AMENDEDJOBS ACT / REGULATION A, AS AMENDED - OFFERING CIRCULAR
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE
MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF
THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY
OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER,
THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE
SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.
SOUTHERN TIER REGION RURAL BROADBAND COMPANY, INC. (STRRBC)
Issuing Company: Southern Tier Region Rural Broadband Company, Inc.
Issuer's Representative: Tony Ramos, President
1050 Connecticut Ave., NW
10th floor
Washington, D.C. 20036
202-321-7969
tramos@urbroadband.com
DATE OF OFFERING CIRCULAR: June 19, 2015, AMENDED: AUGUST 9, 2015
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALES TO THE PUBLIC: UPON
APPROVAL
DESCRIPTION OF SECURITIES: $20,000,000.00 common/voting shares / Tier 1
Regulation A
MATERIAL RISK: THE COMPANY HAS NO OPERATING HISTORY. SEE OTHER RISKS SHOWN
IN THIS OFFERING CIRCULAR.
MITIGATION OF RISK FACTOR: THREE-DAY RIGHT OF WITHDRAWAL AFTER SIGNING OF
SALES CONTRACT
UNDERWRITERS: none.
DISTRIBUTION SPREAD TABLE
Price to public
Underwriting discounts and commissions*
Proceeds to Issuer or to other persons per unit
Termination date
Total maximum securities offered
Total minimum securities offered
$100 per share
None
100% to Issuing company
June 18, 2016
200,000
200,000
*Per Model B instructions, investors are advised as follows: as of the date of
sales to the public, because this is a new rule under JOBS Act, the Issuer
has not been able to locate any affiliates to whom commissions would be paid,
and therefore, no cash or any other commissions would be paid as of that
date. That said, the Issuer will seek such affiliates as they become known,
and, upon the retainer of any, or of any underwriters or others who may sell
these securities consistent with the new JOBS Act rules for this exempt
offering, this Offering Circular will be amended, and, should it have been
already provided to any potential or real investors, will be provided to
them, and will also be posted on the Internet with this original Offering
Circular at www.urbroadband.com. No finder's fees are offered without
amending this Offering Circular.
TABLE OF CONTENTS - FORM 1-A, AS AMENDED BY NEW REG. A
TABLE OF CONTENTS......................................................i-xiv
ITEM 1. SUMMARY INFORMATION,
RISK FACTORS AND DILUTION..............................................1-5
A . SUMMARY INFORMATION............................................1
B . RISK FACTORS...................................................1-3
C . RISK MITIGATION FACTORS: ......................................3-4
D . DILUTION.......................................................4
E . MATERIAL DISPARITIES...........................................4-5
ITEM 2 . PLAN OF DISTRIBUTION - ALL SALES
TO LAND IN THE HANDS OF THE INVESTOR...................................5-8
A . UNDERWRITERS...................................................5
B . DISCOUNTS AND COMMISSIONS..........................................6
C . PLAN OF DISTRIBUTION...............................................6
D. NO SHARES OFFERED OR SOLD
ON ACCOUNT OF SECURITIES HOLDERS.......................................7
i
E. NO RESTRICTIONS ON AMOUNT OF
FUNDS RAISED UP TO REGULATION A
LIMITS, AND THEREFORE, NO 'RETURN OF
FUNDS' ISSUE...........................................................7-8
1 . NO UNDERWRITERS............................................7
2 . NO PAYMENT DELAYS..........................................8
ITEM 3 . USE OF PROCEEDS TO ISSUER.....................................8-10
A . INTENDED USE OF NET PROCEEDS...................................8
B . STATEMENT AS TO USE OF
ACTUAL PROCEEDS....................................................8
C . NO OTHER FUNDS TO BE USED......................................8
D. NO PROCEEDS USED TO DISCHARGE
INDEBTEDNESS.......................................................9
E . NO PROCEEDS TO BE USED TO ACQUIRE
NON-PROJECT ASSETS.....................................................9
F . RESERVATION OF RIGHTS TO CHANGE
USE OF PROCEEDS ......................................................9
G. COMPLIANCE WITH 17 CFR 230.251,
AS AMENDED.............................................................10
ii
ITEM 4 . DESCRIPTION OF BUSINESS.......................................10-15
A . BUSINESS DONE AND INTENDED
TO BE DONE.............................................................10
B . THE PRINCIPAL PRODUCTS PRODUCED AND
SERVICES RENDERED AND THE PRINCIPAL
MARKET FOR AND METHOD OF DISTRIBUTION
OF SUCH PRODUCTS AND SERVICES..........................................10-11
C . THE STATUS OF A PRODUCT OR SERVICE
IF THE ISSUER HAS MADE PUBLIC INFORMATION
ABOUT A NEW PRODUCT OR SERVICE WHICH
WOULD REQUIRE THE INVESTMENT OF A MATERIAL
AMOUNT OF THE ASSETS OF THE ISSUER
OR IS OTHERWISE MATERIAL ..............................................11
D . THE ESTIMATED AMOUNT SPENT
DURING THE LAST TWO FISCAL YEARS
ON COMPANY-SPONSORED RESEARCH
AND DEVELOPMENT ACTIVITIES DETERMINED
IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES .................................................12
E . THE ESTIMATED DOLLAR AMOUNT
SPENT DURING EACH OF SUCH YEARS
ON MATERIAL CUSTOMER-SPONSORED
RESEARCH ACTIVITIES RELATING TO
THE DEVELOPMENT OF NEW PRODUCTS,
SERVICES OR TECHNIQUES OR THE
IMPROVEMENT OF EXISTING PRODUCTS,
SERVICES OR TECHNIQUES.................................................12
iii
F . THE NUMBER OF PERSONS EMPLOYED
BY THE ISSUER..........................................................12-13
G . THE MATERIAL EFFECTS THAT
COMPLIANCE WITH FEDERAL, STATE,
AND LOCAL PROVISIONS WHICH HAVE
BEEN ENACTED OR ADOPTED
REGULATING THE DISCHARGE OF MATERIALS
INTO THE ENVIRONMENT, MAY HAVE
UPON THE CAPITAL EXPENDITURES,
EARNINGS AND COMPETITIVE
POSITION OF THE ISSUER AND ITS
SUBSIDIARIES...........................................................13
H . DISTINCTIVE OR SPECIAL CIRCUMSTANCES
OF THE ISSUER'S OPERATIONS OR
INDUSTRY WHICH MAY HAVE A
MATERIAL IMPACT UPON THE ISSUER'S
FUTURE FINANCIAL PERFORMANCE...........................................13-14
1 . DEPENDENCE ON ONE
OR A FEW MAJOR CUSTOMERS
OR SUPPLIERS (INCLUDING
SUPPLIERS OF RAW MATERIALS
OR FINANCING...........................................................13
2 . EXISTENCE OF PROBABLE
GOVERNMENTAL REGULATION................................................13
iv
3 . MATERIAL TERMS OF AND/OR
EXPIRATION OF MATERIAL LABOR
CONTRACTS, OR PATENTS,
TRADEMARKS, LICENSES, FRANCHISES,
CONCESSIONS OR ROYALTY
AGREEMENTS.............................................................13
4 . UNUSUAL COMPETITIVE CONDITIONS
IN THE INDUSTRY AND ANTICIPATED
RAW MATERIAL OR ENERGY SHORTAGES
TO THE EXTENT MANAGEMENT MAY
NOT BE ABLE TO SECURE A
CONTINUING SOURCE OF SUPPLY............................................14
I. THE ISSUER'S PLAN OF OPERATION FOR
THE TWELVE MONTHS FOLLOWING
COMMENCEMENT OF THE PROPOSED
OFFERING...............................................................14
J . PROCEEDS FROM THE OFFERING TO PROJECT
CASH REQUIREMENTS AND WHETHER,
IN THE NEXT SIX MONTHS, IT WILL BE
NECESSARY TO RAISE ADDITIONAL FUNDS....................................14-15
K . ANY ENGINEERING, MANAGEMENT,
OR SIMILAR REPORTS WHICH HAVE BEEN
PREPARED OR PROVIDED FOR EXTERNAL
USE BY THE ISSUER OR UNDERWRITER
OR BY A PRINCIPAL UNDERWRITER..........................................15
L . SEGMENT DATA ......................................................15
v
ITEM 5. DESCRIPTION OF PROPERTY........................................16
ITEM 6 . DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES..............................................17-22
A . DIRECTORS......................................................17-18
B . EXECUTIVE OFFICERS AND
SIGNIFICANT EMPLOYEES..................................................18
C . FAMILY MEMBERS.....................................................19
D . BUSINESS EXPERIENCE................................................19-22
E . INVOLVEMENT IN CERTAIN LEGAL
PROCEEDINGS............................................................22
1 . BANKRUPTCY OR STATE
INSOLVENCY.............................................................22
2 . CRIMINAL PROCEEDINGS...............................................22
ITEM 7 . REMUNERATION OF DIRECTORS AND OFFICERS........................22-23
A . ANNUAL REMUNERATION ...............................................22
B . PROPOSED REMUNERATION PAYMENTS.....................................23
vi
ITEM 8 . SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN SECURITYHOLDERS ...........................................23-25
A . VOTING SECURITIES AND PRINCIPAL
HOLDERS THEREOF........................................................23
1 . BY THE THREE HIGHEST PAID PERSONS
WHO ARE OFFICERS AND DIRECTORS
OF THE ISSUER .........................................................23
2 . ALL OFFICERS AS A GROUP ...................................23
3 . EACH SHAREHOLDER WHO OWNS
MORE THAN 10% OF ANY CLASS OF
THE ISSUER'S SECURITIES, INCLUDING
THOSE SHARES SUBJECT TO
OUTSTANDING OPTIONS....................................................23
B . TABLE OF OWNERSHIP.................................................24
1 . PRE-OFFERING SHARES................................................24
2 . CONTROL VOTES.....................................................24
3 . 10% voting shares..................................................24
C . NON-VOTING SECURITIES
AND PRINCIPAL HOLDERS THEREOF..........................................25
D . OPTIONS, WARRANTS AND RIGHTS ......................................25
vii
E . PARENTS OF THE ISSUER, BASIS OF
CONTROL, AND PERCENTAGE OF
VOTING SECURITIES .....................................................25
1 . PARENT.............................................................25
2 . BASIS OF CONTROL...................................................25
3 . PERCENTAGE OF OWNERSHIP............................................25
ITEM 9. INTEREST OF MANAGEMENT
AND OTHERS IN CERTAIN TRANSACTIONS.....................................26-30
BRIEF DESCRIPTION OF ANY
TRANSACTIONS DURING THE PREVIOUS TWO
YEARS OR ANY PRESENTLY PROPOSED
TRANSACTIONS, TO WHICH THE ISSUER OR
ANY OF ITS SUBSIDIARIES WAS OR IS TO BE
A PART, IN WHICH ANY OF THE FOLLOWING
PERSONS HAD OR IS TO HAVE A DIRECT OR
INDIRECT MATERIAL MATERIAL INTEREST,
NAMING SUCH PERSON AND STATING HIS
RELATIONSHIP TO THE ISSUER, THE NATURE
OF HIS INTEREST IN THE TRANSACTION,
AND, WHERE PRACTICABLE, THE AMOUNT
OF SUCH INTEREST.......................................................26
A . ANY DIRECTOR OR OFFICER
OF THE ISSUER..........................................................26
viii
B . ANY NOMINEE FOR ELECTION AS
A DIRECTOR.............................................................26
C . ANY PRINCIPAL SECURITYHOLDER
NAMED IN ANSWER TO ITEM 8 A, ABOVE.....................................26
D . IF THE ISSUER WAS INCORPORATED
OR ORGANIZED WITHIN THE PAST THREE
YEARS, ANY PROMOTER OR ISSUER.........................................26
E . ANY RELATIVE OR SPOUSE OF ANY
OF THE FOREGOING PERSONS, OR ANY
RELATIVE OF SUCH SPOUSE, WHO HAS
THE SAME HOUSE AS SUCH PERSON
OR WHO IS A DIRECTOR OR OFFICER
OF ANY PARENT OR SUBSIDIARY OF
THE ISSUER.............................................................27
F . MATERIAL TRANSACTIONS
INVOLVING BANK DEPOSITORY
OF FUNDS, TRANSFER AGENT
REGISTRAR, TRUSTEE UNDER
A TRUST INDENTURE, OR SIMILAR
SERVICES ..............................................................27
G . MATERIAL TRANSACTIONS
OR A SERIES OF SIMILAR TRANSACTIONS,
INCLUDING ALL PERIODIC INSTALLMENTS
IN THE CASE OF ANY LEASE OR
OTHER AGREEMENT PROVIDING FOR
PERIODIC PAYMENTS OR INSTALLMENTS
THAT DOES NOT EXCEED $50,000.00........................................28
ix
H . WHERE THE INTEREST OF THE
SPECIFIED PERSON ARISES SOLELY
FROM THE OWNERSHIP OF SECURITIES
OF THE ISSUER AND THE SPECIFIED
PERSON RECEIVES NO EXTRA OR
SPECIAL BENEFIT NOT SHARED ON
A PRO-RATA BASIS BY ALL OF THE
HOLDERS OF SECURITIES OF THE
CLASS..................................................................28
I . MATERIAL INDIRECT RELATIONSHIPS ...................................28-30
1 . FROM SUCH PERSON'S
POSITION AS A DIRECTOR OF
ANOTHER CORPORATION OR
ORGANIZATION (OTHER THAN
A PARTNERSHIP) WHICH IS A
A PARTY TO THE TRANSACTION.............................................28
2. FROM THE DIRECT OR
INDIRECT OWNERSHIP BY
SUCH PERSON AND ALL OTHER
PERSONS SPECIFIED HEREIN
IN THE AGGREGATE, OF LESS
THAN 10 PERCENT OF EQUITY
INTEREST IN ANOTHER PERSON
(OTHER THAN A PARTNERSHIP)
WHICH IS A PARTY TO THE
TRANSACTION............................................................28
x
3 . WHERE THE INTEREST OF
SUCH PERSON ARISES SOLELY
FROM THE HOLDING OF AN EQUITY
INTEREST (INCLUDING A LIMITED
PARTNERSHIP INTEREST BUT
EXCLUDING A GENERAL
PARTNERSHIP INTEREST) OR A
CREDITOR INTEREST IN ANOTHER
TRANSACTION WITH THE ISSUER
OR ANY OF ITS SUBSIDIARIES
AND THE TRANSACTION IS
NOT MATERIAL TO SUCH
OTHER PERSON ..........................................................29
4 . MATERIAL UNDERWRITING
DISCOUNTS AND COMMISSIONS
UPON THE SALE OF SECURITIES
BY THE ISSUER WHERE ANY OF
SPECIFIED PERSONS WAS OR
IS A CONTROLLING PERSON,
OR MEMBER, OF A FIRM WHICH
WAS OR IS TO BE A PRINCIPAL
UNDERWRITER ...........................................................29
5 . AS TO ANY TRANSACTION
INVOLVING THE PURCHASE OR
SALE OF ASSETS BY OR TO ANY
ISSUER, OR ANY SUBSIDIARY,
OTHERWISE THAN IN THE
ORDINARY COURSE OF BUSINESS,
xi
STATE THE COST OF THE ASSETS
TO THE PURCHASER AND,
IF ACQUIRED BY THE SELLER WITHIN
TWO YEARS PRIOR TO THE
TRANSACTION, THE COST
THEREOF TO THE SELLER..................................................29
6 . MATERIAL TRANSACTIONS
WHICH INVOLVE REMUNERATION
FROM THE ISSUER OR ITS
SUBSIDIARIES, DIRECTLY OR
INDIRECTLY, TO ANY OF THE
SPECIFIED PERSONS FOR SERVICES
IN ANY CAPACITY UNLESS
THE INTEREST OF SUCH PERSONS
ARISES SOLELY FROM THE
OWNERSHIP INDIVIDUALLY AND
IN THE AGGREGATE OF LESS THAN 10
PERCENT OF ANY CLASS OF EQUITY
SECURITIES OF ANOTHER
CORPORATION FURNISHING
SERVICES TO THE ISSUER
OR ITS SUBSIDIARIES....................................................30
ITEM 10 . SECURITIES BEING OFFERED.....................................30-35
A . CAPITAL STOCK.................................................30-31
l . TITLE OF CLASS....................................................30
2 . DIVIDEND RIGHTS ..................................................30
xii
3 . VOTING RIGHTS .....................................................30
4 . LIQUIDATION RIGHTS.................................................31
5 . PREEMPTIVE RIGHTS ................................................31
6 . CONVERSION RIGHTS ................................................31
7. REDEMPTION PROVISIONS .............................................31
8 . SINKING FUND PROVISIONS ...........................................31
9 . LIABILITY TO FURTHER CALLS
OR TO ASSESSMENT BY THE
ISSUER ................................................................31
B . DEBT OR SECURITIES BEING
OFFERED................................................................31
C . WARRANTS, RIGHTS, OR
CONVERTIBLE SECURITIES.................................................32
D . BALANCE SHEET ....................................................32-35
E . STATEMENT OF INCOME,
CASH FLOWS, AND OTHER
STOCKHOLDER EQUITY ....................................................35
F . FINANCIAL STATEMENTS OF
BUSINESS ACQUIRED OR TO
BE ACQUIRED ...........................................................35
xiii
G . PRO FORMA FINANCIAL
INFORMATION ...........................................................35
CONCLUSION.............................................................33
xiv
ITEM 1. SUMMARY INFORMATION, RISK FACTORS, RISK MITIGATION FACTORS, DILUTION
AND MATERIAL DISPARITIES
A. Summary Information:
This Regulation A opportunity is for what is called the 'interconnector'
sector of the broadband infrastructure industry. This sector provides the
system whereby broadband Internet access service (BIAS) providers, as
currently defined by the FCC's new Open Internet rules, sell their retail
services to customers. These are companies like Netflix, Hulu, Crackle,
YouTube, Apple TV, as well as the traditional content providers, like
Comcast and Time Warner Cable.
This project is limited to unserved and underserved rural areas of the
United States, and provides such 'interconnector' infrastructure for homes,
businesses, and rural cities.
B. Risk Factors:
1. Statements of future forecasts, projections and expectations are not
statements of returns on investment;
2 . Market penetration may not be immediate;
3 . Zoning issues may delay the start of parts of the project;
4. Attracting broadband providers to a carrier-neutral environment could
result in initial limited user expansion;
l
5 . Local government needs could accelerate adoption, at a short term
financial loss;
6 . The Company has no operating history;
7 . Sales of shares will be restricted in accordance with Regulation A, as
amended, effective June 19, 2015;
8 . Technology choice: the primary technology choice for this project is
white space infrastructure technology. This technology was authorized by
the U.S. Federal Communications Commission (FCC), in 2012, and thus, there
is limited data on a national rollout of this technology at the present
time. This project would be among the first for a consumer-ready rollout
of the technology infrastructure;
9 . There is an absence of profitable operations in recent periods;
10 . There is no current, defined method for determining market price for the
service, as the service has, as of yet, not had a commercial rollout;
2
11. the project has not yet been completed and, accordingly; has no operating
history. The company, therefore, has no operating history of earnings and
its operations will be subject to all of the risks inherent in the
establishment of a new business enterprise. Accordingly the success of the
business is completely dependent upon financial, business, competitive,
regulatory and other general factors affecting the rural broadband
interconnector sector in general as well as prevailing economic conditions;
12. although, under Regulation A securities are unrestricted, there is,
for this offering, no opportunity to achieve control securities;
C . Risk Mitigation Factors:
l . 3-day right of withdrawal;
2. required pre-purchase in-person meeting in Washington, D.C. with Issuer's
representative, and, upon signing confidentiality statement, additional
proprietary project information provided;
3.right of rescission maintained under new JOBS Act rules;
3
4. stock class: not restricted;
5 . distribution: shares to land in the hands of the investor as of this
offering.
D . Dilution:
The dilution formula that is utilized is taken from the administrative code
of the State of Florida. After a survey of various dilution calculations
from industry, as well as research among different State Blue Sky laws,
we found that Florida's formula, as specifically codified, offers the
best transparency by which to calculate dilution.
E . Material disparities:
There is no material disparity between the public offering price and the
effective cash cost to officers, directors, promoters and affiliated persons
as of the time of this offering circular, and there has been none in the
past three years.
Further, the Issuer's representative, and its officers and directors, which
includes the Issuer's representative, do not anticipate any such material
disparity, or discount.
4
With respect to promoters and affiliated persons, because this Regulation A
offering is based upon new rules, made effective on June 19, 2015, the
Issuer's representative was unable to locate any such persons as of the
effective offering
date of this offering circular, which is also June 19, 2015. This being said,
in the event such persons do begin to hold themselves out as promoters or
affiliates, and are so qualified, the Issuer intends to utilize the services
of such promoters and affiliates and will amend this Offering Circular, as
required by the Regulation A rules, as amended, in a timely manner, or with
withdraw same and file a new one, consistent with said rules.
ITEM 2. PLAN OF DISTRIBUTION - ALL SALES TO LAND IN THE HANDS OF THE
INVESTOR
A . Underwriters:
For this initial filing, there is only a primary distribution, with all
shares to land in the hands of the investor directly from the Issuer.
There are no underwriters on this offering as of the potential date of first
public sale, June 19, 2015. In the event, however, that underwriters do
begin to take business under this new, amended Regulation A offering
opportunity, the Issuer intends to seek out and retain such for this
offering.
In that event, and at that time, the Issuer intends to utilize the services
of such underwriters and will amend this Offering Circular, as required by
the Regulation A rules, as amended, in a timely manner, consistent with
said rules.
5
B . Discounts and commissions:
There are no agreements for discounts and commissions as of the potential date
of the first public sale, June 19, 2015, because there have been no
promoters, underwriters or affiliates yet retained.
In the event, however, that such persons are retained under this new, amended
Regulation A offering opportunity, the Issuer intends to allow for such
discounts and to pay to such persons such amounts as may be reasonable and
allowed by the new rules for Regulation A, as well as by any such voluntary
or required groups, organizations or agencies that may provide for
regulation and licensing of said persons.
In that event, and at that time, the Issuer will amend this Offering Circular,
as required by the Regulation A rules, as amended, in a timely manner, or
withdraw this one and file a new one, consistent with said rules.
C. Plan of distribution:
As of the date of the filing of this first Regulation A offering circular for
this project, such is limited to primary distribution only, with all shares
landing in the hands of the investor directly from the Issuer and the
Issuer's representative.
As of the potential first offering sale date, and only upon successful upload
to the SEC for registration, and if those two are not the same, upon the
completion of the latter, there will be no secondary offering agreements,
contracts, or any other relations with any persons or companies for other
than primary sales.
6
D. No shares offered or sold on account of securities holders:
Consistent with Item 2. C, above, all shares will be sold upon issuance only
from the Issuer and to land in the hands of the investor.
E. No restrictions on amount of funds raised up to Regulation A
limit, and therefore, no return of funds issue, no underwriters:
1 . no restrictions: all sales are primary in nature, and will land in the
hands of the investor directly from the Issuer.
There are no arrangements with any persons, by the Issuer, or the Issuer's
representative for any return of funds, other than those as stated herein
with respect to the 3-day right of withdrawal, and except as to the Tier 1
funding cap of $20 million.
The existence of the Tier 1 funding cap, however, is not a restriction as to
the return of any funds for this offering, as any funds raised, up to and
including the funding cap limit, will be used for project implementation;
7
2 . No underwriters: as there are no underwriters, there will be no delay in
payments.
ITEM 3 . USE OF PROCEEDS TO ISSUER
A . Intended use of net proceeds:
All proceeds will be utilized to effectuate the
implementation/install/operational activation of large scale rural broadband
inter-connector infrastructure, utilizing, primarily, white space technology,
with co-location for backhaul, as well as the integration of streaming
video capability.
B . Statement as to use of actual proceeds:
All proceeds will be utilized to effectuate the
implementation/install/operational activation of large scale rural broadband
inter-connector infrastructure, utilizing, primarily, white space technology,
with co-location for backhaul, as well as the integration of streaming
video capability.
All funds will be sufficient, consistent with budget scaling of the amount of
investments, so as to accomplish project goals. For example, if X amount of
funding is achieved, then Y amount, or sections, of a given project area can
be fully built out and made operational.
C . No other funds to be used:
There are no other funds that would be used in conjunction with any
proceeds.
8
D . No proceeds to be used to discharge indebtedness:
The project carries no debt, and therefore, no proceeds would be used to
discharge any indebtedness.
E . No proceeds to be used to acquire non-project assets:
With the exception of assets acquired in the ordinary course of business for
the project, there will be no other use of the proceeds.
F . Reservation of right to change use of proceeds:
The issuer reserves the right to change the use of proceeds provided that such
reservation is due to certain contingencies which are adequately disclosed.
For example, the project may require the purchase of small and insignificant
tracts of real estate for the purposes of positioning hardware, or
structures upon which to mount such hardware. Or, for co-location purposes,
the project may require the long-term leasing of space on certain rooftops,
again for the purposes of providing relay connector hardware to the project
area.
In all instances, however, the project plan is to avoid either the purchase
of any real estate or the necessity of establishing such rooftop links. In
other words, one of the primary project goals is to have access to broadband
Internet service utility connections that are a part of the location of the
sending radios, or in very close proximity to such. In this manner,
significant costs of such real estate and other co-location items may be
avoided, and thus, budget kept more efficient.
9
G. Compliance with 17 CFR 230.251, as amended:
The Issuing company/applicant has no plans and no business plan, or intentions
to engage in a merger or acquisition with an unidentified company, companies,
entity or person.
ITEM 4 . DESCRIPTION OF BUSINESS
A . Business done and intended to be done:
The project has consisted of the origination, organization, design and
development of a large-scale rural interconnector infrastructure that will
bring Internet service to unserved areas of rural America.
Such business has been conducted over a period in excess of five years.
The business to be done consists of utilizing the proceeds to implement,
fulfill, and make operational, such infrastructure in a defined project area.
B . The principal products produced and services rendered and the principal
market for and method of distribution of such products and services:
10
The principal 'product' produced consists of a consumer-ready 'kit' that
brings full Internet service to the unserved areas of rural America. The
Federal Communications Commission (FCC), for example, has identified 84,000
unserved census blocks in rural America.
The 'kit' concept was originated by the parent company in order to create a
defined, consumer-ready project plan that can be scaled from a small, to a
massive project size, depending on funding.
The principal 'service' that would be provided consists of the permanent
operation of the 'kit' over the entire rural American landscape.
C . The status of a product or service, if the issuer has made public
information about a new product or service which would require the
investment of a material amount of the assets of the issuer or is otherwise
material:
The issuer has made 'public' the 'product' by making JOBS Act, Rule 506
notifications on the Internet. The principal 'service' is identified on the
main project website, at www.urbroadband.com.
Thus, there are no investment proceeds which would require such new
information, and saving, therefore, the proceeds for use in project
implementation.
11
D . The estimated amount spent during each of the last two fiscal years on
company-sponsored research and development activities determined in
accordance with generally accepted accounting principles:
The company has spent all of its time during the past six fiscal years on
research and development activities.
E . The estimated dollar amount spent during each of such years on material
customer-sponsored research activities relating to the development of new
products, services or techniques or the improvement of existing products,
services or techniques:
For largely proprietary reasons, the company has avoided such spending, and
will continue to avoid such, for those same reasons. Further, both the FCC
and th United States Department of Agriculture, among other Federal and
State agencies, have extensive public information available on this issue.
F . The number of persons employed by the issuer:
For purposes of cost control, the Issuer maintains no staff of employees.
All persons who are employed on the project are consultants and others with
specialized knowledge, who work for themselves, or for outside companies.
Further, the project anticipates little employment because most of the work
to be performed, in terms of install and the like, must be done by the
original equipment manufacturers (OEM), or by contractors employed by them
for that purpose.
This being said, a staff of customer support personnel, to relay messages
for customer issues, will be retained upon funding.
12
Further, a staff of computer-related personnel, for the purposes of media,
social media, community outreach and the like will be maintained for the
project.
G . The material effects that compliance with Federal, State and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, may have upon the capital expenditures,
earnings and competitive position of the issuer and its subsidiaries:
None.
H . Distinctive or special characteristics of the issuer's operation or
industry which may have a material impact upon the issuer's future financial
performance:
1. dependence on one or a few major customers or suppliers
(including suppliers of raw materials or financing):
none;
2 . existence of probable governmental regulation:
the interconnector sector for broadband is not a part of the FCC's recent
Open Internet rules. This said, to the extent that broadband Internet
access service (BIAS) provider retailers will sell their services on our
system, those providers will be regulated by the FCC;
3 . material terms of and/or expiration of material labor contracts or
patents, trademarks, licenses, franchises, concessions or royalty
agreements:
none;
13
4 . unusual competitive conditions in the industry, cyclicality of the
industry and anticipated raw material or energy shortages to the extent
management may not be able to secure a continuing source of supply:
none.
I. The issuer's plan of operation for the twelve months following the
commencement of the proposed offering:
Proceeds will be utilized, immediately, to achieve full implementation of
the projects. All planning is in place, and there is, thus, nothing else
to do other than proceed to installation and activation;
J . Proceeds from the offering to project cash requirements and whether, in
the next six months, it will be necessary to raise additional funds:
Proceeds will be utilized in strict accordance with budget calculations and
for install and activation.
Accordingly, as the budget may be measured by the amount of any proceeds a
t any one given time, and then the project sector may be scaled accordingly,
there would be no need to raise additional funds for that sector.
For example, if the project raises an initial $600,000.00, then that amount
would go towards the installation of one of the big sending radios, and 80
receiving radios in homes or offices. The only reason that the full 80 may
not be installed at the outset would be the result of needing a higher
capacity hardware install at the peering point. As these costs are
generally known, and may be calculated, in fact, whether such additional
capacity will be needed at any given sector would not be known until the
install begins.
14
For example, a base station location that otherwise qualifies for the sending
radio, on that has height and electricity and is not in an FCC-prohibited
flight path, among other factors, may not have an Internet connection, or
may have one, but the hardware is not sufficient to be able to handle the
bandwidth that is needed. In this scenario, we would look for such a
co-location, which would be nearby, and would make contract arrangements
to put a sending radio onto that co-location area, to send the signal to
the base station, where the 80-account radio will be mounted.
All such calculations and variations of this theme have long been worked out,
and are overcome at a price/budget point that would allow for the 80
customer accounts to be placed on the big radio.
In terms of scaling, thus, if $6,000,000.00 were achieved, for example, the
number of pieces of hardware would simply be multiplied to accommodate that
funding award, and so forth.
K . Any engineering, management or similar reports which have been prepared
or provided for external use by the issuer or by a principal underwriter:
None.
L . Segment Data:
None required.
15
ITEM 5. DESCRIPTION OF PROPERTY
The location and general character of the principal plants, and other
materially important physical properties of the issuer and its subsidiaries.
If any such property is not held in fee or is held subject to any major
encumbrance, so state and briefly describe how held:
To the greatest extent possible, the Issuer seeks to avoid owning any
property in fee simple. Such expenses, often promoted by vendors of such
components as cell. towers, have resulted, historically, in both
unnecessary and unsustainable, and therefore, unprofitable results.
By contrast, the projects specifically seek a 'light footprint,'
wherever possible, to utilize existing assets of others, in order to
create the 'kit' system that is the successful business plan.
Put another way, the era of 'cable is coming to my farm any time now,' has
largely ended. Further, the era of cell. towers for rural areas, has also
largely ended. Those two self-limiting sectors never adjusted their
business models to suit the needs of rural America, and have, accordingly,
and for good and sound business reasons limited to their narrow function,
abandoned the rural sector.
This being said, the projects absolutely will rely on both fiber and cell
towers as crucial location, or co-location peering points and thus, among
the best starting points for any project is the location where the last
fiber strand ends, or where the last cell. tower stands.
In this regard, the projects will make every effort to avoid the ownership
of property, because, those sectors already own their own assets. Where the
base stations are needed, long term rental contracts with building owners,
or silo owners, or others, will be made.
16
ITEM 6 . DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
A . DIRECTORS
Tony Ramos
Age: 60
Term of Service in Office: 2 years
Procedure for selection: board vote
Marc J. Hagemeier, M.A.
Age: 52
Term of Service in Office: 2 years
Procedure for selection: board vote
Eric W. Will, II
Age: 67
Term of Service in Office: 2 years
Procedure for selection: board vote
Harriet W. Grifo
Age: 63
Term of Service in Office: 2 years
Procedure for selection: board vote
17
Rex R. Helwig
Age: 55
Term of Service in Office: 2 years
Procedure for selection: board vote
Mark E. Bayliss
Age: 55
Term of Service in Office: 2 years
Procedure for selection: board vote
B . EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
Tony Ramos, President
David J. Karre, M.B.A, M.L.S., Vice President
Rex R. Helwig, Treasurer
Harriet W. Grifo, Secretary
Anthony J. Castaldo, IT Architect
Eric W. Will, II, Finance consultant
Marc J. Hagemeier, M.A., Chief, Office of Financial Management
Mark E. Bayliss, Broadband infrastructure, broadband Internet
access service, streaming video, and FCC consultant
18
C . FAMILY MEMBERS
There are no officers, directors or significant employees who have family
members in any such corresponding position, or who have any controlling
voting interest over such persons.
D . BUSINESS EXPERIENCE
Experience and principal occupations, employment and business experience:
Tony Ramos
Founding concept company and current company president, 2009. Leader. Third
generation self-made entrepreneur. Member of the elite professional
political sector in Washington, D.C. of originators of Congressional
legislation. Veteran fundraiser. Member of the elite professional
political sector in Washington, D.C., of originators of significant
political policy/action campaigns. Writer and Issuer of JOBS Act offerings,
filings and shares.
19
Marc J. Hagemeier, M.A.
Company pioneer, 2009. Personal wealth member. Entrepreneur. Member of
family-controlled conglomerate, of largest roadbed gravel infrastructure
company in Germany. Significant advisor on matters of infrastructure and
business. Accredited investor. Master of Arts degree.
Eric W. Will, II
Company pioneer, 2009. Founding member. Self-made entrepreneur. Work history
with IBM. Venture capital organizer. Significant advisor on matters of
business finance and financing, with a specialty in commercial lease
financing. Accredited investor.
Harriet W. Grifo
Company pioneer, 2011. Rural library director, project liaison and community
organizer. Lobbyist for libraries as community anchor institutions for
expanded rural broadband.
Anthony J. Castaldo
Company pioneer, 2009. Designer of 52+ building dark fiber loop
infrastructure for large, rural library system. Library computer
manager, 20+ years. Technology expertise on infrastructure for our
company, including white space technology, broadband service and
connectivity, and wireless technology. Major designer of company
philanthropy program, Lend-A-Gadget, to place tablets, like iPads,
in rural libraries to check out like books.
20
Rex R. Helwig
Company pioneer. Founding member, 2009. Project leader and liaison. Computer
manager of large rural library system of 30+ buildings. Technology expert
with Mr. Castaldo on issues of broadband architecture, broadband service
and implementation in rural settings.
Gary Horowitz
Company pioneer. Founding member, 2009. Leader. Project organizer and liaison,
'My First Car Club' broadband project - Greenfield Park, NY. New York State
Police. Volunteer Firefighter. Commissioner, Ellenville Fire District
(past Chief & Captain). Director of Personnel and Board Member, Ellenville
Rescue Squad. Commissioner, Ulster County Medical Advisory Board.
Commissioner, Ulster County Ambulance Association. Commissioner, Ellenville
Zoning Board of Appeals. New York State Special Olympics Coordinator.
Emergency EMT Instructor, Sullivan (County, NY) Community College. President,
Save a Life Training Center. Instructor, New York State Police Academy. A.A.
business administration.
Mark E. Bayliss
Company pioneer, 2010. Personal wealth member. Broadband infrastructure,
broadband Internet access service, streaming video, and FCC consultant.
Co-owner, rural broadband Internet access service company. Venture capital
veteran. Organizer and implementer of streaming video company, 2015, trading
on the over-the-counter market. Writer of FCC policy and Executive Orders.
FCC Committee member and Chair of FCC Committees. Accredited investor.
21
David J. Karre, M.B.A., M.L.S.
Company pioneer. Founding member, 2009. Leader. Former Chief Executive
Officer of large, rural library system in New York, 42 libraries. Project
organizer and leader for rural city 'sidewalk Internet' company projects.
Highly experienced local, State and Federal lobbyist. Veteran fundraiser.
Master of Business Administration and Master of Library Science degrees.
E . Involvement in certain legal proceedings
1 . Bankruptcy or State insolvency:
None;
2 . Criminal proceedings:
None.
ITEM 7 . REMUNERATION OF DIRECTORS AND OFFICERS
A . Annual remuneration:
None.
22
B . Proposed remuneration payments:
Until funding is achieved, the Board has forgone consideration of this issue.
As members are financially self-sustaining, the position of the Board has
been that the project comes first, and any remuneration later.
ITEM 8. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
A . Voting securities and principal holders thereof:
1 . by the three highest paid persons who are are officers
and directors of the Issuer:
as discussed above, there is no current remuneration for any officers and
directors;
2 . all officers as a group:
same as above;
3 . each shareholder who owns more than 10% of any class of the issuer's
securities, including those shares subject to outstanding options:
same as above;
23
B . Table of ownership:
1 . Pre-offering shares:
Consistent with the Amended Offering Statement, which is incorporated into the
Amended Offering Circular by reference, those shareholders named therein all
own shares in excess of 5% of shares owned before the offering, and will own
their same respective percentages, according to the dilution formula, after
the offering.
Thus, in order to achieve a Regulation A funding offering of $20,000,000.00,
the amount of 200,000 shares will be issued, and then an amount that, with
the calculation of the dilution formula, will keep those shareholders at
the same percentage before this offering.
2 . Control votes:
There are no persons who hold or share any voting power either pre-offering,
or post-offering;
3 . 10% voting shares:
There are no persons who hold shares or the power to vote shares of 10% or
more of any shares other than direct owners of those shares.
24
C . Non-voting securities and principal holders thereof:
All shares are common/voting shares;
D . Options, warrants, and rights:
None.
E . List all parents of the issuer, showing the basis of control and as to
each parent the percentage of voting securities owned or other basis of
control by its immediate parent, if any:
1 . Parent:
Rural Broadband Company, Inc.;
2 . Basis of control:
majority ownership of shares;
3 . Percentage of shares:
55%
25
ITEM 9 . INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Brief description of any transactions during the previous two years or any
presently proposed transactions, to which the issuer or any of its
subsidiaries was or is to be a party, in which any of the following persons
had or is to have a direct or indirect material interest, naming such
person and stating his relationship to the issuer, the nature of his
interest in the transaction and, where practicable, the amount of such
interest:
A . Any director or officer of the issuer:
with the exception of ownership of shares, and serving as officers and
directors, none;
B . Any nominee for election as a director:
none;
C . Any principal securityholder named in answer to Item 8 A., above:
none;
D . If the issuer was incorporated or organized within the past three years,
any promoter of the issuer:
The Issuer's representative, Tony Ramos, is also the Issuer of JOBS Act/Rule
506 securities, and notice of same was filed by the uploading of Form
Regulation D onto EDGAR upon the opening of that opportunity, in
September, 2013;
26
E . Any relative or spouse of any of the foregoing persons, or any relative
of such spouse, who has the same house as such person or who is a director
or officer of any parent or subsidiary of the issuer:
none;
F . Material transactions involving bank depositary of funds, transfer
agent, registrar, trustee under a trust indenture, or similar services:
Material transactions involving banks include security steps taken by the
company with respect to co-signors on the accounts, as well as such steps
taken to comply with rights of succession upon the death, disability or
illness of one of the signers of the accounts. To this end, the company
originated its 'Office of Financial Management,' with the sole purpose of
appointing a trusted board member, and person of personal wealth,
Marc J. Hagemeier, M.A., as having login, signing, and disbursement authority
for the accounts upon such contingency as to any signers.
Further, the board passed a resolution as to such transactions, to be
implemented by November, 2015, that requires the board to replace the
president and the office of the president as a signer on any accounts.
This measure was also taken for security purposes, in order to avoid the
president being placed in any coercive situations with respect to said
accounts.
Thus, the only 'transfer agent' would be Mr. Hagemeier.
With the exception of the Issuer's representative, Mr. Ramos, there is no
'registrar' for any such material transactions.
27
There is no trustee under a trust indenture, or any other material
transactions.
There are no further 'similar services.'
G . Material transactions or a series of similar transactions, including all
periodic installments in the case of any lease or other agreement providing
for periodic payments or installments that does not exceed $50,000:
none;
H . Where the interest of the specified person arises solely from the
ownership of securities of the issuer and the specified person receives
no extra or special benefit not shared on a pro-rata basis by all of the
holders of securities of the class:
none other than as to ownership of the shares and voting rights equal to
all shareholders;
I . Material indirect relationships:
1 . from such person's position as a director of another corporation or
organization (other than a partnership) which is a party to the transaction:
none;
2. from the direct or indirect ownership by such person and all other
persons specified in subparagraphs (1) through (5) above, in the aggregate,
of less than a 10 percent equity interest in another person
(other than a partnership) which is a party to the transaction:
none;
28
3 . where the interest of such person arises solely from the holding of an
equity interest (including a limited partnership interest but excluding a
general partnership interest) or a creditor interest in another person
which is a party to the transaction with the issuer or any of its
subsidiaries and the transaction is not material to such other person:
none;
4 . material underwriting discounts and commissions upon the sale of
securities by the issuer where any of the specified persons was or is to be
a principal underwriter or is a controlling person, or member, of a firm
which was or is to be a principal underwriter:
none, however, as amended Regulation A is a new industry, the Issuer has yet
been able to locate any such persons or companies who are taking such
business.
This said, the Issuer fully intends to engage such persons, once they begin
to enter into this sector, and will, therefore, amend this subsection
accordingly, or, if required by the rules, withdraw this Regulation A
filing and file a new one;
5 . as to any transaction involving the purchase or sale of assets by or to
any issuer or any subsidiary, otherwise than in the ordinary course of
business, state the cost of the assets to the purchaser and, if acquired
by the seller within two years prior to the transaction, the cost thereof
to the seller:
none;
29
6 . material transactions which involve remuneration from the issuer or its
subsidiaries, directly or indirectly, to any of the specified persons for
services in any capacity unless the interest of such persons arises solely
from the ownership individually and in the aggregate of less than 10
percent of any class of equity securities of another corporation furnishing
the services to the issuer or its subsidiaries:
none.
ITEM 10 . SECURITIES BEING OFFERED
A . Capital stock:
l . title of class:
common;
2 . dividend rights:
common to all;
3 . voting rights:
common to all;
30
4 . liquidation rights:
common to all, subject to JOBS Act SEC rules on one-year resale restriction;
5 . preemptive rights:
none;
6 . conversion rights:
subject to JOBS Act SEC rules;
7. redemption provisions:
to company treasury only, and only upon approval of the board;
8 . sinking fund provisions:
none;
9 . liability to further calls or to assessment by the issuer:
none;
B . debt securities are being offered:
none;
31
C . warrants, rights, or convertible securities:
none;
D . Balance sheet:
Assets
Current Assets 2014 2015
Cash 0 0
Accounts
receivable 0 0
Inventory 0 0
Prepaid
expenses 0 0
Short-term 0 0
investments
Total current assets 0 0
32
2014 2015
Fixed (long-term) Assets
Long-term
investments 0 0
Property,
plant & equipment
(less accumulated
depreciation) 0 0
Intangible assets 0 0
Total fixed assets 0 0
Other Assets
Deferred income 0 0
Other 0 0
Total Other Assets 0 0
Total Assets 0 0
33
2014 2015
Liabilities & Owner's Equity
Current Liabilities
Accounts payable 0 0
Short-term loans 0 0
Income taxes payable 0 0
Accrued salaries & wages 0 0
Unearned income 0 0
Current portion of
long-term debt 0 0
Total current liabilities 0 0
Long-term Liabilities
Long-term debt 0 0
Deferred income
tax 0 0
34
Other 0 0
Total long-term liabilities 0 0
34
2014 2015
Owner's Equity
Owner's investment 0 0
Retained earnings 0 0
Other 0 0
Total owner's equity 0 0
Total Liabilities & Owner's Equity 0 0
E . Statements of income, cash flows, and other stockholder equity:
none;
F . Financial Statements of Businesses Acquired or to be Acquired:
not applicable;
G . Pro Forma Financial Information:
none.
35
CONCLUSION
Serious investors should first schedule an appointment with the Issuer's
representative, Tony Ramos, at the company's office, in Washington, D.C.
Upon any meeting and further inquiry, and signing of a confidentiality
statement, further project-specific information may be provided to
such investors.
The applicant company requests qualification by the Commission of this
Regulation A application.
Mr. Ramos may be contacted at:
202-321-7969 or at tramos@urbroadband.com
Thank you.
36