U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
AMENDMENT NO. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Link2 Technologies, Inc.
(Exact name of Registrant as specified in its charter)
NEVADA 52-2360156
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3235 W. 4th Ave., Suite 101
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Vancouver, British Columbia V6K 1R8
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Phone: 604-736-4989
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(Address and telephone number of principal executive offices and principal place
of business)
Val-U-Corp Services, Inc., 1802 N. Carson Street, Suite 212,
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Carson City, Nevada 89701 (775) 887-8853
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(Name, Address and telephone number of agent for service)
Approximate date of commencement of proposed As soon as practicable after
sale to the public: the effective date of this
Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. |__|
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE PRICE (1) FEE (1)
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Common Stock 9,077,500 shares $0.10 $907,750 $83.51
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(1) This price was arbitrarily determined by Link2 Technologies, Inc.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
2300 W. Sahara Blvd., Suite 500
Las Vegas, NV 89102
(702) 312-6255
Fax: (702) 944-7100
SUBJECT TO COMPLETION, DATED OCTOBER 30, 2002
PROSPECTUS
LINK2 TECHNOLOGIES, INC.
9,077,500 SHARES
COMMON STOCK
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The selling shareholders named in this prospectus are offering all of our shares
of common stock offered through this prospectus. This offering will proceed for
a period of twenty months. Link2 Technologies, Inc. will not receive any
proceeds from this offering. We have set an offering price for these securities
of $0.10 per share.
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Proceeds to Selling Shareholders
Offering Price Commissions Before Expenses and Commissions
Per Share $0.10 Not Applicable $0.10
Total $907,750 Not Applicable $907,750
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We will bear the expenses associated with these offering materials and those
associated with the filing of the Form SB-2 registration statement with the
Securities and Exchange Commission. The estimated cost of these expenses are
$21,084.
Our common stock is presently not traded on any market or securities exchange.
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THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 5 - 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS: __________________________
TABLE OF CONTENTS
PAGE
----
Summary 3
Risk Factors 5
- - If we do not obtain additional financing,
our business will fail 5
- - Our short operating history and lack of
a finalized product makes our business
difficult to evaluate in terms of predicting
our ability to become successful
thereby giving substantial risk
to any investment in Link2 5
- - We depend on Carl Whiteside and Jeremy
Stewart whom we may not be able to retain 5
- - Because our president, Mr. Sawatsky owns
56.9% of our outstanding common stock, investors
may find that corporate decisions influenced
by Mr. Sawatsky are inconsistent with the
best interests of other stockholders 6
- - If a market for our common stock does
not develop, shareholders may be unable
to sell their shares 6
- - If we are not successful in dealing with
the competitive forces within our industry
our business will fail 6
- - Our independent auditor's believe there
is substantial doubt that we can continue
as a going concern which, if true, raises
substantial doubt that a purchaser of our
common stock will receive a return on
his or her investment. 6
Use of Proceeds 7
Determination of Offering Price 7
Dilution 7
Selling Shareholders 7
Plan of Distribution 10
Legal Proceedings 12
Directors, Executive Officers, Promoters and
Control Persons 12
Security Ownership of Certain Beneficial Owners
and Management 13
Description of Securities 14
Interest of Named Experts and Counsel 15
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities 16
Description of Business 16
Plan of Operations 21
Description of Property 22
Certain Relationships and Related Transactions 22
Market for Common Equity and Related Stockholder Matters 22
Executive Compensation 25
Financial Statements 25
Changes in and Disagreements with Accountants 26
Available Information 26
2
SUMMARY
LINK2 TECHNOLOGIES, INC.
We provide high end 3D animation and digital effects to the music video
industry. Computer graphics are becoming vital in the music video industry to
create desired effects and animations. We create animations and effects for the
enhancement of what are short film productions as music videos or advertising
excerpts.
The long term goals of the company are to work in the Canadian music industry
until Link2 has a portfolio of completed projects it can present to the US
market and larger record companies. Link2 is currently working with the rock
band "Search for Utopia" on its premiere video. We are working with the band
building concepts and ideas that we want to portray in the video. We are
utilizing live footage in conjunction with 3D animation and digital effects to
complete the video. We are also seeking work in the advertising industry which
we consider off focus to the business plan but of potential use to enhance cash
flow during the early stages of our business development.
We were incorporated on August 16, 1996 under the laws of the state of Nevada.
Our principal offices are located at 3235 W. 4th Ave., Suite 101, Vancouver, BC
V6K 1R8. Our Phone number is 604-736-4989.
THE OFFERING
Securities Being Offered Up to 9,077,500 shares of our common
stock.
Offering Price and The offering price of the common stock is
Alternative Plan of Distribution $0.10 per share. We intend to apply to the
over-the-counter bulletin board to allow the
trading of our common stock upon our becoming
a reporting entity under the Securities
Exchange Act of 1934. If our common stock
becomes so traded and a market for the stock
develops, the actual price of stock will be
determined by prevailing market prices at the
time of sale or by private transactions
negotiated by the selling shareholders. The
offering price would thus be determined by
market factors and the independent decisions
of the selling shareholders. Investors should
remember, however, that a market for the
stock may never develop.
Minimum Number of Shares None.
To Be Sold in This Offering
Securities Issued 21,077,500 shares of our common stock are
And to be Issued issued and outstanding as of the date of this
prospectus. All of the common stock to be
sold under this prospectus will be sold by
existing shareholders.
Use of Proceeds We will not receive any proceeds from the
sale of the common stock by the selling
shareholders.
3
SUMMARY FINANCIAL INFORMATION FOR THE THREE MONTH PERIOD ENDING JUNE 30, 2002
Balance Sheet Summary
- -----------------------
Cash $ 0
Total Assets $ 0
Liabilities $ 17,453
Total Stockholders' Equity ($ 17,453)
Statement of Operations and Deficit Summary
- -----------------------------------------------
Revenue $ 0
Net Loss for the Period ($ 6,075)
Net Loss Since Inception ($ 94,153)
4
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
As of June 30, 2002, we had no cash on hand. We project that we need to raise
$900,000 in order to execute our business plan over the next 12 months. We
currently do not have any arrangements for financing and we may not be able to
obtain financing in which event it will be unlikely that we will be able to
sustain our business operations. Obtaining additional financing would depend
upon a number of factors, including the market for financing technology startups
and the attractiveness of our business plan to investors. These factors may
make the timing, amount, terms or conditions of additional financing unavailable
to us.
OUR SHORT OPERATING HISTORY MAKES OUR BUSINESS DIFFICULT TO EVALUATE IN TERMS OF
PREDICTING OUR ABILITY TO BECOME SUCCESSFUL THEREBY GIVING SUBSTANTIAL RISK TO
ANY INVESTMENT IN LINK2.
We are currently working on our first project which is a video for a rock music
group. Accordingly, we have a limited operating history upon which to base an
evaluation of our business and prospects. Our business and prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets. To address these risks, we must
successfully implement our business plan and marketing strategies. We may not
successfully implement all or any of our business strategies or successfully
address the risks and uncertainties that we encounter.
WE DEPEND ON CARL WHITESIDE AND JEREMY STEWART WHOM WE MAY NOT BE ABLE TO
RETAIN.
Mr. Robert Sawatsky, our only officer and director does not have personal
expertise with respect to 3D animation. Accordingly, we rely on the training and
talent of Carl Whiteside and Jeremy Stewart to run and oversee the technical and
operational side of our business. Mr. Whiteside works full time for Link2
spending six to eight hours per day. Mr. Stewart works part time on an as needed
basis spending at the present time three to four hours every two days. Due to
the competitive nature of our industry and Mr. Whiteside's and Mr. Stewart's
current involvement in the industry, we may not be able to retain their
services. In such event, we could not prosecute our business plan unless we can
replace them. It is uncertain whether we would be able to do so. In addition, we
have no key-man life insurance on Mr. Whiteside or on Mr. Stewart.
5
BECAUSE OUR PRESIDENT, MR. SAWATSKY, OWNS 56.9% OF OUR OUTSTANDING COMMON STOCK,
INVESTORS MAY FIND THAT CORPORATE DECISIONS INFLUENCED BY MR. SAWATSKY ARE
INCONSISTENT WITH THE BEST INTERESTS OF OTHER STOCKHOLDERS.
Mr. Sawatsky is our president and director. He owns approximately 56.9% of the
outstanding shares of our common stock. Accordingly, he will have a significant
influence in determining the outcome of all corporate transactions or other
matters. The interests of Mr. Sawatsky may differ from the interests of the
other stockholders. Factors which could cause the interests of Mr. Sawatsky to
differ from the interest of other stockholders include his ability to devote the
time required run a developing company.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES
A market for our common stock may never develop. We currently plan to apply for
listing of our common stock on the over-the-counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms a
part. However, our shares may never be traded on the bulletin board or, if
traded, a public market may not materialize. If our common stock is not traded
on the bulletin board or if a public market for our common stock does not
develop, investors may not be able to re-sell the shares of our common stock
that they have purchased and may lose all of their investment.
IF WE ARE NOT SUCCESSFUL IN DEALING WITH THE COMPETITIVE FORCES WITHIN OUR
INDUSTRY OUR BUSINESS WILL FAIL.
The 3D Animation industry is competitive, depending on what services the studios
offer. There is no assurance that other studios will not offer the same
services that we offer. The area of business in which we wish to prosper is a
niche business. It is possible however that in due time we could face strong
competition from now unseen sources. This will mean, among other things,
increased costs in the form of research and development, marketing, client
services and support, and a reduction in any future production budgets making it
more difficult for our business to succeed.
OUR INDEPENDENT AUDITOR'S BELIEVE THERE IS SUBSTANTIAL DOUBT THAT WE CAN
CONTINUE AS A GOING CONCERN WHICH, IF TRUE, RAISES SUBSTANTIAL DOUBT THAT A
PURCHASER OF OUR COMMON STOCK WILL RECEIVE A RETURN ON HIS OR HER INVESTMENT.
Note 1 of our audited financial statements states in part that we have suffered
recurring losses from operations which raises substantial doubt about our
ability to continue as a going concern. Further, in their report, they point
out that the financial statements do not include any adjustments that might
result if we do not continue as a going concern. Their report also states that
the recurring losses raise substantial doubt about our ability to continue as a
going concern. If we are not able to continue as a going concern it is likely
any holder of our common stock will lose his or her investment in that stock.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are most likely to differ materially from those anticipated in
these
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forward-looking statements for many reasons, including the risks faced by
us described in this Risk Factors section and elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The $0.10 per share offering price of our common stock was arbitrarily chosen.
There is no relationship whatsoever between this price and our assets, earnings,
book value or any other objective criteria of value. We intend to apply to the
over-the-counter bulletin board for the trading of our common stock upon our
becoming a reporting entity under the Securities Exchange Act of 1934. We
intend to file a registration statement under the Exchange Act concurrently with
the effectiveness of the registration statement of which this prospectus forms a
part. If our common stock becomes so traded and a market for the stock
develops, the actual price of stock will be determined by prevailing market
prices at the time of sale or by private transactions negotiated by the selling
shareholders. The offering price would thus be determined by market factors and
the independent decisions of the selling shareholders.
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering 9,077,500 shares
of common stock. The following table provides as of September 23, 2002,
information regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion of
the offering; and
4. the percentage owned by each following the offering.
All numbers in the table are adjusted for the two for one forward split of our
common stock that took place since June 30, 2002.
7
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Total
Number
Of Shares
To Be Total
Offered Shares
For To Be Percent
Selling Owned Upon Owned Upon
Share- Completion Completion
Name Of Selling Shares Owned Prior holders Of This Of This
Stockholder To This Offering Account Offering Offering
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Malcolm Atkins 400 400 -0- 0.0%
Raymond Attanasio 400 400 -0- 0.0%
Dale Beaulier 400 400 -0- 0.0%
Tim Beaulier 400 400 -0- 0.0%
Tedd Biernstein 400 400 -0- 0.0%
Randy Bell 400 400 -0- 0.0%
Scott Bittinger 400 400 -0- 0.0%
Murray Blewitt 800 800 -0- 0.0%
Kelly Boechler 300,000 300,000 -0- 0.0%
Julie Boechler 200,000 200,000 -0- 0.0%
James Briant 400 400 -0- 0.0%
Michael J. Brochete 400 400 -0- 0.0%
Robert E. Brodie 400 400 -0- 0.0%
Bob Brunelle 400 400 -0- 0.0%
Ralph Busch 400 400 -0- 0.0%
Larry Clark 400 400 -0- 0.0%
Richard Clemas 400 400 -0- 0.0%
Stanley Davis 600 600 -0- 0.0%
Patrick Davis 400 400 -0-
0.0%Dennis Defehr 400 400 -0- 0.0%
Brian Del Signore 2,000 2,000 -0- 0.0%
Ernest Del Signore 2,000 2,000 -0- 0.0%
Dian Diamond 400 400 -0- 0.0%
Daniel Drago 400 400 -0- 0.0%
Peter Dranchuk 400 400 -0- 0.0%
Galen Evans 600,000 600,000 -0- 0.0%
Raymond Fagan 400 400 -0- 0.0%
Jenny Faifel 400,000 400,000 -0- 0.0%
Roy Farrington 400 400 -0- 0.0%
Hal Faverty 2,000 2,000 -0- 0.0%
Karen Fleeman 400 400 -0- 0.0%
Gualter Furtado 400 400 -0- 0.0%
Peter Georgiou 400 400 -0- 0.0%
Harry Gibson 400 400 -0- 0.0%
Dorothy Gilbeaux 400 400 -0- 0.0%
Sandra Gillette 400 400 -0- 0.0%
John Gordon 3,000 3,000 -0- 0.0%
Steven Gorkoff 400 400 -0- 0.0%
William Graves 400 400 -0- 0.0%
Myron Hardy 400 400 -0- 0.0%
8
Darel Hartwig 400 400 -0- 0.0%
Darrell Kirkeby 400 400 -0- 0.0%
Dustin Kneeland 700,000 700,000 -0- 0.0%
Tom Kofin 400 400 -0- 0.0%
Jerry Lee 2,000 2,000 -0- 0.0%
Steven Leslie 400 400 -0- 0.0%
Joseph Leslie 400 400 -0- 0.0%
William Lin 400 400 -0- 0.0%
Dezso J. Linbrunner 3,000 3,000 -0- 0.0%
Annette Linbrunner 2,000 2,000 -0- 0.0%
Darwin Linn 400 400 -0- 0.0%
Steve Livingston 600,000 600,000 -0- 0.0%
Bruno Loschiavo 2,000 2,000 -0- 0.0%
Boris Machula 772,800 772,800 -0- 0.0%
Walter and Francis Majewski 3,000 3,000 -0- 0.0%
Jeffrey Maraulja 400 400 -0- 0.0%
Mark Mastiliak 2,000 2,000 -0- 0.0%
Webb W. McClure 400 400 -0- 0.0%
Kevin McLaurin 4,000 4,000 -0- 0.0%
Cameron Mixon 400 400 -0- 0.0%
Phyllis Nelson 2,500 2,500 -0- 0.0%
Robert N. Nelson 400 400 -0- 0.0%
Gerald Owens 400 400 -0- 0.0%
Johnny Patterson 400 400 -0- 0.0%
Delores Pfau 400 400 -0- 0.0%
Eli Ponack 400 400 -0- 0.0%
David Postetter 400 400 -0- 0.0%
Alan Profili 400 400 -0- 0.0%
David G. Radford 400 400 -0- 0.0%
Richard Radford 4,000 4,000 -0- 0.0%
Lynne Radford 2,000 2,000 -0- 0.0%
Warrem Reid 400 400 -0- 0.0%
Klaus Rieder 400 400 -0- 0.0%
Leonard Rosinski 400 400 -0- 0.0%
Doug Rosseau 400 400 -0- 0.0%
Viktoria Roudnitskaia 400,000 400,000 -0- 0.0%
H.R. and E. J. Schneider 400 400 -0- 0.0%
Dr. Robert Servais 400 400 -0- 0.0%
Dale Severson 8,000 8,000 -0- 0.0%
Shetland Holdings 700,000 700,000 -0- 0.0%
Richard Simonetti 400 400 -0- 0.0%
Frank Smartt 400 400 -0- 0.0%
Phillip Snow 400 400 -0- 0.0%
Peter Solobay 400 400 -0- 0.0%
Tim Stanford 1,000,000 1,000,000 -0- 0.0%
Scott Sutherland 700,000 700,000 -0- 0.0%
Hugh Thompson 2,000 2,000 -0- 0.0%
Richard Tieman 400 400 -0- 0.0%
9
James Turner 400 400 -0- 0.0%
Don Tymrick 2,000 2,000 -0- 0.0%
Pat Vallier 2,000 2,000 -0- 0.0%
Georgina Wallace 1,000,000 1,000,000 -0- 0.0%
James Walker 4,000 4,000 -0- 0.0%
Shelley Walker 400 400 -0- 0.0%
Elizabeth Wentworth 400 400 -0- 0.0%
Carl Whiteside (1) 1,020,000 1,020,000 -0- 0.0%
Sharleen Whiteside (2) 600,000 600,000 -0- 0.0%
Gale L. Whitford 400 400 -0- 0.0%
Warren Willmeng 2,000 2,000 -0- 0.0%
James Wong 400 400 -0- 0.0%
Earl W. Zeider 400 400 -0- 0.0%
Herbert Zane 2,000 2,000 -0- 0.0%
Sherri Zysk 400 400 -0- 0.0%
The named party beneficially owns and has sole voting and investment power over
all shares or rights to these shares. The numbers in this table assume that
none of the selling shareholders sells shares of common stock not being offered
in this prospectus or purchases additional shares of common stock, and assumes
that all shares offered are sold.
(1) Carl Whiteside is currently a key employee of Link2.
(2) Sharleen Whiteside is the sister of Carl Whiteside. However, neither
Sharleen Whiteside nor Carl Whiteside has voting rights or disposition
rights with respect to the shares of the other. In addition, they do they
live under the same roof. Accordingly, they are not considered the
beneficial owner of the shares held by the other. In the aggregate they own
a total of 7.7% of the total issued and outstanding common shares of Link2.
Separately each owns less that 5% of the issued and outstanding common
shares of Link2. Therefore, neither of them has been included in the
section of the prospectus entitled Security Ownership of Certain Beneficial
Owners and Management in which is listed all holders of 5% or more of the
issued and outstanding common shares of Link2.
None of the other selling shareholders or their beneficial owners:
- have had a material relationship with the company other than as a
shareholder at any time within the past three years; or
- have ever been an officer or directors of the company or any of its
predecessors or affiliates within the past three years.
PLAN OF DISTRIBUTION
This prospectus is part of a registration statement that enables the selling
shareholders to sell their shares on a continuous or delayed basis for a period
of twenty months. We have advised the selling shareholders that they shall only
be permitted to sell their shares in jurisdictions where it is lawful to sell
such securities. Thus, the selling shareholders will be permitted to sell their
shares in foreign countries if they comply with all rules and regulations of
that particular jurisdiction. Additionally, the selling shareholders shall be
permitted to sell their shares in the United States only upon this
10
registration statement becoming effective. Furthermore, the selling
shareholders' selling efforts shall be limited to unsolicited brokerage
transactions that comply with the provisions of Regulation M.
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may from time to
time be trading;
2. In privately negotiated transactions;
3. In short sales; or
4. In any combination of these methods of distribution.
The sales price to the public is fixed at $0.10 per share until such time as the
shares of our common stock become traded on the Over-The-Counter Bulletin Board
or another exchange. Although we intend to apply for trading of our common
stock on the Over-The-Counter Bulletin Board, public trading of our common stock
may never materialize. If our common stock becomes traded on the
Over-The-Counter Bulletin Board or another exchange, then the sales price to the
public will vary according to the selling decisions of each selling shareholder
and the market for our stock at the time of resale. In these circumstances, the
sales price to the public may be:
1. The market price of our common stock prevailing at the time of sale;
2. A price related to such prevailing market price of our common stock; or
3. Such other price as the selling shareholders determine from time to time.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as agents in unsolicited brokerage transactions. Any broker or dealer
participating in such transactions as agent may receive a commission from the
selling shareholders, or, if they act as agent for the purchaser of such common
stock, from such purchaser. The selling shareholders will likely pay the usual
and customary brokerage fees for such services. If applicable, the selling
shareholders may distribute shares to one or more of their partners who are
unaffiliated with us. Such partners may, in turn, distribute such shares as
described above.
The selling shareholders whose shares are being registered under this prospectus
and registration statement may choose not to sell their shares.
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of the common stock.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act in the offer and sale of the common
stock. In particular, during such times as the selling shareholders may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and may,
among other things:
1. Not engage in any stabilization activities in connection with our common
stock;
11
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the
Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
Our agent for service of process in Nevada is Val-U-Corp Services, Inc., 1802 N.
Carson Street, Suite 212, Carson City, Nevada 89701.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
OFFICERS AND DIRECTORS
The following is information regarding our sole executive officer and director
and his age as of September 23, 2002:
Name of Director Age
- ---------------------- ---
Robert Sawatsky 36 President, CEO, Secretary,
Treasurer and Director
Robert Sawatsky
- ----------------
Mr. Sawatsky holds a degree in Economics from the University of Saskatchewan.
He is presently a venture capitalist with North Rim Capital, a position he has
held for the past 7 years. Mr. Sawatsky is also the owner and president of North
Rim Capital. Prior to that he spent 3 years as an investment advisor and
investment banker with Yorkton Securities in Vancouver, BC where he provided
financing for four oil and gas firms. He did much of the original investment
banking work for North American Resort & Golf, Inc. which is now Most Home
Corp., a public entity. Until 1999, Mr. Sawatsky was the president, a director
and the controlling shareholder of North American Resort & Golf, Inc. During
the fiscal year ended December 31, 2001, Link2 paid Mr. Sawatsky $1,600 for
services rendered to the Link2.
TERM OF OFFICE
Our directors are appointed for one-year terms to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
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SIGNIFICANT EMPLOYEES
The following persons are not executive officers but are expected to make a
significant contribution to our business.
Carl Whiteside
- ---------------
Mr. Whiteside joined Link2 in May, 2002. During the four years prior to joining
Link2 he was employed at Mainframe Entertainment, a 3D animation company, where
he worked as a 3D modeler. Prior to joining Mainframe Entertainment, Mr.
Whiteside attended and graduated from the prestigious Vancouver Film School
where he was awarded a diploma in visual effects and 3D animation. Mr.
Whiteside works full time for Link2 but continues to consult for and work on
projects for Mainframe Entertainment. He is responsible for day-to-day
management of Link-2's productions. Mr. Whiteside owns 1,020,000 shares of
common stock of Link2 which he purchased on April 20, 1997. Mr. Whiteside is 24
years old.
Jeremy Stewart
- ---------------
Mr. Stewart graduated from the Vancouver Film Schools' 3d animation and visual
effects program in 1998. During 1999 and 2000 he worked for Sextant
Entertainment Group and had a major role in the completion of two animated TV
shows, the Mr. Hell Show and Don't Eat The Neighbors. The Mr. Hell Show which
aired on the BBC and the Canadian Comedy Channel was given a Leo Award for Best
new comedy show. During 2001, Mr. Stewart worked as a 3D artist for Mainframe
Entertainment, Prospero Entertainment, and Bardell Animation. While Employed by
Bardell, Jeremy was responsible for animating scenes for a Disney/Bardell
co-production of the "Book of Pooh", a CD-ROM computer game featuring the
characters from Disney's "Whinney the Pooh".
During 2002 and at the present time, Mr. Stewart works for Newline Cinema. At
Newline, during the preproduction phase of creating the feature film Jason Vs.
Freddy, Mr. Stewart was responsible for the majority of the 3D pre-visualisation
work needed to plan complex computer generated and practical visual effects.
Freddy Vs. Jason is scheduled to be released in 2003. Mr. Stewart continues to
work on various TV and film projects and is working for Link2 on an as needed
part time basis until more work is available.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of September 20, 2002 by: (i)
each person (including any group) known to us to own more than five percent (5%)
of any class of our voting securities, (ii) each of our directors, and (iii)
officers and directors as a group. The shareholder listed possesses sole voting
and investment power with respect to the shares shown.
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- --------------------------------------------------------------------------------
Title of Name and address Number of Shares Percentage of
class of beneficial owner of Common Stock Common Stock (1)
- --------------------------------------------------------------------------------
Common Stock Robert Sawatsky 12,000,000 shares 56.9%
Director and President
3235 W. 4th Ave., Suite 101
Vancouver, BC Canada V6K 1R8
Common Stock All Officers and Directors 12,000,000 shares 56.9%
as a Group (one person)
- --------------------------------------------------------------------------------
(1) The percent of class is based on 21,077,500 shares of common stock issued
and outstanding as of September 20, 2002.
The person named above has full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange Commission, a
person (or group of persons) is deemed to be a "beneficial owner" of a security
if he or she, directly or indirectly, has or shares the power to vote or to
direct the voting of such security, or the power to dispose of or to direct the
disposition of such security. Accordingly, more than one person may be deemed
to be a beneficial owner of the same security. A person is also deemed to be a
beneficial owner of any security, which that person has the right to acquire
within 60 days, such as options or warrants to purchase our common stock.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 50,000,000 shares of common stock, with
a par value of $0.001 per share. As of September 23, 2002, there were 21,077,500
shares of our common stock issued and outstanding that are held by 104
stockholders of record. The number of shares issued and outstanding are up
10,538,750 since June 30, 2002, due to a forward split on a two for one basis
since that date.
COMMON STOCK
Our common stock is entitled to one vote per share on all matters submitted to a
vote of the stockholders, including the election of directors. Holders of our
common stock will possess all voting power unless the law, or a resolution is
adopted by our board, provides otherwise with regard to preferred stock.
Generally, all matters to be voted on by stockholders must be approved by a
majority (or, in the case of election of directors, by a plurality) of the votes
entitled to be cast by all shares of our common stock that are present in person
or represented by proxy. Holders of our common stock representing a majority of
our capital stock issued, outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding shares is
required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our Articles of Incorporation. Our
Articles of Incorporation do not provide for cumulative voting in the election
of directors.
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The holders of shares of our common stock will be entitled to such cash
dividends as may be declared from time to time by our board of directors from
funds available for that purpose. In the event of a liquidation, dissolution or
winding up, the holders of shares of our common stock will be entitled to
receive pro rata all assets available for distribution to such holders.
In the event of any merger or consolidation with or into another company in
connection with which shares of our common stock are converted into or
exchangeable for shares of stock, other securities or property (including cash),
all holders of our common stock will be entitled to receive the same kind and
amount of shares of stock and other securities and property (including cash).
Holders of our common stock have no pre-emptive rights, no conversion rights and
there are no redemption provisions applicable to our common stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest exceeding $50,000, direct or indirect, in the registrant or any of its
parents or subsidiaries. Nor was any such person connected with the registrant
or any of its parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
Cane O'Neill Taylor, LLC, our independent legal counsel, has provided an opinion
on the validity of our common stock.
Spicer, Jeffries and Company, independent public accountants, have audited our
financial statements included in this prospectus and registration statement to
the extent and for the periods set forth in their audit report. Spicer,
Jeffries and Company has presented their report with respect to our audited
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financial statements. The report of Spicer, Jeffries and Company is included in
reliance upon their authority as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act of 1933 is against public policy as expressed in the
Securities Act of 1933, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the securities
being registered, we will, unless in the opinion of our legal counsel the matter
has been settled by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate jurisdiction.
We will then be governed by the court's decision.
DESCRIPTION OF BUSINESS
HISTORY
We were incorporated in the state of Nevada on August 16, 1996 under the name
Great Energy Corporation International. At the time of inception we thought we
had an opportunity to produce and market a fruit health bar. Monies were raised
for the purpose of developing this opportunity, however, it never materialized
to the point where production of product actually commenced.
In April, 2001, we determined to take steps to develop the current business
operations of Link2. In preparation for this, the name of Link2 was changed
from Great Energy Corporation International to Link2 Technologies, Inc.
However, plans progressed slowly and it was not until May of 2002 that we
engaged the services of Carl Whiteside to develop the business operations of
Link2. We commenced our first project under our current business format in
August, 2002. Link2 has a specific business plan and is actively pursuing the
development of that plan. We are excited about the talents and abilities of our
animators and believe we can create a niche for Link2 in the animation industry.
OPERATIONS
Our business plan is to provide 3D animation and digital effects to the music
video industry. We have full capability without further development of
providing this product and entered into our first engagement on August 21, 2002.
Pursuant to that engagement we are currently producing a music video based on
performances of the rock group Search for Utopia. Production of the video
includes modeling, animation and visual effects as well as some live action
footage. When the production is complete and ready for broadcast we hope to
utilize airplay of the video as well as distribution of the video to various
prospective clients and artists as a marketing tool. This project is expected
to take four months to complete. Payment for this contract has been partially
received. We have no other income producing agreements at this time.
Under our contract with Search for Utopia, we are obligated to work on a video
segment featuring one or more of the band's songs. We are to work on the
segment for four months, which will conclude on December 20, 2002, or until the
segment is completed, whichever occurs first. We will stand the costs
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of production which is basically our employee time. We will receive total
payment under the contract of $10,000 of which we have already been paid $5,000.
We are marketing our services and hope to have additional engagements in the
near future. We have demonstration reels or "demo reels" which showcase the
animation Link2 can do and we are currently developing new ones that may be more
appropriate to our business model. We are attempting to contact additional
musical talent so that we can create a library of demonstration videos or "demo
reels" and create a reputation for Link2.
PRINCIPAL PRODUCTS AND SERVICES
We aspire to become a full service provider of 3D animation and digital effects
for the music video industry. We are, however, not averse to completing
contracts for the advertising industry in order to provide a source of interim
cash flow. We conceptualize ideas for clients and provide a budget break down
for each project. We provide character designs, pre-visualization of ideas,
digital and traditional storyboarding and digital effects design. We carry out
3D animation and digital effects, 2d compositing, 2D and 3D digital matte
paintings, title design and text. For example, a potential client may want to
provide us with pictures and images for incorporation into a video segment.
These pictures and images could be 2D or two dimensional such as the printed
name and/or logo of the band or advertiser, any written text, and other two
dimensional images such as cartoon images. On the other hand, the pictures and
images could be 3D or three dimensional such as traditional still photographs or
moving or action images such as recorded video segments.
A potential client may not have the desired pictures and images but engage us to
provide them. We would then generate the desired images through the use of the
computer, drawing on data bases available through software or through the
Internet. Matte paintings are computer generated backgrounds such as landscapes
that the band or the product will appear in front of.
After the 2D, 3D and action components are available, we will use a process
known as compositing to bring all of the components into a live action sequence.
To give the impression that the various elements fit together, compositing
software is used to track the camera movement of any action components and
create shadows and lighting effects to give the illusion that the elements blend
together seamlessly. Through the use of software, we can even give action to
otherwise still images in order to create a seamless live action sequence. 2D
images are often given motion in the form of moving logos and scrolling credits.
The Link2 team can create imagery that is conceived by other individuals or
organizations as a component of their overall concept and make it a flowing
piece of work often integrated with reality. This is what is expected of
animators in the industry and it is what we can provide.
Our business focus is to establish Link2 as an animator in the pop and rock
video industry. A key factor in achieving this goal, however, is keeping Link2
financed in the early going. This may mean doing animation work initially that
is not connected to pop and rock videos. Our animators have worked for
companies that have done animation work for the advertising industry and they
are capable of performing this work. At the present time we are contacting
advertising agencies for potential work but have not secured any advertising
work to date. At such time as we have sufficient animation work in the pop and
rock video industry, we will no longer seek work in the advertising industry.
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The product we provide for the pop and rock music industry is high end digital
animation for video segments. This is the same product we will seek to provide
for the advertising industry with the differences being the subject matter
content of the video segments. Also, advertising video segments will be short
when compared to pop and rock music video segments.
Link2 can be a large part or a small part of the video production process
depending upon the needs of a particular client. Decisions are made about what
is feasible based on the budget and time-lines of each production. The parties
decide on all visual elements and then compositions are locked down and a
storyboard of the video is created. The 3D artists then get more involved
deciding where and when computer grahpics will be used, or in some cases how the
entire video will be done in computer graphics. This includes breaking up all
the shots into separate categories, models, animation and effects. The models
include what computer grahpics characters may be needed, what virtual sets may
be needed as well as any "props" that may be needed for the production.
Timelines are worked out to decide on time needed to model, texture (add color
and details to the models) and envelope all the necessary elements. Other
breakdowns will be done of all the visual effects necessary including effects
like fire, rain or snow that will be added digitally. A breakdown will also be
done of all the live-action shots that are needed, locations where they will be
shot and any further production. e.g. costumes and lighting.
After all the storyboards and breakdowns are done, production begins with
modeling and texturing of the characters and sets, animation setups as well as
beginning the filming of the live-action shots. Upon completion of the modeling
process animators animate the models, referencing the storyboards and the
live-action film. During this process there are constant revisions changing
animations, colors, concepts and any other changes necessary to achieve the a
common desired goal. When all parties are content with the animation and
live-action elements, visual effects are added to the video. The effects are
animated and rendered and then layered over the film whether it be a live-action
shot or a computer grahpics shot, or a combination of both. With all the shots
complete the entire video is rendered out shot by shot inside the editing
software and the final product appears through trial and error. At this point
the visuals will be mastered with the sound to complete the production.
INDUSTRY BACKGROUND AND STATUS
A growing number of music videos utilize computer graphics animation within
their two to five minute runs enhancing the imagery presented. Videos can be
completed entirely in computer graphics. Completely animated backdrops are used
to create any kind of experience desired.
In the opinion of management, 3D animation has created an impact in the movie,
television, hardcopy and gaming industries. Other areas, such as music videos,
architecture, corporate print and even internet companies are increasingly using
computer graphics. We believe computer-generated images are sometimes not
easily distinguished from reality.
MARKETING
Our main marketing tool will be our product which is completed works in the
advertising realm and/or entertainment/music video realm. As noted earlier, we
are in the process of completing our first music video that will become our
primary marketing tool going forward. Forms of marketing such as print or TV
are expensive and untargeted. We believe the best marketing strategy for a
niche talent such as outs is to approach organizations directly that may require
the skills housed in the Link2 team.
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Sawatsky has been involved in sales in various business enterprises and
industries. The following subsections will detail Link2's plans for finding
music video contacts and contracts.
1. Our Video. Our first animated video will act as a demo-reel for Link2. This
is a visual resume, displaying the abilities of the Link-2 team. Our first
demo-reel is our video for Search For Utopia.
2. Influential individuals. The Link2 team is targeting record company
executives who are involved in video production. However, we received no
response to our first mailing to these persons.
3. Print ads. We eventually plan to establish a series of ads in industry
music publications such as Georgia Strait, Vibe, and other more localized
publications in markets such as Los Angeles, Seattle and Vancouver. No such
advertising deals have been signed to date. The target here would of course
be rock and pop bands themselves.
4. Web Site. Still under construction the Link2 web site will provide
information about Link2. The web site will detail our services, our videos,
profiles on our artists and contact information. We will attempt to direct
potential clients to the site by word of mouth and by media where Link2 may
appear.
Expense associated with the marketing of our product under items 1, 2, and 4
above is basically payment for employee time which consists of salaries. At the
present time, our employees are engaged in one on one contact marketing and
making available our demo reels to persons who may help us find additional work
for Link2.
If we are successful in raising working capital through the sale of stock as
discussed in our Plan of Operations, we plan on spending a portion of that
working capital on a print ad campaign promoting our product. Our initial print
ad will be a five inch by five inch ad in The Georgia Strait, an entertainment
magazine local to Vancouver, B.C. The cost of running the ad for one month will
be $2,400. The decision to run additional ads will depend upon funds available
and the success of the initial ads.
COMPETITION (MUSIC VIDEO PRODUCTION)
Perhaps our main competitor in the field of music video production in Canada is
Topix/Mad Dog Computer Graphics. It is an established 3d animation and digital
effects company based out of Toronto, Canada. It has extensive experience in
music video production. We believe we can attract clients away from an
organization like Topix/Mad Dog Computer Graphics with our lower overhead and
talented animators. Here are some of the larger animation studios that have
done work in the music video industry. These companies employ anywhere from 30
to 700 people each. They are all involved in a variety of animated productions
- - Topix/Mad Dog
- - Core Digital Pictures
- - Lost-Boys Studios
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- - Metro-Light Studios
- - Rainmaker Entertainment
- - Animal Logic
- - The Mill
- - Duck Soup Studios
- - Cinesite
- - Digital Domain
Each of the animation studios named above can produce the same products that we
can produce. They are well known and can be easily contacted by any potential
client that we may solicit. In that sense, we compete with each of them. We
believe by seeking out clients in our general geographic area, we will have a
competitive advantage with those potential clients over studios located in major
media centers large distances away which is the case with these studios . We
can also compete favorable with these studios on the price of our products.
TECHNOLOGY
The Link-2 team uses various technologies with respect to the software and
hardware aspects of animation. The following is a list of software packages
that the Link2 artists will use and have used to create animation.
3D Animation and Effects software- SOFTIMAGE|XSI
The main software package that Link2's artists will be using is Softimage's 3D
package SOFTIMAGE|XSI. SOFTIMAGE|XSI integrates the Internet directly into the
media being produced. The Net View feature allows the artist to open an HTML
browser directly within a viewport in SOFTIMAGE|XSI. The artist can then use the
browser to do online research for visual references and other information, all
from within SOFTIMAGE|XSI. In addition to an enhanced ability to create more
work in a given amount of time, our artists have more time to spend refining
their work, as less time is spent on basic construction. Softimage has a
verystrong customer support network as well.
2D Photo and Texturing software- Adobe Photoshop
Adobe Photoshop gives the Link-2 team tools for use when manipulating video
stills and images from the production as well as giving them a tool for
applications of textures and colors to the 3d models and effects. Photoshop is
known for its ability to achieve high quality effects for output to film,
Internet and other media. Our artists are familiar with Photoshop and related
software and have used Photoshop at other companies.
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2D-3D Compositing and Film Editing software- Adobe After Effects
Adobe After Effects is motion graphics and visual effects software. After
Effects gives the Link-2 team the ability to produce motion graphics, visual
effects and compositing for film, video, multimedia and the Internet. The
artist can control the 3D environment and the 2D television or film environment
while compositing and editing the final footage. After Effects is integrated
with Adobe Photoshop giving the user the ability to go back and forth between
software packages during production.
PLAN OF OPERATIONS
Link2 is presently producing its first music video. Our employee Carl Whiteside
is working almost full time on this project. We expect this project to be
completed in about December of this year. Over the next 12 months we hope to
obtain engagements to produce other music videos. We believe the results of our
first video will establish our credibility within the industry.
At the present time we have no cash resources. We are using computer equipment
to do our animation work that is on loan to Link2. Our most significant current
expense is a $2,000 monthly salary being paid to Carl Whiteside. Our cash needs
are being met by borrowings from our president, Robert Sawatsky.
It is our goal to raise $900,000 over the next 12 months. This money would be
used primarily to purchase equipment, pay salaries, and to do marketing. We
plan to raise this money through private placements of equity capital. If we
can raise the operating capital, over the next 12 months we will obtain
engagements to produce as many music videos as possible and employ personnel as
necessary to produce those videos.
The equipment we will purchase during the next 12 months depends upon the amount
of animation work we secure and the money available for business expansion. Our
goal for the next 12 months is to have sufficient work to require the employ of
three to five full time animators. This will require the acquisition of the
following equipment:
- - 3 to 5 NT workstation desktop PC's;
- - 1 to 2 Adobe Photoshop licenses;
- - 1 to 2 Adobe After FX licenses;
- - 3 to 5 Softimage XSI licenses;
- - 1 personal video recorder for the transfer of digital media to tape; and
- - 1 photocopier.
At the present time, our three employees, Mr. Sawatsky, Mr. Whiteside and Mr.
Stewart, each own their own computer systems. Any work performed for Link2 at
the present time by any employee is performed on that employees computer system.
There are no formal or written arrangements for the use of this equipment and no
compensation is paid to the employees for the use of their equipment. As funds
are available, Link2 will purchase equipment as discussed above for use by its
employees. To date, Link2 has not purchased or licensed the software described
in this prospectus. All software described is being made available to Link2
through the use of the computers owned by Mr. Whiteside and Mr. Stewart.
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EMPLOYEES
We currently have 1 full time and 2 part time employees including the president
of the company.
SUBSIDIARIES
We do not have any subsidiaries.
DESCRIPTION OF PROPERTY
We do not lease or own any real property. We maintain our corporate office at
3235 W. 4th Ave., Vancouver, B.C. This office space is an office sharing
arrangement being provided as an accommodation to us by our president Mr.
Sawatsky where we can receive mail and perform other minimal corporate
functions. Our current production work is taking place at the private office of
Mr. Carl Whiteside an employee of Link2. Mr. Whiteside does not charge Link2
for the use of his private office. As our business operations expand it will be
necessary for us to seek appropriate individual office space. Management
believes suitable office space will be available when it is needed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us, other than
noted in this section:
- - Any of our directors or officers;
- - Any person proposed as a nominee for election as a director;
- - Any person who beneficially owns, directly or indirectly, shares carrying
more than 10% of the voting rights attached to our outstanding shares of
common stock;
- - Any of our promoters;
- - Any relative or spouse of any of the foregoing persons who has the same
house as such person.
Our president, Mr. Sawatsky, has loaned Link2 $15,453. The loan is non-interest
bearing with no specific terms of repayment.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for our common stock. We anticipate making
an application for trading of our common stock on the over the counter bulletin
board upon the effectiveness of the registration statement of which this
prospectus forms a part. However, we may not be successful in obtaining status
on a public exchange, or if we are successful, a public market for our stock
may not materialize.
The Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on
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the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure document prepared by the
Commission, that: (a) contains a description of the nature and level of risk in
the market for penny stocks in both public offerings and secondary trading; (b)
contains a description of the broker's or dealer's duties to the customer and of
the rights and remedies available to the customer with respect to a violation to
such duties or other requirements of Securities' laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and (f) contains such other information and
is in such form, including language, type, size and format, as the Commission
shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, the customer with: (a) bid and offer quotations for the penny
stock; (b) the compensation of the broker-dealer and its salesperson in the
transaction; (c) the number of shares to which such bid and ask prices apply, or
other comparable information relating to the depth and liquidity of the market
for such stock; and (d) a monthly account statements showing the market value of
each penny stock held in the customer's account. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from those rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written acknowledgment of the receipt of a risk disclosure
statement, a written agreement to transactions involving penny stocks, and a
signed and dated copy of a written suitability statement.
If our stock becomes categorized as a penny stock, these disclosure requirements
may have the effect of reducing the trading activity in the secondary market for
our stock. This could result in stockholders having a difficult time in selling
those securities.
HOLDERS OF OUR COMMON STOCK
As of the date of this registration statement, we had 104 registered
shareholders.
RULE 144 SHARES
A total of 12,000,000 shares of our common stock is currently available for
resale to the public, in accordance with the volume and trading limitations of
Rule 144 of the Securities Act of 1933.
Under Rule 144, a person who has beneficially owned shares of a company's common
stock for at least one year is entitled to sell within any three month period a
number of shares that does not exceed the greater of:
1. One percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 210,775 shares as
of the date of this prospectus; or
2. The average weekly trading volume of the company's common stock during the
four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
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Sales under Rule 144 also must comply with a manner of sale provisions and
notice requirements in addition to the requirement that there be an availability
of current public information about the company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates hold all
12,000,000 of the total shares that may be sold under Rule 144.
STOCK OPTION GRANTS
To date, we have not granted any stock options.
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
We are paying the expenses of the offering because we seek to: (i) become a
reporting company with the Commission under the Securities Exchange Act of 1934;
and (ii) enable our common stock to be traded on the over-the-counter bulletin
board. We plan to file a Form 8-A registration statement with the Commission
prior to the effectiveness of the Form SB-2 registration statement. The filing
of the Form 8-A registration statement will cause us to become a reporting
company with the Commission under the 1934 Act concurrently with the
effectiveness of the Form SB-2 registration statement. We must be a reporting
company under the 1934 Act in order that our common stock is eligible for
trading on the over-the-counter bulletin board. We believe that the
registration of the resale of shares on behalf of existing shareholders may
facilitate the development of a public market in our common stock if our common
stock is approved for trading on the over-the-counter bulletin board.
We consider that the development of a public market for our common stock will
make an investment in our common stock more attractive to future investors. In
the near future, it may be necessary for us to raise additional capital in order
for us to continue with our business plan,. We believe that obtaining reporting
company status under the 1934 Act and trading on the OTCBB should increase our
ability to raise these additional funds from investors.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual
course of business; or
24
2. Our total assets would be less than the sum of our total liabilities plus
the amount that would be needed to satisfy the rights of shareholders who
have preferential rights superior to those receiving the distribution.
We have not declared any dividends and we do not plan to declare any dividends
in the foreseeable future.
EXECUTIVE COMPENSATION
COMPENSATION
During the fiscal year ended December 31, 2001, Link2 paid its president, Mr.
Robert Sawatsky, $1,600 for services rendered to Link2. Otherwise, no executive
officer has received any compensation from Link2 during the past three years
fiscal years. Link 2 has agreed to pay its president, Mr. Sawatsky an annual
salary of $36,000. However, Mr. Sawatsky does not intend to receive the salary
until such time as Link2 has the capital resources to pay the salary.
STOCK OPTION GRANTS
We did not grant any stock options to the executive officers during our most
recent financial reporting period ending June 30, 2002. We have also not
granted any stock options to the executive officers since our inception date of
August 16, 1996.
FINANCIAL STATEMENTS
Index to Financial Statements:
1. Independent Auditors' Report;
2. Financial Statements for the periods ending June 30, 2002, and December 31,
2001 and 2002, including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Changes in Shareholders' Deficit;
d. Statements of Cash Flows;
e. Notes to Financial Statements.
FINANCIAL STATEMENTS
LINK2 TECHNOLOGIES, INC.
(formerly Great Energy Corporation International)
(A COMPANY IN THE DEVELOPMENT STAGE)
VANCOUVER, BRITISH COLUMBIA, CANADA
SIX MONTHS ENDED JUNE 30, 2002 AND THE
YEARS ENDED DECEMBER 31, 2001 AND 2000
1. INDEPENDENT AUDITORS' REPORT
2. BALANCE SHEETS
3. STATEMENTS OF OPERATIONS
4. STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
5. STATEMENTS OF CASH FLOWS
6. NOTES TO FINANCIAL STATEMENTS
25
Spicer, Jeffries & Co.
CERTIFIED PUBLIC ACCOUNTANTS
4155 E. JEWELL AVENUE
SUITE 307
DENVER, COLORADO 80222
TELEPHONE: (303) 753-1959
FAX: (303) 753-0338
www.spicerjeffries.com
INDEPENDENT AUDITORS' REPORT
To the Shareholders
Link2 Technologies, Inc.
(A Company in the Development Stage)
We have audited the balance sheets of Link2 Technologies, Inc. (A Company in the
Development Stage) as of December 31, 2001 and 2000 and the related statements
of operations, changes in shareholders' deficit and cash flows for the years
then ended and the cumulative amounts for the period from inception (August 16,
1996) to December 31, 2001. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Link2 Technologies, Inc. (A
Company in the Development Stage) as of December 31, 2001 and 2000, and the
results of its operations and its cash flows for the years then ended and the
cumulative amounts for the period from inception (August 16, 1996) to December
31, 2001, in conformity with accounting principles generally accepted in the
United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from operations and has a
working capital deficiency that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Spicer, Jeffries & Co.
Denver, Colorado
July 4, 2002
A MEMBER FIRM OF MACINTYRE STRATER INTERNATIONAL LIMITED (MSI)
A WORLDWISE ASSOCIATION OF INDEPENDENT PROFESSIONAL FIRMS
MSI
F-1
Link2 Technologies, Inc.
(A Company in the Development Stage)
BALANCE SHEETS
(EXPRESSED IN U.S. DOLLARS)
June 30, 2002 December 31, 2001 December 31, 2000
------------- ----------------- -----------------
(Unaudited)
ASSETS $ - $ - $ -
============ ========= ========
LIABILITIES:
Current:
Accounts payable
and accrued
expenses $ 2,000 $ 2,000 $ 1,000
Due to shareholder
[Note 3] 15,453 9,378 4,214
------------ --------- ---------
Total current
liabilities 17,453 11,378 5,214
------------ --------- ---------
SHAREHOLDERS' DEFICIT:
Common capital stock;
with a par value of $0.001
Authorized: 50,000,000 shares;
issued and outstanding:
10,538,750
Discount on common stock 10,539 10,539 10,539
Additional paid-in capital (5,900) (5,900) (5,900)
Deficit accumulated during 72,061 72,061 72,061
the development stage (94,153) (88,078) (81,914)
------------ --------- ---------
Total shareholders'
deficit (17,453) (11,378) (5,214)
------------ --------- ---------
$ - $ - $ -
============ ========= ========
The accompanying notes are an integral part of these statements.
F-2
Link2 Technologies, Inc.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(EXPRESSED IN U.S. DOLLARS)
August 16,
Six Months Year Ended Year Ended 1996 (date of
Ended December 31, December 31, inception) to
June 30, 2002 2001 2000 June 30, 2002
------------ ------------ ------------ --------------
(Unaudited) (Unaudited)
REVENUE $ - $ - $ - $ -
============ ============ ============ =========
EXPENSES: - - - -
Professional fees $ 4,455 $ 2,860 $ 1,202 $ 13,602
Consulting [Note 5] - 2,882 1,600 53,403
Filing fees - 215 - 215
Office and general 596 207 12 13,790
Telephone 308 - - 5,514
Advertising - - - 3,202
Rent - - - 2,974
Travel 716 - - 1,453
------------ ------------ ------------ ---------
Total expenses 6,075 6,164 2,814 94,153
------------ ------------ ------------ ---------
NET LOSS
$ (6,075) $ (6,164) $ (2,814) $(94,153)
============ ============ ============ =========
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE
$ (0.001) $ (0.001) $ (0.000)
============ ============ ============
WEIGHTED AVERAGE
SHARES OF COMMON
STOCK OUTSTANDING
10,538,750 10,538,750 10,538,750
============ ============ ============
The accompanying notes are an integral part of these statements.
F-3
STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
(EXPRESSED IN U.S. DOLLARS)
Period from inception (August 16, 1996) to December 31, 2001(Audited)
and the six months ended June 30, 2002 (Unaudited)
Deficit
Accumulated
Common Common Additional During the
Stock Stock Discount on Paid-In Development
Shares Amount Common Stock Capital Stage
---------- ------- -------------- -------- ---------
Inception, August 16, 1996 - $ - $ - $ - $ -
Common stock issued for:
Cash, February 1997, $.0001 per share 6,000,000 6,000 (5,900) - -
Cash, April 1997, $.01 per share 2,000,000 2,000 - 18,000 -
Cash, May and June 1997, $.02 per share 1,650,000 1,650 - 31,350 -
Services, March 1997, $.01 per share 510,000 510 - 4,590 -
Net loss - - - - (45,313)
---------- ------- -------------- -------- ---------
Balance, December 31, 1997 TAKE OUT 10,160,000 10,160 (5,900) 53,940 (45,313)
Common stock issued for:
Cash, February 1998, $.02 per share 350,000 350 - 6,650 -
Cash, May and June 1998, $.40 per share 28,750 29 - 11,471 -
Net loss - - - - (33,787)
---------- ------- -------------- -------- ---------
Balance,
December 31, 1998 TAKE OUT 10,538,750 10,539 (5,900) 72,061 (79,100)
Net loss
- - - - -
---------- ------- -------------- -------- ---------
Balance,
December 31, 1999 TAKE OUT 10,538,750 10,539 (5,900) 72,061 (79,100)
Net loss
- - - - (2,814)
---------- ------- -------------- -------- ---------
Balance,
December 31, 2000 TAKE OUT 10,538,750 10,539 (5,900) 72,061 (81,914)
Net loss
- - - - (6,164)
---------- ------- -------------- -------- ---------
Balance,
December 31, 2001 TAKE OUT 10,538,750 10,539 (5,900) 72,061 (88,078)
Net loss
- - - - (6,075)
---------- ------- -------------- -------- ---------
Balance, June 30, 2002 10,538,750 $10,539 $ (5,900) $ 72,061 $(94,153)
========== ======= ============== ======== =========
The accompanying notes are an integral part of these statements.
F-4
Link2 Technologies, Inc.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(EXPRESSED IN U.S. DOLLARS)
Six Months Year Ended Year Ended August 16, 1996
Ended December 31, December 31, (date of inception)
June 30, 2002 2001 2000 to June 30, 2002
------------ -------------- ------------------ --------------------
(Unaudited) (Unaudited)
OPERATIONS:
Net loss $ (6,075) $ (6,164) $ (2,814) $ (94,153)
Shares issued for services - - - 5,100
Increase (decrease) in accounts
payable and accrued expenses - 1,000 (1,500) 2,000
------------ -------------- ------------------ --------------------
Net cash used in operating
activities (6,075) (5,164) (4,314) (87,053)
------------ -------------- ------------------ --------------------
FINANCING:
Increase in amount
due to shareholder 6,075 5,164 4,314 15,453
Common stock issued for cash - - - 71,600
------------ -------------- ------------------ --------------------
Net cash provided by
financing activities 6,075 5,164 4,314 87,053
------------ -------------- ------------------ --------------------
Net increase
in cash
- - - -
Cash, beginning
of period - - - -
------------ -------------- ------------------ --------------------
Cash, end
of period $ - $ - $ - $ -
============ ============== ================== ====================
The accompanying notes are an integral part of these statements.
F-5
Link2 Technologies, Inc.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
1. NATURE OF OPERATIONS AND GOING CONCERN
- --------------------------------------------------------------------------------
The Company was incorporated in the State of Nevada on August 16, 1996 and on
April 24, 2001 changed its name from "Great Energy Corporation International" to
Link2 Technologies, Inc.
The Company is currently in the development stage and has been in the
process of investigating and evaluating new business opportunities. The
Company is currently in the process of developing a three-dimensional (3D)
animation and digital effects studio that provides 3D animation and digital
effects to the music video industry.
The Company has suffered recurring losses from operations and has a working
capital deficiency of $17,453 that raise substantial doubt about its ability to
continue as a going concern. The continuation of the Company as a going concern
is dependent upon the Company attaining profitable operations and raising funds.
Management's plan in this regard is to raise additional funding through debt
financing. The financial statements do not include any adjustment relating to
the recovery and classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary should the Company
discontinue operations.
2. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Financial instruments - The Company's financial instruments consist of accounts
payable and accrued expenses and amount due to shareholder. Amount due to
shareholder is interest free. It is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising from its
financial instruments and that their fair values approximate their carrying
values, unless otherwise noted.
Use of estimates in the preparation of financial statements - The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reporting period. Actual results could differ from those
estimates.
Income taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". Under the asset and liability method of Statement 109, deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered or
settled.
3. DUE TO SHAREHOLDER
- --------------------------------------------------------------------------------
Amounts due to shareholder are non-interest bearing with no specific terms of
repayment.
F-6
Link2 Technologies, Inc.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS (Continued)
(EXPRESSED IN U.S. DOLLARS)
4. INCOME TAXES
- --------------------------------------------------------------------------------
At December 31, 2001, the Company had a federal net operating loss carryforward
of approximately $88,000 that may be available to be applied against any future
taxable income. This net operating loss carryforward may result in future
income tax benefits of approximately $18,000, however, because realization is
uncertain at this time, a valuation reserve in the same amount has been
established.
Significant components of the Company's deferred tax liabilities and assets as
of December 31, 2001 are as follows:
2001
- --------------------------------------------------------------------------------
Deferred tax liabilities $ -
================================================================================
- --------------------------------------------------------------------------------
Deferred tax assets:
Net operating loss
carryforwards
$ 18,000
Valuation allowance (18,000)
--------------
$ -
================================================================================
The valuation allowance for deferred tax assets was increased by $1,500 during
the year ended December 31, 2001.
The Company's net operating loss carryforwards, if not used, will expire as
follows:
2012 $ 45,300
2018 33,800
2020 2,800
2021 6,100
- --------------------------------------------------------------------------------
$ 88,000
================================================================================
5. RELATED PARTY TRANSACTIONS
Consulting fees of $1,600 were paid to a director and shareholder of the Company
for the year ended December 31, 2001. Total consulting fees paid to this
director and shareholder since inception through December 31, 2001 were $37,295.
F-7
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants.
AVAILABLE INFORMATION
We have filed a registration statement on form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the Commission's principal
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
------------------
statements and information regarding registrants that file electronically with
the Commission. Our registration statement and the referenced exhibits can also
be found on this site.
Until ______, all dealers that effect transactions in these securities whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
26
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation that is not the case with our articles
of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders
in connection with a matter in which the director has a material
conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal
profit; and
(4) willful misconduct.
Our bylaws provide that Link2 may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, except an action by or in the right of Link2, by reason of the
fact that he is or was a director, officer, employee, or agent of Link2, or is
or was serving at the request of Link2 as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including attorneys' fees, judgments, fines, and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit, or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of Link2, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation, and that, with
respect to any criminal action or proceeding, he had reasonable cause to believe
that his conduct was unlawful.
Our bylaws also provide that Link2 may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of Link2 to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee,
or agent of Link2, or is or was serving at the request of Link2 as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of Link2. Indemnification may not be made for any claim,
issue, or matter as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to Link2 or for amounts paid in settlement to Link2, unless and only to the
extent that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
The bylaws provide that to the extent that a director, officer, employee, or
agent of Link2 has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in the preceding two paragraphs,
27
or in defense of any claim, issue, or matter therein, he must be indemnified by
Link2 against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense. Any indemnification under the
preceding two paragraphs, unless ordered by a court or advanced pursuant to the
following paragraph, must be made by Link2 only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee, or agent is proper in the circumstances. The determination must be
made:
(i) By the stockholders;
(ii) By the Board of Directors by majority vote of a quorum
consisting of directors who were not parties to the act, suit or proceeding;
(iii) If a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(iv) If a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
Our bylaws also provide that the articles of incorporation, the bylaws, or an
agreement made by Link2 may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit, or proceeding must be
paid by Line2 as they are incurred and in advance of the final disposition of
the action, suit, or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately determined by
a court of competent jurisdiction that he is not entitled to be indemnified by
Link2. The provisions of this paragraph do not affect any rights to advancement
of expenses to which corporate personnel other than directors or officers may be
entitled under any contract or otherwise by law.
Our bylaws also provide that the indemnification and advancement of
expensesauthorized in or ordered by a court pursuant to the bylaws:
(i) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to the bylaws or for the
advancement of expenses made pursuant to the bylaws, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and was material to the cause of action.
(ii) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors,
and administrators of such a person.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 84
Transfer Agent Fees $ 1,000
Accounting fees and expenses $ 2,000
Legal fees and expenses $ 18,000
----------
Total $ 21,084
==========
- --------------------------------------------------------------------------------
All amounts are estimates, other than the Commission's registration fee.
28
We are paying all expenses of the offering listed above. No portion of these
expenses will be paid by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
There have been no unregistered securities sold by Link2 within the last three
years.
ITEM 27. EXHIBITS
Exhibit
Number Description
- ------ --------------------
3.1 Articles of Incorporation (1)
3.2 By-Laws (1)
5.1 Opinion of Cane & Company, LLC, with consent to use (1)
10.1 Services Agreement dated August 21, 2002
23.1 Consent of Spicer, Jeffries & Co., Independent Auditors
(1) Previously filed as an exhibit to the Form SB-2 on September 24, 2002.
ITEM 28. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
29
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, 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 hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin 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 whether such
indemnification is against public policy as expressed in the Securities Act of
1933, and we will be governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia, Canada on October 30, 2002.
LINK2 TECHNOLOGIES, INC.
By: /s/ Robert Sawatsky
_________________________
Robert Sawatsky
President and Sole Director
(Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)
30