U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Pre-effective Amendment No. 1 to
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SIMPLICIA TELECOMMUNICATIONS, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 4812 98-0362224
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code) Identification Number)
Simplicia Telecommunications Inc.
280 Fairways Bay NW
Airdrie, Alberta
T4B 2P5
(403) 615-5609
(Address, Including Zip Code, and Telephone Number, including
Area Code, of Registrant's Executive Offices)
Joseph Sierchio, Esq.
Eiseman Levine Lehrhaupt & Kakoyiannis, P.C.
845 Third Avenue
New York, New York 10022
(Name, Address, Including Zip Code, and Telephone Number, including
Area Code, of Agent for Service)
Copies of all correspondence to:
Joseph Sierchio, Esq.
Eiseman Levine Lehrhaupt & Kakoyiannis, P.C.
845 Third Avenue
New York, New York 10022
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
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If this Form is filed to register additional securities for an offering pursuant
to Rule 426(b) under the Securities Act of 1933, 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 of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier Registration Statement for the same
offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier 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
- -------------------------------------------------------------------------------------------------------------------------------
Amount of
Title Of Each Class Of Securities Number of Shares To Proposed Maximum Proposed Maximum Registration
To Be Registered Be Registered Offering Price Per Share Aggregate Offering Price Fee
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Common Stock, $.0001 par value 300,000 $0.25(1) $ 75,000 $23.00
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(1) Calculated in accordance with Rule 457(o) under the Securities Act of
1933.
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 Securities And Exchange Commission, Acting
Pursuant To Section 8(A), May Determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities, in any state where the offer or sale is not permitted.
PROSPECTUS
SIMPLICIA TELECOMMUNICATIONS, INC.
300,000 SHARES
COMMON STOCK
This is our initial public offering. We are offering to sell up to 300,000
shares of our common stock at a price of $0.25 per share directly on a no
minimum basis. This means that we do not have to sell a minimum number of shares
before we will have access to the proceeds. At this time we intend to offer the
shares ourselves through our officers and directors.
The minimum number of shares that an investor may purchase is 100. There
is no trading market for our common stock.
See "Risk Factors" beginning on page 8 for a discussion of
risks to consider before purchasing our common stock.
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.
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Price to the Public(1) Maximum Commissions(1) Proceeds to the Company(2)
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Per Share $0.25 -0- $0.25
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Total 300,000 Shares $75,000 -0- $75,000
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(1) We are offering the shares directly on a no minimum basis.
(2) Current working capital is expected to cover all but $18,000 of the
offering expenses currently estimated to be an aggregate of $50,000. We
have already paid approximately $25,000 towards legal and accounting
expenses related to this offering.
The date of this prospectus is ______________, 2002.
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TABLE OF CONTENTS
Prospectus Summary.............................................................5
Risk Factors...................................................................7
Cautionary Note Regarding Forward-Looking Statements .........................13
Use of Proceeds...............................................................14
Arbitrary Determination of Offering Price.....................................16
Dilution......................................................................16
Plan of Distribution .........................................................17
Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................................18
Business .....................................................................20
Management....................................................................26
Executive Compensation........................................................27
Principal Shareholders........................................................28
Description of Capital Stock..................................................28
Market for Our Common Stock...................................................29
Certain Relationships and Related Transactions................................30
Limitation of Liability and indemnification matters ..........................30
Legal Proceedings.............................................................31
Legal Matters.................................................................31
Experts.......................................................................31
Interest of Named Experts and Counsel.........................................31
Where You Can Find Additional Information.....................................31
Financial Statements..........................................................33
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PROSPECTUS SUMMARY
This summary highlights selected material information from the prospectus,
but may not contain all of the information that may be important to you. We
encourage you to read the entire prospectus, including "Risk Factors" and our
financial statements and the related notes, before making an investment decision
regarding the purchase of our common stock.
Simplicia
Simplicia was organized in July, 2001 under the laws of Delaware for the
purpose of entering into the business of recycling telecommunications devices
consisting of cellular communications equipment, portable computers and personal
digital assistants.
We are a development stage company with no operations and no revenues. In
our financial statements, our auditor has stated that because we do not have an
established source of revenues, there is substantial doubt about our ability to
continue as a going concern.
In August 2001, we were granted, by Humanity Direct Wireless Networks,
Inc., a Canadian corporation, exclusive rights to the collection, refurbishment
and resale of cellular phones and other wireless telecommunication devices in
the United States, its territories and possessions, as well as the right to use
of the Humanity's Proprietary Business Plan in connection with the refurbishment
and resale of such telecommunication devices.
Subsequently, we signed a Letter of Intent in connection with the possible
acquisition by us of Humanity. The acquisition was contingent upon several
conditions being satisfied. Although the Letter of Intent terminated
automatically on June 30, 2002, on June 12, we received a termination notice
from Humanity. The reason cited by Humanity for the termination was its
inability "...to executed its business plan due to internal reasons."
We have taken the position that the failure of Humanity to execute its
business plan constitutes a default under the terms of the August 2001
assignment to us; accordingly, we have, under the terms of the assignment,
written to the Phones for Sight Foundation, informing it that we intend to
continue under the terms of the assignment to deal directly with the Foundation
as contemplated by the August 2001 Assignment. See "Business."
Our Offices and Telephone Number
Our offices are located at 280 Fairways Bay NW, Airdrie, Alberta, Canada
T4B 2P6. Our telephone number at our corporate offices is (403) 615-5609.
The Offering
We are offering to sell up to 300,000 shares of our common stock at a
price of $0.25 per share on a direct basis. We are offering the shares directly
through our officers and directors on a no minimum basis. This means that the
proceeds from the offering will not be kept in an escrow account pending
completion of this offering. We will use the proceeds, as discussed in
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the prospectus, as we receive them. There is no maximum investment amount per
investor. The minimum number of shares an investor may purchase is 1000 shares.
There is no commitment by anyone to purchase any shares.
Common Stock Outstanding Prior to and after the Offering
We currently have 1,600,000 shares issued and outstanding. Assuming all of
the shares offered in this offering are sold, we will have 1,900,000 shares
issued and outstanding.
Use of proceeds
The proceeds from the sale of the shares will be utilized to offset the
costs of becoming a reporting issuer and for general working capital purposes.
Term of Offering
The Offering will terminate on or before 120 days from the date of this
prospectus unless all of the shares offered are sold prior to such date.
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RISK FACTORS
An investment in our shares is highly speculative, involves a high degree
of risk and should be made only by investors who can afford the loss of their
entire investment. Prospective investors, prior to making an investment decision
should carefully consider the following risk factors, together with the other
matters referred to in this Prospectus, including the financial statements and
the notes to the financial statements.
We may not be able to generate enough capital to continue operations
We need approximately $12,000 to sustain operations through December 31,
2002. We cannot rely on receiving the maximum proceeds from this offering. In
the event that our cash reserves are depleted, we may need to seek additional
capital. If we do, there can be no assurance that we will be successful in
raising a sufficient amount of additional capital or in internally generating a
sufficient amount of capital to meet our long term requirements. From the date
of inception through February, 28, 2002 we have not earned any income and have
incurred losses totaling $21,847. If we are unable to generate the required
amount of additional capital, we will not be able to meet our obligations and to
continue our operations may be adversely affected.
There may not be a market for our products since the market for communications
equipment products and services is rapidly changing.
Our future will depend on the growth of the wireless equipment market. The
growth in the market for wireless equipment products and services is dependent
on a number of factors. These factors include:
o the amount of capital expenditures by network providers;
o regulatory and legal developments;
o the addition of new customers to the market; and
o end-user demand for wireless telecommunication devices.
We cannot predict whether the market for refurbished wireless
telecommunication devices will develop rapidly. Also, we cannot predict
technological trends or new products in this market. In addition, we cannot
predict whether our products and services will meet with market acceptance or be
profitable. We may not be able to compete successfully, and competitive
pressures may result in reduced revenues and increased operating costs.
We may not be able to compete successfully against current and future
competitors who are better financed than we are or are using a more evolved
technology.
There are no patents available for the business being undertaken and thus
there are no barriers to competition. Companies with greater financial,
technical, and marketing resources could severely impact our business model if
they enter our industry.
Competing technologies or any new technologies may provide significant
competition for us. We cannot assure you that one or more of the technologies
that we sell will not become inferior or obsolete at some time in the future.
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We may be unable to anticipate and adapt to the rapid changes experienced in the
wireless telecommunications industry.
The wireless equipment industry is characterized by rapid technological
change. In our industry, we also face evolving industry standards, changing
market conditions and frequent new product and service introductions and
enhancements.
Technological changes that are affecting the telecommunications industry
may adversely affect our business model. Examples are as follows
o the increasing pace of digital upgrades in existing analog wireless
systems,
o evolving industry standards,
o ongoing improvements in the capacity and quality of digital
technology,
o shorter development cycles for new products and enhancements, and
o changes in end-user requirements and preferences.
The introduction of products using new technologies or the adoption of new
industry standards can make existing products or products being refurbished
obsolete or unmarketable. In order to grow and remain competitive, we will need
to adapt to these rapidly changing technologies, to enhance our existing
solutions, and to introduce new solutions to address our customers' changing
demands.
If we fail to anticipate or respond on a cost-effective and timely basis
to technological developments, changes in industry standards or customer
requirements, or if we have any significant delays in product development or
introduction, our business, operating results and financial condition could be
affected in a material adverse way. Our business plan may not be transferable to
new technological developments.
We cannot predict the effect of technological changes on our business, and
it is possible that technological developments will cause our refurbished
wireless telecommunication devices to become obsolete.
We may be unsuccessful in selling our wireless telecommunication devices since
the possible health effects of radio frequency emission may reduce the demand
for cellular telephone services.
Media reports have suggested that certain radio frequency emissions from
portable cellular telephones may be linked to cancer and interfere with heart
pacemakers and other medical devices. Concerns over radio frequency emissions
and interference may have the effect of discouraging the use of cellular
telephones. The resultant decrease in demand would be
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reflected in a reduction in our revenues. It is possible that government
authorities will increase regulation of cellular telephones resulting from these
concerns or that cellular telephone companies may be liable for costs or damages
associated with these concerns. Such regulations may result in higher operating
costs in order for us to comply. Such increase in costs will reduce our
operating profit, if any.
Our ability to successfully implement our business plan is dependent on our two
officers with whom we have no employment agreements.
Our performance is substantially dependent on the performance of our
senior management and sales personnel. In particular, our success depends on the
continued efforts of our president, Robert Auld and our vice president , Riaz
Sumar. The loss of the services of either of Messrs. Auld or Sumar could have a
negative impact on our ability to successfully implement our business plan. We
do not have employment agreements in place with our senior management or key
employees.
We may not be able to identify or complete suitable acquisitions and investments
which may prevent us from carrying out our strategy for growth.
According to our business model, we may acquire or make investments in
complementary businesses, products, services or technologies in order to expand
our business. It is possible that we will be unable to identify suitable
acquisitions or investment candidates. Even if we identify suitable candidates,
we cannot assure you that we will be able to make acquisitions or investments on
commercially acceptable terms, if at all. If we acquire a company, we may have
difficulty assimilating its businesses, products, services, technologies and
personnel into our operations. These difficulties could disrupt our ongoing
business, distract our management and workforce, increase our expenses and
negatively impact our operating results. In addition, we may incur debt or be
required to issue equity securities to pay for future acquisitions or
investments. The issuance of any equity securities could be dilutive to our
shareowners.
We may be unable to successfully implement our business plan since our
management is inexperienced in managing a public company or a large operating
company.
Our current management has had limited experience in managing a public
company or a large operating company. There can be no assurance that we will be
able to effectively manage the expansion of our operations, that our systems,
procedures or controls will be adequate to support our operations or that our
management will be able to achieve the rapid execution necessary to fully
exploit the market opportunities for our products and services. Any inability to
manage growth effectively could result in reduced revenues and increased
expenses.
Since there is no public market for our shares and since one may never develop,
our shares are not liquid.
There is no current trading market for our shares and there can be no
assurance that a trading market will develop, or, if such trading market does
develop, that it will be sustained. To the extent that a market develops for our
shares at all, they will likely appear in what is
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customarily known at the "pink sheets" or on the NASD Bulletin Board, which may
limit their marketability and liquidity.
To date, neither we nor anyone acting on our behalf has taken any
affirmative steps to request or encourage any broker/dealer to act as a market
maker for our shares. Further, we have not had any discussions with any market
maker regarding the participation of any market maker in the future trading
market, if any, for our shares.
Our stockholders may experience difficulty in selling their securities as a
result of the "penny stock rules."
Holders of our common stock may be affected by the "penny stock rules."
Under Rule 15g-9, a broker or dealer may not sell a "penny stock" (as defined in
Rule 3a51-1) to or effect the purchase of a penny stock by any person unless:
(1) the sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction, the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with Rule
15g-9 and (b) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock to
be purchased.
Our shares of common stock will be subject to the regulations on penny
stocks; consequently, the market liquidity and market price for our common stock
may be adversely affected by those regulations limiting the ability of
broker/dealers to sell our common stock and the ability of purchasers in this
offering to sell their securities in the secondary market.
Our chance of becoming a successful operating company are reduced because a
substantial amount of the proceeds we raise in this offering will not be
utilized for the growth of our business.
Of the proposed maximum offering, we expect to use $15,000 to pay the
remainder of our costs of the offering, estimated at $50,000. Therefore, only
approximately $60,000 of the maximum offering proceeds will be available for the
implementation of our business plan and for use in the growth of our business in
general.
Future sales of shares may adversely impact the value of our stock.
The total amount of shares covered by this prospectus would represent
approximately 16% of the number of our outstanding shares on the date of this
prospectus. If required, we will seek to raise additional capital through the
sale of our common stock. Future sales of shares by us could cause the market
price of our common stock to decline.
The offering price of our shares was arbitrarily determined by us.
Prior to this offering, there has been no public trading market for our
shares. The initial public offering price of our shares has been arbitrary
determined by us and does not bear any
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relationship to established valuation criteria such as assets, book value or
prospective earnings. Among the factors considered by us were the proceeds to be
raised by the offering, the lack of trading market, the amount of capital to be
contributed by the public in proportion to the amount of stock to be retained by
present stockholders and our relative requirements. Accordingly, you should not
use the offering price as a measure of the value of the shares or of our
company.
Since we are in the early stage of development and have no operating history, it
may be difficult for you to assess our business and future prospects.
We were only recently incorporated. Since incorporation our activities
have been limited to corporate administrative matters, initial financing and
negotiation of the terms of the Humanity Agreement. We have limited resources
and have had no revenues to date. See "Business." Therefore there is nothing at
this time upon which to base an assumption that our plans will prove successful,
and there is no assurance that we will operate profitably.
We may lose our rights under the Humanity Agreement if we are in default of any
of the terms of the Humanity Agreement and we fail to cure that default within
30 days of being notified that we are in default or if we fail to make royalty
or rights payments required under the terms of the Humanity Agreement.
Our initial operations will be based entirely on the exercise by us of the
exclusive rights granted to us under the Humanity Agreement. If we lose our
rights under that Agreement, we would have no sources of revenues nor would we
be able to implement our business plan.
We may be unsuccessful in implementing our business plan since we have limited
marketing resources and have had no experience in marketing telecommunications
devices.
We have no sales and marketing capabilities with respect to
telecommunications devices. Accordingly, we intend to use a portion of the
proceeds of this offering to develop our own sales and marketing force. The
development of an internal sales and marketing capability will entail
significant expenditures, management resources and marketing capability. If we
are unable to establish our own marketing capability, we will need to enter into
a joint venture, distribution or other arrangement with a third party with
established marketing resources. There can be no assurance that we would be able
to enter into third-party sales and marketing arrangements on favorable terms or
at all. In any event, arrangements with third parties would typically entail
sharing a significant percentage of sales which would reduce the profit margin
on sales of the telecommunications devices.
We have had no operations or revenues to date and our independent auditor has
stated that as a result there is substantial doubt about our ability to continue
in business.
Our independent auditor has stated that there is substantial doubt about
our ability to continue in business. After the net proceeds of the offering have
been exhausted, we may require additional financing in order to carry out our
business plan. Such financing may take
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the form of the issuance of common or preferred stock or debt securities, or may
involve bank financing. There can be no assurance that we will be able to obtain
such additional capital on a timely basis, on favorable terms, or at all. If we
are unable to generate the required amount of additional capital, we may not be
able to meet our obligations and to implement our business plan.
We need to attract, retain and motivate skilled personnel and retain our key
personnel in order for our business to succeed.
Currently, we do not have any employees. We believe that our future
success will depend in large part upon our ability to attract and retain highly
skilled scientific, managerial and marketing personnel. We face competition for
such personnel from other companies, research and academic institutions,
government entities and other organizations. There can be no assurance that we
will be successful in hiring or retaining the personnel we require.
Even if our stock is approved for quotation by a broker/dealer through the NASD
over the counter bulleting board or the National Quotations Bureau pink sheets,
our share prices still may be highly volatile.
The market prices of equity securities of telecommunications companies
have experienced extreme price volatility in recent years for reasons not
necessarily related to the individual performance of specific companies.
Accordingly, the market price of our shares following this offering may be
highly volatile. Factors such as announcements by us, or our competitors
concerning products, patents, technology, governmental regulatory actions, other
events affecting wireless devices and telecommunications companies generally and
general market conditions may have a significant impact on the market price of
our shares and could cause it to fluctuate substantially. In addition stocks
traded on the NASD over the counter bulletin board or the National Quotation
Bureau are usually thinly traded, highly volatile and generally not followed by
analysts.
We have a large number of restricted shares outstanding, the potential sale of
which under Rule 144 may impact the price of our stock should a public trading
market ever develop.
Of the 150,000,000 shares of our common stock authorized, there are
presently issued and outstanding 1,600,000. All are "restricted securities" as
that term is defined under the Securities Act of 1933, and in the future may be
sold in compliance with Rule 144 of the Securities Act of 1933, or pursuant to a
Registration Statement filed under the Securities Act of 1933. Rule 144
provides, in essence, that a person holding restricted securities for a period
of 1 year may sell those securities in unsolicited brokerage transactions or in
transactions with a market maker, in an amount equal to 1% of our outstanding
shares every 3 months. Additionally, Rule 144 requires that an issuer of
securities make available adequate current public information with respect to
the issuer. That public information is deemed available if the issuer satisfies
the reporting requirements of Sections 13 or 15(d) of the Exchange Act and of
Rule 15c 2-11 of the Exchange Act. Rule 144 also permits, under certain
circumstances,
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the sale of shares by a person who is not an affiliate of a company and who has
satisfied a 2 year holding period without any quantity limitation and whether or
not there is adequate current public information available. Investors should be
aware that sales under Rule 144, or pursuant to a Registration Statement filed
under the Securities Act, may have a depressive effect on the market price of
our securities in any market that may develop for our shares. Presently
1,600,000 of the outstanding shares will be available for sale under Rule 144
when applicable. The currently issued and outstanding shares will not be
available for resale under Rule 144 until at least August 31, 2002.
Possible issuance of additional shares sales may impact the price of our
stock should a public trading market ever develop.
Our Certificate of Incorporation, authorizes the issuance of 150,000,000
shares of common stock. Upon the sale of the maximum shares offered in this
offering, approximately 98.73% of our authorized common stock will remain
un-issued. Our Board of Directors has the power to issue any or all of such
additional common stock without stockholder approval. Potential investors should
be aware that any stock issuances may result in a reduction of the book value or
market price, if any, of the then outstanding common stock. If we were to issue
additional common stock, such issuance will reduce the proportionate ownership
and voting power of the other stockholders. Also, any new issuance of common
stock may result in a change of our control.
The total amount of shares covered by this prospectus would represent
approximately 16% of the number of our outstanding shares on the date of this
prospectus. If required, we will seek to raise additional capital through the
sale of our common stock. Future sales of shares by us could cause the market
price of our common stock to decline.
At the present time, we have only one customer who is not contractually bound to
purchase products from us.
Since we only have one customer who is not contractually bound to purchase
our products, we may not be able to sell our wireless telecommunication devices.
This could have a negative impact on our potential revenues and create a working
capital shortage.
We currently have only one supplier of wireless telecommunication devices.
Since we currently only have one supplier of wireless telecommunication
devices, we may not be able to obtain enough wireless telecommunication devices
to sustain ongoing operations. In the event that the supplier goes out of
business, we would not be able to maintain operations without finding another
supplier.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the
future, called "forward-looking statements." In some cases, you can identify
forward-looking statements by
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terminology such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms and other comparable terminology.
These forward-looking statements include, without limitation, statements
about:
o our markets;
o our strategies;
o competition;
o expected activities and expenditures as we pursue our business plan;
and
o the adequacy of our available cash resources.
These statements appear in a number of places in this report and include
statements regarding our intent, belief or current expectations, those of our
directors or officers with respect to, among other things: (i) trends affecting
our financial condition or results of operations, (ii) our business and growth
strategies, (iii) the Internet and Internet commerce and (iv) our financing
plans. Although we believe that the expectations reflected in the
forward-looking statement are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our offering.
The accompanying information contained in this prospectus, including,
without limitation, the information set forth under the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Business" identify important factors that could adversely
affect actual results and performance. All forward-looking statements
attributable to us are expressly qualified in their entirety by the foregoing
cautionary statement.
USE OF PROCEEDS
We have filed a registration statement pursuant to the Securities Act of 1933 in
order to
- become a reporting issuer;
- raise funds to offset the cost of becoming a reporting issuer. It is
our view that by becoming a reporting issuer we will be in an
improved position to effect private placement and or public
financings in the future; and
- to satisfy certain of our obligations under the Letter of Intent
signed December 12, 2001.
The shares are being offered directly by us on a no minimum basis. If the
300,000 shares offered are sold, the gross proceeds of this offering will be
$75,000.00 and the net proceeds will be $50,000.00 after deducting the estimated
expenses of the offering. We expect expenses of the offering, including, but not
limited to, accounting fees and legal fees, to be approximately $50,000.00. We
have already paid approximately $25,000 of such expenses. The balance of the
expenses will be paid from the offering proceeds to the extent available and
required. If we fail
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to raise sufficient funds to pay the offering expenses, we will pay any such
deficiency from our existing working capital.
Since there is no minimum amount to be raised, proceeds from our sale of
shares will be available for use by us as the funds are received. All
subscriptions that are accepted by us are, subject to any applicable laws,
irrevocable. Because we are offering the shares on a direct basis, we cannot
represent what percentage of the offered shares we will actually sell.
The following table shows our intended application of the proceeds as a
percentage of the gross proceeds received from a minimum of 25% to a maximum of
100%:
=========================
Intended use of proceeds:
================================================================================
25% 50% 75% 100%
- --------------------------------------------------------------------------------
Proceeds $ 18,750 $37,500 $56,250 $75,000
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Use of Proceeds:
- --------------------------------------------------------------------------------
Balance of Offering expenses 25,000 25,000 25,000 25,000
- --------------------------------------------------------------------------------
Working Capital (6,250) 12,500 31,250 50,000
================================================================================
Total $ 18,750 $37,500 $56,250 $75,000
================================================================================
The foregoing represents our best estimate of our allocation of the net
proceeds from the sale of the shares based upon our currently contemplated
operations, our business plan and current economic and industry conditions and
is subject to reapportionment of proceeds among the categories listed above or
to new categories in response to, among other things, changes in our plans,
regulations, industry conditions, future revenues and expenditures and the
amount of the proceeds from the offering. The amount and timing of expenditures
will vary depending on a number of factors, including changes in our
contemplated operations or business plan which may be affected by any delays in
the marketing and development and success of our business activities and changes
in economic and industry conditions. Any reallocation of the net proceeds of the
offering will be made at the discretion of our board of directors but will be a
part of our strategy to achieve growth and profitable operations through the
development of our products and commencement of our marketing efforts. Our
working capital requirements are a function of our future growth and expansion,
neither of which can be predicted with any reasonable degree of certainty. We
may need to seek funds through loans or other financing arrangements in the
future, and there can be no assurance that we will be able to make these
arrangements in the future should the need arise.
We expect to keep any proceeds not utilized for these purposes in a
working capital reserve for payment of unexpected operating expenses. Pending
our use of the net proceeds of the offering, the funds will be invested
temporarily in certificates of deposit, short-term government securities, or
similar investments. Any income from these short-term investments will be used
for working capital.
No portion of the proceeds of the offering will be paid to officers,
directors and/or their affiliates or associates.
15
ARBITRARY DETERMINATION OF OFFERING PRICE
There is no trading market for our shares. The initial offering price of
$0.25 per share has been arbitrarily determined by us, and bears no relationship
whatsoever to our assets, earnings, book value or any other objective standard
of value. Among the factors considered by us in determining the initial offering
price were:
o The lack of trading market;
o The proceeds to be raised by the offering;
o The amount of capital to be contributed by the public in proportion
to the amount of stock to be retained by present stockholders; and
o Our capital requirements.
We have not declared, and do not foresee declaring, any dividends now or
into the foreseeable future.
DILUTION
The difference between the public offering price per share and the pro
forma net tangible book value per share of our common stock after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share is determined by dividing our net tangible book value (total tangible
assets less total liabilities) by the number of outstanding shares of common
stock. Dilution arises mainly from the arbitrary decision by a company as to the
offering price per share. Dilution of the value of the shares purchased by the
public in this offering will also be due, in part, to the lower book value of
the shares presently outstanding, and in part, to expenses incurred in
connection with the public offering.
Net tangible book value is the net tangible assets of a company (total
assets less total liabilities and intangible assets; please refer to "Financial
Statements"). At February 28, 2002, we had a net tangible book value of $4,762
or $ .00 per share.
After giving effect to the sale of the 300,000 shares being offered at an
initial public offering price of $0.25 per share and after deducting estimated
expenses of this offering ($50,000), our adjusted net tangible book value at
February 28, 2002 after the offering would have been $29,762 or $.02 per share,
representing an immediate increase in net tangible book value of $.01 per share
to the existing shareholders and an immediate dilution of $.23 or 91% per share
to new investors.
The following table illustrates the above information with respect to
dilution to new investors on a per share basis:
16
Initial public offering price $ 0.25
Pro forma net tangible book value at February 28, 2002 0.01
Increase in pro forma net tangible book value attributed to new investors 0.01
Adjusted pro forma net tangible book value after offering 0.02
Dilution to new investors 0.23
The following table sets forth, on a pro forma basis as of February 28,
2002, with respect to our existing stockholders and new investors, a comparison
of the number of shares of common stock we issued, percentage ownership of those
shares, the total consideration paid, the percentage of consideration paid and
the average per share.
Average
Shares Purchased Total Consideration (Approximately)
----------------------------------------------------------------
Number Percentage Number Percentage Price per Share
----------------------------------------------------------------
Existing shareholders 1,600,000 84% $ 34,920 32% .02
New investors 300,000 16% 75,000 68% .25
----------------------------------------------------------------
Total 1,900,000 100% 109,920 100% .06
================================================================
PLAN OF DISTRIBUTION
We are offering to sell up to 300,000 shares of our common stock at a
price of $0.25 per share directly on a no minimum basis. This means that the
proceeds from the offering will not be kept in an escrow account pending
completion of this offering.
There is no maximum investment amount per investor. At this time we intend
to offer the shares ourselves through our officers and directors. This is a
direct offering, with no commitment by anyone to purchase any shares. No
compensation is to be paid to any person for the offer and sale of the shares.
Our officers and directors may distribute prospectuses related to this offering.
We estimate that approximately 100 Prospectuses will be distributed by them.
They intends to distribute prospectuses to acquaintances, friends and business
associates.
Although our officers and directors are associated persons as that term is
defined in Rule 3a4-1 under the Exchange Act, they are not deemed to be a broker
for the following reasons:
* They are not subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Exchange Act at the time of their
participation in the sale of our securities.
* They will not be compensated for their participation in the sale of our
securities by the payment of commission or other remuneration based either
directly or indirectly on transactions in securities.
* They are not an associated person of a broker or dealer at the time of
their participation in the sale of our securities.
17
* They meet all of the following conditions:
* They primarily perform, or are intended to perform at the end of the
offering, substantial duties for or on behalf of the company
otherwise than in connection with transactions in securities;
* They were not a broker or dealer, or an associated person of a
broker or dealer, within the preceding 12 months; and
* They do not participate in selling an offering of securities for any
issuer more than once every 12 months other than in reliance on
paragraph (a)(4)(i) or (a)(4)(iii) of Rule 3A4-1 of the Exchange
Act, except that for securities issued pursuant to Rule 415 under
the Securities Act of 1933, the 12 months shall begin with the last
sale of any security include within one Rule 415 registration.
As of the date of this prospectus, no broker has been retained by us for
the sale of shares being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement will
be filed.
Method of Subscribing
You may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the expiration date, to us. The minimum number of shares
that you may purchase is 100. The subscription price of $0.25 per share must be
paid in cash or by check, bank draft or postal express money order payable in
United States dollars to the order of "Simplicia Telecommunications, Inc." and
delivered to us. We reserve the right to reject any subscription in whole or in
part in our sole discretion for any reason whatsoever notwithstanding the tender
of payment at any time prior to our acceptance of the subscriptions received.
Expiration Date
This offering will expire 120 days from the date of this prospectus unless
all of the shares offered are sold prior to that date.
Legal Proceedings
We are not a party to any pending legal proceeding.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of
operations should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in this prospectus. This discussion
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these
forward-looking statements as a result of various factors, including but not
limited to, those set forth under "Risk Factors" and elsewhere in this
prospectus.
18
Overview
We were organized in July, 2001. Since our inception, and prior to July
2001, we have engaged only in corporate administrative and financing activities
and the negotiation of the Humanity Agreement.
We have filed a registration statement pursuant to the Securities Act of
1933 in order to
- become a reporting issuer;
- raise funds to offset the cost of becoming a reporting issuer, as it
is our view that by becoming a reporting issuer we will be in an
improved position to effect private placement and or public
financings in the future; and
- to satisfy certain of an obligations under the Letter of Intent.
Liquidity And Capital Resources
We have cash on hand as of February 28, 2002 of approximately $1,300. We
have also paid $33,000 towards offering expenses of which $3,500 represented
accounting fees and $29,500 represented legal fees and expenses. We feel that
our cash on hand plus the maximum proceeds from the offering will be sufficient
to satisfy our current requirements through December 2002. Our cash requirements
through December 31, 2003 are not expected to exceed $25,000, which expenses
consist primarily of accounting and legal costs to comply with the United States
Securities and Exchange Commission regulatory and reporting requirements. The
nature of the expenses we expect to incur are largely administrative and legal
in connection with the preparation and filings of periodic reports with the
Securities and Exchange Commission. We expect to use the proceeds from this
offering, after having paid offering expenses, for working capital purposes. We
will need to raise a minimum of 33% of the offering in order to meet our
expected cash requirements. If we are unable to raise enough funds to meet our
cash requirements, Messrs. Auld and Sumar have agreed to advance up to $25,000
to us to cover these costs on an as needed basis.
Since we are able to sell refurbished wireless telecommunication devices
before we are required to pay any royalties or rights payments, we do not
anticipate having to use the proceeds from this offering for those purposes.
However, we may require significant additional financial resources for
future expansion. It is not possible to quantify what amount may actually be
required. If needed, we may seek to obtain the financing through public or
private equity offerings. If we are unable to generate the required amount of
additional capital, our ability to implement our expansion strategies may be
adversely affected. No specific plans exist for a financing at this time.
19
Based on our operating plan, we believe that the net proceeds of this
offering (if fully subscribed), and when combined with our cash on hand, will be
sufficient to satisfy capital requirements and finance our operations for a
least the next 12 months. As we currently have no operations or an established
source of revenues such belief is based upon our assumptions about our future
operations and potential revenue stream. There can be no assurance that our
expectations and assumptions are correct. We may be required to raise
substantial additional capital in the future in order to carry out business
plan. In addition, contingencies may arise which may require us to obtain
additional capital. Accordingly, there can be no assurance that such resources
will be sufficient to satisfy capital requirements for such period. After the 12
month period, we anticipate that additional financing may be required in order
to meet our current plans for expansion. Such financing may take the form of the
issuance of common or preferred stock or debt securities, or may involve bank
financing. There can be no assurance that we will be able to obtain such
additional capital on a timely basis, on favorable terms, or at all. In any of
such events, we may be unable to implement our business plan.
BUSINESS
Background
By Agreement dated August 1, 2001 by and among ourselves, Humanity Direct
Wireless Networks Inc. ("Humanity") , a company incorporated under the Canada
Business Corporation Act, and the Phones for Sight Foundation (the
"Foundation"), a company limited by guarantee and not having share capital under
the Company's Act of 1985 and 1989 (UK), Humanity granted us the sale and
exclusive rights to the collection, refurbishment and resale of
telecommunications devices in the United States, its territories and
possessions. The telecommunications devices that we intend to collect and sell
initially are mobile phones.
Humanity had acquired the worldwide rights to the telecommunication
devices from the Foundation under an Assignment Agreement dated June 25, 2001.
The Foundation granted to Humanity the sole and exclusive right, on a worldwide
basis, to purchase all non-refurbished wireless telecommunication devices that
were collected by the Foundation through its Phones for Sight Initiative. The
Foundation, through this initiative, seeks to collect wireless telecommunication
devices and to raise funds for its purposes via the refurbishment and resale of
such wireless telecommunication devices.
The Foundation is a non-profit charitable entity with the long-term goal
of funding the elimination of avoidable blindness. The Foundation's global
fundraising strategy centers on collecting deactivated cell phones and selling
them to wholesale cellular refurbishes. The Foundation's collection efforts will
focus on mobilizing deactivated cell phones from the wireless carriers, the
corporate community and the retail market on a global basis.
Humanity Agreement:
Under the terms of the Humanity Agreement:
20
- We paid to Humanity the amount of ten US Dollars (USD$10.00) for the
sole and exclusive right in the United States of America, its
territories and possessions to carry out Humanity Proprietary
Business Plan and any modifications thereof;
- We will pay the Foundation Royalties as follows;
----------------------------------------------------------------
Net Proceeds CDN$ * Royalty % of Net Proceeds
----------------------------------------------------------------
$0.00 - $500,000.00 1.5%
----------------------------------------------------------------
$500,000.01 - $1,000,000.00 3.0%
----------------------------------------------------------------
$1,000,000.01 - $2,000,000.00 4.0%
----------------------------------------------------------------
$2,000,000.01 - $5,000,000.00 5.0%
----------------------------------------------------------------
$5,000,000.01 and Over 10.0%
----------------------------------------------------------------
* Net proceeds are based upon funds actually received by us and do not
include any receivable amounts, excise taxes, or bad debts.
- We will also pay to Humanity US$1.00 per Telecommunications Device
resold at a specified minimum price by us (the "Rights Payment").
The Rights Payment is payable on a quarterly basis and is due no
later than the 30th day after the end of each quarter.
Commencing on January 1, 2002 (the "Deliverable Date"), the Foundation is
required to deliver to us not less than 20,000 Telecommunications Devices
monthly ("Minimum Deliverable") that can be refurbished and resold on
commercially reasonable terms in accordance with the Proprietary Business Plan.
An earlier Deliverable Date may be implemented at our option upon 30 days
written notice to the Foundation. As of March 31, 2002, 997 telecommunication
devices have been delivered to and sold by us.
The Humanity Agreement may be terminated by the Foundation upon six (6)
months' prior written notice to us if (i) we are in default of our obligations
under the Agreement and we fail to cure such default within thirty (30) days
following written notice thereof delivered by the Foundation to us, or (ii) if
we fail to make the Rights Payment to Humanity.
The Humanity Agreement may be terminated by us upon six (6) months' prior
written notice to the Foundation if (i) the Foundation is in default of its
obligations under Agreement and fails to cure such default within thirty (30)
days following written notice thereof delivered by us to the Foundation, or (ii)
if the Foundation fails to make the Minimum Deliverable.
The Agreement may also be terminated by us upon six (6) months' prior
written notice to the Humanity if Humanity is in default of its obligations
under Agreement and fails to cure such default within thirty (30) days following
written notice thereof delivered by us to Humanity.
In the event that the Assigned Agreement between the Foundation and the
Humanity is terminated for any reason, the Assigned Agreement shall be deemed to
exist in its entirety with
21
us except that it will only apply to the United States of America, its
territories and possessions and no further Rights Payment shall be due to
Humanity.
On December 12, 2001, we entered into a non-binding Letter of Intent with
Humanity. In the Letter of Intent we agreed to consider, subject to the
satisfaction of numerous conditions, the acquisition of Humanity.
Although the Letter of Intent terminated automatically on June 30, 2002,
on June 12, we received a notice from Humanity terminating the Letter of
Intent;. The reason cited by Humanity for the termination was its inability
"...to executed its business plan due to internal reasons."
We have taken the position that the failure of Humanity to execute its
business plan constitutes a default under the terms of the Humanity Agreement;
accordingly, we have, under the terms of the Humanity Agreement, written to the
Phones for Sight Foundation, informing it that we intend to continue under the
terms of the agreement to deal directly with the Foundation as contemplated by
the Humanity Agreement.
We believe that no payments are now due Humanity under the terms of the
Humanity Agreement .
Our Intended Business
We intend to collect unused wireless telecommunication devices through the
Foundation's charitable-based collection network, add value through the
refurbishing process and use contracted sales agents to distribute product to
growing domestic and emerging markets.
As step one in our business plan, we do not intend to refurbish the
telecommunication devices ourselves. We intend to use a third party
refurbishment and resale company such as Recellular in order to minimize costs
and generate cash flow. Revenues in this case will be derived from the
collection and resale of the collected phones to Recellular or like company.
Once we have enough of a supply to warrant the set up of a full refurbishment
facility and the hiring of a sales force we will undertake to do so. Since
devices will be collected by the Foundation and then sent to the third party
refurbishment facility on our behalf, we do not anticipate the need to hire any
employees as we begin to carry out our plan.
We believe that there is a demand for refurbished product in order to
satisfy the wireless infrastructures being developed in the emerging economies
as they cannot obtain a consistent supply of new cell phone product.
In addition, we recognize that refurbished cellular telephone equipment
provides North American service providers with the opportunity to penetrate
domestic price-sensitive markets by providing low-cost terminal equipment.
22
We believe that wireless infrastructures are expected to replace landline
systems in many regions as installation is less costly and connectivity costs
(airtime) are comparable. Due to technological advancements, product
penetration, rapid product turnover and environmental concerns, there exists a
supply of surplus mobile wireless telecommunication devices. These are primarily
cell phones but also include personal organizers (Palm Pilots), wireless-enabled
laptops and pagers. We intend to reclaim the value in these surplus assets.
We will be the exclusive purchaser in the United States of all product
sourced through the collection efforts of the Phone for Sight Foundation. The
cell phones will be refurbished to insure good working order. Refurbishing
production capacity will be established through strategic alliances, outsourcing
or new construction. This capacity will be matched with the Foundation's main
product collection centers. We will not be importing any deactivated mobile
phones from outside of North America.
We currently have a relationship in the US with Recellular Incorporated
that was established by Humanity Direct. Recellular Incorporated will purchase a
number of the collected phones from us. ReCelluar Incorporated has provided
Humanity with a letter of intent to purchase a number of phones every month.
Since we have the rights in the United States, its territories and possessions
to carry out the Humanity business plan, we will replace Humanity in that letter
of intent. ReCellular Incorporated, established in 1991, have pioneered and
defined wireless refurbishing for over 10 years. They work with all levels of
wireless service providers from the largest carriers to the smallest agents. We
have also entered into a relationship with ReSave Technologies.
We believe that there exists a market for recycled cellular phones within
North America. As Cellular Service Providers shift their marketing focus from
the mid / high income market segment to the price-sensitive consumer segment in
an attempt to secure market share and maximize infrastructure utilization, the
demand for low-cost end user equipment increases. Through our relationship with
Recellular and other refurbishing and sales agents we will be able to meet this
demand with refurbished equipment.
Internationally, product demand exists in the emerging economies. With the
US being one of the largest target markets for collection of used mobile assets,
these markets will be a prime target for Simplicia. Due to the relatively low
cost of refurbished wireless telecommunication devices, a new cellular phone
market can be developed. We have been given the authority, by Humanity, to sell
phones collected in the United States, its territories and possessions to
emerging markets such as Africa.
The Phones For Sight Foundation
The Phones for Sight Foundation was established in 2000 to take part in
the fight against avoidable blindness and to support blind citizens globally.
The Phones for Sight program will raise funds through the collection of the
worlds deactivated cell phones. Cell phones are a serious environmental hazard,
not suitable for landfill disposal due to the cadmium in the batteries. They are
a perfect product to recycle. The telecommunications cell
for
23
phones will be resold to the refurbishing wholesale industry. Humanity obtained
the global rights to purchase all collected wireless telecommunication devices
from the Foundation refurbishment and resale. In an agreement dated August 1,
2001 between the Foundation, Humanity and ourselves, we were granted these
rights in the United States and were granted the rights to use Humanity's
Business Plan as necessary for the collection, refurbishment, and resale of
wireless telecommunication devices.
A sustainable supply of wireless telecommunication devices is paramount to
both the Foundation achieving their humanitarian mission and for the success of
Simplicia. The US refurbishing industry has not flourished due to its inability
to collect a consistent volume of surplus cell phones. The greatest challenge
has been how to motivate the world's telecom companies, major corporations and
private citizens to donate or return their used wireless telecommunication
devices into the hands of the private sector for either charitable, profit or
environmental reasons. Simplicia will overcome this obstacle by purchasing
wireless telecommunication devices from the Foundation.
We believe there is also a substantial corporate pre-paid market
opportunity. We believe that pre-paid will be attractive to the corporations as
they can control how much their employees spend on airtime and hence, their
costs. Refurbished sales efforts will target the corporate market through two
channels. First, as a source of less expensive phones that can be used by their
employees and second, as a branded price-point cell phone product that can be
sold through their retail chains. We will attempt to develop a co-branding
strategy for these clients, such as the "Phones for Sight" pre-paid cell phone
to strengthen brand loyalty and increase sales.
We believe that, through our relationship with the Foundation, we will
have a reliable supply of wireless telecommunication devices. With respect to
the demand side of the equation, we believe we have found a buyer of all the
refurbished wireless telecommunication devices we are able to produce. This is
solidified by a letter of intent between Recellular Incorporated and Humanity
indicating ReCellular Incorporated's desire to purchase from us our collected
cellular assets.
Competition
There are no patents available for the business being undertaken and thus
there are no barriers to competition. Companies with greater financial,
technical, and marketing resources could severely impact our business model if
they enter our industry.
Competing technologies or any new technologies may provide significant
competition for us. We cannot assure you that one or more of the technologies
that we sell will not become inferior or obsolete at some time in the future.
New technologies that are comparable to cellular service include:
o personal communications services,
o ESMR, and
24
o satellite-based services.
Personal communications services refer to the series of two-way
communication licenses recently awarded by the FCC which are expected to use
digital wireless technologies. Many personal communication services licensees
who will compete with us have access to substantial capital resources. In
addition, many of these companies, or their affiliates, already operate large
cellular telephone systems and thus bring significant wireless experience to
this new marketplace.
ESMR is a two-way wireless communications service that incorporates
characteristics of cellular technology, including many low-power transmitters
and connection with the network that provides traditional telephone services.
ESMR service may compete with cellular service by providing digital
communication technology, lower rates, enhanced privacy and additional features
such as electronic mail and built-in paging. Nextel Communications, Inc. is the
primary provider of such services today. The FCC has issued a number of licenses
for satellite-based services that would enable subscribers to access mobile
communications systems throughout the world. Additional proposals for the
provision of satellite services remain pending with the FCC and foreign
regulatory bodies must approve certain aspects of some satellite systems.
Competition in the industry is intense. We believe that competition may
increase substantially with the increased use of wireless telecommunication
devices. We believe our success in competing with other companies in our
industry will depend primarily on our engineering, manufacturing and marketing
skills, the price, quality and reliability of our products, and our delivery and
service capabilities. We anticipate increasing pricing pressures from current
and future competitors. Many of our foreign and domestic competitors have more
extensive engineering, manufacturing, marketing, financial and personnel
resources than we have. As a result, they may be able to respond more quickly to
changes in customer requirements. We cannot predict whether we will be able to
compete successfully with our existing and new products and services or with
current and future competitors.
In addition, we believe that technological change, the increasing addition
of Internet/data, video, voice, and other services to networks, continuing
regulatory changes and industry consolidation or new entrants will continue to
cause rapid evolution in the competitive environment. The full scope and nature
of these changes is difficult to predict at this time. Increased competition
could lead to price cuts, reduced gross margins and loss of market share, which
may seriously harm our business, operating results and financial condition.
Employees
As of June 30, 2002 we had no employees.
Properties
We currently are using the offices of our President on a month to month,
rent free basis.
25
MANAGEMENT
Our director(s), executive officer(s) and other key employees, and their
ages, as of the date of this prospectus, are as follows:
Name Age Positions held Since
- ---- --- -------------- -----
Robert G. Auld 29 President July 2001
Riaz Sumar 31 CFO & Corporate Secretary July 2001
The backgrounds of our directors, executive officers and significant employees
are as follows:
Robert G. Auld MBA, PEng President
In the last 5 years Robert Auld has held a number of positions in key management
roles. Since July, 2001, Robert Auld has served as President of Simplicia. From
January 2000 to the present, Robert Auld has been the President of Auld
Management Consulting. Since April, 2001 Robert Auld has held the position of
President and CEO of North American Gem Inc. Between November 1998 and January
2000, Robert Auld held the position of Senior Project Manager with IBM Canada.
Between November 1995 and November 1998, he was employed by Computing Devices
Canada a division of General Dynamics. He has managed various telecommunications
and computer infrastructure projects ranging in size from $500,000 to
$50,000,000 for clients including IBM, Canadian Department of National Defense,
General Dynamics, and, Alberta Treasury Branches.
Riaz Sumar CGA, Secretary
Since April 2001, Mr. Sumar has served as our CFO and Corporate Secretary. Since
April, 2001 Mr. Sumar has held the position of President and CEO of North
American Gem Inc. From 1996 until present Riaz Sumar has been the controller for
Tracer Petroleum Corporation, a publicly traded international oil and gas
company. His responsibilities included financial and public reporting as well as
corporate governance. More recently, Mr. Sumar also worked with Corona Ventures
Group Ltd., a private venture capital company where he helped analyze business
plans of various companies and provided management support for companies that
were in development stages.
All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. We have not compensated
our directors for service on the Board of Directors or any committee thereof. As
of the date hereof, no director has accrued any expenses or compensation.
Officers are appointed annually by the Board of Directors and each executive
officer serves at the discretion of the Board of Directors. We do not have any
standing committees at this time.
There are no family relationships between any of our directors, executive
officers and other key personnel.
26
All of our directors and officers are elected annually to serve for one
year or until their successors are duly elected and qualified.
During the past ten years none of our directors, executive officers,
promoter or control persons of the Company were:
(1) the subject of any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time;
(2) convicted in a criminal proceeding or is subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
(3) subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; or
(4) found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law.
EXECUTIVE COMPENSATION
The following summary compensation table reflects all compensation awarded
to, earned by, or paid to our Chief Executive Officer and president and other
employees for all services rendered to us in all capacities during each of the
years ended August 31, 1999, 2000 and 2001. None of our other executive offices
received salary and bonus exceeding $100,000 during those years.
- --------------------------------------------------------------------------------
Summary Compensation Table
- --------------------------------------------------------------------------------
All Annual
Compensation
Name and Principal Position Year Salary Bonus (**)
--------------------------- ---- ------ ----- ------------
- --------------------------------------------------------------------------------
Robert Auld, President 2001 Nil Nil Nil
2000 N/A N/A N/A
1999 N/A N/A N/A
- --------------------------------------------------------------------------------
Riaz Sumar, Corporate Secretary 2001 Nil Nil Nil
2000 N/A N/A N/A
1999 N/A N/A N/A
- --------------------------------------------------------------------------------
Directors' Compensation
Directors are not compensated for their services.
27
Employment and Severance Agreement
There are no employment contracts or agreements between us and our
officers.
We do not have any employee stock option or other incentive plans
PRINCIPAL SHAREHOLDERS
The following lists as of February 28, 2002 the beneficial ownership of shares
of each person known to us who owns more than 5% of our issued and outstanding
shares and of our directors, executive officers and significant employees.
- --------------------------------------------------------------------------------
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
- --------------------------------------------------------------------------------
Robert Auld (1) 650,000 40.6%
280 Fairways Bay NW
Calgary, Alberta T4B 2P5
- --------------------------------------------------------------------------------
Riaz Sumar (1) 650,000 40.6%
Suite 1204
1030 - 16th Avenue SW
Calgary, Alberta T2R 1N1
- --------------------------------------------------------------------------------
Joseph Sierchio (2) 200,000 12.5%
Eiseman Levine Lehrhapt &
Kakoyiannis, PC
845 Third Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
Christina McDonald (3) 100,000 6.3%
21 Buggey Lane
Ajax, ON L1S 4S7
- --------------------------------------------------------------------------------
1) Directors and officers as a group (Mr. Auld and Mr. Sumar) own 83.4%
of the issued and outstanding shares in Simplicia.
2) Joseph Sierchio is a member of Eiseman Levine Lehrhapt &
Kakoyiannis, P.C., our legal counsel.
3) Christina McDonald is the wife of Jim Earle, the President of
Humanity.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue 150,000,000 shares of common stock, $.0001 par
value per share, of which 1,600,000 shares were issued and outstanding as of the
date of this Prospectus. Each outstanding share of common stock entitles the
holder to one vote, either in person or by proxy, on all matters that may be
voted upon by the owners of those shares at meetings of the stockholders.
28
The holders of common stock (i) have equal rights to dividends from funds
legally available for the payment of dividends, when, as and if declared by our
board of directors; (ii) are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; (iii) do not have preemptive,
subscription or conversion rights, and (iv) are entitled to one non-cumulative
vote per share on all matters on which stockholders may vote at all meetings of
stockholders.
All shares of common stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to their ownership. The holders of shares of our common stock do not
have cumulative voting rights, which means that the holders of more than 50% of
the outstanding common stock, voting for the election of directors, can elect
all of our directors if they so choose and, in that event, the holders of the
remaining common stock will not be able to elect any of our directors.
Each share of common stock is entitled to share pro rata in dividends and
distributions with respect to the common stock when, as and if declared by the
board of directors from funds legally available for that purpose. No holder of
any shares of common stock has any pre-emptive right to subscribe for any of our
securities. Upon dissolution, liquidation or winding up of our company, the
assets will be divided pro rata on a share-for-share basis among holders of the
shares of common stock after any required distribution to the holders of
preferred stock, if any. All shares of common stock outstanding are fully paid
and nonassessable.
Each shareholder of common stock is entitled to one vote per share with
respect to all matters that are required by law to be submitted to shareholders.
Dividends
We have not declared any dividends since inception, and have no present
intention of paying any cash dividends on our shares in the foreseeable future.
The payment of dividends, if any, in the future, rests within the discretion of
our board of directors and will depend, among other things, upon our earnings,
our capital requirements and our financial condition, as well as other relevant
facts.
Transfer Agent and Registrar
Currently, we are acting as our own transfer agent and registrar for our
common stock. Upon completion of the offering we will engage Stocktrans, Inc.,7
E. Lancaster Avenue, Ardmore, Pennsylvania 19003 to act as our transfer agent.
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
There has been no trading market for our common stock nor is there any
assurance that one will develop. There are currently 4 beneficial holders of our
outstanding common stock.
29
The outstanding shares of common stock were sold in reliance upon an exemption
from registration contained in Section 4(2) of the Securities Act. There can be
no assurance that a trading market will develop. To date, neither we nor anyone
acting on our behalf has taken any affirmative steps to retain or encourage any
broker/dealer to act as a market maker for our common stock. Further, there have
been no discussions or understandings, preliminary or otherwise, between us or
anyone acting on our behalf and any market maker regarding the participation of
any such market maker in the future trading market, if any, for our common
stock.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. All of the shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act.
As of the date of this Prospectus, none our shares of common stock are
immediately eligible for sale in the public market without restriction or
further registration under the Securities Act unless purchased by or issued to
any "affiliate" of ours, as that term is defined in Rule 144 promulgated under
the Securities Act, described below. All other outstanding shares of our common
stock are "restricted securities" as such term is defined under Rule 144, in
that those shares were issued in private transactions not involving a public
offering and may not be sold in the absence of registration other than in
accordance with Rule 144, 144(k) or 701 promulgated under the Securities Act or
another exemption from registration.
Sales of substantial amounts of our shares under Rule 144, this Prospectus
or otherwise could adversely affect the prevailing market price of our common
stock and could impair our ability to raise capital through the future sale of
our securities.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions during the last two years, or proposed
transactions, to which we were or are a party in which any of our directors,
officers, shareholders, owning more than 5% of our securities or members of
their family had or have a material interest. Each of our directors acquired
650,000 shares of our common stock for an aggregate price of $4,950.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
We believe that provisions of our Certificate of Incorporation and bylaws
will be useful to attract and retain qualified persons as directors and
officers. Our Certificate of Incorporation limit the liability of directors and
officers to the fullest extent permitted by Delaware law. This is intended to
allow our directors and officers the benefit of Delaware's corporation law which
provides that directors and officers of Delaware corporations may be relieved of
monetary liabilities for breach of their fiduciary duties as directors or
officers, except under circumstances which involve acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law.
30
In the event that a claim for indemnification against those liabilities
(other than our payment of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by a director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether the indemnification by us is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of that issue.
LEGAL PROCEEDINGS
We are not a party to any pending lawsuit or legal proceedings nor are we
aware of any threatened lawsuit or proceeding.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has been
passed upon for us by Eiseman Levine Lehrhaupt & Kakoyiannis, P.C., New York,
New York.
EXPERTS
Our financial statements at August 31, 2001, appearing in this Prospectus
and in the registration statement have been audited by Richard Prinzi Jr. CPA.,
independent Certified Public Accountants, as set forth in their report thereon
appearing elsewhere in this Prospectus, and are included in reliance upon such
report given upon the authority of such firm as experts in auditing and
accounting.
INTEREST OF NAMED EXPERTS AND COUNSEL
Joseph Sierchio, a member of Eiseman Levine Lehrhaupt & Kakoyiannis, P.C.,
our legal counsel, owns 200,000 shares of our common stock.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2. This prospectus, which is a part of the registration
statement, does not contain all of the information included in the registration
statement. Some information is omitted and you should refer to the registration
statement and its exhibits. With respect to references made in this prospectus
to any of our contracts, agreements or other documents, such references are not
necessarily complete and you should refer to the exhibits attached to the
registration statement for copies of the actual contract, agreement or other
document.
31
We intend to send an annual report, including audited financial
statements, to our shareholders. We will also file annual, quarterly and current
reports, and other information with the Securities and Exchange Commission.
Our registration statement and other filings with the Securities and
Exchange Commission can be reviewed by accessing the Securities and Exchange
Commission's Internet site at http://www.sec.gov, which contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
32
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Financial Statements
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Index To Financial Statements
Page
Report of Independent Public Accounts 34
Financial Statements:
Balance Sheet- February 28, 2002 35
Statement of Operations for September 1, 2001 through February 28, 2002 36
Statement of Changes in Shareholders' Equity for the period September 1, 2001 through
February 28, 2002 37
Statement of Cash Flows for the period September 1, 2001 through February 28, 2002 38
Notes to Financial Statements 39 to 41
33
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors Simplicia Telecommunications, Inc.:
We have audited the accompanying balance sheet of Simplicia Telecommunications,
Inc. (a Delaware Corporation in the Development Stage) as of August 31, 2001,
and the related statements of operations, changes in shareholders' equity and
cash flows for the period from July 27, 2001 (Date of Inception) through August
31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 financial statements referred to above present fairly, in
all material respects, the financial position of Simplicia Telecommunications,
Inc. as of August 31, 2001, and the related statements of operations, changes in
shareholders' equity and cash flows for the period from July 27, 2001 (Date of
Inception) through August 31, 2001 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #1 to the financial
statements, the Company has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note #1. The financial
statements do not include any adjustments that might result from the outcome for
this uncertainty.
/s/ "Richard Prinzi Jr., CPA"
Staten Island, New York
December 2, 2001
34
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Balance Sheets
Assets
February 28, August 31,
2002 2001
Current Assets:
Cash $ 1,301 $ 2,369
Subscription Receivable -- 15,000
Prepaid Expenses 3,784 3,113
-------- --------
Total Current Assets 5,085 20,482
-------- --------
Total Assets $ 5,085 $ 20,482
======== ========
Liabilities And Shareholders' Equity
Current Liabilities:
Accounts Payable $ 323 $ 1,578
-------- --------
Total Current Liabilities 323 1,578
-------- --------
Total Liabilities 323 1,578
-------- --------
Shareholders' Equity:
Common stock, $.0001 par value,150,000,000 shares
Authorized, 1,560,000 shares issued and outstanding 160 156
Additional Paid in Capital 34,760 24,764
-------- --------
Total Stockholders' Equity 34,920 24,920
Loss accumulated during the development stage (30,158) (6,016)
-------- --------
Total Shareholders' Equity 4,762 18,904
-------- --------
Total Liabilities and Shareholders' Equity $ 5,085 $ 20,482
======== ========
See Accompanying Notes to Financial Statements
35
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Statement of Operations
For the period
For the six month July 27, 2001
period ended (Date of Inception)
February 28, To August 31,
2002 2001
----------------- ------------------
Income:
Total Income $ 0 $ 0
----------- -----------
Expenses:
Legal & Professional 22,829 4,551
Foreign Exchange 36 --
Bank Charges 76 12
Office Expenses 324 --
Licenses & Permits -- 10
Travel 877 1,443
----------- -----------
Total Expenses 24,142 6,016
----------- -----------
Loss Accumulated During The Development Stage $ (24,142) $ (6,016)
=========== ===========
Loss per Common Share $ (.02) $ (.00)
=========== ===========
Weighted Average of Common Shares Outstanding 1,600,000 1,560,000
=========== ===========
See Accompanying Notes to Financial Statements
36
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity
Loss
Common Stock Accumulated
-------------------------- Additional During the
Paid In Development
Par Value Capital Stage Total
--------- ------------ ------------ --------------
For the Period July 27, 2001
(Date of Inception)
Through February 28, 2002
- ----------------------------
Issuance of stock 1,600,000 $ 160 $ 34,760 $ 34,920
Loss Accumulated During
the Development Stage $ (30,158) (30,158)
---------------------------------------------------------------------------------
Balance, February 28, 2002 1,600,000 $ 160 $ 34,760 $ (30,158) $ 4,762
=================================================================================
See Accompanying Notes to Financial Statements
37
Simplicia Telecommunications, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the period
For the six July 27, 2001
months ended (Date of
February 28, Inception)
2002 To August 31, 2001
------------- ------------------
Cash Flows From Operating Activities:
Loss Accumulated During the Development Stage $ (24,142) $ (6,016)
Net (increase) decrease in Subscription Receivable 15,000 (15,000)
Net (increase) decrease in Prepaid Expenses (671) (3,113)
Net increase (decrease) in Accounts Payable (1,255) 1,578
------------ ------------
Net Cash Used in Operating Activities (11,068) (22,551)
------------ ------------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock 10,000 24,920
------------ ------------
Net Cash Provided By Financing Activities 10,000 24,920
------------ ------------
Net Increase in Cash: (1,068) 2,369
------------ ------------
Cash, beginning of period 2,369 0
------------ ------------
Cash, end of period $ 1,301 $ 2,369
============ ============
See Accompanying Notes to Financial Statements
38
Simplicia Telecommunications, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. COMPANY INFORMATION
Simplicia Telecommunications, Inc., ("The Company") was organized July 27, 2001,
under the laws of the State of Delaware, as Simplicia Telecommunications, Inc.
The Company is currently in the development stage. Management has elected an
August 31 year-end for the Company. The Company will be in the development stage
until it raises the required capital and begins recycling wireless assets.
The Company acquired the worldwide rights from the Phones for Sight Foundation,
a non-profit charitable entity, for the sale and exclusive rights to the
collection, refurbishment and resale of cellular phones and other devices in the
United States, its territories and possessions, as well as the right to the use
of its proprietary business plan in connection with the refurbishment and resale
of the cellular phones and other devices. The Company intends to commence
operations following the successful consummation of this offering and may need
additional financing in order to carry out its business plan.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash & Cash Equivalents
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments, with a maturity of three months or less.
Basis of Financial Statements
These financial statements are prepared on the accrual basis of accounting in
conformity with generally accepted accounting principles.
Income Taxes
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this method,
deferred income taxes are determined based on differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. No provision for income taxes is included in the
statement due to its immaterial amount.
39
Simplicia Telecommunications, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Utilization of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net Income Per Common Share
Net income per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
NOTE 3. CAPITAL STOCK
The Company is offering ("The Offering") the right to subscribe for 300,000
shares at $.25 per share on a no minimum basis. This means that the proceeds
from the offering will not be kept in an escrow account pending completion of
this offering. The shares will be sold through the President and Directors of
the Company and no compensation is to be paid to any person for the offer and
sale of the shares.
The Company's Certificate of Incorporation authorizes the issuance of
150,000,000 shares of common stock. The Company's Board of Directors has the
power to issue any or all of the authorized but un-issued common stock without
stockholder approval. To the extent that additional shares of common stock are
issued, dilution to the interest of the Company's stockholders participating in
the Offering will occur.
There are presently outstanding 1,600,000 shares of the Company's Common Stock
for which a relatively nominal consideration was paid. In contrast, the
purchasers of the Shares offered are providing the Company with $75,000 of
funding. Purchasers of the Shares will represent 16% of all Shares outstanding,
although they will have provided the major portion of the Company's funding to
date. The purchasers of the Shares offered hereby would have no effective voice
in the Company's management and the Company would be controlled by the existing
stockholders.
40
Simplicia Telecommunications, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3. CAPITAL STOCK (Continued)
Upon any liquidation, dissolution or winding up of the Company, holders of
Shares of Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to holders of shares of the Company's Common
Stock. Moreover, In the event such a liquidation were to occur all stockholders
of the Company, including those owning shares purchased privately at less than
the public offering price, will receive the liquidated assets on a pro-rata
basis (as opposed to being based on the amounts paid for such shares).
On August 31, 2001, the Company accepted a subscription agreement for 60,000
shares at $.25 per share. The Funds were received on September 6, 2001. At
August 31, 2001, $15,000 was recorded as subscription receivable on the Balance
Sheet.
NOTE 4. INCOME TAXES
The Company has available at February 28, 2002, $6,016 of unused operating loss
carry forwards that may be applied against future taxable income and expire in
various years beginning 2019.
NOTE 5. RELATED PARTY TRANSACTIONS
As of February 28, 2002, the officers of the Company owned 1,300,000 shares and
the Company's attorney owned 200,000 shares of the 1,600,000 shares outstanding
of the Company.
41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. Indemnification of Officers and Directors.
The only statute, charter provision, by-law, contract, or other
arrangement under which any controlling person, director or officer of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is as follows:
Our Certificate of Incorporation and our By-laws require us to indemnify
officers and directors to the fullest extent permitted by the Delaware Business
Corporation Law (DBCA). Simplicia has also entered into agreements to indemnify
its directors and executive officers to provide the maximum indemnification
permitted by Delaware law. These agreements, among other provisions, provide
indemnification for certain expenses (including attorney fees), judgments, fines
and settlement amounts incurred in any action or proceeding, including any
action by or in our right.
Our By-laws require us to indemnify our directors, officers, employees and
agents to the maximum extent permitted by the DBCA. Section 317 of the DBCA
provides that a corporation has the power to indemnify and hold harmless a
director, officer, employer, or agent of the corporation who is or is made a
party or is threatened to be made a party to any threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, against
all expense, liability and loss actually and reasonably incurred by such person
in connection with such a proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in the best interest of the
corporation, and, with respect to any criminal proceeding, had no reasonable
cause to believe that the conduct was unlawful. If it is determined that the
conduct of such person meets these standards, such person may be indemnified for
expenses incurred and amounts paid in such proceeding if actually and reasonably
in connection therewith.
If such a proceeding is brought by or on behalf of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually and
reasonably incurred if such person acted in good faith and in a manner
reasonably believed to be in the best interest of the corporation and its
shareholders. There can be no indemnification with respect to any matter as to
which such person is adjudged to be liable to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite such adjudication but in view of all of
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
Where any such person is successful in any such proceeding, such person is
entitled to be indemnified against expenses actually and reasonably incurred by
him or her. In all other cases (unless order by a court), indemnification is
made by the corporation upon determination by it that indemnification of such
person is proper in the circumstances because such person has met the applicable
standard or conduct.
42
A corporation may advance expenses incurred in defending any such
proceeding upon receipt of an undertaking to repay any amount so advanced if it
is ultimately determined that the person is not eligible for indemnification.
The indemnification rights provided in Section 317 of the DBCA are not
exclusive of additional rights to indemnification for breach of duty to the
corporation and its shareholders to the extent additional rights are authorized
in the corporation's articles of incorporation and are not exclusive of any
other rights to indemnification under any by-law, agreement, vote of
shareholders or disinterested directors or otherwise, with as to action in his
or her office and as to action in another capacity which holding such office.
ITEM 25. Other Expenses of Issuance and Distribution.
The following table sets forth an itemization of various expenses, all of
which we will pay, in connection with the sale and distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee.
- --------------------------------------------------------------------------------
Securities and Exchange Commission Registration Fee $ 23
- --------------------------------------------------------------------------------
Accounting Fees and Expenses 4,000
- --------------------------------------------------------------------------------
Transfer Agents Fees 1,500
- --------------------------------------------------------------------------------
Printing Costs 500
- --------------------------------------------------------------------------------
Edgar Fees 3,000
- --------------------------------------------------------------------------------
Legal Fees and Expenses 37,500
- --------------------------------------------------------------------------------
Blue Sky Fees 2,000
- --------------------------------------------------------------------------------
Miscellaneous 1,500
- --------------------------------------------------------------------------------
TOTAL $50,023
- --------------------------------------------------------------------------------
ITEM 26. Recent Sales of Unregistered Securities.
Set forth in chronological order is information regarding shares of common
stock issued from incorporation-to the date of this prospectus. Also included is
the consideration, if any, received by us for such securities. We believe that
all of the issuances were exempt from registration of the Securities Act of
1933, amended, by virtue of section 4(2) thereof and/or Regulation S promulgated
thereunder.
- --------------------------------------------------------------------------------
Name Number Date Amount
- --------------------------------------------------------------------------------
Joseph Sierchio 200,000 July 30, 2001 $ 20.00
- --------------------------------------------------------------------------------
Robert Auld 650,000 August 28, 2001 $ 4,950
- --------------------------------------------------------------------------------
Riaz Sumar 650,000 August 28, 2001 $ 4,950
- --------------------------------------------------------------------------------
Christina McDonald 60,000 September 6, 2001 $15,000
- --------------------------------------------------------------------------------
Christina McDonald 40,000 November 29, 2001 $10,000
- --------------------------------------------------------------------------------
Total 1,600,000 $34,920
- --------------------------------------------------------------------------------
43
ITEM 27. Exhibits
The following Exhibits are attached hereto:
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT AND FILING REFERENCE
3.1 Certificate of Incorporation*
3.2 Bylaws *
5.1 Opinion of Eiseman Levine Lehrhaupt & Kakoyiannis, P.C., regarding
the legality of the securities being registered
10.1 Memorandum of Agreement between Humanity and the Foundation dated
June 25, 2001 and Amendment thereto dated July 31, 2001*
10.2 Memorandum of Agreement between Humanity, Simplicia and the
Foundation dated August 1, 2001*
10.3 Recellular Incorporated Letter of Intent dated October 12, 2001*
10.4 Letter Of Intent between Humanity and Simplicia dated December 12,
2001*
10.5 June 12, 2002 termination letter
10.6 June 12, 2002 Letter from Simplicia Telecommunications, Inc. to
the Phones for Sight Foundation
10.7 Letter dated May 16, 2002 from ReSave Technology
23.1 Consent of Eiseman Levine Lehrhaupt & Kakoyiannis, P.C. (included
in Exhibit 5.1)
23.2 Consent of Richard Prinzi JR. CPA
* Previously Filed.
ITEM 28. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 24 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
44
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
45
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 authorizes this Amendment No. 1
to the registration statement to be signed on its behalf by the undersigned, in
the City of Airdrie, Province of Alberta, Canada, on the 10th day of
July, 2002.
SIMPLICIA TELECOMMUNICATIONS, INC.
By: /s/ Robert Auld
-------------------------------
Robert Auld
President
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to the registration statement was signed by the following
persons in the capacities so stated and on the 10th day of July, 2002.
SIGNATURE TITLE
/s/ Robert Auld
- ---------------------
Robert Auld President
/s/ Riaz Sumar
- ---------------------
Riaz Sumar CFO & Corporate Secretary
46
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------
SIMPLICIA TELECOMMUNICATIONS, INC.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT AND FILING REFERENCE
3.1 Certificate of Incorporation*
3.2 Bylaws *
5.1 Opinion of Eiseman Levine Lehrhapt & Kakoyiannis, P.C., regarding
the legality of the securities being registered
10.1 Memorandum of Agreement between Humanity and the Foundation dated
June 25, 2001 and Amendment thereto dated July 31, 2001*
10.2 Memorandum of Agreement between Humanity, Simplicia and the
Foundation dated August 1, 2001*
10.3 Recellular Incorporated Letter of Intent dated October 12, 2001*
10.4 Letter Of Intent between Humanity and Simplicia dated December 12,
2001*
10.5 June 12, 2002 termination letter.
10.6 June 12, 2002 Letter from Simplicia Telecommunications, Inc. to the
Phones for Sight Foundation.
10.7 Letter dated May 16, 2002 from ReSave Technology.
23.1 Consent of Eiseman Levine Lehrhapt & Kakoyiannis, P.C. (included in
Exhibit 5.1)
23.2 Consent of Richard Prinzi JR. CPA
* Previously filed.
47