As filed with the Securities and Exchange Commission on March 7, 2003
Registration No. 333-103224
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- - - - - - -
Amendment No. 1 to
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INTERNATIONAL BIOFUEL AND BIOCHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 06-1411727
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 River Road, Suite 301
Wilton, Connecticut 06897 06897
(Address of Principal Executive Offices) (Zip Code)
EMPLOYEE RESTRICTED STOCK PURCHASE
AGREEMENT BETWEEN REGISTRANT
AND CERTAIN EMPLOYEES
(Full title of the plan)
LeeRoy Allen, Jr.
5 River Road, Suite 301
Wilton, CT 06897
(Name and address, including zip code of agent for service)
(203) 255-1826
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
===================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
be Registered Registered per Share* Price* Fee
- ---------------------------------------------------------------------------------------------------
Common Stock Par Value,
$.001 Per Share Issued
Pursuant to an Employee
Restricted Stock Purchase
Agreement with three
Employees 1,100,000 $.19 $209,000 $19.23
Pursuant to certain
Consulting Agreements
With Four Consultants 275,000 $.19 $52,250 $ 4.81
----------- ------ ---------- --------
1,375,000 $.19 $261,250 $24.04
* Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) on the basis of the average of
the low bid and ask prices of the Common Stock of the Registrant as
traded in the over-the-counter market and reported in the Electronic
Bulletin Board of the National Association of Securities Dealers on
February 11, 2003.
Cross Reference Sheet Showing Location in Reoffer Prospectus of
Information Required by Items of Part I of Form S-3 Included Herein
Under Cover of Form S-8, Pursuant to Rule 404(a)
Form S-3 Item No. and Heading Heading in Prospectus
- ----------------------------- ---------------------
1. Forepart of the Registration
Statement and Outside
Front Cover Page of Prospectus........... Outside Front Cover Page
1. Inside Front and Outside
Back Cover Pages of Prospectus.......... AVAILABLE INFORMATION;
REPORTS TO STOCKHOLDERS;
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE;
TABLE OF CONTENTS
2. Summary Information, Risk
Factors and Ratio of
Earnings to Fixed Charges............... Outside Front Cover Page
THE COMPANY;RISK FACTORS
4. Use of Proceeds.......................... USE OF PROCEEDS
5. Determination of Offering Price.......... Outside Front Cover Page
PLAN OF DISTRIBUTION
6. Dilution................................. Not Applicable
7. Selling Security Holders................. SELLING SHAREHOLDER
8. Plan of Distribution..................... Outside Front Cover Page
PLAN OF DISTRIBUTION
9. Description of Securities
to be Registered........................ DESCRIPTION OF SECURITIES
10. Interests of Named Experts and Counsel... EXPERTS;LEGAL OPINIONS
11. Material Changes......................... THE COMPANY
12. Incorporation of Certain Information
by Reference............................ INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
13. Disclosure of Commission Position on
Indemnification For Securities Act
Liabilities............................. INDEMNIFICATION
REOFFER
PROSPECTUS
- -------------------------------------------------------------------------------
EXPLANATORY NOTE
International Biofuel and Biochemical Corporation ("Company") has prepared this
Registration Statement in accordance with the requirements of Form S-8 under the
Securities Act of 1933,as amended (the "1933 Act"), to register certain shares
of common stock, par value $0.001 per share, issued to a certain selling
shareholders. Under cover of this Form S-8 is a Reoffer Prospectus the Company
prepared in accordance with Part I of Form S-3 under the 1933 Act. The Reoffer
Prospectus may be utilized for reofferings and resales of up to 1,375,000 shares
of Common Stock acquired by the selling shareholders.
PART I
REOFFER PROSPECTUS
INTERNATIONAL BIOFUEL AND BIOCHEMICAL CORPORATION
5 RIVER ROAD, SUITE 301
WILTON, CONNECTICUT 06897
(203) 255-1826
1,375,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of International Biofuel
and Biochemical Corporation (the "Company") offered for sale hereby (the
"Shares") will be sold from time to time by the following Employees and the
following Consultants:
Employees Offices & Services No. Shares Offered
- --------- ------------------ ------------------
LeeRoy Allen, Jr. President 500,000
Hope D. Trowbridge Secretary 200,000
H. Andre Bohnen Shipping & Receiving 200,000
Asa L. Fish VP Sales 200,000 1,100,000
------- ---------
Consultants Services
- ----------- --------
H. Melville Hicks, Jr. Legal 85,000
Joseph Kriz Legal 50,000
Melentina Pusztay Business Development,
Managerial Solutions 140,000 275,00
------- ---------
TOTAL 1,375,000
(collectively "Selling Shareholders"). The Selling Shareholders acquired the
Shares pursuant to a certain Employee Restricted Stock Purchase Agreement dated
as of January 1st, 2003 and 4 separate Consulting Agreements for consulting,
legal and accounting services that the Selling Shareholders have provided or are
still providing to the Company.
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The sales may occur in transactions on the over-the-counter market and quoted on
the Bulletin Board maintained by Nasdaq at prevailing market prices or in
negotiated transactions. The Company will not receive proceeds from any of the
sales of the Shares. The Company is paying for the expenses incurred in
registering the Shares.
The Shares are "restricted securities" under the 1933 Act before their sale
under the Reoffer Prospectus. The Reoffer Prospectus has been prepared for the
purpose of registering the Shares under the 1933 Act to allow for future sales
by the Selling Shareholders to the public without restriction. To the knowledge
of the Company, the Selling Shareholders have no arrangement with any brokerage
firm for the sale of the Shares. The Selling Shareholders may be deemed to be
"underwriters" within the meaning of the 1933 Act. Any commissions received by a
broker or dealer in connection with resales of the Shares may be deemed to be
underwriting commissions or discounts under the 1933 Act.
The Company's common stock is currently traded on the Over-the-Counter market
and quoted on the NASDAQ Bulletin Board under the symbol "IBBO".
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS REOFFER PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------------
March 6, 2003
TABLE OF CONTENTS
Where You Can Find More Information....................................3
Incorporated Documents............................................. ...3
Our Company............................................................4
Risk Factors...........................................................8
Use of Proceeds........................................................19
Selling Shareholders...................................................19
Plan of Distribution...................................................20
Experts................................................................21
Legal Proceedings......................................................22
Legal Opinion..........................................................23
You should only rely on the information incorporated by reference or provided in
this Reoffer Prospectus or any supplement. We have not authorized anyone else to
provide you with different information. The common stock is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this Reoffer Prospectus or any supplement is accurate as of any
date other than the date on the front of this Reoffer Prospectus.
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We have filed with the Securities and Exchange Commission (the"SEC") in
Washington, D.C. a registration statement on Form S-8 under the Securities Act
with respect to the shares of common stock offered in this Reoffer Prospectus.
This Reoffer Prospectus does not contain all the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information about us and our common stock, we refer you to the registration
statement and to the exhibits and schedules filed with it. Statements contained
in this prospectus as to the contents of any contract or other document referred
to are not necessarily complete; we refer you to those copies of contracts or
other documents that have been filed as exhibits to the registration statement,
and statements relating to such documents are qualified in all respects by such
reference. Anyone may inspect a copy of the registration statement without
charge at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain copies of all or any portion of the registration
statement by writing to the SEC's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and paying prescribed fees. You may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a Web site at HTTP://WWW.SEC.GOV
that contains reports, proxy and information statements and other information
regarding companies such as ours that file electronically with the SEC.
We are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and therefore we file reports,
statements and other information with the SEC. You can inspect and copy the
reports, proxy statements and other information that we file at the public
reference facilities maintained by the SEC at the Public Reference Room, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices
located at 233 Broadway, New York, New York 10279 and 500 West Madison Street,
Suite 1400 Chicago, Illinois 60661. You can also obtain copies of such material
from the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The SEC also makes electronic filings publicly
available on its Web site within 24 hours of acceptance. Our common stock is
currently traded on the Over-The-Counter market and quoted on the NASDAQ
Bulletin Board under the Symbol "IBBO"
INCORPORATED DOCUMENTS BY REFERENCE
The SEC allows the Company to "incorporate by reference" information into this
Reoffer Prospectus, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Reoffer Prospectus, except for any information superseded by information in this
Reoffer Prospectus.
3
The following documents which we have filed with the Commission are incorporated
by reference into this prospectus:
(a) Our annual report on Form 10-KSB for the fiscal year ended December 31,2001;
(b) Our quarterly reports on Form 10-QSB for the quarters ended September 30,
2002, June 30, 2002 and March 31, 2002
(c) Our current Reports on Form 8-K filed on October 28, 1998, July 20, 2001,
September 25, 2002 and December 23, 2002;
(d) Our Registration Statement on Form 10-SB filed on June 11, 1998 and the
Amendments thereto filed on September 1, 1998 and December 18, 1998.
All documents that we have filed with the Commission pursuant to Section 13 (a),
13(c), 14 or 15 (d) of the Exchange Act subsequent to the date of this Reoffer
Prospectus and prior to the completion of the offering shall be deemed to be
incorporated by reference into this Reoffer Prospectus and to be part of this
prospectus from the date of filing of these documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference in this prospectus, shall be deemed modified, superseded or
replaced for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed documents, which also
is or is deemed incorporated by reference in this prospectus,
modifies,supersedes or replaces that statement. Any statement so modified,
superseded or replaced shall not be deemed, except as so modified, superseded or
replaced, to constitute a part of this prospectus.
The Company will provide without charge to each person to whom a copy of this
Reoffer Prospectus is delivered, upon oral or written request, a copy of any or
all documents incorporated by reference into this Reoffer Prospectus (excluding
exhibits unless the exhibits are specifically incorporated by reference into the
information the Reoffer Prospectus incorporates). Requests should be directed to
LeeRoy Allen, Jr., President at the Company's executive offices, located at 5
River Road, Suite 301, Wilton, Connecticut 06897. The Company's telephone number
is (203)255-1826. The Company's corporate Web site address
http://www.jbirdrecords.com. Information contained on our website is not part of
this Reoffer Prospectus.
OUR COMPANY
GENERAL
We were incorporated under the name of Caltron, Inc. in the State of
Pennsylvania on June 7, 1991. On October 8, 1997 we acquired J-Bird Records,
Inc., the first World Wide Web Recording Label(TM) and changed our name to
J-Bird Music Group, Ltd. J-Bird Records, Inc. is a wholly owned subsidiary. On
December 9, 2002 the Company changed its name to International Biofuel and
Biochemical Corporation (herein referred to as the "Company" or"IBBC"). J-
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Bird Records, Inc. remains a wholly owned subsidiary. We are presently
authorized by our Articles of Incorporation as amended to issue up to 50,000,000
shares of $0.001 par value of common stock, of which 8,435,883 shares were
outstanding as of January 31, 2003.
On May 24, 2001 the Board of Directors declared effective June 1, 2001
("Effective Date" a forty (40) to one (1) reverse split on the currently issued
and outstanding shares of common stock of the Company ("Reverse Stock Split").
Each forty (40) shares of common stock of the Company issued and outstanding
immediately prior to the Effective Date were changed into one (1) share of
common stock, par value $0.001 per share ("New Common Stock"). There were no
changes in the par value nor any change in the number of authorized shares the
Company may issue under its Articles of Incorporation.
Our Company in alliance with American Bio-fuels LLC ("ABF")intends to
build multiple continuous flow biodiesel manufacturing plants with capacities
scaleable to 20 million gallons per year. The building of approximately 12
strategically located manufacturing plants operating at full capacity would
produce sufficient biodiesel to 1% of the existing diesel fuel market estimated
at 66 billion gallons in 2001. On December 4, 2002, IBBC and ABF entered into a
contract for the first biofuel fuel facility in the State of Connecticut. (See
"Connecticut Project" below).
IBBC in alliance with ABF intends to become a bio-energy fuels company
involved in the production, distribution and marketing of biodiesel fuel.
Biodiesel is an alternative fuel that is very similar to diesel in all
performance characteristics including equivalent energy content, higher power
(cetane) and other characteristics. Furthermore, it has much lower emissions of
particulates and smoke, while also reducing dependence on imported oil and
lowering C02 emissions by 78% compared to petroleum diesel. More importantly,
biodiesel can be used in a diesel engine with no modifications and can be
delivered to customers through the existing fueling infrastructure system for
fuel according to government studies including U.S. Department of Energy and
Department of Defense. As a result, it is the fastest growing segment of the
alternative fuels industry, jumping from only 1% to 16% total market share
between 2000 and 2001 (according to Natural Gas Fuels reader survey). In
addition, biodiesel prices are equivalent to diesel prices in some parts of the
world and provide significant cost savings in countries with favorable tax codes
relating to biodiesel or where diesel prices are high.
Biodiesel is a clean, renewable diesel fuel substitute produced from
agricultural resources such as soybeans or rapeseed (canola), or recycled
cooking oil from restaurants. It can be burned in any standard, unmodified blend
at any proportion with petroleum diesel. Pure biodiesel is completely
BIODEGRADABE and NON-TOXIC TO PLANTS, ANIMALS AND HUMANS.
Biodiesel is the first clean fuel that does not require fleets to
purchase new vehicles or construct new facilities. Biodiesel seamlessly
integrates with current engine technology and biodiesel fleets have reported
operational consistency over extended periods of use - engine performance,
payload power and range are completely unaltered. Biodiesel is registered
5
with the Environmental Protection Agency (EPA) as a fuel and fuel additive and
meets clean diesel standards established by the California Air Resources Board
(CARB). Biodiesel is a recognized alternative fuel by the Department of Energy
(DOE) and the United States Department of Transportation (USDOT).
It is contemplated each biofuel manufacturing plant will be constructed
and operated by a separate limited liability company ("LLC"), with each LLC
formed the customer will own 51% of the LLC, IBBC will own 24.5% thereof and ABF
will also own 24.5% thereof. In the alternative if the customer wishes to own
and operate the biofuel plant it can pay to an LLC, owned by IBBC and ABF on a
50/50% basis, the cost of construction plus 15% per plant. In addition, the
customer as owner and operator of such plant shall pay to the LLC for the right
to use the biofuel technology a license fee of $1 Million every three months
plus a royalty of 3% on the sales price for each gallon sold by the plant.
Our Success and Proprietary Technology.
Our success and ability to compete with our competitors is largely
dependant on certain proprietary technology being patented and developed by
Bio-Clean Fuels, Inc. ("BCF") which is being utilized and marketed in the United
States under an exclusive license by American Biofuels, LLC ("ABF") under the
trademark "Green Star Fuels". There is presently a United States patent
application filed by BCF under a claim entitled "Continuous Flow Technology".
Our Company will construct and operate each Biofuel facility under separate
licensing agreements with ABF. Each licensing agreement will have its own terms
and conditions and may be on an exclusive or non-exclusive basis. For example
the Connecticut Project is exclusive for an 18 month period and if at the end of
this period our Company has raised the capital requirements for the Connecticut
Biofuel facility this exclusive period will continue for a period of 10 years
subject to review by ABF every two years. On the other hand if the required
capital is not raised then ABF agrees to grant our Company a non-exclusive
license for a Biofuel plant for a license fee of $250,000 per year during the
ten year license period.
The Connecticut Project:
On December 4, 2002 our Company, entered into an agreement (the
"Agreement") with ABF for the first Biofuel plant to be constructed in the State
of Connecticut on a 50/50 joint venture bases through a Nevada limited liability
company to be formed. Under the terms of the Agreement ABF has granted IBBC, an
eighteen (18) month exclusive license to construct a 15 million gallon Biofuel
facility in Connecticut only. The Agreement provides among other things:
1) IBBC, within 45 days from the date of the Agreement is to pay ABF
$50,000 and within 10 days from the Agreement date issue to ABF
500,000 shares of its common stock. Said shares will be
"restricted shares" as defined by Rule 144 of the Securities Act
of 1933, as amended.
2) Both parties to the Agreement are to form a Nevada limited
liability company to be licensed in the State of Connecticut on a
50/50 and within six (6) months from the Agreement date IBBC, is
to loan $1 million to the Nevada limited liability company to
start the initial permit process and site acquisition.
6
In addition, IBBC, shall provide additional funds for construction
of the Biofuel facility and ABF is to assist in obtaining the
necessary permits for the construction of the facility during the
eighteen (18) month exclusive license period, which can be
extended by mutual agreement, for a reasonable time only if there
are unforeseen delays in the issuance of permits to start
construction.
3) ABF is to construct the Biofuel facility on a turnkey basis at a
cost of $.45 per installed gallon plus 10% for cost overruns
caused by unforeseen circumstances and weather conditions.
IBBC, is to provide the capital requirements to the Nevada limited
liability company to acquire title or a leasehold interest, (10
year term at least with extensions)to the land .
4) After completion of the Biofuel facility, ABF shall train the
operators, provide the marketing for the Biofuel including
applying for state or federal subsidies if available.
5) The eighteen (18) month license period may continue and shall be
renewed on a biannual basis for ten (10) years if IBBC, raises the
necessary capital to complete the initial Biofuel plant.
6) If IBBC is not successful in raising the capital for the Nevada
limited liability company ABF will agree to a non-exclusive
license to build a smaller plant if it pays ABF a license fee of
$250,000 a year.
7) The Nevada limited liability company will be managed by three (3)
Manager/Directors, two of which will be selected by ABF and one by
IBBC. The first Manager/Directors will be Joseph P. La Stella,
P.E., William L. Fowler and LeeRoy Allen, Jr.
In compliance with the above terms the Company has paid ABF $50,000 and
has issued and delivered 500,000 shares of restricted Common Stock to ABF.
There are other provisions in the Agreement dealing with marketing and
territorial restrictions and production accreditation among distributors.
J-Bird Records, Inc.: The Company's wholly owned subsidiary, J-Bird
Records, Inc., began in 1996 as "The First World Wide Web Recording Label"
(jbirdrecords.com), signing, promoting and selling its artists' CDs exclusively
online. It quickly developed a traditional brick and mortar presence to enhance
its efforts, thereby creating a hybrid label combining the best of both offline
and online worlds. J-Bird Records is an independent label with a roster of over
350 artists including Rockapella, John Entwistle, the Guess Who, Mitch Ryder,
Jimmie Van Zant, Lee Rocker and more. The label utilizes traditional and online
marketing and distribution methods for the promotion of its artists. The Navarre
Corporation is the label's exclusive
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North American distributor to retail accounts. Navarre is the leading
independent distributor of music and music-related products throughout North
America.
J-Bird Records attracts a wide array of established and emerging
talent by offering artists a greater level of creative control, freedom and
involvement. J-Bird Records offers recording contracts which allow artists to
exercise a large amount of self-direction in their career planning, while
driving those careers towards a successful future.
RISK FACTORS
In this section we highlight some of the risks associated with the
Company's business and operations. Prospective investors should carefully
consider the following risk factors when evaluating an investment in the common
stock offered by this Reoffer Prospectus.
1. Limited Operating History and No Assurance as to Future Profitable
Operations. The Company has entered into a strategic alliance with American
Bio-fuels LLC to build continuous flow biodiesel plants on an exclusive basis in
the State of Connecticut and intends to extend this alliance on an non-exclusive
basis to alter areas of the United States. Each of the plants can have
capacities scaleable to 20 million gallons per year. The Company also acquired
J-Bird Records, Inc. in October of 1997 to implement its business opportunities.
In view of this the Company has a limited operating history and limited revenues
from operations or assets and must be regarded as a new or "start-up" venture
with all of the risks of a new business with all the unforeseen cost, expenses,
problems and difficulties to which a new venture is subject. The Company cannot
predict with any certainty the future success or failure of its operations.
There is no assurance that the Company will generate net income or successfully
expand its operations in the future. Moreover, as a small and relatively new
enterprise, it is likely to remain subject to risks and occurrences which
management is unable to predict with any degree of certainty, and for which it
is unable to fully prepare. The likelihood of the success of the Company must be
considered in light of the problems, expenses, difficulties, complications and
delays frequently encountered in connection with the commencement of a new
business and the competitive environment in which the Company is operating.
Because of the Company's relatively limited business history and limited assets
and revenues there is little evidence for investors to analyze in order to make
an informed judgment as to the merits of an investment in the Company. This
investment should therefore be considered high risk investment in an unseasoned
start-up company with the possibility of the loss of the entire investment.
2. Need for Substantial Additional Capital. The Company remains in need
of substantial financing from sources other than operations in order to cover
its overhead and to maintain and expand its operations. To date, the Company has
been able to meet its outside financing requirements. We have raised additional
capital in private placements not involving public offerings in accordance with
Section 4(2) of the 1933 Act. these transactions
8
were with purchasers who in the opinion of the Company were either accredited
investors within the meaning of Rule 501(a) of Regulation D promulgated under
the 1933 Act or sophisticated by virtue of business background and knowledge of
the Company through existing relationships giving them access to business and
financial information on the Company. These transactions resulted in
approximately $1,236,000 in gross proceeds.
We expect equity funding in the form of contributions to the ownership
in LLCs formed to construct and operate the Biofuel facilities and those same
funding sources, which were started in November of 1996, together with
anticipated cash flow from conventional asset based debt financing against
equipment, inventory and/or receivables will provide sufficient capital to cover
overhead and maintain and expand its operations.
Absent adequate revenues from operations during the phase-in period of
commercial operations, we will remain dependent on the outside sources described
above to meet our financial needs to complete the Biofuel plants and to continue
operations. While we believe the Company will be successful in continuing to
obtain sufficient financing from such sources, there can be no assurance with
any certainty that this will in fact, be the case and the failure to do so would
have a material adverse effect on our ability to continue to complete the
construction of the plants and operate them. Our more long term future capital
requirements will depend upon numerous factors, including the amount of revenues
generated from operations, the cost of our sales and marketing activities, none
of which can be predicted with certainty.
While we do not believe that it will be the case, prospective investors
should note that if all of the above described internal and external sources for
financing should fail to be sufficient, we could be required to reduce its
operations, seek an acquisition partner or sell securities on terms that may be
highly dilutive or other wise disadvantageous.
3. History of Losses an Accumulated Deficit. We have experienced
operating losses in each fiscal period since commencing operations in 1991. As
of December 31, 2001, we had a deficit accumulated since formation in the
aggregate approximate amount of $12,080,181, of which approximately $2,633,007
was accumulated in the 2000 fiscal year and approximately $1,253,545 was
accumulated in the 2001 fiscal year. (see above, Risk Factor No.1 "Limited
Operating History: No Assurance as to Future Profitable Operations"). Since our
inception, we have generated extremely limited revenues from operations.
4. New Businesses and No Assurance of Success or Profitability. The
biofuel business is new to IBBC and is a relatively new product that has only
recently proven commercially viable. Since neither management nor IBBC has not
previously engaged in the production, distribution and marketing of biofuels and
there can be no guarantee that IBBC will be able to do so successfully. The
ability of investors to receive dividends or otherwise realize a profit on their
investment, will depend upon the ability of IBBC, ABF and the owners and
operators of every plant to successfully operate and market our biofuel
products. If IBBC, ABF and the owners and operators of such plants are unable to
perform successfully, an investor could lose his or
9
her entire investment. IBBC, ABF and the owner and operator of such plants will
be responsible for providing financing for the development of each biofuel
plant, which after payment or operating expenses, may not generate sufficient
revenues to make IBBC profitable. For these and other reasons, purchase of the
Shares must be considered a highly speculative investment.
5. Going Concern Assumption. Our independent auditor's report on the
Company's financial statements for the year ended December 31, 2001 contain an
explanatory paragraph indicating that, the Company's uncertainty as to its
productivity and its ability to raise sufficient capital raise substantial doubt
about its ability to continue as a going concern. In addition that we have an
accumulated deficit of $12,080,181 as of December 31, 2001. The Company will
require substantial additional funds in the future, and there can be noassurance
that any independent auditor's report on the our future financial statements
will not include a similar explanatory paragraph if we are unable to raise
sufficient funds or generate sufficient cash from operations to cover the cost
of its operations. The existence of the explanatory paragraph may naturally
adversely affect our relationship with prospective owners and operators of any
biofuel facilities and suppliers and artists, for our music business and
therefore could have a material adverse effect on our businesses, financial
condition and results of operations.
6. Conflicts of Interests. Certain conflicts of interest exist between
the Company and its officers and directors. Many of them have other business
interests to which they devote attention and they may be expected to do so
although management time should be devoted to the business of the Company.
Conflicts of interest may arise that can be resolved only through exercise of
such judgment as is consistent with their fiduciary duties to the company.
7. Dilution from Issuance of Shares for Services. To date, the Company
has had very limited revenues from operations. Accordingly, the bulk of its cash
assets have been, and may continue to be, utilized to cover the expenses
associated with the development of its business and products. Given the
foregoing, the Company regularly pays certain of its financial obligations by
issuing restricted shares of its common stock, at a discount, in lieu of cash.
The discounts at which such shares were issued was generally, but not always,
set at 50% of the average market price of the stock, as traded in the
over-the-counter market and quoted in the OTC Bulletin Board. Such discounts
were either negotiated at arms length with third parties or determined
arbitrarily and in such cases they bore no relationship to the Company's assets,
earnings, book value or other such criteria of value. Such issuances have, and
may continue to, result in substantial dilution to the Company's existing
shareholders.
From May of 1995 through December, 2002, the Company has issued a total
of 269,000 shares after giving effect to the Reverse Stock Split, constituting
approximately 3% of the issued and outstanding shares. These shares were issued
in lieu of cash compensation and expense reimbursement due under employment and
consulting agreements with its executive officers, employees, and corporate
counsel and in additional compensation by way of directors shares and stock
bonuses. In addition, during that period, the
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Company issued 1,473,625 post reverse stock split shares, constituting
approximately 18.6% of the issued and outstanding common stock to affiliated and
non-affiliated consultants and subcontractors for consulting services of various
obligations to its officers, counsel, and outside vendors, the Company will, to
the extent possible, continue to issue shares of its common stock at negotiated
or arbitrary discounts. Finally, there have been issued 790,000 shares of after
giving effect to the Reverse Stock Split in lieu of cash payments of vendor
invoices and to artists pursuant to contracts.
8. Possible Depressive Effect on Price of Securities of Future Sales of
Common stock. The resale of approximately 7,914,143 post reverse stock split
common shares of the Company, issued and outstanding as of December 31, 2002, of
which approximately 2,024,143 can currently be resold pursuant to Rule 144 of
the 1933 Act. The sale or other disposition of much of these currently
outstanding shares of common stock is restricted by the 1933 Act. Unless such
sales are registered, these shares may only be sold in compliance with Rule 144
promulgated under the 1933 Act or some other exemption from registration
thereunder. Rule 144 provides, among other matters, that if certain information
concerning the operating and financial affairs of the Company is publicly
available, persons who have held restricted securities for a period of one year
may thereafter sell in each subsequent three month period up to that number of
such shares equal to one percent of our total issued and outstanding common
stock. The sale or availability for sale of substantial amounts of common stock
in the public market after this offering being made by this Registration
Statement could adversely affect the prevailing market price for our common
stock and could impair our ability to raise additional capital through the sale
of its equity securities.
9. Possible Voting Control by Management: Possible Depressive Effect
on Market Prices. As of December 31, 2002, the Company's officers and directors
were the beneficial owners of an aggregate of 96,350 post reverse stock split
shares, constituting of approximately .012% of the outstanding common stock.
10. Limited Public Market: Company Not Eligible for Inclusion on
NASDAQ. To date there has been only a limited and sporadic public market for the
Company's common stock. There can be no assurance that an active and reliable
public-market will develop or. if developed, that such market will be sustained.
Purchasers of shares of common stock of the Company may, therefore, have
difficulty in reselling such shares. As a result, investors may find it
impossible to liquidate their investment in the Company should they desire to do
so. Our common stock is currently traded in the over-the-counter market and
quoted on the OTC Bulletin Board. The Company intends to apply to have its
common stock approved for quotation on the Nasdaq SmallCap Market at such time,
in the future, that it meets the requirements for inclusion. As at the date
hereof, however, the Company is not eligible for inclusion in NASDAQ or for
listing on any national stock exchange All companies applying and authorized for
NASDAQ are required to have not less than $4,000,000 in net tangible assets, a
public float with a market value for not less than five million dollars, and a
minimum bid of price of $4.00 per share. At the present time, the Company is
unable to state when, if ever, it will meet the Nasdaq application standards.
Unless we are able to increase the Company's net worth and market valuation
substantially, either through the accumulation of surplus out of earned income
of successful capital
11
raising financing activities, it will never be able to meet the eligibility
requirements of NASDAQ. Moreover, even if we meet the minimum requirements to
apply for inclusion in The Nasdaq SmallCap Market, there can be no assurance,
that approval will be received or, if received, that the Company will meet the
requirements for continued listing on the Nasdaq SmallCap Market. Further,
Nasdaq reserves the right to with draw or terminate a listing on the Nasdaq
Small Cap at any time and for any reason in its discretion. If the Company is
unable to obtain or to maintain a listing on the on the Nasdaq SmallCap Market,
quotations, if any, for "bid" and "asked" prices of the common stock would be
available only on the OTC Bulletin Board where the common stock is currently
quoted or in the "pink sheets" published by the National Quotation Bureau, Inc.
This can result in an investor's finding it more difficult to dispose of or to
obtain accurate quotations of prices for the common stock than would be the case
if the common stock were quoted on the Nasdaq SmallCap Market.
Irrespective of whether or not the common stock is included in the Nasdaq
SmallCap system, there is no assurance that the public market for the common
stock will become more active or liquid in the future. In that regard,
prospective purchasers should consider that this offering is being made without
the underwriting arrangements typically found in a public offering of
securities. Such arrangements generally provide for the issuer of the securities
to sell the securities to an underwriter which, in turn, sells the securities to
its customers and other members of the pubic at a fixed offering price, with the
result that the underwriter has a continuing interest in the market for such
securities following the offering. In order to qualify for listing on a national
stock exchange, similar minimum criteria respecting, among other things, the
Company's net worth and/or income from operation must be met.
Accordingly, market transactions in the Company's common stock are
subject to the "Penny Stock Rules" of the Securities and Exchange Act of 1934,
which are discussed in more detail, below, under "Risk Factor No. 12 "Regulation
of Penny Stocks". These rules could make it difficult to trade the common stock
of the Company because compliance with them can delay and/or preclude certain
trading transactions. This could have an adverse effects on the ability of an
investor to sell any shares of the Company's common stock.
11. Regulation of Penny Stocks. As discussed above, at the present
time, the Company's common stock is not listed on The Nasdaq Small Cap Stock
market or on any stock exchange. Although dealer prices for the Company's common
stock are listed on the OTC Bulletin Board, trading has been sporadic and
limited since such quotations first appeared on or about June 8, 1995.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
special disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a "penny stock" Commission regulations generally
define a penny stock to be an equity security that has a market price of less
than $5.00 per share and is not listed on The Nasdaq SmallCap Stock Market or a
major stock exchange. These regulations subject all broker-dealer transactions
involving such securities to the special "Penny Stock Rules" set forth in Rule
15g-9 of the Securities Exchange Act of
12
1934 (the "34 Act"). It may be necessary for the Selling Shareholders and the
Underlying Share Selling Shareholders to utilize the services of broker-dealers
who are members of the NASD. The current market price of the Company's Common
Stock is substantially less than $5. Accordingly, any broker-dealer sales of the
shares being registered hereunder, as subject to the Stock Rules. These Rules
affect the ability of broker-dealers to sell the Company's securities and also
may affect the ability of purchasers in this offering to sell their shares in
the secondary market, if such a market should ever develop.
The Penny Stock Rules also impose special sales practice requirements
on broker-dealers who sell such securities to persons other than their
established customers or "Accredited Investors". Among other things, the Penny
Stock Rules require that a broker-dealer make a special suitability
determination respecting the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. In addition, the Penny Stock
Rules require that a broker-dealer deliver, prior to any transaction, a
disclosure schedule prepared in accordance with the requirements of the
Commission relating t the penny stock market. Disclosure also has to be made
about commissions payable to both the broker-dealer and the registered
representative and the current quotations for the securities. Finally, monthly
statements have to be sent to ally holder of such penny stocks disclosing recent
rice information for the penny stock held in the account and information on the
limited market in penny stocks. Accordingly, for so long as the Penny Stock
Rules are applicable to the Company's common stock, it may be difficult to trade
such stock because compliance with such Rules can delay and/or preclude certain
trading transactions. This could have an adverse effect on the liquidity and/or
price of the Company's common stock.
Shareholders should be aware that, according to Securities and Exchange
Commission release No. 34-329093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differentials and markups by selling broker-dealers; and
(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.
12. Dependence on Key Personnel. We are dependent on key personnel and
our business would be disrupted if we are unable to retain and expand our
management team. Our success depends to a significant extent on the efforts and
abilities of certain of its senior management, in particular those of LeeRoy
Allen, Jr., President. The loss of this person could have a material
13
adverse affect on our business, prospects, operating results and financial
condition. There can, however, be no assurance that, in such event, we will be
able to locate and retain a capable successor to her or any member of its senior
management. We do not presently have key man life insurance policies and do not
intend to obtain any unless required to do so under future financing
arrangements. There can be no assurance that such policies will be available to
the Company on commercially reasonable terms, if at all.
None of our personnel is covered by an employment contract and any
officer or employee of our company can terminate his or her relationship with us
at any time. None of our employees is subject to non-competition agreements
which would survive termination of employment.
13. Lack of Continuity in Management. We do not have employment
agreements with any of our officers and directors.
14. Indemnification of Officers and Directors. Our By-Laws provide for
the indemnification of its directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the Company therefore
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures which we will be unable to recoup.
15. Dependence Upon Outside Advisors. To supplement the business
experience of its officers and directors, we have been and in the future may be
required to employ accountants, technical expert, appraiser, attorneys or other
consultants or advisors. The selection of any such advisors will be made by the
President without any input from stockholders. Furthermore, it is anticipated
that such persons may be engaged on a "as needed" basis without a continuing
fiduciary or other obligation to the Company. In the event the President of the
Company considers it necessary to hire outside advisors, they may elect to hire
persons who are affiliates, if they are able to provide the required services.
16. Our Industries are Highly Competitive. The markets for
our businesses (both biofuel and recording) are intensely competitive and
characterized by changing technology. We currently experience or will experience
competition from numerous companies in each of the businesses in which we
participate. Our competition consists of major oil and energy companies and
music publishing and recording companies. Many of our competitors in both
industries are more established, benefit from greater market recognition and
have substantially greater financial, development, production, manufacturing and
marketing resources than we have.
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Presently the biggest suppliers of Biodiesel fuel currently produce
approximately 17,256,000 gallons and have an aggregate production capacity of
approximately 45 million gallons.
A number of large U.S. and foreign companies are engaged in the
conventional diesel fuel business are investing in alternative fuels such as
hydrogen, natural gas and other renewable energy and may in the future compete
with our biofuel products. These include such companies as The Royal Dutch/Shell
Group, Texaco-Chevron, British Petroleum and others.
We believe the principal competitive factors in the market for biofuel
products are:
o price per gallon
o long-term stability and availability
o product performances (primarily operating and environmental
efficiency)
o product quality
o reputation
o environmental factors
In the recording business we compete for artists and recordings to
distribute with national and regional recording and distributing companies,
which have a competitive edge over the Company by virtue of their stronger
management, promotional, and financial resources. We compete in the distribution
and sale of recorded music with established record label companies and with
other music producers and distributors including Polygram, Time Warner, EMI,
Columbia and Phillips. Our strategy is to sign artists who are unable to obtain
recording contracts with larger recordings that management believes will appeal
to customers interested in particular music genres. The recording products
offered by the Company compete for consumers who have a wide selection of music
choices within the same music genres offered by the Company. The Company also
competes with other businesses that offer and sell recordings through the
Internet. The Company will compete for consumer dollars on the basis of the
types of music it selects for distribution and the marketing of its music
selections through the Internet.
17. The alternative energy industry including the Biofuel business is
new and there is a limited history of operations, revenues and profits compared
to the more established conventional diesel fuel industry. In view of this there
are several risks associated with our Company's project and business. Some of
these risks are:
o Difficulty in executing the Company's business plan and
significantly grow the business
15
o Difficulty in negotiating agreements with existing petroleum
distributors
o Difficulty in securing long term contracts with raw material
suppliers
o Limited availability of suppliers that offer soybean oil
o Fluctuation in prices of raw material o Fluctuation in price of
petroleum diesel
18. The ability of the Company to establish brand and product
recognition through an aggressive promotion and a rapid expansion in production
and distribution
19. Potential Fluctuations in Periodic Results. Our revenues may be
subject to significant variation from period to period due to the seasonal
nature of the business and will be difficult to predict. Revenues are difficult
to forecast because the biofuel business is evolving, and our sales cycle may
vary substantially from time to time.
20. Our Future Operating Results Are Likely to Fluctuate. Our quarterly
and annual operating revenues, expenses and operating results may fluctuate due
to a variety of factors, many of which are beyond our control, including:
o the timing of contracts
o the timing of new introductions and products to us or our
competitors
o the timely payment of our invoices
o possible decreases in average price in response to competitive
pressures
o market acceptance to new products
o fluctuations in general economic conditions
Due to all of the foregoing factors, we do not believe that
period-to-period comparisons or our historical results of operations are
indications of future performance. Furthermore, it is possible that in some
future quarters our results of operations may fall below the expectations of
management and investors. In such event, the price of our stock on the OTC
Bulletin Board will likely be materially and adversely affected.
21. Our Stock Price is Volatile. The market for securities of music
companies, including ours, has been highly volatile. The market price of our
post reverse stock split common stock has fluctuated between $2.80 and $.20 from
June 8, 2001 to December 31, 2002, and the last sale price was $.27 on January
28, 2003. It is likely that the price of our common stock will continue to
fluctuate widely in the future. Factors affecting the trading price of our
common stock include:
o responses to quarter-to quarter variations in operating results
16
o failure to meet securities analysts' estimates
o changes in financial estimates by securities analysts
o conditions, trends or announcements in the energy and music and
entertainment industries
o announcements or significant acquisitions, strategic
alliances,joint ventures, or capital commitments by us or our
competitors.
o additions or departures of key personnel
o sales of common stock
o accounting pronouncements or changes in accounting rules that
effect our financial statements
o external factors and events beyond our control
In addition, the stock market in general, the energy market and the
market for music and entertainment related stocks in particular, has experienced
extreme volatility that often has been unrelated to the operating performance of
particular companies. These broad market and industry fluctuations may adversely
affect the trading price of our common stock, regardless of our actual operating
performance.
Investors may be unable to resell their shares of our common stock at
or above their purchase price. In the past, companies that have experienced
volatility in the market price of their stock have been the object of securities
class action litigation. If we were the subject of securities class action
litigation, it could result in substantial costs, a diversion of management's
attention and resources and a material adverse effect on our business and
financial condition.
22. External Factors Could Affect Our Common Stock Trading Price.
Fluctuations in the trading price of our common stock and purchase warrants may
result from a number of factors, some of which are beyond our control,
including:
o general economic and stock market conditions
o or anticipated fluctuations in our operating results;
o changes in expectations as to our future financial performance or
changes in financial estimates by securities analysts;
o earnings and other announcements by, and changes in market
valuations of other comparable companies and
o trading of our common stock.
23. Our Success Depends on Protection of Intellectual Property. The
success and competitiveness of our products depend in a large part upon our
17
ability to protect our current and future technology and manufacturing processes
through a combination of patent, trademark, trade secret and unfair competition
laws. In this regard BCF has filed a U.S. patent application under a claim
entitled "Continuous Flow Technology" and granted an exclusive license ABF to
construct, operate and market Biofuel facilities and products in the United
States. ABF in turn has granted our Company an 18 month exclusive license to
construct a Biofuel facility in the State of Connecticut.
Patent applications in the United States are maintained in secrecy
until the patents are issued, and the publication of discoveries in the
scientific literature tends to lag behind actual discoveries. Therefore, we
cannot be certain that BCF is the first creator of the invention covered by the
pending patent application or the first to file the patent application on
inventions covered by the pending patent application. We cannot ensure that:
o a patent will be issued from the pending application or future
applications
o BCF's new patent if and when issued will be sufficient in scope or
strength to provide meaningful protection or any commercial
advantage to us
o others will not independently develop similar products, duplicate
BCF's products or design around any patents issued to us
For any technology not within the scope of the patent, if issued, or in
the event a patent will not issue from the application filed by BCF, we, BCF and
ABF may have to enter into confidentiality and non-disclosure of intellectual
property agreements with their respective employees, consultants and certain
vendors and generally control access to and distribution of our proprietary
information. Notwithstanding these precautions, it may be possible for a third
party to copy or otherwise obtain and use the proprietary information without
authorization or to develop similar information independently.
Policing unauthorized use of intellectual property is difficult. We
cannot assure you that the steps taken by us BCF or ABF will prevent
misappropriation of this technology or that agreements entered into for that
purpose will be enforceable. In addition, litigation may be necessary in the
future to enforce the rights to the intellectual property, to protect trade
secrets and to determine the validity and scope of the proprietary rights of
others. Litigation may result in substantial costs and diversion of resources,
either of which could have a material and adverse effect on our business,
results of operations and financial condition.
FORWARD-LOOKING STATEMENT
This Reoffer Prospectus contains forward-looking statements that
involve risks and uncertainties, which may include statements about our:
o business strategy expansion of our products, marketing and
distribution
18
o plans for entering into licensing and distribution agreements
o anticipated sources of funds, including the proceeds from our
operations, to fund our operations for the ensuing years following
the date of this Reoffer Prospectus
o plans, objectives, expectations and intentions contained in this
Reoffer Prospectus that are not historical facts.
When used in this prospectus, the words "expects," "anticipates,"
"intends," "plans," "believes, "seeks," estimates" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, actual results could
differ materially from those discussed under "Risk Factors" and elsewhere in
this Reoffer Prospectus. We assume no obligation to update any forward-looking
statements
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
Shares of our common stock eligible for sale pursuant to this Reoffer
Prospectus or which may become eligible for sale pursuant to this Reoffer
Prospectus, whether or not the holders of these shares have any present intent
to do so, are shares which (I)have been acquired pursuant to the terms of a
Employee Restricted Stock Purchase Agreement ("Stock Purchase Agreement") dated
as of January 1, 2003. Under the terms of the Stock Purchase Agreement the
shares are being sold to the employees at a price of $.28 per share or an
aggregate of $308,000 which may be paid for in cash or if the Company permits by
the performance of employment services performed or to be performed or (II) have
been acquired by them pursuant to the terms of four separate consulting
agreements ("Consulting Agreements") which are individually negotiated written
compensation agreements pursuant to which the Selling Shareholders are rendering
or have rendered bona fide services not in connection with the offer or sale of
securities in a capital raising transaction. In these cases the Company is
permitting payment by the performance of employment or consulting services in
lieu of the payment thereof in cash to the employee.
For the purposes of this Reoffer Prospectus, all of the Shares being
registered hereunder are "restricted shares" insofar as they were issued to an
individual employee or consultant of our Company under an employee benefit plan
pursuant to the 1933 Act exemption prior to their inclusion in a registration
statement on Form S-8, of which this Reoffer Prospectus is a part.
19
LeeRoy Allen, Jr. is and has been a director and the President of the
Company from December 4, 2002. Prior to the offering he did not own any shares
of the Company's common stock. He will own 500,000 shares at the time of the
offering or approximately .05% of then issued and outstanding common stock of
the Company.
Asa L. Fish is and has been a director of the Company from December
1996. He also has been secretary of the Company from October 30, 2002 to
December 4, 2002. Prior to the offering he owned 16,375 shares of common stock
of the Company. He will own 216,375 shares after at the time of the offering or
..021% of the Company's then issued and outstanding common stock.
Hope D. Trowbridge is and has been a director of the Company from June
7, 1991. She also has been President of the Company from October 30, 2002 to
December 4, 2002 and is and has been Treasurer from October 30th, 2002. She also
was elected Secretary on December 4, 2002. Prior to the offering she owned
59,975 shares of common stock of the Company individually and through an
affiliate IMM International, Inc. These shares and the 200,000 shares aggregate
after being issued to her approximately 0.026% of then issued and outstanding
common stock of the Company.
Henri Andre Bohnen has been a consultant to the Company and now is an
employee as to matters relating to shipping, receiving and inventory controls.
Prior to the offering he owned 2500 shares of the Company's stock. He will own
202,500 shares at the time of the offering or approximately .02% of the
Company's issued and outstanding shares. He is not or has not been an officer or
director of the Company.
H. Melville Hicks, Jr. is and has been special counsel to the Company
for several years. Prior to the offering he did not own any shares of the
Company's common stock and is not or has not been an officer or director of the
Company.
Joseph Kriz is and has been general counsel to the Company for several
years. Prior to the offering he owned 43,500 shares of the Company's common
stock. He will continue to own 93,500 at the time of the offering or
approximately .009% of the Company's issued and outstanding shares. He is not or
has not been an officer or director of the Company.
Melentina Pusztay is a consultant for the manufacture and marketing of
the Company's biofuel products. Prior to the offering she did not own any shares
of the Company's common stock and she is not or has not been an officer or
director of the Company.
PLAN OF DISTRIBUTION
All or a portion of the Shares offered through this prospectus may be
sold, from time to time, by or for the Selling Stockholders in one or more
transactions in the public market on the Over-the-Counter ("OTC") Market, in
privately negotiated transactions, or in a combination of those transactions.
These sales may be made either at fixed prices which may be changed, at market
prices prevailing at the time of sale on the OTC Market, at prices
20
related to prevailing market prices or at negotiated prices. The Shares may be
sold directly by the Selling Stockholders, each acting as principal for his own
account or may be sold through brokers, dealers or other agents designated from
time to time by the Selling Shareholders. These brokers, dealers or other agents
may receive compensation in the form of customary brokerage commissions or
concessions from the selling stockholders or the purchasers of the Shares. We
anticipate that there will be no underwriting commissions or discounts payable
with respect to these transactions, other than brokers commissions or fees
customarily paid on these types of transactions, which commissions and fees will
be borne by the Selling Stockholders.
Any shares of common stock that qualify for sale pursuant to Rule 144
under the Securities Act of 1933, as amended, may be sold under Rule 144 rather
than pursuant to this Reoffer Prospectus.
The Selling Stockholders and any broker-dealers or agents that
participate with the selling stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended, and any commissions received by them and any profit received by them
may be deemed to be underwriting commissions or discounts under the Securities
Act of 1933, as amended. Under applicable rules and regulations under the
Securities Exchange Act of 1934, as amended any person engaged in the
distribution of the Shares may not simultaneously engage in market-making
activities with respect to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended, including, Regulation M, which
provisions may limit the timing of purchases and sales of our common stock by
the Selling Stockholders. All of these things may limit the marketability of the
Shares.
To our knowledge, no underwriting arrangements have been entered into
by the Selling Stockholders with respect to the Shares as of the date of this
Reoffer Prospectus. If we are notified by a Selling Shareholder that any
material arrangement has been entered into with a broker or dealer for the sale
of shares through a block trade, special offering or secondary distribution, or
a purchase by a broker or dealer, we will file a supplement to this Reoffer
Prospectus, if required, pursuant to Rule 424(b) under the Securities Act of
1933, as amended, disclosing (a) the name of each Selling Shareholder and of the
participating broker or dealer, (b) the number of shares involved, (c) the price
at which the shares were sold, (d) the commissions paid or the discounts or
concessions allowed to the broker or dealer, where applicable, (e) that the
broker or dealer did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (f) other facts
material to the transaction.
To the extent required, we will use our best efforts to file, during
any period in which offers or sales are being made, one or more supplements to
this Prospectus to describe any material information concerning the plan of
distribution not previously disclosed in this prospectus or any material change
to that information in this prospectus.
21
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in those jurisdictions only through
registered or licensed brokers or dealers.
We will pay all expenses incurred to register the Shares, which are
estimated to be approximately $4,000, but all brokerage commissions and other
expenses incurred by individual selling stockholders will be paid by them. There
is no assurance that any of the Selling Stockholders will sell any or all of the
Shares offered through this Prospectus.
EXPERTS
The financial statements and schedules of the Company and its
subsidiaries included in the Company's Annual Report on Form 10-KSB, for the
fiscal years ended December 31, 2000, and December 31, 2001 have been examined
by, Caracansi Ramey & Associates, LLC., Certified Public Accountants, and such
financial statements and schedules are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing.
LEGAL PROCEEDINGS
From time to time, we may be involved in litigation that arises in the
normal course of business operations. On March 11, 2002 J-Bird Records Inc.
d/b/a J-Bird Music Group was our subsidiary named a defendant in breach of
contract suit brought by Color Film Corporation for payment of services
performed between December 12, 2000 and February 12, 2001 in Superior Court of
the State of Connecticut alleging damages of $6,968 under a contract for
services, plus costs and attorney's fees. This case is still pending but is
inactive.
Also on February 8, 2002 our subsidiary J-Bird Records, Inc. was named
a defendant in a breech of contract suit with Donald Argott for payment of past
due royalties brought in the Philadelphia Municipal Court of the State of
Pennsylvania alleging damages in the amount of $9,224 plus costs. Judgment was
rendered against J-Bird Records on February 18, 2002 for $9,224.25.
Also on January 2, 2002, J-Bird Records, Inc. was named a defendant by
Bernard Resnick attorney for legal service rendered for legal fees and
disbursements in the amount of $2,272 in the Philadelphia Municipal Court in the
State of Pennsylvania. Judgment was rendered against J-Bird Records on February
11, 2002 for $2,272.35.
We are not party to any other legal proceedings, and to the best of our
knowledge, no such proceedings by or against the Company or J-Bird Records, Inc.
have been threatened.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this
registration statement:
(a) General Form for Registration of Securities of Small Business Issuer on
form 10-SB and all Exhibits thereto filed pursuant to Section 12 (g) of
the Exchanges Act of 1934, as amended (the "1934 Act").
(b) Registrant's Annual Report on Form 10-KSB and all Exhibits thereto for
The fiscal years ended December 31, 2000 and December 31, 2001, filed
pursuant to Section 15(d) of the 1934 Act.
(c) Registrant's quarterly reports on Forms 10-QSB for the fiscal quarter
Ended September 30, 2002, field pursuant to Section 15(d) of the 1934
Act.
(d) Registrant's Current Reports on Form 8-K dated October 28, 1999,
November 15, 1999, July 16, 2001, September 25, 2002 and December 23,
2002.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 and 15(d) of the 1933 Act and Sections 13(a), 13(c), and 14 of the 1934 Act
after the date of this registration statement and prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered hereunder have been sold, or which registers all securities
then remaining unsold under this registration statement, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
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Item 4. Description of Securities.
Not Applicable (securities to be offered are registered under Section
12 of the Exchange Act).
Item 5. Interest of Named Experts and Counsel.
H. Melville Hicks, Jr. is being issued 85,000 shares of common stock as
payment for services rendered, excluding services rendered in connection with
transactions for capital-raising purposes.
Joseph Kriz is being issued 50,000 shares of common stock as payment
for services rendered, excluding services rendered in connection with
transactions for capital-raising purposes.
Item 6. Indemnification of Directors and Officers.
The By-laws of the Company provide that a director or officer of the
Company will not be personally liable to the Company or its shareholders for
monetary damages for acts or conduct of said officer or director performed for
or on behalf of the Company, except for liability arising out of his own
negligence or willful misconduct.
The Company is entitled under its By-laws to purchase and maintain
insurance on behalf of any director or officer against any liability asserted
against him and incurred by him in any capacity.
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers, and controlling persons of that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by registrant of expenses incurred in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final the final
adjudication of such issue.
Except to the extent herein above set forth, there is no charter
provision, by-law, contract, arrangement or statute pursuant to which any
director or officer of the Company is indemnified in any manner against any
liability which he may incur in his capacity as such.
Item 7. Exemption From Registration Claimed.
The shares were issued for employment compensation and compensation for
advising and consulting services rendered or to be rendered. This sale was made
in reliance on the exemption from registration requirements of the 1933 Act
contained in Section 4(2) thereof covering transactions not involving any public
offering or not involving any "offer" or "sales".
24
Item 8. Exhibits.
The exhibits filed as a part of this Registration Statement are
incorporated herein by reference are as follows:
Exhibit No. Item
- ----------- ----
5.7 Opinion of H. Melville Hicks, Jr., Esq., regarding the legality Of
the securities being registered under this Registration Statement,
as Amended hereby.
10.1 Agreement dated as of the 4th day of December, 2002
24.11 Consent of Caracansi Ramey & Associates, LLC.,Certified Public
Accountants Independent Auditors for the Company.
24.2 Consent of H. Melville Hicks, Jr., Esq., counsel for the Company
(set forth in the opinion of counsel included as Exhibit 5.7).
99.1 Memorandum re Biofuel and Biochemical Projects of the Company
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers of sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the 1933 Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the Plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of
25
the 1934 Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each
filing of the Registrant's annual report pursuant to section
13(a) or Section 15(d) of the 1934 Act 9and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act that is incorporated
by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilton, Connecticut on the 28th day of January, 2003.
INTERNATIONAL BIOFUEL AND BIOCHEMICAL CORPORATION
By:s/LeeRoy Allen, Jr.
----------------------
LeeRoy Allen, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
s/LeeRoy Allen, Jr. President March 6,2003
-----------------
LeeRoy Allen, Jr.
s/Hope D. Trowbridge Secretary March 6,2003
------------------
Hope D. Trowbridge
s/LeeRoy Allen, Jr. Director March 6,2003
-----------------
LeeRoy Allen, Jr.
s/Hope D. Trowbridge Director March 6,2003
------------------
Hope D. Trowbridge
s/Asa L. Fish Director March 6,2003
----------------
Asa L. Fish
27
INDEX TO EXHIBITS
Exhibit
Number Description of Documents
5.7 Opinion of H. Melville Hicks, Jr., Esq., regarding the
Legality of the securities being registered under this
Registration Statement, as Amended hereby.
10.1 Agreement dated the 4th day of December, 2002 between American
Biofuels, LLC and J-Bird Music Group, Ltd.
24.9 Consent of Caracansi Ramey & Associates, LLC.,Certified
Public Accountants Independent Auditors for the Company.
24.11 Consent of Caracansi Ramey & Associates, LLC.,Certified
Public Accountants Independent Auditors for the Company.
24.12 Consent of H. Melville Hicks, Jr., Esq., counsel for the
Company (set forth in the opinion of counsel included as
Exhibit 5.7).
99.1 Memorandum re Biofuel and Biochemical Projects of the
Company.