AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 2003
REGISTRATION NO. 333-102555
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
INVICTA GROUP INC.
(Name of Small Business Issuer in Its Charter)
Nevada 4700 91-2051923
(State or Other Jurisdiction of (Primary Standard (I.R.S.
Incorporation or Organization) Industrial Employer
Classification Number) Identification No.)
9553 Harding Avenue, Suite 301
Miami Beach, FL 33154
(305) 866-6525
(Address and Telephone Number of Principal Executive Offices)
William G. Forhan, President
9553 Harding Avenue, Suite 301
Miami Beach, FL 33154
(305) 866-6525
(Name, Address and Telephone Number of Agent for Service)
Copies of all communications to:
Jackson L. Morris, Esq.
3116 West North A Street
Tampa, Florida 33609-1544
Telephone: (813) 874-8854
Approximate Date of Proposed Sale to the Public: As soon as practicable after
the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act, check
the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Maximum Maximum Aggregate Amount of
Class of Securities Amount to be Offering Price Offering Registration
to be Registered Registered Per Security(1) Price(1) Fee
- ------------------- ------------ --------------- ---------- ------------
Common Stock,
par value $.001
per share (2) 12,000,000 $.60 $7,200,000 $582.48
Common Stock
par value $.001
per share (3) 2,715,000 $.21 $ 570,150 $ 46.13
- ------------- ------------ --------------- ---------- -----------
Total $628.61
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457, based upon the proposed public offering price per share of
common stock.
(2) 12,000,000 shares proposed to be offered by the issuer.
(3) 2,715,000 shares proposed to be offered by selling stockholders.
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A) MAY DETERMINE.
CROSS REFERENCE TABLE
This table sets forth the location in the prospectus of the information required
to be included in the prospectus in response to the items in Form SB-2.
Item of Form SB-2 Location in Prospectus
- ------------------- ----------------------
Item 1. Front of registration statement Outside front cover of prospectus.
Item 2. Inside front and outside back Inside front cover and outside
cover pages of prospectus. back cover of prospectus and
Additional Information.
Item 3. Summary information Risks Related to Invicta Group's
and risk factors. Business.
Item 4. Use of proceeds. Use of Proceeds.
Item 5. Determination of offering price. Distribution by Invicta Group.
Item 6. Dilution. Not applicable.
Item 7. Selling security holders. Selling Stockholders.
Item 8. Plan of distribution. Plan of Distribution.
Item 9. Legal proceedings. Invicta Group's Business
-Legal Proceedings.
Item 10. Directors, executive officers, Invicta Group's Management,
promoters and control persons and Principal Stockholders.
Item 11. Security ownership of certain Principal Stockholders.
beneficial owners and management.
Item 12. Description of securities. Information about Invicta Group's
Shares.
Item 13. Interest of named experts and Interest of Counsel, Experts.
counsel.
Item 14. Disclosure of Commission Invicta Group's Management.
position on indemnification for
Securities Act liabilities.
Item 15. Organization within last Information about Invicta Group's
five years. History.
Item 16. Description of business. Invicta Group's Business.
Item 17. Management's discussion and Management's Discussion and
analysis or plan of operation. Analysis of Results of
Operations, Liquidity and Financial
Condition.
Item 18. Description of property. Invicta Group's Business
-Description of Property.
Item 19. Certain relationships and Transactions between Invicta Group
related transactions. and its Management.
Item 20. Market for common equity Market for Shares, Dividends on
and related stockholder matters. Common Shares and Related
Stockholder Matters.
Item 21. Executive compensation. Invicta Group's Management
-Management Compensation.
Item 22. Financial statements. Financial Statements.
Item 23. Changes In and Disagreements Not Applicable.
With Accountants on Accounting
and Financial Disclosure.
The information in this prospectus is not complete and may be changed. Invicta
Group 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.
PRELIMINARY PROSPECTUS DATED DECEMBER 16, 2003
PROSPECTUS
INVICTA GROUP INC.
14,715,000 SHARES OF COMMON STOCK
Twelve million shares are being offered for sale by Invicta Group at a
price of $.60 per share. Assuming all these shares are sold, Invicta Group would
receive gross proceeds of $7,200,000, before underwriting discounts, commissions
or concessions, which at the date of this prospectus Invicta Group has no
agreement to pay. Assuming the sale of all the shares and underwriting
discounts, commissions or concessions of 10 percent of gross proceeds, Invicta
Group would recognize net proceeds of $6,480,000. There is no minimum number of
shares Invicta Group must sell before any are sold and subscribers' funds will
not be place in escrow until a minimum number of shares are sold. Investors'
funds will be used immediately upon receipt and acceptance for the purposes
described under "Use of Proceeds". Invicta Group intends to continue offering
its common stock until all of the shares are sold. There is no assurance as to
the number of shares that will be sold or the period of time it will take
Invicta Group to sell all the shares, if they can be sold. The offering will
terminate 180 days from the date of this prospectus, subject to one extension at
the election of Invicta Group not to exceed thirty days, whether or not all of
the shares have been sold.
2,715,000 of the shares are being offered by selling security holders.
Selling security holders are expected to offer and sell their shares through
their own securities broker-dealers or in private transactions. See, "Plan of
Distribution". The selling security holders may sell their shares at market
prices or at privately negotiated prices. Assuming all these shares are sold at
$.60 per share, the selling security holders, as a group, would receive gross
proceeds in the aggregate of $1,629,000, before underwriting discounts,
commissions or concessions, which at the date of this prospectus the selling
security holders are unable to determine and which can be expected to vary from
transaction to transaction and selling security holder to selling security
holder. Selling security holders may continue to offer the shares until sold, as
long as Invicta Group maintains a current prospectus to cover the sales. Invicta
Group will not receive any proceeds from sales of shares by the selling security
holders. Selling security holders and brokers effecting transaction in Invicta
Group's common stock on their behalf may be deemed to be "underwriters", as
defined in the Securities Act of 1933.
Invicta Group's shares are quoted on the OTC Bulletin Board under the
trading symbol of "IVGA".
The following table sets forth the gross proceeds to be received by the
selling security holders, as a group, for the sale of the shares at $.60 per
shares, and the net proceeds, assuming an average rate of commissions,
concessions and discounts at ten percent of gross proceeds.
Seller Number of Price to Gross Commissions Net
Shares Public (1) Proceeds (2) Proceeds
- ------- --------- ---------- -------- ----------- --------
Invicta Group 12,000,000 $.60 $7,200,000 $720,000 $6,480,000
Selling Security 2,715,000 $.60 $1,629,000 $162,900 $1,466,100
Holders
- ------- --------- ---------- -------- ----------- --------
(1) Invicta Group may sell its shares within a range of ten percent more and
less than $.60 per share, provided that it must amend this prospectus in
the event it intends to sell any shares outside of that range. Selling
security holders are expected to sell their shares at the prevailing market
price at the time of sale. The price provided is for illustration only.
(2) Estimated at an average of ten percent. Neither Invicta Group nor any
selling security holder has any arrangements or understandings with respect
to sales of the shares or the commissions, discounts or concessions
securities broker-dealer may charge for transactions in the shares.
INVESTMENT IN INVICTA GROUP'S SHARES INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is December 16, 2003
1
TABLE OF CONTENTS
Information about Invicta Group's History 2
Summary of the Offering 3
Selected Historical Financial Data 4
Risks Related to Invicta Group's Business 5
Forward Looking Statements 8
Limitation on Authority to Make Representations and Location of Offering 8
Use of Proceeds 9
Management's Discussion and Analysis of Results of Operations,
Liquidity and Financial Condition 10
Invicta Group's Business 14
Invicta Group's Management 19
Information about the Experience of Invicta Group's Management 21
Executive Compensation 22
Incentive and Non-Qualified Stock Option Plan 23
Transactions between Invicta Group and its Management 24
Principal Shareholders 25
Information about Invicta Group's Shares 26
Market for Common Stock and Dividend Policy 27
Plan of Distribution 28
Selling Stockholders 30
Legal Matters 31
Experts 31
Where You Can Find Additional Information 31
Financial Statements F-1
All dealers effecting transactions in Invicta Group's shares, whether or
not they are acting on behalf of Invicta Group, may be required to deliver
a copy of this prospectus until __________, 2004 (40 days after the date
of this prospectus). Dealers acting on behalf of Invicta Group have an
obligation to deliver a copy of this prospectus when acting as an
underwriter.
INFORMATION ABOUT INVICTA GROUP'S HISTORY
Invicta Group Inc. was incorporated in Nevada on June 1, 2000 for the
purpose of engaging in the travel industry. The founder of Invicta Group is
Richard David Scott, who currently is its Chief Operating Officer and a
director. Invicta Group did not commence business activities until July 2001.
Invicta Group has amended its charter several times to increase its authorized
common stock and to authorize preferred stock. Invicta Group has one wholly
owned subsidiary, Casino Rated Players, Inc., a Florida corporation. Casino
Rated Players was incorporated in Florida on January 27, 2000. The founder of
Casino Rated Players is William G. Forhan, who currently is Invicta Group's
president and a director. Casino Rated Players commenced its business activities
on July 1, 2000. Invicta Group acquired Casino Rated Players from its
stockholders on July 15, 2002 in an exchange of stock transaction. The
transaction has been accounted for as a reverse merger in which Casino Rated
Players is treated as the surviving company for accounting purposes, even though
Invicta Group is the surviving company for legal purposes.
INVICTA GROUP'S ADDRESS, TELEPHONE NUMBER AND WEB SITES ARE:
9553 Harding Avenue, Suite 301
Miami Beach, Florida 33154
(305) 866-6525
www.dontpayfullfare.com
www.casinoratedplayers.com
2
SUMMARY OF THE OFFERING
The issuer: Invicta Group Inc.
The sellers: Invicta Group Inc.
Selling Stockholders
Shares offered:
By Invicta Group - 12,000,000 shares of common stock
By Selling security holders - 2,715,000 shares of common stock
Estimated offering price:
By Invicta Group - $.60 per share
By selling security holders - At market
Proceeds to Invicta Group:
Gross Proceeds - $7,200,000
Estimated Net Proceeds - $1,629,000
Proceeds to selling security holders:
Gross Proceeds - $6,480,000
Estimated Net Proceeds - $1,466,100
Plan of Distribution:
By Invicta Group - By its directors
and officers, provided that any
securities broker-dealer may
sell less than ten percent of the
offering on behalf of Invicta
Group.
By selling security holders - In the public market through
brokers arranged by individual
selling stockholders or in
negotiated transactions.
Public Market: Invicta Group's shares are
quoted on the OTC Bulletin
Board under the symbol "IVGA".
Shares issued and outstanding:
Before the offering by Invicta Group - 34,322,200 shares
After the offering by Invicta Group - 46,322,200 shares
3
SELECTED HISTORICAL FINANCIAL DATA
The following tables set forth selected historical operating data and
balance sheet data for the periods ended and at the dates indicated. This
selected financial data should be read in conjunction with Invicta Group's
financial statements included in this prospectus. Invicta Group acquired Casino
Rated Players in a purchase transaction treated as a reverse merger on July 15,
2002. Accordingly, the operating data presented below is the data of Casino
Rated Players and does not include operating data of Invicta Group prior to the
date of the transaction. For information about Invicta Group's sales and
revenues prior to the date of the transaction, see "Management's Discussion and
Analysis of Results of Operations, Liquidity and Financial Condition".
STATEMENT OF OPERATIONS DATA:
FOR THE FOR THE
YEARS ENDED 9 MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
-------------------------- -----------------------
2001 2002 2002 2003
----------- ------------ ---------- ----------
Total revenues $ 33,315 $ 8,245 $ 9,833 $ 14,906
Net (loss) $(394,880) $(540,037) $(301,425) $(410,197)
Basic (loss) per share $ (0.003) $ (0.032) $ (.010) $ (.013)
Diluted (loss) per share $ (0.003) $ (0.032) $ (.010) $ (.013)
BALANCE SHEET DATA:
AT DECEMBER 31, AT SEPTEMBER 30,
------------------------- ----------------------
2001 2002 2002 2003
---------- ---------- ---------- ----------
Current assets $ 35,579 $ 44,528 $ 2,985 $ 23,377
Total assets $ 194,015 $ 273,050 $ 244,517 $ 214,099
Current liabilities $ 802,215 $ 463,922 $ 381,593 $ 758,912
Long-term liabilities,
net of current portion $ 10,000 $ 223,671 $ 223,671 $ 279,071
Shareholders' equity $(618,200) $(414,543) $ (360,747) $ (823,884)
Book value per share $ (0.033) $ (0.033) $ (.010) $ (.013)
Dividends per share NONE NONE NONE NONE
Shares used in computing
(loss) per common share:
Basic 12,901,000 31,717,200 13,051,000 31,732,200
Diluted 12,901,000 31,717,200 13,051,000 31,732,200
4
RISK FACTORS
INVICTA GROUP'S LIMITED OPERATING HISTORY WILL MAKE IT DIFFICULT TO EVALUATE AN
INVESTMENT IN ITS SHARES.
Invicta Group's; operating history began in July 2001, Casino Rated Players'
operating history began in July 2000. Furthermore, Casino Rated Players had
essentially no sales during 2002. These limited operating histories make it
difficult for you to evaluate Invicta Group's business and its prospects based
on prior performance. There is no assurance Invicta Group will be able to
develop a successful and profitable business.
INVICTA GROUP'S LACK OF FUNDING FOR CURRENT EXPENSES MAY PREVENT INVICTA GROUP
FROM CONTINUING ITS BUSINESS AND PURCHASERS OF ITS COMMON STOCK ARE SUBJECT TO A
COMPLETE LOSS OF THEIR INVESTMENT.
Invicta Group is offering twelve million shares for sale to the public at a
price of $.60 per share. Invicta Group needs funding from the sale of these
shares in order to fund the continuation its operations. Without such funding,
purchasers of the shares are at risk of loosing their entire investment. There
is no assurance as to when or if Invicta Group will be able to sell its shares
during the offering period in an amount sufficient to provide a level of funding
that will enable it to remain in business.
INVICTA GROUP'S LOSSES AND ACCUMULATED DEFICIT MAY PREVENT IT FROM SURVIVING AND
BECOMING A GOING CONCERN.
For the fiscal years ended December 31, 2001 and 2002 and the nine month period
ended September 30, 2003, Invicta Group experienced net losses of $394,880,
$539,994 and $ 410,197 respectively. Invicta Group's accumulated deficit on
September 30, 2003 was $1,354,938. Invicta Group's operating results for future
periods will include significant expenses, including ongoing product development
expenses, sales and marketing costs, programming and administrative expenses,
and will be subject to numerous uncertainties. As a result, Invicta Group may be
unable to achieve profitability in the future. In the absence of revenues
sufficient to pay the costs of operations or alternative financing, of which
there is no assurance, it is unlikely that Invicta Group will be able to survive
and become a going concern.
INVICTA GROUP IS DEPENDENT UPON THE SALE OF THE SHARES IN THE OFFERING UNDER
THIS PROSPECTUS FOR FUNDING TO CONTINUE ITS OPERATIONS AND DEVELOPMENT OF ITS
BUSINESS.
At the date of this prospectus, Invicta Group does not have any source of
funding for its business plan other than the sale of the shares it is offering
under this prospectus. In the event it is unable to sell a sufficient number of
those shares to sustain and expand its operations and development of it travel
and travel-related products and services, principally its websites, it is likely
that it will be necessary for Invicta Group to cease operations.
EARLIER INVESTORS WILL HAVE A GREATER RISK OF LOSS THAN LATER INVESTORS AS A
RESULT OF THE UNCERTAINTY AS TO WHETHER INVICTA GROUP WILL SELL ENOUGH SHARES TO
FUND ITS BUSINESS PLAN.
Invicta Group has been unsuccessful in its attempts to obtain private loans and
equity investment to fund the implementation of its business plan. Invicta
Group's ability to implement its business plan is entirely dependent upon the
sale of the shares it is offering under this prospectus. There is no minimum
number of shares required to be sold before Invicta Group begins using the net
proceeds in its business. If less than all the shares are sold, Invicta Group
will be able to implement only limited portions of its business plan, with the
fewer shares sold the less utility the net proceeds will be in supporting
Invicta Group's operations. Accordingly, earlier investors will not be able to
determine how many shares Invicta Group will ultimately be able to sell or
whether they will be sold at a time needed to pay Invicta Group's expenses and
development costs when they become due and the earlier investors will have a
greater risk of loss.
5
INVICTA GROUP'S BUSINESS IS VULNERABLE TO CHANGE AND RESTRUCTURING IN THE TRAVEL
INDUSTRY, PARTICULARLY IN THE COMPENSATION PAID FOR THIRD-PARTY TICKET SALES AND
CONSOLIDATION OF SERVICES.
The airline and travel-services industries are undergoing rapid and widespread
changes and restructuring. These changes are, in large part, due to the effects
of September 11, 2001. In addition to the consolidation of service providers
through acquisitions and cessation of operations, changes in the traditional
financial structure of travel marketing have occurred. For example, airlines
have ceased their long-standing practice of paying commissions to travel agents.
It is likely that additional changes will take place in the way travel-related
services are marketed and compensated. These changes may decrease or eliminate
Invicta Group's profit margin in the sale of travel and travel-related products
and services, with the effect that Invicta Group may not be able to become a
going concern.
THE COMPETITION INVICTA GROUP FACES FROM OTHER ONLINE PROVIDERS OF
AIRFARE SEARCH ENGINES AND TRAVEL-RELATED SERVICES INCREASES THE LIKELIHOOD
INVICTA GROUP WILL BE UNABLE TO SURVIVE.
The on-line travel industry in which Invicta Group participates is characterized
by intense competition and Invicta Group competes with other providers of
travel-related services such as Expedia, Cheap Tickets, Orbitz and Travelocity.
While Invicta Group is not well established, some of these and other competitors
are well established, owned by large corporations, with longer operating
histories than Invicta Group has, and many of them have substantially greater
financial and other resources than Invicta Group has. As a result, Invicta Group
expects to encounter difficulty in effectively marketing its services and
gaining a viable share of the market. The online travel industry is marked by
innovation, with the introduction of similar or superior products by current or
future competitors which could have a material adverse effect on Invicta Group's
business, financial condition and results of operation.
INVICTA GROUP COULD LOOSE ITS ACCESS TO DISCOUNTED AIRFARES OFFERED BY AIRLINE
CONSOLIDATORS BECAUSE IT DOES NOT HAVE WRITTEN AGREEMENTS WITH AIRLINE
CONSOLIDATORS.
Invicta Group's ontheflyfaring search engine includes access to unpublished air
fares offered by airline consolidators. This access is a major factor in Invicta
Group's ability to compete in the online travel industry. But, Invicta Group
does not have any written agreements assuring its continued access to airline
consolidator fares. In the event Invicta Group is unable to continue to access
airline consolidator fares, its competitive advantage, if it achieves any
advantage, may be lost, and its viability adversely affected.
THE VOTING CONTROL BY INVICTA GROUP'S DIRECTORS AND OFFICERS WILL MAKE IT
IMPOSSIBLE FOR OTHER STOCKHOLDERS TO EFFECT CHANGE EVEN IF THEY ARE DISSATISFIED
WITH MANAGEMENT'S PERFORMANCE.
Invicta Group's directors and officers beneficially own approximately
Sixty-eight percent of Invicta Group's currently issued and outstanding shares
of common stock, and will own approximately forty-six percent, assuming all of
the shares offered under this prospectus by Invicta Group and by the selling
security holders and under a separate prospectus by selling security holders are
sold. With these percentages of ownership, Invicta Group's directors and
officers are able to prevent other stockholders from participating in decisions,
such as the election of directors, which affect Invicta Group's management and
business direction, even if the outside stockholders are dissatisfied with
management's performance.
6
IN VIEW OF INVICTA GROUP'S HISTORY OF LOSSES, THE MARKET PRICE FOR INVICTA
GROUP'S SHARES IS LIKELY TO REMAIN LOW AND MAKE IT VULNERABLE TO SHORT SELLERS.
INVICTA GROUP'S OFFER TO SELL SHARES AT THE OFFERING PRICE UNDER THIS PROSPECTUS
IS LIKELY TO PLACE A CEILING ON THE MARKET PRICE FOR THE SHARES WHILE SHARES IN
THE OFFERING REMAIN UNSOLD.
Invicta Group's losses are expected to result in the market price for its shares
remaining low. Shares are also being offered by Invicta Group's stockholders
under a separate registration statement, which combined with the offering of
shares under this prospectus by Invicta Group, may cause an oversupply of shares
and when there is an undersupply of purchasers. These conditions may attract the
attention of short sellers, who could place additional downward pressure on the
market price of Invicta Group's shares. Furthermore, Invicta Group's offering of
shares at $.60 can be expected to place a ceiling on a public market price,
since persons desiring to invest in Invicta Group's stock could purchase
directly from Invicta Group if the market price were ever to exceed $.60 per
share.
THE "PENNY STOCK RULES" WILL MAKE IT MORE DIFFICULT FOR AN ACTIVE PUBLIC TRADING
MARKET TO DEVELOP FOR INVICTA GROUP'S STOCK.
Invicta Group's shares will initially be, and likely for some extended period of
time will continue to be, classified as a penny stock, that is stock that trades
for less than $5 per share in the over-the-counter market. Federal securities
regulations require securities broker-dealers to notify new customers of the
additional risk of investing in penny stocks, obtain written consent to the
investment and make a written determination that the investment is suitable for
the investor, among other things. These requirements are expected not only
discourage securities broker-dealers from marketing Invicta Group's stock to new
customers, but also may be a deterrent to the purchase of Invicta Group's stock
by new customers. Many larger firms refuse to handle penny stocks for their
customers.
ARBITRARY DETERMINATION OF THE OFFERING PRICE INCREASES THE RISK THAT PURCHASERS
OF THE SHARES IN THE OFFERING WILL PAY MORE THAN THE VALUE THE PUBLIC MARKET
ULTIMATELY ASSIGNS TO INVICTA GROUP'S COMMON STOCK AND MORE THAN AN INDEPENDENT
APPRAISAL VALUE OF INVICTA GROUP.
The offering price for the shares was arbitrarily determined by Invicta Group's
management. The offering price bears no relation to Invicta Group's assets,
revenues, book value or other traditional criterion of value. Investors may be
unable to resell their shares at or near the offering price, if they are able to
resell the shares at all.
INVICTA GROUP HAS ISSUED ADDITIONAL STOCK WHICH, ALTHOUGH NOT OFFERED UNDER THIS
PROSPECTUS AND PRESENTLY INELIGIBLE FOR SALE TO THE PUBLIC, CAN BE SOLD INTO THE
PUBLIC MARKET IN THE FUTURE AND DEPRESS THE MARKET PRICE FOR INVICTA GROUP'S
STOCK.
7
As of the date of this prospectus, there are 34,322,200 shares of Invicta
Group's common stock issued and outstanding. 7,732,200 of those shares are being
offered for sale by selling stockholders to the public under another prospectus
and 2,590,000 of those shares are being offered for sale by selling stockholders
to the public under this prospectus, leaving twenty-four million shares
available for sale into the public market at some time in the future. These
sales may take place under a future registration statement or, after stock has
been outstanding for more than one year, pursuant to Rule 144, which places a
limit on how many shares can be sold by an individual in a three month period,
and imposes other requirements on the sale. The bulk of these shares become
eligible for sale under Rule 144, subject to the individual volume limitations
on sales during a three month period, beginning July 2003. Each of the three
holders of these shares, who are Invicta Group's directors and officers, could
begin selling approximately 357,222 shares (or, 477,222 shares, assuming Invicta
Group sells the twelve million shares it is offering under this prospectus) into
the market every three months after that date, subject to satisfying the notice,
transaction and public information requirements of the Rule. Beginning in July
2004, these shares can be sold without restrictions or limitations, assuming the
holders are at that time no longer affiliates of Invicta Group. The introduction
of these shares, even in limited quantities, into the market place could result
in a decline in the market price for Invicta Group's common stock as a result of
supply exceeding demand.
FORWARD-LOOKING STATEMENTS
Assumptions about future events used as a basis for certain statements in
this prospectus about those expected events may differ from actual future
events, causing the statements in this prospectus about those expected events to
be inaccurate and the results of future operations to be different from and
perhaps worse than suggested in this prospectus. Invicta Group makes statements
in this prospectus about its future based upon its current expectations. Invicta
Group's actual future may be materially different from its expectations
described in this prospectus. Some of the words Invicta Group uses to describe
its future are "believes", "anticipates", "expects", "intends", "may" and other
similar expressions, but other words may be used. Also, any information
described as forecasts, projections or future events or circumstances and
statements made with future-tense verbs are forward-looking statements. Readers
should realize that many of the future events described in this prospectus are
beyond Invicta Group's control. Invicta Group does not intend to publicly
publish any revisions to reflect events or circumstances occurring after the
date of this prospectus which differ from the expectations and assumptions
reflected in this prospectus.
LIMITATION ON AUTHORITY TO MAKE REPRESENTATIONS AND
LOCATION OF OFFERING
Invicta Group has not authorized anyone to make any representations which
are not contained in this prospectus. You should rely only on the information
contained in this prospectus. You should not rely upon any unauthorized
information.
This prospectus does not offer to sell or to buy shares of Invicta Group's
common stock in any jurisdiction where it is unlawful. You should not assume
that any information in this prospectus is accurate as of any date other than
the date on the cover of this prospectus. Invicta Group is obligated to file a
new prospectus in the event of material change in the information contained in
this prospectus. You should ask if Invicta Group has a more current prospectus
available; and, you should review any such prospectus carefully before making
your investment.
8
USE OF PROCEEDS
Invicta Group will receive net proceeds of approximately $6,480,000,
assuming it is able to sell all of the twelve million share it is offering in
the prospectus and after the payment of expenses of this offering, estimated at
$32,500, assuming the payment of brokerage commissions equal to ten percent of
the gross proceeds. Invicta does not have any agreement, arrangement or
understanding with any securities broker-dealer for sale of the shares. If it is
able to reach any such agreements, the compensation required by the
broker-dealer may exceed ten percent. See, "Plan of Distribution". There is no
assurance Invicta Group will be able to sell any of the shares. The following
table sets forth Invicta Group's intended uses of the net proceeds, assuming the
sale of all, seventy-five percent, fifty percent and twenty-five percent of the
shares.
Percentage of
offering sold: 100% 75% 50% 25%
---- --- --- ---
Gross proceeds: $7,200,000 $5,400,000 $3,600,000 $1,800,000
Estimated offering
expenses - 747,500 576,500 387,500 207,500
--------- --------- --------- --------
Estimated net
proceeds: 6,452,500 4,823,500 3,212,500 1,592,500
Use of net proceeds:
Advertising/Branding- 750,000 700,000 300,000 150,000
Legal/Professional- 100,000 100,000 100,000 100,000
Working Capital- 1,883,500 1,304,500 793,500 323,500
Acquisitions- 3,500,000 2,500,000 1,800,000 800,000
Accrued executive
compensation- 113,000 113,000 113,000 113,000
Repayment of loan
from stockholder- 106,000 106,000 106,000 106,000
Invicta Group has identified a need to acquire an air travel consolidator
company and a casino representative company, which it estimates can be acquired
for a total of $2.5 million. Invicta Group does not have any agreements,
arrangements or understandings for such acquisitions. See, "Invicta Group's
Business - Acquisitions". Invicta Group may issue stock offered by this
prospectus in full or partial consideration for acquisitions or payment of legal
and professional fees (including an investor relations firm), rather than
selling the stock and paying the consideration or fees in cash. Any stock issued
for these purposes will be valued at $.60 per share. Invicta Group will not use
any of the net proceeds for acquisitions to pay deferred compensation to its
executive officers or to repay a loan from Mr. Forhan until it realizes gross
proceeds of at least $1 million. Deferred executive compensation, if paid from
net proceeds of the offering, will be paid over an eighteen-month period. See,
"Transactions between Invicta Group and its Management" for the terms of
repayment of the loan from Mr. Forhan and the use of the proceeds from that
loan.
9
Invicta Group expects the net proceeds from the sale of twenty-five percent
of the shares will sustain its operations for a period of twelve months and the
sale of more shares for a proportionally longer period of time. Revenues
generated during the period will extend the period over which Invicta Group can
use the net proceeds. There is no assurance that the net proceeds will be
received in time to meet Invicta Group's needs. Invicta Group's board of
directors reserves the right to reallocate the use of proceeds to meet
unforeseen events. Pending their use, Invicta Group may deposit proceeds in
commercial bank accounts or invest them in money market funds for short term
government obligations.
Invicta Group will not receive any of the net proceeds from the sales by
selling security holders.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS,
LIQUIDITY AND FINANCIAL CONDITION
BUSINESS DEVELOPMENT OF CASINO INVICTA GROUP AND CASINO RATED PLAYERS AS
SEPARATE COMPANIES SINCE INCEPTION
Invicta Group began its business operations in July 2001 with advertising
of discount air travel tickets in newspapers in South Florida, which resulted in
limited sales beginning in September of that year made by telephone. See
explanation below of accounting treatment of reverse acquisition which reflects
no sales in 2001 based on the results of operations of Casino Rated Players.
Although it introduced its web site, dontpayfullfare.com, in January 2002,
ticket sales have remained confined primarily to the telephone from inception to
the date of this prospectus. In early 2002 Invicta Group initiated negotiations
for the acquisition of its wholly-owned subsidiary, Casino Rated Players, which
was completed on July 15, 2002.
Casino Rated Players began its operations in July 2000, with sales of
airline tickets and tour packages. Casino Rated Players introduced its web site,
casinoratedplayers.com, in March 2001 but did not generate any commission
revenues from casinos during that year. During 2001 and 2002, Casino Rated
Players revenues were derived almost entirely from sale of airline tickets and
general travel packages, and not from what was intended to be its primary focus
- - the sale of casino tour packages which it has not had funding to advertise.
During 2002, Casino Rated Players earned approximately $1,800 in casino
commissions as a result of casino patrons who discovered casinoratedplayers.com
by doing their own web searches. Invicta Group intends to begin marketing
Casino Rated Players casino travel package products when and if equity funding
for that purpose can be obtained and, in that event, expects casino travel
package products to become a significant part of its business.
The acquisition of Casino Rated Players by Invicta Group was treated as a
purchase in a reverse acquisition in which the subsidiary, Casino Rated Players,
is the survivor for accounting purposes, even though Invicta Group is the
survivor for legal purposes. Invicta Group issued 13,151,000 of its shares in
exchange for the issued and outstanding shares of Casino Rated Players held by
that company's stockholders and an additional one million shares to Mr. Forhan
in payment of $500,000 in accrued and unpaid compensation due to him from that
company. Mr. Forhan joined the management of Invicta Group. Accordingly, the
results of operations prior to July 15, 2002 presented in the financial
statements and discussed below are the results of Casino Rated Players only,
which commenced its business on January 27, 2000. The following table presents
information to assist the reader in understanding the historical operations
conducted by each of Invicta Group and Casino Rated Players, separately, even
though the information for Invicta Group prior to the acquisition is excluded
from the financial statements presented in this prospectus as a result of the
reverse acquisition accounting treatment.
10
INVICTA GROUP CASINO RATED PLAYERS
---------------------------- -----------------------------
9 months ended 9 months ended
Year ended September 30, Year ended September 30,
------------- -------------- -------------- --------------
2001 2002 2003 2001 2002 2003
---- ---- ---- ---- ---- ----
Revenues $0 $6,445 $14,906 $439,234* $1,800 $0
Gross profit $0 $6,445 $14,906 $33,315 $1,800 $0
*Primarily derived from sale of air travel and not the sale of casino packages.
The following discussion and analysis should be read in conjunction with
Invicta Group's financial statements included in this prospectus. Invicta Group
also engaged in negotiations for the acquisition of another Internet-based
travel company, but was unable to obtain a written letter of intent or
acquisition agreement due to its inability to arrange funding for the proposed
transaction.
RESULTS OF OPERATIONS:
REVENUES
Revenues for the year ended December 31 2002 were $8,245 as compared to
revenues of $33,315 for the year ended December 31, 2001. The revenues in both
periods were derived principally from the sale of airline tickets. The primary
reason for the decrease in 2002 over 2001 was the termination of the sale of air
travel packages during 2002 because the cost of staffing this sales effort
exceeded sales. Revenues in 2002 were driven principally by marketing in the
Sunday Travel section of the Miami Herald newspaper and in 2001 by yellow page
and outdoor advertising. Revenues are commissions on air tickets booked directly
with airlines (eight percent), on hotel and motel rooms (eight to sixteen
percent), on rental cars (ten percent), on cruises (sixteen to eighteen percent)
and casino based travel (as described below). Revenues on air travel tickets
purchased through airline consolidators are booked at the commission earned, not
the gross sales price.
Revenues for the nine months ended September 30, 2002 and 2003 were $9,833
versus $14,906 respectivly. Management believes the increase in 2003 over 2002
is a result of "word-of-mouth" advertising and greater interest in travel by the
public arising from a perception of increased safety of air travel resulting
from greater airport security, which has generated more searching of the world
wide web for travel bargains in which users have been directed via search
engines to dontpayfullfare.com. The revenues in both periods were derived
principally from the sale of airline tickets. The increase from period to period
reflects the sale of air travel package sales by Invicta Group.
Invicta Group believes that an increase in its marketing expenditures will
generate additional revenues. There is no assurance Invicta Group will be able
to obtain the funding necessary to increase its expenditures for marketing or,
if available, the amount of additional revenues increased marketing expenditures
will generate.
11
COST OF REVENUES
Revenues are the net amount earned from airline tickets, car rentals,
cruises and travel products. Revenues are the commission earned from these
sources; resulting in revenues between 8% and 18% of the cost of the product
sold to the consumer.
EXPENSES
The major components of selling, general and administrative expenses for
the twelve months ended December 31, 2002 and the nine months ended September
30, 2003, in round numbers, are set forth in the following table.
Year ended 9 Months ended
December 31, 2002 September 30, 2003
----------------- ---------------------
Marketing $ 17,200 $ 3,400
Executive compensation $ 342,000 $ 270,000
Professional fees $ 25,600 $ 13,812
Amortization and depreciation $ 24,500 $ 26,100
Automobile expense $ 12,100 $ 10,485
Insurance $ 7,400 $ 6,003
Rent $ 21,600 $ 7,720
Telephone $ 12,100 $ 8,546
Misc. General Administrative $ 85,782 $ 67,574
The major components of expenses are general and administrative expense.
The results for the nine months ended September 30, 2003 were $425,103 versus
$311,258 for September 30, 2002. The additional costs in 2003 are professional
fees for the SB-2 registration of which this prospectus is a part and the
addition of the chief executive officer's deferred compensation.
As noted above, sales are driven by marketing. Invicta Group's business
plan calls for an increase in marketing expense in 2003 and 2004. At the date of
this prospectus, Invicta Group does not have funding for marketing expenses.
Executive compensation has been accrued and not paid in 2001, 2002 and 2003. In
the event Invicta Group is able to obtain additional funding, it plans to add
personnel, which would significantly increase non-management compensation
expense. See, "Invicta Group's Business - Personnel". Invicta Group made the
acquisition of its ontheflyfaring software, a custom Internet search engine
software, from an unrelated third party for two million shares of its common
stock valued at $100,000. Invicta Group does not expect to purchase another
software package in the near future, although it expects to have ongoing
software development costs incurred under contracts with various software and
website developers for the enhancement of its existing software and website
platforms.
12
NET LOSSES
Net loss increased for the year ended December 31, 2002, to $540,037
compared to a net loss of $394,880 for the 2001 fiscal year. Net loss for the
nine months ended September 30, 2003, were $410,197 compared to a net loss of
$301,425 for the same period in 2002. The increase in loss in year 2002 over
year 2001 and in the first nine months of 2003 compared to the first nine months
of 2002 was principally due to additional deferred officer compensation of
$240,000 in 2002 compared to 2001 and of $270,000 in the first nine months of
2003 compared to the same period in 2002. Without the ability to expand its
marketing effort, Invicta Group expects losses to continue; and, even then,
there is no assurance increased marketing activities will result in an increase
in sales.
Invicta Group expects losses to continue until increased marketing
activities results in an increase in sales, of which there is no assurance.
LIQUIDITY:
At December 31, 2001 and 2002 and at September 30, 2003, Invicta Group's
current ratios were .085%, .096% and .03%, respectively. Invicta Group has not
generated sufficient revenue in any period to carry its costs of operations,
realizing a negative cash flow from operations, as adjusted, of $107,180 for
year 2001, a negative cash flow from operations, as adjusted, of $87,879 for the
year 2002 and a negative cash flow as adjusted, of $600 for the nine months
ended September 30, 2003. Invicta Group has derived its liquidity principally
from a loan from Mr. Forhan in the amount of $320,671 in 2000, the sale of its
common stock by Invicta Group and Casino Rated Players for an aggregate of
$493,700 in 2000 thru 2002 and the deferred executive compensation of $526,792
through September 30, 2003. For the foreseeable future, Invicta Group expects to
attempt a public or private sale of common stock from which to derive sufficient
liquidity for it to remain in for twelve months or more business and pursue its
business plan. Minimum cash requirements for Invicta Group to cover its costs of
operations, including expanding its marketing cost to $3,000 per week covering
six market areas, addition of 3 staff positions and increased in telephone and
related expenses and assuming no increase in revenues, during the next twelve
months are estimated at $800,000. This estimate does not include amounts payable
to Mr. Forhan described in the next paragraph. At the date of this prospectus,
Invicta Group does not have cash on hand or arrangements for financing to cover
this amount.
Invicta Group owes $320,671 to Mr. Forhan in loan repayments. The total
accrual of executive compensation at Septembr 30, 2003 was $ 526,792. Both
repayment of the loan and the payments of accrued compensation will have a
significant impact on Invicta Group's liquidity available from additional
funding, of which there is no assurance. Invicta Group will not make any
payments to Mr. Forhan or of accrued compensation until it has obtained more
than $1 million from the sale of its shares.
CAPITAL RESOURCES:
Invicta Group has substantially all the capital resources required to
conduct its core business, consisting of its two web sites and search engine for
air fares and casino, cruise and tour packages, and travel related services,
such as rental cars and lodging accommodations. Day-to-day operations of the web
sites require very limited personnel. Invicta Group does not have the capital
resources, including cash ($ 7,687 at September 30, 2003), however, necessary to
continue in business and expand it marketing activities, add personnel, expand
its relationships with the providers of travel products and services and engage
it a program of acquisitions of airline consolidators and casino representative
companies, not to consider the acquisition of casino and hotel properties which
comprise part of its business plan. Invicta Group does not have any arrangements
for the sale of its common stock or for debt financing, in the alternative, to
provide liquidity necessary for it to continue its business.
13
CONTROLS AND PROCEDURES:
Invicta Group's Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of Invicta Group's disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934, as amended) as of December 31, 2002, (the "Evaluation
Date"), have concluded that, as of the Evaluation Date, Invicta Group's
disclosure controls and procedures were effective to ensure the timely
collection, evaluation, and disclosure of information relating to Invicta Group
that would potentially be subject to disclosure under the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated under the
Act. There were no significant changes in Invicta Group's internal controls or
in other factors that could significantly affect the internal controls
subsequent to the Evaluation Date.
INVICTA GROUP'S BUSINESS
OVERVIEW
Invicta Group began its business in July 2000 by offering airline tickets
and other travel-related products and services over the telephone and has
expended to offering them over the Internet. Invicta Group has not engaged in
any other business. The travel related services include hotel rooms, car
rentals, cruises, casino packages and vacation packages. Invicta Group's
websites are located at www.dontpayfullfare.com and www.casinoratedplayers.com.
At these websites, Internet users can view and compare air fares and book
airplane tickets, hotel rooms, car rentals, cruises, casino packages and
vacation packages. As the on-line travel services industry continues to evolve
and mature, Invicta Group believes consumers will increase their patronage of
easy-to-use web sites that provide a broad range of travel services, including
transportation, accommodations, activities, travel packages and travel-related
content, as well as the ability compare prices. Invicta Group's "ontheflyfaring"
proprietary search engine software includes these features. This software
searches domestic and international published airfares and air consolidators'
unpublished databases. Based on its search of the published and unpublished
airfares, the software automatically calculates the price offered to the
Internet user which is between Invicta Group's cost and the price the Internet
user could obtain from most other sources on the Internet with whom Invicta
Group competes, including fares offered directly by the air carriers, and it
does this at a level which is designed to optimize Invicta Group's markup within
the range between Invicta Group's cost and its competitors' pricing. As used in
this description of Invicta Group's business, Invicta Group includes both the
travel business and the casino package business, except where the two are
distinguished by the context.
ON-LINE TRAVEL INDUSTRY
In contrast to travel agency bookings, the on-line travel market has been
strong. Despite tough economic conditions, a tense political climate and fewer
travelers, the online travel market performed surprisingly well in 2002.
According to a new report from PhoCusWright Inc., Online Travel Overview: Market
Size and Forecasts 2002-2005, online leisure/unmanaged business travel grew
thirty-seven percent to over $28 billion while the overall travel market
declined five percent. In the U.S., the combination of more households on-line
and an increasing propensity to buy travel on-line is forecast to lead to an
annual increase in on-line travel buyers of about nineteen percent through 2003,
according to the Travel Industry Association of America. Forrester Research (a
consulting firm in the Internet travel industry) estimates that more than $29.4
billion in travel will be sold on-line in 2003, almost four times 1999 level,
and ten times the 1998 level.
14
The on-line travel sector enjoyed resurgence at the start of January 2002.
ComScore Networks, a Reston, Virginia-based Internet research firm reported that
consumers spent nearly $7 billion at domestic travel sites in the first quarter
of 2002, an increase of forty-eight percent over the same period in 2001, and
thirty-nine percent above the fourth quarter of 2001, which saw a huge slump
caused by the terrorist attack on the United States. The first six months of
2002 saw sales totaling $14.8 billion, a seventy-one percent increase in sales
from the first half of 2001.
ComScore reported that the sale of travel packages totaled $552 million
during the first six months of 2002, a 141 percent increase. Furthermore, both
the low cost of customer interaction and the automation of processing and
fulfillment functions supported by Internet sales allow online travel service
providers the potential to maintain lower operating expenses. On the other hand,
consumers benefit from convenient access to a range of travel options and
information regarding available travel services and products.
Due to its limited participation in the online market for travel related
products and services; Invicta Group has not participated in the growth in its
market segment. And, it is not likely to fully participate in that growth in the
future if it does not have the financial resources to completely develop and
market its web sites.
DONTPAYFULLFARE.COM
Invicta Group's Internet website is located at www.dontpayfullfare.com.
Visitors to Invicta Group's website are greeted by a home page, from which users
can select the type of travel product they desires. By clicking the desired menu
item, visitors are guided through a series of screens that enable them to select
the particular travel product(s) they are seeking and dates on which they desire
to travel. Once the desired selections are made, visitors can obtain pricing
information and make reservations for their selections. Payment can be made by
most major credit cards.
Invicta Group plans to add timeshares and vacation packages to its website
and daily updates for travel specials.
Invicta Group's web site was designed and is maintained for it by an
independent third party, whose services Invicta Group secures on an as-needed
basis, at prevailing hourly rates. The website is updated on a continuing basis
to ensure that offerings are current. Invicta Group has expended approximately
$35,000 on development of dontpayfullfare.com, or approximately seven hundred
hours at a rate of $50 an hour, paid to a contract software developer during the
period since its inception. Other than costs of maintenance and enhancement,
Invicta Group does not anticipate expending any substantial amounts or hours on
web site development in the future.
ONTHEFLYFARING (TM)
Invicta Group has purchased its ontheflyfaring search engine from an
unrelated third-party software developer. The core of Invicta Group's web site
software is the "ontheflyfaring" search engine. This search engine provides
Invicta Group with access to airfares from published sources and from
unpublished sources not available to the general public. dontpayfullfare.com
displays these prices adjusted for Invicta Group's markup. Unpublished prices
are generally those offered by airline consolidators. Airline consolidators are
a major source of seats for Invicta Group's customers.
15
Ontheflyfaring searches AirPlan of Pittsburgh, Pennsylvania and Picasso of
Los Angeles, California, two airline consolidators with which Invicta Group
maintains relationships based on Mr. Scott's long association with the operators
of these organizations. The system enables ontheflyfaring to search up to
fifteen data bases for fares. Tickets purchased by Invicta Group's customers are
booked through global reservation systems, including WorldSpan, Amadeus and
Sabre. Invicta Group has an arrangement with a ticket fulfillment house, Global
Marine, for tickets booked through Amadeus. For a flat fee per ticket, the
fulfillment house issues the physical ticket upon Invicta Group's instruction
and mails the ticket to Invicta Group's customer.
Increasingly, in the competition for the travel customer, price and
selection are the overwhelming factors in the decision to purchase. For this
reason, airline consolidators have become increasingly popular sources for last
minute and price conscious consumers. Airline consolidators contract for excess
capacity and unsold seats from scheduled air carriers and resell those seats to
travel agency customers at a markup generally specified by the travel agency on
a ticket by ticket basis. There are currently about thirty large airline
consolidators in the United States.
The airline consolidators negotiate contracts for discounts directly with
the air lines and suppliers of travel products and services. These contracts are
difficult to obtain and are significant barriers to entry into the consolidation
market. Access to consolidator air fares is critical to positioning Invicta
Group to effectively compete in the travel market.
PRODUCTS AND SERVICES
Invicta Group's dontpayfullfare.com website offers the following products
and services to visitors:
Air Line Tickets - Visitors can view and compare fares and purchase tickets
----------------
for domestic and international flights. Invicta Group displays airfares
offered by major airline carriers worldwide.
Hotel Accommodations - Visitors can select hotel accommodations by
- --------------------
selecting their destination country, state/province and city, and viewing a list
of properties available on the dates selected. Invicta Group offers hotel
reservations through an affiliate program of CNG Group that enables it to sell
hotel rooms online, worldwide.
Car Rentals - Invicta Group's website offers car rental services through
-----------
Alamo Car Rental.
Cruises - This menu page on Invicta Group's website offers cruises from
-------
all of the major cruise lines including Crystal Cruise Lines, Carnival
Cruise Lines, Norwegian Cruise Lines and Royal Caribbean Lines. Invicta
Group utilizes a third-party cruise booking engine.
16
Casino Packages - Invicta Group offers discounted casino tour packages to
---------------
website customers, and complementary rooms and suites to qualified players
through its Casino Rated Players website.
Airline ticketing through AirPlan and Global Marine is based on Mr. Scott's
long personal relationships with the management of those companies. Both
companies provide ticketing to Invicta Group's customers at a fixed charge per
ticket, book the tickets with the air carrier and provide the ticket to the
customer. Invicta Group's access to the operators of global reservation systems
is based on its participation in the travel industry. These products and
services are available to Invicta Group through the personal relationships Mr.
Scott has developed over his years in the travel industry. None of these
relationships are reflected in written agreements. Invicta Group's primary
reliance on informal relationships which Mr. Scott maintains based on his many
years of involvement in the travel industry and his personal relationships with
the airline consolidators with which Invicta Group does business, rather than
written agreements, for access to airline consolidators and other services makes
it vulnerable to loss to such access. Invicta Group offers hotel accommodations
to its customers under CNG Group's standard affiliate contract. It also offers
car rentals to its customers provided by Alamo Car Rental under that company's
standard affiliate contract. In the case of both hotel bookings and car rentals,
Invicta Group is paid the standard commission under the respective affiliate
agreements.
CASINO RATED PLAYERS
On July 15, 2002, Invicta Group acquired Casino Rated Players. At its
website, www.casinoratedplayers.com, Invicta Group offers gamblers with a
history of gaming activity the opportunity to visit casino properties in the
United States and the Caribbean Islands, and to obtain complementary rooms,
meals and other services. The availability and extent of complementary products
and services is dependent upon the gaming history of the player. In general,
Invicta Group is compensated by the casino owner/operator based upon a
percentage of the players' betting activity. The percentage of Invicta Group's
compensation varies from casino to casino generally between ten and fifteen
percent of the player's estimated average bet per hand multiplied by the
estimated number of hands per hour of play in domestic casinos and ten to
fifteen percent of the player's estimated loss at foreign casinos.
Membership is free; however, if a guest fails to wager at the casino in
which he is booked, he will be charged a room fee. Members of Casino Rated
Players can obtain reservations at over forty casinos identified on
www.casinoratedplayers.com in addition, Invicta Group's website at
www.dontpayfullfare.com includes access to the products and services of Casino
Rated Players.
Invicta Group's web site was designed and is maintained for it by an
independent third party, whose services Invicta Group secures on an as-needed
basis, at prevailing hourly rates. The website is updated on a continuing basis
to ensure that offerings are current. Invicta Group has expended approximately
$82,000 on development of casinoratedplayers.com, or approximately 1,640 hours
at a rate of $50 an hour, paid to a contract software developer during the
period since its inception. Other than costs of maintenance and enhancement,
Invicta Group does not anticipate expending any substantial amounts or hours on
web site development in the future.
17
MARKETING
The marketing plan for dontpayfullfare.com is principally print advertising
in the travel section of Sunday newspapers. The marketing plan for Casino Rated
Players includes advertising in the travel section of Sunday newspapers, but
also includes direct mail and email to online gamblers.
GROWTH THROUGH ACQUISITIONS
Invicta Group intends to grow its business, in part, by acquiring one or
more airline consolidators and companies who represent and market casino
vacation packages. The typical acquisition target will be an established
business with a track record of profits or customer base and strategic
relationships which Invicta Group's management believes can become profitable.
In general, these figures would initially be annual revenues of $1 million for
an airline consolidator and of $500,000 for a casino representative company.
Invicta Group may consider subsequent acquisitions with lower annual revenues.
Also, Invicta Group will consider properties which can be acquired at a price
below their market value in established resort destinations. Invicta Group
believes that direct ownership of companies offering these products and services
will improve its gross margin. At the date of this prospectus, Invicta Group
does not have any agreements, arrangements or understandings for acquisitions.
Invicta Group anticipates that acquisitions would involve primarily or
entirely exchanges of stock. Invicta Group believes that such acquisitions will
not involve a change in its management or control, although it anticipates they
will involve additions to management, including the possible addition of
directors to its board. Invicta Group does not intend to acquire businesses
outside of the travel, resort and casino industries; however, it may attempt to
acquire software development or web services companies who provide software and
services which Invicta Group can use in its travel related business. Except as
described here, Invicta Group does not anticipate making acquisitions outside of
the travel and travel related industry.
COMPETITION
Invicta Group faces competition primarily from other online travel
companies, including airlines and travel agencies. Online travel companies
traditionally have established a strong market presence primarily based on the
sale at published fares. Some of these companies also sell non-published fares.
Two primary online competitors have emerged in the sale of non-published fares.
The leading online competitor is Priceline.com, which sells tickets in an
auction-based setting. The other online competitor is Hotwire.com, which
acquires non-published fares primarily from five domestic airlines that are
Hotwire shareholders. Users must decide whether to purchase tickets without
knowing the specific carrier, schedule, connections or equipment type. Unlike
these competitors, Invicta Group's website permits users to choose a specific
airline, knowing the schedule, connections and equipment, and immediately book a
flight.
The online travel services market is relatively new, rapidly evolving and
intensely competitive. Invicta Group expects competition to intensify in the
future. In the online travel services market, Invicta Group competes for
published fares with similar commercial websites of other companies, such as
Expedia, which is operated by USA Networks, Travelocity, which is operated by
Sabre, TravelWeb, which is operated by Pegasus, as well as Cheap Tickets,
Cendant Corporation, Internet Travel Network, Biztravel.com and TheTrip.com.
18
Airlines do not generally offer non-published fares directly or indirectly
through affiliates or travel agents for regularly scheduled travel, presumably
to prevent the erosion of their published fare structure. Many airlines do offer
limited special discounted fares through their own websites that are not
generally made available to travel agents. These fares are typically offered
only on a last-minute, "special sale" basis.
Many of Invicta Group's competitors are subsidiaries, divisions or joint
ventures whose participants include large companies having substantially longer
operating histories and greater financial and other resources than Invicta Group
has. Invicta Group's ability to compete successfully will depend on many
factors, including its ability to adapt to changing technologies and meet the
needs of the marketplace on a price competitive and timely basis. While Invicta
Group believes its ontheflyfaring search engine will be attractive to consumers
of online travel services, there is no assurance that Invicta Group can attract
online traffic on a high volume basis or that its can become a competitive force
in its industry.
While Invicta Group will compete with travel agents for a share of the
travel market, its believes that traditional travel agents and agencies offer
services to a different market segment from that serviced by online providers.
Given the increasing popularity of online travel services, and continued
disincentives to travel agents (e.g., discontinuation of commissions from
airlines), Invicta Group believes online providers will continue to take market
share from traditional travel agents and travel agencies.
EMPLOYEES
Invicta Group currently employs three executive officers, all of whom are
full-time employees. Invicta Group may add as many as forty-three additional
full time employees, subject to obtaining additional funding, of which there is
no assurance, in order to fully staff its operations.
OFFICES
Invicta Group leases 900 square feet of commercial office space. The one
year lease terminates August 31, 2003. Invicta Group pays monthly rent at the
rate of $10,080 per year. This facility is adequate for Invicta Group's current
operations, but not adequate for its planned operations, assuming shares are
sold in a sufficient number to expand operations.
INVICTA GROUP'S MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table includes the names, ages, positions held and terms of
office of Invicta Group's directors and executive officers.
NAME AGE POSITION DIRECTOR SINCE
- ----- --- -------- --------------
William G. Forhan 58 Chief Executive Officer, July 2002
President and Director
Richard David Scott 56 Chief Operating Officer, inception
Chief Financial Officer
and Director
Mercedes Henze 57 Vice President Not Applicable
Secretary
- - --------------------------------------------------------------------------
19
The stockholders of Invicta Group elect the directors at the annual meeting
to serve for one year and until their successors are elected and qualify.
Directors do not receive compensation for serving as directors. Officers are
elected by the board of directors and their terms of office are, except as
otherwise stated in employment contracts, at the discretion of the board of
directors.
As authorized by the Nevada Statutes, Invicta Group's Articles of
Incorporation provide that none of Invicta Group's directors shall be personally
liable to Invicta Group or Invicta Group's shareholders for monetary damages for
breach of fiduciary duty as a director, except liability for:
- - any breach of the director's duty of loyalty to Invicta Group's or its
shareholders;
- - acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- - unlawful payments of dividends or unlawful stock redemptions or
repurchases; and
- - any transaction from which the director derived an improper personal
benefit.
This provision limits Invicta Group's rights and the rights of its
shareholders to recover monetary damages against a director for breach of the
fiduciary duty of care except in the situations described above. This provision
does not limit Invicta Group's rights or the rights of any shareholder to seek
injunctive relief or rescission if a director breaches his duty of care. These
provisions will not alter the liability of directors under federal securities
laws.
Invicta Group is authorized by Nevada corporation law and its bylaws to
indemnify its directors and officers against damages, which qualify, in the
opinion of the disinterested members of the board, for indemnification. Invicta
Group is authorized to purchase liability insurance to cover this
indemnification. The Securities and Exchange Commission has informed Invicta
Group that it is against public policy for Invicta Group to indemnify its
directors and officers for liabilities arising under the Securities Act and that
claims for indemnification for this type of liability is unenforceable.
INFORMATION ABOUT THE EXPERIENCE OF INVICTA GROUP'S MANAGEMENT
William G. Forhan is Invicta Group's Chief Executive Officer, President and
a director beginning July 15, 2002.
20
- - From January 5, 2000 to July 15, 2002, he was the founder, director,
president and owner of a majority of the stock of Casino Rated Players,
Inc. which Invicta Group acquired for stock on July 15, 2002.
- - From June 1, 1999 until January 5, 2000 he served as President of
byebyenow.com, Inc., a South Florida-based internet travel company with
annual revenues of approximately $1 million for six months of operations in
1999. In January 2001, more than thirteen months after Mr. Forhan's
departure, byebyenow.com filed a petition for liquidation under Chapter 7
of the Bankruptcy Code in the U.S. Federal Bankruptcy Court for the
Southern District of Florida, Ft. Lauderdale Division, and Case No.
01-20536-EKC-RBR. byebyenow.com's Amended Plan was confirmed on February
13, 2002. In related cases which are still pending, none of which involve
Mr. Forhan, certain of byebyenow.com's management is being sued for claims
including alleged securities fraud.
- - From June 15, 1998 thru December 31, 1999, Mr. Forhan served as President
of Aviation Industries Corp., a holding company specializing in the travel
industry that acquired five (5) travel related companies; totaling over $23
million in revenue:.
1) Magnolia Tours of Biloxi, Miss, (destination management and motor coach
operator generating $950,000 annual revenues);
2) Business Travel of Atlanta, a. (business travel agency, with annual
revenues exceeding $19 million);
3) Cruise Society located in Charlotte, N.C.(cruise specialty travel agency)
with annual revenues $1.5 million;
4) Casino Marketing International based in Pompano Beach, Florida (casino rep
company) with annual revenues $700,000;
5) Professional Travel Intl. located in Louisville Ky. generating $1 million
in annual revenues through a travel agent franchise.
- - From January 5, 1994 to January 5, 2000, he served as President and Chief
Executive Officer of Integrated Marketing Professionals, Inc., an
over-the-counter (Pink Sheets: POKR) provider of casino package tours with
annual revenues of approximately $15,000,000 a year. More than two years
after Mr. Forhan left the company, Integrated Marketing Professionals, Inc.
filed a petition for relief under Chapter 7 of the Bankruptcy Code and has
liquidated all of their assets
Richard David Scott is Invicta Group's founder, Chief Operating Officer and
a director. From May 1, 1999 to August 15, 2001, Mr. Scott served as Invicta
Group's president. During the past twenty years, Mr. Scott has held the
following positions:
- - From May 1, 1999 to August 15, 2001, Mr. Scott served as Chief Executive
Officer of Globalfare.com, a California-based travel company specializing
in both last minute travel specials and in travel for consumers who plan
their vacations a year or more in advance. Globalfare.com has annual
revenues of $2 million.
- - From June 1, 1981 until November 28, 1999 he served as President of
Euram Flight Center, a Washington D.C.-based air consolidator with annual
revenues of $50 million.
Mercedes Henze has served as Invicta Group's Vice President since July 1,
2001. From August 1, 2000 to April 1, 2001, Ms. Henze served as Vice President
for Globalfare.com. From November 1, 1982 to November 15, 2001, she served as
Executive Vice President of Euram Flight Center.
21
Family Relationships: Mr. Scott, Invicta Group's Chief Operating Officer,
and Ms. Henze, Invicta Group's Vice President, are husband and wife.
Board Committees: Invicta Group does not as yet have an audit committee or
a compensation committee. Invicta Group will be required to organize these
committees if its secures a listing for its common stock on the BBXchange.
Employment Agreements. Invicta Group has entered into employment agreements
with Mr. Forhan, Invicta Group's Chief Executive Officer, Mr. Scott, Invicta
Group's Chief Operating Officer and Ms. Henze, Invicta Group's Vice President.
Each agreement is for a term of two years, terminating August 1, 2004, which
provide for automatic annual renewals, unless either Invicta Group or the
employee elects to terminate the agreement at the end of the initial or any
renewal term. Claims under the agreements are to be resolved by arbitration
before the American Arbitration Association.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table presents the compensation earned by Invicta Group's
executive officers during the last three fiscal years.
Cash Compensation
Name and Position Year Paid Accrued
- ----------------- ---------------------- ---------
William G. Forhan 2000 None None
President and Chief Executive Officer 2001 None $ 70,000
2002 None $ 30,000
2003 None $-90,000
- -------------------------------------
Richard David Scott 2000 None None
Chief Operations and 2001 None None
Chief Financial Officer 2002 None $120,000
(President from inception 2003 None $ 48,396
to July 15, 2002)
- ----------------------------
Mercedes Henze 2000 None None
Vice President 2001 None None
2002 None $120,000
2003 None $-48,396
Invicta Group has not paid any of the cash compensation reflected in the
preceding table, which has been accrued, as reflected in the right hand column
the table. In addition; Mr. Forhan and Mr. Scott each are due a monthly car
allowance of $750. Each of the named executive officers is entitled to a salary
of $120,000, prorated from date of employment, under his or her employment
agreement. These executive officers are not entitled to and have not received
any non-cash or any other compensation, bonuses or other forms of long term
compensation. Invicta Group has not issued any stock options or stock
appreciation rights to these executive officers, although they do have the
opportunity to participate in the Incentive and Non-Qualified Stock Option Plan
described below.
22
INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
The following table sets forth information about Invicta Group's 2002
Incentive and Non-Qualified Stock Option Plan approved by directors and
stockholders on August 1, 2002.
Shares remaining Shares issuable upon Weighted average exercise
available exercise of outstanding price of outstanding
for future issuance options options
- ------------------- ----------------------- -------------------------
Stockholder approved none none
plan 5,000,000
- -------------------- ----------------------- -------------------------
Invicta Group does not have any equity compensation plan which has not been
approved by stockholders. The 2002 plan is intended to assist Invicta Group in
securing and retaining key employees, directors and consultants by allowing them
to participate in its ownership and growth through the grant of incentive and
non-qualified options, as well as direct stock grants. Under the 2002 plan,
Invicta Group may grant incentive stock options only to key employees and
employee directors. Invicta Group may grant non-qualified options and issue
direct stock awards to its employees, officers, directors and consultants. The
2002 equity compensation plan is administered by its board of directors.
Subject to the provisions of the 2002 plan, the board determines who
receives options or grants, the number of shares of common stock that may be
purchased under the options, the time and manner of exercise of options and
exercise prices. The term of options granted under the stock option plan may not
exceed ten years or five years for an incentive stock option granted to an
optionee owning more than ten percent of Invicta Group's voting stock. The
exercise price for incentive stock options will be equal to or greater than the
fair market value of the shares of the common stock at the time granted.
However, the incentive stock options granted to a ten percent holder of Invicta
Group's voting stock are exercisable at a price equal to or greater than 110
percent of the fair market value of the common stock on the date of the grant.
The exercise price for non-qualified options will be set by the board, in its
discretion, but in no event will the exercise price be less than the par value
for Invicta Group's common stock. The exercise price may be payable in cash or,
with the approval of the board, by delivery of shares or by a combination of
cash and shares. The board may also direct the issuance of shares of Invicta
Group's common stock as awards under the 2002 plan. Absent registration under
the Securities Act of 1933, as amended, or the availability of an exemption from
registration, shares of common stock received as stock grants and upon exercise
of options will be subject to restrictions on sale or transfer provided in the
federal securities laws.
23
TRANSACTIONS BETWEEN INVICTA GROUP AND ITS MANAGEMENT
Invicta Group issued 11,000,000 shares to Mr. Forhan, as consideration for
the acquisition of Casino Rated Players on July 15, 2002. Mr. Forhan was a
founder of Casino Rated Players and purchased its stock at the time of its
organization on January 27, 2000 for $.001 per share. At that time, Mr. Forhan
was the Chief Executive Officer of Casino Rated Players and owned approximately
two-thirds of its stock, but he was not a stockholder, director or officer of
Invicta Group. The transaction was negotiated between Mr. Forhan and Mr. Scott.
Mr. Forhan received one share of Invicta Group for each share of Casino Rated
Players he owned (ten million shares) and two shares of Invicta Group for each
dollar of $500,000 in deferred compensation which Casino Rated Players owed to
Mr. Forhan (one million shares).
Mr. Forhan loaned Casino Rated Players and aggregate of $320,671 during
2000, before its acquisition by Invicta Group as a wholly owned subsidiary in
July 2002. Casino Rated Players used the borrowing for the following purposes.
Uses: Amount
- -------------------------------- --------
Investment Tours By Charlie. $ 50,000
Cash : working capital 18,731
Marketing 29,593
Advertising and Promo 16,391
Legal 7,800
Furniture, Equip. and computers 18,000
Web site Development 16,500
Wages 122,000
G&A Exp 41,656
--------
Total uses of loan $320,671
Invicta Group has executed a promissory note to Mr. Forhan for the loan.
The note does not bear interest, and is due and payable in equal monthly
installments over eighteen months commencing upon Invicta Group obtaining not
less than $1 million in additional equity funding, of which there is no
assurance.
Mr. Scott sold 380,000 of his Invicta Group shares in a private transaction
and has loaned the proceeds of $38,000 to Invicta Group for corporate working
capital without interest. Mr. Forhan sold 250,000 shares of his Invicta Group
shares in a private transaction and has loaned the proceeds of $55,000 to
Invicta Group for corporate working capital without interest. Subsequently,
loans were converted into 380,000 shares and 250,000 shares of Invicta Group's
common stock, respectively.
24
PRINCIPAL SHAREHOLDERS
The following tables set forth information known to Invicta Group, as of
the date of this prospectus, relating to the beneficial ownership of shares of
common stock by:
- - each person who is known by Invicta Group to be the beneficial owner of
more than five percent of its outstanding common stock;
- - each director;
- - Each executive officer; and
- - All executive officers and directors as a group.
Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of Invicta Group Inc., 9553 Harding Avenue, Suite
301, Miami Beach, Florida 33154. Innovapp's address is 9855 Erma Road # 135,
San Diego, CA 92131
Invicta Group believes that all persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as being
owned by them.
The following table provides information before and after the offering of
the twelve million shares, assuming all shares are sold, but assuming the shares
being offered by each of the named person pursuant to this prospectus and a
separate prospectus are not sold.
Before Offering After Offering
----------------------- -----------------------
Name Shares Percentage Shares Percentage
- ---- ---------- ---------- ---------- ----------
William G. Forhan 11,000,000 32.05% 11,000,000 23.75%
Richard David Scott 6,500,000 18.94% 6,500,000 14.03%
Mercedes Henze 6,000,000 17.48% 6,000,000 12.95%
Officers and Directors
As a group (3 persons). 23,500,000 68.47% 23,500,000 50.73%
Innovapp Inc 2,000,000 5.83% 2,000,000 4.32%
The following table provides information before and after the offering of
the twelve million shares by Invicta Group, assuming all shares are sold, but
assuming also that all the shares being offered by each of the named person
pursuant to a separate prospectus are sold.
25
Before Offering After Offering
----------------------- -----------------------
Name Shares Percentage Shares Percentage
- ---- ---------- ---------- ---------- ----------
William G. Forhan 11,000,000 29.86% 10,500,000 22.13%
Richard David Scott 6,500,000 16.37% 6,000,000 12.13%
Mercedes Henze 6,000,000 16.02% 5,500,000 11.87%
Officers and Directors
As a group (3 persons). 23,500,000 62.26% 22,000,000 46.13%
Innovapp Inc 2,000,000 5.83% 1,800,000 3.89%
Mr. Scott and Ms. Henze are married. The shares legally owned by one are
treated as being beneficially owned by the other for purposes of federal
securities law, but have not been presented in this way in the table above in
order to avoid possible confusion.
Innovapp's controlling persons are Scott Meader and Henry Marentes, neither
of whom have any relationship with Invicta Group or its directors, officers and
principal stockholders.
INFORMATION ABOUT INVICTA GROUP'S SHARES
GENERAL
- -------
Invicta Group is authorized by its Articles of Incorporation to issue
ninety million shares of common stock, par value $.001 per share, and ten
million shares of preferred stock, par value $.001 per share.
COMMON STOCK
- ------------
A total of 34,322,200 shares of common stock are issued and outstanding on
the date of this prospectus. Assuming all twelve million shares offered by this
prospectus are sold, Invicta Group would have 46,322,200 shares issued and
outstanding. Each of the common shares has the following rights:
1. To receive its equal share of dividends when the board decides to declare
them from Invicta Group's funds which can be legally used to pay dividends;
2. To receive its equal share of assets in a liquidation, dissolution or
winding up of Invicta Group's affairs, after payment of all debts; and
3. To one vote on election of each director and each other matter submitted to
a vote of stockholders. Stockholders do not have cumulative voting rights.
The common stock does not carry a pre-emptive right to purchase additional
common stock in the event Invicta Group issues more common stock or the right to
convert into any other type of security Invicta Group may issue in the future.
Invicta Group is not required to and has not set up any fund to repurchase its
common stock. The shares of common stock now outstanding are fully paid, duly
authorized and are legal issued and are not assessable.
26
PREFERRED STOCK
- ---------------
The board of directors is authorized to determine, without stockholder
approval, the designations, rights, preferences, powers and limitations of
Invicta Group's 10,000,000 shares of authorized preferred stock immediately
prior to issuance of any preferred shares. Invicta Group has not issued any
preferred shares.
TRANSFER AGENT AND REGISTRAR
- ----------------------------
The transfer agent and registrar for Invicta Group's common stock is
Florida Atlantic Stock Transfer, 7130 Nob Hill Road, Tamarac, FL 33321.
MARKET FOR THE SHARES, DIVIDENDS ON COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
Market for the Shares:
- -----------------------
Invicta Group's common stock quoted on the OTC Bulletin Board under the
trading symbol of "IVGA". Quotations began on October 26, 2003. The high and low
bid quotations for Invicta between that date and the date of this prospectus
have been $.45 and $.20 per share. These quotations are inter-dealer quotations
without retail markup, markdown or commissions and may not represent actual
transactions.
Invicta Group's common stock is owned of record by approximately
seventy-seven individual holders. Invicta Group does not have any shares subject
to outstanding options or warrants or issuable on conversion of securities.
Invicta Group has 24,000,000 shares issued and outstanding that may be sold in
the future pursuant to Rule 144 under the Securities Act, including the
7,732,200 shares proposed to be sold to the public under another prospectus. The
balance of twenty-four million shares is entirely owned by Invicta Group's
directors and officers and by Innovapp. See, "Principal Stockholders". Invicta
Group does not have an obligation to register any of the balance of these
shares. See Risk Factors".
The offering price for the shares offered by Invicta was arbitrarily
determined by Invicta Group and does not bear any relationship to Invicta
Group's assets, earnings, book value or any other recognized criterion of value.
The price at which the shares are actually sold is expected to be determined by
negotiation between the buyer and Invicta Group based on then current market
price, provided that the actual price must be withing plus or minus ten percent
of the offering price. The offering price is not an indication of and is not
based upon Invicta Group's actual value, and should not be regarded as an
indicator or the future market price for its shares.
Invicta Group have never paid cash dividends on its common stock. Invicta
Group intend to keep future earnings, if any, to finance the expansion of its
business, and it does not anticipate that any cash dividends will be paid in the
foreseeable future. Invicta Group's future payment of dividends will depend on
its earnings, capital requirements, expansion plans, financial condition and
other relevant factors. The board of directors has the sole authority to declare
dividends.
27
PLAN OF DISTIBUTION BY INVICTA GROUP
By Invicta Group -
Invicta Group is offering twelve million shares of its common stock in a
self-underwritten public offering. These shares will be offered by its officers
and directors, as part of their normal duties, who will not be compensated for
making such sales, apart from their executive salaries. None of the directors
and officers have ever been affiliated with or employed by a securities
broker-dealer. Invicta Group may also sell shares outside the United States in
the event the opportunity arises to make foreign sales.
Invicta Group plans to sell the shares directly to investors at a price of
$.60 per share. Invicta Group intends to use advertising and other means of
public communication, including an explanation on its web sites of how to obtain
a prospectus. Invicta Group will receive the net proceeds from the sale of the
twelve million shares. There is no assurance Invicta Group will be able sell all
or any of these shares. Invicta Group may also issue shares as consideration for
acquisitions or as compensation for services. Invicta Group plans to engage a
securities broker-dealer to act as an underwriter. At the date of this
prospectus, Invicta Group does not have any agreement, arrangement or
understanding with any securities broker-dealer regarding distribution of the
shares and there is no assurance it will be able to obtain an underwriter for
the shares. In the event Invicta Group is able to engage an underwriter, Invicta
Group will be obligated to amend this prospectus to identify the underwriter and
disclose the terms of the underwriter's compensation and disclose any change in
the plan of distribution. If Invicta Group is successful in engaging an
underwriter, it will be required to amend this prospectus to set forth the terms
of the engagement.
By selling security holders -
The selling security holders are offering 2,715,000 shares of Invicta
Group's common stock under this prospectus. Invicta Group does not have any
plan, agreement or understanding with the selling security holders regarding the
coordination of its offering with theirs. In the event any of the selling
security holders is able to engage an underwriter, Invicta Group will be
obligated to amend this prospectus to identify the underwriter and disclose the
terms of the underwriter's compensation and disclose any change in the plan of
distribution.
The selling security holders may sell the shares from time to time directly
to purchasers or through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders or from the purchasers. Invicta Group does not expect these
discounts, concessions or commissions to be in excess of those customary in the
types of transactions involved. Invicta Group will not receive any proceeds from
the sale of the shares by selling security holders.
The shares may be sold in one or more transactions at then prevailing
market prices at the time of sale, at prices related to prevailing market
prices, a varying prices determined at the time of sale, or at negotiated
prices. These sales may be in transactions, which may involve crosses or block
transactions:
- - On the OTC Bulletin Board or in the over-the-counter market.
- - In transactions other than the OTC Bulletin Board or in the
over-the-counter market.
- - Through the writing of options, whether the options are listed on an
options exchange or otherwise;
- - Through the settlement of short sales made after the effective date of
this prospectus.
28
In connection with the sale of the shares, or otherwise, the selling
security holders may enter into hedging transactions with broker-dealers or
financial institutions, which may in turn engage in short sales of the shares in
the course of hedging the positions they assume. The selling security holders
may also sell Invicta Group's common stock short, provided the sale is not made
before the effective date of this prospectus, and deliver the shares to cover to
close out their short positions, or loan or pledge their shares to
broker-dealers who in turn may sell the shares.
The aggregate proceeds to the selling security holders from the sale of the
shares offered by them will be the purchase price of the shares less discounts,
concessions and commissions, if any. The selling security holders reserve the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of the shares to be made directly or
through agents.
In order to comply with the securities laws of some states, if applicable,
the shares may be sold in these jurisdictions only through registered or
licensed securities brokers or dealers. In addition, in some states, the shares
may not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and has
been complied with.
The selling security holders and any underwriters, broker-dealers or agents
who participate in the sale of the shares may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act. Any discounts,
concessions, commissions or profit they earn on any re-sales of the shares may
be underwriting discounts or commissions under the Securities Act. Selling
security holders and their agents who are "underwriters" within the meaning of
Section 2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Act. Invicta Group has advised the selling security holders
that they or persons acting on their behalf are required to deliver a copy of
this prospectus when making sales of the shares.
In addition, any shares covered by this prospectus which also qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. A selling security holders may
transfer, devise or gift his shares by other means not described in this
prospectus.
To the extent required, the specific shares to be sold, the purchase prices
and the public offering prices, the name of any agent, dealer or underwriter and
any applicable discounts or commissions with respect to a particular offer or
sale will be set forth in accompanying prospectus supplement or, if appropriate,
in a post-effective amendment to the registration statement of which this
prospectus is a part.
This offering of the shares for resale by the selling security holders will
begin on the date of this prospectus and continue as long as this prospectus is
in effect or until the selling security holders have sold all of their shares,
whichever occurs first. If required, Invicta Group will distribute a supplement
to this prospectus or amend the registration statement of which this prospectus
is a part to describe material changes to the terms of the offering.
Invicta Group's is paying all of the costs for registering the shares for
resale by the selling security holders. These expenses include the SEC's filing
fees and filing fees under state securities or "blue sky" laws. The selling
security holders will pay all underwriting discounts, commissions, transfer
taxes and other expenses associated with their resale of the shares.
29
REGULATION M APPLIES TO THE SELLING SECURITY HOLDERS:
Invicta Group has informed the selling security holders that a selling
security holder, a group of selling security holders acting together, and family
members of selling security holders should not place any bid for, purchase or
attempt to purchase, directly or indirectly, any of Invicta Group's common
shares in the public market before he, or all of them in the case of a group,
have sold all of Invicta Group's shares he or she is entitled to sell under this
prospectus. Also, the selling security holders should not attempt to convince
anyone else to bid for or purchase Invicta Group's common stock in the public
market before he has sold all of his shares covered by this prospectus. To do so
may violate Regulation M under the Securities Exchange Act. Any person who,
directly or indirectly, bids for or effects any purchase of the common stock for
the purpose of pegging, fixing or maintaining the price of Invicta Group's
common shares, practices known as "stabilizing", may violate Regulation M if the
action does not comply with Regulation M. Furthermore, no person should engage
in any activity that is fraudulent, manipulative, or deceptive under the federal
securities laws and regulations.
SELLING SECURITY HOLDERS
This prospectus covers the resale of 2,715,000 shares of Invicta Group's
common stock. None of the selling security holders are affiliated with Invicta
Group, except Messrs. Forhan, Scott and Morris. Mr. Forhan is Invicta Group's
Chief Executive Officer, Mr. Scott is Invicta Group's Chief Operating Officer
and Mr. Morris is Invicta Group's securities counsel.
The following table sets forth the name of each selling security holder who
is not a director, officer or affiliate of Invicta Group and the number or
shares of common stock beneficially owned by each selling security holder, all
of which is included for sale in this prospectus and which in every case
represents less than one percent of the total issued and outstanding common
stock, unless otherwise indicated. Assuming the sale of all the shares offered
by each selling security holder, none of them will own any of Invicta Group's
shares at the conclusion of the offering.
Number of Number of
Name Shares Owned Shares Offered
- ----- ------------ --------------
Mark Brillant 10,000 10,000
Eric Cheshire 50,000 50,000
Tom Davis 100,000 100,000
Certified Financial Consultants, Inc. 350,000 350,000
Bernie Gilman 750,000 750,000
Innovapp, Inc. (Henry Marentes) 200,000 200,000
Charles Moskowitz 100,000 100,000
Louis Katz 125,000 125,000
U.S. Capital Partners, Inc. 250,000 250,000
30
The following table sets forth the name of each selling security holder who
is a director, officer or affiliate of Invicta Group, his position with Invicta
Group, the number or shares of common stock beneficially he owns, the number of
shares included for sale in this prospectus and the number of shares included
for sale in a separate prospectus, the number of shares to be owned assuming the
sale of all the shares offered and the percentage of the total issued and
outstanding common stock he or she will own, assuming the sale of all the shares
offered. The percentages assume the sale of the twelve million shares offered by
Invicta Group under this prospectus. None of these selling security holders has
informed Invicta Group that he or she has any agreements, arrangements or
understandings for the sale of his or her shares. All expenses of the
registration of the common stock on behalf of the selling security holders are
being borne by Invicta Group.
Percentage
Name/Position Shares Owned Shares Offered After Sale
- ------------- ------------ -------------- ----------
William Forhan 11,000,000 250,000 22.00
Chief Executive Officer
Jackson L. Morris 150,000 150,000 none
Securities Counsel (1)
David Scott 6,500,000 380,000 12.57
Chief Operating Officer
(1) Mr. Morris disclaims that he is an affiliate of Invicta Group.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed
upon for Invicta Group by Jackson L. Morris, Esq., an attorney in Tampa,
Florida. Mr. Morris is the owner of 150,000 shares of Invicta Group's shares,
issued for services, which Mr. Morris is offering for sale pursuant to this
prospectus.
EXPERTS
The consolidated financial statements of Invicta Group at December 31,
2001 and 2002 and for the years then ended, appearing in this prospectus and
registration statement have been audited by Dreslin Financial Services,
independent auditors, Seminole, Florida as set forth in their report thereon
appearing elsewhere in this prospectus, and are included in reliance upon this
report given on the authority of such firm as experts in auditing and
accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Invicta Group has filed a registration statement containing this
prospectus, other information and documents referred to in this prospectus with
the Securities and Exchange Commission. You may read and copy this registration
statement at the Commission's public reference room located at 450 Fifth Street,
N.W. in Washington, D.C. You can request copies of these documents by writing to
the Commission and paying a fee for the copying costs. Please call the
Commission at 1-800-SEC-0330 for more information about the operation of the
public reference room. Invicta Group's filings are also available on the
Commission's Web site at http://www.sec.gov.
31
INVICTA GROUP INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30,
2003
----------
ASSETS
Current assets:
Cash and cash equivalents $ 7,687
Accounts Receivable 10,190
Notes Receivable 5,500
----------
Total current assets 23,377
----------
Property and equipment, net of accumulated depreciation
of $13,256, and $21,466. 7,232
Other assets:
Intangible assets, net of accumulated
amortization of $ 35,609 and $79,109. 183,490
----------
$ 214,099
==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 8,013
Notes payable 117,107
Loans from shareholders - current portion 107,000
Deferred officer compensation 526,792
----------
Total current liabilities 758,912
----------
Long-term debt
Loans from shareholders - long term portion 254,071
Convertible Debenture 25,000
Shareholder's equity:
Common stock, par value $ .001, 90,000,000 shares
authorized, 31,732,200 issued and outstanding 31,732
Additional paid in capital 499,322
Retained earnings (1,354,938)
----------
Total shareholder's equity (823,884)
----------
$ 214,099
==========
F-1
INVICTA GROUP INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
NINE MONTHS NINE MONTHS QUARTER QUARTER
ENDING ENDING ENDING ENDING
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2002 2003 2002 2003
---------- ---------- ---------- ----------
Revenues earned $ 9,833 $ 14,906 $ 8,791 $ 1,480
Selling, general, and
Administrative expenses 311,258 425,103 138,776 147,191
---------- ---------- ---------- ----------
Operating loss (301,425) (410,197) (129,985) (145,711)
NET LOSS (301,425) (410,197) (129,985) (145,711)
========== ========== ========== ==========
Net loss per share ($ 0.010) ($ 0.013) ($ 0.004) ($ 0.005)
========== ========== ========== ==========
Weighted average shares
outstanding 30,085,200 31,732,200 30,085,200 31,732,200
F-2
INVICTA GROUP INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS NINE MONTHS
ENDING ENDING
SEPTEMBER 30, SEPTEMBER 30,
2002 2003
---------- ----------
Cash flows from operating activities:
Net income $ (301,425) $ (410,197)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization 24,040 38,400
Stock issued for services
Changes in assets and liabilities:
Accounts receivable and prepaid expenses 30,000 24,310
Accrued expenses 165,000 262,000
Accounts payable & accrued liabilities 7,227 (30,455)
---------- ----------
(75,158) (115,942)
---------- ----------
Cash flows used in investing activities:
Capital asset expenditures (600)
Cash flows used in financing activities:
Proceeds from long term debt 16,200 196,103
Proceeds from sale of comon stock 82,500 800
Payments on long term debt (26,136) (77,202)
---------- ----------
72,564 119,701
---------- ----------
Net change in cash and cash equivalents (2,594) 3,159
Cash and cash equivalents, beginning of period
5,579 4,528
---------- ----------
Cash and cash equivalents, end of period $ 2,985 $ 7,687
========== ==========
SUPPLEMENTAL DISCLOSURE:
Interest expense paid $ 0 $ 0
========== ==========
F-3
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDING SEPTEMBER 30, 2003
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Organization
- ------------
The Company was organized June 1, 2000 under the laws of the State of Nevada.
The Company specializes in the travel and entertainment industry, and is
focusing on the acquisition of various travel and entertainment entities,
operating as independent entities, and capitalizing on marketing and operational
efficiencies.
On July 2, 2002, at a meeting of the Board of Directors, the Board approved
amending its Articles of Incorporation. These amendments were approved by a
majority vote of the stockholders. The Company authorized changing its common
stock authorized, 1000 shares, $0.01 par value, to 90,000,000 shares, common
stock par value $0.001. Additionally, the Company authorized 10,000,000
Preferred shares.
Principles of Consolidation
- ---------------------------
The consolidated financial statements include the accounts of the company and
the following wholly owned subsidiary. All material inter-company transactions
have been eliminated.
Subsidiary's Name Business Activity
- ----------------- -----------------
Casino Rated Players, Inc. Casino representative company offering
- --------------------------
comp rooms to rated players. The Company
revenues are a percentage of the amount of
income the Casino earns from the rated
player. The Casino tracks the play of the
rated player to determine its gross income,
and the Company then is paid its contractual
percentage based on that income, realized at
the time of play.
Basis of Accounting
- -------------------
The accompanying consolidated financial statements are prepared using the
accrual basis of accounting where revenues are recognized when earned and
expenses are recognized when incurred. This basis of accounting conforms to
generally accepted accounting principles.
Fixed assets
- ------------
Fixed assets are carried at cost. The company provides depreciation over the
estimated useful lives of fixed assets using the straight line method. Upon
retirement or sale of fixed assets, their net book value is removed from the
accounts and the difference between such net book value and proceeds received is
income or loss. Expenditures for maintenance and repairs are charged to income
while renewals and betterment's are capitalized.
F-4
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
Estimated useful lives are as follows:
Furniture 7 years
Office equipment 5 years
Income taxes
- ------------
The Company has adopted SFAS 109. The Company has not made a provision for
income tax purposes due to incurring losses since inception. The net losses of
approximately $590,000 can be carried forward to offset future taxable income.
The net operating loss carry-forward begin expiring in 2017.
Intangible assets
- -----------------
The Company assesses long-lived assets for impairment under FASB Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. Under those rules, long-lived assets are included in
impairment evaluations when events or circumstances exist that indicate the
carrying amount of those assets may not be recoverable.
Net income per share
- --------------------
The company has adopted of SFAS 128, Earnings per Share issued by the Financial
Accounting Standards Board.
Net loss per share was computed based on the weighted average number of shares
outstanding during the periods presented.
F-5
NOTE 2: MANAGEMENT PLANS REGARDING LIQUIDITY AND OPERATIONS
The Company's management is currently attempting to market and sell the
Company's common shares to individual investors in order to provide cash for
continuing operations, and to fund acquisitions.
If the Company is unable to market and sell it shares of stock, it is unlikely
that the Company will be able to continue to fund operations from existing
revenues. Management believes these efforts will allow the Company to become
profitable, and allow it to continue as a going concern, however; there can be
no assurances to that effect.
NOTE 3: ACQUISITION OF BUSINESSES
Casino Rated Players, Inc.
- --------------------------
On July 15, 2002, the Company acquired all of the common stock of Casino Rated
Players, Inc. in exchange for 14,151,000 restricted shares of the Company's
stock with a calculated value of $.005 per share resulting in a total purchase
price of $70,755.
Based on the resulting outstanding shares of the Company at the conclusion of
the transaction, the former shareholders of Casino Rated Players Inc.
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
NOTE 3: ACQUISITION OF BUSINESSES (CONTINUED)
held a majority voting position in the combined company. Accordingly, based on
the criteria of SFAS 141, the acquisition was accounted for as a reverse
acquisition. All assets of Invicta Group, Inc. were recorded at fair market
value, and all assets and liabilities of Casino Rated Players have been recorded
at historical cost. The transaction resulted in a reduction of paid in capital
and retained earnings of $356,965 to account for the elimination of the
accumulated deficit of Invicta Group, Inc. and the elimination for the
outstanding common stock of Casino Rated Players, Inc.
The following pro forma information is presented as required by SFAS 141
regarding the presentation of any period present in the financial statements.
The following selected financial information is presented as if the transaction
has occurred at the beginning of each period presented, and the operations were
consolidated.
F-6
NOTE 4: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is carried at cost. The cost and related
accumulated depreciation as of September 30, 2003 is summarized as follows:
Office furniture and equipment $28,698
Less accumulated depreciation and amortization $21,466
-------
Total $ 7,232
=======
F-7
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
NOTE 5: OPERATING LEASES
The Company leases office space for its operations on a month-to-month basis at
$800 per month.
Rent expense for the quarter ended September 30, 2003 and the nine months ended
September 30, 2002 was $2,400, and $2,400 respectively.
NOTE 6: INTANGIBLE ASSETS
Intangible assets consist of the following:
Software $100,000
Web-Site Development 117,658
Client List 44,941
--------
Total 262,599
Less Accumulated Amortization 79,109
--------
$183,490
========
The company amortizes intangible assets using the straight-line method over a
5-year period for software, and a 7-year period for both web-site development,
and client list.
NOTE 7: DEFERRED OFFICER COMPENSATION
Amounts accrued for officer salaries, are based on the standard monthly officer
salary. The deferred amounts are non-interest bearing. The Company intends to
pay the deferred amounts from cash flow generated from operations. The Company
intends to make payments on the deferred compensation balances when it has
successfully raised $1,000,000 with its intended stock offering. Payments will
be amortized over 18 months.
F-8
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
NOTE 8: LONG TERM DEBT
Long term debt consist of the following:
Notes Payable - 90-day notes with an annual
-------------
Interest rate of 6%. The notes automatically
Renew at the end of the 90-day period until
Paid. $117,107
Loans from shareholders - notes with a
-----------------------
zero interest rate - payable in monthly
payments over 18 months provided the
Company is successful in selling a minimum
of $1,000,000 of the Company's common stock. $361,071
--------
Total long-term debt 478,178
Less current maturities 224,107
--------
Total long-term debt, less current maturities $254,071
========
Scheduled long-term debt maturities as of September 30, 2003 are as
follows:
2003 $224,107
2004 254,071
--------
$468,178
========
NOTE 9: CONVERTIBLE DEBENTURE
Convertible Debenture - Issued on August 7,2003 the debenture is for a term of 5
months with interest at 10% annual and is convertible at $.30 per share. The
debenture expires on December 31, 2003.
NOTE 10: FAIR VALUES OF FINANCIAL INSTRUMENTS
All financial instruments are held or issued for purposes other than trading.
The carrying amount of cash, accounts receivable, accounts payable and other
current liabilities approximates fair value because of their short maturity. The
carrying amount of notes payable, related party notes payable, convertible
debentures, and capital lease obligations approximates their fair value based on
current market interest rates offered by the company.
F-9
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
NOTE 11: RELATED PARTY TRANSACTIONS
The company has received various short-term advances from one of its primary
shareholders. There is no interest on these advances. The Company intends to
make payments on the shareholder advances when it has successfully raised
$1,000,000 with its intended stock offering. Payments will be amortized over 18
months.
NOTE 12: INNOVAPP SOFTWARE PURCHASE
On July 28,2002 the Company acquired a unique proprietary software called "on
the fly faring" from Innovapp. The software allows the Company to compare
airfare prices from multiple sources on both the internet and major airline
booking systems, allowing the Company to mark up or down fares in order to
receive the best possible yield on tickets sold.
The software was acquired for two million shares of the Company's common stock,
plus a royalty fee of 10% on sales of licensing agreements over the next five
years. The shares were valued at $.05 per share, resulting in an effective
purchase price of $100,000. The software is amortized ratably over a 5-year
period.
F-10
Dreslin Financial Services
7985 113th Street, Suite 220
Seminole, Florida 33772
(727) 393-7439
Independent Auditor's Report
The Board of Directors and Shareholders of
Invicta Group Inc.
We have audited the accompanying consolidated balance sheets of Invicta Group
Inc. and subsidiaries as of December 31, 2001, and December 31, 2002 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the two years then ended. 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 statements 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 Invicta Group Inc. and
subsidiaries as of December 31, 2001 and December 31, 2002 and the results of
its operations and its cash flows for the two years then ended in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company incurred significant losses from operations,
and because of these losses, the Company has a working capital deficiency, which
raises substantial doubts about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Dreslin Financial Services
- ------------------------------
Dreslin Financial Services
Seminole, Florida
April 4, 2003, except for Note 13, as
To which the date July 11, 2003
F-11
INVICTA GROUP INC.
CONSOLIDATED BALANCE SHEET
RESTATED
DECEMBER 31, DECEMBER 31,
2001 2002
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,579 $ 4,528
Stock subscription receivable $ 40,000
Prepaid expenses 30,000
-------------- --------------
Total current assets 35,579 44,528
-------------- --------------
Property and equipment, net of accumulated 17,542 12,632
depreciation of $5,615, and $15,466. (note 5)
Other assets:
Intangible assets, net of accumulated
amortization of $21,405 and $46,709. 140,894 215,890
-------------- --------------
$ 194,015 $ 273,050
============== ==============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 5,066 $ 14,922
Loans from shareholders - current portion
(note 8) 332,149 107,000
Deferred officer compensation (note 7) 465,000 342,000
-------------- --------------
Total current liabilities 802,215 463,922
-------------- --------------
Long-term debt
Loans from shareholders - long term portion
(note 8) 213,671
Convertible Debenture (note 9) 10,000 10,000
Shareholder's equity:
Common stock, par value $.001, 90,000,000 shares 12,901 31,717
authorized, 31,717,200 issued and outstanding
Additional paid in capital 273,652 498,530
Retained earnings (904,753) (944,790)
-------------- --------------
Total shareholder's equity (618,200) (414,543)
-------------- --------------
$ 194,015 $ 273,050
============== ==============
F-12
INVICTA GROUP INC.
CONSOLIDATED STATEMENT OF OPERATIONS
RESTATED
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2001 2002
-------------- --------------
Commissions earned. $ 33,315 $ 8,245
Selling, general, and administrative expenses 428,195 548,282
-------------- --------------
Operating loss (394,880) (540,037)
NET LOSS (394,880) (540,037)
============== ==============
Net loss per share ($0.033) ($0.032)
============== ==============
Weighted average shares outstanding 11,934,000 16,642,200
F-13
INVICTA GROUP INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
RESTATED
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2001 2002
-------------- --------------
Cash flows from operating activities:
Net income ($398,120) ($540,037)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization 20,785 22,130
Stock issued for services 28,000 121,198
Changes in assets and liabilities:
Accounts receivable 39,536
Prepaid expenses (6,000) 30,000
Accounts payable and accrued expenses 208,619 278,830
-------------- --------------
(107,180) (87,879)
-------------- --------------
Cash flows used in investing activities:
Capital asset expenditures (58,801)
Cash flows used in financing activities:
Proceeds from long term debt 11,101 13,200
Proceeds from sale of common stock 177,728 137,905
Payments on long term debt (36,000) (64,277)
-------------- --------------
152,829 86,828
-------------- --------------
Net change in cash and cash equivalents (13,152) (1,051)
Cash and cash equivalents, beginning of year 18,731 5,579
-------------- --------------
Cash and cash equivalents, end of year $ 5,579 $ 4,528
============== ==============
SUPPLEMENTAL DISCLOSURE:
Interest expense paid $ 0 $ 0
============== ==============
F-14
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Organization
- ------------
The Company was organized June 1, 2000 under the laws of the State of Nevada.
The Company specializes in the travel and entertainment industry, and is
focusing on the acquisition of various travel and entertainment entities,
operating as independent entities, and capitalizing on marketing and operational
efficiencies.
On July 2, 2002, at a meeting of the Board of Directors, the Board approved
amending its Articles of Incorporation. These amendments were approved by a
majority vote of the stockholders. The Company authorized changing its common
stock authorized, 1000 shares, $0.01 par value, to 90,000,000 shares, common
stock par value $0.001. Additionally, the Company authorized 10,000,000
Preferred shares.
Principles of Consolidation
- ---------------------------
The consolidated financial statements include the accounts of the company and
the following wholly owned subsidiary. All material inter-company transactions
have been eliminated.
Subsidiary's Name Business Activity
- ----------------- -----------------
CASINO RATED PLAYERS, INC. Casino representative company offering
comp rooms to rated players. The Company
revenues are a percentage of the amount of
income the Casino earns from the rated
player. The Casino tracks the play of the
rated player to determine its gross income,
and the Company then is paid its contractual
percentage based on that income, realized at
the time of play.
Basis of Accounting
- -------------------
The accompanying consolidated financial statements are prepared using the
accrual basis of accounting where revenues are recognized when earned and
expenses are recognized when incurred. This basis of accounting conforms to
generally accepted accounting principles.
Fixed assets
- ------------
Fixed assets are carried at cost. The company provides depreciation over the
estimated useful lives of fixed assets using the straight line method. Upon
retirement or sale of fixed assets, their net book value is removed from the
accounts and the difference between such net book value and proceeds received is
income or loss. Expenditures for maintenance and repairs are charged to income
while renewals and betterment's are capitalized.
Estimated useful lives are as follows:
Furniture 7 years
Office equipment 5 years
F-15
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
Income taxes
- ------------
The Company has adopted SFAS 109. The Company has not made a provision for
income tax purposes due to incurring losses since inception. The net losses of
approximately $455,000 can be carried forward to offset future taxable income.
The net operating loss carry-forward begin expiring in 2017.
Revenue recognition
- -------------------
The Company derives its revenue from the commissions earned from travel
suppliers, and on the direct sale of travel related products. Revenue is
recognized upon the receipt of the commission.
Intangible assets
- -----------------
The Company assesses long-lived assets for impairment under FASB Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. Under those rules, long-lived assets are included in
impairment evaluations when events or circumstances exist that indicate the
carrying amount of those assets may not be recoverable.
Net income per share
- --------------------
The company has adopted of SFAS 128, Earnings per Share issued by the Financial
Accounting Standards Board.
Net loss per share was computed based on the weighted average number of shares
outstanding during the periods presented.
NOTE 2: MANAGEMENT PLANS REGARDING LIQUIDITY AND OPERATIONS
The Company's management is currently attempting to market and sell the
Company's common shares to individual investors in order to provide cash for
continuing operations, and to fund acquisitions.
If the Company is unable to market and sell it shares of stock, it is unlikely
that the Company will be able to continue to fund operations from existing
revenues. Management believes these efforts will allow the Company to become
profitable, and allow it to continue as a going concern, however; there can be
no assurances to that effect.
NOTE 3: STOCK SUBSCRIPTION RECEIVABLE
The Company entered into an agreement for the sale of 500,000 shares of its
common stock on December 23, 2002 for a sum of $50,000. The Company received a
payment of $10,000 with the agreement, and recorded a receivable for the balance
of $40,000. The Company has collected the entire amount of the subscription
receivable.
F-16
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4: ACQUISITION OF BUSINESSES
Casino Rated Players, Inc.
- --------------------------
On July 15, 2002, the Company acquired all of the common stock of Casino Rated
Players, Inc. in exchange for 14,151,000 restricted shares of the Company's
stock, including 1,000,000 shares as payment for $500,000 of deferred officers
compensation on the books of Casino Rated Players, Inc. The calculated per share
value of $.005 per share resulted in a total purchase price of $70,755, and the
reduction of $500,000 of the outstanding liabilities were recorded as a
reduction to retained earnings.
Based on the resulting outstanding shares of the Company at the conclusion of
the transaction, the former shareholders of Casino Rated Players, Inc. held a
majority voting position in the combined company. Accordingly, based on the
criteria of SFAS 141, the acquisition was accounted for as a reverse
acquisition. All assets of Invicta Group, Inc. were recorded at fair market
value, and all assets and liabilities of Casino Rated Players have been recorded
at historical cost. The transaction resulted in a reduction of paid in capital
of $202,105 to account for the elimination of the accumulated deficit of Invicta
Group, Inc. and the elimination for the outstanding common stock of Casino Rated
Players, Inc.
The following pro forma information is presented as required by SFAS 141
regarding the presentation of any period present in the financial statements.
The following selected financial information is presented as if the transaction
has occurred at the beginning of each period presented, and the operations were
consolidated.
2002 2001
--------------------------
Gross Revenues $12,316 $ 41,930
Net Income ($611,999) ($441,722)
Earnings Per Share (.021) (.028)
NOTE 5: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is carried at cost. The cost and related
accumulated depreciation as of December 31, 2002 is summarized as follows:
Office furniture and equipment $28,098
Less accumulated depreciation and amortization 15,466
-------
Total $12,632
=======
F-17
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6: INTANGIBLE ASSETS
Intangible assets consist of the following:
Software $100,000
Web-Site Development 117,658
Client List 44,941
--------
Total 262,599
Less Accumulated Amortization 46,709
--------
$215,890
========
The company amortizes intangible assets using the straight-line method over a
5-year period for software, and a 7-year period for both web-site development,
and client list.
NOTE 7: OPERATING LEASES
The Company leases office space for its operations on a month-to-month basis at
$800 per month.
Rent expense for the year ended December 31, 2001 and the year ended December
30, 2002 was $3,200, and $9,800 respectively.
NOTE 8: DEFERRED OFFICER COMPENSATION
Amounts accrued for officer salaries, based on the standard monthly officer
salary. The deferred amounts are non-interest bearing. The Company intends to
pay the deferred amounts from cash flow generated from operations. The Company
intends to make payments on the deferred compensation balances when it has
successfully raised $1,000,000 with its intended stock offering. Payments will
be amortized over 18 months.
NOTE 9: LONG TERM DEBT
Long term debt consist of the following:
Loans from shareholders - notes with a
zero interest rate - payable in monthly
payments over 18 months provided the
Company is successful in selling a minimum
of $1,000,000 of the Company's common stock. $320,671
--------
Total long-term debt 320,671
Less current maturities 107,000
--------
Total long-term debt, less current maturities $213,671
========
Scheduled long-term debt maturities as of December 31, 2002 are as follows:
2003 $107,000
2004 213,671
--------
$320,671
========
NOTE 10: CONVERTIBLE DEBENTURE
Convertible Debenture - Issued in return for marketing services performed. The
debenture, issued on July 1, 2001, is for a term of three years with interest at
7% and is convertible at $.50 per share. The debenture expires on July 1, 2003.
F-18
INVICTA GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: FAIR VALUES OF FINANCIAL INSTRUMENTS
All financial instruments are held or issued for purposes other than trading.
The carrying amount of cash, accounts receivable, accounts payable and other
current liabilities approximates fair value because of their short maturity.
The carrying amount of notes payable, related party notes payable, convertible
debentures, and capital lease obligations approximates their fair value based on
current market interest rates offered by the company
NOTE 12: RELATED PARTY TRANSACTIONS
The company has received various short-term advances from one of its primary
shareholders. There is no interest on these advances. The Company intends to
make payments on the shareholder advances when it has successfully raised
$1,000,000 with its intended stock offering. Payments will be amortized over 18
months.
NOTE 13: INNOVAPP SOFTWARE PURCHASE
In July 2002, the Company acquired a unique proprietary software called "on the
fly faring" from Innovapp. The software allows the Company to compare airfare
prices from multiple sources on both the internet and major airline booking
systems, allowing the Company to mark up or down fares in order to receive the
best possible yield on tickets sold.
The software was acquired for two million shares of the Company's common stock,
plus a royalty fee of 10% on sales of licensing agreements over the next five
years. The shares were valued at $.05 per share, resulting in an effective
purchase price of $100,000. The software is amortized ratably over a 5-year
period.
NOTE 14: RESTATEMENT
The balance sheet was restated for year-end 2002 to properly account for the
acquisition of Casino Rated Players, Inc. as a reverse acquisition instead of a
purchase as originally reported. The income statement was restated to remove the
write off of goodwill that was recorded as part of the purchase, then written
off as an impaired asset.
The net loss for year-end 2002 as restated is ($540,037) reduced from ($754,798)
after the effect of the removal of the written off impaired asset, and the
effect of the operations of Casino Rated Players through July 15, 2002. Total
shareholders equity was unchanged, as the effect of the reverse acquisition
resulted in a reduction to additional paid in capital.
F-19
PART TWO
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Nevada Statutes (the "Corporation Act") permits the indemnification of
directors, employees, officers and agents of Nevada corporations. Invicta
Group's Articles of Incorporation (the "Articles") and Bylaws provide that
Invicta Group shall indemnify its directors and officers to the fullest extent
permitted by the Corporation Act.
The provisions of the Corporation Act that authorize indemnification do not
eliminate the duty of care of a director, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Florida law. In addition, each director will continue to
be subject to liability for (a) violations of criminal laws, unless the director
had reasonable cause to believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful, (b) deriving an improper personal
benefit from a transaction, (c) voting for or assenting to an unlawful
distribution and (d) willful misconduct or conscious disregard for the best
interests of Invicta Group in a proceeding by or in the right of a shareholder.
The statute does not affect a director's responsibilities under any other law,
such as the Federal securities laws.
The effect of the foregoing is to require Invicta Group to indemnify the
officers and directors of Invicta Group for any claim arising against such
persons in their official capacities if such person acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling Invicta
Group pursuant to the foregoing provisions, Invicta Group has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the act and is therefore unenforceable.
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ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by Invicta Group in connection with the
distribution of the securities being registered are as follows:
SEC Registration and Filing Fee $ 630.00
Legal Fees and Expenses* $17,800.00
Accounting Fees and Expenses* $ 8,900.00
Financial Printing* $ 750.00
Transfer Agent Fees* $ 1,500.00
Blue Sky Fees and Expenses* $ 2,000.00
Miscellaneous* $ 920.00
-----------
TOTAL $32,500.00
===========
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On July 1, 2001, Invicta Group issued a total of 12,500,000 founders' shares to
Mr. Scott and Ms. Henze, Invicta Group's Chief Operating
officer/director/founder and Vice President, respectively. No commissions or
other compensation was paid for the issue of these shares. These persons were
fully familiar with Invicta Group's condition and prospects and the condition
and prospects of Casino Rated Players, which Invicta Group acquired
simultaneously with the issuance of these shares. A restrictive legend was
placed on the certificates.
These transactions were exempt from the registration requirement of the
Securities Act of 1933, as amended (the "Act") by reason of Section 4(2) of the
Act and the rules and regulations there under.
On July 15, 2002, Invicta Group issued 13,151,000 shares of common stock to all
thirty-eight shareholders of Casino Rated Players, Inc. in exchange for all of
the issued and outstanding shares of Casino Rated Players, Inc. and 1,000,000 to
William Forhan for compensation accrued by Casino Rated Players, Inc. No
commissions or other compensation was paid for the issue of these shares. Not
only did these stockholders have information about Casino Rated Players, Invicta
Group provided access to financial statements and other relevant information
concerning Invicta Group. Invicta Group believes the shareholders had such
knowledge and experience in business and financial transactions that they were
able to understand and evaluate the risks and merits of the transaction. A
restrictive legend was placed on the certificates. This transaction was exempt
from the registration requirement of the Securities Act of 1933, as amended (the
"Act") by reason of Section 4(2) of the Act and the rules and regulations there
under.
On July 28, 2002, Invicta Group issued 2,000,000 shares of common stock to
Innovapp Inc., as consideration for Invicta Group's purchase of the
ontheflyfaring software. No commission or other compensation was paid on the
issue of this stock. The board of directors of Innovapp Inc. had access to
financial statements and other relevant information concerning Invicta Group.
Invicta Group believes Innovapp had such knowledge and experience in business
and financial transactions that they were able to understand and evaluate the
risks and merits of the transaction. A restrictive legend was place on the
certificates. This transaction was exempt from the registration requirement of
the Act by reason of Section 4(2) of the Act and the rules and regulations there
under.
During the period from November 6, 2001 to the original filing date of this
registration statement, Invicta Group issued 3,081,200 shares of common stock to
thirty-seven persons, the proceeds of which were used for general working
capital purposes. The prices at which the shares were issued ranged from $.10 to
$1, with aggregate proceeds to Invicta Group of $188,700. Thirty-six investors
were non-accredited and one was accredited. Invicta Group provided each of the
purchasers with access to financial statements and other relevant information
concerning Invicta Group. Invicta Group believes the investors had such
knowledge and experience in business and financial transactions that they were
able to understand and evaluate the risks and merits of the transaction. A
restrictive legend was placed on the certificates. This transaction was exempt
from the registration requirement of the Act by reason of Rule 504 of Regulation
D and Section 4(2) of the Act and the rules and regulations there under.
On December 12, 2003, Invicta Group issued a total of 2,580,000 shares of its
common stock to eight individuals and two corporations, in each case the shares
being issued in compensation for services. On that same date Invicta Group
issued 10,000 shares to one individual in payment for computer equipment.
Invicta Group directed each such person to its registrations and reports on file
with the Commission for current information and financial statements. Invicta
Group believes each such person had such knowledge and experience in business
and financial transactions that they were able to understand and evaluate the
risks and merits of the transaction. A restrictive legend was placed on the
certificates. These transactions were exempt from the registration requirement
of the Act by reason of Section 4(2) of the Act and the rules and regulations
there under.
On December 12, 2003, Invicta Group sold 380,000 shares and 250,000 shares of
its common stock to Mr. Scott and Mr. Forhan, respectively, who are its
directors and officers. The price paid for the shares was $38,000 and $55,000,
respectively, in the form of conversion of loans recently made to Invicta Group.
A restrictive legend was placed on the certificates. These transactions were
exempt from the registration requirement of the Act by reason of Section 4(2) of
the Act and the rules and regulations there under.
II-2
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit No Description of Document
- ---------- -----------------------
3.1(a) Articles of Incorporation of Invicta Group Inc.*
3.1(b) Articles of Amendment*
3.2 Bylaws*
5.1 Opinion and Consent of Jackson L. Morris, Esq.
10.1 2002 Equity Compensation Plan*
10.2 Employment Agreement between Invicta Group and
William G. Forhan*
10.3 Employment Agreement between Invicta Group and R. David Scott*
10.4 Employment Agreement between Invicta Group and Mercedes Henze*
10.5 Lease for Miami Beach, Florida Office*
10.6 Stock Purchase Agreement for the Shares of Casino Rated
Players. Inc.*
10.7 Asset Purchase Agreement with Innovapp Inc.*
10.8 Promissory Note to William G. Forhan*
10.9 Notice of Termination of Consulting Agreement with Frank
Pinizzotto*
10.10 Agreement with ANC Rental Corporation regarding Alamo Car Rental*
10.11 CNG Group Agreement*
22 Subsidiaries of the Registrant*
23.1 Consent of Jackson L. Morris, included in Exhibit 5.1
23.2 Consent of Dreslin Financial Services
* Indicates previously filed in a Registration on Form SB-2, Commission File No.
333-102555
ITEM 28. UNDERTAKINGS
The undersigned Registrant undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) ( 230.424(b) of this chapter) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and;
(iii) Include any additional or changed material information on the plan of
distribution.
Provided, However, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement of the securities offered , and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission") such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or preceding)
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 and will be governed by the final adjudication of such
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Miami Beach, Florida on December 16, 2003.
INVICTA GROUP INC.
By: /s/ William G. Forhan
- --------------------------
William G. Forhan
Chief Executive Officer and President
By: /s/ Richard David Scott
- ----------------------------
Chief Operating Officer
Principal Financial and Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment to
Form SB-2 registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----------------------- ---------------
/s/ William G. Forhan Chief Executive Officer, December 16, 2003
- ---------------------
William G. Forhan President and Director
/s/ Richard David Scott Chief Operating Officer, December 16, 2003
- -----------------------
Richard David Scott Principal Accounting and
Financial Officer and Director
II-3