As filed with the Securities and Exchange Commission on August 24, 2005
Registration No. ________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COMPUPRINT, INC.
(Name of small business issuer in its charter)
North Carolina 7380 56-1940918
State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization Classification Code Number)
99 Park Avenue, 16th Floor
New York, New York 10016
212-286-9197
(Address and telephone number of principal executive offices)
Roman Rozenberg, Chief Executive Officer
COMPUPRINT, INC.
99 Park Avenue, 16th Floor
New York, New York 10016
212-286-9197
(Name, address and telephone number of agent for service)
With copies to:
Dan Brecher, Esq.
Law Offices of Dan Brecher
99 Park Avenue, 16th Floor
New York, New York 10016
212-286-0747
(212) 808-4155 (fax)
Approximate date of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
If any securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each class of Proposed Proposed
securities to be Amount to be maximum offering maximum aggregate Amount of
registered Registered (1) price per share (2) offering price (2) registration fee (2)
- ---------- -------------- ------------------- ------------------ --------------------
Common stock, 2,411,138 $1.875 $4,520,883.75 $532.11
$0.0001 par value
Common stock, 2,000,000 $1.875 $3,750,000.00 $441.38
$0.001 par value,
issuable upon
conversion of
$2,000,000 in 6%
convertible debentures
Total 4,411,138 $1.875 $8,270,993.75 $973.49
(1) The amount to be registered includes an indeterminate number of shares
issuable upon conversion of the debentures, as such number may be
adjusted as a result of stock splits, stock dividends and similar
transactions in accordance with Rule 416.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, using the
average of the bid and asked price as reported on the OTC Bulletin
Board on August 23, 2005, which was $1.875 per share.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED AUGUST 24, 2005
COMPUPRINT, INC.
4,411,138 SHARES OF COMMON STOCK
This prospectus relates only to the resale of 4,411,138 shares of common stock
of CompuPrint, Inc., a North Carolina corporation, that may be offered and sold
from time to time by the selling stockholders identified in this prospectus, of
which:
o 2,411,138 shares of common stock were sold to two persons in private
securities transactions with our company; and
o 2,000,000 shares of common stock underlie 8% convertible debentures
sold to one person in a private securities transaction with our
company.
The selling stockholders may from time to time sell their shares of common stock
to or through one or more underwriters, directly to other purchasers or through
agents, in ordinary brokerage transactions, in negotiated transactions or
otherwise, at market prices prevailing at the time of sale, at prices related to
the then-prevailing market price or at negotiated prices. We will not receive
any of the proceeds from the sale of the shares of common stock by the selling
stockholders. The selling stockholders will pay all brokerage fees and
commissions and similar sale-related expenses. We are paying expenses relating
to the registration of the shares with the Securities and Exchange Commission.
Our common stock is quoted on the OTC Bulletin Board under the symbol "CPPT".
The last reported sales price per share of our common stock as reported by the
OTC Bulletin Board on July 26, 2005, was $2.00.
Investing in these securities involves significant risks. SEE "RISK FACTORS"
BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is [August 24], 2005.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THIS REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
1
TABLE OF CONTENTS
Prospectus Summary 3
Risk Factors 4
Forward-Looking Statements 10
Use of Proceeds 10
Management's Discussion and Analysis or Plan of Operations 11
Description of Business 14
Management 18
Security Ownership of Certain Beneficial Owners and Management 24
Certain Relationships and Related Transactions 26
Description of Securities 29
Market for Common Equity and Related Stockholder Matters 30
Selling Stockholders 32
Plan of Distribution 33
Legal Matters 34
Experts 34
Indemnification for Securities Act Liabilities 34
Report to Stockholders 34
Available Information 35
Index to Financial Statements 35
2
PROSPECTUS SUMMARY
The following summary highlights selected information contained in this
prospectus. This summary does not contain all the information you should
consider before investing in the securities. Before making an investment
decision, you should read the entire prospectus carefully, including the "Risk
Factors" section, the financial statements and the notes to the financial
statements.
ABOUT COMPUPRINT, INC.
We are a North Carolina corporation named CompuPrint, Inc. Prior to May 19,
2005, we were essentially a shell company with no material assets or operations.
On May 19, 2005, we split off all of our former business and operations, and
acquired Terra Insight Corporation.
Terra Insight Corporation is a Delaware corporation, incorporated on January 7,
2005, that provides mapping and analytic services to exploration, drilling and
mining companies, using an integrated approach with proprietary attributes to
gather, manage and interpret geologic and satellite data to improve the
assessment of resources. The services provided include those of The Institute of
Geoinformational Analysis of the Earth, a foreign affiliate of Terra Insight
Corporation. Terra Insight Corporation provides its services to customers for a
cash fee, on a per service transaction basis to its customers. Its services are
not available to the general public. The Terra Insight Corporation business
model for the future places greater emphasis on: seeking joint venture and
similar relationships with third parties to map and analyze certain geographic
areas in exchange for oil or mineral rights; acquiring licenses for targeted oil
and mineral rights; and, acquiring stock, royalties or working interests in
exploration projects.
Our principal corporate office is located at 99 Park Avenue, 16th Floor, New
York, New York 10016. Our telephone number is 212-286-9197. Our web site address
is www.terrainsight.com.
THE OFFERING
Common stock offered for resale Resale of up to 4,411,138 shares, of which:
to the public by selling stockholders
o 2,411,138 shares of common stock were sold
to two persons in private securities
transactions with our company; and
o 2,000,000 shares of common stock underlie
convertible debentures sold to one person in a
private securities transaction with our company.
Total shares outstanding 41,333,338
Common stock to be outstanding after the offering 43,333,338 shares, assuming the issuance of shares
underlying convertible debentures included in this
prospectus
Use of proceeds We will not receive any of the proceeds from the
sale of the shares of common stock offered by the
selling stockholders.
Over-The-Counter Bulletin Board Symbol CPPT
3
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
carefully consider the risks and uncertainties described below before you
purchase any of our common stock. If any of the following risks occurs, our
actual results could differ significantly, and the trading price of our common
stock could decline, and you may lose all or part of your investment. You should
also keep these risk factors in mind when you read forward-looking statements.
We have identified all of the material risks which we believe may affect our
business and the principal ways in which we anticipate that they may affect our
business or financial condition.
RISKS CONCERNING OUR BUSINESS
OUR GROWTH WILL DEPEND ON OUR ABILITY TO ACCURATELY ASSESS THE PRESENCE OF AND
QUANTITY OF NATURAL RESOURCES.
The success of our business will depend on our ability to accurately detect and
quantify the existence of natural resources in a certain territory. If we are
unable to provide our mapping and analysis services with an accuracy at least
equal to the industry custom and at a price competitive with prevailing industry
custom, we will find it difficult to attract new customers and generate any
revenues. And, if competitors develop or provide services based upon technology
that proves more effective than ours, then we may need to expend significant
capital to improve our licensed technology.
OUR LACK OF OPERATING FINANCIAL DATA MAKES PREDICTING OUR FUTURE PERFORMANCE
DIFFICULT.
We have only recently commenced our commercial operations so that we have no
prior operating history upon which you may forecast our business and prospects.
Our proposed services are unproven in the marketplace. As a result of these
factors, it is difficult to evaluate our prospects, and our future success is
more uncertain than if we had a longer or more proven history of operations.
WE EXPECT TO ENCOUNTER POTENTIAL FLUCTUATIONS IN ANNUAL OPERATING RESULTS.
We have generated very little revenues from operations to date, and as a company
with a limited operating history, and limited number of customers, our annual
operating results may fluctuate significantly in the future as a result of a
variety of factors, including: the demand for our services, the amount and
timing of capital expenditures and other costs relating to exploration and
development activities, price competition or pricing changes in the market,
general economic conditions and economic conditions specific to the oil
industry.
WE MAY CHANGE OUR BUSINESS MODEL TO INCLUDE ACTIVITIES THAT MAY NOT GENERATE
REVENUES IN THE NEAR TERM AND MAY REQUIRE SIGNIFICANT CAPITAL RESOURCES.
We currently offer our services for a cash fee, but in the future we may offer
our services in exchange for oil or mineral rights, licenses for oil and mineral
rights, or royalties and working interests in exploration projects. We may also
be required to, or we may elect to invest in, arrange for third party
investment, or contribute capital to, such exploration projects. If we do this,
this would make forecasting our revenues difficult and unpredictable, as we may
generate little or no revenues for a significant period of time, depending on
the success of such exploration projects. Our management has limited experience
in exploration projects or in the operational risks associated with such
projects, so we may participate in projects where there are costs substantially
higher than contemplated.
4
IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDING TO FINANCE EXPLORATION COSTS, OUR
BUSINESS OPERATIONS WILL BE HARMED AND IF WE DO OBTAIN ADDITIONAL FINANCING OUR
THEN EXISTING SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.
Additional capital will be required to effectively support our operations and to
implement our overall business strategy. In addition, we may be required to
expend significant capital for future projects long before we realize any
revenues from such projects. We estimate that to fund three contemplated
exploration projects just in the states of Nevada and Montana this year and next
year, we will need a total of approximately $13 million of capital or other
participation during the next twelve to twenty four months. However, there can
be no assurance that financing will be available when needed on terms that are
acceptable to us. The inability to obtain additional capital will restrict our
ability to continue in business, let alone to grow, and may force us to
discontinue business operations. If we are unable to obtain additional
financing, we will likely be required to curtail our marketing and development
plans and possibly cease our operations. Any additional equity financing may
involve substantial dilution to our then existing shareholders.
OUR PROFITABILITY WILL BE HIGHLY DEPENDENT ON AND AFFECTED BY CONDITIONS AND
TRENDS IN THE ENERGY AND THE NATURAL RESOURCES EXPLORATION INDUSTRIES, SUCH AS
THE PRICES OF CRUDE OIL AND OTHER NATURAL RESOURCES, WHICH HAVE HISTORICALLY
BEEN VERY VOLATILE.
We derive substantially all of our revenue from customers primarily in the
energy and natural resource industries. As a result, our revenues,
profitability, operating cash flows and future rate of growth are highly
dependent on the conditions and trends affecting these industries. For example,
prices of crude oil and other natural resources may affect the willingness of
natural resources exploration, drilling, and mining companies to pay third
parties, such as us, for geological analysis, to expand existing exploration
opportunities, or to engage in new ones. A significant downward trend in
commodity prices would have a material adverse effect on our revenues,
profitability and cash flow as natural resources exploration, drilling, and
mining companies elect not to engage in expanded or new exploration projects.
International oil prices, which are out of our control, can vary as a result of
changes in supply and demand and may be influenced by factors such as economic
conditions, weather conditions or actions taken by major oil exporting
countries. Political developments, including war, embargos and political strife
in oil producing regions can also affect oil supply, and thus affect
international oil prices. Changes in oil prices typically result in changes in
the price of oil products. International oil prices have fluctuated widely over
the last ten years.
SEVERAL OF OUR OFFICERS ALSO HAVE OUTSIDE BUSINESS AND PROFESSIONAL INTERESTS
THAT MAY PRESENT A CONFLICT OF TIME COMMITMENT, AND A POTENTIAL CONFLICT OF
INTEREST, THAT MAY NOT BE IN THE BEST INTERESTS OF OUR STOCKHOLDERS.
We currently have one full-time officer, our Chief Executive Officer, and all of
our other officers have outside business and professional interests to which
they devote a significant level of time. Ivan Railyan, President and Chairman,
owns and operates The Institute of Geoinformational Analysis of the Earth, and
will continue to devote time to that business while he works for us. Dan
Brecher, an officer and director, is an attorney and the principal of Law
Offices of Dan Brecher. Dmitry Vilbaum, Chief Operating Officer, works on a
part-time basis for Law Offices of Dan Brecher providing computer, technical and
other services. Kenneth Oh, Secretary, is an attorney with Law Offices of Dan
Brecher.
5
WE HAVE BEEN DEPENDENT UPON PRIVATE PLACEMENTS OF OUR SECURITIES FOR WORKING
CAPITAL AND WE MAY HAVE DIFFICULTY IN OBTAINING ADDITIONAL FUNDING, IF REQUIRED,
AND THEREFORE IT MAY BE DIFFICULT FOR US TO CONTINUE OUR OPERATIONS.
We have been dependent upon proceeds from private sales of our securities
offerings for our operating capital. If additional funds are needed, we may have
difficulty obtaining them, and we may have to accept terms that would adversely
affect our shareholders. For example, the terms of any future financings may
impose restrictions on our right to declare dividends or on the manner in which
we conduct our business. Also, lending institutions or private investors may
impose restrictions on future decisions by us to make capital expenditures,
acquisitions or asset sales. Therefore it may be difficult for us to continue
our operations, which may result in a complete loss of value of our shares. We
may not be able to locate additional funding sources at all or on acceptable
terms. If we cannot raise funds on acceptable terms, if and when needed, we may
not be able to grow our business or respond to competitive pressures or
unanticipated requirements, which could seriously harm our business.
IF WE ARE NOT ABLE TO PROTECT OUR PROPRIETARY TECHNOLOGIES, OUR BUSINESS MAY
SUFFER DUE TO COMPETITION.
We rely on copyright laws and nondisclosure, license, and confidentiality
arrangements to protect our proprietary rights as well as the intellectual
property rights of third parties whose content we license. However, it is not
possible to prevent all unauthorized uses of these rights. We cannot assure you
that the steps we have taken to protect our intellectual property rights, and
the rights of those from whom we license intellectual property, are adequate to
deter misappropriation or that we will be able to detect unauthorized uses and
take timely and effective steps to remedy this unauthorized conduct. In
particular, a significant portion of our revenues may be derived internationally
where protecting intellectual property rights is even more challenging. To
prevent or respond to unauthorized uses of our intellectual property, we might
be required to engage in costly and time-consuming litigation and we may not
ultimately prevail. In addition, our offerings could be less differentiated from
those of our competitors, which could adversely affect the fees we are able to
charge.
WE WILL NEED TO RECRUIT QUALIFIED MANAGERIAL AND TECHNICAL PERSONNEL, AS OUR
CURRENT MANAGEMENT HAS VERY LITTLE EXPERIENCE RELATED TO THE NATURAL RESOURCE
INDUSTRY, AND WE DO NOT KNOW IF WE WILL BE ABLE TO MANAGE ANY SUBSTANTIAL
EXPANSION OF OUR BUSINESS.
Our success will require significant expansion of our business. In order to
successfully implement and manage our business plan, we will be dependent upon
successfully recruiting qualified managerial and technical personnel having
relevant natural resource industry experience, as our present officers have
little experience in exploration activities or in the natural resource industry,
so that we need to rely upon the experience and advice of outside professionals
and consultants, which we have done to date, but which is costly.
OUR CURRENT MANAGEMENT TEAM HAS VERY LITTLE EXPERIENCE IN FINANCIAL ACCOUNTING
AND IN MAINTAINING INTERNAL CONTROLS.
We currently do not have a financial officer, and rely on the services of an
outside, accounting firm to maintain certain books and records, which is costly.
We may experience growth, which will place a strain on our managerial,
operational and financial systems resources. To accommodate and manage growth,
if it occurs, we must devote management attention and resources to improve our
financial strength and our operational systems.
6
RISKS RELATED TO OUR COMMON STOCK
UNLESS A PUBLIC MARKET DEVELOPS FOR OUR COMMON STOCK, YOU MAY NOT BE ABLE TO
SELL YOUR SHARES, THEREFORE YOUR INVESTMENT WOULD BE A COMPLETE LOSS.
There has been no material public market for our common stock and you may be
unable to sell your shares. An active trading market may never develop or, if
developed, it may not be maintained. Failure to develop or maintain an active
trading market could negatively affect the price of our common stock, and you
may be unable to sell your shares, and therefore your investment would be a
complete loss.
WE NEED TO REMAIN ELIGIBLE FOR QUOTATION ON THE OTC BULLETIN BOARD, BECAUSE
REMOVAL FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF
BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL
THEIR SECURITIES IN THE SECONDARY MARKET.
Our common stock is quoted on the OTC Bulletin Board, which requires that we be
current in our reports filed with the SEC in order to maintain price quotation
privileges on the OTC Bulletin Board. If we become delinquent in our filings
with the SEC, our common stock could be removed from quotation on the OTC
Bulletin Board. As a result, the market liquidity for our securities could be
severely adversely affected by limiting the ability of broker-dealers to sell
our securities and the ability of stockholders to sell their securities in the
secondary market.
OUR DIRECTORS AND EXECUTIVE OFFICERS BENEFICIALLY OWN APPROXIMATELY 85% OF OUR
OUTSTANDING COMMON STOCK. THEIR INTERESTS COULD CONFLICT WITH YOURS AND OTHER
STOCKHOLDERS MAY BE UNABLE TO EXERCISE CONTROL.
As of August 23, 2005, our executive officers, directors and affiliated persons
beneficially owned approximately 85% of our issued and outstanding common stock.
As a result, our executive officers, directors and affiliated persons will have
significant influence to:
o elect or defeat the election of our directors;
o amend or prevent amendment of our articles of incorporation or
bylaws;
o effect or prevent a merger, sale of assets or other corporate
transaction; and
o control the outcome of any other matter submitted to the
stockholders for vote.
As a result of their ownership and positions, our directors and executive
officers collectively are able to significantly influence all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions. Management's stock ownership may discourage
a potential acquirer from making a tender offer or otherwise attempting to
obtain control of us, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.
We intend to submit one or more of the following proposals for stockholder
approval in the near future:
o proposal to change corporate name to "Terra Insight Corporation;
o proposal to increase in the number of shares of authorized shares of
common and preferred stock;
o proposal to change in the state of incorporation from North Carolina
to Delaware; and
o proposal to effect a parent-subsidiary merger of CompuPrint, the
parent holding company, and its wholly-owned operating company,
Terra Insight Corporation.
Our directors and executive officers collectively have the necessary votes to
approve such proposals and other stockholder matters.
7
FUTURE SALES OF OUR COMMON STOCK BY EXISTING SHAREHOLDERS COULD NEGATIVELY
AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT MORE DIFFICULT FOR US TO
SELL SHARES OF OUR COMMON STOCK IN THE FUTURE.
We presently have a large number of shares that are presently restricted shares,
and many of those shares are or may soon become eligible for resale pursuant to
exemptions from registration requirements, and sales of our common stock in the
public market, or the perception that such sales could occur, could result in a
drop in the market price of our securities and make it more difficult for us to
complete future equity financings.
As of August 23, 2005, we have 41,333,338 shares of common stock issued and
outstanding. Of the outstanding shares:
o approximately 3,892,000 shares of our outstanding common stock are
freely tradeable or eligible for trading in the public markets; and
o approximately 37,441,118 shares are restricted common stock that
have been held for under one year, of which 2,411,138 shares are
being registered pursuant to this prospectus.
Additionally, we have securities convertible into shares of common stock
outstanding, of which:
o 2,000,000 shares of common stock underlie outstanding convertible
debentures that have been held for under one year, of which
2,000,000 shares are being registered pursuant to this prospectus;
o an aggregate of approximately 4,763,333 shares of common stock
underlie outstanding stock options and warrants that have been held
for under one year.
Additionally, we have an agreement for the purchase of convertible debentures,
of which:
o 1,000,000 shares of common stock underlie convertible debentures
committed for, but not yet issued;
o up to 2,000,000 shares of common stock underlie convertible
debentures not irrevocably committed for and may be issued at a
future date.
We cannot estimate the number of shares of common stock that may actually be
resold in the public market since this will depend upon the market price for the
common stock, the individual circumstances of the sellers and other factors.
We cannot control when the selling stockholders will sell their shares. If all
or a substantial portion of the shares of common stock offered for sale by this
prospectus are sold in a short period of time, the common stock available for
sale may exceed the demand and the stock price may be adversely affected. In
addition, the mere perception that such sales could occur may depress the price
of our common stock.
WE ISSUED, AND MAY CONTINUE TO ISSUE, A LARGE NUMBER OF SHARES OF COMMON STOCK
AND SECURITIES CONVERTIBLE INTO COMMON STOCK, AND THE SALE OF THESE SHARES MAY
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.
Because of our lack of significant operating revenues to pay for operating
expenses, we issued, and may continue to issue, a large number of shares of
common stock and other securities convertible into shares of common stock.
Because of the large number of shares that have been and may be issued, and the
availability of those shares to be sold in the public market, the subsequent
resale of those shares may adversely affect the market price of our common
stock..
WE DO NOT EXPECT TO PAY DIVIDENDS, THEREFORE YOU MAY NOT RELY ON YOUR INVESTMENT
TO BE A SOURCE OF INCOME.
We do not anticipate paying cash dividends in the foreseeable future. Therefore,
you may not rely on your investment in our stock as a source of income.
8
WE HAVE AUTHORIZED A CLASS OF PREFERRED STOCK WHICH MAY ALTER THE RIGHTS OF
COMMON STOCK HOLDERS BY GIVING PREFERRED STOCK HOLDERS GREATER DIVIDEND RIGHTS,
LIQUIDATION RIGHTS AND VOTING RIGHTS THAN OUR COMMON STOCKHOLDERS HAVE.
The Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting power or other rights of the holders of
common stock. Our Articles of Incorporation, as amended, authorizes a class of
1,000,000 shares of preferred stock with such designation, rights and
preferences as may be determined from time to time by the Board of Directors. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the company. For example, we could grant holders of preferred stock
the right to elect some number of directors in all events or on the happening of
specified events or the right to veto specified transactions. Similarly, the
repurchase or redemption rights or liquidation preferences we might assign to
holders of preferred stock could affect the residual value of the common stock.
OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES ADOPTED BY THE SECURITIES
AND EXCHANGE COMMISSION, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME TO
EFFECT. THIS MAY MAKE IT MORE DIFFICULT FOR YOU TO DISPOSE OF OUR COMMON STOCK
AND CAUSE A DECLINE IN THE MARKET VALUE OF OUR STOCK.
Our shares of common stock, which are quoted in the over-the-counter market on
the OTC Bulletin Board, are "penny stocks" as defined in the Securities Exchange
Act. As a result, an investor may find it more difficult to dispose of our
shares of the common stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock," for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.
The "penny stock" rules impose sales practice requirements on broker-dealers,
including that broker-dealers, prior to a transaction in a penny stock not
otherwise exempt from the rules, deliver a standardized risk disclosure document
that provides information about penny stocks and the risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in connection with the transaction, monthly account statements
showing the market value of each penny stock held in the customer's account, and
information about the rights and remedies available to an investor in cases of
fraud in penny stock transactions. In addition, the rules generally require that
prior to a transaction in a penny stock, the broker-dealer must make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
Accordingly, because of these burdens placed on broker-dealers, the Commission's
rules may limit the number of broker-dealers who may be willing to execute
transactions in "penny stocks" and limit the number of potential purchasers,
with the effect of reducing the liquidity of penny stocks. These disclosure
obligations will likely make it more difficult for stockholders seeking to sell
our common stock in the secondary market, and may have to ask for a lower price.
9
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain financial information and statements regarding
our operations and financial prospects of a forward-looking nature. Although
these statements accurately reflect management's current understanding and
beliefs, we caution you that certain important factors may affect our actual
results and could cause such results to differ materially from any
forward-looking statements which may be deemed to be made in this Prospectus.
For this purpose, any statements contained in this Prospectus which are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the generality of the foregoing, words such as, "may", "will",
"intend", "expect", "believe", "anticipate", "could", "estimate", "plan" or
"continue" or the negative variations of those words or comparable terminology
are intended to identify forward-looking statements. There can be no assurance
of any kind that such forward-looking information and statements will be
reflective in any way of our actual future operations or financial results, and
any of such information and statements should not be relied upon either in whole
or in part in connection with any decision to invest in the shares.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be offered and
sold from time to time by the selling stockholders. We will not receive any
proceeds from the sale of shares of common stock in this offering.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
INTRODUCTORY NOTE
The discussion below refers to our current operations, that of Terra Insight
Corporation, which we acquired on May 19, 2005 in a transaction viewed as a
reverse acquisition, and does not refer to the operations for our former
business, which was an inactive shell company that did not generate in the
fiscal year ended December 31, 2004 nor in the interim period through May 19,
2005. The following discussion should be read in conjunction with the
information set forth in the audited financial statements for the period from
January 7, 2005 through April 30, 2005.
PLAN OF OPERATION
Our company was formed in January 2005. Our plan of operation for the next
twelve months is expand our customer base for whom we provide our mapping and
analysis services. To date, we have had only two paying customers. We also
intend to enter into agreements whereby we provide our services, such as
providing site and depth locations, to natural resource exploration companies in
exchange for royalties or ownership rights with regard to a specific natural
resource exploration property. We may also seek to finance or otherwise
participate in the efforts to recover natural resources from such properties.
RESULTS OF OPERATIONS FOR THE PERIOD FROM JANUARY 7, 2005 THROUGH APRIL 30, 2005
Our revenues from services since formation through April 30, 2005 have totaled
$100,000, derived from one customer. We anticipate our operating expenses to
increase substantially in the next twelve months as we complete the next stages
of our services for our customers.
We will need to attract new paying customers in order generate revenues after
these projects are completed. We are in negotiations with a number of entities
for the providing of our services, with an emphasis on also obtaining an
ownership or royalty interest in such projects.
Our cost of revenues in this period was $70,000. We anticipate our operating
expenses to increase significantly in the next twelve months.
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2005, we had cash on hand in the amount of $291,952. Cash flows
from operating activities resulted in cash flows of $294,746.
As of August 23, 2005, we have cash on hand in the amount of approximately $2
million, which was primarily derived from financing activities from the sale of
common stock in May 2005 and convertible debentures in July 2005. We believe
this amount is adequate to support our month-to-month obligations for more than
the next twelve months.
However, establishing ownership or other interests in natural resource
exploration projects will likely require significant additional capital. We
estimate that to fund three contemplated exploration projects just in the states
of Nevada and Montana this year and next year, we will need a total of
approximately $13 million of capital or other participation during the next
twelve to twenty four months.
We are in active negotiations with several institutional investors for funding
for such projects through investment in our subsidiary or affiliated entities.
We intend to utilize limited partnerships to raise funds for certain exploration
projects, and have already established two such Delaware partnerships, Tierra
Nevada Exploration Partners, LP and New Found Oil Partners, LP, in which our
wholly-owned subsidiary, Terra Resources, Inc., is the general partner. An
investor, Enficon Establishment, has agreed to provide certain funding to the
Tierra Nevada partnership.
11
These limited partnerships, and similar affiliated entities, will be an
essential part of our plan for obtaining ownership or royalty interests in
natural resource exploration projects in the future, as we do not wish to use
our working capital for such projects where that is not necessary. When we incur
expenses in establishing our interests in such projects, we will seek
reimbursements from the limited partnership or other entities established to
obtain such interest. If we are unable to obtain third-party funding for such
projects in such a manner, that would have a material negative effect on our
working capital and cash flow. We or our subsidiary or affiliate, may be
required to advance funds, provide credit guarantees, or incur liabilities that
would have a material negative affect on our working capital, cash flow or our
ability to raise funds.
It is too early in our operations to provide further material information in
connection with proposed exploration projects, as we have not completed
negotiations for such projects, and do not know what the terms of our
participation in such projects will be. Even our agreement with Enficon
Establishment regarding the Tierra Nevada partnership is not an unconditional
obligation of Enficon Establishment to provide funding.
INFLATION
We do not expect inflation to have a significant impact on our business in the
future.
SEASONALITY
We do not expect seasonal aspects to have a significant impact on our business
in the future..
OFF-BALANCE SHEET ARRANGEMENT
To date, we do not maintain off-balance sheet arrangements nor do we participate
in non-exchange traded contracts requiring fair value accounting treatment.
TRENDS, RISKS AND UNCERTAINTIES
We anticipate that high oil prices this year may cause natural resources
exploration companies to conduct more drilling activities and investigate the
potential of previously undiscovered oil reserves, and if oil prices remain
high, we anticipate that our services will be in demand. However, that may
create a short supply of drilling rights and other equipment needed for
exploration activities, which may drive up the costs of exploration activities.
PRODUCT RESEARCH AND DEVELOPMENT
We do not anticipate incurring significant research and development expenditures
during the next twelve months.
ACQUISITION OR DISPOSITION OF PLANT AND EQUIPMENT
We do not anticipate the sale of any significant property, plant or equipment
during the next twelve months. We do not anticipate the acquisition of any
significant property, plant or equipment during the next twelve months.
Depending on our future business prospects and the growth of our business, and
the need for additional employees, we may seek to purchase or lease new
executive office facilities.
EMPLOYEES
We anticipate the need to hire several management, technical, sales and
marketing employees in the next twelve months. We are planning to hire
approximately six persons, in September 2005, including three scientists in
technical capacities and three administrative personnel. Other than our need to
retain a financial officer, we presently have not identified a specific number
of persons to fill such roles, and will depend upon our generating revenues and
obtaining sources of financing. We may also need to retain business consultants,
especially with significant knowledge of the natural resource industry. To
attract and retain quality personnel, we anticipate we will have to offer
competitive compensation to future employees and consultants.
12
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment: An
Amendment of FASB Statement No. 95." This statement also replaces SFAS 123 and
supersedes APB 25. SFAS 123(R) will require the Company to measure the cost of
all employee stock-based compensation awards that are expected to be exercised
and which are granted after the effective date based on the grant date fair
value of those awards and to record that cost as compensation expense over the
period during which the employee is required to perform service in exchange for
the award (generally over the vesting period of the award). Excess tax benefits,
as defined by SFAS 123(R), will be recognized as an addition to paid-in-capital.
However, if the tax benefit ultimately realized is less than the amount
recognized for financial reporting purposes, the difference will be recognized
as tax expense. SFAS 123(R) addresses all forms of share-based payment awards,
including shares issued under employee stock purchase plan, stock option,
restricted stock and stock appreciation rights. In addition, the Company is
required to record compensation expense (as previous awards continue to vest)
for the unvested portion of previously granted awards that remain outstanding at
the date of adoption. SFAS 123(R) will become effective for annual periods
beginning after June 15, 2005. SFAS 123(R) permits public companies to adopt its
requirements using one of two methods:
A "modified prospective" method in which compensation cost is recognized
beginning with the effective date (a) based on the requirements of SFAS 123(R)
for all share-based payments granted after the effective date and (b) based on
the requirements of SFAS 123 for all awards granted to employees prior to the
effective date of SFAS 123(R) that remain unvested on the effective date.
A "modified retrospective" method which includes the requirements of the
modified prospective method described above, but also permits entities to
restate their financial statements based on the amounts previously recognized
under SFAS 123 for purposes of pro forma disclosures for either (a) all prior
periods presented or (b) prior interim periods of the year of adoption.
The Company is currently evaluating the alternative method of adoption as
described above. As permitted by SFAS 123, the Company currently accounts for
share-based payments to employees using APB 25's intrinsic value method and, as
such, generally recognizes no compensation cost for employee stock options.
Accordingly, the adoption of SFAS 123(R)'s fair value method will have a
significant impact on our results of operations. The impact of adoption of SFAS
123(R) cannot be predicted at this time because it will depend on level of
share-based payments granted in the future.
13
DESCRIPTION OF BUSINESS
GENERAL OVERVIEW
We are a North Carolina corporation named CompuPrint, Inc.
We only recently began our current business operations, on May 19, 2005, when we
acquired the business of Terra Insight Corporation. Terra Insight Corporation is
a Delaware corporation, incorporated on January 7, 2005, that provides mapping
and analysis services for exploration companies related to natural resources to
be found beneath the surface of the earth utilizing unique technologies and
scientific analysis techniques. Prior to May 19, 2005, we had substantially no
operations.
We maintain our executive offices at 99 Park Avenue, 16th Floor, New York, New
York 10016, telephone number: 212-286-9197. We maintain a web site at
www.terrainsight.com.
ORGANIZATION HISTORY
CompuPrint, Inc. was incorporated on September 15, 1995 in the State of North
Carolina.
Prior to 2002, CompuPrint was a remanufacturer and distributor of laser and ink
jet printer cartridges. Thereafter, CompuPrint's business plan consisted of the
sale of laser and ink jet printer cartridges through independent sales
representatives compensated on a commission basis. On August 19, 2003,
CompuPrint sold all operations and net assets of its laser and inkjet printer
cartridge operations in exchange for forgiveness of debt. After the sale,
CompuPrint had no material operations and was searching for new business
opportunities in the laser and inkjet printer cartridge industry.
On May 19, 2005, CompuPrint entered into a Split-Off Agreement with David
Allison, CompuPrint's sole officer and director and CompuPrint's controlling
shareholder. Pursuant to the agreement, CompuPrint transferred all of its assets
and liabilities to CompuPrint Ventures, Inc., a newly formed North Carolina
corporation, in exchange for 100% of the equity of CompuPrint Ventures, Inc.
Immediately following the transfer, CompuPrint transferred its 100% of the
equity of CompuPrint Ventures, Inc. to Mr. Allison in exchange for 13,086,360
shares of common stock that he held, which were then cancelled, and for the
release by Mr. Allison to CompuPrint of all rights to any amounts advanced or
otherwise loaned by Mr. Allison to CompuPrint.
On May 19, 2005, CompuPrint entered into an Agreement and Plan of Reorganization
with Terra Insight Corporation, a Delaware corporation, and the three
shareholders of Terra Insight Corporation. Pursuant to the reorganization
agreement, CompuPrint issued 35,029,980 shares of common stock, constituting
approximately 90% of CompuPrint's outstanding common stock after the issuance,
in exchange for all of the equity of Terra Insight Corporation in a transaction
viewed as a reverse acquisition. The three shareholders of Terra Insight
Corporation received the following number of shares of CompuPrint's common
stock: Ivan Railyan, 29,775,483 shares; Roman Rozenberg, 3,502,998 shares; and
Dan Brecher, 1,751,499 shares. In connection with the transaction, CompuPrint's
sole officer and director resigned and the three shareholders of Terra Insight
Corporation were appointed to CompuPrint's Board of Directors. Subsequently, Mr.
Railyan was appointed President and Chairman of the Board, Mr. Rozenberg was
appointed Chief Executive Officer, and Mr. Brecher was appointed CompuPrint's
Secretary. No director, executive officer or person who may be deemed to be an
affiliate of Terra Insight Corporation had any direct or indirect interest in
CompuPrint prior to the completion of the reverse acquisition.
14
BUSINESS OF TERRA INSIGHT CORPORATION
We provide mapping and analytic services to exploration, drilling and mining
companies, using an integrated approach with proprietary attributes to gather,
manage and interpret geologic and satellite data to improve the assessment of
natural resources. The proprietary analytic technology utilizes a broad range of
available geological information, together with satellite and aerial
photographs, supplementing other geological exploration work, such as thematic
processing of recent remote Earth sensing data, making it possible to optimize
the acquisition of seismic or other geophysical sensing. These efforts can be
directed to various uses, and are used with regard to exploration projects
covering a wide range of natural resources. The mapping services consist of an
analysis of a specified geographic area to predict where natural resources, such
as oil, mineral ores, water, or diamonds are likely to exist, so that assessment
can be made of the commercial prospects of exploring, drilling or mining in a
specified area. The mapping services and the analysis of the geographic area are
accomplished using mathematical techniques to process the information gathered.
The mapping services do not replace traditional exploration techniques, but
rather are intended to supplement and optimize the traditional geological
exploration.
Most of the mapping and analytic services are performed with the use of
technology and services obtained from The Institute of Geoinformational Analysis
of the Earth (the "Institute"), pursuant to an exclusive licensing agreement and
a services agreement. The Institute is an international professional services
firm which specializes in the development and application of remote sensing and
geographic information technologies. Remote sensing and spatial database
technologies are tools used by natural resource scientists to better understand,
use and manage the Earth's resources. We have an exclusive, worldwide 30-year
renewable license for the use of the technology of the Institute. Terra Insight
Corporation is required to pay the Institute $600,000 each year under the
license agreement. The Institute has also entered into an agreement to render
services to Terra Insight Corporation, and to refer all inquiries for commercial
contract services to Terra Insight Corporation.
We provide our services to customers for a cash fee, on a per service
transaction basis to our customers. Our services are not available to the
general public. Our business model for the future places greater emphasis on:
seeking joint venture and similar relationships with third parties to map
certain geographic areas in exchange for royalties, participation or other oil
or mineral rights; acquiring licenses for targeted oil and mineral rights, and,
acquiring stock, royalties and working interests in exploration projects. We may
also seek to invest in, arrange for, or contribute capital to, such exploration
projects.
PRODUCTS AND SERVICES
We provide information, consulting services and reports that include geological
maps of a defined geographic territory and our analyses and assessment of the
likelihood of the existence of a targeted-for natural resource in a specifically
requested territory, so that our customers can assess the commercial prospects
of exploring, drilling or mining in a specified area.
SALES AND MARKETING
To date, our customers have been those of whom our executives had direct prior
knowledge. We seek customers on an individual basis. We do not utilize a sales
or marketing team.
COMPETITIVE BUSINESS CONDITIONS
We believe the principal competitive factors in our business are the accuracy of
information we provide to customers and price. Although we do not believe that
we have a direct competitor for our particular service offering, we do face
significant competition within the natural resource exploration service
industry. We compete against major natural resource exploration and production
companies that conduct their geological and exploration analysis in-house, and
other independent geological and information companies, consultants and service
providers. This includes companies and consultants that provide software for
visualizing, analyzing and modeling sub-surface structures, that provide geology
maps and databases, and that perform geological interpretation and assessment
services.
15
DEPENDENCE ON MAJOR CUSTOMERS
For the period from January 2005 to April 30, 2005, we derived all our revenues
from one customer, # 8 Investment, Inc., located in the state of Nevada.
LICENSE AGREEMENT
Terra Insight Corporation has an exclusive, worldwide 30-year renewable license
for the use of all of the technology of the Institute, which has as its focus
the exploration, sustainable development and management of the Earth's resources
and the monitoring of the environment. Terra Insight Corporation is required to
pay the Institute $600,000 each year under the license agreement until it has
achieved certain milestones, upon which the payments increase.
SERVICES AGREEMENT
The Institute has also entered into an agreement to render services to Terra
Insight Corporation, and to refer all inquiries for commercial contract services
to Terra Insight Corporation. The Institute will perform certain contract
services for Terra Insight Corporation at no more than 40% of the published
rates of $500 per square kilometer, with minimum annual fees totaling $500,000
per year, and with offsets against the license fee until certain minimum
revenues are obtained.
EXPLORATION AGREEMENT
On June 30, 2005, we entered into an agreement with Enficon Establishment, a
Liechtenstein company, for the formation, operation, financing and development
of a Delaware limited partnership, Tierra Nevada Exploration Partners, L.P., in
connection with the exploration of certain natural resource deposits in the
State of Nevada. The plan is to pursue acquisition of the leases related to oil
rights in certain properties in a designated area of Nevada to implement an
exploration program for the drilling of three wells. We are to provide up to $3
million in funding for the project, and, Enficon is to provide up to $3 million
as capital contribution in furtherance of the project. Assuming such funding,
Enficon would have a 50% interest as a limited partner in the partnership. Our
subsidiary, Terra Resources, Inc., is the general partner of the partnership. To
the extent that Enficon contributes less than the amount we contribute to the
partnership, Enficon's interest in the partnership will be diluted. To the
extent that additional third-party financing is required, our interest and the
interest of Enficon in the partnership, or both, may be diluted.
We agreed to grant Enficon, subject to Enficon's satisfaction of certain
conditions, a non-assignable first right of refusal for the providing of funding
to other projects that we may agree to finance. The first right of refusal is
conditioned upon Enficon's full purchase of $5 million dollars in 6% convertible
debentures maturing December 31, 2007, convertible at $1 per share into an
aggregate of 5 million shares of our common stock, pursuant to a Securities
Purchase Agreement dated June 30, 2005 entered into by Enficon with us. The
first right of refusal is of no effect until Enficon has timely paid for and
converted in full the total of $5 million of convertible debentures, and is of
no effect until Enficon has also provided the full amount required of Enficon to
fund the limited partnership pursuant to the terms of the exploration agreement.
Once the conditions for the first right of refusal are satisfied, the first
right of refusal is to last so long as Enficon retains ownership of the majority
of the five million shares of our common stock to be issued upon conversion of
the convertible debentures that Enficon may purchase from us. Enficon will
forfeit its first right of refusal if Enficon breaches its obligations under the
agreement or declines to fund two projects that are subsequently funded on the
terms Enficon declined, or if Enficon agrees to fund a project but fails to do
so. On July 5, 2005, Enficon purchased $2 million in convertible debentures from
us. In July 2005, we sent a notice requiring Enficon to purchase the third
million of the five million dollars in convertible debentures. Enficon has not
yet paid such obligation.
16
GOVERNMENT REGULATION AND COMPLIANCE WITH ENVIRONMENTAL LAWS
We are not aware of any federal, state and local laws, rules and regulations
affecting our business as presently conducted. In the event that we alter our
business model and engage in activities directly involving the exploration and
exploitation of oil and other natural resources, we may become required to make
the necessary expenditures to comply with the applicable health and safety,
environmental and other regulations.
INTELLECTUAL PROPERTY
We rely heavily on intellectual property, including the intellectual property we
license. We regard our trademarks, copyrights, licenses, and other intellectual
property as valuable assets and use intellectual property laws, as well as
license and confidentiality agreements with our employees, certain customers,
dealers, and others, to protect our rights. In addition, we exercise reasonable
measures to protect our intellectual property rights and intend to enforce these
rights when we become aware of any potential or actual violation or misuse.
Intellectual property licensed from third parties, including from the Institute,
is a vital component of our service offerings and, cannot be independently
replaced or recreated by us or others.
EMPLOYEES
We currently have five employees. Our Chief Executive Officer is a full time
employee. Our Chief Operating Officer devotes substantially all of his time to
our business. All other employees work on a part-time basis.
DESCRIPTION OF PROPERTY
We presently sublease our executive office facilities in New York, New York, on
a month-to-month basis, pursuant to an oral agreement with an officer, at $1,500
per month.
We also sublease office facilities at Leninski Prospect 132, Suite 707, Moscow,
Russia, at $14,000 per quarter. The sublease is pursuant to an oral agreement
entered on August 15, 2005. We intend to enter into a sublease agreement, on a
year-to-year or longer basis, in the near future.
We believe that our present office facilities are suitable for our present
needs. Our offices are not covered by insurance.
LEGAL PROCEEDINGS
We are not a party to any material pending legal proceeding, nor are we aware of
any threatened lawsuits or other legal actions or proceedings.
Terra Insight Corporation is not a party to, and none of our property is subject
to, any pending or actual threatened legal or governmental proceedings.
17
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The persons listed in the table below are our present directors and executive
officers.
Name Age Position
- ---- --- --------
Ivan Railyan 38 President and Chairman of the Board
Roman Rozenberg 42 Chief Executive Officer and Director
Dan Brecher 63 Managing Director, Treasurer and Director
Dmitry Vilbaum 36 Chief Operating Officer
Kenneth Oh 33 Secretary
Directors are elected to serve until the next annual meeting of stockholders and
until their successors are elected and qualified. Directors serve without cash
compensation and without other fixed remuneration. We may, in the future,
establish a compensation plan for independent directors. Officers are elected by
the Board of Directors and serve until their successors are appointed by the
Board of Directors.
MANAGEMENT PROFILES
IVAN RAILYAN, PRESIDENT AND CHAIRMAN OF THE BOARD. Ivan Railyan became our
President and Chairman of the Board on May 19, 2005. Mr. Railyan works on a
part-time basis. From January 7, 2005 to the present, Mr. Railyan has been
President and Chairman of the Board of Terra Insight Corporation. In 1997, Mr.
Railyan joined the Institute of Geoinformational Analysis of the Earth
Establishment, a Liechtenstein company as the Head of the Representative office
in the Commonwealth of Independent States. From 2003 to the present, Mr. Railyan
has served as Chairman of the Board of the Institute. From 1993 to 1997, Mr.
Railyan served as the Head of Research and Development team of the Russian
Defense Ministry, Joint Chiefs of Staff. Mr. Railyan received a Master of
Science degree from the University of Patrisa Lumumby, Moscow in 1991, and an
honorary Ph.D. from the Academy of Science, Arts of the CIS Countries, which he
received in 2003. Since 2003 to the present, Mr. Railyan has served as the Vice
President of the Academy of Arts and Science of the Commonwealth of Independent
States.
ROMAN ROZENBERG, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Roman Rozenberg became
our Chief Executive Officer and a director on May 19, 2005. Mr. Rozenberg works
on a full-time basis. From January 7, 2005 to the present, Mr. Rozenberg has
been Chief Executive Officer and a director of Terra Insight Corporation. From
March 2004 through January 2005, Mr. Rozenberg served as Vice President of
TelcoEnergy, Inc. From February 2002 through March 2004, Mr. Rozenberg served as
Chief Executive Officer of Syntaz, Inc. From September 1999 through February
2002, Mr. Rozenberg served as President and Chief Technology Officer of Biolink
Technologies International, Inc. Mr. Rozenberg received a Bachelor of Science
degree in electrical engineering in 1986 and a Masters of Sciences degree in
Information Systems Engineering in 1989 from Polytechnic University (formerly
known as Polytechnic Institute of New York).
DAN BRECHER, MANAGING DIRECTOR, TREASURER AND DIRECTOR. Dan Brecher became our
Secretary and a director on May 19, 2005. On June 1, 2005, Mr. Brecher's duties
were changed from Secretary to Managing Director. Mr. Brecher works on a
part-time basis. From January 7, 2005 to June 1, 2005, Mr. Brecher served as
Secretary of Terra Insight Corporation, and as a director from January 7, 2005
to the present. Mr. Brecher is a practicing attorney. From 1998 through the
present, Mr. Brecher has been the principal of Law Offices of Dan Brecher. Mr.
Brecher received a Bachelor of Arts degree in economics from City College of New
York in 1964, and a Doctor of Jurisprudence from Fordham University in 1969. Law
Offices of Dan Brecher serves as our legal counsel.
18
DMITRY VILBAUM, CHIEF OPERATING OFFICER. On June 13, 2005, Dmitry Vilbaum was
appointed our Chief Operating Officer. Mr. Vilbaum devotes substantially all of
his time to our business. From June 2005 to the present, Mr. Vilbaum has also
been employed by Law Offices of Dan Brecher on a part-time basis. From March
2001 to June 2005, Mr. Vilbaum was employed by Deutsche Bank where he held
various positions in the bank's information technology department. From January
1996 through March of 2001, Mr. Vilbaum served as the president of Anyent, Inc.,
a consulting company providing information technology services to major Wall
Street corporations, such as Citibank, Deutsche Bank, Newbridge Securities,
Deloitte & Touche LLP., as well as technology companies, such as Compaq and
MatchBlade Technologies. Mr. Vilbaum received a Bachelor of Engineering degree
in 1995 from the City University of New York.
KENNETH OH, SECRETARY. On June 1, 2005, Kenneth Oh was appointed our Secretary.
Mr. Oh serves works on a part-time basis. Mr. Oh is a practicing attorney. From
1998 through the present, Mr. Oh has been an attorney with Law Offices of Dan
Brecher. Law Offices of Dan Brecher serves as our legal counsel. Mr. Oh
graduated from Pomona College with a B.A. degree in 1993, and from Fordham
University with a J.D. degree in 1997.
ADDITIONAL INFORMATION ABOUT OFFICERS AND DIRECTORS
None of our officers or directors serves as a director of another reporting
company. None of our officers or directors has a family relationship with any
director, executive officer, or nominee to become a director or an executive
officer. None of our officers or directors during the past five years has been:
involved in a bankruptcy petition or a pending criminal proceeding; convicted in
a criminal proceeding, excluding traffic and minor offenses; subject to any
order, judgment, or decree, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; or found by a court, the SEC or the CFTC to
have violated a federal or state securities or commodities law.
Certain of our employees, Dan Brecher, Kenneth Oh and Dmitry Vilbaum work for
our attorneys, Law Offices of Dan Brecher, and will continue to do so for the
near future as we develop our operations. Mr. Brecher and Mr. Oh are practicing
attorneys who devote a majority of their time to Law Offices of Dan Brecher. Mr.
Vilbaum devotes substantially all of his time to our business.
We have a license agreement and a services agreement with The Institute of
Geoinformational Analysis of the Earth, pursuant to which services of great
importance to our operations are received. Mr. Railyan, our President, Chairman
and majority stockholder, is the owner of the Institute.
BOARD OF DIRECTORS COMMITTEES
The Board of Directors does not currently maintain an audit, nominating or
compensation committee, or similar committees, of the Board of Directors. The
Board of Directors is responsible for matters typically performed by an audit
committee. No person serving on our Board of Directors qualifies as a financial
expert. As our present business operations were only recently commenced, our
Board of Directors consists of three persons who are officers. We are seeking to
attract persons with financial expertise and related industry experience to
serve on our Board of Directors.
CODE OF ETHICS
We have not yet adopted a code of ethics applicable to our directors, officers
and employees.
19
EXECUTIVE COMPENSATION
No cash compensation, deferred compensation, or other compensation, including
employee stock options or long-term incentive plan awards, were issued or
granted to CompuPrint's former management during CompuPrint's last three fiscal
years.
On May 19, 2005, CompuPrint acquired the business of Terra Insight Corporation.
Pursuant to the transaction, CompuPrint's sole officer and director resigned,
and the nominees of Terra Insight Corporation assumed officer and director
positions of CompuPrint. As Terra Insight Corporation was formed in 2005 and did
not complete its fiscal year, there was no executive compensation paid by Terra
Insight Corporation in prior years.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
In connection with the reverse acquisition of Terra Insight Corporation, we
assumed the obligations of the executive employment agreements of Terra Insight
Corporation.
Agreement with Ivan Railyan
- ---------------------------
Ivan Railyan serves as President pursuant to a three-year employment agreement,
effective as of January 7, 2005. The employment is on a part-time basis. His
current annual base salary for fiscal year 2005 is $180,000, with annual
increases for subsequent years of not less than the change in the Consumer Price
Index. His base salary is to be increased to $275,000 when we achieve revenue
totaling at least $5,000,000, or obtain financing of at least $5,000,000, based
upon financing completed after May 1, 2005. His base salary is to be increased
to $365,000 following the first month in which:
o we achieve market capitalization of $100 million or more for at
least four consecutive trading days, or for at least ten of the last
thirty trading days,
o our subsidiaries, in total, achieve revenues totaling at least $6
million or valuation of $25 million or more, based on private or
public financing, sale, merger or similar transaction;
o we achieve revenues of $10 million or more; or
o we, including any subsidiary, obtain financing of at least $8
million, based upon financing completed after May 1, 2005.
We granted him five-year stock options to purchase up to 1,033,334 shares of our
common stock. The exercise price for the stock options is $0.32 per share. The
stock options are subject to future vesting. One-half of the stock options shall
vest following the first fiscal year end in which our earnings before interest,
taxes, depreciation, and amortization (EBITDA) exceeds $2,000,000 or our gross
revenues exceed $6,000,000. The remaining stock options shall vest following the
first fiscal year end in which our EBITDA exceeds $4,000,000 or our gross
revenues exceed $10,000,000.
He is also entitled to receive death benefits of $70,000, an automobile,
reimbursement for reasonable travel and other business related expenses, four
weeks vacation, medical and dental insurance, and participation in any 401(k)
plan, stock option plan, or other employee plan, perquisite and other benefits
made available to our management in general. We may also award him an annual
performance bonus or other bonus as determined by the Board of Directors.
20
If we undergo a "change of control", we must pay him an amount equal to 290% of
his base compensation and all stock options granted are to vest immediately. He
has the right to terminate his employment if we undergo a change in control. As
defined in his employment agreement, a change of control refers to:
o a change in our ownership or management that would be required to be
reported in response to certain provisions of the Securities
Exchange Act of 1934;
o an acquisition, other than directly from us, by a person or entity
other than us of thirty five percent (35%) or more of our common
stock or then outstanding voting securities;
o a change in a majority of the current Board of Directors, excluding
a Board approved change that does not result from a proxy contest;
o a reorganization, merger, consolidation or sale of substantially all
of our assets, after which our shareholders do not own, in the same
proportion, more than 50% of the voting power, after which a
majority of the board of directors changes, and after which a new
shareholder beneficially owns 25% or more of the voting power; or
o the approval by our stockholders of a complete liquidation or
dissolution.
The employment agreement provides for termination for cause.
Agreement with Roman Rozenberg
- ------------------------------
Roman Rozenberg serves as Chief Executive Officer pursuant to a three-year
employment agreement, effective as of January 7, 2005. His current annual base
salary for fiscal year 2005 is $180,000, with annual increases for subsequent
years of not less than the change in the Consumer Price Index. His base salary
is to be increased to $265,000 when we achieve revenue totaling at least
$5,000,000, or obtain financing of at least $5,000,000, based upon financing
completed after May 1, 2005. His base salary is to be increased to $350,000
following the first month in which:
o we achieve market capitalization of $100 million or more for at
least four consecutive trading days, or for at least ten of the last
thirty trading days,
o our subsidiaries, in total, achieve revenues totaling at least $6
million or valuation of $25 million or more, based on private or
public financing, sale, merger or similar transaction;
o we achieve revenues of $10 million or more; or
o we, including any subsidiary, obtain financing of at least $8
million, based upon financing completed after May 1, 2005.
We granted him five-year stock options to purchase up to 1,033,333 shares of our
common stock. The exercise price for the stock options is $0.32 per share. The
stock options are subject to future vesting. One-half of the stock options shall
vest following the first fiscal year end in which our earnings before interest,
taxes, depreciation, and amortization (EBITDA) exceeds $2,000,000 or our gross
revenues exceed $6,000,000. The remaining stock options shall vest following the
first fiscal year end in which our EBITDA exceeds $4,000,000 or our gross
revenues exceed $10,000,000.
He is also entitled to receive death benefits of $70,000, an automobile,
reimbursement for reasonable travel and other business related expenses, four
weeks vacation, medical and dental insurance, and participation in any 401(k)
plan, stock option plan, or other employee plan, perquisite and other benefits
made available to our management in general. We may also award him an annual
performance bonus or other bonus as determined by the Board of Directors.
21
If we undergo a "change of control", we must pay him an amount equal to 290% of
his base compensation and all stock options granted are to vest immediately. He
has the right to terminate his employment if we undergo a change in control. As
defined in his employment agreement, a change of control refers to:
o a change in our ownership or management that would be required to be
reported in response to certain provisions of the Securities
Exchange Act of 1934;
o an acquisition, other than directly from us, by a person or entity
other than us of thirty five percent (35%) or more of our common
stock or then outstanding voting securities;
o a change in a majority of the current Board of Directors, excluding
a Board approved change that does not result from a proxy contest;
o a reorganization, merger, consolidation or sale of substantially all
of our assets, after which our shareholders do not own, in the same
proportion, more than 50% of the voting power, after which a
majority of the board of directors changes, and after which a new
shareholder beneficially owns 25% or more of the voting power; or
o the approval by our stockholders of a complete liquidation or
dissolution.
The employment agreement provides for termination for cause.
Agreement with Dan Brecher
- --------------------------
Dan Brecher serves as Managing Director of the Company pursuant to a three-year
employment agreement, effective as of January 7, 2005. The employment is on a
part-time basis. His current annual base salary for fiscal year 2005 is $60,000,
with annual increases for subsequent years of not less than the change in the
Consumer Price Index. His base salary is to be increased to $150,000 when we
achieve revenue totaling at least $5,000,000, or obtain financing of at least
$5,000,000, based upon financing completed after May 1, 2005. His base salary is
to be increased to $250,000 following the first month in which:
o we achieve market capitalization of $100 million or more for at
least four consecutive trading days, or for at least ten of the last
thirty trading days,
o our subsidiaries, in total, achieve revenues totaling at least $6
million or valuation of $25 million or more, based on private or
public financing, sale, merger or similar transaction;
o we achieve revenues of $10 million or more; or
o we, including any subsidiary, obtain financing of at least $8
million, based upon financing completed after May 1, 2005.
We granted him five-year stock options to purchase up to 1,033,333 shares of our
common stock. The exercise price for the stock options is $0.32 per share. The
stock options are subject to future vesting. One-half of the stock options shall
vest following the first fiscal year end in which our earnings before interest,
taxes, depreciation, and amortization (EBITDA) exceeds $2,000,000 or our gross
revenues exceed $6,000,000. The remaining stock options shall vest following the
first fiscal year end in which our EBITDA exceeds $4,000,000 or our gross
revenues exceed $10,000,000.
He is also entitled to receive death benefits of $70,000, an automobile,
reimbursement for reasonable travel and other business related expenses, four
weeks vacation, medical and dental insurance, and participation in any 401(k)
plan, stock option plan, or other employee plan, perquisite and other benefits
made available to our management in general. We may also award him an annual
performance bonus or other bonus as determined by the Board of Directors.
22
If we undergo a "change of control", we must pay him an amount equal to 290% of
his base compensation and all stock options granted are to vest immediately. He
has the right to terminate his employment if we undergo a change in control. As
defined in his employment agreement, a change of control refers to:
o a change in our ownership or management that would be required to be
reported in response to certain provisions of the Securities
Exchange Act of 1934;
o an acquisition, other than directly from us, by a person or entity
other than us of thirty five percent (35%) or more of our common
stock or then outstanding voting securities;
o a change in a majority of the current Board of Directors, excluding
a Board approved change that does not result from a proxy contest;
o a reorganization, merger, consolidation or sale of substantially all
of our assets, after which our shareholders do not own, in the same
proportion, more than 50% of the voting power, after which a
majority of the board of directors changes, and after which a new
shareholder beneficially owns 25% or more of the voting power; or
o the approval by our stockholders of a complete liquidation or
dissolution.
The employment agreement provides for termination for cause.
Agreement with Dmitry Vilbaum
- -----------------------------
Dmirty Vilbaum serves as Chief Operating Officer pursuant to a three-year
employment agreement, effective as of June 13, 2005. He currently works on a
part-time basis, for which his current annual base salary is at the rate of
$100,000 per year. His salary is to increase to the rate of $160,000 per year
during the term of employment following the first month in which our revenues
from operations during such fiscal year exceeds $5,000,000; and, his salary
shall increase to the rate of $220,000 per year during the term of employment
following the first month in which our revenues from operations during such
fiscal year exceeds $10,000,000. If, however, our revenues subsequently decrease
to below either of such levels in any twelve month period, his salary is to
revert to its former level during such period. Under the agreement, with our
permission, Mr. Vilbaum is permitted to work up to 20 hours per week for another
employer, and he currently works for Law Offices of Dan Brecher on a part-time
basis pursuant to such permission. In the event Mr. Vilbaum works on a full-time
basis, his initial salary is to increase by $25,000. Mr. Vilbaum is entitled to
any bonus as may be determined by the Board of Directors. He is also entitled to
receive reimbursement for reasonable travel and other business related expenses,
four weeks vacation, and medical and dental insurance.
In connection with the employment agreement, we granted Mr. Vilbaum stock
options to purchase 413,333 shares of our common stock. The stock options are
exercisable for five years at $0.80 per share. The stock options are to vest,
subject to conditions of services to us, as follows: options to purchase 310,000
shares vest on June 13, 2006; additional options to purchase 51,667 shares vest
on June 13, 2007; and the remaining options to purchase 51,666 shares vest on
June 13, 2008.
The employment agreement provides for termination for cause. During the first
year of employment, if the employment is to be terminated, Mr. Vilbaum is
entitled to 90 days advance notice and 90 days of severance pay. The stock
options will vest earlier if Mr. Vilbaum is terminated without cause.
23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of August 23, 2005, the shares of our common
stock beneficially owned by each person who is known by us to beneficially own
5% or more of our common stock, each of our directors and executive officers,
and all of our directors and executive officers as a group. This information was
determined in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, and is based upon the information provided by the persons listed below. As
of August 23, 2005, we had 41,333,338 shares of common stock issued and
outstanding.
All persons named in the table have the sole voting and dispositive power with
respect to common stock beneficially owned. Beneficial ownership of shares of
common stock that are acquirable within 60 days of August 23, 2005 pursuant to
options, warrants, conversion privileges or other rights are listed separately.
For each person named in the table, the calculation of percent of class gives
effect to those acquirable shares.
The address of each of the persons named in the table below, unless otherwise
indicated, is c/o Terra Insight Corporation, 99 Park Avenue, 16th Floor, New
York, New York 10016.
Name and Address of Amount and Nature Additional Shares Percent
Beneficial Owner of Beneficial Owner Acquirable within 60 days of Class
- ----------------- ------------------- ------------------------- --------
Ivan Railyan (a) 29,775,483 0 (b) 72.0%
Roman Rozenberg (a) 3,502,998 0 (c) 8.5%
Dan Brecher (a) 1,751,499 0 (c) 4.2%
Dmitry Vilbaum (a) 0 0 (d)(e) 0%
Kenneth Oh (a) 0 0 (f) 0%
Enficon Establishment 0 2,000,000 (g) 4.6%
Liechtenstein
Poststrasse 403
FL-9491 Ruggell
All officers and directors 35,029,980 0 84.7%
as a group (5 persons)
(a) Refers to an officer or director.
(b) Does not include stock options, subject to vesting at a future date
upon achievement of certain Company milestones or thresholds,
exercisable for five years from January 7, 2005 at $0.32 per share, to
acquire up to 1,033,334 shares of common stock. One-half of the stock
options shall vest following the first fiscal year end in which our
earnings before interest, taxes, depreciation, and amortization
(EBITDA) exceeds $2,000,000 or our gross revenues exceed $6,000,000.
The remaining stock options shall vest following the first fiscal year
end in which our EBITDA exceeds $4,000,000 or our gross revenues exceed
$10,000,000.
(c) Does not include stock options, subject to vesting at a future date
upon achievement of certain Company milestones or thresholds,
exercisable for five years from January 7, 2005 at $0.32 per share, to
acquire up to 1,033,333 shares of common stock. One-half of the stock
options shall vest following the first fiscal year end in which our
earnings before interest, taxes, depreciation, and amortization
(EBITDA) exceeds $2,000,000 or our gross revenues exceed $6,000,000.
The remaining stock options shall vest following the first fiscal year
end in which our EBITDA exceeds $4,000,000 or our gross revenues exceed
$10,000,000.
(d) Does not include stock options, subject to vesting at a future date,
exercisable for five years from June 13, 2005 at $0.80 per share, to
acquire up to 413,333 shares of common stock. The stock options are to
vest, subject to conditions of services, as follows: options to
purchase 310,000 shares vest on June 13, 2006; additional options to
purchase 51,667 shares vest on June 13, 2007; and the remaining options
to purchase 51,666 shares vest on June 13, 2008.
24
(e) Does not include stock options, subject to vesting at a future date,
exercisable for five years from June 29, 2005 at $1.00 per share, to
acquire up to 500,000 shares of common stock. The stock options are to
vest, subject to conditions of services, as follows: options to
purchase 375,000 shares vest on June 29, 2006; additional options to
purchase 62,500 shares vest on June 29, 2007; and the remaining options
to purchase 62,500 shares vest on June 29, 2008.
(f) Does not include stock options, subject to vesting at a future date,
exercisable for five years from May 20, 2005 at $0.80 per share, to
acquire up to 250,000 shares of common stock. The stock options are to
vest, subject to conditions of services, as follows: options to
purchase 187,500 shares vest on May 20, 2006; additional options to
purchase 31,250 shares vest on May 20, 2007; and the remaining options
to purchase 31,250 shares vest on May 20, 2008.
(g) Refers to shares of common stock underlying a principal amount of $2
million of 6% convertible debentures due December 31, 2007. The
debentures are convertible into shares of our common stock at $1.00 per
share.
CHANGES IN CONTROL
We do not have any arrangements that may result in a change in control.
25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ISSUANCES OF SECURITIES
On December 29, 2003, we issued 13,086,360 shares (as adjusted for a forward
split at a ratio of 4.36212 to 1 effected in May 2005) of common stock to our
President, David Allison in consideration for his duties relating to his
appointment as CompuPrint's sole officer.
On May 19, 2005, we entered into a Split-Off Agreement with David Allison,
CompuPrint's sole officer and director and our controlling shareholder. Pursuant
to the agreement, we transferred all of our assets and liabilities to CompuPrint
Ventures, Inc., a newly formed North Carolina corporation, in exchange for 100%
of the equity of CompuPrint Ventures, Inc. Immediately following the transfer,
we transferred our 100% of the equity of CompuPrint Ventures, Inc. to Mr.
Allison in exchange for 13,086,360 shares of our common stock that he held,
which were then cancelled, and for the release by Mr. Allison to us of all
rights to any amounts advanced or otherwise loaned by Mr. Allison to us.
On May 19, 2005, we entered into an Agreement and Plan of Reorganization with
Terra Insight Corporation, a Delaware corporation, and the three shareholders of
Terra Insight Corporation. Pursuant to the reorganization agreement, we issued
35,029,980 shares of common stock, constituting approximately 90% of our
outstanding common stock after the issuance, in exchange for all of the equity
of Terra Insight Corporation in a transaction viewed as a reverse acquisition.
The three shareholders of Terra Insight Corporation received the following
number of shares of our common stock: Ivan Railyan, 29,775,483 shares; Roman
Rozenberg, 3,502,998 shares; and Dan Brecher, 1,751,499 shares. In connection
with the transaction, our sole officer and director resigned and the three
shareholders of Terra Insight Corporation were appointed to our Board of
Directors. Subsequently, Mr. Railyan was appointed President and Chairman of the
Board, Mr. Rozenberg was appointed Chief Executive Officer, and Mr. Brecher was
appointed CompuPrint's Secretary. No director, executive officer or person who
may be deemed to be an affiliate of Terra Insight Corporation had any direct or
indirect interest in CompuPrint prior to the completion of the reverse
acquisition.
In connection with the May 19, 2005 acquisition of Terra Insight Corporation, we
assumed the obligations under three employment agreements of Terra Insight
Corporation with our three employees, Mr. Railyan, Mr. Rozenberg and Mr.
Brecher. Under the employment agreements, as amended, each of Mr. Railyan, Mr.
Rozenberg and Mr. Brecher have stock options to purchase shares of our common
stock, exercisable at $0.32 per share for five years from January 5, 2005. The
number of shares underlying these stock options is 1,033,334 as to Mr. Railyan,
and 1,033,333 as to each of Mr. Rozenberg and Mr. Brecher. The stock options are
subject to future vesting. One-half of the stock options shall vest following
the first fiscal year end in which our earnings before interest, taxes,
depreciation, and amortization (EBITDA) exceeds $2,000,000 or our gross revenues
exceed $6,000,000. The remaining stock options shall vest following the first
fiscal year end in which our EBITDA exceeds $4,000,000 or our gross revenues
exceed $10,000,000.
On May 20, 2005, we entered into an agreement with Kenneth Oh, pursuant to which
we issued stock options to purchase 250,000 shares of common stock. The stock
options are exercisable for five years at $0.80 per share. The stock options are
to vest, subject to conditions of services to us, as follows: options to
purchase 187,500 shares vest on May 20, 2006; additional options to purchase
31,250 shares vest on May 20, 2007; and the remaining options to purchase 31,250
shares vest on May 20, 2008. On June 1, 2005, Mr. Oh was appointed Secretary.
On June 13, 2005, we entered into an employment agreement with Dmitry Vilbaum to
serve as Chief Operating Officer. In connection with the employment agreement,
we granted Mr. Vilbaum stock options to purchase 413,333 shares of common stock.
The stock options are exercisable for five years at $0.80 per share. The stock
options are to vest, subject to conditions of services to us, as follows:
options to purchase 310,000 shares vest on June 13, 2006; additional options to
purchase 51,667 shares vest on June 13, 2007; and the remaining options to
purchase 51,666 shares vest on June 13, 2008. Under the employment agreement,
with our permission, Mr. Vilbaum is permitted to work up to 20 hours per week
for another employer. Mr. Vilbaum currently works for Law Offices of Dan Brecher
on a part-time basis pursuant such permission, and the costs of his services for
Law Offices of Dan Brecher are charged to us.
26
On June 29, 2005, we entered into an agreement with Dmitry Vilbaum, pursuant to
which we issued stock options to purchase 500,000 shares of common stock. The
stock options are exercisable for five years at $1.00 per share. The stock
options are to vest, subject to conditions of services to us, as follows:
options to purchase 375,000 shares vest on June 29, 2006; additional options to
purchase 62,500 shares vest on June 29, 2007; and the remaining options to
purchase 62,500 shares vest on June 29, 2008.
On June 30, 2005, we entered into a Securities Purchase Agreement with Enficon
Establishment, a Liechtenstein company, for the sale of up to a principal amount
of $5 million in 6% convertible debentures due December 31, 2007. On July 5,
2005, Enficon purchased a $2 million debenture. We allocated $1 million of the
proceeds to our working capital, and the other $1 million in furtherance of an
exploration agreement that we entered into with Enficon. The debentures are
convertible into shares of our common stock at $1.00 per share. Interest accrues
on the principal amount of the debenture at the simple rate of 6% per year from
the date of issuance. Interest is payable at maturity. In the event of
conversion of the debenture, in whole or in part, the holder forfeits any
accrued interest on the converted principal amount. The debenture is subject to
a mandatory conversion in the event that our non-insider common stock trades in
the public securities market at a price of $2.00 per share or more with a mean
average weekly volume of 250,000 shares or more in eight consecutive weeks. In
connection with this sale of securities, we granted Enficon certain registration
rights, agreeing to include in a registration statement that we file, the resale
of restricted shares underlying the debentures that Enficon purchased. Under the
terms of the agreement, we sent to Enficon a notice prior to August 1, 2005
requiring Enficon to purchase a further $1 million debenture, which Enficon has
not yet paid. The agreement provides that upon Enficon's failure to do so,
Enficon would lose rights to purchase any additional debenture from us under the
agreement, and if Enficon fulfills its obligation to purchase the $1 million
debenture, we can send notice to Enficon requesting the purchase of a further $2
million debenture at a future date. The agreement provides that we are to
allocate the proceeds of that additional $2 million debenture to further an
exploration agreement that we entered into with Enficon.
EXPLORATION AGREEMENT WITH ENFICON
On June 30, 2005, we entered into an agreement with Enficon Establishment, a
Liechtenstein company, for the formation, operation, financing and development
of a Delaware limited partnership, Tierra Nevada Exploration Partners, L.P., in
connection with the exploration of certain natural resource deposits in the
State of Nevada. The plan is to pursue acquisition of the leases related to oil
rights in certain properties in a designated area of Nevada to implement an
exploration program for the drilling of three wells. We are to provide up to $3
million in funding for the project, and, Enficon is to provide up to $3 million
as capital contribution in furtherance of the project. Assuming such funding,
Enficon would have a 50% interest as a limited partner in the partnership. Our
subsidiary, Terra Resources, Inc., is the general partner of the partnership. To
the extent that Enficon contributes less than the amount we contribute to the
partnership, Enficon's interest in the partnership will be diluted. To the
extent that additional third-party financing is required, our interest and the
interest of Enficon in the partnership, or both, may be diluted.
27
We agreed to grant Enficon, subject to Enficon's satisfaction of certain
conditions, a non-assignable first right of refusal for the providing of funding
to other projects that we may agree to finance. The first right of refusal is
conditioned upon Enficon's full purchase of $5 million dollars in 6% convertible
debentures maturing December 31, 2007, convertible at $1 per share into an
aggregate of 5 million shares of our common stock, pursuant to a Securities
Purchase Agreement dated June 30, 2005 entered into by Enficon with us. The
first right of refusal is of no effect until Enficon has timely paid for and
converted in full the total of $5 million of convertible debentures, and is of
no effect until Enficon has also provided the full amount required of Enficon to
fund the limited partnership pursuant to the terms of the exploration agreement.
Once the conditions for the first right of refusal are satisfied, the first
right of refusal is to last so long as Enficon retains ownership of the majority
of the five million shares of our common stock to be issued upon conversion of
the convertible debentures that Enficon may purchase from us. The agreement
provides that Enficon will forfeit its first right of refusal if Enficon
breaches its obligations under the agreement or declines to fund two projects
that are subsequently funded on the terms Enficon declined, or if Enficon agrees
to fund a project but fails to do so. On July 5, 2005, Enficon purchased $2
million in convertible debentures from us. In July 2005, we sent a notice
requiring Enficon to purchase the third million dollars in convertible
debentures pursuant to the June 30, 2005 Securities Purchase Agreement. Enficon
has not yet paid such obligation.
OTHER TRANSACTIONS AND RELATIONSHIPS
On April 18, 2005, in connection with the perceived need of Terra Insight
Corporation for its Chief Executive Officer to be available on a regular basis
in Europe, and for him to establish a residence in Europe, Terra Insight
Corporation paid Mr. Rozenberg, on a one-time basis, $30,000 to reimburse his
travel and other expenses, on an accountable basis, in connection with the
business of Terra Insight Corporation.
Terra Insight Corporation has a license agreement and a services agreement with
The Institute of Geoinformational Analysis of the Earth Establishment. Mr.
Railyan is a principal and owner of the Institute. The Institute is an
international professional services firm which specializes in the development
and application of remote sensing and geographic information technologies (GIS).
Terra Insight Corporation has an exclusive, worldwide 30-year renewable license
for the use of all of the technology of the Institute, which has as its focus
the exploration, sustainable development and management of the Earth's resources
and the monitoring of the environment. Terra Insight Corporation is required to
pay the Institute $600,000 each year under the license agreement until it has
achieved certain milestones, upon which the payments increase.
The Institute has also entered into an agreement to render services to Terra
Insight Corporation, and to refer all inquiries for commercial contract services
to Terra Insight Corporation. The Institute will perform certain contract
services for Terra Insight Corporation at no more than 40% of the published
rates of $500 per square kilometer, with minimum annual fees of $500,000, and
with offsets against the license fee until certain minimum revenues are
obtained.
Terra Insight Corporation presently subleases office facilities on a
month-to-month basis pursuant to an oral agreement with its officer and
director, Dan Brecher, at $1,500 per month.
28
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital consists of 101,000,000 shares, par value $0.0001 per
share, of which 100,000,000 shares are common stock and 1,000,000 shares are
preferred stock.
COMMON STOCK
Holders of our common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do have cumulative voting
rights. Subject to preferences that may be applicable to any shares of preferred
stock outstanding at the time, holders of our common stock are entitled to
receive dividends ratably, if any, as may be declared from time to time by our
board of directors out of funds legally available therefor.
Upon our liquidation, dissolution or winding up, the holders of our common stock
are entitled to receive ratably, our net assets available after the payment of:
o all secured liabilities, including any then outstanding secured debt
securities which we may have issued as of such time;
o all unsecured liabilities, including any then unsecured outstanding
secured debt securities which we may have issued as of such time;
and
o all liquidation preferences on any then outstanding preferred stock.
Holders of our common stock have no preemptive, subscription, redemption or
conversion rights, and there are no redemption or sinking fund provisions
applicable to the common stock. The rights, preferences and privileges of
holders of common stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of preferred stock which we may
designate and issue in the future.
PREFERRED STOCK
Our board of directors is authorized, without further stockholder approval, to
issue up to 1,000,000 shares of preferred stock in one or more series and to fix
the rights, preferences, privileges and restrictions of these shares, including
dividend rights, conversion rights, voting rights, terms of redemption and
liquidation preferences, and to fix the number of shares constituting any series
and the designations of these series. These shares may have rights senior to our
common stock. The issuance of preferred stock may have the effect of delaying or
preventing a change in control of us. The issuance of preferred stock could
decrease the amount of earnings and assets available for distribution to the
holders of common stock or could adversely affect the rights and powers,
including voting rights, of the holders of our common stock. At present, we have
no plans to issue any shares of our preferred stock.
29
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is quoted on the OTC Bulletin Board under the symbol "CPPT."
The following table sets forth, for the fiscal periods indicated, the high and
low bid prices per share of common stock as reported on the OTC Bulletin Board.
The quotations reflect inter dealer prices, without retail mark-up, mark-down or
commissions and may not represent actual transactions.
Stock prices prior to May 19, 2005 reflect a predecessor business, which was
essentially a shell company with no material operations, and are not related to
our current business operations. On May 9, 2005, we authorized a forward split
of our common stock at a ratio of 4.36212 to 1. For purposes of the quotation on
the OTC Bulletin Board, the record date for the forward split was May 26, 2006
with a payment date of May 31, 2005, and an ex-dividend date of June 1, 2005.
Stock prices for dates prior to May 19, 2005 have not been adjusted in the table
below to give effect to the forward stock split.
High Low
---- ---
Fiscal Year 2003
- ----------------
Quarter ending March 31, 2003 $0.25 $0.05
Quarter ending June 30, 2003 $0.05 $0.05
Quarter ending September 30, 2003 $0.06 $0.05
Quarter ending December 31, 2003 $0.07 $0.05
Fiscal Year 2004
- ----------------
Quarter Ending March 31, 2004 $0.15 $0.07
Quarter ending June 30, 2004 $0.15 $0.15
Quarter ending September 30, 2004 $0.10 $0.07
Quarter ending December 31, 2004 $0.10 $0.10
Fiscal Year 2005
- ----------------
Quarter Ending March 31, 2005 $0.10 $0.10
Quarter ending June 30, 2005 $1.75 $0.10
As of July 29, 2005 $3.00 $1.05
HOLDERS
As of August 23, 2005, we had 11 record holders of our common stock. The number
of record holders does not include beneficial owners of common stock whose
shares are held in the names of various security brokers, dealers, and
registered clearing agencies.
DIVIDENDS
We have never declared any cash dividends on our common stock. Future cash
dividends on the common stock, if any, will be at the discretion of our Board of
Directors and will depend on our future operations and earnings, capital
requirements and surplus, general financial condition, contractual restrictions,
and other factors that the Board of Directors may consider important. The Board
of Directors does not intend to declare or pay cash dividends in the foreseeable
future. It is the current policy to retain all earnings, if any, to support
future growth and expansion.
TRANSFER AGENT
The transfer agent for our common stock is Continental Stock Transfer & Trust
Company.
30
PENNY STOCK
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock" for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:
o that a broker or dealer approve a person's account for transactions
in penny stocks; and
o the broker or dealer receive from the investor a written agreement
to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must
o obtain financial information and investment experience objectives of
the person; and
o make a reasonable determination that the transactions in penny
stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:
o sets forth the basis on which the broker or dealer made the
suitability determination; and
o that the broker or dealer received a signed, written agreement from
the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
As of our most recent fiscal year completed, we did not have any securities
authorized for issuance under equity compensation plans.
31
SELLING STOCKHOLDERS
This prospectus relates to the resale of 4,411,138 shares of common stock by the
selling stockholders. The shares of common stock offered by this prospectus may
be offered from time to time by the selling stockholder. We will not receive any
proceeds from the resale of the common stock by the selling stockholders. The
registration of these shares does not necessarily mean that the selling
stockholder will sell all or any of the shares.
The following table provides information regarding the beneficial ownership of
our common stock by the selling stockholders as of August 23, 2005. The table
sets forth the name of each person who is offering the resale of shares of
common stock by this prospectus, the number of shares of common stock
beneficially owned by each person, the number of shares of common stock that may
be sold in this offering and the number of shares of common stock each person
will own after the offering, assuming they sell all of the shares offered.
The information with respect to beneficial ownership of common stock held by
each person is based upon record ownership data provided by our transfer agent,
information as supplied or confirmed by selling stockholders, based upon
statements filed with the Securities and Exchange Commission, or based upon our
actual knowledge.
Number of Shares Number of Percent
Beneficially Owned Number of Shares Owned
Prior to this Shares Owned After After
Name of Selling Stockholder Offering Being Offered this Offering Offering
- --------------------------- ------------------ ------------- ------------- --------
Zebra Strategic Holdings Limited (a) 1,377,793 1,377,793 0 0%
c/o 11 Bath Street. St Helier
Jersey, JE4 8UT Channel Islands
EFS European Financial Services Ltd. (b) 1,033,345 1,033,345 0 0%
Kaspar Fenner Strasse 6
CH-8700 Kusnacht/Switzerland
Enficon Establishment (c) 2,000,000 (d) 2,000,000 (d) 0 0%
Liechtenstein
Poststrasse 403
FL-9491 Ruggell
Total 4,411,138 4,411,138 0 0%
(a) The person with voting and investment control over the securities is David
Ernest Bryant.
(b) The person with voting and investment control over the securities is Urs
Meisterhans, its Managing Director.
(c) The person with voting and investment control over the securities
Alexander Fedyaev, its beneficial owner.
(d) Refers to shares of common stock underlying a principal amount of $2
million of 6% convertible debentures due December 31, 2007. The debentures
are convertible into shares of common stock at $1.00 per share. Does not
include additional shares of common stock underlying 6% convertible
debentures that the holder is obligated to purchase or may elect to
purchase, but has not yet done so.
32
PLAN OF DISTRIBUTION
We are registering shares of common stock offered for sale by this prospectus on
behalf of the selling stockholders. The selling stockholders and any of their
respective pledgees, donees, assignees and other successors-in-interest may,
from time to time, sell in one or more transactions any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. The selling stockholders may use
any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits the purchaser;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately-negotiated transactions;
o short sales that are not violations of the laws and regulations of
any state or the United States;
o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
o through the writing of options on the shares;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
Selling stockholders may sell their shares of common stock:
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices;
o at negotiated prices;
o at fixed prices; or
o at a combination of such prices.
The selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale of shares of common stock
currently held by selling stockholders. The selling stockholders may also sell
shares under Rule 144 of the Securities Act of 1933, as amended, if available,
rather than under this prospectus.
We will pay for substantially all of the expenses incident to the offer and sale
of the shares of common stock offered by the selling stockholders using this
prospectus. The selling stockholders will pay applicable stock transfer taxes,
transfer fees and brokerage commissions or underwriting or other discounts.
To comply with the securities laws of certain states, the shares of common stock
offered by this prospectus may need to be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers.
None of the selling shareholders are broker-dealers or affiliates of
broker-dealers. There are no standby agreements or agreements with any
broker-dealers or underwriting firms to resell on behalf of the selling
shareholders. If the selling stockholders notify us that they have a material
arrangement with a broker-dealer for the resale of the common stock, then we
would be required to amend the registration statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreements between
the selling stockholders and the broker-dealer.
The offering of the shares of common stock pursuant to this prospectus will
terminate on the earlier of the time when the shares of common stock have been
sold by the selling stockholders pursuant to this prospectus, the time when all
of the shares of common stock are eligible to be sold pursuant to Rule 144(k)
under the Securities Act, or this prospectus is no longer effective.
33
LEGAL MATTERS
The validity of the shares offered pursuant to this prospectus will be passed
upon for us by Law Offices of Dan Brecher, New York, New York, counsel to
CompuPrint, Inc. Dan Brecher, the sole principal of the law firm, is an officer
and director of CompuPrint, and owns 1,751,499 shares of our common stock and
stock options to acquire 1,033,334 shares of common stock. Kenneth Oh, an
associate of the law firm, is an officer of CompuPrint, and owns stock options
to acquire 250,000 shares of common stock. Dmitry Vilbaum a part-time
non-attorney employee of the law firm, is an officer of CompuPrint, and owns
stock options to acquire 913,333 shares of common stock.
EXPERTS
The financial statements of CompuPrint, Inc., for the years ended December 31,
2004 and 2003, have been included herein and in the registration statement in
reliance upon the report of Sherb & Co., LLP, independent registered public
accounting firm, appearing elsewhere herein, given the authority of said firm as
experts in auditing and accounting.
The financial statements of Terra Insight Corporation and Subsidiary, as of
April 30, 2005, have been included herein and in the registration statement in
reliance upon the report of Rosen, Seymour, Shapss, Martin & Company LLP,
independent registered public accounting firm, appearing elsewhere herein, given
the authority of said firm as experts in auditing and accounting.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
We will indemnify our directors, officers, and controlling persons against
liability under the Securities Act to the extent permitted by the North Carolina
Business Corporation Act. We will indemnify them against all expenses and
liabilities that are reasonably incurred in connection with this prospectus to
the extent allowed under North Carolina law. Neither our Articles of
Incorporation, as amended, nor Bylaws contains provisions concerning
indemnification of officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the CompuPrint pursuant to the foregoing provisions, or otherwise, CompuPrint
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 CompuPrint of expenses incurred or paid by a director,
officer or controlling person of CompuPrint 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, CompuPrint will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
REPORTS TO STOCKHOLDERS
We intend to furnish our stockholders with annual reports containing audited
financial statements as soon as practical after the end of each fiscal year. Our
fiscal year ends December 31.
34
AVAILABLE INFORMATION
We have filed with the SEC a registration statement on Form SB-2 under the
Securities Act with respect to the common stock offered by this prospectus. This
prospectus does not contain all of the information set forth in the registration
statement and its exhibits and schedules. For further information regarding the
company and the shares offered hereby, reference is made to the registration
statement and the exhibits and any schedules filed therewith. A copy of the
registration statement, including the exhibits and schedules thereto, may be
read and copied at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington D.C. 20549. Information on the operation of the Public Reference Room
may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains an Internet site at http://www.sec.gov, from which interested persons
can electronically access the registration statement, including the exhibits and
any schedules thereto. You may inspect a copy of the registration statement
without charge at the SEC's principal offices, and you may obtain copies of all
or any part of the registration statement from such office upon payment of the
fees prescribed by the SEC.
We file reports and other information with the Securities and Exchange
Commission and are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. These filings may be read and copied at the
SEC's Public Reference Room. Our filings with the SEC are available to the
public on the SEC's web site at http://www.sec.gov. Our company maintains an
Internet site at httlp://www.terrainsight.com.
FINANCIAL STATEMENTS
CompuPrint, Inc., Financial Statements, year ended December 31, 2004 F-1
Terra Insight Corporation and Subsidiary, Financial Statements, F2-1
period from January 7, 2005 (inception) to April 30, 2005
35
COMPUPRINT, INC.
INDEX TO FINANCIAL STATEMENTS
December 31, 2004
Report of Independent Registered Public Accounting Firm......................F-2
Balance Sheet as of December 31, 2004 .......................................F-3
Statements of Operations for the years ended December 31, 2004
and 2003 ..................................................................F-4
Statement of Shareholders' Deficit For the years
ended December 31, 2004 and 2003...........................................F-5
Statements of Cash Flows for the years ended December 31, 2004
and 2003 ..................................................................F-6
Notes to Financial Statements .......................................F-7 to F-10
F-1
Report of Independent Registered Public Accounting Firm
The shareholders and Board of Directors
of CompuPrint, Inc.
We have audited the accompanying consolidated balance sheet of CompuPrint,
Inc. as of December 31, 2004 and the related statements of operations, changes
in shareholders' deficit and cash flows for the years ended December 31, 2004
and 2003. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purposes of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining
on a test basis, evidence supporting the amount and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CompuPrint, Inc. as of
December 31, 2004 and the results of its operations and its cash flows for the
years ended December 31, 2004 and 2003 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has a shareholder's deficit of $415,432 and a
working capital deficiency of $415,432 at December 31, 2004, had net losses and
cash used in operations of $49,879 and $43,287, respectively, in 2004. This
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regards to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/Sherb & Co., LLP
Certified Public Accountants
Boca Raton, Florida
April 14, 2005
F-2
COMPUPRINT, INC.
Balance Sheet
December 31, 2004
Assets
Other current assets $ 969
-----------
Total Assets $ 969
===========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $ 7,561
Advances from shareholder 408,840
-----------
Total current liabilities 416,401
-----------
Shareholders' Deficit:
Preferred stock; $.0001 par value, 1,000,000 shares authorized,
no shares isued and outstanding --
Common stock; $.0001 par value, 9,000,000 shares authorized;
3,892,277 shares issued and outstanding 389
Additional paid-in capital 1,717,919
Accumulated deficit (2,133,740)
-----------
Total shareholders' deficit (415,432)
-----------
Total Liabilities and Shareholders' Deficit $ 969
===========
See accompanying notes to financial statements
F-3
COMPUPRINT, INC.
Statements of Operations
For The Years Ended
December 31,
--------------------------
2004 2003
----------- -----------
Revenues $ -- $ --
Operating expenses:
General and administrative 49,879 99,455
----------- -----------
Total operating expenses 49,879 99,455
----------- -----------
Loss from operations (49,879) (99,455)
Gain on early extinguishment of debt -- 426,220
----------- -----------
Income (loss) before discontinued operations (49,879) 326,765
----------- -----------
Discontinued operations:
Gain on disposal of discontinued operations 37,701
Loss from discontinued operations -- (261,665)
----------- -----------
Loss from discontinued operations -- (223,964)
----------- -----------
Net income (loss) $ (49,879) $ 102,801
=========== ===========
Net income (loss) per common share - basic
Income (loss) from operation $ (0.01) $ 0.36
Loss from discontinued operations -- (0.24)
----------- -----------
Net income (loss) per share - basic $ (0.01) $ 0.12
=========== ===========
Weighted average common shares outstanding - basic 3,892,277 916,935
=========== ===========
Net income (loss) per common share - diluted
Income (loss) from operation $ (0.01) $ 0.36
Loss from discontinued operations -- (0.24)
----------- -----------
Net income (loss) per share - diluted $ (0.01) $ 0.12
=========== ===========
Weighted average common shares outstanding - diluted 3,892,277 916,935
=========== ===========
See accompanying notes to financial statements
F-4
COMPUPRINT, INC.
Statement of Shareholders' Deficit
For the Years Ended December 31, 2004 and 2003
Common Stock Additional Total
------------------------- Paid-in Accumulated Shareholders'
Shares Amount Capital Deficit Deficit
----------- ----------- ----------- ----------- -----------
Balance, January 1, 2003 892,277 $ 89 $ 1,538,219 $(2,186,662) $ (648,354)
Issuance of common stock for services 3,000,000 300 179,700 -- 180,000
Net income -- -- -- 102,801 102,801
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2003 3,892,277 389 1,717,919 (2,083,861) (365,553)
Net loss -- -- -- (49,879) (49,879)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2004 3,892,277 $ 389 $ 1,717,919 $(2,133,740) $ (415,432)
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
F-5
COMPUPRINT, INC.
Statements of Cash Flows
For the Years
Ended December 31,
-----------------------
2004 2003
--------- ---------
Cash flows from operating activities:
Income (loss) from continuing operations $ (49,879) $ 398,765
Adjustments to reconcile income (loss) from continuing
operations to net cash used in operating activities:
Forgiveness of debt -- (498,220)
Common stock issued for services -- 180,000
Changes in operating assets and liabilities:
Other current assets (969) --
Accounts payable and accrued expenses 7,561 --
--------- ---------
Net cash provided by (used in) continuing operating activities (43,287) 80,545
--------- ---------
Loss from discontinued operations -- (295,964)
Adjustments to reconcile loss from discontinued operations to net cash used
in discontinued operating activities:
Decrease in net assets from discontinued operations -- 39,560
--------- ---------
Net cash used in discontinued operating activities -- (256,404)
--------- ---------
Net cash used in operating activities (43,287) (175,859)
--------- ---------
Cash flows from financing activities:
Payment on notes payables -- (278,866)
Proceeds from notes payable -- 35,000
Advances from shareholder 43,287 365,553
--------- ---------
Net cash provided by financing activities 43,287 121,687
--------- ---------
Net decrease in cash -- (54,172)
Cash, beginning of year -- 54,172
--------- ---------
Cash, end of year $ -- $ --
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ -- $ 2,036
========= =========
Supplemental disclosure of non-cash financing activities:
Accrued interest payable added to principal of notes payable $ -- $ 34,467
========= =========
Forgiveness of accounts payable for sale of net assets $ -- $ 43,294
========= =========
See accompanying notes to financial statements
F-6
COMPUPRINT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 1 - DESCRIPTION OF BUSINESS
CompuPrint, Inc. (the "Company") was incorporated on September 15, 1995 in the
State of North Carolina. On August 19, 2003, the Company sold all operations and
net assets of its laser and inkjet printer cartridge operations in exchange for
forgiving debt, resulting in a gain of $37,701. After the sale, the Company has
no operations and is currently searching for new business opportunities in the
laser and inkjet printer cartridge industry.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has an accumulated
deficit of $2,133,740 and a negative working capital of $415,432 at December 31,
2004 and has incurred an operating loss of $49,879 for the year ended December
31, 2004. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans include obtaining capital both
from themselves and the significant shareholder sufficient to meet its minimal
operating expenses.
However, management cannot provide any assurances that the Company will be
successful in accomplishing any of its plans. The ability of the Company to
continue as a going concern is dependent upon its ability to successfully
accomplish the plans described in the preceding paragraph and eventually secure
other sources of financing and attain profitable operations. The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Reclassifications
Certain items for 2003 have been reclassified to comply with 2004 presentation.
These reclassifications had no impact on previously reported results of
operations or shareholders' equity.
Income Taxes
Deferred income taxes are determined on the liability method in accordance with
the Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for
Income Taxes.
Earnings (Loss) Per Share
The Company has adopted SFAS, No. 128, Earnings per Share. Basic earnings (loss)
per share is computed by dividing net income (loss) available to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted earnings per share reflects the per share amount that would
have resulted if dilutive common stock had been converted to common stock, as
prescribed by SFAS No. 128.
F-7
COMPUPRINT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock Based Compensation
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related interpretations.
Accordingly, compensation cost for stock options is measured as the excess, if
any, of the estimated fair market value of the Company's stock at the date of
the grant over the amount an employee must pay to acquire the stock. The Company
has adopted the "disclosure only" alternative described in FAS 123 and SFAS 148
(See Recent Accounting Pronouncements), which require pro forma disclosures of
net income and earnings per share as if the fair value method of accounting had
been applied.
Fair value of financial instruments
The carrying amounts reported in the balance sheet for accounts payable and
accrued expenses approximate their fair market value based on the short-term
maturity of these instruments.
Recent accounting pronouncements
In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
companies to recognize in the statement of operations the grant- date fair value
of stock options and other equity-based compensation issued to employees. FAS
No. 123R is effective beginning in the Company's second quarter of fiscal 2006.
The Company is in process of evaluating the impact of this pronouncement on its
financial position.
In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of
Non-monetary Assets." The Statement is an amendment of APB Opinion No. 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial statements.
In March 2004, the Emerging Issues Task Force ("EITF") reached a consensus on
Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and its
Application to Certain Investments." The EITF reached a consensus about the
criteria that should be used to determine when an investment is considered
impaired, whether that impairment is other-than-temporary, and the measurement
of an impairment loss and how that criteria should be applied to investments
accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES." EITF 03-01 also included accounting considerations
subsequent to the recognition of an other-than-temporary impairment and requires
certain disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. Additionally, EITF 03-01 includes new
disclosure requirements for investments that are deemed to be temporarily
impaired. In September 2004, the Financial Accounting Standards Board (FASB)
delayed the accounting provisions of EITF 03-01; however the disclosure
requirements remain effective for annual reports ending after June 15, 2004. The
Company believes that the adoption of this standard will have no material impact
on its financial statements.
NOTE 4 -NOTES PAYABLE
In 2003, the Company extinguished approximately $642,000 of outstanding
principal on notes payable and $63,000 of interest thereon by paying
approximately $279,000 for the release of the obligations of the Company to the
note holders. For the year ended December 31, 2003, in connection with the
settlement of this debt, the Company recognized approximately $426,000 from
forgiveness of the notes payable.
F-8
COMPUPRINT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 5 - DISCONTINUED OPERATIONS
On August 19, 2003, the Company ceased operations in connection with the
acquisition of its common stock directly by an outside third party. The disposal
of the distribution and recycling business has been reflected as a discontinued
operation in the statement of operations. The comparative statements of
operation have been restated to reflect the discontinuance.
The Company sold all operations and net assets of its laser and inkjet printer
cartridge operations in exchange for forgiving debt, resulting in a gain of
$37,701. Prior to the sale of assets, the Company settled all operating
liabilities and recognized approximately $72,000 of gain in the extinguishment
of debts.
NOTE 6 - SHAREHOLDERS' DEFICIT
Common Stock
On December 29, 2003, the Company issued 3,000,000 shares of its common stock to
its president for services rendered. The Company recorded compensation expense
of $180,000 or $0.06 per share which approximates fair market value. Such
compensation is reflected in discontinued operations as the Company's current
president will continue to serve, up until the time where the Company's previous
operations have transitioned fully to its current ownership.
NOTE 7 - INCOME TAXES
At December 31, 2004, the Company had net operating loss carry forwards of
approximately $50,000 for federal and state income tax purposes available to
offset future taxable income expiring on various dates through 2024. During the
year ended December 31, 2003, the Company had a more than 50% change in
ownership, as defined in section 382 of the Internal Revenue Code ("IRC").
Following such a change in ownership, the IRC limits the annual utilization of
the Company's net operating losses to the value of the Company at the date of
change multiplied by the Federal long-term-tax exempt interest rate. However, in
addition to the change in ownership, the Company did not continue its historical
business after the change in ownership. Under Section 382(c)(1) of the IRC, the
Company can no longer use its net operating losses.
The Company's tax expense differs from the "expected" tax expense for the years
ended December 31, 2004 and 2003 as follows: he differences between the recorded
income taxes (benefits) and the expected income taxes/(benefit) using a 40%
effective tax rate are as follows:
Year Ended December 31,
-------------------------------
2004 2003
-------------- -------------
Expected income taxes (benefit) $ (19,000) $ 41,000
Permanent differences - 72,000
Utilization of net operating loss - (113,000)
Change in valuation allowance 19,000 -
-------------- ------------
$ - $ -
============== ============
F-9
COMPUPRINT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 7 - INCOME TAXES (continued)
The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at December 31, 2004 are as follows:
Deferred tax assets:
Net operating loss carry forward $ 19,000
--------
Total gross deferred tax assets 19,000
Less valuation allowance (19,000)
--------
Net deferred tax assets $ --
========
The valuation allowance at December 31, 2004 was $19,000. The increase during
2004 was $19,000.
In assessing the realizability of the deferred tax assets, management considers
whether it is more likely than not that some portions or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income or changes in ownership
or business during the periods in which the temporary differences become
deductible. Due to the Company's continuing losses and recent change in
ownership, it is more likely than not that the deferred tax assets will not be
realized.
NOTE 8 - ADVANCES FROM SHAREHOLDER
In connection with the settlement of certain accounts payable and notes payable,
from time to time, the majority shareholder has advanced the Company $408,840.
The advances from the shareholder currently bear no interest and are payable
upon demand.
F-10
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
CONTENTS
Period from January 7, 2005 (inception) to April 30, 2005
- --------------------------------------------------------------------------------
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F2-2
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet F2-3
Statement of Operations F2-4
Statement of Shareholders' Equity (Deficit) F2-5
Statement of Cash Flows F2-6
Notes to Consolidated Financial Statements F2-7 - F2-12
F2-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Terra Insight Corporation and Subsidiary:
We have audited the accompanying consolidated balance sheet of Terra Insight
Corporation and Subsidiary (the "Company") as of April 30, 2005, and the related
consolidated statements of operations, shareholders' equity (deficit) and cash
flows for the period from January 7, 2005 (inception) to April 30, 2005. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Terra Insight
Corporation and Subsidiary as of April 30, 2005, and the results of their
operations and their cash flows for the period from January 7, 2005 (inception)
to April 30, 2005 in conformity with U.S. generally accepted accounting
principles.
/s/ Rosen Seymour Shapss Martin & Company LLP
CERTIFIED PUBLIC ACCOUNTANTS
New York, New York
July 20, 2005
F2-2
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
April 30, 2005
- --------------------------------------------------------------------------------
Assets
- ------
Current assets:
Cash $ 291,952
Accounts receivable 85,950
Deferred costs (Note 2) 217,780
Prepaid expenses and other current assets 103,097
---------
Total current assets 698,779
Property and equipment, net of accumulated
depreciation of $264 (Note 4) 6,530
---------
Total assets $ 705,309
=========
Liabilities and Shareholders' Equity (Deficit)
- ----------------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 448,157
Deferred revenue (Note 2) 515,066
---------
Total current liabilities 963,223
---------
Commitments (Note 7)
Shareholders' equity (deficit) (Note 8):
Preferred stock - par value $.0004, 5,000,000 shares authorized; no
shares issued or outstanding --
Common stock - par value $.0004, 45,000,000 shares authorized;
10,000,000 shares issued and outstanding 4,000
Accumulated deficit (261,914)
---------
Total shareholders' equity (deficit) (257,914)
---------
Total liabilities and shareholders' equity (deficit) $ 705,309
=========
The accompanying notes are an integral part of these consolidated financial
statements.
F2-3
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
Period from January 7, 2005 (inception) to April 30, 2005
- --------------------------------------------------------------------------------
Revenues $ 100,000
Cost of revenues (Note 6) 70,000
---------
Gross profit 30,000
Operating expenses (Note 6) 291,914
---------
Operating loss before provision for income taxes (261,914)
Provision for income taxes, net (Note 5) --
---------
Net loss $(261,914)
=========
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
F2-4
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
Period from January 7, 2005 (inception) to April 30, 2005
- --------------------------------------------------------------------------------
Total
Preferred Retained Shareholders'
Common Stock Stock Deficit Deficit
------------ ------------ ------------ ------------
Balance, January 7, 2005 $ -- $ -- $ -- $ --
Issuance of common stock 4,000 -- -- 4,000
Net loss -- -- (261,914) (261,914)
------------ ------------ ------------ ------------
Balance, April 30, 2005 $ 4,000 $ -- $ (261,914) $ (257,914)
============ ============ ============ ============
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
F2-5
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Period from January 7, 2005 (inception) to April 30, 2005
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(261,914)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 264
Changes in assets and liabilities:
(Increase) in assets:
Accounts receivable (85,950)
Deferred costs (217,780)
Prepaid expenses and other current assets (103,097)
Increase in liabilities:
Accounts payable and accrued expenses 448,157
Deferred revenue 515,066
---------
Net cash provided by operating activities 294,746
---------
Cash flows from investing activities:
Capital expenditures (6,794)
---------
Net cash used in investing activities (6,794)
---------
Cash flows from financing activities:
Issuance of common stock 4,000
---------
Net cash provided by financing activities 4,000
---------
Net change in cash 291,952
Cash, beginning of period --
---------
Cash, end of period $ 291,952
=========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ --
=========
Income taxes $ --
=========
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
F2-6
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
1. Organization and Basis of Presentation
--------------------------------------
Terra Insight Corporation ("Terra" or the "Company"), a Delaware corporation,
was formed January 7, 2005 and provides mapping, surveying and analytical
services to exploration, drilling and mining companies. The Company manages and
interprets geologic and satellite data to improve the assessment of natural
resources. The Company provides these services to its customers exclusively
through a services arrangement whereby it outsources the mapping, surveying and
analytical services to a related entity (see Note 6). The Company expects to
derive its revenue primarily from domestic customers. For the period ended April
30, 2005, all revenue was derived from a customer located in the state of
Nevada.
The consolidated financial statements include the accounts of Terra and its
wholly owned subsidiary, Terra Resources, Inc., a Delaware corporation, which is
currently inactive. All significant intercompany balances and transactions have
been eliminated.
2. Summary of Significant Accounting Policies
------------------------------------------
Revenue Recognition
- -------------------
Revenue is recognized when the survey is delivered to customer and
collectibility is reasonably assured. Amounts received in advance of performance
and/or completion of such services are recorded as deferred revenue.
Deferred Costs
- --------------
Deferred costs represent costs incurred in connection with services yet to be
completed.
Accounts Receivable
- -------------------
Accounts receivable are reported at amounts expected to be collected, net of
allowance for non-collection due to the financial position of customers. It is
the Company's policy to regularly review the accounts receivable aging for
specific accounts past due and set up an allowance when collection is uncertain.
Credit Risk
- -----------
Financial instruments which potentially subject the Company to concentrations of
credit risk, consist principally of cash and accounts receivable. The Company
places its cash with high quality financial institutions and limits the amount
of credit exposure to any single financial institution or instrument. As to
accounts receivable, the Company performs credit evaluations of customers before
services are rendered and generally requires no collateral.
Significant Customers
- ---------------------
The Company derived all of its revenue for the period ended April 30, 2005 from
one customer from the state of Nevada and all of its accounts receivable at
April 30, 2005 pertained to one Australian customer.
Property, Equipment and Depreciation
- ------------------------------------
Property and equipment are stated at cost. Depreciation is computed utilizing
the straight-line method over the estimated useful lives of the assets.
F2-7
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
Income Taxes
- ------------
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes. Deferred
tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Deferred income tax provisions
are based on the changes to the respective assets and liabilities from period to
period. A valuation allowance is recorded to reduce deferred tax assets when
uncertainty regarding realization exists.
Stock Options
- -------------
For the period ended April 30, 2005, the Company issued performance-based stock
options to employees in connection with employment agreements (see Note 7). The
Company applies the intrinsic value method in accounting for its employee stock
options as permitted by Statement of Financial Accounting Standards No. 123
("SFAS 123").
Certain pro forma information regarding employee stock options is required by
SFAS 123. Management has determined that due to the uncertainty of meeting the
performance based criteria of the stock options granted, there would not be any
pro forma impact to net income for the period ended April 30, 2005.
Estimates
- ---------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements, if any, and the reported amounts of revenue and
expenses during the reporting periods. Actual results could differ from those
estimates.
3. Subsequent Events
-----------------
Reverse Merger
- --------------
On May 19, 2005, the Company entered into an agreement and plan of
reorganization (the "Agreement") with Compuprint, Inc. ("CPPT"), an inactive
public company. Pursuant to the Agreement, CPPT acquired the Company through an
exchange of 35,029,980 post-split shares of its common stock for all of the
outstanding shares of the Company's common stock. The shares issued by CPPT to
the Company's shareholders constitute approximately 85% of CPPT's common shares
outstanding as of May 19, 2005. A "reverse merger" transaction resulted because
the shareholders of the Company became the controlling shareholders of CPPT. The
reverse merger will be accounted for as a recapitalization. To complete the
reverse merger, it is anticipated that CPPT will change its name to Terra
Insight Corporation.
F2-8
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
Securities Purchase Agreement
- -----------------------------
On May 19, 2005, in connection with the reverse merger transaction, the Company
sold 2,411,138 shares of common stock to two accredited investors for gross
proceeds of $1,750,000. In connection with the sale of securities, the Company
granted the investors certain registration rights, agreeing to file a
registration statement for the resale of restricted shares that were sold. The
proceeds from the sale of securities will be used for working capital purposes.
Convertible Debenture
- ---------------------
On July 5, 2005, CPPT issued a $2 million 6% convertible debenture due December
31, 2007. The holder of the debenture is entitled, at any time, to convert the
principal amount of the debenture or any portion, into shares of CPPT common
stock at $1 per share. If, upon election of conversion, CPPT's issuance would
cause it to violate any listing requirements, then in lieu of such stock
issuance, CPPT will pay the holder cash in an amount equal to the amount elected
for conversion.
The debenture shall be subject to mandatory conversion in the event that the
CPPT's common stock trades in a public market at a price of $2 per share or more
with a mean average weekly volume of 250,000 shares or more in eight consecutive
weeks.
4. Property and Equipment
----------------------
Property and equipment at April 30, 2005 consists of the following:
Estimated
Useful
Lives - Years Amount
------------- ------
Office equipment 5 $ 6,794
Less accumulated
depreciation 264
---------
$ 6,530
=========
Depreciation expense for the period ended April 30, 2005 was $264.
5. Income Taxes
------------
The following summarizes the provision for income taxes
April 30, 2005
-----------
Current $ -
Deferred tax asset (105,000)
-----------
Total (105,000)
Valuation allowance 105,000
-----------
Net tax provision $ -
===========
At April 30, 2005, the Company had a deferred tax asset of approximately
$105,000, comprised of a net operating loss carryforward. This deferred tax
asset has been reduced in full by a valuation allowance due to uncertainty
regarding its ultimate utilization.
F2-9
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
6. Related Party Transactions
--------------------------
Technology License Agreement
- ----------------------------
The Company licenses, under a 30-year Technology License Agreement entered into
January 7, 2005, certain mapping technology from The Institute of
Geoinformational Analysis of the Earth (the "Institute"), a foreign-based
company controlled by the majority shareholder of the Company. Under the
Technology License Agreement, the Company is required to pay an annual license
fee of $600,000, payable on or before December 31 of each year. Until certain
criteria (as defined in the Services Agreement discussed below) are met, the
Company is entitled to a credit towards the licensing fees as described below.
Services Agreement
- ------------------
The Company entered into a Services Agreement with the Institute on January 7,
2005 for consulting and advisory services including analysis, surveying, and
mapping as well as recommendations related to the utilization of the Institute's
mapping technologies. Under the terms of the Services Agreement, the Institute
will charge the Company no more than 40% of its published standard rates for
such services subject to an annual minimum charge (see below). Within ten days
after the end of each month, for all requested services, the Institute must
furnish the Company with a statement, certified by an officer of the Institute,
setting forth the amounts owed for such services.
The minimum annual service fees for 2005 and 2006 are $500,000. Subsequent to
2006, the minimum annual service fee will increase by the lesser of 4% or the
percentage increase in the Consumer price Index using 2005 as the base year.
Until such time as the Company has annual revenues of at least $10 million or
until such time as the market capitalization of the Company exceeds $100
million, 83.334% of the license fees paid by the Company to the Institute
pursuant to the Technology License Agreement will be credited against service
fees pursuant to the Services Agreement.
The Company can terminate the Services Agreement by providing four weeks'
notice. If the Company does not provide such notice, the Company is obligated to
pay a termination fee equal to 8.33% of the prior calendar year's service fee
payments to the Institute. Termination of the Services Agreement does not
relieve the Company of its obligations under the Technology License Agreement.
Operating Lease
- ---------------
The Company leases office space from one of its directors on a month-to-month
basis pursuant to an oral agreement at $1,500 per month.
Other
- -----
For the period ended April 30, 2005, the Company paid legal fees of
approximately $93,000 to an attorney who is a director and shareholder of the
Company.
F2-10
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
7. Commitments
-----------
Employment Agreements
- ---------------------
On January 7, 2005, the Company entered into three, 3-year agreements with
certain of its executives. These agreements call for annual aggregate minimum
compensation of $420,000 with annual increases based on the Consumer Price
Index. If the Company's revenue exceeds $5 million or the Company obtains
financing of at least $5 million, annual aggregate minimum compensation
increases to $690,000. If the Company achieves a market capitalization of at
least $100 million, obtains financing of at least $8 million or achieves revenue
of at least $10 million, annual aggregate minimum compensation increases to
$965,000.
In connection with these employment agreements, the executives received
performance-based stock options. The stock options are exercisable over a 5-year
period and entitle the executives to purchase an aggregate of 7.5% of the
Company's outstanding common shares. The stock options are exercisable at
$0.32/share and vest as follows:
1/2 of the total When EBITDA exceeds $2 million or
revenue exceeds $6 million
1/2 of the total When EBITDA exceeds $4 million or
revenue exceeds $10 million
The employment agreement also contains change of control provisions, as defined,
whereby the executives would be entitled to 290% of their base compensation in
effect at that time. All stock options would also vest subsequent to a change of
control.
8. Shareholders' Equity
--------------------
Preferred Stock
- ---------------
The Board of Directors is expressly authorized to provide for the issue of all
or any shares of the preferred stock, in one or more series, and to fix for each
such series such voting powers, full or limited, and other such designations and
preferences. The number of authorized shares of preferred stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the voting power of all of
the then outstanding shares of the capital stock of the corporation entitled to
vote generally in the election of directors.
9. Recent Accounting Pronouncements
--------------------------------
In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment: An
Amendment of FASB Statement No. 95." This statement also replaces SFAS 123 and
supersedes APB 25. SFAS 123(R) will require the Company to measure the cost of
all employee stock-based compensation awards that are expected to be exercised
and which are granted after the effective date based on the grant date fair
value of those awards and to record that cost as compensation expense over the
period during which the employee is required to perform service in exchange for
the award (generally over the vesting period of the award). Excess tax benefits,
as defined by SFAS 123(R), will be recognized as an addition to paid-in-capital.
However, if the tax benefit ultimately realized is less than the amount
recognized for financial reporting purposes, the difference will be recognized
as
F2-11
TERRA INSIGHT CORPORATION AND SUBSIDIARY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005
- --------------------------------------------------------------------------------
tax expense. SFAS 123(R) addresses all forms of share-based payment awards,
including shares issued under employee stock purchase plan, stock option,
restricted stock and stock appreciation rights. In addition, the Company is
required to record compensation expense (as previous awards continue to vest)
for the unvested portion of previously granted awards that remain outstanding at
the date of adoption. SFAS 123(R) will become effective for annual periods
beginning after June 15, 2005. SFAS 123(R) permits public companies to adopt its
requirements using one of two methods:
1. A "modified prospective" method in which compensation cost is
recognized beginning with the effective date (a) based on the
requirements of SFAS 123(R) for all share-based payments granted after
the effective date and (b) based on the requirements of SFAS 123 for
all awards granted to employees prior to the effective date of SFAS
123(R) that remain unvested on the effective date.
2. A "modified retrospective" method which includes the requirements of
the modified prospective method described above, but also permits
entities to restate their financial statements based on the amounts
previously recognized under SFAS 123 for purposes of pro forma
disclosures for either (a) all prior periods presented or (b) prior
interim periods of the year of adoption.
The Company is currently evaluating the alternative method of adoption as
described above. As permitted by SFAS 123, the Company currently accounts for
share-based payments to employees using APB 25's intrinsic value method and, as
such, generally recognizes no compensation cost for employee stock options.
Accordingly, the adoption of SFAS 123(R)'s fair value method will have a
significant impact on our results of operations. The impact of adoption of SFAS
123(R) cannot be predicted at this time because it will depend on level of
share-based payments granted in the future.
In December 2004 the FASB also issued Statement No. 152 "Accounting for Real
Estate Time-Sharing Transactions," and No. 153, "Exchanges of Nonmonetary
Assets." In May 2005 the FASB issued Statement No. 154, "Accounting Changes and
Error Corrections" which superseded APB Opinion No. 20 and FASB Statement No. 3.
These pronouncements are not expected to have any impact on the Company's future
operations.
F2-12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The North Carolina Business Corporation Act, in section 55-8-51 - Authority to
indemnify, provides that: a corporation may indemnify an individual made a party
to a proceeding because he is or was a director against liability incurred in
the proceeding if he conducted himself in good faith, he reasonably believed in
the case of conduct in his official capacity with the corporation that his
conduct was in its best interests, and in all other cases, that his conduct was
at least not opposed to its best interests, and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
However, a corporation may not indemnify a director in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation, or in connection with any other proceeding
charging improper personal benefit to him, whether or not involving action in
his official capacity, in which he was adjudged liable on the basis that
personal benefit was improperly received by him.
The North Carolina Business Corporation Act, in section 55-8-52 - Mandatory
indemnification, provides that: unless limited by its articles of incorporation,
a corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he was a party
because he is or was a director of the corporation against reasonable expenses
incurred by him in connection with the proceeding.
The North Carolina Business Corporation Act, in section 55-8-54 - Court-ordered
indemnification, provides that: unless a corporation's articles of incorporation
provide otherwise, a director of the corporation who is a party to a proceeding
may apply for indemnification to the court conducting the proceeding or to
another court of competent jurisdiction.
The North Carolina Business Corporation Act, in section 55-8-56 -
Indemnification of officers, employees, and agents, provides that: unless a
corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under section 55-8-52, and is entitled to
apply for court-ordered indemnification under section 55-8-54,
in each case to the same extent as a director;
(2) The corporation may indemnify and advance expenses under this
Part to an officer, employee, or agent of the corporation to
the same extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the
extent, consistent with public policy, that may be provided by
its articles of incorporation, bylaws, general or specific
action of its board of directors, or contract.
Neither the Company's Articles of Incorporation, as amended, nor Bylaws contains
provisions concerning indemnification of officers and directors.
II-1
ITEM 25. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by us in
connection with the offer and sale of the common stock being registered.
SEC registration fee $ 973.49
Legal fees and expenses $ 30,000.00
Blue Sky fees and expenses $ 1,000.00
Accounting fees and expenses $ 10,000.00
Transfer agent fees $ 500.00
Printing expenses $ 500.00
-----------
Total $42,973.49
The foregoing items, except for the Securities and Exchange Commission
registration fee, are estimated. We will pay all of the expenses listed above.
The selling stockholders will not pay any of those expenses. The selling
stockholders are responsible for any stock transfer taxes, transfer fees, and
brokerage commissions or underwriting discounts and commissions.
II-2
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Each of the issuance and sale of securities described below was deemed to be
exempt from registration under the Securities Act in reliance on Section 4(2) of
the Securities Act as transactions by an issuer not involving a public offering.
No advertising or general solicitation was employed in offering the securities.
All recipients either received adequate information about us or had access,
through employment or other relationships, to such information.
On May 9, 2005, the Company filed an Articles of Amendment to the Company's
Articles of Incorporation to increase the Company's authorized shares of common
stock from 10,000,000 shares to 100,000,000 shares, and in connection with the
increase in shares of common stock, to effect a forward split at a ratio of
4.36212 to 1. For stock issuances prior to May 19, 2005, the number of shares
issued have not been adjusted to reflect the stock split and are referred to as
pre-split shares. For issuances on May 19, 2005 and thereafter, the number of
shares issued are reflect the forward stock split and are referred to as
post-split shares.
In January 2002, the Company issued 1,500 pre-split shares of its common stock,
at $1.00 per share, to an independent contractor for partial compensation for
web site development.
In January 2002, the Company issued 25,000 pre-split shares of its common stock
to KGL Investments, Ltd., the beneficial owner of which is Kaplan Gottbetter &
Levenson, LLP, the former counsel to the Company. The shares were issued in
exchange for $25,000 worth of legal services rendered.
On December 29, 2003, the Company issued 3,000,000 pre-split shares of its
common stock to its president, David Allison in consideration for his duties
relating to his appointment as the Company's sole officer.
On May 19, 2005, the Company entered into an Agreement and Plan of
Reorganization with Terra Insight Corporation, a Delaware corporation, and the
three shareholders of Terra Insight Corporation. Pursuant to the reorganization
agreement, the Company acquired the business of Terra Insight Corporation,
together with its inactive subsidiary, Terra Resources, Inc., a Delaware
corporation. Pursuant to the reorganization agreement, the Company exchanged
35,029,980 post-split shares of its common stock in exchange for all of the
shares of common stock of Terra Insight Corporation in a transaction viewed as a
reverse acquisition. The three shareholders of Terra Insight Corporation
received the following number of post-split shares:
Ivan Railyan 29,775,483
Roman Rozenberg 3,502,998
Dan Brecher 1,751,499
On May 19, 2005, as a consequence of the Agreement and Plan of Reorganization
with Terra Insight Corporation, the Company assumed the obligations of three
executive employment agreements of Terra Insight Corporation. Ivan Railyan,
Roman Rozenberg, and Dan Brecher have stock options to purchase shares of the
Company's common stock, exercisable for five years from January 7, 2005 at $0.32
per share. Mr. Railyan is entitled to acquire up to 1,033,334 post-split shares
of the Company's common stock, and each of Mr. Rozenberg and Mr. Brecher are
entitled to acquire up to 1,033,333 post-split shares of the Company's common
stock. The stock options are subject to future vesting. One-half of the stock
options shall vest following the first fiscal year end in which the Company's
earnings before interest, taxes, depreciation, and amortization (EBITDA) exceeds
$2,000,000 or its gross revenues exceed $6,000,000. The remaining stock options
shall vest following the first fiscal year end in which the Company's EBITDA
exceeds $4,000,000 or its gross revenues exceed $10,000,000.
On May 19, 2005, the Company sold 2,411,138 post-split shares of common stock to
two accredited investors for gross proceeds of $1,750,000. In connection with
the sale of securities, the Company granted the investors certain registration
rights, agreeing to use its best efforts to file a registration statement for
the resale of restricted shares that they purchased within ninety days, and
seeking effectiveness within 180 days. If the Company fails to perform its
obligations in connection with the filing of the registration statement, for
each thirty day period that the registration statement is not timely filed, the
Company is to pay the investors as liquidated damages a number of shares equal
to two percent of the total outstanding capital. The proceeds of the sale of
securities were used for working capital.
II-3
On May 20, 2005, the Company entered into an agreement with Kenneth Oh, pursuant
to which the Company issued stock options to purchase 250,000 post-split shares
of the Company's common stock. The stock options are exercisable for five years
at $0.80 per share. The stock options are to vest, subject to conditions of
services to the Company, as follows: options to purchase 187,500 shares vest on
May 20, 2006; additional options to purchase 31,250 shares vest on May 20, 2007;
and the remaining options to purchase 31,250 shares vest on May 20, 2008.
On June 13, 2005, in connection with the employment agreement, the Company
granted Mr. Vilbaum stock options to purchase 413,333 post-split shares of the
Company's common stock. The stock options are exercisable for five years at
$0.80 per share. The stock options are to vest, subject to conditions of
services to the Company, as follows: options to purchase 310,000 shares vest on
June 13, 2006; additional options to purchase 51,667 shares vest on June 13,
2007; and the remaining options to purchase 51,666 shares vest on June 13, 2008.
On June 29, 2005, the Company entered into an agreement with Dmitry Vilbaum,
pursuant to which the Company issued stock options to purchase 500,000
post-split shares of the Company's common stock. The stock options are
exercisable for five years at $1.00 per share. The stock options are to vest,
subject to conditions of services to the Company, as follows: options to
purchase 375,000 shares vest on June 29, 2006; additional options to purchase
62,500 shares vest on June 29, 2007; and the remaining options to purchase
62,500 shares vest on June 29, 2008.
On June 29, 2005, the Company entered into a consulting agreement with Stuart
Sundlun, pursuant to which the Company issued stock options to purchase 500,000
post-split shares of the Company's common stock. The stock options are
exercisable for five years at $0.80 per share.
On June 30, 2005, the Company entered into a Securities Purchase Agreement with
Enficon Establishment, a Liechtenstein company, for the sale of up to a
principal amount of $5 million in 6% convertible debentures due December 31,
2007. On July 5, 2005, Enficon purchased a $2 million debenture. The Company
allocated $1 million to its working capital and the other $1 million in
furtherance of an exploration agreement that the Company entered into with
Enficon. The debentures are convertible into shares of the Company's common
stock at $1.00 per share. Interest accrues on the principal amount of the
debenture at the simple rate of 6% per year from the date of issuance. Interest
is payable at maturity. In the event of conversion of the debenture, in whole or
in part, the holder forfeits any accrued interest on the converted principal
amount. The debenture is subject to a mandatory conversion in the event that the
Company's non-insider common stock trades in the public securities market at a
price of $2.00 per share or more with a mean average weekly volume of 250,000
shares or more in eight (8) consecutive weeks. In connection with this sale of
securities, the Company granted Enficon certain registration rights, agreeing to
include, in a registration statement that the Company files, the resale of
restricted shares underlying the debentures that the investor purchased. Under
the terms of the agreement, the Company sent to Enficon a notice prior to August
1, 2005 requiring Enficon to purchase a further $1 million debenture for which
Enficon has not yet paid. The agreement provides that upon Enficon's failure to
do so, Enficon would lose rights to purchase any additional debenture from us
under the agreement, and if Enficon fulfills its obligation to purchase the $1
million debenture, the Company can send notice to Enficon requesting the
purchase of a further $2 million debenture at a future date. The agreement
provides that the Company is to allocate the proceeds of that additional $2
million debenture to further an exploration agreement that the Company entered
into with Enficon.
II-4
ITEM 27. EXHIBITS.
The following exhibits are included as part of this Form SB-2.
Exhibit
Number Description of Exhibit
- ------ ----------------------
2.1 Split-Off Agreement (Incorporated by reference to Exhibit 2.1 of
Form 8-K filed on May 25, 2005)
2.2 Agreement and Plan of Reorganization (Incorporated by reference to
Exhibit 2.2 of Form 8-K filed on May 25, 2005)
3(i)(1) Articles of Incorporation (Incorporated by reference to Exhibit
3.1 to Registration Statement on Form SB-2, No. 333-90272, filed
on June 11, 2002)
3(i)(2) Articles of Amendment of Articles of Incorporation (Incorporated
by reference to Exhibit 3.2 to Registration Statement on Form
SB-2, No. 333-90272, filed on June 11, 2002)
3(i)(3) Certificate of Amendment of CompuPrint, Inc. (Incorporated by
reference to Exhibit 3(i)(1) of Form 8-K filed on May 25, 2005)
3(i)(4) Certificate of Incorporation of Terra Insight Corporation
(Incorporated by reference to Exhibit 3(i)(2) of Form 8-K filed on
May 25, 2005)
3(i)(5) Certificate of Incorporation of Terra Resources, Inc.
(Incorporated by reference to Exhibit 3(i)(3) of Form 8-K filed on
May 25, 2005)
3.3 By-Laws (Incorporated by reference to Exhibit 3.3 to Registration
Statement on Form SB-2, No. 333-90272, filed on June 11, 2002)
4.1 Specimen Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to Registration Statement on Form SB-2, No. 333-90272,
filed on June 11, 2002)
5* Opinion and Consent of Counsel
10.1 Securities Purchase Agreement and Supplement (Incorporated by
reference to Exhibit 10.1 of Form 8-K filed on May 25, 2005)
10.2 Registration Rights Agreement (Incorporated by reference to
Exhibit 10.2 of Form 8-K filed on May 25, 2005)
10.3 Securities Purchase Agreement and Supplement (Incorporated by
reference to Exhibit 10.3 of Form 8-K filed on May 25, 2005)
10.4 Registration Rights Agreement (Incorporated by reference to
Exhibit 10.4 of Form 8-K filed on May 25, 2005)
10.5 Escrow Agreement (Incorporated by reference to Exhibit 10.5 of
Form 8-K filed on May 25, 2005)
10.6 Employment Agreement with Ivan Railyan (Incorporated by reference
to Exhibit 10.6 of Form 8-K filed on May 25, 2005)
10.7 Employment Agreement with Roman Rozenberg (Incorporated by
reference to Exhibit 10.7 of Form 8-K filed on May 25, 2005)
10.8 Employment Agreement with Dan Brecher (Incorporated by reference
to Exhibit 10.8 of Form 8-K filed on May 25, 2005)
10.9* License Agreement with the Institute, dated January 7, 2005
10.10* Services Agreement with the Institute, dated January 7, 2005
10.11* Amended and Restated License Agreement with the Institute
10.12* Amended and Restated Services Agreement with the Institute
10.13* Addendum to Employment Agreements, dated May 19, 2005
10.14 Option Agreement, dated May 20, 2005 (Incorporated by reference to
Exhibit 10.1 of Form 8-K filed on July 6, 2005)
10.15 Employment Agreement with Dmitry Vilbaum (Incorporated by
reference to Exhibit 10.2 of Form 8-K filed on July 6, 2005)
10.16* Addendum to Employment Agreement with Dmitry Vilbaum
II-5
10.17 Option Agreement, dated June 29, 2005 (Incorporated by reference
to Exhibit 10.3 of Form 8-K filed on July 6, 2005)
10.18 Securities Purchase Agreement, dated June 30, 2005 (Incorporated
by reference to Exhibit 10.4 of Form 8-K filed on July 6, 2005)
10.19* Debenture issued pursuant to June 30, 2005 Securities Purchase
Agreement
10.20 Tierra Nevada Exploration Corporation Agreement, dated June 30,
2005 (Incorporated by reference to Exhibit 10.6 of Form 8-K filed
on July 6, 2005)
10.21* Consulting Agreement, Stuart Sundlun, June 30, 2005
21* List of Subsidiaries
23.1* Consent of Sherb & Co., LLP
23.2* Consent of Rosen Seymour Shapss Martin & Company LLP
23.3* Consent of legal counsel (incorporated by reference to Exhibit 5.1
filed herewith)
- -----
* Filed herewith.
II-6
ITEM 28. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement;
(iii) Include any additional or changed material information
on the plan of distribution.
Provided, however, that the registrant does not need to make
post-effective amendments with respect to the information set forth in
paragraphs (a) and (b) above if the information is incorporated by reference
from periodic reports filed by the registrant under the Exchange Act.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") 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
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
(c) In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
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 small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-7
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of New
York, State of New York on August 24, 2005.
COMPUPRINT, INC.
By: /s/ Roman Rozenberg
-------------------------
Roman Rozenberg,
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
SIGNATURE TITLE DATE
/s/ Ivan Railyan Chairman of the Board and President August 24, 2005
- ---------------------------
Ivan Railyan
/s/ Roman Rozenberg Director and Chief Executive Officer August 24, 2005
- ---------------------------
Roman Rozenberg
/s/ Dan Brecher Director, Managing Director August 24, 2005
- ---------------------------
Dan Brecher and Treasurer (Principal Financial Officer)
/s/ Dmitry Vilbaum Chief Operating Officer August 24, 2005
- ---------------------------
Dmitry Vilbaum
II-8
COMPUPRINT, INC.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
2.1 Split-Off Agreement (Incorporated by reference to Exhibit 2.1 of
Form 8-K filed on May 25, 2005)
2.2 Agreement and Plan of Reorganization (Incorporated by reference to
Exhibit 2.2 of Form 8-K filed on May 25, 2005)
3(i)(1) Articles of Incorporation (Incorporated by reference to Exhibit
3.1 to Registration Statement on Form SB-2, No. 333-90272, filed
on June 11, 2002)
3(i)(2) Articles of Amendment of Articles of Incorporation (Incorporated
by reference to Exhibit 3.2 to Registration Statement on Form
SB-2, No. 333-90272, filed on June 11, 2002)
3(i)(3) Certificate of Amendment of CompuPrint, Inc. (Incorporated by
reference to Exhibit 3(i)(1) of Form 8-K filed on May 25, 2005)
3(i)(4) Certificate of Incorporation of Terra Insight Corporation
(Incorporated by reference to Exhibit 3(i)(2) of Form 8-K filed on
May 25, 2005)
3(i)(5) Certificate of Incorporation of Terra Resources, Inc.
(Incorporated by reference to Exhibit 3(i)(3) of Form 8-K filed on
May 25, 2005)
3.3 By-Laws (Incorporated by reference to Exhibit 3.3 to Registration
Statement on Form SB-2, No. 333-90272, filed on June 11, 2002)
4.1 Specimen Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to Registration Statement on Form SB-2, No. 333-90272,
filed on June 11, 2002)
5* Opinion and Consent of Counsel
10.1 Securities Purchase Agreement and Supplement (Incorporated by
reference to Exhibit 10.1 of Form 8-K filed on May 25, 2005)
10.2 Registration Rights Agreement (Incorporated by reference to
Exhibit 10.2 of Form 8-K filed on May 25, 2005)
10.3 Securities Purchase Agreement and Supplement (Incorporated by
reference to Exhibit 10.3 of Form 8-K filed on May 25, 2005)
10.4 Registration Rights Agreement (Incorporated by reference to
Exhibit 10.4 of Form 8-K filed on May 25, 2005)
10.5 Escrow Agreement (Incorporated by reference to Exhibit 10.5 of
Form 8-K filed on May 25, 2005)
10.6 Employment Agreement with Ivan Railyan (Incorporated by reference
to Exhibit 10.6 of Form 8-K filed on May 25, 2005)
10.7 Employment Agreement with Roman Rozenberg (Incorporated by
reference to Exhibit 10.7 of Form 8-K filed on May 25, 2005)
10.8 Employment Agreement with Dan Brecher (Incorporated by reference
to Exhibit 10.8 of Form 8-K filed on May 25, 2005)
10.9* License Agreement with the Institute, dated January 7, 2005
10.10* Services Agreement with the Institute, dated January 7, 2005
10.11* Amended and Restated License Agreement with the Institute
10.12* Amended and Restated Services Agreement with the Institute
10.13* Addendum to Employment Agreements, dated May 19, 2005
10.14 Option Agreement, dated May 20, 2005 (Incorporated by reference to
Exhibit 10.1 of Form 8-K filed on July 6, 2005)
10.15 Employment Agreement with Dmitry Vilbaum (Incorporated by
reference to Exhibit 10.2 of Form 8-K filed on July 6, 2005)
10.16* Addendum to Employment Agreement with Dmitry Vilbaum
II-9
10.17 Option Agreement, dated June 29, 2005 (Incorporated by reference
to Exhibit 10.3 of Form 8-K filed on July 6, 2005)
10.18 Securities Purchase Agreement, dated June 30, 2005 (Incorporated
by reference to Exhibit 10.4 of Form 8-K filed on July 6, 2005)
10.19* Debenture issued pursuant to June 30, 2005 Securities Purchase
Agreement
10.20 Tierra Nevada Exploration Corporation Agreement, dated June 30,
2005 (Incorporated by reference to Exhibit 10.6 of Form 8-K filed
on July 6, 2005)
10.21* Consulting Agreement, Stuart Sundlun, June 30, 2005
21* List of Subsidiaries
23.1* Consent of Sherb & Co., LLP
23.2* Consent of Rosen Seymour Shapss Martin & Company LLP
23.3* Consent of legal counsel (incorporated by reference to Exhibit 5.1
filed herewith)
- -----
* Filed herewith.
II-10