Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Registration of Securities by a Small-Business 48 179K
Issuer
2: EX-3 Articles of Incorporation 3± 13K
3: EX-3.1 Bylaws 5± 24K
4: EX-5 Attorney's Consent 1 8K
5: EX-10 License Agreement 1 8K
6: EX-23 Accountant's Consent 1 6K
SB-2 — Registration of Securities by a Small-Business Issuer
Document Table of Contents
AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JULY 9, 2002
REGISTRATION NO.
Securities and Exchange Commission
Washington D.C. 20549
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Sky Way Aircraft, Inc.
(Exact name of registrant as specified in its charter)
Nevada 48-1256417
(State of (Primary standard industrial (I.R.S. employer
Incorporation) classification code number) identification number)
2701 N. Rocky Point Dr., Suite 1150
Tampa, FL 33607
1(866) SKY WAY9
(Address and telephone number of Registrant's
principal executive offices)
James S. Kent
2701 N. Rocky Point Dr., Suite 1150
Tampa, FL 33607
1 (866) SKY WAY9
(Name, address, and telephone number
of Agent for Service of Process)
Copies to:
Jody M. Walker, Esq.
7841 South Garfield Way
Littleton, CO 80122
(303) 850-7637
(303) 220-9902 - facsimile
Approximate Date of Commencement of Proposed Sale
to the Public: 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 under the Securities Act
of 1993, check the following box [ ]
CALCULATION OF REGISTRATION FEE
[Download Table]
Title of Each Class Amount of
Securities to be Shares to be Valuation Aggregate Registration
Registered Registered Per Share Valuation Fee
Common Shares 2,500,000 $17.50 $43,750,000 $10,937.50
Common Shares 953,199 $17.50 $16,680,983 $ 4,170.25
--------- ----------- ----------
Total 3,453,199 $60,430,983 $15,107.75
(1)Represents common stock being registered
on behalf of Selling Security Holders.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION
STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY
TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(a), MAY DETERMINE.
Sky Way Aircraft, Inc.
$43,750,000
2,500,000 Common Shares
At $17.50 per Common Share
953,199 common shares on behalf of
selling security holders
at $17.50 per common share
There is no minimum offering amount
The common shares are being offered on a self
underwritten basis by Brent C. Kovar and James
Kent, officers and directors of Sky Way Aircraft
and selected broker/dealers.
Our offering and the selling security holder
offering will commence on the effective date of
this prospectus and will terminate on or before
December 31, 2003.
This is our initial public offering and no public
market current exists for our securities. We have
not applied to be listed on any trading market or
exchange.
An investment in our securities involves high risk.
Consider carefully the risk factors beginning on
page 8 in the prospectus.
[Download Table]
Per
Common Share Total
Public Price $17.50 $43,750,000
Proceeds to Sky Way
Aircraft $17.50 $43,750,000
Our officers and directors will sell the
securities. Up to a 10% commissions will only be
paid if a registered broker-dealer sells our common
shares.
Neither the Securities and Exchange Commission, nor
any state securities commission has approved or
disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal
offense.
Date: July 8, 2002
TABLE OF CONTENTS
[Download Table]
Summary of the Offering 5
Risk Factors 6
We have not conducted any significant operations
We do not currently have sufficient capital
Our officers will only work part time
Dependence on relationships with aircraft industry
We may not be able to establish and maintain
brand recognition
We may be liable for any failure to protect customer's
private information
You will experience immediate dilution
Forward Looking Statements 5
Sky Way Aircraft 6
Use of Proceeds 7
Dilution 8
Plan of Operation 9
Determination of Offering Price 10
Plan of Distribution 10
Management 10
Principal Shareholders 11
Indemnification 11
Certain Transactions 12
Description of Securities 12
Legal Matters 13
Reports 13
Financial Statements 14
Summary Of The Offering
Corporate History. Sky Way Aircraft was
incorporated on April 24, 2002 under the laws of
the State of Nevada.
Sky Way Aircraft's principal executive and
administrative offices are located at 2701 N. Rocky
Point Drive, Suite 1150, Tampa, Florida, 33607.
These offices consist of 4,500 square feet and are
leased on a monthly basis at the lease price of
$9,000 per month.
Sky Way Aircraft's operations center and 24 hour
aircraft monitoring building is located at 6700
Citicorp Drive, Tampa, Florida 33618. These
premises consist of 100,000 square feet of disaster
operation class 5 raised floor bunker and is leased
on a monthly basis, and our current lease of 2060
square feet is $6000 per month with option to
expand to the 100,000 square feet.
Operations. Sky Way Aircraft provides high-speed
broadband wireless homeland security services. We
supply private and public broadband networks,
infrastructure and applications to in-flight or on
the tarmac aircraft. Our current airline network
is 500 miles in diameter with 360 degrees of
airborne coverage.
Outstanding
Securities 7,500,000 common shares
The Offering Up to a maximum of
2,500,000 common shares
at $17.50 per common share
Selling Shareholders 953,199 shares at $17.50
per common share
Sales by Selling
Security Holders. We are registering common
shares on behalf of selling
security holders in this
prospectus. We will not
receive any cash or other
proceeds in connection with
the subsequent sale. We
are not selling any common
shares on behalf of selling
security holders and have no
control or affect on these
selling security holders.
Offering termination December 31, 2003
Arbitrary Offering Price. The aggregate offering
price and number of the common shares to be
offered were arbitrarily determined by Sky Way
Aircraft.
Plan of Distribution. Our officers and directors
are offering the common shares on a self-
underwritten basis. If a selected broker/dealer
sells any common shares, standard commissions not
to exceed 10% of the offering price will be paid.
No Escrow Account There is no minimum offering
amount and no escrow account has been established.
All proceeds from this offering will be deposited
directly into the operating account of Sky Way
Aircraft.
Public Market There is no public market for the
common shares.
Use of Proceeds The proceeds from this offering
will be used for:
Lease office space and related construction -
Office equipment and furniture -
Utilities and services -
Licenses -
Marketing -
Advertising -
Hiring of executive and corporate support
Personnel -
Continue inflight testing and analysis -
Commence hiring and training of installation
and testing teams -
Upgrade research and development and operations
Center -
Purchase, install and test ground monitoring
Equipment -
Commence hiring and training of monitoring
teams -
Lease WorldCom facility co-location sites 1-30
-
Aircraft equipment purchase,
installation and text -
Establish international anti-terrorism
monitoring networks -
Sky Way Aircraft will use the net proceeds of the
offering over the next twelve months.
No Commitment to Purchase Common Shares. No
commitment by anyone exists to purchase any of the
common shares we are offering.
Risk Factors
1. We have not conducted any significant
operations to date and have not generated any
revenues. You may lose your entire investment.
Since our incorporation, our activities have been
principally devoted to positioning ourselves to
achieve our business objectives. We have had no
material operating revenue to date and expect to
incur losses and administrative expenses until we
begin the sales of our products or we receive
revenues from any of our proposed operations. We
have a deficit accumulated during the development
stage of $(5,400) for the period from inception to
April 30, 2002. If we cannot generate revenues,
you may lose your entire investment.
2. We do not currently have sufficient capital
to meet our financial needs for the next twelve
months. You may lose your entire investment.
We do not currently have sufficient capital to
meet our financial needs for the next twelve
months. If we do not raise even minimal funds,
our officers and directors have verbally agreed to
provide the funds necessary to maintain
operations, not to exceed $20,000. If operations
require more than $20,000, we may not be able to
continue operations.
3. Our officers will only work part time for Sky
Way Aircraft. Operations may not increase due to
their limited involvement.
Brent Kovar as president and James S. Kent, as
chief executive officer will only be required to
work 20 hours per week each for Sky Way Aircraft.
We may not be able to increase operations due to
the limited time availability by our officers,
which could reduce our profitability.
4. We depend on relationships with the airline
industry. If we cannot maintain these
relationships, we will not be profitable and you
may lose your entire investment.
We rely on the airlines to provide the necessary
contacts with its operating centers. If we do not
maintain our relationships with these airlines, we
may not obtain successful operations. You may
lose your entire investment.
5. If we cannot establish and maintain brand
recognition of Sky Way Aircraft, we will not be
able to successfully conduct our operations. You
could lose your entire investment.
We believe brand recognition will become more
important due to the growing number of competitors
and the relatively low barriers to entry. If we
cannot establish and maintain brand recognition,
our operations will be negatively effected and you
could lose your entire investment.
6. You will experience immediate dilution of at
least $13.13 or 75.03% of your investment if we
raise the entire offering amount.
Immediately after the offering, if we raise the
entire amount, the book value per common share
will be $13.13 or 75.03% less than the offering
price.
7. If our securities have no active trading
market, you may not be able to sell your common
shares preferred easily.
We do not have a public market for our securities,
nor can we assure you that a public market will
ever develop. Consequently, you may not be able
to liquidate your investment in the event of an
emergency or for any other reason.
8. The selling shareholders may have liability
because of their status as underwriters. They may
sue us if there are any omissions or misstatements
in the registration statement that subject them to
civil liability.
Under the Securities Act of 1933, the selling
security holders will be considered to be
underwriters of the offering. The selling security
holders may have civil liability under Section 11
and 12 of the Securities Act for any omissions or
misstatements in the registration statement because
of their status as underwriters. We may be sued
by selling security holders if omissions or
misstatements result in civil liability to them.
Forward-Looking Statements
The statements contained in this prospectus that
are not historical fact are forward-looking
statements which can be identified by the use of
forward-looking terminology such as "believes,"
"expects," "may," "will," "should," or
"anticipates" or the negative thereof or other
variations, thereon or comparable terminology, or
by discussions of strategy that involve risks and
uncertainties. We have made the forward-looking
statements with management's best estimates
prepared in good faith.
Because of the number and range of the assumptions
underlying our projections and forward-looking
statements, many of which are effected by
significant uncertainties and contingencies that
are beyond our reasonable control, some of the
assumptions inevitably will not materialize and
unanticipated events and circumstances may occur
subsequent to the date of this prospectus.
These forward-looking statements are based on
current expectations, and we will not update this
information other than required by law.
Therefore, the actual experience of Sky Way
Aircraft, and results achieved during the period
covered by any particular projections and other
forward-looking statements, should not be regarded
as a representation by Sky Way Aircraft, or any
other person, that we will realize these estimates
and projections, and actual results may vary
materially. We cannot assure you that any of
these expectations will be realized or that any of
the forward-looking statements contained herein
will prove to be accurate.
SELLING SECURITY HOLDERS
Sky Way Aircraft shall register pursuant to this
prospectus 953,199 common shares currently
outstanding for the account of the following
individuals or entities. The percentage owned
prior to and after the offering reflects all of the
then outstanding common shares. The amount and
percentage owned after the offering assumes the
sale of all of the common shares being registered
on behalf of the selling security holders.
[Enlarge/Download Table]
Name Amount Total Number % Owned Number of % Owned
Being Owned Prior to Shares Owned After
Registered Currently offering After offering offering
KH-0(1) 34,500 345,000 4.6% 310,500 3.11%
ARJ Associates(2) 75,000 750,000 10.0% 675,000 6.75%
Wireless Ventures 565,500 5,655,000 75.4% 5,089,500 50.90%
Venture Group 22,500 225,000 3.0% 202,500 2.03%
Constance Swenson 127,000 262,500 3.5% 135,500 1.36%
Martyne Elder 127,000 262,500 3.5% 135,500 1.36%
KH-O is controlled by Brent Kovar, Glenn Kovar and
Joy Kovar. Brent Kovar and Joy Kovar are officers
and directors of Sky Way Aircraft.
ARJ Associates is controlled by Alan R. Josselyn
who may be deemed to be a promoter of Sky Way
Aircraft.
Sky Way Aircraft
General Corporate History. Sky Way Aircraft was
incorporated on April 24, 2002 under the laws of
the State of Nevada. Sky Way Aircraft's
principal executive and administrative offices are
located at 2701 N. Rocky Point Drive, Suite 1150,
Tampa, Florida, 33607. These offices consist of
4,500 square feet and are leased on a monthly
basis at the lease price of $9,000 per month.
Sky Way Aircraft's operations center and 24 hour
aircraft monitoring building is located at 6700
Citicorp Drive, Tampa, Florida 33618. These
premises consist of 100,000 square feet of
disaster operation class 5 raised floor bunker and
is leased on a monthly basis, and our current
lease of 2060 square feet is $6000 per month with
option to expand to 100,000 square feet.
Business Activities.
License with Sky Way Global. Sky Way Aircraft
entered into a ten-year licensing agreement with
Sky Way Global, LLC, an entity under common
control on April 26, 2002 for the exclusive right
to use the patent pending technology that supplies
private and public broadband wireless networks,
infrastructure and applications to airborne
customers. Sky Way Aircraft shall pay a royalty
fee of 5% of gross sales. The royalty fee will
be adjusted every six months, but is limited to
30% of gross sales. The agreement is renewable
in five-year increments with mutual consent. The
agreement may be terminated by either party upon
thirty days written notice.
Sky Way Global purchases components including:
- Lucent Technology radio frequency equipment,
- Hughes Network Systems Integrated Satellite
feeds and
- Proprietary high intensity transfer technology
system.
The network is a loop design, with self-healing
adjustable feeds of 1-155 Mbps Up and Down Link to
each customer, based on sales package. Wireless
security includes a 128 bit transmission
encryption and a 448 bit blowfish telephony
encryption. All of these components are FCC,
Industy in Canada, and European Union compliant
Back-up power on the wireless loop utilizes solar
energy for an environmentally friendly business.
The airline will have access to real-time data
feeds from the aircraft both airborne and on the
tarmac. Practical applications are a proactive
approach to monitoring aircraft systems. This
technology provides an interface to data flight
digital recorder, other data capture equipment
onboard the aircraft, thereby alerting operations
of potential maintenance issues prior to the
aircraft landing and reaching its destination.
With the heightened level of awareness for airline
safety and security, a video link is provided to
monitor activities in the cockpit and cabin of the
aircraft. The video feed is viewed in real time
or stored and viewed as needed. A two-way video
feed is provided for medical care in assisting
crewmembers or on-board medical personnel in
emergency situations. Remote control from the
ground could also be coupled with the capability
of releasing a sleeping agent as a deterrent
against terrorists killing passengers or
destroying the aircraft.
Management is of the opinion that in flight high
speed connection will provide a significant
increase in customer service and entertainment
including
- Internet access
- telephony capabilities
- videos on demand
- audio on demand
- online shopping and
- many other entertainment services.
Preliminary Flight Testing
The technology has been flight tested with
positive results. Preliminary testing, utilizing
a temporary internal and external airborne antenna
system, attained bandwidth speeds of 8Mbps at an
altitude of 35,000 feet and a speed of 450 knots.
At 35,000 feet, estimated coverage was within a
radius of 300 miles. These preliminary tests
indicate that with the installation of a
permanently installed external antenna system, an
increase in bandwidth to 15 Mbps is likely with a
coverage extending over a 500-mile radius.
Some services the technology can provide are:
- real-time video up to 30 frames per second,
multiple camera video surveillance systems that
can provide both zoom and pan options cover all
areas from the cockpit to cabin, utilization while
airborne or on the tarmac.
- Direct wireless connection with various
government agencies (FAA, CIA, FBI, etc.)
- Air to ground link for Smart Aircraft of
all flight control, which enables ground agencies
to fly and land the aircraft from the ground.
- Provide in flight video conferencing for
medical services.
- Monitor aircraft avionics. Providing
direct wireless connection between the aircraft
and airport maintenance personnel for real-time
reporting of aircraft health and welfare systems.
- Passenger and employee security
identification readers.
- Provide airport management monitoring.
- Secure communications between the aircraft
and ground facilities utilizing a proven military
level encryption service of 128 to 448 bits.
- Airline VPN - connections between airline
corporate headquarters, various national airline
offices and airline call center support services.
- Data storage facilities.
- An Internet connection, providing a variety
of services to the aircraft, which include e-mail
service, voice over IP and movies on-demand.
Business Strategy. Sky Way Aircraft anticipates
starting operations in the second and third
quarter of 2002 serving commercial airlines on the
eastern seaboard of the United States.
Current Activities of Sky Way Global. In
December 2001 Sky Way Global, responding to the
Airline Safety Bill, submitted business and
technical documentation explaining Sky Way's ultra
high-speed wireless system and providing
recommendations resolving current aircraft-related
security issues. Currently, Sky Way Global is
engaged in further dialogue with the Department of
Transportation and the evaluation group organized
to examine proposals and analyze technologies that
provide solutions to the nations air safety bill.
Sky Way Global attended the meeting with strategic
executives of the Under Secretary of Defense and
key representatives from the various military
services in mid April 2002. Sky Way Global is
scheduled for a follow-up meeting with
Congressional Representatives, the Department of
Transportation, and Department of Defense during
the late June 2002.
On February 8, 2002, WorldCom and Internet and
network communications solutions company, accepted
Sky Way Global into the WorldCom Digital Ventures
Program. This Program provides Sky Way Global a
comprehensive range of telecommunications services
including Network Co-location Services and Data
Center Facilities of more than 2,500 point of
presence (POP) locations covering more than 65
countries including the United States, Canada,
Europe, and the Pacific Rim. In April 2002 Sky Way
Global demonstrated their technology for the
Principle Strategic Development Manager for
Rockwell/Collins. As a direct result of the
demonstration, SkyWay Global has received a
listing of aircraft and communications-related
projects from Rockwell Collins, which outlines the
Next Steps between the two companies. On May 30,
2002, Rockwell/Collins has agreed to provide their
experimental airplane to be used in the testing
and development phases of the Sky Way Aircraft
technology. Teaming and Licensing Agreements are
being prepared.
Anticipate signing a Memorandum of Understanding
and Teaming Agreement with EVOX, Inc., marketer of
a Lockheed Martin developed Stealthware technology
which is a system that modulates digital data to
prevent intercept through a virtually featureless
waveform. Sky Way Global believes that the Sky
Way technology and the Stealthware technology can
be combined to provide a high-speed and secure
communication on any application and platform
available and will have immense impact on the
government's need for high-speed, secure, non-
exploitable communications (military and civilian)
in a variety of agencies, law enforcement, first
response teams, aviation applications. EVOX Inc.
is currently under contract by the Department of
State for delivery of systems for these purposes
A demonstration for Boeing executives and
engineers is tentatively scheduled for late June
2002.
Sky Way Aircraft is in discussions with Air Cell
and Verizon AirFone regarding nation-wide network
and services.
Sky Way Aircraft will continue analysis on Lear 60
and Challenger 600A jet airlines. Sky Way
Aircraft will evaluate
- video cameras,
- internal and external antenna,
- in-flight data from flight data recorder,
- in flight Internet to the seat, and
on demand and music.
Airborne test results for October 2001 and May 2,
2002 are currently under analysis.
Sky Way Aircraft will continue news relationships
with CBS, NBC, ABC, FOX and CNN to provide in-
flight broadcasts.
Revenue Generation. Sky Way Aircraft will
generate revenue by providing:
- Internet service like e-mail and movies/music
on-demand to the plane for use by the passengers,
- transportation of aircraft avionics data
from the plane to the ground,
- up-selling of full service camera and server
equipment,
- Internet ad time to advertisers, and
- telephone service.
Competition. We will compete by price and
service. The prices or price ranges for our
products and service will vary depending on
services provided.
In addition, we also compete directly with other
communication providers. We do not know of any
other companies that offer similar services with
sufficient bandwidth to provide 15 Mbps to and from
the aircraft and have the ability to monitor a
network.
We intend to keep the fees at a competitive rate as
new competitors enter the market in this area.
The market for information and security products
and services is highly competitive and competition
is expected to continue to increase significantly.
There are no substantial barriers to entry in these
markets, and we expect that competition will
continue to intensify. Although we currently
believe that the diverse segments of the Internet
market will provide opportunities for more than one
supplier of products and services similar to ours,
it is possible that a single supplier may dominate
one or more market segments. We will compete with
many other providers of informational services on
the Internet.
Government Regulation.
Sky Way Aircraft only provides a service and does
not tranmit. Sky Way Aircraft does not have to
ask for FCC permission, only has to notify the FCC
as to which channel they will use. It does not
need to comply with any special Government
Regulations. Aircraft to be used will already be
certified by FAA regulations. Cameras and
antennas are on the market and have been FCC
certified.
Use of Proceeds
Assuming $1,000,000, $5,000,000 $10,000,000,
$20,000,000, $30,000,000 or $43,750,000 of the
common shares are sold, the net proceeds of the
offering will be used as set forth in the following
tables. We may not raise sufficient capital to
expand our operations.
[Download Table]
Assuming Assuming
$1,000,000 raised % $5,000,000 raised %
Gross proceeds $1,000,000 100.00% $5,000,000 100.00%
Offering expenses 62,608 6.26% 62,608 1.25%
---------- ------- ---------- -------
Net proceeds $937,392 93.74% $4,937,392 98.75%
Lease office space and
related construction 93,738 9.37% 93,738 1.87%
Office equipment and
furniture 46,870 4.69% 46,870 .94%
Utilities and services 18,748 1.87% 18,748 .37%
Licenses 28,122 2.81% 28,122 .56%
Marketing 187,478 18.75% 187,478 3.75%
Advertising 140,609 14.06% 140,609 2.81%
Hiring of executive and
corporate support personnel 140,609 14.06% 140,609 2.81%
Continue inflight testing and
analysis 140,609 14.06% 140,609 2.81%
Commence hiring and training
of installation and testing
teams 140,609 14.06% 140,609 2.81%
Upgrade research and development
and operations center - -- 812,522 16.25%
Purchase, install and test
ground monitoring equipment - -- 812,522 16.25%
Commence hiring and training
of monitoring teams - -- 749,912 15.00%
Lease WorldCom facility
co-location sites 1-30 - -- 812,522 16.25%
Aircraft equipment purchase,
installation and text - -- 812,522 16.25%
Total Expended $ 937,392 93.74% $4,937,392 98.75%
[Enlarge/Download Table]
Assuming Assuming
$10,000,000 raised % $20,000,000 raised %
Gross proceeds $10,000,000 100.00% $20,000,000 100.00%
Offering expenses 62,608 .63% 62,608 .31%
---------- ---------- ----------- -------
Net proceeds $ 9,937,392 99.37% $19,937,392 99.69%
Lease office space and
related construction 93,738 .94% 93,738 .47%
Office equipment and
furniture 46,870 .47% 46,870 .23%
Utilities and services 18,748 .19% 18,748 .09%
Licenses 28,122 .28% 28,122 .14%
Marketing/Advertising 328,087 3.28% 1,278,087 6.39%
Hiring of executive and
corporate support personnel 140,609 1.41% 140,609 .70%
Continue inflight testing and
analysis 140,609 1.41% 140,609 .70%
Hiring and training of
installation and testing
teams 1,040,609 10.41% 3,315,000 16.58%
Upgrade research and development
and operations center 1,992,224 19.92% 3,250,000 16.25%
Purchase, install and test
ground monitoring equipment 1,494,183 14.94% 3,250,000 16.25%
Hiring and training of
monitoring teams 2,490,306 24.90% 3,250,000 16.25%
Lease WorldCom facility
co-location sites 1-30 - -- 1,875,609 9.38%
Aircraft equipment purchase,
installation and text 2,123,287 21.23% 3,250,000 16.25%
----------- ------ ----------- ------
Total Expended $ 9,937,392 99.37% $19,937,392 99.69%
[Enlarge/Download Table]
Assuming Assuming
$30,000,000 raised % $43,750,000 raised %
Gross proceeds $30,000,000 100.00% $43,750,000 100.00%
Offering expenses 62,608 .21% 62,608 .14%
---------- ---------- ----------- ---------
Net proceeds $29,937,392 99.79% $43,687,392 99.86%
Lease office space and
related construction 93,738 .31% 93,738 .21%
Office equipment and
furniture 46,870 .16% 46,870 .11%
Utilities and services 18,748 .06% 18,748 .04%
Licenses 28,122 .09% 28,122 .06%
Marketing/Advertising 1,278,087 4.26% 1,278,087 2.92%
Hiring of executive and
corporate support personnel 140,609 .47% 140,609 .32%
Continue inflight testing and
analysis 140,609 .47% 140,609 .32%
Hiring and training of
installation and testing
teams 3,315,000 11.05% 3,315,000 7.58%
Upgrade research and development
and operations center 3,315,000 11.05% 3,315,000 7.58%
Purchase, install and test
ground monitoring equipment 3,234,091 10.78% 7,062,122 16.14%
Commence hiring and training
of monitoring teams 3,234,091 10.78% 5,296,591 12.11%
Lease WorldCom facility
co-location sites 1-30 2,156,061 7.19% 7,062,122 16.14%
Aircraft equipment purchase,
installation and text 8,624,244 28.75% 10,593,183 24.21%
Lease international office
space and related construction - -- 1,765,530 4.04%
Establish international anti-
terrorism monitoring networks 4,312,122 14.37% 3,531,061 8.07%
Total Expended $29,937,392 99.79% $43,687,392 99.86%
If we raise less than $1,000,000, we shall utilize
the proceeds on a pro rata basis on the areas
listed above.
If we do not raise even minimal funds, our officers
and directors have verbally agreed to provide the
funds necessary to maintain operations, not to
exceed $20,000. These amounts will be through a
no interest loan with no specific payback
provisions.
Sky Way Aircraft anticipates that the proceeds from
this offering, together with projected cash flow
from operations, will be sufficient to meet
estimated capital expenditures for the next 24-36
months. If cash flows do not develop as
anticipated, Sky Way Aircraft will be required to
try to obtain additional sources of capital, yet to
be identified.
The actual allocation of funds will depend on Sky
Way Aircraft's success and growth. If results do
not meet our requirements, we will reallocate the
proceeds among the other contemplated uses of
proceeds, as prudent business practices dictate.
Pending application by Sky Way Aircraft of the net
proceeds of this offering, such proceeds will be
invested in short-term, interest-bearing
instruments.
Dilution
Persons purchasing common shares in this offering
will suffer a substantial and immediate dilution to
the net tangible book value of their common shares
below the public offering price.
The following table illustrates the per common
share dilution as of the date of this prospectus,
which may be experienced by investors upon reaching
the levels as described below.
Assuming $1,000,000 raised and a total of 7,557,143
common shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering .0003
Increase per Share attributable to investors .1237
-----
Pro Forma net tangible book value per common
share after offering .12
-----
Dilution to investors $17.38
Dilution as a percent of offering price 99.29%
Assuming $5,000,000 raised and a total of 7,785,715 common
shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering $.0003
Increase per Share attributable to investors .6339
------
Pro Forma net tangible book value per common
share after offering .63
------
Dilution to investors $16.87
Dilution as a percent of offering price 96.38%
Assuming $10,000,000 raised and a total of
8,071,429 common shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering $ .0003
Increase per Share attributable to investors 1.2309
-------
Pro Forma net tangible book value per common
share after offering 1.22
-----
Dilution to investors $16.27
Dilution as a percent of offering price 92.96%
Assuming $20,000,000 raised and a total of
8,642,857 common shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering $ .0003
Increase per Share attributable to investors 2.3065
-------
Pro Forma net tangible book value per common
share after offering 2.31
------
Dilution to investors $15.19
Dilution as a percent of offering price 86.82%
Assuming $30,000,000 raised and a total of
9,214,286 common shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering $ .0003
Increase per Share attributable to investors 3.2487
-------
Pro Forma net tangible book value per common
share after offering 3.25
------
Dilution to investors $14.25
Dilution as a percent of offering price 81.43%
Assuming $43,750,000 raised and a total of
10,000,000 common shares outstanding
[Download Table]
Offering price $17.50
Net tangible book value per common share before offering $ .0003
Increase per Share attributable to investors 4.3684
Pro Forma net tangible book value per common -------
share after offering 4.37
------
Dilution to investors $13.13
Dilution as a percent of offering price 75.04%
Further Dilution. We may issue additional
restricted common shares pursuant to private
business transactions. Any sales under Rule 144
after the applicable holding period may have a
depressive effect upon the market price of our
common shares and investors in this offering upon
conversion.
Plan of Operation
Trends and Uncertainties. Demand for Sky Way
Aircraft's products and services will be dependent
on, among other things, market acceptance of the
Sky Way Aircraft's concept, the quality of our
services, and general economic conditions, which
are cyclical in nature. Inasmuch as a major
portion of Sky Way Aircraft's activities will be
the receipt of revenues from our services, Sky Way
Aircraft's business operations may be adversely
affected by Sky Way Aircraft's competitors and
prolonged recessionary periods.
Capital and Source of Liquidity. All of the
initial working capital has been obtained from the
issuance of common shares for payment of
organization costs of $1,870, services rendered
valued at $5,630. Additionally, Sky Way Global,
LLC, an entity under common control, advanced Sky
Way Aircraft $1,000. The advance bears no
interest.
For the period from inception (April 24, 2002) to
April 30, 2002, Sky Way Aircraft did not pursue any
financing or investing activities.
We currently have no working capital and will rely
on further issuance of common stock and loans to
continue operations until completion of the
offering.
On a long-term basis, liquidity is dependent on
continuation and expansion of operation and receipt
of revenues, additional infusions of capital, and
debt financing. Sky Way Aircraft believes that
additional capital and debt financing in the short
term will allow Sky Way Aircraft to increase its
marketing and sales efforts and thereafter result
in increased revenue and greater liquidity in the
long term. However, there can be no assurance that
Sky Way Aircraft will be able to obtain additional
equity or debt financing in the future, if at all.
Results of Operations. For the period from
inception to April 30, 2002, Sky Way Aircraft did
not receive any revenues from operations.
For the period from inception to April 30, 2002,
Sky Way Aircraft had general and administrative
expenses of $5,400.
Plan of Operation. Sky Way Aircraft is in the
development stage and has not conducted any
significant operations to date or received
operating revenues. Sky Way Aircraft can satisfy
our cash requirements in the next 24-36 months if
we can successfully complete this offering or
through loans from affiliated entities, our
officers and directors. We will not need to
conduct any research and development regarding our
business plan.
Network expansion includes establishing business
alliances with current vendors and additionally,
contacting search engines to gain national exposure
of our website with major networking partner
WorldCom, Lucent Technology, Avaya and Sky Way
Aircraft's customer and sales force.
Officers and directors have agreed to provide the
minimal funds we require to maintain operations
through no interest loans not to exceed $20,000.
There are no specific repayment terms.
Over the next twelve months, we will continue to
seek any necessary funding from other sources and
will begin meeting with United States government
officials on the proposals to the Department of
Defense for Airline Safety Bill. Additionally, we
will begin marketing to major airlines and complete
real-time monitoring nationwide.
The failure to do any of the above will not cause
us to change our business plan or business focus.
Upon funding of less than $1,000,000, the use of
proceeds shall be utilized on a pro rata basis for
the purposes described. Nominal expenses will be
paid to obtain greater exposure of our services.
As we begin to generate revenues, we shall review
advertising expansion options. As funding allows,
we will conduct expanded advertising activities.
Other than described in the use of proceeds
section, we do not expect to purchase any plant or
significant equipment. If the offering is
successful, we do not expect immediate significant
changes in the number of employees to conduct
operations.
If we raise only $1,000,000, we will not have to
raise additional funds in the next twelve months.
Sky Way Aircraft may experience problems; delays,
expenses, and difficulties sometimes encountered by
an enterprise in Sky Way Aircraft's stage of
development, many of which are beyond Sky Way
Aircraft's control. These include, but are not
limited to, unanticipated problems relating to the
development of the system, production and marketing
problems, additional costs and expenses that may
exceed current estimates, and competition.
Market for Common Equity and
Related Stockholder Matters
At the present time, there is no market for our
common shares.
We have four holders of record.
Since inception we have not paid any dividends. We
intend to use any profits for operations and do not
intend to pay dividends.
If the trading price of our common stock is less
than $5.00 per share, trading in the common stock
would also be subject to the requirements of Rule
15g-9 under the Exchange Act. Under this rule,
broker/dealers who recommend low-priced securities
to persons other than established customers and
accredited investors must satisfy special sales
practice requirements. The broker/dealer must make
an individualized written suitability determination
for the purchaser and receive the purchaser's
written consent prior to the transaction.
SEC regulations also require additional disclosure
in connection with any trades involving a "penny
stock", including the delivery, prior to any penny
stock transaction, of a disclosure schedule
explaining the penny stock market and its
associated risks. These requirements severely limit
the liquidity of the common stock in the secondary
market because few brokers or dealers are likely to
undertake compliance activities. Generally, the
term penny stock refers to a stock with a market
price of less than $5.00 per share. A market in
our stock may never develop due to these
restrictions.
Determination of Offering Price
The offering price of the common shares were
arbitrarily determined by Sky Way Aircraft without
any consideration of the actual value of our
company or what the market might pay for our stock.
Plan of Distribution
Plan of Distribution. The common shares are being
offered by Brent C. Kovar and James Kent, officers
and directors of Sky Way Aircraft and selected
broker/dealers. Consequently, there may be less
due diligence performed in conjunction with this
offering than would be performed in an underwritten
offering. Although they are associated persons of
us as that term is defined in Rule 3a4-1 under the
Exchange Act, they are deemed not to be a broker
for the following reasons:
- They are not subject to a statutory
disqualification under the Exchange Act at the time
of their participation in the sale of our
securities.
- They will not be compensated for their
participation in the sale of our securities by the
payment of commission or other remuneration based
either directly or indirectly on transactions in
securities.
- They are not an associated person of a
broker or dealer at the time of their participation
in the sale of our securities.
As of the date of this prospectus, no broker has
been retained by us for the sale of securities
being offered. In the event a broker who may be
deemed an underwriter is retained by us, an
amendment to our registration statement will be
filed.
Management, principal shareholders or their
affiliates may not acquire common shares in the
offering.
The common shares may be offered by selected
broker/dealers. Selected broker/dealers, if any,
will receive the standard industry commission not
to exceed 10% of the offering price.
No Minimum Offering Amount or Escrow Account.
There is no minimum offering amount and therefore,
no escrow account has been established. Any funds
received from the offering will be deposited
directly into the operating account of Sky Way
Aircraft.
Selling security holder. The selling security
holder offering of 953,199 common shares at $17.50
per common share will begin on the effective date
of the prospectus and terminate on or before
December 31, 2003.
No member of management, promoter or anyone acting
at their direction is expected to recommend,
encourage or advise investors to open brokerage
accounts with any broker-dealer that is obtained to
make a market in our securities.
We will disseminate information regarding any
broker-dealers that make a market in our securities
in the future, if any, to our shareholders as part
of ongoing communication.
Offering Period. The offering period will commence
on the date of this prospectus and will terminate
on December 31, 2003.
Management
Executive Officers and Directors
Our executive officers and directors and their
business experience follows:
[Enlarge/Download Table]
Name Position Period Served
James S. Kent, age 64 Chief Executive Officer/ Inception
Vice President/Director to present
Brent C. Kovar, age 35 President/Director Inception
to present
James Dublikar, age 49 Chief Financial Officer/
Senior Vice President/ Inception
Airline Industry Coordinator to present
Joy Carson Kovar, age 66 Corporate Secretary/Director Inception
to present
Resumes:
James S. Kent - Mr. Kent has been director of
business operations for Sky Way Florida since 2000.
From 1998 to 1999, Mr. Kent served as director of
operations for Satellite Access Systems, Inc., a
satellite services corporation. From 1997 to 1998
he served as a senior management consultant with
Booz, Allen & Hamilton, a major government
contractor and national/international business
consulting firm. From 1980 to 1997, Mr. Kent
served in various government contract management
positions supporting projects of the Department of
Defense, National Security Agency, and Department
of the Navy.
Brent C. Kovar - Mr. Kovar founded Sky Way Global
in 2000, a high speed broadband wireless service
company. In 1990, Mr. Kovar founded PC, Ltd., a
company that produced specialty-designed remote
controlled arm and RF products. From 1987 to
1989, he was associated with Jacobs Engineering,
an engineering company in Pasadena, California.
From 1986 to 1987, Mr. Kovar worked with Falcon
Communications as a wireless communications
engineer. Mr. Kovar earned a Bachelor of Science
degree from Devry Institute and is currently
pursuing seminars and programs with a goal of
masters degree.
James a. Dublikar - Mr. Dublikar has been
president of Dublikar & Associates, a company that
provides consulting in the areas of airline
operations, risk management and information
technology from 1999 to present. His
responsibilities were for financial projections,
informaton technology, human resources and
administrative areas.
From 1989 to 1992, he was responsible for risk
management functions including: insurance
administration, claims loss control and safety
programs. He served as a key member of the
emergency response team and directed the
development of disaster recovery procedures. He
worked directly with the NTSB in the application
of the Air Carrier Disaster - Family Assistance
Act. 1984 - 1989 Chief Information Officer where
he designed, developed and implemented a long
range IT strategy. Initiated a joint venture with
Delta Airlines to replace the Revenue Accounting
Processes that resulted in a hardware savings and
implementation savings. During the time period of
1976 to 1984, Mr. Dublikar was in positions of
comptroller, director of operations and manger of
finance. Mr. Dublikar earned his Bachelor of
Science degree in business administration with a
major in accounting and finance from Xavier
University in 1975.
Joy Carson Kovar - Mrs. Kovar started working for
Sky Way Global in 2000 as vice president of
corporate services. Her early experience in
personnel work was gained during 1957 to 1960 for
the Department of Agriculture and later with the
Air Force in 1963 and 1964.
In 1960, Mrs. Kovar started Communication Skills
Laboratory, in Pasadena, California. She conducted
classes for hundreds of business people. From 1964
to 1993, Mrs. Kovar worked in the field of
education. In addition to classroom experience she
worked in school administration, including Federal
programs for improvement and State of California
team for school inspection.
She completed a Bachelor of Arts at Arizona State
University in 1957 and a Masters of Arts in 1978 at
Redlands University, California with post graduate
work at UCLA.
Remuneration. To date, no material compensation
has been paid to the officers of Sky Way Aircraft.
Upon successful completion of the offering, we will
enter into written employment agreements with our
current officers and key employees yet to be named.
Since inception, the executive officers have not
received any compensation
None of our officers and/or directors has received
any compensation for their respective services
rendered unto us. They all have agreed to act
without compensation. As of the date of this
registration statement, we have no funds available
to pay directors. Further, none of the directors
are accruing or will accrue any compensation
pursuant to any agreement with us.
Employee Incentive Stock Option Plan. The
shareholders and the directors, at their
organizational meeting, adopted an employee
incentive stock option plan pursuant to the
regulations of the Internal Revenue Service. The
plan provides for a pool of authorized, but
unissued common shares to be reserved for issuing
to key executives, employees and consultants
pursuant to the plan. Up to 1,000,000 options may
be granted. The board of directors plans to elect
a compensation committee to award the options from
time to time. Committee members may not be
grantees while serving.
Principal Shareholders
The following tabulates holdings of common shares
of Sky Way Aircraft (on a fully diluted basis) by
each person who, at the date of this prospectus,
holds of record or is known by management to own
beneficially more than 5.0% of the common shares
and, in addition, by all directors and officers of
Sky Way Aircraft individually and as a group.
[Download Table]
Percentage of
Number & Class Common Shares
Name and Address of Shares Prior to offering
KH-01 Ventures(1) 1,019,294 13.59%
121 6th Street East
Tierra Verde, FL 33715
Brent C. Kovar(1) 0 0.00%
121 6th Street East
Tierra Verde, FL 33715
James S. Kent 0 0.00%
8609 30th St. East
Parrish, FL 34219
James A. Dublikar 0 0.00%
822 Riverwatch Dr.
Crescent Springs, KY 4107
Joy C. Kovar(1) 0 0.00%
2701 N. Rocky Point Dr.
Suite 1150
Tampa, FL 33607
All Directors & Officers
as a group (4 persons) 1,019,294 13.59%
Wireless Ventures(2) 5,274,706 70.33%
13300 3rd St. East
Madeira Beach, FL 33708
ARJ Associates(3) 750,000 10.00%
1325 South 800 East, Suite 315
Orem, Utah 84057
(1)KH-01 Ventures is controlled by Brent Kovar,
Glenn Kovar and Joy Kovar
(2)Wireless Ventures is controlled by Craig Swink
(3)ARJ Associates is controlled by Alan R. Josselyn.
Pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, beneficial
ownership of a security consists of sole or shared
voting power (including the power to vote or direct
the voting) and/or sole or shared investment power
(including the power to dispose or direct the
disposition) with respect to a security, whether
through a contract, arrangement, understanding,
relationship, or otherwise. Unless otherwise
indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition
of all shares beneficially owned.
Brent Kovar, Glenn Kovar, Joy Kovar and ARJ
Associates would be deemed to be promoters of Sky
Way Aircraft.
We do not know of any arrangements, including any
pledge by any personnel, which would result in a
change of control of Sky Way Aircraft.
Indemnification
Our bylaws do not contain a provision entitling
any director or executive officer to
indemnification against liability under the
Securities Act of 1933. The Colorado Corporation
Code allow a company to indemnify its officers,
directors, employees, and agents from any
threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal,
administrative, or investigative, except under
certain circumstances.
Indemnification may only occur if a determination
has been made that the officer, director,
employee, or agent acted in good faith and in a
manner, which such person believed to be in the
best interests of the company. A determination may
be made by the shareholders; by a majority of the
directors who were not parties to the action,
suit, or proceeding confirmed by opinion of
independent legal counsel; or by opinion of
independent legal counsel in the event a quorum of
directors who were not a party to such action,
suit, or proceeding does not exist.
Provided the terms and conditions of these
provisions under Nevada law are met, officers,
directors, employees, and agents of Sky Way
Aircraft may be indemnified against any cost,
loss, or expense arising out of any liability
under the '33 Act. Insofar as indemnification for
liabilities arising under the '33 Act may be
permitted to directors, officers and controlling
persons of Sky Way Aircraft. Sky Way Aircraft has
been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is
against public policy and is, therefore,
unenforceable.
Certain Transactions
During April 2002, Sky Way Aircraft issued
5,400,000 shares of common stock of
officers/shareholders of Sky Way Aircraft or
entities related to them for payment of
organization costs of $1,870 and non-cash services
rendered valued at $3,530.
License with Sky Way Global. Sky Way Aircraft
entered into a ten-year licensing agreement with
Sky Way Global, LLC, an entity under common
control on April 26, 2002 for the exclusive right
to use the patent pending technology that supplies
private and public broadband wireless networks,
infrastructure and applications to airborne
customers. Sky Way Aircraft shall pay a royalty
fee of 5% of gross sales. The royalty fee will
be adjusted every six months, but is limited to
30% of gross sales. The agreement is renewable
in five-year increments with mutual consent. The
agreement may be terminated by either party upon
thirty days written notice.
Sky Way Global, LLC advanced Sky Way Aircraft
$1,000. The advance bears no interest.
Description of Securities
Sky Way Aircraft is authorized to issue 40,000,000
common shares, $.001 par value per share and
10,000,000 preferred shares, $.001 par value per
share. As of the date hereof, there are
7,500,000 common shares outstanding and no
preferred shares outstanding.
Holders of common shares of Sky Way Aircraft are
entitled to cast one vote for each share held at
all shareholders meetings for all purposes. There
are no cumulative voting rights. Upon liquidation
or dissolution, each outstanding common share will
be entitled to share equally in the assets of Sky
Way Aircraft legally available for distribution to
shareholders after the payment of all debts and
other liabilities. Common shares are not
redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or
purchase additional common shares in the event of a
subsequent offering. All outstanding common shares
are, and the shares offered hereby will be when
issued, fully paid and non-assessable.
There are no limitations or restrictions upon the
rights of the board of directors to declare
dividends out of any funds legally available
therefore. Sky Way Aircraft has not paid dividends
to date and it is not anticipated that any
dividends will be paid in the foreseeable future.
The board of directors initially may follow a
policy of retaining earnings, if any, to finance
the future growth of Sky Way Aircraft.
Accordingly, future dividends, if any, will depend
upon, among other considerations, Sky Way
Aircraft's need for working capital and its
financial conditions at the time.
Preferred Stock. Sky Way Aircraft is authorized
to issue 10,000,000 shares of preferred stock, par
value of $.001.
Authorized stock may be issued from time to time
without action by the stockholders for such
consideration as may be fixed from time to time by
the Board of Directors, and shares so issued, the
consideration for which have been paid or
delivered, shall be deemed fully paid stock and the
holder of such shares shall not be liable for any
further payment thereon.
The capital stock of Sky Way Aircraft, after the
amount of the subscription price or par value has
been paid in full shall be non-assessible.
There are not anti-takeover provisions that may
have the affect of delaying or preventing a change
in control.
Transfer Agent. State Agent and Transfer
Syndicate, Inc. located in Carson City, Nevada acts
as the transfer agent for Sky Way Aircraft.
Legal Matters
All legal matters with respect to the issuance of
the securities offered hereby will be passed upon
by the law firm of Jody M. Walker, Littleton,
Colorado.
There is no litigation pending or, to our
knowledge, threatened to which the property of Sky
Way Aircraft is subject or to which Sky Way
Aircraft may be a party. No such proceedings are
known to be contemplated by governmental
authorities or any other parties.
Reports
Pursuant to the Rules and Regulations of the
Securities and Exchange Commission, we will provide
our Investors with Annual Reports containing
audited financial statements, together with
Quarterly Reports containing unaudited financial
statements and Interim Reports containing
information regarding relevant information about
the operations of Sky Way Aircraft.
Financial Statements
Independent Auditors' Report
Balance Sheet, April 30, 2002
Statement of Operations, from inception on April
24, 2002 through April 30, 2002
Statement of Stockholders' Equity, from inception
on April 24, 2002 through April 30, 2002
Statement of Cash Flows, from inception on April
24, 2002 through April 30, 2002
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
Board of Directors
SKY WAY AIRCRAFT INC.
Tampa, Florida
We have audited the accompanying balance sheet of
Sky Way Aircraft Inc. [a development stage company]
at April 30, 2002 and the related statements of
operations, stockholders' equity and cash flows for
the period from inception on April 24, 2002 through
April 30, 2002. 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 in the United States of
America. Those standards require that we plan and
perform the audit to obtain reasonable assurance
about whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant
estimates made by management, as well as evaluating
the overall financial statement presentation. We
believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements audited by
us present fairly, in all material respects, the
financial position of Sky Way Aircraft Inc. [a
development stage company] as of April 30, 2002 and
the results of its operations and its cash flows
for the period from inception on April 24, 2002
through April 30, 2002, in conformity with
generally accepted accounting principles in the
United States of America.
The accompanying financial statements have been
prepared assuming the Company will continue as a
going concern. As discussed in Note 5 to the
financial statements, the Company was only recently
formed, has incurred losses since its inception and
has no on-going operations. These factors raise
substantial doubt about the ability of the Company
to continue as a going concern. Management's plans
in regards to these matters are also described in
Note 5. The financial statements do not include
any adjustments that might result from the outcome
of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
May 8, 2002
Salt Lake City, Utah
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
[Download Table]
April 30,
2002
---------
CURRENT ASSETS:
Cash $ -
----------
Total Current Assets -
OTHER ASSETS:
Deferred stock offering costs 2,100
----------
$ 2,100
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ -
---------
Total Current Liabilities -
---------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
40,000,000 shares authorized,
7,500,000 shares issued and
outstanding 7,500
Capital in excess of par value -
Deficit accumulated during the
development stage (5,400)
--------
Total Stockholders' Equity 2,100
--------
$ 2,100
========
The accompanying notes are an integral
part of this financial statement.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
[Download Table]
From Inception
on April 24,
2002 Through
April 30,
2002
---------------
REVENUE $ -
EXPENSES:
General and administrative 5,400
---------------
LOSS BEFORE INCOME TAXES (5,400)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
---------------
NET LOSS $ (5,400)
---------------
LOSS PER COMMON SHARE $ (.00)
---------------
The accompanying notes are an integral
part of this financial statement.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM THE DATE OF INCEPTION ON APRIL 24, 2002
THROUGH APRIL 30, 2002
[Enlarge/Download Table]
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
--------------- ------------ Excess of Development
Shares Amount Shares Amount Par Value Stage
------ ------ ------ ------ ---------- ----------
BALANCE, April 24, 2002 - $ - - $ - $ - $ -
Issuance of 7,500,000
shares of common stock
for payment of organization
costs of $1,870 and services
rendered valued at $5,630, or
$.001 per share, April 2002 - - 7,500,000 7,500 - -
Net loss for the period
ended April 30, 2002 - - - - - (5,400)
------ ------ -------- -------- ------ --------
BALANCE, April 30, 2002 - $ - 7,500,000 $ 7,500 $ - $ (5,400)
------ ------ ========= ======== ====== ========
The accompanying notes are an integral
part of this financial statement.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
[Download Table]
From Inception
on April 24,
2002 Through
April 30,
2002
--------------
Cash Flows From Operating Activities:
Net loss $ (5,400)
Adjustments to reconcile net loss to
net cash provided (used) by operating
activities:
Non-cash services rendered for stock 5,400
Changes in assets and liabilities -
-------------
Net Cash Provided (Used) by Operating Activities -
-------------
Cash Flows From Investing Activities -
-------------
Net Cash Provided (Used) by Investing Activities -
-------------
Cash Flows From Financing Activities -
-------------
Net Cash Provided (Used) by Financing Activities -
-------------
Net Increase (Decrease) in Cash -
Cash at Beginning of Period -
-------------
Cash at End of Period $ -
-------------
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and
Financing Activities:
For the period from inception on April 24, 2002
through April 30, 2002:
In connection with its organization, the
Company issued 7,500,000 shares of common
stock for organizational costs of $1,870
and services rendered valued at $5,630,
or $.001 per share.
The accompanying notes are an integral
part of this financial statement.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Sky Way Aircraft Inc. ("the
Company") was organized under the laws of the State
of Nevada on April 24, 2002. The Company plans to
provide security services for the airlines
industry. The Company has not yet generated any
revenues from its planned principal operations and
is considered a development stage company as
defined in Statement of Financial Accounting
Standards No. 7. The Company has, at the present
time, not paid any dividends and any dividends that
may be paid in the future will depend upon the
financial requirements of the Company and other
relevant factors.
Stock Offering Costs - Costs related to proposed
stock offerings are deferred and will be offset
against the proceeds of the offering in capital in
excess of par value. In the event a stock offering
is unsuccessful, the costs related to the offering
will be written-off directly to expense.
Organization Costs - Organization costs, which
reflect amounts expended to organize the Company,
were expensed as incurred.
Loss Per Share - The computation of loss per share
is based on the weighted average number of shares
outstanding during the period presented in
accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" [See Note
6].
Cash and Cash Equivalents - For purposes of the
statement of cash flows, the Company considers all
highly liquid debt investments purchased with a
maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial
statements in conformity with generally accepted
accounting principles in the United States of
America requires management to make estimates and
assumptions that affect the reported amounts of
assets and liabilities, the disclosures of
contingent assets and liabilities at the date of
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[Continued]
the financial statements, and the reported amount
of revenues and expenses during the reported
period. Actual results could differ from those
estimated.
Recently Enacted Accounting Standards - Statement
of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations", SFAS No. 142, "Goodwill
and Other Intangible Assets", SFAS No. 143,
"Accounting for Asset Retirement Obligations", and
SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", were recently
issued. SFAS No. 141, 142, 143 and 144 have no
current applicability to the Company or their
effect on the financial statements would not have
been significant.
NOTE 2 - CAPITAL STOCK
Preferred stock - The Company has authorized
10,000,000 shares of preferred stock, $.001 par
value, with such rights, preferences and
designations and to be issued in such series as
determined by the Board of Directors. No shares
were issued and outstanding at April 30, 2002.
Common Stock - The Company has authorized
40,000,000 shares of common stock with a par value
of $.001. During April 2002, in connection with
its organization, the Company issued 7,500,000
shares of its previously authorized but unissued
common stock for payment of organization costs of
$1,870 and non-cash services rendered valued at
$5,630 (or $.001 per share).
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance
with Statement of Financial Accounting Standards
No. 109 "Accounting for Income Taxes". SFAS No.
109 requires the Company to provide a net deferred
tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES [Continued]
differences between book and tax accounting methods
and any available operating loss or tax credit
carryforwards.
The Company has available at April 30, 2002 unused
operating loss carryforwards of approximately
$5,400 which may be applied against future taxable
income and which expire in 2022. The amount of and
ultimate realization of the benefits from the
operating loss carryforwards for income tax
purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and
other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding
the realization of the loss carryforwards, the
Company has established a valuation allowance equal
to the tax effect of the loss carryforwards and,
therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net
deferred tax assets are approximately $800 as of
April 30, 2002 with an offsetting valuation
allowance of the same amount, resulting in a change
in the valuation allowance of approximately $800
during the period from inception on April 24, 2002
through April 30, 2002.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - During April 2002, the
Company issued 5,400,000 shares of common stock to
officers/shareholders of the Company or entities
related to them for payment of organization costs
of $1,870 and non-cash services rendered valued at
$3,530. The Company has not paid any cash
compensation to any officer or director of the
Company.
Office Space - The Company has not had a need to
rent office space. An officer of the Company is
allowing the Company to use his address, as needed,
at no expense to the Company.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - GOING CONCERN
The accompanying financial statements have been
prepared in conformity with generally accepted
accounting principles in the United States of
America, which contemplate continuation of the
Company as a going concern. However, the Company
was only recently formed, has incurred losses since
its inception and has no on-going operations.
These factors raise substantial doubt about the
ability of the Company to continue as a going
concern. In this regard, management is proposing
to raise any necessary additional funds not
provided by operations through loans or through
additional sales of its common stock. There is no
assurance that the Company will be successful in
raising this additional capital or achieving
profitable operations. The financial statements do
not include any adjustments that might result from
the outcome of these uncertainties.
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in
computing loss per share:
[Download Table]
From Inception
on April 24,
2002 Through
April 30,
2002
-------------
Loss from operations available to
common shareholders (numerator) $ (5,400)
---------
Weighted average number of common
shares outstanding used in loss per share
for the period (denominator) 7,500,000
---------
Dilutive loss per share was not presented, as the
Company had no common stock equivalent shares for
all periods presented that would affect the
computation of diluted loss per share.
SKY WAY AIRCRAFT INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - COMMITMENTS
Licensing Agreement - The Company entered into a
ten-year licensing agreement with Sky Way Global,
LLC, an entity under common control. The Company
is to pay a royalty fee of 5% of gross sales for
the exclusive right to use high-speed, broadband
wireless technology for the aircraft industry. The
royalty fee will be adjusted every six months, but
is limited to 30% of gross sales. The agreement is
renewable in five-year increments with mutual
consent.
NOTE 8 - SUBSEQUENT EVENTS
Loan - On May 1, 2002, Sky Way Global, LLC, an
entity under common control, advanced the Company
$1,000. The advance bears no interest.
Proposed Stock Offering - The Company is proposing
to make a public offering of 2,500,000 shares of
its previously authorized but unissued common
stock. This offering is proposed to be registered
with the Security and Exchange Commission on Form
SB-2. An offering price of $17.50 per share has
been arbitrarily determined by the Company. The
offering will be managed by Company management, who
will receive no sales commissions or other
compensation in connection with the offering,
except for reimbursement of expenses actually
incurred on behalf of the Company in connection
with the offering. Offering costs are estimated to
be approximately $63,000.
Part II
Information Not Required in Prospectus
Item 24. Indemnification of Directors and Officers
The Nevada Revised Statutes grants to Sky Way
Aircraft the power to indemnify the officers and
directors of Sky Way Aircraft, under certain
circumstances and under certain conditions and
limitations as stated therein, against all expenses
and liabilities incurred by or imposed upon them as
a result of suits brought against them as such
officers and directors if they act in good faith
and in a manner they reasonably believe to be in or
not opposed to the best interests of Sky Way
Aircraft and, with respect to any criminal action
or proceeding, have no reasonable cause to believe
their conduct was unlawful.
Our bylaws provide as follows:
Sky Way Aircraft shall indemnify any person who was
or is a party or is threatened to be made a party
to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an
action by or in the right of Sky Way Aircraft, by
reason of the fact that he is or was a director,
officer, employee, fiduciary or agent of Sky Way
Aircraft or is or was serving at the request of Sky
Way Aircraft as a director, officer, employee,
fiduciary or agent of another corporation,
partnership, joint venture, trust, or other
enterprise, against expenses (including attorney
fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him
in connection with such action, suit, or proceeding
if he acted in good faith and in a manner he
reasonably believed to be in the best interest of
Sky Way Aircraft, and with respect to any criminal
action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination
of any action, suit, or proceeding by judgment,
order, settlement, or conviction or upon a plea of
nolo contendere or its equivalent shall not of
itself create a presumption that the person did not
act in good faith and in a manner which he
reasonably believed to be in the best interest of
Sky Way Aircraft and, with respect to any criminal
action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
Sky Way Aircraft shall indemnify any person who was
or is a party or is threatened to be made a party
to any threatened, pending, or completed action or
suit by or in the right of Sky Way Aircraft to
procure a judgment in its favor by reason of the
fact that he is or was a director, officer,
employee, or agent of Sky Way Aircraft or is or was
serving at the request of Sky Way Aircraft as a
director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or
other enterprise against expenses (including
attorney fees) actually and reasonably incurred by
him in connection with the defense or settlement of
such action or suit if he acted in good faith and
in a manner he reasonably believed to be in the
best interest of Sky Way Aircraft; but no
indemnification shall be made in respect of any
claim, issue, or matter as to which such person has
been adjudged to be liable for negligence or
misconduct in the performance of his duty to Sky
Way Aircraft unless and only to the extent that the
court in which such action or suit was brought
determines upon application that, despite the
adjudication of liability, but in view of all
circumstances of the case, such person is fairly
and reasonably entitled to indemnification for such
expenses which such court deems proper.
To the extent that a director, officer, employee,
fiduciary or agent of Sky Way Aircraft has been
successful on the merits in defense of any action,
suit, or proceeding referred to in the first two
paragraphs of this Article VII or in defense of any
claim, issue, or matter therein, he shall be
indemnified against expenses (including attorney
fees) actually and reasonably incurred by him in
connection therewith.
Any indemnification under the first two paragraphs
of this Article VII (unless ordered by a court)
shall be made by Sky Way Aircraft only as
authorized in the specific case upon a
determination that indemnification of the director,
officer, employee, fiduciary or agent is proper in
the circumstances because he has met the applicable
standard of conduct set forth in said first two
paragraphs. Such determination shall be made by
the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties
to such action, suit, or proceeding, or, if such
quorum is not obtainable or even if obtainable a
quorum of disinterested directors so directs, by
independent legal counsel in a written opinion or
by the shareholders.
Expenses (including attorney fees) incurred in
defending a civil or criminal action, suit, or
proceeding may be paid by Sky Way Aircraft in
advance of the final disposition of such action,
suit, or proceeding as authorized in this Article
VII upon receipt of an undertaking by or on behalf
of the director, officer, employee, fiduciary or
agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by
Sky Way Aircraft as authorized in this Article VII.
The indemnification provided by this Article VII
shall not be deemed exclusive of any other rights
to which those indemnified may be entitled under
the Articles of Incorporation, any bylaw,
agreement, vote of shareholders or disinterested
directors, or otherwise, and any procedure provided
for by any of the foregoing, both as to action in
his official capacity and as to action in another
capacity while holding such office, and shall
continue as to a person who has ceased to be a
director, officer, employee, fiduciary or agent and
shall inure to the benefit of heirs, executors, and
administrators of such a person.
A corporation may purchase and maintain insurance
on behalf of any person who is or was a director,
officer, employee, fiduciary or agent of Sky Way
Aircraft or who is or was serving at the request of
Sky Way Aircraft as a director, officer, employee,
fiduciary or agent of another corporation,
partnership, joint venture, trust, or other
enterprise against any liability asserted against
him and incurred by him in any such capacity or
arising out of his status as such, whether or not
Sky Way Aircraft would have the power to indemnify
him against such liability under the provisions of
this Article VII.
Item 25. Other Expenses of Issuance and
Distribution
Expenses in connection with the issuance and
distribution of the common stock being registered
hereunder other than underwriting commissions and
expenses are estimated below.
Registration fee $ 15,107.75
Printing expenses 5,000.00
Accounting fees and expenses 5,000.00
Legal fees and expenses 22,500.00
State securities law fees
and expenses 5,000.00
Miscellaneous expenses 10,000.00
------------
Total $ 62,607.75
============
Item 26. Recent Sales of Unregistered Securities
During April 2002, Sky Way Aircraft issued
5,400,000 common shares to officers of Sky Way
Aircraft or entities related to them for payment of
organization costs of $1,870 and non-cash services
rendered valued at $3,530 or $.001 per common
share.
During April 2002, Sky Way Aircraft issued 825,000
to the following for consulting services rendered
valued at $.001 per common share.
ARJosselyn 750,000 common shares
Venture Group 75,000 common shares
The above issuances of common shares were made to
sophisticated individuals pursuant to an exemption
from registration under Sec. 4(2) of the Securities
Act of 1933.
Item 27. Exhibit Index.
(3) Articles of Incorporation dated
April 24, 2002
(3.1) Bylaws
(4) Specimen certificate for common
stock
(5) Consent and Opinion of Jody M.
Walker regarding legality of
securities registered under
this Registration Statement
and to the references to
such attorney in the
prospectus filed as part of
this Registration Statement
(10) License Agreement with Sky Way
Global
(23) Consent of Pritchett, Siler &
Hardy, P.C.
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers
or sales are being made, a post-effective amendment
to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To 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) and any deviation form 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) 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) To include any additional or changed material
information on the plan of distribution.
(2) That, for the purpose of determining any
liability under the Securities Act, we shall treat
each such post-effective amendment as 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.
(3) To file a post-effective amendment to remove
from registration any of the securities that remain
unsold at the end of the offering.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer
has been advised that in the opinion of the
Securities and Exchange Commission such
indemnification is against public policy as
expressed in the Act and is, therefore,
unenforceable.
Signatures
Pursuant to the requirements of the Securities Act
of 1933, as amended, the Registrant has duly
caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly
authorized in Tampa Florida, as of the 28th of
June, 2002.
Sky Way Aircraft, Inc.
By /s/Brent C. Kovar
------------------------
President and Director
Pursuant to the requirements of the Securities Act
of 1933, as amended, this Registration Statement
has been signed below by the following persons in
the capacities and on the dates indicated and each
of the undersigned persons, in any capacity, hereby
severally constitutes a majority of the Board of
Directors.
[Download Table]
Signature Title Date
--------- ------ -----
/s/James S. Kent CEO/Director 6/28/02
----------------------
James S. Kent
/s/ James Dublikar CFO/ Director 6/28/02
James Dublikar
/s/Brent C. Kovar President/Director 6/28/02
----------------------
Brent C. Kovar
/s/Joy Carson Kovar Director 6/28/02
----------------------
Joy Carson Kovar
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘SB-2’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/31/03 | | 3 | | 24 | | | None on these Dates |
| Filed on: | | 7/12/02 |
| | 7/9/02 | | 1 |
| | 7/8/02 | | 3 |
| | 5/30/02 | | 13 |
| | 5/8/02 | | 33 |
| | 5/2/02 | | 14 |
| | 5/1/02 | | 42 |
| | 4/30/02 | | 7 | | 41 |
| | 4/26/02 | | 10 | | 29 |
| | 4/24/02 | | 5 | | 46 |
| | 2/8/02 | | 13 |
| List all Filings |
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