SKYPATH NETWORKS INC IPO
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Company Overview | Company Name | SKYPATH NETWORKS INC |
| Company Address | 300 METRO CENTER BLVD SUITE 150A WARWICK, RI 02886 |
| Company Phone | 4019211200 |
| Company Website | -- |
| CEO | David R. Paolo |
| Employees (as of 5/12/2004) | 12 |
| State of Inc | -- |
| Fiscal Year End | -- |
| Status | Withdrawn (5/25/2005) |
| Proposed Symbol | -- |
| Exchange | OTCBB |
| Share Price | $1.00 |
| Shares Offered | 4,449,996 |
| Offer Amount | $3,914,998.00 |
| Total Expenses | $92,000.00 |
| Shares Over Alloted | -- |
| Shareholder Shares Offered | 2,449,996 |
| Shares Outstanding | 9,590,908 |
| Lockup Period (days) | 180 |
| Lockup Expiration | -- |
| Quiet Period Expiration | -- |
| CIK | 0001268704 |
Our net proceeds from this offering, after deducting the 10% sales commission and offering expenses estimated to be $92,000 will be from $358,000 to $1,708,000 depending upon the number of shares sold. The offering is being made on a best-efforts basis, and we do not know how many shares will be sold in the offering. The primary purposes of this offering are to obtain additional capital, create a public market for the common stock, and facilitate future access to public markets. In general, we intend to use the net proceeds from this offering to provide us with working capital to fund sales and marketing programs, to fund research and development of our software products, and to retire debt. We will not receive any proceeds from the sale of the shares of common stock offered by the selling shareholders pursuant to this Prospectus. The table below represents our best estimate of the allocation of the net proceeds, including the priorities for the use of the proceeds in descending order, based upon our current business plan. Proceeds From Offering ----------------------------------------------------- Gross Offering Proceeds $500,000 $1,000,000 $1,500,000 $2,000,000 Less: Underwriting Commissions (1) 50,000 100,000 150,000 200,000 Other Costs of Issuance (2) 92,000 92,000 92,000 92,000 -------- ---------- ---------- ---------- Net Proceeds to Skypath 358,000 808,000 1,258,000 1,708,000 -------- ---------- ---------- ---------- Acquisitions (3) 0 0 0 100,000 Research and Development (4) 60,000 210,000 360,000 400,000 Sales and Marketing 43,000 200,000 300,000 508,000 Repayment of Debt (5) 205,000 205,000 205,000 405,000 Working Capital (6) 50,000 193,000 393,000 295,000 -------- ---------- ---------- ---------- TOTAL USE OF NET PROCEEDS $358,000 $ 808,000 $1,258,000 $1,708,000 (1) Subject to the sale of at least 500,000 shares, the underwriter will be paid an underwriter's commission of 10% of the gross offering proceeds. (2) Including an expense allowance paid to the underwriter and attorney's fees, accountant's fees, registration and filing fees, costs of printing this prospectus and stock certificates, and registration and issuance of stock to public investors and other miscellaneous items. (3) When necessary, we will augment our software technology through acquisition. We have not yet identified any potential acquisition target and there can be no assurance we will acquire any other company or intellectual property. (4) We are developing a wireless email solution, AutoCourier, that will allow users to securely send and receive email, contacts, calendar appointments and attachments from their existing Java enabled mobile phones. We will continue to enhance and add additional functionality to this product. (5) We intend to use a portion of the offering proceeds to repay debt. The following table sets forth our current intent as to debt repayment: Total Loan and Lender Amount to be repaid ---------------------- ------------------- Stephen D. Scharman $ 10,000 Hazel Noe Trust $ 2,666 Robert Wong $ 2,666 Chapman Spira, Carlson $ 2,668 Michael Kelly $ 2,000 Cory Powers, IRA $ 5,000 Michael Senglaub $ 30,000 Jeffrey Senglaub $ 15,000 Gary Bolinder $ 40,000 Gregory Claudio $ 20,000 Phillip Bowers $ 75,000 ---------- Total $ 205,000 All of the above listed loans accrue interest at the rates of 12% per annum All loan proceeds were used for general working capital. Phillip Bowers' loan matures on October 31, 2004. Gregory Claudio's loan matures on December 31, 2004. All other loans listed above matured on March 31, 2004, but we are working to extend the maturity date to August 1, 2004. If the maximum number of shares offered is sold, we intend to repay $200,000 we owe to Arthur Claudio, our president. This loan was in the original amount of $300,000. The loan proceeds were used to purchase assets from InfoClarus, Inc. Mr. Caludio converted $100,000 of the loan amount into 305,000 shares of our common stock. This loan accrued interest at 8% per annum and is due and payable on December 31, 2004. This loan is secured by the assets Skypath purchased from InfoClarus, Inc. (6) We anticipate that we will use the remaining net proceeds for general corporate purposes, including working capital and capital expenditures, but we have not designated any specific uses. The amounts set forth merely indicate our intent as to the general application of net proceeds of the offering. We do not have a history of revenues and earnings and cannot predict what cash flow may be available for various aspects of our operations. Pending these uses, we intend to invest the net proceeds in short-term interest-bearing, investment grade securities, certificates of deposit or direct or guaranteed obligations of the U.S. government.
We face competition from a number of different companies engaged in the wireless business on a number of possible fronts. Wireless email providers provide wireless email hardware and software solutions. Examples include Seven, Visto and Good. These companies could expand their wireless solutions into our market, or could develop J2ME versions of their products. Wireless service providers such as Verizon, Sprint, AT&T Wireless and Vodaphone, could provide our competitors alternate solutions to their subscribers, or could block traffic for our solution. Device manufacturers such as Nokia, Motorola, Qualcomm, Motorola, Sony, Ericsson and RIM, could develop and embed native phone operating system based solutions that are not subject to J2ME limitations on their devices. They could also develop devices that are more compelling than phones, or could alter the business landscape by releasing PDA solutions which are more cost effective than devices currently on the market. Messaging System Providers such as Microsoft (Exchange), IBM (Lotus Domino), AOL, and Yahoo could develop competing solutions directly tied to their messaging servers and release it at a price point unfavorable to our business. Large systems integrators such as HP and IBM, could develop services into our market or could adopt a competing solution for delivery to their large customer base.
Company DescriptionWe are a provider of mobile messaging software products, technology and services designed to connect employees and individuals to information from their mobile phones. We anticipate that our AutoCourier product, which is under development, will be our primary product. AutoCourier will
allow a mobile phone user to utilize his or her mobile phone to send and receive data over the Internet. Users of the AutoCourier will be able to access their calendars, email and files through a mobile phone. Depending on adequate capital, we anticipate the retail release of our AutoCourier product will be ready for delivery in the 3rd quarter of 2004. We also offer a product known as ActiveNet which facilitates a user's remote access to files and attachments. We are currently seeking prerelease pilot users of the AutoCourier software. As of May 16, 2004 we have signed up one customer for a paid pilot of our AutoCourier product. At May 16, 2004, there were approximately 11,000 users of our ActiveNet product. Our software products allow users of wireless data services to securely send and receive email, contacts, calendar appointments, attachments and files from their mobile phone with greater ease and a lower cost than most competitive products. We also derive a small amount of revenue through the sale of software license maintenance for ActiveNet. Software licence maintenance entitles existing ActiveNet customers to receive released software bug fixes and support. We acquired the AutoCourier and ActiveNet technologies from InforClarus, Inc. in the first quarter of 2004. We believe that our AutoCourier and ActiveNet products will address a growing market niche for mobile phone users. Wireless service providers are offering businesses wireless data services which allow mobile phone users to not only make voice telephone calls but allow the mobile phone users to send and receive data over the Internet through their mobile phones. At the same time, mobile phone manufacturers are marketing phones capable of running Java software programs. These phones are referred to as Java enhanced phones or Java 2 Micro Edition phones. Java technology, from Sun Microsystems, are products based on the power of networks and the idea that the same software should run on many different kinds of systems and devices. The Java 2 Micro Edition, or J2ME, is a version of the Java programming language optimized for small devices such as mobile phones. The AutoCourier product is designed to provide end-to-end secure, synchronized, and easy-to-use access to corporate messaging systems such as Microsoft Exchange on a J2ME phone. As long as a user has a J2ME phone, the user can securely send and receive email, contacts, calendar appointments, attachments and files from his or her mobile phone. Available competing technologies which allow mobile users to access the Internet are not developed for J2ME phones but (i) utilize Personal Device Assistants (PDA), which are significantly more expensive than J2ME phones or (ii) require subscribers to use a WAP browser. (WAP stands for Wireless Applications Protocol). Although WAP based technologies and browsers allow a mobile user to send and receive data over the Internet, it is slower and more cumbersome than the AutoCourier technology. Our products are not dependent on a specific wireless provider, thereby allowing businesses to provide email access to their users who may be using different service providers for their mobile phone service. Since Java programs are portable across mobile phones from multiple manufacturers, our products are compatible with devices from Motorola, Nokia, Samsung, Sanyo, Siemens, Sony Ericsson, and Toshiba. We license our products and services on a per-user basis for a monthly recurring fee directly to enterprises as well as hosted messaging (Microsoft Exchange and POP3(1)) providers, who in turn offer email services to individuals and enterprises. In addition to our own direct sales activity, we also license our products indirectly through resellers and integrators. We offer services to our customers, reseller partners, and integration partners to assist in the marketing and support of our products. We acquired the rights to the AutoCourier product and the ActiveNet product in the first quarter of 2004 and therefore have had limited operations with these products. As a development stage company, we have generated limited revenues and we are attempting to further develop and carry out our business plan. In order to carry out our business plan, we need to obtain additional capital to complete our product development and marketing objectives and to generate sales. Our business is subject to numerous risks, which are highlighted in the section entitled "Risk Factors" immediately following this prospectus summary. In particular, we have incurred significant operating losses in the past and may incur significant operating losses in the future. Skypath was incorporated under the laws of the State of Delaware in September 2001 and commenced active operations on October 1, 2002. Our executive offices are located at 9 Thurber Boulevard, Smithfield, RI 02917, and our telephone number is (866)-975-9638.
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