common stock and other escrowed shares from escrow. To
date, neither we nor anyone acting on our behalf has taken any affirmative steps
to retain or encourage any broker dealer to act as a market maker for our common
stock. Further, there have been no discussions or understandings, preliminary or
otherwise, between us or anyone acting on our behalf and any market maker
regarding the participation of any such market maker in the future trading
market, if any, for our common stock.
Present management does not anticipate that any such negotiations,
discussions or understandings shall take place prior to the execution of an
acquisition agreement. Management expects that discussions in this area will
ultimately be initiated by the party or parties controlling the entity or assets
which we may acquire. Such party or parties may employ consultants or advisors
to obtain such market maker, but our management has no intention of doing so at
the present time.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 210,000 shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act. Generally, Rule 144 provides that directors, executive officers,
and persons or entities that they control or who control them may sell shares of
common stock in any three-month period in a limited amount. However, the SEC has
taken the position that resales cannot be made pursuant to Rule 144 for blank
check companies. Therefore, the 10,000 outstanding shares held by an executive
officer and director and his affiliates cannot be sold pursuant to Rule 144, and
are being registered in this offering. The holders of the restricted securities
are entitled to certain piggyback registration rights which may only be
exercised at our election. The exercise of such rights will enable the holders
of the restricted securities to sell their shares prior to such date. We are
offering 2,800,000 shares of our common stock at $1.00 per share. Dilution to
the investors in this offering shall be approximately ($0.09) per share.
Reports to Stockholders
We have not previously been required to comply with the reporting
requirements of the Exchange Act. We have filed a registration statement with
the SEC on Form SB-2 to register the offer and sale of the shares. This
prospectus is part of that registration statement, and, as permitted by the
SEC's rules, does not contain all of the information in the registration
statement. We intend to furnish our stockholders with annual reports containing
audited financial statements as soon as practicable at the end of each fiscal
year. Our fiscal year ends on September 30.
For further information about us and the shares offered under this
prospectus, you may refer to the registration statement and to the exhibits and
schedules filed as a part of the registration statement. You can review the
registration statement and its exhibits and schedules at the public reference
facility maintained by the SEC at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the SEC at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. The
registration statement is also available
29
electronically on the World Wide Web at HTTP://WWW.SEC.GOV. You can also call or
write us at any time with any questions you may have. We'd be pleased to speak
with you about any aspect of our business and this offering.
EXECUTIVE COMPENSATION
We have not and have no intention to pay, award to or reserve any
salary or other compensation to our officers and directors until after we
complete the intended business combination. In connection with this offering, we
will not pay any of the following types of compensation or other financial
benefit to our management, directors or current stockholders:
o Consulting Fees
o Finders' Fees
o Sales of insiders' stock positions in whole or in part to the
private company, the blank check company and/or principals thereof
o Any other methods of payments by which management or current
shareholders receive funds, stock, other assets or anything of
value whether tangible or intangible.
30
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A Development Stage Company)
MARCH 31, 2004
INDEX
-----
PAGE NO.
FINANCIAL STATEMENTS:
INDEPENDENT AUDITORS' REPORT F-2
BALANCE SHEET AS AT MARCH 31, 2004 F-3
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004 F-4
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004 F-5
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004 F-6
NOTES TO FINANCIAL STATEMENTS F-7-9
F-1
WEINICK
SANDERS 1375 Broadway
LEVENTHAL & CO. LLP NEW YORK, N.Y. 10018-7010
CERTIFIED PUBLIC ACCOUNTANTS 212-869-3333
FAX: 212-764-3060
WWW.WSLCO.COM
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
WE HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF INTERNATIONAL COMMERCE
DEVELOPMENT CORP. (A DEVELOPMENT STAGE COMPANY) AS AT MARCH 31, 2004 AND THE
RELATED STATEMENTS OF OPERATIONS, CASH FLOWS AND STOCKHOLDERS' EQUITY FOR THE
PERIOD FROM OCTOBER 30, 2003 (DATE OF INCEPTION) TO MARCH 31, 2004. 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
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 INTERNATIONAL COMMERCE
DEVELOPMENT CORP. (A DEVELOPMENT STAGE COMPANY) AS AT MARCH 31, 2004 AND THE
RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE PERIOD FROM OCTOBER 30,
2003 (DATE OF INCEPTION) TO MARCH 31, 2004 IN CONFORMITY WITH ACCOUNTING
PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA.
/s/WEINICK SANDERS LEVENTHAL & CO., LLP
NEW YORK, NEW YORK
APRIL 28, 2004
F-2
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 2004
ASSETS
------
Current assets:
Cash $13,937
Prepaid expenses 8,333
-------
Total current assets $22,270
Deferred registration costs 20,000
-------
Total assets $42,270
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 2,500
Stockholders' equity:
Common stock, $.001 par value, 50,000,000 shares
authorized, 210,000 shares issued and outstanding $ 210
Additional paid-in capital 52,290
Deficit accumulated during the development stage (12,730)
-------
Total stockholders' equity 39,770
-------
Total liabilities and stockholders' equity $42,270
=======
F-3
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004
Revenue $ -
Expenses:
Accounting fees $ 5,000
Consulting fees 1,667
Start-up costs 5,000
Office and miscellaneous expenses 1,063
--------
Total expenses 12,730
--------
Net loss ($12,730)
========
Per share data:
Loss per share - basic and diluted ($.26)
========
Weighted average number of
shares outstanding 49,350
========
F-4
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004
Deficit
Accumulated
Common Stock Additional in the Total
--------------------- Pain-in Development Stockholders'
Shares Value Capital Stage Equity
------ ----- ------- ----- ------
Sale of common stock 210,000 $210 $52,290 $ - $52,500
Net loss - - - (12,730) (12,730)
------- ---- ------- -------- -------
Balance, March 31, 2004 210,000 $210 $52,290 ($12,730) $39,770
======= ==== ======= ======== =======
F-5
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 30, 2003
(DATE OF INCEPTION) TO MARCH 31, 2004
Cash flows from operating activities:
Net loss ($12,730)
Increase (decrease) in cash flows as
a result of changes in asset and
liability account balances:
Prepaid expenses ($ 8,333)
Accrued expenses 2,500
-------
Total adjustments (5,833)
-------
Net cash used in operating activities (18,563)
Cash flows from financing activities:
Sale of common stock 52,500
Deferred registration costs (20,000)
-------
Net cash provided by financing activities 32,500
-------
Cash at end of period - net increase in cash $13,937
=======
F-6
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
(A) NATURE OF BUSINESS:
INTERNATIONAL COMMERCE DEVELOPMENT CORP. (THE "COMPANY") WAS
INCORPORATED IN THE STATE OF DELAWARE. THE COMPANY INTENDS TO PURSUE ACQUISITION
OPPORTUNITIES GLOBALLY IN THE MINING INDUSTRY.
(B) BASIS OF PRESENTATION:
THE ACCOMPANYING FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE
WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA.
(C) USE OF ESTIMATES:
THE PREPARATION OF THE FINANCIAL STATEMENTS IN CONFORMITY WITH
ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA
REQUIRES MANAGEMENT TO MAKE ESTIMATES AND ASSUMPTIONS THAT AFFECT CERTAIN
REPORTED AMOUNTS AND DISCLOSURES. ACCORDINGLY, ACTUAL RESULTS COULD DIFFER FROM
THOSE ESTIMATES.-
(D) CASH:
THE COMPANY PLACES ITS CASH INVESTMENTS WITH A HIGH CREDIT QUALITY
FINANCIAL INSTITUTION. AT TIMES, SUCH INVESTMENTS MAY BE IN EXCESS OF THE FDIC
INSURED LIMIT.
(E) EARNINGS PER SHARE:
THE COMPANY ADOPTED STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.
128, "EARNINGS PER SHARE". BASIC EARNINGS PER SHARE IS BASED ON THE WEIGHTED
EFFECT OF ALL COMMON SHARES ISSUED AND OUTSTANDING, AND IS CALCULATED BY
DIVIDING NET INCOME AVAILABLE TO COMMON STOCKHOLDERS BY THE WEIGHTED AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. DILUTED EARNINGS PER SHARE, WHICH IS
CALCULATED BY DIVIDING NET INCOME AVAILABLE TO COMMON STOCKHOLDERS BY THE
WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN THE BASIC EARNINGS PER SHARE
CALCULATION PLUS THE NUMBER OF COMMON SHARES THAT WOULD BE ISSUED ASSUMING
CONVERSION OF ALL POTENTIALLY DILUTIVE SECURITIES OUTSTANDING, IS NOT PRESENTED
AS IT IS ANTI-DILUTIVE.
F-7
NOTE 2 - DEVELOPMENT STAGE OPERATIONS.
THE CORPORATION WAS ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE ON OCTOBER 30, 2003. SINCE INCEPTION, THE COMPANY'S ACTIVITY
HAS BEEN LIMITED TO RAISING CAPITAL. THE COMPANY WAS FORMED TO PURSUE
ACQUISITION OPPORTUNITIES GLOBALLY IN THE MINING INDUSTRY. THE COMPANY
HAS RETAINED A CONSULTANT TO HELP IT IDENTIFY POTENTIAL ACQUISITION
TARGETS.
NOTE 3 - DEFERRED REGISTRATION COSTS.
DEFERRED REGISTRATION COSTS OF $20,000 AT MARCH 31, 2004
CONSIST OF LEGAL FEES ASSOCIATED WITH THE FUTURE REGISTRATION OF
SECURITIES.
NOTE 4 - PREPAID EXPENSES.
PREPAID EXPENSES CONSIST OF FEES PAID TO A CONSULTING FIRM TO
FACILITATE THE ACQUISITION OF A GOLD MINE IN THE REPUBLIC OF GHANA. THE
COMPANY AND THIS CONSULTING FIRM HAVE AN AGREEMENT WHICH RUNS THROUGH
FEBRUARY 2005.
NOTE 5 - ACCRUED EXPENSES.
ACCRUED EXPENSES OF $2,500 CONSISTS OF ACCOUNTING FEES.
NOTE 6 - COMMON STOCK.
FROM INCEPTION ON OCTOBER 30, 2003 TO MARCH 31, 2004, THE
COMPANY SOLD 10,000 SHARES OF ITS COMMON STOCK TO THE FOUNDER FOR
$2,500 AND AN ADDITIONAL 200,000 SHARES OF ITS COMMON STOCK IN A
PRIVATE PLACEMENT FOR PROCEEDS OF $50,000.
NOTE 7 - INCOME TAXES.
THE COMPANY DOES NOT HAVE ANY CURRENTLY PAYABLE OR DEFERRED
FEDERAL OR LOCAL TAX BENEFIT SINCE ITS INCEPTION TO MARCH 31, 2004. AT
MARCH 31, 2004, THE COMPANY HAD A NET OPERATING LOSS CARRYFORWARD OF
$12,730 AVAILABLE REDUCE FUTURE TAXABLE INCOME WHICH EXPIRES IN 2024.
MANAGEMENT IS UNABLE TO DETERMINE IF THE UTILIZATION OF THE FUTURE TAX
BENEFIT IS MORE LIKELY THAN NOT AND ACCORDINGLY THE ASSET OF $3,200 FOR
FEDERAL AND LOCAL TAXES HAS BEEN FULLY RESERVED. A RECONCILIATION OF
THE ACTUAL TAX PROVISION TO THE EXPECTED STATUTORY RATE IS AS FOLLOWS:
October 30, 2003 to
March 31, 2004
-------------------
Loss before income taxes ($12,730)
========
Expected statutory tax benefit ($ 3,200) (25%)
Net operating loss valuation reserve 3,200 25%
-------- ---
Total tax benefit $ - 0%
======== ===
F-8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements with Weinick
Sanders Leventhal & Co., LLP, our present accountants, regarding financial
disclosure.
F-9
- --------------------------------------------------------------------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied on as having been authorized by International Commerce Development
Corp. This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy, by any person in any jurisdiction in which it is unlawful for
such person to make such offer or solicitation. Neither the delivery of this
Prospectus nor any offer, solicitation or sale made hereunder, shall under any
circumstances create an implication that the information herein is correct as of
any time subsequent to the date of the Prospectus.
---------------------
Until , 2005 (ninety days after the date funds and
securities are released from the escrow account pursuant to Rule 419), all
dealers effecting transactions in the registered securities, whether or not
participating in the distribution thereof, 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
allotment or subscriptions.
- --------------------------------------------------------------------------------
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
3,010,000 Shares of
Common Stock
-------------
PROSPECTUS
-------------
May , 2004
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our directors are bound by the general standards for director
provisions in Delaware law. These provisions allow our directors in making
decisions to consider any factors as they deems relevant, including our
long-term prospects and interests and the social, economic, legal or other
effects of any proposed action on the employees, suppliers or our customers, the
community in which the we operate and the economy. Delaware law limits our
director's liability.
We have agreed to indemnify our directors, meaning that we will pay for
damages they incur for properly acting as a director. The SEC believes that this
indemnification may not be given for violations of the Securities Act that
governs the distribution of our securities.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Amount to be Paid
-----------------
SEC Registration Fee $ 381
Blue Sky Fees and Expenses $1,535
Legal Fees and Expenses $50,000
Printing and Engraving Expenses $7,500
Accountants' Fees and Expenses $5,000
Miscellaneous $10,584
-------
Total $75,000
The foregoing expenses, except for the SEC fees, are estimated.
RECENT SALES OF UNREGISTERED SECURITIES
The following table sets forth information regarding all securities
sold by us since our inception on October 30, 2003.
Aggregate Purchase
Date Of Title Of Number Of Price And Form Of
Class Of Purchasers Sale Securities Securities Consideration
- --------------------------------------------------------------------------------
Kenneth V. Holloway 2/04 Common Stock 10,000 $ 2,500
Jerry Stefaniuk 2/04 Common Stock 100,000 $25,000
Darrell Sullivan 11/03 Common Stock 100,000 $25,000
The sale to Mr. Holloway was made in reliance on Section 4(2) of the
Securities Act. The sales to Messrs. Stefaniuk and Sullivan were made pursuant
to Regulation D, Rule 506 under the Securities Act. All sales were made without
general solicitation or advertising. Each purchaser was an accredited investor
with access to all relevant information necessary to evaluate the investment
and represented to the Registrant that the shares were being acquired for
investment.
II-1
EXHIBITS
The following exhibits are filed with this Registration Statement:
Number Exhibit Name
1 Escrow Agreement with Jersey Transfer & Trust Company in
Accordance with Rule 419 under the Securities Act of 1933, as
amended
3.1 Articles of Incorporation
3.2 By-Laws
4.1 Specimen Common Stock Certificate*
5
10 Opinion Regarding Legality
23.1 Consent of Counsel (to be included in Opinion Regarding
Legality)
23.2 Consent of Expert
99.1 Agreement with Appankran Mining Consultants Ltd.
* To be filed in a subsequent Amendment
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing. Information pertaining to our Common Stock is
contained in our Articles of Incorporation and By-Laws.
UNDERTAKING
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offer or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of 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;
(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, as amended, each such post-effective
amendment that contains a form of prospectus 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.
II-2
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the Offering.
Subject to the terms and conditions of Section 15(d) of the Exchange
Act, the undersigned Registrant hereby undertakes to file with the Securities
and Exchange Commission such supplementary and periodic information, documents,
and reports as may be prescribed by any rule or regulation of the Commission
heretofore or hereafter duly adopted under authority conferred to that section.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized by power of attorney, in the City of
Waterbury, State of Connecticut, May , 2004.
---
INTERNATIONAL COMMERCE DEVELOPMENT CORP.
(Registrant)
/s/ Kenneth V. Holloway
-------------------------------
Kenneth V. Holloway, President,
Secretary and Director
/s/ Kwabena Mensah
-------------------------------
Kwabena Mensah,
Chief Financial Officer and Director
/s/ Amponsah Tawiah
-------------------------------
Amponsah Tawiah, Director
II-4
EXHIBIT INDEX
Number Exhibit Name
1 Escrow Agreement with Jersey Transfer & Trust Company in
Accordance with Rule 419 under the Securities Act of 1933, as
amended
3.1 Articles of Incorporation
3.2 By-Laws
4.1 Specimen Common Stock Certificate*
5
10 Opinion Regarding Legality
23.1 Consent of Counsel (to be included in Opinion Regarding
Legality)
23.2 Consent of Expert
99.1 Agreement with Appankran Mining Consultants Ltd.
* To be filed in a subsequent Amendment