As filed with the Securities and Exchange Commission, August 2, 2001
File No. 333-58246
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Amendment 1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Alaska Freightways, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0464853
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
300 East 54th Ave., Suite 200
Anchorage, AK 99518
(907) 227-7319
(Address and telephone number of registrant's principal offices)
Donald E. Nelson, President
Alaska Freightways, Inc.
300 East 54th Ave., Suite 200
Anchorage, AK 99518
(907) 227-7319
(Name, address and telephone number of agent for service)
Copies to:
Cletha A. Walstrand, Esq.
Lehman Walstrand & Associates
8 East Broadway, Suite 620
Salt Lake City, UT 84111-2204
(801) 532-7858
(801) 363-1715 fax
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
The securities being registered on the Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933.
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
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(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 delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each class Amount to be Proposed offering Proposed maximum
Amount of
of securities to registered price per share aggregate offering
registration
be registered price
fee
Common Stock 300,000 shares $0.75 per share $225,000
$56.25
Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
ii
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to completion _____, 2001
PROSPECTUS
$75,000 Minimum / $225,000 Maximum
ALASKA FREIGHTWAYS, INC.
COMMON STOCK
This is our initial public offering. We are offering a
minimum of 100,000 and a maximum of 300,000 shares of common
stock. The public offering price is $0.75 per share. No public
market exists for our shares.
See "Risk Factors" beginning on page 2 for certain
information you should consider before you purchase the shares.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The shares are offered on a minimum/maximum, best efforts
basis directly through our officers and directors. No commission
or other compensation related to the sale of the shares will be
paid to any of our officers or directors. The proceeds of the
offering will be placed and held in an escrow account at Brighton
Bank until a minimum of $75,000 in cash has been received as
proceeds from sale of shares. If we do not receive the minimum
proceeds within 90 days from the date of this prospectus, unless
extended by us for up to an additional 30 days, your investment
will be promptly returned to you without interest and without any
deductions. This offering will expire 30 days after the minimum
offering is raised. We may terminate this offering prior to the
expiration date.
Price to Public Commissions Proceeds to Company
Per Share $0.75 $-0- $0.75
Minimum $ 75,000 $-0- $ 75,000
Maximum $225,000 $-0- $225,000
The date of this Prospectus is, _________________ 2001
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PROSPECTUS SUMMARY
About our company
We are a Nevada corporation, formed on June 1, 2000. Our
corporate name is Alaska Freightways, Inc. and we operate under
the name of R.L. Trucking. We intend to provide transportation
and freight brokerage services in the Anchorage, Alaska area.
Our transportation service will be in the trucking area where we
transport goods overland by truck. Freight brokerage involves
our securing loads that need to be hauled and contracting with
other transportation services or independent contractors to
perform the job on which we receive a commission. We are
primarily focusing on short to medium haul truckload carrier and
freight brokerage operations.
We will be competing with a large number of transportation
and freight brokerage service companies. The transportation and
freight brokerage service industry is highly fragmented and
competitive, with several national freight service providers as
well as a large number of smaller independent businesses serving
local, regional and national markets.
We are currently leasing trucking equipment from one of our
officers and directors, Mr. Richard Strahl. Along with our
leased equipment, a significant portion of our trucking and
freight brokerage services is provided through a network of
independent contractors. These relationships allow us to control
a larger fleet of equipment and provide our customers with a
broad range of transportation services without committing
significant capital to the acquisition and maintenance of an
extensive asset base. Our relatively low capital and working
capital requirements and variable cost structure should enable us
to be competitive.
We have commenced only limited operations and are
considered a development stage company. As of December 31, 2000
we realized a net loss of $5,563 and have not yet established
profitable operations. In March 2001, we implemented our
operating plan by offering transportation and freight brokerages
services. As of March 31, 2001, we have generated revenues of $
40,400 but have $69,883 net loss from our operations. These
factors raise substantial doubt about our ability to continue as
a going concern. The proceeds from this offering are needed so
we can continue operations and implement our growth and marketing
plan. We intend to actively pursue contracts for providing
transportation and freight brokerage services. As of June 18,
2001, we have secured three contracts totaling $298,000.
Our principal executive offices are located at 300 East 54th
Ave., Suite 200, Anchorage, Alaska 99518. Our telephone number
is (907) 227-7319.
About our offering
We are offering a minimum of 100,000 and a maximum of
300,000 shares of common stock. Upon completion of the offering,
we will have 3,530,000 shares outstanding if the minimum is sold
and 3,730,000 shares outstanding if all shares offered are sold.
We will use the proceeds from the offering to purchase equipment,
implement our marketing and advertising plan and expand our
business.
RISK FACTORS
Investing in our stock is very risky and you should be able
to bear a complete loss of your investment.
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Alaska Freightways is a development stage company that is
not operating at a profit, so there is no assurance we will ever
be profitable or that your investment will have future value.
Although our management has past experience in the trucking and
freight brokerage industry, Alaska Freightways is a new business
and investment in our company is risky. We have no meaningful
operating history so it will be difficult for you to evaluate an
investment in our stock. As of December 31, 2000, we have had no
revenue and a net loss of $5,563. We cannot assure you that we
will ever be profitable. Since we have not proven the essential
elements of profitable operations, you will be furnishing venture
capital to us and will bear the risk of complete loss of your
investment in the event we are not successful.
If we do not raise money through this offering, it is
unlikely we can continue operations. As of December 31, 2000,
Alaska Freightways had a working capital deficit of $2,403. We
are devoting substantially all of our present efforts to
establishing a new business and need the proceeds from this
offering to continue our business and sell our trucking and
brokerage services. Although we started our planned operation in
March 2001, we have only generated $40,400 in revenue and have a
net loss from operations of $69,883. If we cannot raise money
through this offering, we will have to seek other sources of
financing or we will be forced to curtail or terminate our
business. Even if we raise the minimum amount of this offering,
we may find it necessary to raise additional capital to fully
implement our business plan. There is no assurance that
additional sources of financing will be available at all or at a
reasonable cost. These factors raise substantial doubt about our
ability to continue as a going concern.
If we were unable to retain existing or obtain new
clients, our revenues and operations will be severely impaired.
We must obtain new clients and extend or renew existing client
contracts on favorable terms to be successful. Our existing
clients are those clients our officers and directors have had a
previous relationship with and we do not have any formal
arrangements in place with these clients. Since commencing our
operations in March, we have signed three formal contracts with
clients. If we do not succeed in maintaining existing clients
and obtaining new clients, our revenues and results of operations
will be adversely affected.
We operate in a very competitive business environment that
could adversely affect our ability to obtain and maintain
clients. The transportation and freight brokerage service
industry is highly fragmented and competitive, with several
national freight service providers as well as a large number of
smaller independent businesses serving local and regional
markets. The majority of our competitors have greater financial
and other resources than we do. Many of our competitors also
have a history of successful operations and an established
reputation within the industry. Contracts in the transportation
and freight brokerage service industry are generally gained or
renewed through a competitive bidding process. Some of our
competitors may be prepared to accept less favorable fee
structures than us when negotiating or renewing contracts. Our
inability to be competitive in obtaining and maintaining clients
would have a material adverse effect on our revenues and results
of operations.
We depend entirely on our executive officers to implement
our business and losing the services of any of our executive
officers would adversely affect our business. Alaska Freightways
is in the development stage and requires the services of our
executive officers to become established. We have no employment
agreements with our executive officers. If we lost the services
of any of our executive officers, it is questionable we would be
able to find a replacement and our business would be adversely
affected.
We are dependent upon third parties for trucking equipment
and services essential to operate our business. We rely on third
parties to lease equipment to us and provide driving services
necessary for our operations. There have historically been
periods of equipment shortages in the transportation industry,
particularly in a strong economy. In the event we lose our
current lease or are
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unable to secure another lease on equipment, our operations will
be severely impacted. Further, if we receive insufficient
transportation equipment or services from these third parties to
meet our customers' needs, our business, results of operations
and financial position could be materially adversely affected.
Our reliance on drivers who are independent contractors
could reduce our operating control and we may have trouble
attracting and retaining independent contractors. We rely on the
services of drivers who are independent contractors that may
cause disadvantages such as reduced operating control compared to
companies who do not rely as heavily on independent contractors.
We also face potential difficulties attracting independent
contractors during times when freight services are in high
demand. In most cases, contracts with independent contractors
are terminable upon short notice by either party. Typically our
independent contract drivers are hired on a per job basis without
formal contract. We do not currently have any formal written
agreements with any independent contract drivers. We cannot
assure that we will be successful in obtaining the services of
independent contractors or that any independent contractors who
terminate their contracts with us can be replaced.
A determination by regulators that our independent
contractors are employees could expose us to various liabilities.
From time to time, tax and other regulatory authorities and
others have sought to assert that independent contractors in the
trucking industry are employees, rather than independent
contractors. There can be no assurance, that tax authorities or
others will not successfully challenge this position, or that
such interpretations will not change, or that tax laws will not
change. If our independent contractors were determined to be
employees, such determination could materially increase our
exposure under a variety of federal and state tax, worker's
compensation, unemployment benefits, labor and employment and
tort laws, as well as our potential liability for employee
benefits. Our business model relies on the fact that our
independent contractors are not deemed to be employees, and
exposure to any of the above increased costs would impair our
competitiveness in the industry.
If we cannot pass on any increased costs to our
customers, our net profits will decrease. Economic recession,
customers business cycles, increases in prices charged by third
party carriers, interest rate fluctuations and other economic
factors over which we have no control may adversely effect our
business. We may not be able to pass through to our customers
the full amount of increased transportation costs or if passed
through to our customers we may not be able to competitively
price our services.
We arbitrarily determined our offering price. The offering
price of the shares was arbitrarily determined by our management.
The offering price bears no relationship to our assets, book
value, net worth or other economic or recognized criteria of
value. In no event should the offering price be regarded as an
indicator of any future market price of our securities. In
determining the offering price, we considered such factors as the
prospects for our products, our management's previous experience,
our historical and anticipated results of operations and our
present financial resources.
Our stock is subject to the Penny Stock rules which
imposes significant restrictions on the Broker-Dealers and may
affect the resale of our stock. A penny stock is generally a
stock that
- is not listed on a national securities exchange or Nasdaq,
- is listed in "pink sheets" or on the NASD OTC Bulletin
Board,
- has a price per share of less than $5.00 and
- is issued by a company with net tangible assets less than
$5 million.
4
The penny stock trading rules impose additional duties and
responsibilities upon broker-dealers and salespersons effecting
purchase and sale transactions in common stock and other equity
securities, including
- determination of the purchaser's investment suitability,
- delivery of certain information and disclosures to the
purchaser, and
- receipt of a specific purchase agreement from the
purchaser prior to effecting the purchase transaction.
Many broker-dealers will not effect transactions in penny
stocks, except on an unsolicited basis, in order to avoid
compliance with the penny stock trading rules. Because our
common stock is subject to the penny stock trading rules,
- such rules may materially limit or restrict the ability to
resell our common stock, and
- the liquidity typically associated with other publicly
traded equity securities may not exist; and
- such rules because it may affect an investor's ability to
sell the stock, may also have a depressive effect on your
stock price.
Shares of stock that are eligible for sale by our
stockholders may decrease the price of our stock. Upon
completion of the offering, we will have 3,530,000 shares
outstanding if the minimum is sold and 3,730,000 shares
outstanding if the maximum is sold, of which 100,000 shares will
be freely tradable if the minimum is sold or 300,000 if the
maximum is sold and 3,430,000 shares that are restricted shares
but may be sold under Rule 144 commencing in June 2001. If the
holders sell substantial amounts of our stock, then the market
price of our stock could decrease. Mr. Richard Strahl controls
Alaska Freightways which limits your ability to direct our
activities. Our president, Mr. Richard Strahl owns and controls
a majority of our outstanding stock and will continue to hold a
majority of the stock after this offering. As the majority
shareholder, Mr. Strahl controls all shareholder votes as well as
the composition of the board and management. Mr. Strahl may not
necessarily vote in a manner consistent with that of other
shareholders.
FORWARD-LOOKING STATEMENTS
You should carefully consider the risk factors set forth
above, as well as the other information contained in this
prospectus. This prospectus contains forward-looking statements
regarding events, conditions, and financial trends that may
affect our plan of operation, business strategy, operating
results, and financial position. You are cautioned that any
forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties. Actual
results may differ materially from those included within the
forward-looking statements as a result of various factors.
Cautionary statements in this "Risk Factors" section and
elsewhere in this prospectus identify important risks and
uncertainties affecting our future, which could cause actual
results to differ materially from the forward-looking statements
made in this prospectus.
5
DILUTION AND COMPARATIVE DATA
At March 31, 2001, we had a net tangible book value which
is total assets less total liablities of $62,864 or a net
tangible book value per share of approximately $.018. The
following table shows the dilution to your equity interest
without taking into account any changes in our net tangible book
value after March 31, 2001, except the net proceeds received from
our limited offering and sale of the minimum and maximum number
of shares offered.
Assuming Minimum Assuming Maximum
Shares Sold Shares Sold
Shares Outstanding 3,530,000 3,730,000
Public offering proceeds $ 50,000 $ 200,000
at $0.75 per share (after expenses)
Net tangible book value $ 112,864 $ 262,864
after offering
Net tangible book value $.018 $.018
per share before offering
Increase attributable to $.0139 $.052
Purchase of shares by new investors
Pro forma net tangible $.0319 $.070
book value after offering
Dilution per share to new $.7181 $.68
investors
Percent dilution 95.74% 90.66%
The following table summarizes the comparative ownership and
capital contributions of existing common stock shareholders and
investors in this offering as of March 31, 2001:
Shares Owned Total Average Price
Number Consideration Per Share
% Amount
Present Shareholders
Minimum Offering 3,430,000 65% $138,160 $0.40
Maximum Offering 3,430,000 38% $138,160 $0.40
New Investors
Minimum Offering 100,000 35% $ 75,000 $.75
Maximum Offering 300,000 62% $225,000 $.75
The numbers used for Present Shareholders assumes that
none of the present shareholders purchase additional shares in
this offering. Of our Present Shareholders, the founders and
principal shareholders own 3,160,000 shares for which they paid
$3,160, while 270,000 shares were sold to accredited investors
for a total of $135,000.
6
The above table illustrates that as an investor in this
offering, you will pay a price per share that substantially
exceeds the price per share paid by current shareholders and that
you will contribute a high percentage of the total amount to fund
Alaska Freightways, but will only own a small percentage of our
shares. New investors will contribute $75,000 if the minimum is
raised or $225,000 if the maximum offering is raised, compared to
$138,160 contributed by current shareholders. Further, if the
minimum is raised, new investors will own only 2.8% of the total
shares and if the maximum is raised new investors will own only
8% of the total shares.
USE OF PROCEEDS
The net proceeds to be realized by us from this offering,
after deducting estimated offering related expenses of
approximately $25,000 is $50,000 if the minimum number of shares
is sold and $200,000 if the maximum number of shares is sold.
The following table sets forth our estimate of the use of
proceeds from the sale of the minimum and maximum amount of
shares offered. Since the dollar amounts shown in the table are
estimates only, actual use of proceeds may vary from the
estimates shown.
Description Assuming Sale of Assuming Sale of
Minimum Offering Maximum Offering
Total Proceeds $ 75,000 $ 225,000
Less Estimated Offering Expenses 25,000 25,000
Net Proceeds Available 50,000 200,000
Use of Net Proceeds
Equipment lease and maintenance 40,000 125,000
Advertising 0 25,000
Working capital 10,000 50,000
TOTAL NET PROCEEDS $ 50,000 $ 200,000
The working capital reserve may be used for general
corporate purposes to operate, manage and maintain the current
and proposed operations including wages and salaries,
professional fees, expenses and other administrative costs.
Costs associated with being a public company, including
compliance and audits of our financial statements will be paid
from working capital and revenues generated from our operations.
If we receive less than the entire offering amount, funds will be
applied according to the priorities outlined above. For example,
if more than the minimum is raised but less than the maximum
amount, the proceeds will first be allocated according to the
minimum amount and an excess will be applied 60% to equipment
lease and maintenance, 12% to advertising and the balance applied
to working capital. Pending expenditures of the proceeds of this
offering, we may make temporary investments in short-term,
investment grade, interest-bearing securities, money market
accounts, insured certificates of deposit and/or in insured
banking accounts.
DETERMINATION OF OFFERING PRICE
The offering price of the shares was arbitrarily determined
by our management. The offering price bears no relationship to
our assets, book value, net worth or other economic or recognized
criteria of value. In no event should the offering price be
regarded as an indicator of any future market price of our
securities. In determining the offering price, we considered
such factors as the prospects for our products,
7
our management's previous experience, our historical and
anticipated results of operations and our present financial
resources.
DESCRIPTION OF BUSINESS
General
We were incorporated in the state of Nevada on June 1, 2000
under the name Alaska Freightways, Inc. We currently operate in
Anchorage, Alaska under the name RL Trucking. We intend to
provide transportation and freight brokerage services.
Our business
Our initial focus will be providing trucking and freight
hauling and brokerage services, in and around the Anchorage area.
Freight hauling includes identifying loads that need to be hauled
and then use our own trucks and trailers to perform the service.
Freight brokerage services will also be employed and involves
identifying loads that need to be hauled and contracting with
other transportation services or independent contractors to
perform the service for which we receive a commission.
Strategically located in a fast developing city, Anchorage, we
will work toward establishing a steady clientele and orders for
our services. We will also actively seek other companies that
are interested in outsourcing their transportation needs. Our
primary interest is the short to medium haul trucking which is up
to fifty miles from town and freight brokerage operations.
Our current operations include local hauling of gravel
products for several ongoing projects. We are also hauling
asphalt, concrete material and ballast rock in the short to
medium haul range. We are hauling Alaskan soil from Anchorage to
Napa Valley, California and will soon deliver Alaskan soil to New
Mexico and Las Vegas.
The trucking segment
Transportation modes include rail, highway, water, air and
pipeline transportation. Ground transportation is the largest
component of the domestic freight transportation market. Ground
transportation consists primarily of trucking and rail services,
with a small portion related to pipeline transport.
Transportation service offerings that utilize multiple modes of
transportation are commonly known as intermodal. Our services
are targeted at freight that is shipped within Alaska.
Trucking is a vital segment of the transportation system in
the United States. The trucking industry is comprised of more
than 500,000 for-hire, private and government fleets, including
owner operators. It employs 9.7 million people, including 3.12
million drivers, and accounts for nearly 5% of the U.S. gross
domestic product, according to the Economics & Statistical
Analysis Department at American Trucking Association
(http://www.truckline.com/infocenter/econ/econ_about.html as of
Feb. 22, 2001). According to the same source, the for-hire
truckload market segment of the transportation industry accounted
for approximately $65 billion of revenue in 1998.
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Providers of freight hauling services include private
shippers who manage the transportation of their own freight, for-
hire service providers such as over-the-road trucking companies
and third-party transportation and logistics companies such as
intermodal marketing companies. Over-the-road trucking companies
are those providers that are dispatched for long hauls state wide
or for out of state hauling and intermodal marketing companies
are those providers that transport goods involving more than one
mode of transportation, for example, truck to train, or train to
barge. Providers in the freight transportation industry compete
on the basis of cost, delivery time, reliability and precision of
delivery and pick-up, as well as freight-specific requirements
such as handling and temperature control.
The truckload transportation market generally consists of a
service-sensitive segment and a price-sensitive segment.
Shippers of high value or time-sensitive goods tend to be more
concerned with the service capability of the carrier than simply
obtaining the lowest priced transportation. In many cases,
carriers choose either to provide premium service and charge
rates consistent with that service or to compete primarily on the
basis of price.
The trucking market is comprised of private and for-
hire fleets, handling either truckload or less-than-truckload
shipments over various lengths of haul. Relative advantages of
trucking versus other modes include flexibility of pickup, route,
and delivery as well as relatively rapid delivery cycles.
Trucking is often at a cost disadvantage versus other modes of
transportation, such as rail, due to capacity limitations and
high variable costs related to fuel and labor. However, trucking
is often advantageous for shorter lengths of haul. Private fleets
operated by shippers represent the largest sector of the non-
local trucking industry, but has been losing market share to for-
hire carriers since deregulation of the industry began in 1980.
Shippers' increased focus on cost reduction and core competencies
has led to an accelerated rate of growth of the for-hire trucking
sector.
The truckload transportation industry currently is
undergoing changes that affect both shippers and carriers.
Shippers, which are the customers of trucking companies, have
been focusing their capital resources on their primary businesses
and are outsourcing their transportation requirements. Shippers
increasingly have been seeking to reduce the number of authorized
carriers they utilize and to establish service-based, long-term
relationships with smaller groups of preferred or "core carriers"
who are often able to provide a wide range of services. While
truckload transportation market remains highly fragmented, there
is an emerging trend among carriers toward consolidation in order
to become better positioned with customers as core carriers.
Carriers are also consolidating to take advantage of economies of
scale in purchasing equipment and in recruiting and retaining
drivers.
The truckload market is further segmented on the basis of
length of haul. In the long haul market, the average length of
haul is greater than 1,500 miles. In this segment, truckload
carriers compete with air freight on the basis of lower prices
and with railroads on the basis of time of delivery. In the
medium-to-long haul segment, the average length of haul ranges
from 750 miles to 1,500 miles. We are focusing on short to
medium haul ranges.
An article released by PR Newswire on December 4, 2000 from
Alexandria, VA states that, according to the American Trucking
Associations, a record $198 billion in gifts and goods will be
delivered by truck to homes and businesses across the country, a
six percent increase over last year. As trucks fan out across
the nation bearing their special holiday cargo, the industry will
simultaneously set another record - passing the 200 billion miles-
driven mark in the year 2000.
Trucking, for-hire and private, moves more of the
nation's freight, whether measured by value, tons, and ton-miles,
than other methods such as train or air freight. Ton-miles is
the hauling cost of one ton offload per one mile of haul.
Changes in how goods are produced and increases in international
trade have contributed to the rise in freight tonnage and tin-
miles over the past few years.
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Freight brokerage segment
Other elements of the trucking industry include truck
brokerage and the use of independent contractors to provide
services. Truck brokerage involves the outsourced arrangement of
trucking services by a third-party with a licensed carrier on
behalf of a shipper. Truck brokerage allows us to offer trucking
services without actually having dedicated capacity. The use of
independent contractors generally facilitates a low investment in
transportation equipment and increased flexibility.
Operating Strategy
Our operating strategy is to provide high quality
transportation and freight brokerage services that position us as
a preferred supplier or "core carrier" to shippers, initially in
Alaska. We do not compete primarily on a price basis, but on a
price and quality basis. We seek to effect this strategy by
providing reliable, time-definite pick up and delivery services.
An important factor in our ability to effect this strategy is the
ready availability of drivers. We seek to address the chronic
driver shortage in the trucking industry through a variety of
practices. We are developing a log of drivers who are
independent contractors, allowing us to have a large number of
available work force.
We believe that our operating strategy will position us
to capitalize on evolving trends in the transportation industry.
Shippers are reducing their number of approved carriers to a
small group of core carriers. As a small carrier with the
capability to also offer freight brokerage services, we are well-
situated to capitalize on this trend.
Independent Contractors
We rely on the services of independent agents and
contractors in our trucking services. Although we lease a small
number of tractors and trailers, the majority of our truck
equipment and drivers are provided by independent contractors
and agents. Our relationships with independent contractors allow
us to provide customers with a broad range of trucking services
without the need to commit capital to acquire and maintain an
asset base.
Independent contractors and fleet owners are compensated on
the basis of mileage rates and a fixed percentage of the revenue
generated from the shipments they haul. Under the terms of our
typical contracts, independent contractors must pay all the
expenses of operating their equipment, including driver wages and
benefits, fuel, physical damage insurance, maintenance and debt
service. We have not entered into any formal contracts at the
present time.
Business Cycle
Historically, sectors of the transportation industry have
been cyclical as a result of economic recession, customers'
business cycles, increases in prices charged by third-party
carriers, interest rate fluctuations and other economic factors
over which we have no control. Increased operating expenses
incurred by third-party carriers can be expected to result in
higher costs to us, and our net revenues and income from
operations could be materially adversely affected if we were
unable to pass through to our customers the full amount of
increased transportation costs. Economic recession or a downturn
in our customers' business cycles also could have a material
adverse effect on our operating results if the volume of freight
shipped by those customers were reduced. Further, if independent
contractors cost rises as a result of adverse economic changes,
they may increase their rates which will result in higher cost to
us if we are unable to pass this cost through to our customers
when using independent contractor services.
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Competition
The transportation services industry is highly competitive
and fragmented. Our trucking and freight brokerage business
competes primarily against other domestic non-asset-based
transportation and freight brokerage companies, asset-based
transportation and freight brokerage companies, third-party
freight brokers, private shipping departments and freight
forwarders. We compete with other short to medium haul truckload
carriers; internal shipping conducted by existing and potential
customers and, to a lesser extent, railroads and air
transportation. Competition is based primarily on freight rates,
quality of service, such as damage free shipments, on-time
delivery and consistent transit times, reliable pickup and
delivery and scope of operations. We also compete with
transportation services companies for the services of independent
agents, and with trucklines for the services of independent
contractors and drivers.
There are a number of other trucking companies that may have
substantially greater financial resources, operate more equipment
or carry a larger volume of freight than we do. Our local
competition includes Weaver Bros., Inc. Alberts Trucking B&M
Trucking, Beluga Trucking Inc., and Bootleg Trucking Inc.
Some of our competitors may be prepared to accept less
favorable fee structures than us when bidding for contracts.
There can be no assurance that we will be able to compete
successfully or that the competitive pressures faced by us,
including those described, will not have a material adverse
effect on our business, results of operations and financial
condition.
We have yet to establish our reputation and develop name
recognition. We intend to become competitive by offering better
service and prices than our competitors.
Our primary emphasis is service, especially to our core
customers, rather than price alone. However, the industry in
which we operate is extremely price sensitive and we are
responsive to competitive price pressures.
As a small business and to effectively compete with
larger carriers, we have chosen a non-asset based structure.
This provides greater flexibility and allows us to accept more
jobs without having to purchase or lease additional equipment.
This also increases our name recognition in the local market.
When we commit to a contract with a client for a job that is too
large for our own capacity, we may engage services of several
independent contractors for different parts of the job. We
capitalize on the revenue received for our freight service and
our total cost includes fees paid to independent contractors.
We also compete with other motor carriers in hiring
qualified drivers. Although we currently have an adequate number
of drivers, there can be no assurance that we will not be
affected by a shortage of qualified drivers in the future.
Significant driver turnover is a problem within the industry as a
whole. In addition, the trucking industry is experiencing a
diminished workforce of qualified drivers. As a result, we must
compete with other transportation service companies for the
available drivers. We anticipate that the intense competition
for qualified drivers in the trucking industry will continue.
We contract with a select group of independent
contractors who own and operate their own tractors and trailers.
Our selection process for independent owner-operators is
substantially the same as the process for employees. Each owner-
operator is required to enter into an owner-operator lease
agreement which is cancelable by either party upon thirty days
notice. The owner-operators provide us with an additional source
of drivers, particularly during periods of peak demand for
transportation services.
11
Marketing and advertising
We intend to market high quality, "just-in-time" freight
truckload services in the truckload carrier market. Our
operations are statewide, Anchorage in particular. We are
actively establishing a presence in these regions and intend to
develop a competitive ability for the return shipment of goods,
which reduces the amount of empty truck miles and increases
overall productivity and profitability.
We currently have one employee who develops and
implements our advertising strategies, including identifying
clients and developing business relationships with local
businesses. Additionally, this person is responsible for
soliciting advertising contracts. We intend to increase the size
of our sales force as our sales and revenues increase. We intend
to use print advertising, direct mail and local telephone
directories as our initial advertising and marketing methods.
Our marketing strategy is to emphasize our commitment to
high levels of service, flexibility, responsiveness, analytical
planning and information management in order to serve customers'
demands for time definite pickup and delivery. We are seeking to
establish, maintain and strengthen our presence with prospective
customers.
We maintain a strong commitment to expanding our
relationships with our customers. Customer shipping patterns
will be monitored on a regular basis, allowing us flexibility in
responding rapidly to the varying service demands of our
customers.
Governmental Regulation
The trucking industry is subject to regulatory oversight and
legislative changes which can affect the economics of the
industry by requiring certain operating practices or influencing
the demand for, and the costs of providing, services to shippers.
The Department of Transportation of the United States ("DOT"), as
well as various state agencies that have jurisdiction over us,
have broad powers, generally governing such matters as authority
to engage in motor carrier operations, rates and charges, certain
mergers, consolidations and acquisitions, and periodic financial
reporting. Rates and charges are not directly regulated by these
authorities. As primarily a contract carrier, we negotiate
competitive rates directly with customers as opposed to relying
on schedule tariffs. State agencies impose tax, license and
bonding requirements.
The Motor Carrier Act of 1980 commenced a program to
increase competition among motor carriers and to diminish
regulation in the industry. Following this deregulation,
applicants have more easily been able to obtain DOT operating
authority, and interstate motor carriers have been able to impose
certain rate changes without DOT approval. The Motor Carrier Act
also removed many route and commodity restrictions on
transportation of freight. Each state regulates to some extent
what a motor carrier may transport in that state. We intend to
obtain authority from the states in which we may carry general
commodities such as soil, gravel, wood, etc., on an as needed
basis.
Under the Negotiated Rates Act of 1993, certain procedures
must be followed for resolving claims involving unfilled,
negotiated transportation rates. Generally, when a claim is made
by a motor carrier of property for the collection of rates and
charges in addition to those originally billed and collected by
the carrier, the person against whom the claim is made may elect
to satisfy the claim pursuant to certain provisions specified in
the Negotiated Rates Act. The Negotiated Rates Act specifies the
types of disputes to be resolved by the ICC and allows for the
nonpayment of the disputed additional compensation until the
dispute is resolved. We believe that we are in compliance in all
material respects with the provisions of the Negotiated Rates
Act.
12
Interstate motor carrier operations are subject to safety
requirements prescribed by the DOT. Such matters as weight and
dimensions of equipment are also subject to federal and state
regulation. We comply with all applicable regulations imposed on
Company's employees and owner-operators. The DOT's national
commercial driver's license, drug testing requirements and new
alcohol and drug-use regulations have not to date and are not
expected to adversely affect the availability to us of qualified
drivers.
The Company's operations are subject to federal, state and
local laws and regulations concerning the environment. We have
not received any notices from any regulatory authority relating
to any violation of any environmental law and incur no material
costs specifically related to compliance with such laws.
Employees
Mr. Nelson, our president, will devote as much time as
needed in order to run the business of Alaska Freightways, Inc.
We anticipate Mr. Strahl, our secretary/treasurer will devote at
least 50% of his time to the operations of Alaska
Freightways.
We currently have two full time employees. At present,
we do not intend to hire additional full time employees until
such time as our operations require. We are developing a log of
drivers who are independent contractors, which will allow it to
have a much larger number of available work force than if it were
to maintain a limited amount of employees. We have established
relationships with over 20 independent contractors who have
agreed to provide their services when needed. We intend to
continue to rely on independent contractors in the future.
Potential risks we may face by relying on independent contractors
is the availability of their services and any increase in
transportation costs that we cannot pass on to our customers.
Properties
Our principal address is 300 West 54th Avenue, Suite 200,
Anchorage, Alaska, 99518. Our president provides this office
space at no cost to us and will continue this arrangement until
such time as we generate sufficient revenue to rent.
We operate a fleet of eight tractors and fourteen
trailers. Three of the tractors and ten of the trailers are
owned by RL Trucking and Richard L. Strahl, an officer of the
company, five additional tractors and four trailers are on a on a
four year lease in the name of Richard L. Strahl. The Company
has signed an equipment lease agreement with Richard L. Strahl
and RL Trucking allowing the Company to lease the equipment on as
needed basis until such time as the Company can purchase its own
trucks, which minimizes the Company's capital commitment for
trucking. According to the terms of the lease, the lease
payments are to include an amount sufficient to pay the principal
and interest on the current loan against the equipment and a
reasonable amount of monies for insurance and maintenance. The
Company also agrees to assume responsibility for the payment of
all fuel used by the trucks. The aggregate annual amount we
currently pay to lease the fleet is $123,000.
The Company also intends to enter into contracts with owner-
operators to provide additional tractors and trailers if needed.
The Company plans to establish standard specifications for the
purchase of equipment replacements.
13
Legal proceedings
Our company is not a party to any bankruptcy, receivership
or other legal proceeding, and to the best of our knowledge, no
such proceedings by or against Alaska Freightways have been
threatened.
PLAN OF OPERATION
We did not have any revenue for the period ending December
31, 2000. We believe that the proceeds from this offering will
satisfy our cash requirements for the next twelve months.
In January and February 2001, we issued 270,000 shares
for $135,000 in cash. These funds are being used for legal,
accounting, administrative, consulting and marketing costs. We
need at least the minimum amount of proceeds from this offering
to further implement our business plan and continue
operations.
In March 2001, we implemented our operating plan by
providing transportation and freight brokerage services. As of
March 31, 2001 we have generated revenue of $40,400 and
recognized a net loss of $69,883. As of June 18, 2001, we have
secured three contracts:
* Isabel Construction and Excavation for $69,000. Completed
and paid in full on April 16, 2001.
* Hamilton Construction for $52,000. Job commenced May 17,
2001 with completion expected June 30, 2001.
* Quality Asphalt & Trucking for $168,000. Job commenced on
May 2, 2001 and approximate completion is scheduled for
September 2001.
Should we receive the minimum offering of $75,000, we
will realize net proceeds of $50,000. This amount will enable us
to maintain existing leases on equipment and lease additional
equipment and provide us with sufficient working capital to
continue operations for a period of twelve months. We will not
be able to fully implement our marketing and advertising plan
with proceeds from the minimum offering and instead will have to
rely on funds received from operations for marketing and
advertising. Even if we raise the minimum amount of the
offering, we may find it necessary to raise additional capital to
fully implement our business plan. Should we receive the maximum
amount of the offering, we will realize net proceeds of $200,000.
This amount will enable us to lease and purchase additional
equipment, implement our marketing and advertising plan and
provide us with additional working capital. We intend to use the
majority of the proceeds to enter additional equipment leasing
arrangements and provide maintenance for our current leased
fleet. We anticipate an increase in capital expenditures
consistent with anticipated growth in operations, infrastructure
and personnel.
We intend to develop and increase our customer base
through advertising and referrals from previous customers. If
necessary, we will advertise to increase our pool of independent
contractors.
We may purchase trucking equipment during the next twelve
month if our operating revenues are sufficient to allow us to do
so. Depending on the success of our operations, we plan to hire
up to five additional employees by the end of our first 12 months
of operations. These additional employees may serve in any of
the following capacities: drivers; marketing and promotion; and
administration.
If we are unable to raise the minimum offering amount,
it will be necessary for us to find additional funding in order
to market our services and maintain our lease arrangements. In
this event, we may seek additional financing in the form of loans
or sales of our stock. There is no assurance that we
14
will be able to obtain financing on favorable terms or at all or
that we will find qualified purchasers for the sale of our stock.
As of March 31, 2001, Alaska Freightways had a working
capital deficit of $75,446. We are devoting substantially all of
our present efforts to establishing a new business and need the
proceeds from this offering to continue our business and sell our
trucking and brokerage services. Although we started our planned
operation in March 2001, we have only generated $40,400 in
revenue as of March 31, 2001 and we have a net operating loss of
$69,883. If we cannot raise money through this offering, we will
have to seek other sources of financing or we will be forced to
curtail or terminate our business. Even if we raise the minimum
amount of this offering, we may find it necessary to raise
additional capital to fully implement our business plan. There
is no assurance that additional sources of financing will be
available at all or at a reasonable cost. These factors raise
substantial doubt about our ability to continue as a going
concern.
MANAGEMENT
Name Age Position Since
Donald L. Nelson 43 President, CEO and Director June 2000
Richard L. Strahl 58 Secretary, Treasurer and June 2000
Director
Brady Strahl 23 Director and Vice President June 2000
Donald E. Nelson, CEO, President. Mr. Nelson was the owner
of Fleet Services, a truck repair, fabrication, and maintenance
company from June 1983 to July 1987, working under contracts with
Weaver Bros., K&W Trucking, Lynden Transport, and Drilling Mud
Haulers. From July 1987 to January 1994 he worked as a shop
mechanic supervisor & instructor for Craig Taylor Equipment Co.
located in Fairbanks, Alaska. From January 1994 to December 1999
he was a supervisor, concrete and asphalt cutting, for Summit
Paving & Construction, Inc. in Anchorage, Alaska. Starting in
December 1999, Mr. Nelson has been the production manager and the
director of maintenance for APC Export, Inc. located in
Anchorage, AK.
Richard L. Strahl, Secretary/Treasurer, Director. Mr.
Strahl is currently serving as a President and CEO of APC Export,
Inc., a soil development company located in Anchorage, Alaska.
He assumed this position in September of 1998, after owning RL
Trucking company from March 1989 to October 1998. He is the
father of Brady Strahl.
Brady Strahl, Vice President and Director. From June 1995
to October 1998 Mr. Strahl was providing dispatch and equipment
management services to RL Trucking. From October 1998 to present
Mr. Strahl is an undergraduate student at Gonzaga University with
a major in Business.
COMPENSATION
The Company does not have employment contracts with its
executive officers, but has agreed to pay Donald Nelson and
Richard Strahl $80,000 each for their services in 2001. Brady
Strahl will not receive a salary until our operations are
profitable. No salaries were paid to officers for the year ended
December 31, 2000. The officers will defer their salaries until
such time as we generate sufficient revenue to pay the identified
salary.
15
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our company's charter provides that, to the fullest
extent that limitations on the liability of directors and
officers are permitted by the Nevada Revised Statutes, no
director or officer of the company shall have any liability to
the company or its stockholders for monetary damages. The Nevada
Revised Statutes provide that a corporation's charter may include
a provision which restricts or limits the liability of its
directors or officers to the corporation or its stockholders for
money damages except: (1) to the extent that it is provided that
the person actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or
profit in money, property or services actually received, or (2)
to the extent that a judgment or other final adjudication adverse
to the person is entered in a proceeding based on a finding in
the proceeding that the person's action, or failure to act, was
the result of active and deliberate dishonesty and was material
to the cause of action adjudicated in the proceeding. The
company's charter and bylaws provide that the company shall
indemnify and advance expenses to its currently acting and its
former directors to the fullest extent permitted by the Nevada
Revised Business Corporations Act and that the company shall
indemnify and advance expenses to its officers to the same extent
as its directors and to such further extent as is consistent with
law.
The charter and bylaws provide that we will indemnify our
directors and officers and may indemnify our employees or agents
to the fullest extent permitted by law against liabilities and
expenses incurred in connection with litigation in which they may
be involved because of their offices with Alaska Freightways.
However, nothing in our charter or bylaws of the company protects
or indemnifies a director, officer, employee or agent against any
liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
To the extent that a director has been successful in defense of
any proceeding, the Nevada Revised Statutes provide that he shall
be indemnified against reasonable expenses incurred in connection
therewith.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy and is, therefore,
unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of
our common stock as of the date of this prospectus, and as
adjusted to reflect the sale of 100,000 shares if we sell the
minimum and 300,000 shares if we sell the maximum.
The table includes:
each person known to us to be the beneficial owner of more than
five percent of the outstanding shares
each director of Alaska Freightways, Inc.
each named executive officer of Alaska Freightways, Inc.
Name & Address # of Shares % Before % After Offering
Beneficially Offering Minimum Maximum
Owned
Donald Nelson(1) 500,000 14.57% 14.16% 13.40%
300 East 54th Ave.
Suite 200
Anchorage, AK 99518
16
Richard L. Strahl (1)(2) 2,500,000 72.88% 70.82% 67.02%
300 East 54th Ave.
Suite 200
Anchorage, AK 99518
Brady Strahl (1)(2) 10,000 0.29% 0.28% 0.26%
GU MSC 395
502 East Boone Ave.
Spokane, WA
99258
All directors
and executive 3,010,000 87.75% 85.26% 80.69%
officers as a
group (3 people)
(1) Officer and/or director
(2) Richard L. Strahl is the father of Brady Strahl.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Richard L and Brady Strahl are father and son.
During our development stage, we entered an agreement with
Richard Strahl to provide consulting services for which we paid
$1,500.
We have entered into a lease agreement with Richard
Strahl to lease the trucks and trailers we will initially use in
our business. Mr. Strahl is to be paid the principal and
interest amount due on each loan against the equipment as well as
a reasonable amount of monies for insurance and maintenance for
each truck and trailer leased by us. We are responsible for the
payment of all fuel used by the trucks. The aggregate annual
lease amount is $123,000. As of March 31, 2001, we have paid
Mr. Strahl $28,483 under the lease agreement.
Brady Strahl purchased 10,000 shares $10 cash. Donald
Nelson purchased 500,000 shares for $500 cash. Richard Strahl
purchased 2,500,000 shares for $2,500 cash. Nina Kravchenko, a
founder, purchased 150,000 shares for $150 cash.
Richard Strahl loaned us $100 to open our corporate bank
account. We have since repaid the loan with no interest.
DESCRIPTION OF THE SECURITIES
Common Stock
We are authorized to issue up to 50,000,000 shares of common
stock with a par value of $.001. As of the date of this
prospectus, there are 3,430,000 shares of common stock issued and
outstanding.
The holders of common stock are entitled to one vote per
share on each matter submitted to a vote of stockholders. In the
event of liquidation, holders of common stock are entitled to
share ratably in the distribution of assets remaining after
payment of liabilities, if any. Holders of common stock have no
cumulative voting rights, and, accordingly, the holders of a
majority of the outstanding shares have the
17
ability to elect all of the directors. Holders of common stock
have no preemptive or other rights to subscribe for shares.
Holders of common stock are entitled to such dividends as may be
declared by the board of directors out of funds legally available
therefor. The outstanding common stock is, and the common stock
to be outstanding upon completion of this offering will be,
validly issued, fully paid and non-assessable.
We anticipate that we will retain all of our future
earnings, if any, for use in the operation and expansion of our
business. We do not anticipate paying any cash dividends on our
common stock in the foreseeable future.
Transfer Agent
Interwest Transfer Company, Inc., 1981 East 4800 South, Salt
Lake City, Utah 84124, is our transfer agent.
SHARES AVAILABLE FOR FUTURE SALE
As of the date of this prospectus, there are 3,430,000
shares of our common stock issued and outstanding. Upon the
effectiveness of this registration statement, 100,000 shares of
common stock will be freely tradable is the minimum is sold and
300,000 shares of common stock will be freely tradable if the
maximum is sold. The remaining 3,430,000 shares of common stock
will be subject to the resale provisions of Rule 144. Sales of
shares of common stock in the public markets may have an adverse
effect on prevailing market prices for the common stock.
Rule 144 governs resale of "restricted securities" for the
account of any person (other than an issuer), and restricted and
unrestricted securities for the account of an "affiliate of the
issuer. Restricted securities generally include any securities
acquired directly or indirectly from an issuer or its affiliates
which were not issued or sold in connection with a public
offering registered under the Securities Act. An affiliate of
the issuer is any person who directly or indirectly controls, is
controlled by, or is under common control with the issuer.
Affiliates of the company may include its directors, executive
officers, and person directly or indirectly owning 10% or more of
the outstanding common stock. Under Rule 144 unregistered
resales of restricted common stock cannot be made until it has
been held for one year from the later of its acquisition from the
company or an affiliate of the company. Thereafter, shares of
common stock may be resold without registration subject to Rule
144's volume limitation, aggregation, broker transaction, notice
filing requirements, and requirements concerning publicly
available information about the company ("Applicable
Requirements"). Resales by the company's affiliates of
restricted and unrestricted common stock are subject to the
Applicable Requirements. The volume limitations provide that a
person (or persons who must aggregate their sales) cannot, within
any three-month period, sell more that the greater of one percent
of the then outstanding shares, or the average weekly reported
trading volume during the four calendar weeks preceding each such
sale. A non-affiliate may resell restricted common stock which
has been held for two years free of the Applicable Requirements.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
We have six shareholders of our stock. Currently, there is
no public trading market for our securities and there can be no
assurance that any market will develop. If a market develops for
our securities, it will likely be limited, sporadic and highly
volatile.
Presently, we are privately owned. This is our initial
public offering. Most initial public offerings are underwritten
by a registered broker-dealer firm or an underwriting group.
These underwriters generally will act as market makers in the
stock of a company they underwrite to help insure
18
a public market for the stock. This offering is to be sold by
our officers and directors. We have no commitment from any
brokers to sell shares in this offering. As a result, we will
not have the typical broker public market interest normally
generated with an initial public offering. Lack of a market for
shares of our common stock could adversely affect a shareholder
in the event a shareholder desires to sell his shares.
Currently, we do not plan to have our shares listed nor do we
have any agreements with any market makers. At some time in the
future, a market maker may make application for listing our
shares.
Currently the Shares are subject to Rule 15g-9, which
provides, generally, that for as long as the bid price for the
Shares is less than $5.00, they will be considered "penny stocks"
under rules promulgated under the Exchange Act. Under these
rules, broker-dealers participating in transactions in low priced
securities must first deliver a risk disclosure document which
describes the risks associated with such stocks, the broker-
dealer's duties, the customer's rights and remedies, and certain
market and other information, and make a suitability
determination approving the customer for low priced stock
transactions based on the customer's financial situation,
investment experience and objectives. Broker-dealers must also
disclose these restrictions in writing to the customer and obtain
specific written consent of the customer, and provide monthly
account statements to the customer. Should the broker-dealer
fail to meet the disclosure requirements within the time
specified under Rule 15g3, the purchaser may enjoy the right to
rescind the transaction. Consequently, so long as the common
stock is a designated security under the Rule, the ability of
broker-dealers to effect certain trades may be affected
adversely, thereby impeding the development of a meaningful
market in the common stock. The likely effect of these
restrictions will be a decrease in the willingness of broker-
dealers to make a market in the stock, decreased liquidity of the
stock and increased transaction costs for sales and purchases of
the stock as compared to other securities.
PLAN OF DISTRIBUTION
We are offering up to 300,000 shares on a best efforts
basis directly to the public through our officers and directors.
Specifically, Mr. Brady Strahl, an officer and director, will
offer the shares for Alaska Freightways. The offering is a best
efforts offering and will conclude 90 days from the date of this
prospectus unless extended an additional 30 days our discretion.
We may terminate this offering prior to the expiration date.
In order to buy our shares, you must complete and execute
the subscription agreement and make payment of the purchase price
for each share purchased either in cash or by check payable to
the order of Brighton Bank, Alaska Freightways, Inc., Escrow
Account.
Solicitation for purchase of our shares will be made only by
means of this prospectus and communications with our officers and
directors who are employed to perform substantial duties
unrelated to the offering, who will not receive any commission or
compensation for their efforts, and who are not associated with a
broker or dealer.
Our officers and directors will not register as a broker-
dealer pursuant to Section 15 of the Securities Exchange Act of
1934, in reliance upon Rule 3a4-1, which sets forth those
conditions under which a person associated with an issuer may
participate in the offering of the issuer's securities and not be
deemed to be a broker-dealer.
We have the right to accept or reject subscriptions in whole
or in part, for any reason or for no reason. All monies from
rejected subscriptions will be returned immediately by us to the
subscriber, without interest or deductions. Subscriptions for
securities will be accepted or rejected within 48 hours after we
receive them.
19
LEGAL MATTERS
The legality of the issuance of the shares offered hereby
and certain other matters will be passed upon for Alaska
Freightways, Inc. by Lehman Walstrand & Associates LLC, Salt Lake
City, Utah.
EXPERTS
The audited financial statements of Alaska Freightways, Inc.
as of December 31, 2000 appearing in this Prospectus and
Registration Statement have been audited by Hawkins Accounting,
Certified Public Accountant, as set forth in their report
appearing elsewhere herein, and are included in reliance upon
such report given upon the authority of said firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
We have filed a Registration Statement on Form SB-2 under
the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares offered hereby. This Prospectus does
not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further
information with respect to Alaska Freightways and the shares
offered hereby, reference is made to the Registration Statement
and the exhibits and schedules filed therewith. A copy of the
Registration Statement, and the exhibits and schedules thereto,
may be inspected without charge at the public reference
facilities maintained by the Securities and Exchange Commission
in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the regional offices of the Commission located at Seven World
Trade Center, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and
copies of all or any part of the Registration Statement may be
obtained from the Commission upon payment of a prescribed fee.
This information is also available from the Commission's Internet
web site, http://www.sec.gov.
20
Alaska Freightways, Inc.
[A Development Stage Company]
CONTENTS
PAGE
Independent Auditors' Review Report 22
Balance Sheets, March 31, 2001 23
Statement of Operations for the three months
ended March 31, 2001 24
Statement of Shareholders' Equity for the three
months ended March 31, 2001 25
Statement of Cash Flows for the three months
ended March 31, 2001 26
Notes to Financial Statements 27
Independent Auditors' Report 30
Balance Sheets, December 31, 2000 31
Statements of Operations 32
Statement of Stockholders' (Deficit) 33
Statements of Cash Flows, for the years ended 34
Notes to Financial Statements 35
21
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS, CA 93901
(831) 759-2480 FAX (831) 759-2482
To the Board of Directors
Alaska Freightways, Incorporated
Anchorage, Alaska
I have reviewed the accompanying consolidating and consolidated
balance sheet of Alaska Freightways, Incorporated as of March 31,
2001 and the related statement of operations stockholders' equity
and the statement of cash flows for the three months then ended,
in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial
statements is the representation of the management of Alaska
Freightways, Incorporated.
A review consists principally of inquiries of company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications
that should be made to the accompanying financial statements and
the cumulative results of operations and cash flows in order for
them to be in conformity with generally accepted accounting
principles.
/s/ Hawkings Accounting
July 12, 2001
22
ALASKA FREIGHTWAYS, INC.
BALANCE SHEET
March 31, 2001
ASSETS
Current assets
Cash $ 3,331
Accounts receivable 42,600
Investments 17,900
Total current assets 63,831
Fixed assets
Office equipment 1,134
Total assets $ 64,965
LIABILITIES
Current liabilities
Accounts payable $ 2,101
Loan payable 0
Total liabilities 2,101
SHAREHOLDERS' EQUITY
Common stock 50,000,000 shares
authorized $.001 par value
3,430,300 outstanding 3,430
Paid in capital 134,880
Retained earnings (75,446)
62,864
Total liabilities and shareholders' equity $ 64,965
See accompanying notes and accountant's report
23
ALASKA FREIGHTWAYS, INC.
STATEMENT OF OPERATIONS
For the three months ended March 31, 2001
Revenue $ 40,400
Cost of revenue 30,832
Gross margin 9,568
Operating expenses
Accounting fees 300
Advertising 120
Bank charges 63
Consulting fees 37,332
Freight and delivery 107
Insurance 7,980
Licenses and taxes 2,500
Office supplies 295
Postage 153
Printing and reproduction 21
Professional services 1,518
Rent 3,000
Repairs 15,420
Telephone 618
Training 3,000
Travel and entertainment 7,024
Total expenses 79,451
(Loss) from operations (69,883)
Other income and (expenses) 0
Net (loss) $ (69,883)
(Loss) per share $ (0.02)
Weighted average per share 3,406,969
See accompanying notes and accountant's report
24
ALASKA FREIGHTWAYS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
For the three months ended March 31, 2001
Deficit
Accumulated
During
Paid in Development
Date Shares Amount Capital Stage Total
December 31, 2000 3,160,000 $ 3,160 $ 0 $ (5,563) $ (2,403)
January, 2001 200,300 200 99,950 100,150
February, 2001 70,000 70 34,930 35,000
March, 2001 0 0 0
Net (loss) (69,883) (69,883)
3,430,300 $ 3,430 $ 134,880 $ (75,446) $ 62,864
See accompanying notes and accountant's report
25
ALASKA FREIGHTWAYS, INC.
STATEMENT OF CASH FLOWS
For the three months ended March 31, 2001
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) $ (69,883)
Adjustments to reconcile net income
to net cash provided by operating activities
Increase in accounts receivable (42,600)
Increase in investments (17,900)
Increase (Decrease) in accounts payable (899)
(Decrease) in note payable (100)
NET CASH PROVIDED BY
OPERATING ACTIVITIES (131,382)
INVESTING ACTIVITIES
Purchase of equipment 1,134
FINANCING ACTIVITIES
Sale of common stock 135,150
INCREASE IN CASH AND CASH
EQUIVALENTS 2,634
Cash and cash equivalents at beginning of year 697
Cash and cash equivalents at end of period $ 3,331
See accompanying notes and accountant's report
26
ALASKA FREIGHTWAYS, INC.
FOOTNOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business - Alaska Freightways, Inc (the
"Company) operates as a trucking company hauling over
the road goods.
Investments - The Company classifies its marketable
debt securities as "held to maturity". All other
marketable securities are classified as "available for
sale". Securities classified as "available for sale
are carried in the financial statements at fair value.
Realized gains and losses determined using the first
in, first out (FIFO) method, are included in earnings;
unrealized holding gains and losses are reported in
other comprehensive income. Securities classified as
held to maturity are carried at amortized cost.
Pervasiveness of estimates - The preparation of
financial statements in conformity with generally
accepted accounting principles requires management to
make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from these estimates.
Cash and cash equivalents - For financial statement
presentation purposes, the Company considers all short
term investments with a maturity date of three months
or less to be cash equivalents.
Property and equipment - Property and equipment are
recorded at cost. Maintenance and repairs are expensed
as incurred; major renewals and betterments are
capitalized. When items of property or equipment are
sold or retired, the related costs and accumulated
depreciation are removed from the accounts and any gain
or loss is included in income.
Depreciation is provided using the straight-line
method, over the useful lives of the assets. Since the
company has yet to commence operations, no depreciation
has been taken. Equipment consists of moldings being
developed.
Income taxes - Income taxes are provided for the tax
effects of transactions reported in the financial
statements and consist of taxes currently due plus
deferred taxes related primarily to differences between
the recorded book basis and the tax basis of assets and
liabilities for Financial and income tax reporting.
The deferred tax assets and liabilities represent the
future tax return consequences of those differences,
which
27
ALASKA FREIGHTWAYS, INC.
FOOTNOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1: SIGNIFICANT ACCOUTNING POLICIES (CON'T):
will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred
taxes are also recognized for operating losses that are
available to offset future taxable income.
Material Adjustments - Management is not aware of any
material adjustments that need to be to the financial
statements in order for them to be in compliance with
generally accepted accounting principles.
NOTE 2: BACKGROUND
The Company was incorporated under the laws of the State of
Nevada on June 1, 2000. The principal activities of the Company,
from the beginning of the development stage, have been
organizational matters and the sale of stock.
NOTE 3: COMMON STOCK
Founder's stock- at the initial organizational meeting of the
Company, the board of directors voted to issue stock to the
founders of the corporation. These shares which total 3,160,000
shares are to be issued for consideration of $.001 per share. As
of December 31, 2000 3,160,000 shares have been paid for and
issued.
The Company sold 270,300 shares of its common stock at $.50 a
share raising $135,150 in capital. These shares were sold to
four different investors.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with the majority
shareholder to lease the necessary equipment in order to commence
operations. The Company further agrees that these leases are
operating leases and will lease only the needed equipment until
such time as the Company is able to purchase the equipment
itself. For the period ending March 31, 2001 that amount was
$28,483.
28
ALASKA FREIGHTWAYS, INC.
FOOTNOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the
following components: current tax benefit of $10,000 resulting
from a net loss before income taxes, and a deferred tax expense
of $10,000 resulting from a valuation allowance recorded against
the deferred tax asset resulting from net operating losses. Net
operating loss carryforward will expire in 2020 and 2001.
The valuation allowance will be evaluated at the end of each
year, considering positive and negative evidence about whether
the asset will be realized. At that time, the allowance will
either be increased or reduced; reduction would result in the
complete elimination of the allowance if positive evidence
indicates that the value of the deferred tax asset is no longer
required.
NOTE 6: GOING CONCERN
From the date of inception to March 31, 2001, the Company has yet
to commence actual operations and receiving revenue, and, has net
losses from operating activities which raise substantial doubt
about its ability to continue as a going concern.
Also during this period of development stage the Company pursuant
to an exemption under Rule 504 of Regulation D of the Securities
Act of 1933, as amended (the Act), the Company intends to sell
solely to accredited and/or sophisticated investors, its common
stock. Each share has a par value of $.001and is being offered
at $.50 a share.
The Company's ability to continue as a going concern is dependent
upon a successful public offering and ultimately achieving
profitable operations.
There is no assurance that the Company will be successful in its
efforts to raise additional proceeds or achieve profitable
operations. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
29
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS, CA 93901
(831) 759-2480 FAX (831) 759-2482
To the Board of Directors and Shareholders
Alaska Freightways, Inc.
Anchorage, Alaska
Independent Auditor's Report
I have audited the balance sheet of Alaska Freightways, Inc. (a
development stage company) as of December 31, 2000 and the
related statements of operations, stockholders' equity and cash
flows from June 1, 2000, date of inception, to year end December
31, 2000. These financial statements are the responsibility of
the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I 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 assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides reasonable basis for my opinion.
In my opinion, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial
position of Alaska Freightways, Inc as of December 31, 2000, the
results of operations the cash flows and the cumulative results
of operations and cumulative cash flows from June 1, 2000, date
of inception, to the year then ended December 31, 2000, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 6 to the financial statements, the Company has incurred net
losses since inception, which raise substantial doubt about its
ability to continue as a going concern. The financial statements
do not include any adjustment that might result from the outcome
of this uncertainty.
/s/ Hawkins Accounting
January 25, 2001
(except for Note 7, as to
which the date is March 13, 2001)
30
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 2000
ASSETS
Current assets
Cash $ 697
Total assets $ 697
assets
LIABILITIES
Current liabilities
Accounts payable 3,000
Loan payable 100
Total liabilities 3,100
SHAREHOLDERS' EQUITY
Common stock 50,000,000 shares
authorized $.001 par value
3,160,000 outstanding 3,160
Retained (Deficit) (5,563)
(2,403)
Total liabilities and shareholders' equity $ 697
The accompanying notes are an integral part of these financial
statements
31
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
From date of inception to December 31, 2000
Deficit
Accumulated
During
Development
Stage
Revenue $ 0 $ 0
Cost of revenue 0 0
Gross margin 0 0
Operating expenses
Accounting fees 4,000 4,000
Bank charges 63 63
Consulting fees 1,500 1,500
Total expenses 5,563 5,563
(Loss) from operations (5,563) (5,563)
Other income and (expense) 0 0
Net (loss) $ (5,563) $ (5,563)
(Loss) per share $ (0.01) $ (0.01)
Weighted average share 3,160,000 3,160,000
The accompanying notes are an integral part of these financial
statements
32
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' (DEFICIT)
From June 1, 2000, date of inception to December 31, 2000
Deficit
Accumulated
During
Paid in Development
Date Shares Amount Capital Stage Total
December 13, 2000 500,000 $ 500 $ 0 $ $ 500
December 13, 2000 10,000 10 0 10
December 20, 2000 2,500,000 2,500 0 2,500
December 26, 2000 150,000 150 150
Net (loss) (5,563) (5,563)
3,160,000 $ 3,160 $ 0 $ (5,563) $ (2,403)
The accompanying notes are an integral part of these financial
statements
33
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
From date of inception to December 31, 2000
Deficit
Accumulated
During
Development
Stage
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (los) $ (5,563) $ (5,563)
Adjustments to reconcile net income
to net cash provided by operating activities
Increase in accounts payable 3,000 3,000
Increase in note payable 100 100
NET CASH PROVIDED BY
OPERATING ACTIVITIES (2,463) (2,463)
INVESTING ACTIVITIES 0 0
FINANCING ACTIVITIES
Sale of common stock 3,160 3,160
NET CASH REALIZES FROM FINANCING
ACTIVITIES 3,160 3,160
INCREASE IN CASH AND CASH
EQUIVALENTS $ 697 $ 697
The accompanying notes are an integral part of these financial
statements
34
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
FOOTNOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business - Alaska Freightways, Inc (the
"Company) operates as a trucking company hauling over
the road goods.
Development Stage Company - The Company is a
development stage company, as defined in the Financial
Accounting Standards Board No. 7. The Company is
devoting substantially all of its present efforts in
funding the company and attracting investors for major
expansion.
Pervasiveness of estimates - The preparation of
financial statements in conformity with generally
accepted accounting principles requires management to
make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from these estimates.
Cash and cash equivalents - For financial statement
presentation purposes, the Company considers all short
term investments with a maturity date of three months
or less to be cash equivalents.
Property and equipment - Property and equipment will be
recorded at cost. Maintenance and repairs are expensed
as incurred; major renewals and betterments are
capitalized. When items of property or equipment are
sold or retired, the related costs and accumulated
depreciation are removed from the accounts and any gain
or loss is included in income.
Depreciation will be provided using the straight-line
method, over the useful lives of the assets. Since the
company has yet to commence operations, no depreciation
has been taken. Equipment consists of moldings being
developed.
Income taxes - Income taxes are provided for the tax
effects of transactions reported in the financial
statements and consist of taxes currently due plus
deferred taxes related primarily to differences between
the recorded book basis and the tax basis of assets and
liabilities for Financial and income tax reporting.
The deferred tax assets and liabilities represent the
future tax return consequences of those differences,
which will either be taxable or deductible when the
assets and liabilities are recovered or settled.
Deferred taxes are also recognized for operating losses
that are available to offset future taxable income.
35
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
FOOTNOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 2: BACKGROUND
The Company was incorporated under the laws of the State of
Nevada on June 1, 2000. The principal activities of the Company,
from the beginning of the development stage, have been
organizational matters and the sale of stock.
NOTE 3: COMMON STOCK
Founder's stock- at the initial organizational meeting of the
Company, the board of directors voted to issue stock to the
founders of the corporation. These shares which total 3,160,000
shares are to be issued for consideration of $.001 per share. As
of December 31, 2000 3,160,000 shares have been paid for and
issued.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with the majority
shareholder to lease the necessary equipment in order to commence
operations. The Company further agrees that these leases are
operating leases and will lease only the needed equipment until
such time as the Company is able to purchase the equipment
itself.
The Company further paid the majority shareholder a total of
$1,500 for the period of inception to year-end for consulting
services.
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the
following components: current tax benefit of $800 resulting from
a net loss before income taxes, and a deferred tax expense of
$800 resulting from a valuation allowance recorded against the
deferred tax asset resulting from net operating losses. Net
operating loss carryforward will expire in 2020.
The valuation allowance will be evaluated at the end of each
year, considering positive and negative evidence about whether
the asset will be realized. At that time, the allowance will
either be increased or reduced; reduction would result in the
complete elimination of the allowance if positive evidence
indicates that the value of the deferred tax asset is no longer
required.
36
ALASKA FREIGHTWAYS, INC.
(A Development Stage Company)
FOOTNOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 6: GOING CONCERN
From the date of inception to December 31, 2000, the Company has
yet to commence actual operations and receiving revenue, and, has
net losses from operating activities which raise substantial
doubt about its ability to continue as a going concern.
The Company plans to commence operations during its first quarter
of the year ending March 31, 2001.
Also during this period of development stage the Company pursuant
to an exemption under Rule 504 of Regulation D of the Securities
Act of 1933, as amended (the Act), the Company intends to sell
solely to accredited and/or sophisticated investors, its common
stock. Each share has a par value of $.001and is being offered
at $.50 a share.
The Company's ability to continue as a going concern is dependent
upon a successful public offering and ultimately achieving
profitable operations.
There is no assurance that the Company will be successful in its
efforts to raise additional proceeds or achieve profitable
operations. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
NOTE 7: SUBSEQUENT EVENTS
The Company raised $135,000 through sale of stock subsequent to
the balance sheet date. This was raised solely through
accredited and sophisticated investors.
Also, the $100 note payable was paid subsequent to the balance
sheet date to the majority shareholder. This was the amount
necessary to open the corporate bank account.
The company has incurred $287 in offering costs associated with
the filing of the regulation 504-D.
37
====================================
Until _____________, 2001, all
dealers that effect $75,000 / $225,000
transactions in these
securities, whether or not
participating in this offering,
may be required to deliver a
prospectus. This is in Alaska Freightways, Inc.
addition to the dealers'
obligation to deliver a
prospectus when acting as
underwriters and with respect
to their unsold allotments or 100,000 Shares Minimum
subscriptions. 300,000 Shares Maximum
Common Stock
- ------------------------------- $.001 Par Value
TABLE OF CONTENTS
- -------------------------------
Prospectus Summary 2 ---------------------
Risk Factors 2 PROSPECTUS
Forward-Looking Statements 5 ---------------------
Dilution and Comparative Data 6
Use of Proceeds 7
Determination of Offering Price 7
Description of Business 8
Plan of Operation 14
Management 15
Compensation 15
Principal Stockholders 16
Certain Relationships and ___________________ 2001
Related Transactions 17
Description of the Securities 17
Shares Available for Future
Sale 18
Market for Common Stock 18
Plan of Distribution 19
Legal Matters 20
Experts 20
Additional Information 20
Index to Financial Statements 21
No dealer, salesperson or 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 the Company. This
Prospectus does not constitute
an offer to sell or a
solicitation of an offer to buy
any of the securities offered
hereby to whom it is unlawful
to make such offer in any
jurisdiction. Neither the
delivery of this Prospectus nor
any sale made hereunder shall,
under any circumstances, create
any implication that
information contained herein is
correct as of any time
subsequent to the date hereof
or that there has been no
change in the affairs of the
Company since such date.
====================================
38
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our company's charter provides that, to the fullest extent
that limitations on the liability of directors and officers are
permitted by the Nevada Revised Statutes, no director or officer
of the company shall have any liability to the company or its
stockholders for monetary damages. The Nevada Revised Statutes
provide that a corporation's charter may include a provision
which restricts or limits the liability of its directors or
officers to the corporation or its stockholders for money damages
except: (1) to the extent that it is provided that the person
actually received an improper benefit or profit in money,
property or services, for the amount of the benefit or profit in
money, property or services actually received, or (2) to the
extent that a judgment or other final adjudication adverse to the
person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the
result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding. The company's
charter and bylaws provide that the company shall indemnify and
advance expenses to its currently acting and its former directors
to the fullest extent permitted by the Nevada Revised Business
Corporations Act and that the company shall indemnify and advance
expenses to its officers to the same extent as its directors and
to such further extent as is consistent with law.
The charter and bylaws provide that we will indemnify our
directors and officers and may indemnify our employees or agents
to the fullest extent permitted by law against liabilities and
expenses incurred in connection with litigation in which they may
be involved because of their offices with Alaska Freightways.
However, nothing in our charter or bylaws of the company protects
or indemnifies a director, officer, employee or agent against any
liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
To the extent that a director has been successful in defense of
any proceeding, the Nevada Revised Statutes provide that he shall
be indemnified against reasonable expenses incurred in connection
therewith.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy and is, therefore,
unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection
with this Registration Statement. We will pay all expenses of the
offering. All of such expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Securities and Exchange $ 56.25
Commission Filing Fee
Printing Fees and Expenses 1,000.00
Legal Fees and Expenses 15,000.00
Accounting Fees and Expenses 7,000.00
Blue Sky Fees and Expenses 1,000.00
Trustee's and Registrar's Fees 500.00
Miscellaneous 443.75
TOTAL $ 25,000.00
39
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Upon incorporation, we issued 500,000 shares for $500 cash,
10,000 shares for $10 cash, 2,500,000 shares for $2,500 cash and
150,000 shares for $150 cash to our founders. The securities
were sold in a private transaction, without registration in
reliance on the exemption provided by Section 4(2) of the
Securities Act. The investors had a pre-existing relationship
with the Company and had access to all material information
pertaining to the Company and its financial condition. No broker
was involved and no commissions were paid in the transaction.
In January 2001, we issued 270,000 shares for $135,000
cash to three accredited investors pursuant to Regulation D, Rule
504. The securities were sold in a private transaction, without
registration in reliance on the exemption provided by Regulation
D, Rule 504. No broker was involved and no commissions were paid
in the transaction. Neither Alaska Freightways nor any person
acting on its behalf offered or sold the securities by any form
of general solicitation or general advertising.
ITEM 27. EXHIBITS.
SEC Ref. Title of Document Location
No.
3.1 Articles of Incorporation *
3.2 By-laws *
5 Legal Opinion included in Exhibit 23.1 *
10.1 Material Contract-Equipment Lease *
23.1 Consent of Lehman Walstrand & Associates *
23.2 Consent of Hawkins Accounting Attached
99.1 Escrow Agreement *
99.2 Subscription Agreement *
* Incorporated by reference to the SB-2 registration statement
filed April 3, 2001
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
provisions described in this Registration Statement or otherwise,
we have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the us of expenses incurred or paid by a director, officer or
controlling persons of Alaska Freightways 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, we 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 of
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.
The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3)
of the Securities Act;
40
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain
unsold at the end of the offering.
41
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, Alaska Freightways, Inc., certifies that it has reasonable
ground to believe that it meets all of the requirements of filing
on Form SB-2 and authorizes this Registration Statement to be
signed on its behalf on August 2, 2001.
Alaska Freightways, Inc.
By:/s/ Donald Nelson
President
By: /s/ Richard Strahl
Treasurer and Chief
Accounting Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
person in the capacity and on the dates indicated.
42
POWER OF ATTORNEY
Know all men by these presents, that each person whose
signature appears below constitutes and appoints Donald Nelson
and Richard Strahl (with full power to each of them to act alone)
as his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead
in any and all capacities to sign any or all amendments or post-
effective amendments to this Registration Statement, including
registration statements filed or amendments made pursuant to Rule
462 under the Securities Act of 1933, as amended, and to file the
same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, to sign
any and all applications, registration statements, notices or
other document necessary or advisable to comply with the
applicable state securities laws, and to file the same, together
with all other documents in connection therewith, with the
appropriate state securities authorities, granting unto said
attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, thereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated: August 2, 2001 /s/ Donald Nelson
Donald Nelson
Director and President
Dated: August 2, 2001 /s/ Richard Strahl
Richard Strahl
Director, Secretary & Treasurer
Dated: August 2, 2001 /s/ Brady Strahl
Brady Strahl
Director
43