AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON February 13, 2002
REGISTRATION NO. 333-66690
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 2 to
FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
UPSIDE DEVELOPMENT, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 39-1765590
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
141 North Main Street, Suite 207
West Bend, Wisconsin 53095
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(Address of Principal Executive Office) (Zip Code)
Commission File No.: 000-26235
Michael Porter, Chief Executive Officer
141 North Main Street, Suite 207, West Bend, Wisconsin 53095
(262) 334-4500
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(Name, address and telephone number of agent for service)
Copies to:
Michael S. Krome, P.C.
8 Teak Court
Lake Grove, New York 11755
(631) 737-8381
(631) 737-8382 (fax)
Securities to be registered pursuant to Section 12(b) of the Act:
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
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.
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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 registration statement for the same
offering. ________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. _________
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
Be Registered Registered Per Share (1) Offering Price (1) Fee (3)
- ---------------- ----------- --------- ----------------- ---------
Common Stock, 47,155,600 $0.075 $3,536,670 $933.68
par value $.01
per share
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457, based on the closing price of the Common
Stock, as reported by the OTC Bulletin Board, on July 31, 2001.
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================================================================================
(1) The shares of common stock are being registered hereby for the account of
certain shareholders of Upside Development, Inc. No other shares of common
stock are being registered pursuant to this offering. Pursuant to Rule 416,
this registration statement also covers such indeterminate number of
additional shares of common stock as may be issued because of future stock
dividends, stock distributions, stock splits, or similar capital
readjustments.
(2) Estimated solely for the purpose of calculating the filing fee pursuant to
Rule 457(c) under the Securities Act of 1933.
(3) $449.26 was paid on the initial filing of this registration statement on
August 3, 2001. The additional $484.42 represents additional shares and
shares underlying certain warrants to be registered that were not included
in the original filing
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THAT DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE SEC, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
This prospectus is part of a shelf registration statement, which Upside
Development, Inc. has filed with the Securities and Exchange Commission. Under
the shelf registration statement, Upside Development may offer shares of common
stock, warrants or other rights to purchase shares of capital stock. In
addition, up to 47,155,600 shares of common stock may be offered by certain
selling stockholders. Under the shelf registration process, we and the selling
stockholders may sell the securities from time to time in one or more separate
offerings, in amounts, at prices and on terms to be determined at the time of
sale. Our common stock is listed on the Over the Counter Bulletin Board,
maintained by the NASD, under the symbol "UPSD". In addition to common stock, we
also have shares of preferred stock issued and outstanding. The rights of
holders of common stock and preferred stock differ with respect to some aspects
of convertibility and voting (See" Preferred Stock"). We will not offer or sell
any shares of preferred stock under this prospectus. This prospectus provides a
general description of the securities that we may offer. Each time we sell
shares of common stock or warrants or other rights, we will provide a prospectus
supplement which will contain the specific terms of the securities being offered
at that time. The prospectus supplement may add, update or change information
contained in this prospectus. You should read both this prospectus and the
prospectus supplement in conjunction with the additional information described
under the headings "Where You Can Find More Information" and "Information
Incorporated by Reference."
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Limitation of Liability and Indemnification matters
The Registrant's certificate of incorporation limits the liability of the
Registrant's directors to the maximum extent permitted by Delaware law. Delaware
law provides that a director of a corporation will not be personally liable for
monetary damages for breach of that individual's fiduciary duties as a director
except for liability for (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2) any act or omission not in good faith or
that involves intentional misconduct or a knowing violation of the law, (3)
unlawful payments of dividends or unlawful stock repurchases or redemptions, or
(4) any transaction from which the director derived an improper personal
benefit.
This limitation of liability does not apply to liabilities arising under federal
securities laws and does not affect the availability of equitable remedies such
as injunctive relief or rescission.
The Delaware General Corporation Law provides that a corporation may indemnify
directors and officers, as well as other employees and individuals, against
attorneys' fees and other expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
any threatened, pending or completed actions, suits or proceedings in which such
person was or is a party or is threatened to be made a party by reason of such
person being or having been a director, officer, employee or agent of the
corporation. The Delaware General Corporation Law provides that this is not
exclusive of other rights to which those seeking indemnification may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise.
The Registrant's certificate of incorporation and bylaws provide that the
Registrant is required to indemnify its directors and officers to the maximum
extent permitted by law. The Registrant's bylaws also require the Registrant to
advance expenses incurred by an officer or director in connection with the
defense of any action or proceeding arising out of that party's status or
service as a director or officer of the Registrant or as a director, officer,
employee benefit plan or other enterprise, if serving as such at the
Registrant's request. The Registrant's bylaws also permit the Registrant to
secure insurance on behalf of any director or officer for any liability arising
out of his or her actions in a representative capacity. The Registrant intends
to enter into indemnification agreements with its directors and some of its
officers containing provisions that (1) indemnify, to the maximum extent
permitted by Florida law, those directors and officers against liabilities that
may arise by reason of their status or service as directors or officers except
liabilities arising from willful misconduct of a culpable nature, (2) to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified, and (3) to obtain directors' and officers' liability
insurance if maintained for other directors or officers.
The Registrant's predecessor limited liability company had liability insurance
for its management committee members and officers and the Registrant intends to
obtain directors' and officers' liability insurance for its directors and
officers.
Reference is also made to the Underwriting Agreement to be filed as Exhibit 3(g)
to the Registration Statement for information concerning the underwriters'
obligation to indemnify the Registrant and its officers and directors in certain
circumstances.
Item 25. Expenses
The following table sets forth the expenses, other than the underwriting
discounts and commissions, paid or payable by the Registrant in connection with
the distribution of the securities being registered. All amounts are estimates
except the SEC registration fee, the NASD filing fee and the Nasdaq National
Market listing fee.
Securities and Exchange Commission registration fee........ $ 928.74
Accounting fees and expenses............................... $10,000.00
Legal fees and expenses.................................... $10,000.00
Printing and engraving expenses............................ $ 2,500.00
Blue Sky fees and expenses (including legal fees).......... $ 2,500.00
TOTAL...................................................... $25,928.74
Item 26. Recent Sales of Unregistered Securities.
The following information describes sales of unregistered securities by the
Registrant since December 31, 2000.
Shareholder Number of Shares Purchased %of Beneficial Ownership
Bruce Lipshutz 500,000 (2) *
John Greco 20,000 (2) *
Michael Grant 1,000,000 (2) 2.05%
Upside Development. relied upon Section 4(2) of the Act and Rule 506 of
Regulation D for these transactions regarding the issuance of its unregistered
securities. In each instance, such reliance was based upon the fact that (i) the
issuance of the shares did not involve a public offering, (ii) there were no
more than 35 investors (excluding accredited investors), (iii) each investor who
was not an accredited investor either alone or with his purchaser
representative(s) has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the prospective
investment, or the issuer reasonably believes immediately prior to making any
sale that such purchaser comes within this description, (iv) the offers and
sales were made in compliance with Rules 501 and 502, (v) the securities were
subject to Rule 144 limitation on resale and (vi) each of the parties is a
sophisticated purchaser and had full access to the information on Upside
Development, Inc. necessary to make an informed investment decision by virtue of
the due diligence conducted by the purchaser or available to the purchaser prior
to the transaction.
Neither the offer nor the sale of any of the securities was accomplished by the
publication of any advertisement.
Augustine Convertible description.
The note provides that Upside Development can borrow up to $1,000,000 from
Augustine, in increments of $25,000. At the option of Augustine, the amount owed
may be converted into common stock of Upside Development, under the terms and
conditions of the Note If, Augustine Capital Management, LLC., converts the
promissory note into shares of common stock, Upside Development, Inc. will not
have to repay the note with cash, but by issuing shares of common stock, based
upon the selling price of the stock at the time of conversion. The following
chart wets out certain examples. The prices listed do not represent the actual
conversion price, which can not be determined at this time.
Conversion Price No. of Shares No. of Shares to Augustine % of Beneficial
At today's Price at Conversion Price Ownership (1)
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$0.03 38,698,645 33,333,333 46.27
$0.0225 38,695,645 44,444,444 53.45
$0.15 38,695,645 66,666,666 63.68
$0.007 38,695,645 142,857,140 78.68
(1) Based upon shares outstanding at end of offering contained herein.
Item 27. Exhibits and Financial Statement Schedule.
(a) The following documents are filed as part of this report:
(1)(2) CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. A
list of the Consolidated Financial Statements filed as part of this Report is
set forth in Item 8 and appears at Page F-1 of this Report; which list is
incorporated herein by reference. The Financial Statement Schedules and the
Report of Independent Auditors as to Schedules follow the Exhibits.
(b) (3) EXHIBITS.
All of the items below are incorporated by reference to the Registrant's
General Form 10-SB and amendments for Registration of Securities as previously
filed.
EXHIBITS AND SEC REFERENCE NUMBERS
Number Title of Document
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2(a) Certificate of Incorporation (2)
2(b) Plan of Merger (2)
2(c) Agreement and Plan of Merger (2)
2(d) Certificate of Merger (2)
2(e) Amendment to Certificate of Incorporation to Increase Authorized Shares (2)
2(f) ByLaws (2)
3(a) Amended and Restated Certificate of Designation, Preferences and Rights of Preferred
Stock(2)
3(b) Convertible Debenture Agreement by and between Alottafun! and Lampton, Inc. and GEM
Management Limited dated December 8, 1998 (2)
3(c) 2% Convertible Debenture (2)
3(d) Warrant to Purchase Common Stock (2)
3(e) Escrow Agreement (2)
3(f) Preferred Shareholder Agreement (2)
3(g) Form of Subscription Agreement for Selling Shareholders (5)
5.1 Legal Opinion of Michael S. Krome, P.C. (6)
6(a) Agreement by and between Michael Porter and Brian Henke (2)
6(b) Employment Contract with Michael Porter dated 1/22/99 (2)
6(c) Employment Contract with David Bezalel dated 1/22/99 (2)
6(d) Employment Contract with Gerald Couture dated 1/22/99 (2)
6(e) Amended Investment Agreement by and between Alottafun! and Swartz Private Equity, LLC,
dated June 3, 1999 (4)
6(f) Amended Registration Rights Agreement by and between Alottafun! and Swartz Private Equity,
LLC dated June 3, 1999 (2)
6(g) Stock Option Plan of Alottafun! dated May 1999 (3)
6(h) Joint Venture Agreement by and between Alottafun! and E-Commerce Fulfillment, L.L.C. dated
May 17, 1999 (3)
6(i) Agreement of Waiver dated February 7, 2000 between Alottafun and Swartz Private Equity,
LLC (5)
6(j) Note Purchase Agreement between Upside Development, Inc. and Augustine Capital Management,
LLC., L.L.C. (1)
6(k) STOCK ESCROW AND SECURITY AGREEMENT (1)
6(l) Promissory Note (1)
23.1 Consent of Pender, Newkirk & Company, C.P.A.'s, independent auditors (6)
(1) Filed herewith.
(2) Filed as exhibits to Form 10-SB filed on June 9, 1999.
(3) Filed as exhibits to Form 10-SB/A filed on September 21, 1999.
(4) Filed as exhibits to Form 10-SB/A filed on November 2, 1999.
(5) Filed as exhibits to Form SB-2 filed on July 12, 2000
(6) Filed as exhibits to Form SB-2 filed on January 28, 2001
Item 28. Undertakings.
The undersigned registrant hereby undertakes to provide to the underwriters at
the closing, specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer, or controlling person of
the Company in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer, or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such issue.
The undersigned registrant hereby further undertakes that:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933, as amended (the Act);
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereto) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
For the purpose of determining any liability under the Securities Act of 1933,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Form SB-2 to Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in West Bend,
Wisconsin, on this 23rd day of January, 2002.
UPSIDE DEVELOPMENT, INC.
Date: February 13, 2002 By: /s/ Michael Porter
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Michael Porter
Chief Executive Officer,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons, in the
capacities indicated, on the dates stated.
Signature Capacity Date
- --------- -------- ----
/s/ Michael Porter Chairman of the Board February 13, 2002
- ------------------ Chief Executive Officer,
Michael Porter Chief Financial Officer
and President
LEGEND TO BE INSERTED ALONG LEFT-HAND SIDE OF COVER PAGE OF PROSPECTUS:
The information in this prospectus is not complete and may be changed. Upside
Development Inc. may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.