As filed with the Securities and Exchange Commission on January 27, 2005
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
Registration Statement
Under the Securities Act of 1933
USURF AMERICA, INC.
(Name of Registrant in its charter)
NEVADA 91-2117796
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
390 INTERLOCKEN CRESCENT, SUITE 900
BROOMFIELD, COLORADO 80021
(719) 260-6455
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
CONSULTING AGREEMENT OF DAVID A. WEISMAN
(Full Title of the Plan)
DOUGLAS O. MCKINNON, PRESIDENT
390 INTERLOCKEN CRESCENT, SUITE 900
BROOMFIELD, COLORADO 80021
(719) 260-6455
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
Christopher K. Brenner
Christopher K. Brenner, P.C.
130 E. Kiowa St., Suite 600
Colorado Springs, CO 80903
(719) 471-7026
(719) 471-7036 Fax
EXPLANATORY NOTE
On January 10, 2005, USURF America, Inc., a Nevada corporation, filed a
Registration Statement (333-121920) in accordance with the requirements of Form
S-8 under the Securities Act of 1933, as amended, to register 17,500,000 shares
of its common stock which had been authorized and reserved for issuance under
that certain Consulting Agreement of David A. Weisman. This post-effective
amendment is being filed for the purpose of adding a reoffer prospectus covering
the sale of these securities by Mr. Weisman. This reoffer prospectus has been
prepared in accordance with the requirements of Form S-3 pursuant to General
Instruction C to Form S-8.
CONTROL SECURITIES REOFFER PROSPECTUS
The material which follows constitutes a prospectus prepared in accordance
with the applicable requirements of Part I of Form S-3 and General Instruction C
to Form S-8, to be used in connection with reoffers and resales of control
securities acquired by Mr. David A. Weisman pursuant to that certain Consulting
Agreement dated September 4, 2004.
PROSPECTUS
USURF AMERICA, INC.
17,500,000 SHARES OF COMMON STOCK
This prospectus relates to the proposed resale from time to time of up to
17,500,000 shares of common stock underlying a warrant held by David A. Weisman,
the selling stockholder.
We will not receive any of the proceeds from the sale of the common stock
by the selling stockholder. However, if the selling stockholder exercises some
or all of the warrant, we will receive the warrant exercise price.
Our common stock currently is listed on the OTC Bulletin Board under the
symbol USUR.
The selling stockholder may sell his common stock by means of this
prospectus and any applicable prospectus supplement or he may decide to sell the
shares by other means, including pursuant to Rule 144, however he is not
obligated to sell his common stock at all. The selling stockholder may sell his
common stock from time to time in one or more types of transactions (which may
include block transactions) in the over-the-counter market, in negotiated
transactions, through put or call option transactions relating to the common
stock, through short sales of common stock, or a combination of such methods of
sale, at market prices prevailing at the time of sale, at prices related to such
market prices, at negotiated prices, or at fixed prices. The selling stockholder
may sell his common stock directly to purchasers, in private transactions, or
through agents, underwriters or broker-dealers. The selling stockholder will pay
any applicable underwriting discounts, selling commissions and transfer taxes.
We will pay all other expenses incident to the registration of the common stock.
The selling stockholder and any broker-dealers, agents or underwriters that
participate in the distribution of the common stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933.
AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE OUR SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR
INVESTMENT. SEE "RISK FACTORS" BEGINNING AT PAGE 4 OF THIS PROSPECTUS.
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.
The date of this prospectus is January 27, 2005.
TABLE OF CONTENTS
PAGE
----
Prospectus Summary 3
Risk Factors 4
Use of Proceeds 7
Selling Stockholders and Plan of Distribution 7
Description of Securities to be Registered 8
Interests of Named Experts and Counsel 9
Where You Can Find More Information 9
Incorporation of Certain Documents by Reference 9
Forward-Looking Statements 10
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities 10
Information Required in the Registration Statement 13
2
PROSPECTUS SUMMARY
USURF AMERICA, INC.
USURF America, Inc. is a facilities-based provider of high-speed "last
mile" connectivity, delivering Internet access and interactive broadband
services to underserved markets. We operate as a provider of video (cable
television) and data (Internet) services to business as well as residential
customers, and we offer telecommunications services including local, long
distance and enhanced telephone (voice) services. We currently provide services
to customers in Colorado, Texas and Arizona. We also market and sell
telecommunications-related hardware and software.
Our current business plan involves obtaining as many voice, video and data
customers as possible by offering various combinations of bundled packages and
communications services. Our growth strategy also includes acquisitions of
telecommunications-related businesses and/or properties which would provide an
immediate or potential customer base for our services.
In April 2004, we acquired all of the issued and outstanding common stock
of Connect Paging, Inc., doing business as Get-A-Phone ("GAP"). GAP is a
Texas-based communications company operating as a local exchange carrier in
areas currently served by SBC and Verizon Southwest. At the time of the
acquisition, GAP had more than 11,000 customers and annual revenues of
approximately $9,600,000.
FINANCIAL CONDITION
We have incurred substantial losses since our inception in 1996. At
September 30, 2004, our accumulated deficit was $56.31 million, our net loss for
the nine months ended September 30, 2004 was $13.30 million, and our operating
activities used $3.2 million in cash for the nine months ended September 30,
2004. Our net loss for the year ended December 31, 2003 was $3.7 million and our
operating activities used $1.1 million in cash for 2003.
In its opinion on our financial statements for the year ended December 31,
2003, our independent registered public accounting firm, Hein & Associates LLP,
expressed substantial doubt about our ability to continue as a going concern.
CORPORATE INFORMATION
We were incorporated under the laws of the State of Nevada on November 1,
1996, under the name "Media Entertainment, Inc." In July 1999, we changed our
corporate name to "USURF America, Inc."
Our principal executive offices are located at 390 Interlocken Crescent,
Suite 900, Broomfield, Colorado 80021. Our telephone number is (303) 285-5379
and our fax number is (303) 465-3150. Our web site is located at www.usurf.com.
The reference to our web site does not constitute incorporation by reference of
the information contained at the site and you should not consider it a part of
this prospectus.
3
RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. YOU SHOULD CAREFULLY
CONSIDER THE RISKS DESCRIBED BELOW BEFORE PURCHASING OUR COMMON STOCK. IF ANY OF
THE FOLLOWING RISKS OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OR
OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED, THE TRADING OF OUR COMMON
STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. YOU SHOULD
ACQUIRE SHARES OF OUR COMMON STOCK ONLY IF YOU CAN AFFORD TO LOSE YOUR ENTIRE
INVESTMENT.
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EXPRESSED IN THEIR AUDIT
REPORT RELATED TO OUR FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2003,
SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
In its opinion on our financial statements for the year ended December 31,
2003, our independent auditor, Hein & Associates LLP, expressed substantial
doubt about our ability to continue as a going concern because of our recurring
losses and negative working capital.
WE HAVE A HISTORY OF SIGNIFICANT LOSSES AND WE MAY NEVER ACHIEVE OR SUSTAIN
PROFITABILITY. IF WE ARE UNABLE TO BECOME PROFITABLE, OUR OPERATIONS WILL BE
ADVERSELY EFFECTED.
We have incurred annual operating losses since our inception. As a result,
at September 30, 2004, we had an accumulated deficit of $56,310,384. Our gross
revenues for the year ended December 31, 2003 were $403,764, with a loss from
operations of $3,583,460 and a net loss of $3,654,356.
As we pursue our business plan, we expect our operating expenses to
increase significantly, especially in the areas of sales and marketing. As a
result of these expected cost increases, we will need to generate increased
revenues to become profitable. Accordingly, we cannot assure you that we will
ever become or remain profitable. If our revenues fail to grow at anticipated
rates or our operating expenses increase without a commensurate increase in our
revenues, our financial condition will be adversely affected. Our inability to
become profitable on a quarterly or annual basis would have a materially adverse
effect on our business and financial condition. Also, the market price for our
stock could fall.
WE ARE DEPENDENT UPON LONG-TERM FINANCING. IF WE ARE UNABLE TO RAISE CAPITAL AS
WE NEED IT, OUR OPERATIONS COULD BE JEOPARDIZED
Our ability to implement our business plan and grow is dependent on
raising a significant amount of capital. We have sustained our operations in
large part from sales of our equity. We may not be able to successfully generate
revenues or raise additional funds sufficient to finance our continued
operations. In the long term, failure to generate sufficient revenues or obtain
financing would have a material adverse effect on our business and would
jeopardize our ability to continue our operations.
WE HAVE IN THE PAST AND MAY IN THE FUTURE ENGAGE IN ACQUISITIONS, WHICH WILL
CAUSE US TO INCUR A VARIETY OF COSTS AND WHICH MAY NOT ACHIEVE ANTICIPATED OR
DESIRED RESULTS.
From time to time we engage in discussions with third parties concerning
potential acquisitions of businesses, products, technologies and other assets.
Acquisitions may require us to make considerable cash outlays and can entail the
need for us to issue equity securities, incur debt and contingent liabilities,
incur amortization expenses related to intangible assets, and can result in the
impairment of goodwill, which could harm our profitability. Acquisitions involve
a number of additional risks, including:
o difficulties in and costs associated with the assimilation of the
operations, technologies, personnel and products of the acquired
companies,
o assumption of known or unknown liabilities or other unanticipated
events or circumstances,
o risks of entering markets in which we have limited or no experience,
and
o potential loss of key employees.
4
Any of these risks could harm our ability to achieve profitability of
acquired operations or to realize other anticipated benefits of an acquisition.
WE HAVE SENIOR SECURED CONVERTIBLE DEBENTURES TOTALING $4,420,000 DUE IN 2005
AND 2006, COLLATERALIZED BY ALL OUR ASSETS. WE DO NOT HAVE THE FUNDS AVAILABLE
TO PAY THESE DEBENTURES IF NOT CONVERTED INTO COMMON STOCK. IF THE DEBENTURES
ARE NOT PAID OR CONVERTED, THE DEBENTURE HOLDERS COULD FORECLOSE ON OUR ASSETS.
During 2004, we entered into a series of private placements totaling
$4,420,000 in senior secured debentures, convertible into common stock at $0.05
per share. If not converted, we will owe $2,095,000 to the debenture holders on
September 15, 2005 and $2,325,000 to the debenture holders on June 15, 2006. The
debentures bear interest at rates from six percent (6%) to twelve percent (12%)
and are collateralized by our assets. We do not currently have the funds to pay
these debentures and we cannot assure you that we will have the funds to pay
them on the due dates. If the debentures are not paid or converted, the
debenture holders could foreclose on our assets.
WE RELY ON LOCAL TELEPHONE COMPANIES AND OTHER COMPANIES TO PROVIDE CERTAIN
TELECOMMUNICATIONS SERVICES. A DISRUPTION OF THESE SERVICES COULD HAVE AN
ADVERSE EFFECT ON OPERATIONS.
Our wholly owned subsidiary, Connect Paging, Inc. d/b/a Get-A-Phone, is a
Texas-based communications company operating as a local exchange carrier in
areas currently served by SBC and Verizon Southwest. We buy certain
telecommunications from SBC and Verizon and resell these to our customers. If we
were not able to buy these services or if we experienced a disruption of these
services, it would adversely affect our ability to operate in these areas.
WE HAVE THE ABILITY, WITHOUT SHAREHOLDER APPROVAL, TO ISSUE PREFERRED STOCK AND
DESIGNATE THE RIGHTS, PREFERENCES AND PRIVILEGES THAT MAY BE SENIOR TO COMMON
STOCK.
In November 2004, we issued 10,000 shares of Series A Convertible
Preferred Stock ("Series A Stock") at $100.00 per share, for a total
consideration of $1,000,000. The Series A Stock is convertible into our common
stock at a conversion price ranging from $0.05 to $0.075 as calculated in
accordance with the Certificate of Designation. The Series A Stock has a
liquidation preference ahead of the common shares in the event of any
dissolution or winding up of our company and is entitled to any dividends that
may be declared from time to time by the Board of Directors.
We have a total of 100,000,000 authorized shares of preferred stock. The
Board of Directors may determine, without shareholder approval, the rights,
preferences and privileges of the preferred stock. Depending on the rights,
preferences and privileges granted when the preferred stock is issued, it may
have the effect of delaying, deferring or preventing a change in control without
further action by the shareholders, may discourage bids for our common stock at
a premium over the market price of the common stock and may adversely affect the
market price of and the voting and other rights of the holders of our common
stock.
WE CAN ISSUE COMMON STOCK WITHOUT SHAREHOLDER APPROVAL RESULTING IN DILUTION TO
EXISTING SHAREHOLDERS.
We have 400,000,000 authorized shares of common stock that can be issued
by the Board of Directors. At December 20, 2004, we had available for issue
198,039,912 shares of common stock. Under most circumstances the Board of
Directors has the right to issue these shares. If all of these shares were
issued, it would substantially dilute the existing shareholders.
OUR COMMON STOCK HAS EXPERIENCED SIGNIFICANT PRICE VOLATILITY IN THE PAST AND WE
EXPECT IT TO EXPERIENCE HIGH VOLATILITY IN THE FUTURE. THIS HIGH VOLATILITY
SUBSTANTIALLY INCREASES THE RISK OF LOSS TO PERSONS OWNING OUR COMMON STOCK.
The trading price for our common stock has been, and we expect it to
continue to be, highly volatile. For example, the closing bid price of our stock
has fluctuated between $0.04 and $0.35 per share since January 1, 2002. The
price at which our common stock trades depends upon a number of factors,
including our historical and anticipated operating results and general market
and economic conditions, which are beyond our control. In addition, the stock
market has, from time to time, experienced extreme price and volume
fluctuations. These broad market fluctuations may lower the market price of our
common stock. Moreover, during periods of stock market price volatility, share
prices of many telecommunications companies have often fluctuated in a manner
not necessarily related to their operating performance. Accordingly, our common
stock may be subject to greater price volatility than the stock market as a
whole.
5
FUTURE SALES OF COMMON STOCK MAY CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.
Future sales of substantial amounts of common stock pursuant to Rule 144
under the Securities Act of 1933 or otherwise by certain shareholders could have
a material adverse impact on the market price for the common stock at the time.
As of the date of this prospectus, there are 87,515,688 outstanding shares of
our common stock held by shareholders which are deemed "restricted securities"
as defined by Rule 144 under the Securities Act. Under certain circumstances,
these shares may be sold without registration pursuant to the provisions of Rule
144. In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three-month period a number of restricted
securities which does not exceed the greater of one (1%) percent of the shares
outstanding or the average weekly trading volume during the four calendar weeks
preceding the notice of sale required by Rule 144. In addition, Rule 144
permits, under certain circumstances, the sale of restricted securities without
any quantity limitations by a person who is not an affiliate of ours and has
satisfied a two-year holding period. Any sales of shares by shareholders
pursuant to Rule 144 may cause the price of our common stock to decline.
In addition, future sales of shares of common stock by shareholders and
us, including sales by the selling stockholder pursuant to this prospectus and
the subsequent sale of common stock by the holders of warrants, could have an
adverse effect on the trading price of our securities. The sale of a significant
amount of these shares at any given time could cause the trading price of our
common stock to decline.
OUR COMMON STOCK IS SUBJECT TO PENNY STOCK RULES WHICH MAY BE DETRIMENTAL TO
INVESTORS.
Our common stock has traded at a price substantially below $5.00 per
share, subjecting trading in the stock to certain SEC rules requiring additional
disclosures by broker-dealers. These rules generally apply to any non-NASDAQ
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions, commonly referred to as a "penny stock." Such rules require
the delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith and impose
various sales practice requirements on broker-dealers who sell penny stocks to
persons other than established customers and institutional or wealthy investors.
For these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to the sale. The broker-dealer also
must disclose the commissions payable to the broker-dealer, current bid and
offer quotations for the penny stock and, if the broker-dealer is the sole
market maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market. Such information must be provided to the
customer orally or in writing before or with the written confirmation of trade
sent to the customer. Monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. The additional burdens imposed upon
broker-dealers by such requirements could discourage broker-dealers from
effecting transactions in our common stock. These disclosure requirements may
have the effect of reducing the level of trading activity in the secondary
market for a stock that becomes subject to the penny stock rules.
OUR COMMON STOCK WAS DE-LISTED FROM THE AMERICAN STOCK EXCHANGE AND IS NOW
TRADED ON THE OTC BULLETIN BOARD, WHICH MAY BE DETRIMENTAL TO INVESTORS.
Our stock common stock was de-listed from the American Stock Exchange
effective March 9, 2004 because we failed to maintain the continued listing
standards of AMEX. As a result, effective March 22, 2004 our common stock is
traded on the OTC Bulletin Board. Stocks traded on the OTC Bulletin Board
generally have limited trading volume and exhibit a wide spread between the
bid/ask quotation.
WE OPERATE IN A HIGHLY COMPETITIVE MARKET, AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY AGAINST ESTABLISHED COMPETITORS WITH GREATER FINANCIAL RESOURCES AND
MORE DIVERSE STRATEGIC PLANS.
We face competition from many communications providers with significantly
greater financial, technical and marketing resources, longer operating
histories, well-established brand names, larger customer bases and diverse
strategic plans and technologies. Intense competition has led to declining
prices and margins for many communications services. We expect this trend to
continue as competition intensifies in the future. We expect significant
competition from traditional and new communications companies, including local,
long distance, cable modem, Internet, digital subscriber line, fixed and mobile
wireless and satellite data service providers, some of which are described in
more detail below. If these potential competitors successfully focus on our
market, we may face intense competition which could harm our business. In
addition, we may also face severe price competition for building access rights,
which could result in higher sales and marketing expenses and lower profit
margins.
6
REGULATION OF THE INTERNET.
Due to the increasing popularity and use of the Internet by broad segments
of the population, it is possible that laws and regulations may be adopted with
respect to the Internet pertaining to content of Web sites, privacy, pricing,
encryption standards, consumer protection, electronic commerce, taxation, and
copyright infringement and other intellectual property issues. No one is able to
predict the effect, if any, that any future regulatory changes or developments
may have on the demand for our Internet access or other Internet-related
services. Changes in the regulatory environment relating to the Internet access
industry, including the enactment of laws or promulgation of regulations that
directly or indirectly affect the costs of telecommunications access or that
increase the likelihood or scope of competition from national or regional
telephone companies, could materially and adversely affect our business,
operating results and financial condition.
USE OF PROCEEDS
We will not receive any of the proceeds from this offering. If the selling
stockholder were to exercise his warrant to acquire the common stock sold
pursuant to this resale prospectus, we would receive the warrant exercise price.
As of the date of this prospectus, a warrant to purchase 17,500,000 shares of
common stock at an exercise price of $0.07 has been granted to David A. Weisman
pursuant to the Consulting Agreement. If Mr. Weisman were to exercise the
warrant in full, we would receive $1,225,000. The proceeds, if the warrant is
exercised in whole or in part, would be used as general working capital.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
All of the common stock registered for sale under this prospectus will be
owned prior to the offer and sale of such shares by the selling stockholder, who
is a current or former employee, officer, director, consultant and/or advisor
(the "selling stockholder"). All of the shares owned by the selling stockholder
were acquired by him pursuant to the Consulting Agreement. The table below sets
forth certain information about the selling stockholder.
We are registering the common stock covered by this prospectus for the
selling stockholder. As used in this prospectus, "selling stockholder" includes
the pledgees, donees, transferees or others who may later hold the selling
stockholder's interests. We will pay the costs and fees of registering the
common shares, but the selling stockholder will pay any brokerage commissions,
discounts or other expenses relating to the sale of the common stock.
The selling stockholder may sell his common stock by means of this
prospectus and any applicable prospectus supplement or he may decide to sell it
by other means, including pursuant to Rule 144, however he is not obligated to
sell his common stock at all. The selling stockholder may sell his common stock
from time to time in one or more types of transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions,
through put or call option transactions relating to the common stock, through
short sales of common stock, or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such market prices,
at negotiated prices, or at fixed prices. The selling stockholder may sell his
common stock directly to purchasers, in private transactions, or through agents,
underwriters or broker-dealers. The selling stockholder will pay any applicable
underwriting discounts, selling commissions and transfer taxes. We will pay all
other expenses incident to the registration of the common stock. The selling
stockholder and any broker-dealers, agents or underwriters that participate in
the distribution of the common stock may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933.
Because the selling stockholder may be deemed to be an underwriter within
the meaning of Section 2(11) of the Securities Act, he will be subject to the
prospectus delivery requirements of the Securities Act. If we are required to
supplement this prospectus or post-effectively amend the registration statement
to disclose a specific plan of distribution of the selling stockholder, the
supplement or amendment will describe the particulars of the plan of
distribution, including the shares of common stock, purchase price and names of
any agent, broker, dealer, or underwriter or arrangements relating to any such
entity or applicable commissions.
Under applicable rules and regulations under the Securities Exchange Act
of 1934, as amended, no person engaged in the distribution of the shares may
simultaneously engage in market making activities with respect to our common
stock for a restricted period before the commencement of the distribution. In
addition, the selling stockholder will be subject to applicable provisions of
the Securities Exchange Act and the associated rules and regulations under the
Securities Exchange Act, including Regulation M, the provisions of which may
limit the timing of purchases and sales of the shares by the selling
stockholder.
7
We will make copies of this prospectus available to the selling
stockholder and have informed the selling stockholder of the need to deliver
copies of this prospectus to purchasers at or before the time of any sale of the
shares.
Additional information related to the selling stockholder and the plan of
distribution may be provided in one or more supplemental prospectuses.
The following table sets forth the name of the selling stockholder who may
sell his shares pursuant to this prospectus. The selling stockholder has, or
within the past three years has had, a position, office or other material
relationship with us or with our predecessors or affiliates. The following table
also sets forth certain information as of the date of this prospectus, to the
best of our knowledge, regarding the ownership of our common stock by the
selling stockholder and as adjusted to give effect to the sale of all the common
stock offered by the selling stockholder pursuant to this prospectus.
Number of Shares
of Common Stock Number of Shares Percentage
Beneficially Owned Beneficially Owned Owned
Selling Shareholder Before the Offering After the Offering After the Offering
David A. Weisman 17,500,000(1) - 0 - - 0 -
(1) Includes 17,500,000 shares of common stock that may be issued upon exercise
of a warrant granted on September 1, 2004. The warrant exercise price is $0.07
per share.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Our authorized capital stock consists of 400,000,000 shares of common
stock, $.0001 par value per share. Each share of common stock is entitled to one
vote at all meetings of shareholders. All shares of common stock are equal to
each other with respect to liquidation rights and dividend rights. There are no
preemptive rights applicable to the common stock. Our Articles of Incorporation,
as amended, prohibit cumulative voting in the election of directors.
8
INTERESTS OF NAMED EXPERTS AND COUNSEL
Christopher K. Brenner, P. C. has given an opinion regarding certain legal
matters in connection with this offering of our securities. Both Christopher K.
Brenner, P. C. and its principles have accepted our common stock in exchange for
services rendered to us in the past and, although they are under no obligation
to do so, they may continue to accept our common stock for services rendered to
us. As of the date of this prospectus, Christopher K. Brenner, a principle of
Christopher K. Brenner, P. C., owns 1,490,000 shares of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a Registration Statement on Form S-8 that we
filed with the Securities and Exchange Commission (the "SEC"). We omitted
certain information in the Registration Statement from this prospectus in
accordance with the rules of the SEC. We file our annual, quarterly and special
reports, proxy statements and other information with the SEC. You can inspect
and copy the Registration Statement as well as reports, proxy statements and
other information we have filed with the SEC at the public reference room
maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. You can obtain copies from the Public Reference Room of the SEC at 450,
Fifth Street, N.W., Washington, D.C. 20549 if you pay certain fees. You can call
the SEC at 1-800-732-0330 for further information about the operation of the
Public Reference Room. We are also required to file electronic versions of these
documents with the SEC, which may be accessed through the SEC's World Wide Web
site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our
publicly-filed documents into this prospectus, which means that information
included in these documents is considered part of this prospectus. Information
that we file with the SEC subsequent to the date of this prospectus will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended.
(a) The Annual Report of the Company on Form 10-KSB for the fiscal year
ended December 31, 2003;
(b) Form 8-K, dated February 6, 2004, disclosing the pending acquisition
of business assets;
(c) Form 8-K, dated March 10, 2004, disclosing the de-listing of the
Company's stock by the American Stock Exchange;
(d) Form 8-K, dated March 23, 2004, disclosing that the Company's stock
was quoted on the OTC Bulletin Board, effective March 22, 2004;
(e) Form 8-KA, dated April 21, 2004, disclosing the pending acquisition
of a business and that financial statements would be filed upon
closing the transaction;
(f) Form 8-K, dated May 5, 2004 disclosing the pending acquisition of
business assets;
(g) The Quarterly Report of the Company on Form 10-QSB for the three
months ended March 31, 2004;
(h) Form 8-KA, dated July 6, 2004 disclosing the financial statements
related to the acquisition of business assets;
(i) Form 8-K, dated July 20, 2004 disclosing the termination of the
agreement to acquire business assets;
(j) The Quarterly Report of the Company on Form 10-QSB for the six
months ended June 30, 2004;
(k) Form 8-K, dated November 5, 2004 disclosing the private placement of
convertible preferred stock;
(l) Form 8-K, dated December 9, 2004 disclosing the election of two
Directors and appointment of Vice President;
(m) The Quarterly Report of the Company on Form 10-QSB for the nine
months ended September 30, 2004;
(n) Form 8-K, dated December 21, 2004 disclosing the election of a
Director and resignation of a Director;
9
(o) Registration Statement on Form SB-2, dated December 27, 2004
registering shares of common stock to be sold by selling
shareholders; and
(p) The description of the Company's Common Stock, par value $.0001 per
share (the "Common Stock"), which is contained in the Company's
Registration Statement on Form 8-A filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on October 8,
1999, including any amendment or report filed with the Commission
for the purpose of updating such description of Common Stock.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing such documents.
We will provide without charge to you, on written or oral request, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, except for exhibits that are incorporated by
reference). You should direct any requests for documents to the President,
USURF, Inc., 390 Interlocken Crescent, Suite 900, Broomfield, Colorado 80021,
telephone (719) 260-6455.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These are statements regarding financial and operating
performance and results and other statements that are not historical facts. The
words "expect," "project," "estimate," "believe," "anticipate," "intend,"
"plan," "forecast," and similar expressions are intended to identify
forward-looking statements. Certain important risks could cause results to
differ materially from those anticipated by some of the forward-looking
statements. Some, but not all, of the risks that could cause actual results to
differ from those suggested by the forward-looking statements include those
included in the section of this prospectus titled "Risk Factors" as well as the
following:
o Our independent registered public accounting firm expressed in their
audit report related to our financial statements for the year ended
December 31, 2003, substantial doubt about our ability to continue
as a going concern.
o We have a history of significant losses and we may never achieve or
sustain profitability. If we are unable to become profitable, our
operations will be adversely effected.
o We are dependent upon long-term financing. If we are unable to raise
capital as we need it, our operations could be jeopardized.
o We have Senior Secured Convertible Debentures totaling $4,420,000
due in 2005 and 2006, collateralized by all of our assets. We do not
have the funds available to pay these debentures if they are not
converted into common stock. If the debentures are not paid or
converted, the debenture holders could foreclose on our assets.
o We rely on local telephone companies and other companies to provide
certain telecommunications services. A disruption of these services
could have an adverse effect on operations.
o We operate in a highly competitive market, and we may not be able to
compete effectively against established competitors with greater
financial resources and more diverse strategic plans.
You are cautioned not to place undue reliance on these forward-looking
statements, which relate only to events as of the date on which the statements
are made. We undertake no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
You should refer to and carefully review the information in future
documents we file with the Securities and Exchange Commission.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Nevada Revised Statutes 78.750, 751, and 752 have similar provisions that
provide for discretionary and mandatory indemnification of officers, directors,
employees, and agents of a corporation. Under these provisions, such persons may
be indemnified by a corporation against expenses, including attorney's fees,
judgment, 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 the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
10
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding, or in defense of any claim, issue or matter, he must be indemnified
by a corporation against expenses, including attorney's fees, actually and
reasonably incurred by him in connection with the defense.
Any indemnification, unless ordered by a court or advanced by a
corporation, must be made 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:
o By the stockholders;
o By the board of directors by majority vote of a quorum consisting of
directors who were not parties to that act, suit or proceeding;
o If a majority vote of 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; or
o 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;
o Expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the corporation
as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by 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 a corporation.
o To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
1 and 2, or in defense of any claim, issue or matter therein, a
corporation shall indemnify him against expenses, including
attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Article X of our Articles of Incorporation limits the personal liability
of directors and officers for damages for breach of fiduciary duty as a director
or officer. Article X does not, however, eliminate or limit the liability of a
director or officer for acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law or for the payment of dividends in violation
of law.
Article XI of our Articles of Incorporation fully protects and absolves
officers, directors and members of any committee designated by the Board of
Directors from liability if he or she relies in good faith upon the books of
account or reports provided by any of our officials, an independent public
accountant or by an appraiser or an investment banker selected with reasonable
care by the Board of Directors or any committee of it or in relying in good
faith upon other corporate records.
Article XII of our Articles of Incorporation indemnifies any and all
persons who may serve at any time as our directors or officers or who, at the
request of our Board of Directors, may serve or have served as directors or
officers of another corporation in which we, during such service, owned shares
of stock or of which we are a creditor. This indemnity includes any and all
expenses, including legal fees and amounts paid in settlement, in connection
with any claim, action, suit or proceeding to which the director or officer is
made a party by reason of his acting in such capacity. The officer or director
shall not be indemnified if he is judged in any action, suit or proceeding to be
liable for his own gross negligence or willful misconduct in the performance of
his duty. This indemnification is in additional to any other rights to which the
officer or director (or former officer or director) may be entitled under any
law, bylaw, agreement, vote of stockholders or otherwise.
11
Our bylaws also provide indemnity to our officers and directors. Pursuant
to our bylaws, no officer or director shall be personally liable for any
obligations arising out of any acts or conduct of said officer or director
performed for us or on our behalf. We indemnify and hold harmless each person
who serves at any time hereafter as a director or officer from and against any
and all claims, judgments and liabilities to which such persons shall become
subject by reason of any action alleged to have been taken or omitted to have
been taken by him as such director or officer. We shall reimburse each such
person for all legal and other expenses reasonably incurred by him in connection
with any such claim of liability; including power to defend such person from all
suits as provided for under the provisions of the Nevada Corporation Laws. No
such person, however, shall be indemnified against, or be reimbursed for, any
expense incurred in connection with any claim or liability arising out of his
own gross negligence or willful misconduct. This indemnity shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise. We may purchase and maintain insurance on behalf of any
person who is or was a director, officer or employee, or is or was serving at
our request in such capacity for another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any capacity, or arising out of his status as such,
whether or not we would have the power to indemnify him against liability under
the provisions of our bylaws or the laws of the State of Nevada. The right of
any person to be indemnified shall be subject always to our right, in lieu of
such indemnity, to settle any such claim, action, suit or proceeding at our
expense by the payment of the amount of such settlement and the costs and
expenses incurred in connection therewith.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
12
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
are hereby incorporated by reference:
(a) The Annual Report of the Company on Form 10-KSB for the fiscal year
ended December 31, 2003;
(b) Form 8-K, dated February 6, 2004, disclosing the pending acquisition
of business assets;
(c) Form 8-K, dated March 10, 2004, disclosing the de-listing of the
Company's stock by the American Stock Exchange;
(d) Form 8-K, dated March 23, 2004, disclosing that the Company's stock
was quoted on the OTC Bulletin Board, effective March 22, 2004;
(e) Form 8-KA, dated April 21, 2004, disclosing the pending acquisition
of a business and that financial statements would be filed upon
closing the transaction;
(f) Form 8-K, dated May 5, 2004 disclosing the pending acquisition of
business assets;
(g) The Quarterly Report of the Company on Form 10-QSB for the three
months ended March 31, 2004;
(h) Form 8-KA, dated July 6, 2004 disclosing the financial statements
related to the acquisition of business assets;
(i) Form 8-K, dated July 20, 2004 disclosing the termination of the
agreement to acquire business assets;
(j) The Quarterly Report of the Company on Form 10-QSB for the six
months ended June 30, 2004;
(k) Form 8-K, dated November 5, 2004 disclosing the private placement of
convertible preferred stock;
(l) Form 8-K, dated December 9, 2004 disclosing the election of two
Directors and appointment of Vice President;
(m) The Quarterly Report of the Company on Form 10-QSB for the nine
months ended September 30, 2004;
(n) Form 8-K, dated December 21, 2004 disclosing the election of a
Director and resignation of a Director;
(o) Registration Statement on Form SB-2, dated December 27, 2004
registering shares of common stock to be sold by selling
shareholders; and
(p) The description of the Company's Common Stock, par value $.0001 per
share (the "Common Stock"), which is contained in the Company's
Registration Statement on Form 8-A filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on October 8,
1999, including any amendment or report filed with the Commission
for the purpose of updating such description of Common Stock.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Nevada Revised Statutes 78.750, 751, and 752 have similar provisions that
provide for discretionary and mandatory indemnification of officers, directors,
employees, and agents of a corporation. Under these provisions, such persons may
be indemnified by a corporation against expenses, including attorney's fees,
judgment, 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 opposed to the
best interests of the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to any action, suit or proceeding, had no
reasonable cause to believe his conduct was unlawful.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding, or in defense of any claim, issue or matter, he must be indemnified
by a corporation against expenses, including attorney's fees, actually and
reasonably incurred by him in connection with the defense.
Any indemnification, unless ordered by a court or advanced by a
corporation, must be made 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:
o By the stockholders;
o By the board of directors by majority vote of a quorum consisting of
directors who were not parties to that act, suit or proceeding;
o If a majority vote of 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; or
o 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;
o Expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the corporation
as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by 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 a corporation.
o To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
1 and 2, or in defense of any claim, issue or matter therein, a
corporation shall indemnify him against expenses, including
attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Article X of our Articles of Incorporation limits the personal liability
of directors and officers for damages for breach of fiduciary duty as a director
or officer. Article X does not, however, eliminate or limit the liability of a
director or officer for acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law or for the payment of dividends in violation
of law.
Article XI of our Articles of Incorporation fully protects and absolves
officers, directors and members of any committee designated by the Board of
Directors from liability if he or she relies in good faith upon the books of
account or reports provided by any of our officials, an independent public
accountant or by an appraiser or an investment banker selected with reasonable
care by the Board of Directors or any committee of it or in relying in good
faith upon other corporate records.
Article XII of our Articles of Incorporation indemnifies any and all
persons who may serve at any time as our directors or officers or who, at the
request of our Board of Directors, may serve or have served as directors or
officers of another corporation in which we, during such service, owned shares
of stock or of which we are a creditor. This indemnity includes any and all
expenses, including legal fees and amounts paid in settlement, in connection
with any claim, action, suit or proceeding to which the director or officer is
made a party by reason of his acting in such capacity. The officer or director
shall not be indemnified if he is judged in any action, suit or proceeding to be
liable for his own gross negligence or willful misconduct in the performance of
his duty. This indemnification is in additional to any other rights to which the
officer or director (or former officer or director) may be entitled under any
law, bylaw, agreement, vote of stockholders or otherwise.
14
Our bylaws also provide indemnity to our officers and directors. Pursuant
to our bylaws, no officer or director shall be personally liable for any
obligations arising out of any acts or conduct of said officer or director
performed for us or on our behalf. We indemnify and hold harmless each person
who serves at any time hereafter as a director or officer from and against any
and all claims, judgments and liabilities to which such persons shall become
subject by reason of any action alleged to have been taken or omitted to have
been taken by him as such director or officer. We shall reimburse each such
person for all legal and other expenses reasonably incurred by him in connection
with any such claim of liability; including power to defend such person from all
suits as provided for under the provisions of the Nevada Corporation Laws. No
such person, however, shall be indemnified against, or be reimbursed for, any
expense incurred in connection with any claim or liability arising out of his
own gross negligence or willful misconduct. This indemnity shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise. We may purchase and maintain insurance on behalf of any
person who is or was a director, officer or employee, or is or was serving at
our request in such capacity for another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any capacity, or arising out of his status as such,
whether or not we would have the power to indemnify him against liability under
the provisions of our bylaws or the laws of the State of Nevada. The right of
any person to be indemnified shall be subject always to our right, in lieu of
such indemnity, to settle any such claim, action, suit or proceeding at our
expense by the payment of the amount of such settlement and the costs and
expenses incurred in connection therewith.
SEC POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
Exhibit
4.1 Consulting Agreement of David A. Weisman *
5.1 Opinion of Christopher K. Brenner, P.C. re: Legality*
23.1 Consent of Hein & Associates LLP. (filed herewith)
23.2 Consent of Christopher K. Brenner, P.C. (included in Exhibit 5.1
opinion letter)*
* Previously filed.
ITEM 9. UNDERTAKINGS.
(a) 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 to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
15
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person
connected with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
16
SIGNATURES
Pursuant to 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 S-8 and has duly caused this Post-Effective
Amendment No. 1 to Registration Statement on Form S-8 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the State of Colorado, on
January 27, 2005.
USURF AMERICA, INC.
By: /s/ Douglas O. McKinnon
---------------------------------------
Douglas O. McKinnon, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Registration Statement on Form S-8 has been signed by the
following persons in the capacities and on the dates indicated below:
SIGNATURES TITLE DATE
- ---------- ----- ----
President and Chief Executive Officer
/s/ Douglas O. McKinnon (Principal Executive Officer) and Director January 27, 2005
- -----------------------
Douglas O. McKinnon
/s/ Ronald Bass Principal Accounting Officer January 27, 2005
--------------
Ronald Bass
/s/ David A. Weisman Director and Chairman of the Board January 27, 2005
- --------------------
David A.Weisman
/s/ Richard E. Wilson Director January 27, 2005
- ---------------------
Richard E. Wilson
/s/ Byron Young Director January 27, 2005
- ---------------
Byron Young
/s/ Ed Garneau Director January 27, 2005
- --------------
Ed Garneau
17