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Sky Way Aircraft Inc – ‘SB-2/A’ on 12/13/02

On:  Friday, 12/13/02, at 4:13pm ET   ·   Accession #:  1014897-2-154   ·   File #:  333-92336

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/13/02  Sky Way Aircraft Inc              SB-2/A                 3:129K                                   Walker Jody M/FA

Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer   —   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2/A      Amendment 2 to Sb2                                    73    275K 
 2: EX-5        Attorney's Consent                                     1      7K 
 3: EX-23       Accountant's Consent                                   1      5K 


SB-2/A   —   Amendment 2 to Sb2
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Calculation of Registration Fee
67Item 24. Indemnification of Directors and Officers
69Item 25. Other Expenses of Issuance and Distribution
70Item 26. Recent Sales of Unregistered Securities
"Item 27. Exhibit Index
71Item 28. Undertaking
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON December 13, 2002 REGISTRATION NO. 333-92336 Securities and Exchange Commission Washington D.C. 20549 AMENDMENT 2 TO THE 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 (813) 287-9332 (Address and telephone number of Registrant's principal executive offices) James S. Kent 2701 N. Rocky Point Dr., Suite 1150 Tampa, FL 33607 (813) 287-9332 (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 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(1) 750,000 $17.50 $13,125,000 $ 3,281.25 --------- ----------- ---------- 3,250,000 $56,875,000 $14,218.75
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(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.
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Sky Way Aircraft, Inc. $43,750,000 2,500,000 Common Shares At $17.50 per Common Share 750,000 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. Our offering will commence on the effective date of this prospectus and will terminate no later than December 31, 2003. The selling security holder offering will commence when the board of directors, in their sole discretion, terminates the offering or the total offering amount has been received in the primary offering. 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. Since there is no minimum amount of shares that must be sold, the proceeds of the offering may be $0 to $43,750,000. We may receive no proceeds. Our officers and directors will sell the securities. - - - 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. Until , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. Date: December 13, 2002
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TABLE OF CONTENTS [Download Table] Summary of the Offering 5 Risk Factors 8 We have not conducted any significant operations Our auditors have express substantial doubt Our lack of operating history We do not currently have sufficient capital There is no minimum offering amount Our officers also work for other related entities We will depend on relationships with the airline industry The airline industry' current financial condition We may not be able to establish and maintain brand recognition You will experience immediate dilution We arbitrarily determined the price of the common shares If our securities have no active trading market Our stock may be thinly traded, highly volatile The selling shareholders may have liability There may be potential conflicts of interest Potential sales under Rule 144 may impact the price Forward Looking Statements 13 Selling Security Holders 13 Sky Way Aircraft 14 Use of Proceeds 25 Dilution 27 Plan of Operation 29 Market for Common Equity and Related Stockholder Matters 33 Determination of Offering Price 34 Plan of Distribution 34 Management 36 Principal Shareholders 39 Indemnification 40 Certain Transactions 41 Description of Securities 42 Legal Matters 43 Reports 43 Financial Statements 43
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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 2,500 square feet and are leased on a monthly basis from Sky Way Global at the lease price of $3,000 per month. Sky Way Aircraft is currently looking at several Tampa Bay locations where we can house our research lab and engineering staff and establish a monitoring network and operations center. Development Stage Company. We are a development stage company and currently have no active business operations. We have had no revenues to date and expect to incur losses and administrative expenses until we receive revenues from any of our proposed operations. We have a deficit accumulated during the development stage of $(114,624) for the period from inception on April 24, 2002 to July 31, 2002. We will need to raise $3,000,000 in the next 12 months to accomplish the following: - Execute selected tower site leases and activate towers. - Test and upgrade selected tower site equipment. - Contract for tower and equipment maintenance. - Test and upgrade selected test aircraft. - Contract for aircraft equipment maintenance. - Corporate and management costs Operations. Utilizing the license to a proprietary technology that has been in commercial use for 18 months and which has been re-engineered for airborne-related applications, Sky Way Aircraft will provide high-speed broadband wireless services to support the homeland security and anti-terrorism issues. We will also supply private and public broadband networks, infrastructure and applications that will support and provide services for in- flight aircraft as well as provide a wireless nationwide monitoring network.
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We have no agreements to provide any services to any governmental agency or airline. Our main focus will be to provide: - in-flight security and surveillance systems supported by a national ground monitoring network which would provide real-time data to local and federal law enforcement agencies, - aircraft flight management systems providing current flight data to the airlines, aircraft parts manufacturers, and various service suppliers. - in-flight entertainment and communications systems to include telephone and Internet services. - private and various broadband services to include - airline VPN - connections between - airline corporate headquarters - national airline offices - call center support services, - airport management monitoring - various video applications as related to the airline industry. Based on their other commitments with Sky Way Global, LLC, a related entity, our officers are only required to work part-time for Sky Way Aircraft. We also intend to utilize this network to provide a variety of high-speed broadband wireless applications to support the United States government homeland security and combating terrorism issues such as: - Emergency communication networks - Tele-medicine/SOS International - Surveillance and monitoring of - chemical - biological - radiological - nuclear detectors - ports of entry - power plants/nuclear waste sites - oil and gas pipelines - detection - warning and protection for the airlines, and ship's cargo containers License with Sky Way Global. The Sky Way Global high-speed transfer proprietary technology was originally developed by Brent Kovar and the rights to this technology were licensed from Sky Way Global, LLC to Sky Way Aircraft. Sky Way Aircraft entered into a ten-year licensing agreement with Sky Way Global, LLC, an entity under common control, in April 2002 for the exclusive right to
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use the patent pending technology that has the ability to supply private and public broadband wireless networks, infrastructure and applications to airborne and ground customers. This technology has been operating in a commercial environment with a wide customer base in Tampa, Fl. for 18 months and any remaining development or testing efforts are related to its specific application to the aircraft business model and the AT&T telephone network. Sky Way Aircraft believes that all further development and testing in that regard will be completed by end of June 2003. 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. The license agreement was signed by Brent and Joy Kovar on behalf of Sky Way Global, LLC. who currently act as our officers and directors. Asset Purchase Agreement. The above cash requirements on based, in part, on the November 26, 2002, letter of intent signed by Sky Way Aircraft with AT&T Wireless Services (Claircom Communications, Inc), to purchase the AirOne airborne telephone network. This operational network includes 154 domestic and international tower locations, access to over 2500 private and commercial telephone equipped aircraft and the rights and patents to a network that was originally designed and built for over $1.7 Billion dollars. 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 There is no minimum amount of securities that must be sold in this offering and accordingly, no minimum amount of proceeds that will be raised. Investors may end up holding shares in a company that has not raised
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sufficient proceeds from the offering to continue operations and has an illiquid small market for its shares. Offering termination On or before December 31, 2003 Selling Security Holders 750,000 shares at $17.50 per common share The Selling Security Holders offering will commence after the board of directors, in their sole discretion, have terminated the primary offering or the entire offering amount has been sold. Plan of Distribution. Our officers and directors are offering the common shares on a self- underwritten basis. No Escrow Account There is no minimum offering amount and no escrow account has been established. All proceeds from this offering will be deposited directly into the operating account of Sky Way Aircraft. Public Market There is no public market for the common shares. Use of Proceeds. Sky Way Aircraft will use the net proceeds of the offering over the next twelve months to commence operations, fund the asset purchase and for working capital. Risk Factors 1. We have not conducted any significant operations to date and have not generated any revenues. You may lose your entire investment. Since our incorporation on April 24, 2002, our activities have been principally devoted to positioning ourselves to achieve our business objectives. We have had no revenues to date and expect to incur losses and administrative expenses even when we begin to receive revenues from any of our proposed operations. We have a deficit accumulated during the development stage of
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$(114,624) for the period from inception on April 24, 2002 to July 31, 2002. If we cannot generate revenues, you may lose your entire investment. 2. Our auditors have expressed substantial doubt about our ability to continue as a going concern. Our auditors have expressed reservations concerning our ability to continue as a going concern. They have stated in their report that there is substantial doubt about our ability to continue as a going concern. We have not yet received any revenues and will continue to incur losses. 3. Our lack of operating history makes it difficult to assess future results. We do not have an operating history that could enable you to assess our future results. We may never achieve profitable operations. 4. 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 minimal administrative operations, not to exceed $20,000 until other funding opportunities are identified. If operations require more than $20,000, we may not be able to continue even minimal operations. We estimate that our operating costs for the next twelve months to be approximately $3,000,000. 5. There is no minimum offering amount. We may not sell sufficient common shares in this offering to complete our business plan. Any funds received from the sale of common shares will be immediately available to Sky Way Aircraft. There is no escrow account or minimum offering amount that must be raised before funds can be released. We may not raise sufficient funds to continue operations. Investors may end up holding shares in a company that has not raised sufficient proceeds from the offering to continue operations.
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6. Our officers also work for other related entities and are only available to work on a part time basis 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 are required to work a minimum of 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. We do not currently have any employment agreements with our officers but plan to identify additional senior management personnel as quickly as possible and enter into appropriate employment agreements. 7. We will depend on relationships with the airline industry and the Homeland Security agencies. If we cannot develop these relationships, we will not be profitable and you may lose your entire investment. We do not currently have any relationships within the airline industry. Development and distribution of our services will be highly dependent on establishing relationships with aviation/aerospace product and service providers as well as airlines, air charter companies, corporate flight departments and Governmental agencies responsible for the Homeland Security Issues. Our operations may never become profitable if we cannot establish the necessary relationships to distribute our services. 8. The airline industry's current financial condition has caused airlines to postpone, and in some cases, cancel new technology investments. The aftermath of September 11, 2001 has had a negative effect on the airline industry's financial condition. As a result, airlines have postponed and, in some cases, cancel new technology investments. We cannot assure you that the airlines will enter into agreements with us. We may not be able to penetrate the targeted markets. 9. 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.
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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. We may not be able to compete successfully against current and future competitors who are better financed than Sky Way Aircraft. 10. You will experience immediate dilution of at least $13.13 or 75.03% of your investment if we raise the entire offering amount and at least $16.28 or 93.03% of your investment if we raise only $10,000,000. Immediately after the offering, if we raise the entire amount, the book value per common share will decrease by $13.13 or 75.03% less than the offering price. If we only raise 25% of the total offering amount, the book value per common share will decrease by $16.28 or 93.03% less than the offering price. 11. We arbitrarily determined the price of the common shares and the price does not reflect the actual value of our company. We have total assets of only $35,201 as of July 31, 2002. The price of the common shares does not reflect the actual value of Sky Way Aircraft. We arbitrarily determined the price based on the funds needed. 12. If our securities have no active trading market, you may not be able to sell your common shares easily. We do not have a public market for our securities, nor can we assure you that a public market will ever develop. We have not applied to be listed on any trading market or exchange. Consequently, you may not be able to liquidate your investment in the event of an emergency or for any other reason. 13. Even if our stock is approved for quotation by a market maker, our stock may be thinly traded, highly volatile and not followed by analysts. We will apply to have our stock quoted on NASD over-the-counter bulletin board or on the pink sheets. Stocks quoted through the NASD over-the-
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counter bulletin board or the National Quotation Bureau pink sheets are usually thinly traded, highly volatile and not followed by analysts. 14. There may be potential conflicts of interest due to the fact that officers and directors are also selling security holders. Brent Kovar and Joy Kovar, officers and directors of Sky Way Aircraft are also selling security holders. As a result, there may be less due diligence performed in conjunction with the offering than would be performed in an underwritten offering. Circumstances may arise where Brent Kovar and Joy Kovar might not have an interest in fully promoting the offering if the offering may reduce the opportunity for them to sell their own shares. They paid only $.001 per common share and could receive up to $9,450,000 is they sell all of their common shares being registered in this offering. 15. The tradability in our stock will be limited under the penny stock regulation. 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. Such requirements severely limit the liquidity of the common stock in the secondary market because few broker or dealers are likely to undertake such compliance activities. Generally, the term penny stock refers to a stock with a market price of less than $5.00 per share. 16. Potential sales under Rule 144 may impact the price of our stock should a public trading market ever develop.
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We have a large number of restricted shares outstanding and 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. Forward-Looking Statements The statements contained in this prospectus that are not historical fact are forward-looking statements that 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 750,000 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
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then outstanding common shares. The amount and percentage owned after the offering assumes the sale of all of the common shares being registered. [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-01(1) 540,000 5,400,000 72.0% 4,860,000 48.60% ARJ Associates(2) 150,000 1,500,000 20.0% 1,350,000 13.50% Venture Group(3) 60,000 600,000 8.0% 540,000 5.40% (1)KH-O1 is controlled by Brent Kovar, Glenn Kovar and Joy Kovar. Brent Kovar and Joy Kovar are officers and directors of Sky Way Aircraft. (2)ARJ Associates is controlled by Alan R. Josselyn. (3)Ventures Group is controlled by Steve Bowers, Ron Jepson and Fred Bowman who would be deemed to be beneficial owners. Sky Way Aircraft 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 from Sky Way Global at the lease price of $3,000 per month. Sky Way Aircraft is currently looking at several Tampa Bay locations where we can establish our national monitoring network and operations center. This center would be the headquarters of the national network, which would provide the 24-hour aircraft monitoring services. In the beginning, we intend that the premises shall consist of approximately 2500 square feet and be a disaster operation class 5 raised floor bunker facility. This facility will have the ability to expand up to 100,000 square feet and will be available to provide support services as the daily operations expand. Business Activities. We are a development stage company and currently have no active business operations. We have had no revenues to date and expect to incur losses and administrative expenses
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until we receive revenues from any of our proposed operations. We have a deficit accumulated during the development stage of $(114,624) for the period from inception on April 24, 2002 to July 31, 2002. We will need to raise $3,000,000 in the next 12 months to accomplish the following: - Execute selected tower site leases and activate towers. - Test and upgrade selected tower site equipment. - Contract for tower and equipment maintenance. - Test and upgrade selected test aircraft. - Contract for aircraft equipment maintenance. - Corporate and management costs Utilizing the license to a proprietary technology that has been in commercial use for 18 months and which has been re-engineered for airborne-related applications, Sky Way Aircraft will provide high- speed broadband wireless services to support the homeland security and anti-terrorism issues. We will also supply private and public broadband networks, infrastructure and applications that will support and provide services for in-flight aircraft as well as provide a wireless nationwide monitoring network. We have no agreements to provide any services to any governmental agency or airline. Based on their other commitments with Sky Way Global, LLC, a related entity, our officers are only required to work part-time for Sky Way Aircraft. License with Sky Way Global. The Sky Way Global high-speed transfer proprietary technology was originally developed by Brent Kovar and the rights to this technology were licensed from Sky Way Global, LLC to Sky Way Aircraft. Sky Way Aircraft entered into a ten-year licensing agreement with Sky Way Global, LLC, an entity under common control, in April 2002 for the exclusive right to use the patent pending technology that has the ability to supply private and public broadband wireless networks, infrastructure and applications to airborne and ground customers.
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This technology has been operating in a commercial environment with a wide customer base in Tampa, Fl. for 18 months and any remaining development or testing efforts are related to its specific application to the aircraft business model and the AT&T telephone network. Sky Way Aircraft believes that all further development and testing in that regard will be completed by end of June 2003. 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. The license agreement was signed by Brent and Joy Kovar on behalf of Sky Way Global, LLC. who currently act as our officers and directors. Using this technology, 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 digital flight data recorder, other data capture equipment onboard the aircraft, thereby alerting operations of potential maintenance issues prior to the aircraft landing and reaching its destination. A video link is provided to monitor activities in the cockpit and cabin of the aircraft. The video feed can be 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. This remote control from the ground could also be coupled with the capability of releasing a sleeping agent as a deterrent against terrorists injuring passengers or destroying the aircraft. Management is of the opinion that in-flight high speed connection will also provide a significant increase in customer and entertainment services including: - Internet access - telephone services - videos on demand - audio on demand - online shopping and - many other in-flight entertainment services.
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Preliminary Flight Testing. The technology has been successfully flight-tested utilizing a Lear 60 and Challenger 600A chartered jets with very encouraging results. Preliminary testing, utilizing a temporary internal airborne antenna and computer system, attained bandwidth speeds of 6-8 Mbps at an altitude of 35,000 feet and a speed of 450 knots. Based on current communication technology in use, and discussions with aerospace service providers and airlines, achieving results of 4-6 Mbps would provide a significant increase in airborne communication capabilities and would provide several revenue generating opportunities through the development and offering of additional products and services. Currently Sky Way Aircraft and the Engineering Department, University of South Florida are in the process of signing an agreement to have USF assist in the testing and further analysis utilizing the Lear 60 and Challenger 600A jet airlines to determine specific radio and antenna configuration, increased throughput, and measure reliability and coverage. Sky Way Aircraft will continue to evaluate: - video cameras, - internal and external antenna, - in-flight data from flight data recorder, - in flight Internet to the seat, and - on-demand video and music. Sky Way Global financed airborne test results for October 2002 and May 2, 2002 and will work with USF to continue technical support and testing. The Sky Way Aircraft technology has exceeded those expectations posed by the AT&T Technical Engineering Review Group when the AT&T network was under development. The original performance of the system was to be able to provide between 56 kbps-112 kbps to and from the aircraft covering an area of approximately 200 miles radius. Utilizing the newly acquired AT&T ground based network and the Sky Way technology, will permit Sky Way Aircraft to impact on all air-to-ground communications currently not available to commercial aircraft. Based upon the location of the Tampa ground monitoring station, at 35,000 feet, air coverage is estimated to be within a radius of 300 miles from any ground based antenna. These preliminary tests indicate that with the installation of a permanently installed external antenna and
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computer systems, an increase in bandwidth to 12- 15 Mbps is possible. It has been determined that a maximum of 10-12 Mbps would be required to transport all the required aircraft data and that the optimally 300 air mile coverage would be more than sufficient to support all possible aircraft- related applications. In order to provide uninterrupted coverage to airborne aircraft, the signal will be passed from ground station to ground station where the signal will actually be provided by two ground stations simultaneously. As the signal weakens from the first ground station and strengthens to the second ground station, the second ground station will take over providing the primary signal to the aircraft. 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 and - An Internet connection, providing a variety of services to the aircraft, which include e-mail service, voice over IP and movies on-demand. Asset Purchase Agreement. On November 26, 2002, letter of intent signed by Sky Way Aircraft with AT&T Wireless Services (Claircom Communications, Inc), to purchase the AirOne airborne telephone network. This operational network includes 154
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domestic and international tower locations, access to over 2500 private and commercial telephone equipped aircraft and the rights and patents to a network that was originally designed and built for over $1.7 Billion dollars. Utilizing the AT&T Wireless nationwide network, Sky Way Aircraft will provide private and public high- speed broadband wireless services, network infrastructure and related applications. These sub-areas would include: - in-flight security and surveillance systems supported by a national ground monitoring network, - aircraft flight management systems, - in-flight entertainment and communications systems, - private and various broadband services to include - airline VPN - connections between airline corporate headquarters - national airline offices - call center support services, - airport management monitoring - various video applications as related to the airline industry. Using the same deployed network as above, we also intend to provide a variety of high-speed broadband wireless applications and communications data link networks which will support the United States government homeland security and combating terrorism issues such as: - emergency communication networks - surveillance and monitoring of - chemical - biological - radiological - nuclear detectors - ports of entry - power plants/nuclear waste sites - oil and gas pipelines - detection - warning and protection for the airlines, and - ship's cargo containers Business Strategy. Based upon the acquisition of the AT&T network, continued private funding support and demonstrations for potential customers and investor groups, Sky Way Aircraft anticipates initial deployment and testing in the commercial airline market August 2003.
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The Sky Way Aircraft applications will continue to undergo testing, further development, and FAA and FCC certification to ensure that the technology is readily available for commercial and business aircraft applications. The current equipment utilized on-board the aircraft and in the AT&T network system have been previously certified and approved by the FCC and FAA. The off-the-shelf equipment, utilized by Sky Way Aircraft, has been previous certified by the manufacture as approved by the FAA. In discussions with AT&T Wireless and representatives of the FCC and FAA, it has been determined that, with the addition of the Sky Way Aircraft technology, this approval and recertification may be accomplished within the next 90 days. Further testing and demonstrations with key aerospace service providers and related applications, either existing or under development will continue to provide any improvements or increase in performance required Our target markets include these service providers to be used as integrators of the technology through partnerships and agreements. Joint marketing programs are also being negotiated which will assist in the sale, marketing and distribution of Sky Way Global's technology to existing customers of the aerospace service providers. On February 8, 2002, WorldCom, an Internet and network communications solutions company, accepted Sky Way Global into the WorldCom Digital Ventures Program. This program provides Sky Way Global and ultimately Sky Way Aircraft, 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. As a result of their strategic locations, these sites could be used as a part of or to supplement the AT&T ground monitoring station network where data from the aircraft can be collected and distributed throughout the national network. Sky Way Global and Sky Way Aircraft executives, as well as other industry experts have examined the current WorldCom business situation and have determined that as a result of the amount of services WorldCom is providing to both the commercial and governmental agencies, the possibility of WorldCom not being able to provide the necessary services are minimal and well within
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the acceptable risk. However, and due to the uncertain nature of WorldCom's ability to continue to provide these services, we are currently in discussions with other internet and communication service providers and potential co-location partners to provide the backup services, and to take over the offering of primary services to Sky Way Aircraft, if required. In April 2002 Sky Way Global demonstrated their technology for Rockwell/Collins. As a direct result of the demonstration, Rockwell Collins has identified their Video Intelligence System (VIS), which is currently under testing and development with a major commercial airline, as a possible joint business opportunity. On May 30, 2002, Rockwell Collins has agreed to provide their experimental airplane to be used in conjunction with the testing and development phases their Video Intelligence System and the Sky Way technology. As of September 2002, several meetings have been held with Rockwell-Collins to further demonstrate the capabilities of the Sky Way technology, to determine compatibility with Rockwell's VIS, and to develop a test plan which would include testing and demonstration flights aboard a yet to be determined commercial airline. The Rockwell VIS system, when coupled with the Sky Way technology, would provide Sky Way Aircraft and Rockwell Collins the opportunity to develop the air-to-ground communications link required to transmit the needed data and video stream to and from a commercial aircraft. Sky Way Aircraft is currently reviewing the terms of a Memorandum of Understanding that will outline the scope of a possible relationship and which identifies the Next Steps between the two companies. As a result of a demonstration held in October 2001, where local media personnel were invited to participate, Sky Way Aircraft has continue to maintain news relationships with local stations of CBS, NBC, ABC, FOX and CNN and has offered to provide in-flight broadcasts to demonstrate the capabilities of the Sky Way Aircraft licensed technology. It is our plan to provide a series of demonstrations in major cities, including Washington D.C. and New York City to coincide with our commercial airline testing to emphasize and bring attention to our services.
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Revenue Generation. Initially, Sky Way Aircraft intends to generate revenue through the licensing of the technology to select aerospace service providers in conjunction with existing and future applications being provided to commercial and business aircraft operators. In addition, Sky Way Aircraft will provide the communication link, Internet and in-flight entertainment services. This approach will allow a more favorable and timely deployment of the Sky Way Global technology into revenue generating projects. Since this technology will allow for significant enhancements to the current communications capabilities, development of new applications will take time. By being able to integrate with existing applications, revenue based on these applications can be realized much more quickly. Existing applications currently being considered are: - Capture and transmission of flight data and voice recorders in real time to the ground. - - Lessens the urgency to locate 'black box' in the event of a crash, - Transmission of aircraft avionics data from the plane to the ground, - Cabin Video Surveillance, Future applications could include: - Up-selling of full service camera and server equipment, - Internet ad time to advertisers, - Telephone service (To be developed in conjunction with existing providers of air phone service to address current market and regulatory requirements) - In-flight entertainment service - Full internet service - Ability to access corporate intranets - E-mail access - Movies/music on-demand - Shopping Competition. We will compete by price and service. The prices or price ranges for our services will vary depending on services provided. In addition, we also compete directly with other communication providers. Since Sky Way Aircraft plans to offer the licensing of our software, along with providing the communication service to the aircraft, other companies offering, or proposing to offer internet, video and other services could be
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potential partners as opposed to competitors. Where these companies plan to offer a similar service to the industry, Sky Way Aircraft's advantage will continue to be based on price and the ability to provided a higher degree of capabilities. We will need to finalize agreements with key service providers, and to deploy the technology quickly. Connexion by Boeing and Tenzing currently offer similar products and services to the airlines and are satellite based and more expensive. While their products and may be similar to that offered by Sky Way Aircraft, their technology is limited in its throughput and does not currently allow for a full range of services that can be provided by utilizing Sky Way's technology. Our key disadvantage is that these companies have begun marketing their products and services and have established airline customers. Our key advantage is that, based on in- house reseach, our products and services will be more cost effective for the airlines, the airline may participate in revenue sharing, and have the ability to provide more services. With the current financial difficulties of the airlines, the number of airlines who have purchased the services of Boeing and Tenzing is extremely limited. We intend to keep the fees at a competitive rate as new competitors enter the market in this area. As a result of the events of September 11, 2001, there has been increased focus on products and service that relate to aviation security. The current financial situation within the aviation business has, however, weakened this market in the short term. - - - Sky Way Aircraft must build relationships with aerospace service providers who are capable of integrating the Sky Way Global technology into their current and future applications. While the commercial and business aircraft operators remain the ultimate customer, working through partnerships with these integrators will allow Sky Way Aircraft to further develop and better package our licensed technology. 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
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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. Information obtained from other companies working with the airlines have indicated that the airlines are looking for opportunities to increase their revenue stream. Our business model provides for installation of the necessary equipment aboard the aircraft with access to all the Internet, in-flight entertainment services and telephone services for the airline. Government Regulation. Sky Way Aircraft intends to be a wireless network communication provider offering broadband service to airborne aircraft. The AT&T network operates in the private frequency band of 850MHz to 859MHz range. The FCC approved license and FAA certifications are to be transferred to Sky Way Aircraft as part of the network acquisition. This situation is being monitored as further testing is performed and if this becomes necessary, we anticipate that such additional licensing would be obtained without complication or disruption in service. The possibility to operate in other licensed frequencies is being investigated as possible alternatives that would allow for a better grade of service and reduce any potential disruption to our customers. All equipment currently being used within the AT&T network has been FCC certified and FAA approved. The equipment that will be used and which is currently on board all aircraft are components that have already been approved either by the FAA or certified individually by the manufacturer. Sky Way Aircraft is currently in discussions with AT&T Wireless and the FAA to determine if any further certifications and/or approvals will be required. We are also in discussions with key aerospace equipment providers to obtain assistance in the certification of Sky Way Aircraft's equipment in conjunction with these provider's equipment and applications. Based on initial discussion and testing, we do not anticipate any issues with obtaining any approvals, authorization or certifications that may be required. The timeliness of obtaining such certifications could delay bringing the system into production and delay the realization of revenue.
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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 begin 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%
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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 in-flight 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 test 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 in-flight 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%
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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 test 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 are planned to be through an advance to Sky Way Aircraft that would bear no interest and would be due on demand. 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 may 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
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[Download Table] Offering price $17.50 Net tangible book value per common share before offering $(.0216) Increase per Share attributable to investors .0884 ----- Pro Forma net tangible book value per common share after offering .11 ----- Dilution to investors $17.39 Dilution as a percent of offering price 99.37% 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 $(.0216) Increase per Share attributable to investors .6416 ------ Pro Forma net tangible book value per common share after offering .62 ------ Dilution to investors $16.88 Dilution as a percent of offering price 96.46% 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 $(.0216) Increase per Share attributable to investors 1.2316 ------- Pro Forma net tangible book value per common share after offering 1.21 ----- Dilution to investors $16.29 Dilution as a percent of offering price 93.09% 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 $(.0216) Increase per Share attributable to investors 2.3116 ------- Pro Forma net tangible book value per common share after offering 2.29 ------ Dilution to investors $15.21 Dilution as a percent of offering price 86.91%
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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 $(.0216) Increase per Share attributable to investors 3.2526 ------- Pro Forma net tangible book value per common share after offering 3.23 ------ Dilution to investors $14.27 Dilution as a percent of offering price 81.54% 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 $(.0216) Increase per Share attributable to investors 4.3716 Pro Forma net tangible book value per common ------- share after offering 4.35 ------ Dilution to investors $13.15 Dilution as a percent of offering price 75.14% 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. The demand for enhanced communication services to the airline/aviation industry is very high. Other than the Sky Way Global technology, other current technology is extremely limited in its ability to transport large amounts of data from the aircraft to the ground, and is very costly due to the use of satellite transmission equipment. With the proliferation of Internet access and use, demand for this type of service by the traveling public will continue to increase. In addition to the above, the increased requirement for aviation security has created additional demand for the transport of information (data, voice, video and audio) in order to monitor airborne activities.
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While we cannot disregard the current economic environment, along with the effects of September 11, 2001 on the financial condition of the airlines, a high degree of uncertainty exists in the aviation industry's ability and/or willingness to invest in new technology. This is especially true where the potential return on such investments may not be immediate. Improvement in the overall economic conditions and in the aviation industry will be certainly critical to the level of success of Sky Way Aircraft. However, Sky Way Aircraft's business plan is to provide a financial model which will present to the airlines a method of providing them with a revenue sharing opportunity and a significant decrease in costs as related to the in- flight entertainment services, increase performance in the flight management services and the aircraft communications link. We also believe that the government will eventually mandate the in-flight surveillance security systems. This may provide government funding assistance. Sky Way Aircraft will continue to pursue the many opportunities, which exist in supporting the anti- terrorism and Homeland Security issues. Sky Way Aircraft will also continue reviewing the opportunities available in the purchasing of the AT&T wireless nation-wide network. Capital and Source of Liquidity. All of the initial working capital has been obtained from the issuance of common shares and from related party advances. Sky Way Aircraft issued 7,500,000 shares of common stock for payment of organization costs of $1,870, services valued at $5,630. On April 30, 2002, Sky Way Global LLC, an entity under common control, had advanced $26,725 to Sky Way Aircraft. Additionally, Sky Way Global, LLC, on May 1, 2002, advanced Sky Way Aircraft an additional $1,000. The advances bear no interest. For the three months ended July 31, 2002, Sky Way Aircraft did not pursue any investing activities. For the three months ended July 31, 2002, Sky Way Aircraft received advances from Sky Way Global, LLC, a related party, of $115,600 and paid stock offering costs of $5,500 resulting in net cash provided by financing activities of $110,100. These stock offering costs were for consulting, attorney and accounting fees related to the preparation of this offering.
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For the period from inception (April 24, 2002) to April 30, 2002, Sky Way Aircraft did not pursue any investing activities. For the period from inception (April 24, 2002) to April 30, 2002, Sky Way Aircraft received advances from a related party of $26,725 and paid stock offering costs of $26,725 resulting in net cash provided by financing activities of $0. These stock offering costs were paid to ARJ Associates related to consulting regarding the preparation of this offering. 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. We will need to raise $3,000,000 in the next 12 months to accomplish the following: - Execute selected tower site leases and activate towers. - Test and upgrade selected tower site equipment. - Contract for tower and equipment maintenance. - Test and upgrade selected test aircraft. - Contract for aircraft equipment maintenance. - Corporate and management costs If we raise only $2,000,000, we will not have to raise additional funds in the next twelve months. 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. There is no minimum amount of securities that must be sold. 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. On a long-term basis, liquidity is dependent on the commencement of operation and receipt of revenues, additional infusions of capital, and debt financing. Sky Way Aircraft will limit its operations in the short term to minimize the 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.
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Results of Operations. For the three months ended July 31, 2002, Sky Way Aircraft did not receive any revenues. For the three months ended July 31, 2002, Sky Way Aircraft had general and administrative expenses of $16,624 and research and development costs of $92,600. For the period from inception to April 30, 2002, Sky Way Aircraft did not receive any revenues. 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. Our auditors have expressed reservations concerning our ability to continue as a going concern. They have stated in their report that there is substantial doubt about our ability to continue as a going concern. We have not yet received any revenues and will continue to incur losses. We intend to pursue successful completion of offering or pursue other types of equity or debt financing to commence operations and obtain the necessary revenues to remove the going concern qualification from the audit opinion. 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. Officers and directors have agreed to provide the minimal funds we require to maintain operations through additional advances 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 Transportation for Airline Safety Bill and other United States Government and military agencies to find applications for our technology. Additionally, we will continue marketing to the major airlines and related companies and complete the development or acquisition of a network that will provide real-time monitoring nationwide. Network expansion to include establishing business alliances with current vendors and contacting search engines to gain national exposure of our proposed website and forming major networking
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partnerships with vendors whose products and services may be better served with our enabling technology. 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. 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 three 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
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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 based on how much funding was needed and what percentage of Sky Way Aircraft current shareholders would retain after the offering without any consideration of the actual value of our company or what the market might pay for our stock. Plan of Distribution Sky Way Aircraft offering. The common shares are being offered by Brent C. Kovar and James Kent, officers and directors of Sky Way Aircraft. 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.
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- They are not an associated person of a broker or dealer at the time of their participation in the sale of our securities. Any officer or director involved with the distribution of the stock will act in reliance on and in compliance with Rule 3a4-1. As of the date of this prospectus, no broker has been retained by us for the sale of securities being offered. In the event we retain a broker who may be deemed an underwriter; an amendment to our registration statement will be filed. Management, principal shareholders or their affiliates may not acquire common shares in the offering. 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 offering. The selling security holder offering of 750,000 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. 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. Brent Kovar and Joy Kovar, officers and directors of Sky Way Aircraft are also selling security holders. Conflicts may arise where Brent Kovar and Joy Kovar might not have an interest in fully promoting the offering if the offering may reduce the opportunity for them to sell their own shares. To limit this conflict, Brent Kovar and Joy Kovar, as principals of KH-01, have agreed not to offer or sell any of their securities until Sky Way Aircraft has terminated the offering.
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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: [Download Table] Name Position Period Served James S. Kent, age 64 Chief Executive Officer/ July 12, 2002 Director to present Brent C. Kovar, age 35 President/Director Inception to present James Dublikar, age 49 Chief Financial Officer/ Senior Vice President/ July 12, 2002 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 Global since 2000. From 1998 to 1999, Mr. Kent served as director of operations for Satellite Access Systems, Inc., a satellite services company where he was responsible for the day-to-day operations. From 1997 to 1998 he served as a senior management consultant for Booz, Allen & Hamilton, a major government contractor and national/international business consulting firm providing program and financial management services to the U. S. Government. From 1980 to 1997, Mr. Kent served in various government contract management positions providing financial and program management services supporting national
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communications and intelligence projects for the Department of Defense, National Security Agency, and Department of the Navy. Brent C. Kovar - As president and director of research and development and engineering, Mr. Kovar founded Sky Way Global in 2000, a high speed broadband wireless service company. From 1996 to 2000, Mr. Kovar served as the executive vice president and director of research and development for Satellite Access Systems, a satellite services company. In 1990, Mr. Kovar founded PC, Ltd., a company that produced specialty-designed remote controlled arm and RF/communications related products, and until 1996, he served as president and director of new product engineering. From 1987 to 1989, he was associated with Jacobs Engineering, an national 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 LLC from 2000 to present, a company that provides aviation consulting services in the areas of finance, airline operations, risk management and information technology. From 1984 through 1999, Mr. Dublikar was employed by Comair Holdings, Inc., a regional airline with headquarters at the Cincinnati/Northern Kentucky International Airport and held several different management positions. He served as director of finance and data processing from 1984-1993, director of information technology and Risk Management from 1994 through 1999. Responsibilities included: financial management, accounting and auditing functions, financial reporting, revenue accounting, all information technology (staff management and development, software applications, infrastructure, budgeting and project management). Mr. Dublikar was also responsible for all insurance programs, claims, contract negotiation and administration. Mr. Dublikar earned his Bachelor of Science degree in business administration with a major in accounting and finance from Xavier University in 1975.
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Joy Carson Kovar - Mrs. Kovar started working for Sky Way Global in 2000 as vice president of corporate services responsible for administrative support, human relations and accounting 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 postgraduate work at UCLA. Executive Compensation [Download Table] Annual Compensation Name and -------------------------- Long-term Principal Position Year Salary(1) Bonus Awards Compensation Other ------------------ ---- ------ ----- ------ ------------ ----- Brent Kovar President 2002 $ -- -- -- -- $5,400 Joy Kovar Corporate Secretary 2002 $ -- -- -- -- $5,400 Jim Kent CEO 2002 $ -- -- -- -- -- James Dublikar CFO, Senior V.P. 2002 $ -- -- -- -- -- (1) represents payment of organizational costs $1,870 and non-cash services rendered valued at $3,530. The value of the shares received by the officers using the sale price of the common shares being sold in this offering would be $94,500,000. Upon successful completion of the offering, we will enter into written employment agreements with our current officers and any key employees yet to be named.
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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. 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) 5,400,000 72.0% 121 6th Street East Tierra Verde, FL 33715 Brent C. Kovar(1) 5,400,000 72.0% 121 6th Street East Tierra Verde, FL 33715 James S. Kent 0 0.00% 8721 28th St. Cir. East Parrish, FL 34219 James A. Dublikar 0 0.00% 822 Riverwatch Dr. Crescent Springs, KY 4107 Joy C. Kovar(1) 5,400,000 72.0% 2701 N. Rocky Point Dr. Suite 1150 Tampa, FL 33607 All Directors & Officers as a group (4 persons) 5,400,000 72.0% Ventures Group(2) 600,000 6.0% 1325 S. 800 East Orem, Utah 84097 Steve Bowers(2) 600,000 6.0% 1325 S. 800 East Orem, Utah 84097
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Ron Jepson(2) 600,000 6.0% 1325 S. 800 East Orem, Utah 84097 Fred Bowman(2) 600,000 6.0% 1325 S. 800 East Orem, Utah 84097 ARJ Associates(3) 1,500,000 20.00% 1325 South 800 East, Suite 315 Orem, Utah 84057 Alan Josselyn(3) 1,500,000 20.00% 1325 South 800 East, Suite 315 Orem, Utah 84057
(1)KH-01 Ventures is controlled by Brent Kovar, Glenn Kovar and Joy Kovar. (2) Ventures Group is controlled by Steve Bowers, Ron Jepson and Fred Bowman who would be deemed a beneficial owners of the 600,000 common shares held by Ventures Group. (3)ARJ Associates is controlled by Alan R. Josselyn who would be deemed a beneficial owner of the 1,500,000 common shares held by ARJ Associates. 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, ARJ Associates and Venture Group 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 - - - The Nevada Revised Statutes 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.
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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 Family Relationships. Joy Kovar is the mother of Brent Kovar and Glenn Kovar is the father of Brent Kovar. During April 2002, Sky Way Aircraft issued 5,400,000 shares of common stock to KH-01, an entity controlled by Brent Kovar, Joy Kovar and Glenn Kovar, promoters, 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. During April 2002, Sky Way Aircraft issued 1,500,000 common shares to ARJ Associates, for non-cash consulting services rendered related to the proposed offering valued at $1,500. During April 2002, Sky Way Aircraft issued 600,000 common shares to Venture Group for non-cash consulting services rendered related to the proposed offering valued at $600. License with Sky Way Global. Sky Way Aircraft entered into a ten-year licensing agreement with Sky Way Global, LLC, an entity under common
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control in April 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. Advances - Sky Way Global, LLC, an entity under common control, paid $26,725 for consulting services rendered to the Company as part of a consulting agreement. On May 1, 2002, Global advanced the Company cash of $1,000. The Company has used office space, supplies, personnel, equipment, etc. of Global. Global has paid all of the costs and provides a billing to the Company for its share. Global has billed the Company a total of $114,600 for expenses during the three months ended July 31, 2002. At July 31, 2002, the Company owes Global a total of $142,325. The advances bear no interest and are due on demand. 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
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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. The terms of the preferred shares such as: - conversion rights - dividend rights and - redemption rights, etc. will be fixed when issued. 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. There are, however, potential anti- takeover effects of having a substantial number of authorized and unreserved common shares and preferred shares and undesignated preferred stock. Transfer Agent. State Agent and Transfer Syndicate, Inc. located in Carson City, Nevada will act 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
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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 Unaudited Condensed Balance Sheets, July 31, 2002 and April 30, 2002 Unaudited Condensed Statements of Operations for the three months ended July 31, 2002 and from inception on April 24, 2002 through July 31, 2002 Unaudited Condensed Statements of Cash Flows, for the three months ended July 31, 2002 and from inception on April 24, 2002 through July 31, 2002 Notes to Unaudited Condensed 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
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SKY WAY AIRCRAFT INC. [A Development Stage Company] UNAUDITED CONDENSED BALANCE SHEETS ASSETS [Download Table] July 31, April 30, 2002 2002 __________ __________ CURRENT ASSETS: Cash $ 876 $ - __________ __________ Total Current Assets 876 - __________ __________ OTHER ASSETS: Deferred stock offering costs 34,325 28,825 Technology license agreement - - __________ __________ Total Other Assets 34,325 28,825 __________ __________ $ 35,201 $ 28,825 __________ __________ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Advances from related party $ 142,325 $ 26,725 __________ __________ Total Current Liabilities 142,325 26,725 __________ __________ STOCKHOLDERS' EQUITY (DEFICIT): 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 7,500 Capital in excess of par value - - Deficit accumulated during the development stage (114,624) (5,400) __________ __________ Total Stockholders' Equity (Deficit) (107,124) 2,100 __________ __________ $ 35,201 $ 28,825 __________ __________ Note: The balance sheet of April 30, 2002 was taken from the audited financial statements at that date and condensed. The accompanying notes are an integral part of these unaudited condensed financial statements.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] UNAUDITED CONDENSED STATEMENTS OF OPERATIONS [Download Table] From Inception For the Three on April 24, Months Ended 2002 through July 31, July 31, 2002 2002 ______________ ______________ REVENUE $ - $ - ______________ ______________ EXPENSES: General and administrative 16,624 22,024 Research and development 92,600 92,600 ______________ ______________ Total Expenses 109,224 114,624 ______________ ______________ LOSS BEFORE INCOME TAXES (109,224) (114,624) CURRENT TAX EXPENSE - - DEFERRED TAX EXPENSE - - ______________ ______________ NET LOSS $ (109,224) $ (114,624) ______________ ______________ LOSS PER COMMON SHARE $ (.01) $ (.02) ______________ ______________ The accompanying notes are an integral part of these unaudited condensed financial statements.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS [Download Table] From Inception For the Three on April 24, Months Ended 2002 through July 31, July 31, 2002 2002 ______________ ______________ Cash Flows From Operating Activities: Net loss $ (109,224) $ (114,624) 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 (Used) by Operating Activities (109,224) (109,224) ______________ ______________ Cash Flows From Investing Activities - - ______________ ______________ Net Cash Provided (Used) by Investing Activities - - ______________ ______________ Cash Flows From Financing Activities: Advances from related party 115,600 142,325 Payments of stock offering costs (5,500) (32,225) ______________ ______________ Net Cash Provided by Financing Activities 110,100 110,100 ______________ ______________ Net Increase (Decrease) in Cash 876 876 Cash at Beginning of Period - - ______________ ______________ Cash at End of Period $ 876 $ 876 ______________ ______________ Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - Income taxes $ - $ -
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SKY WAY AIRCRAFT INC. [A Development Stage Company] UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS Continued Supplemental Schedule of Noncash Investing and Financing Activities: For the period from inception on April 24, 2002 through July 31, 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 these unaudited condensed financial statements.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED 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 and other services for the airlines industry through applications of its licensed high-speed, broadband wireless technology. 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. Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at July 31, 2002 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's April 30, 2002 audited financial statements. The results of operations for the periods ended July 31, 2002 are not necessarily indicative of the operating results for the full year. Fiscal Year - The Company's fiscal year-end is April 30th. Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued] Intangible Assets - The Company accounts for its intangible assets in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets". 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. Research and Development - Research and development costs are expensed as incurred. For the three months ended July 31, 2002, research and development costs amounted to $92,600. 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]. 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 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", SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued] Technical Corrections", and SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities", were recently issued. SFAS No. 141, 142, 143, 144, 145 and 146 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 July 31, 2002 and 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 at $.001 per share for payment of organization costs of $1,870 and non-cash services valued at $5,630 including $2,100 which has been classified as deferred stock offering costs and $3,530 which has been classified as general and administrative expense. 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 differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS NOTE 3 - INCOME TAXES [Continued] The Company has available at July 31, 2002 unused operating loss carryforwards of approximately $13,000 which may be applied against future taxable income and which expire in various years through 2023. 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 $2,000 and $800 as of July 31, 2002 and April 30, 2002, respectively, with an offsetting valuation allowance of the same amount, resulting in a change in the valuation allowance of approximately $1,200 during the three months ended July 31, 2002. NOTE 4 - RELATED PARTY TRANSACTIONS Advances - Sky Way Global, LLC ("Global"), an entity under common control, paid $26,725 for consulting services rendered to the Company as part of a consulting agreement [See Note 7]. On May 1, 2002, Global advanced the Company cash of $1,000. The Company has used office space, supplies, personnel, equipment, etc. of Global. Global has paid all of the costs and provides a billing to the Company for its share. Global has billed the Company a total of $114,600 for expenses during the three months ended July 31, 2002. At July 31, 2002, the Company owes Global a total of $142,325. The advances bear no interest and are due on demand. Management Compensation - In 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.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED 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, has current liabilities in excess of current assets and has not yet commenced planned principal 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 For the Three on April 24, Months Ended 2002 through July 31, July 31, 2002 2002 ______________ ______________ Loss from operations available to common shareholders (numerator) $ (109,224) $ (114,624) ______________ ______________ Weighted average number of common shares outstanding used in loss per share for the period (denominator) 7,500,000 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.
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS NOTE 7 - COMMITMENTS Licensing Agreement - The Company entered into a ten-year licensing agreement with Sky Way Global, LLC ("Global"), an entity under common control. The Company is to pay a royalty fee of 5% of gross sales for the exclusive right to use Global's 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. Consulting Agreement - At the time of its organization, the Company entered into an agreement with a consultant who was to provide assistance related to fund raising and future stock offerings. The consultant received 1,500,000 shares of common stock valued at $1,500. The consultant also received cash payments of $26,725 from Sky Way Global, LLC for his services [See Note 4]. The payments have been classified as deferred stock offering costs. NOTE 8 - SUBSEQUENT EVENTS 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 Securities 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. At July 31, 2002, the Company had deferred $34,325 of fees and consulting services rendered related to the proposed stock offering which will be offset against the proceeds of the offering in capital in excess of par value. Of the $34,325 of deferred stock offering costs, $2,100 was paid by issuing 2,100,000 shares of common stock.
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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
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also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. /s/ PRITCHETT, SILER & HARDY, P.C. PRITCHETT, SILER & HARDY, P.C. May 8, 2002 Salt Lake City, Utah
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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 28,825 Technology license agreement - ___________ Total Other Assets 28,825 ___________ $ 28,825 ___________ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Advances from related party $ 26,725 ___________ Total Current Liabilities 26,725 ___________ 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 ___________ $ 28,825 ___________ The accompanying notes are an integral part of this financial statement.
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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.
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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 [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 at $.001 per share for payment of organization costs of $1,870 and services rendered valued at $5,630 including $2,100 which has been classified as deferred stock offering costs and $3,530 which has been classified as general and administrative expense, 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.
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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: Advances from related party 26,725 Payments of stock offering costs (26,725) _____________ 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 $ -
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SKY WAY AIRCRAFT INC. [A Development Stage Company] STATEMENT OF CASH FLOWS Continued 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.
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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 and other services for the airlines industry through applications of its licensed high-speed, broadband wireless technology. 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. Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents. 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]. 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
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SKY WAY AIRCRAFT INC. [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 at $.001 per share for payment of organization costs of $1,870 and non-cash services valued at $5,630 including $2,100 which has been classified as deferred stock offering costs and $3,530 which has been classified as general and administrative expense. 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
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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 Advances - Sky Way Global, LLC, an entity under common control, paid $26,725 for consulting services rendered to the Company as part of a consulting agreement [See Note 7]. The advances bear no interest and are due on demand. 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.
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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 formeed, 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.
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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 ("Global"), an entity under common control. The Company is to pay a royalty fee of 5% of gross sales for the exclusive right to use Global's 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. Consulting Agreement - At the time of its organization, the Company entered into an agreement with a consultant who was to provide assistance related to fund raising and future stock offerings. The consultant received 1,500,000 shares of common stock valued at $1,500. The consultant also received cash payments of $26,725 from Sky Way Global, LLC for his services [See Note 4]. The payments have been classified as deferred stock offering costs. 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 Securities 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. At April 30, 2002, the Company had deferred $28,825 of consulting services rendered related to the proposed stock offering which will be offset against the proceeds of the offering in capital in excess of par value. Of the $28,825 of deferred stock offering costs, $2,100 was paid by issuing 2,100,000 shares of common stock.
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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.
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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.
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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.
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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 KH-01, an entity controlled by Brent Kovar and Joy Kovar, officers and directors of Sky Way Aircraft and Glenn Kovar 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 2,100,000 to the following for consulting services rendered valued at $.001 per common share. ARJosselyn 1,500,000 common shares $1,500 Venture Group 600,000 common shares $600 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 (10.1) Consulting Agreement with ARJ Associates (to be filed by amendment) (23) Consent of Pritchett, Siler & Hardy, P.C.
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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.
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In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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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 13th of December, 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 12/13/02 ---------------------- James S. Kent /s/ James Dublikar Controller/CFO/ Director 12/13/02 James Dublikar /s/Brent C. Kovar President/Director 12/13/02 ---------------------- Brent C. Kovar /s/Joy Carson Kovar Director 12/13/02 ---------------------- Joy Carson Kovar

Dates Referenced Herein   and   Documents Incorporated by Reference

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12/31/03336
Filed on:12/13/0213
11/26/02718
7/31/02554
7/12/0236SB-2
5/30/0221
5/8/0256
5/2/0217
5/1/023066
4/30/023066
4/24/02570
2/8/0220
9/11/011030
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