Rule 424(b)(3)
File No. 333-96257
POWER MARKETING, INC.
1,250,000 SHARES OF COMMON STOCK
UNDERLYING 1,250,000 COMMON STOCK PURCHASE WARRANTS
Our company, Power Marketing, Inc., has registered:
bullet 1,250,000 warrants, to be distributed without cash consideration, as
soon as practicable after the date of this prospectus, to common
stockholders of record as of July 10, 2000.
bullet 1,250,000 shares of common stock, to be offered and sold by Power
Marketing without any underwriting discounts or other commissions,
only to holders of the warrants, and issued upon exercise of the
warrants, at $1.00 per share underlying warrants, or $1,250,000 in
the aggregate if all warrants are exercised.
The warrants will not be transferable and there will not be any public
market for them. Our common stock has been quoted on the Electronic Bulletin
Board maintaind by the NASD under the symbol "PMKT".
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is June 22, 2000
<PAGE>
Table of contents Page
Prospectus summary . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Comparative data . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Market information & dividend policy . . . . . . . . . . . . . . . . 7
Management's discussion and analysis . . . . . . . . . . . . . . . . 8
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Available information. . . . . . . . . . . . . . . . . . . . . . . .13
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Principal shareholders . . . . . . . . . . . . . . . . . . . . . . .15
Certain transactions . . . . . . . . . . . . . . . . . . . . . . . .15
Description of securities. . . . . . . . . . . . . . . . . . . . . .16
Shares eligible for future sale. . . . . . . . . . . . . . . . . . .19
Plan of distribution . . . . . . . . . . . . . . . . . . . . . . . .19
Legal matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Financial statements . . . . . . . . . . . . . . . . . . . . . . . F-1
<PAGE>
PROSPECTUS SUMMARY
Power Marketing is in the business of buying select vintages of
red wine, champagne and other fine wines, and holding the wines for
investment appreciation and eventual resale. Our address is 311 South
State Street, Suite 460, Salt Lake City, Utah 84111. Our phone number is
(801) 364-9262.
THE OFFERING
Securities 1,250,000 warrants; 1,250,000 shares of
offered our common stock.
Offering Prices $1.00 per share underlying the
warrants. The offering price
is payable in cash upon exercise of the warrants.
Plan of DistributionWarrants will be distributed without
cash consideration.
Shares will be offered and sold without
discounts or other
commissions, to holders of the
warrants, upon exercise. No
minimum number of warrants must be
exercised, and no
assurance exists that all or any
warrants will be exercised.
Use of Proceeds We could receive as much as $1,250,000
from sale of the
1,250,000 shares of common stock, if
all warrants are
exercised. Gross proceeds may range
from zero to
$1,250,000. Any proceeds will be used
generally to provide
additional working capital for wine
investing, but have not
been specifically allocated, since we
do not know if any
warrants will be exercised.
Securities OutstandingWe are authorized to issue up to
50,000,000 shares of
common stock and presently have
1,250,000 shares of
common stock issued and outstanding.
Warrants
bullet 1,250,000 warrants will be distributed without cash consideration.
bullet Each warrant allows you to purchase one share of common stock at
any time until June 30, 2002, if this prospectus is still current
or has been updated.
bullet The exercise price is $1.00 per share, with adjustment in the
event of stock dividends or splits.
bullet The warrants can be redeemed by us for $.01 per warrant on 30 days
notice at any time after the date of this prospectus.
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RISK FACTORS
You should not purchase these securities if you cannot afford to risk
the loss of your entire investment. Investing in our common stock involves
substantial risks. You should carefully consider the following risk factors
and all other information in this prospectus before investing in Power
Marketing.
YOU DO NOT KNOW WHEN, IF EVER, OUR BUSINESS WILL BECOME PROFITABLE. We
have incurred net losses since inception and had accumulated a $(29,829)
deficit at March 31, 2000. We may not ever become profitable in the future.
THE INDEPENDENT AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR
ABILITY TO CONTINUE AS A GOING CONCERN. Their report includes a going concern
qualification because the financial statements do not include any adjustments
that might result from the outcome of the uncertainties which arise from the
net losses and accumulated deficit.
WE MAY NOT BE KNOWLEDGEABLE ENOUGH TO SELECT WINES TO PURCHASE AND HOLD
FOR INVESTMENT THAT WILL APPRECIATE IN VALUE TO GENERATE A PROFIT UPON SALE.
Management's prior experience with or knowledge of the wine industry is very
limited. We will have to rely on the advice of others on the selection of
wines to purchase for investment and the timing of purchase and sale.
WE MAY NOT BE ABLE TO SELL OUR INVENTORY INTO A READY MARKET WHEN THE
WINES ARE AT THEIR PRICE AND QUALITY PEAK, AND MAY SUFFER LOSSES AS A RESULT.
We may need or desire to sell our inventory at an inopportune time for
liquidity reasons or to invest in another vintage of wine when it becomes
available. We may suffer losses if we sell when there is no ready market
and/or when the wines are not at their price and quality peak.
OUR SUPPLY SOURCES ARE NOT ASSURED, AND IF OUR RELATIONSHIP WITH OUR
SOLE SUPPLIER IS TERMINATED AND WE ARE NOT ABLE TO OBTAIN INVESTMENT GRADE
WINES FROM OTHER SOURCES, WE COULD NOT GENERATE ANY REVENUE AND OUR BUSINESS
COULD NOT CONTINUE. We have no contracts with suppliers and depend upon a sole
supplier of investment grade wines. We do not know how long the relationship
with our sole supplier will continue, or that we could find other suppliers.
BECAUSE POWER MARKETING IS NOT LICENSED TO ENGAGE IN THE SALE OR
SHIPMENT OF ALCOHOLIC BEVERAGES, WE MUST SELL OUR WINE INVESTMENTS THROUGH
SOMEONE WHO IS LICENSED, AND RELY UPON THEM TO COMPLY WITH APPLICABLE
LICENSING REQUIREMENTS AND GOVERNMENTAL REGULATIONS. IF WE LOSE OUR
DISTRIBUTOR, WE WILL NOT BE ABLE TO SELL OUR WINE AND WILL RECEIVE NO REVENUE.
The wine industry and the sale and shipment of alcoholic beverages is subject
to extensive licensing requirements and government regulation. If applicable
licensing requirements and governmental regulations are not complied with, we
may not be able to sell our wine investments.
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IT IS NOT ASSURED THAT ALL OR ANY PROCEEDS WILL BE RECEIVED FROM WARRANT
EXERCISE AND THE FEWER WARRANTS EXERCISED, THE LESS MONEY WE WILL HAVE TO
PURCHASE WINE INVESTMENTS. It is unlikely that many warrants will be
exercised. If you exercise your warrants, this increases your risk because you
do not know if any additional warrants will be exercised or we will receive
further funding. Proceeds may not be sufficient to defray offering expenses.
Because no minimum number of warrants must be exercised, there is no escrow of
funds. Any proceeds received will immediately be retained by us for use in our
business.
THE AMOUNT OF CAPITAL CURRENTLY AVAILABLE TO US IS VERY LIMITED AND MAY
NOT ENABLE US TO DEVELOP AND EXPAND OUR BUSINESS AND GENERATE A PROFIT. If
proceeds from this offering and our existing capital are not sufficient, we
may need additional finanncing. We have no commitments or arrangements from
commercial lenders or other sources for additional financing.
YOU MAY NOT BE ABLE TO LIQUIDATE YOUR INVESTMENT READILY OR AT ALL WHEN
YOU NEED OR DESIRE TO SELL. Although our common stock is eligible for
quotation on the Electronic Bulletin Board maintained by the NASD, there has
been no active public trading market. You are not assured that an active
trading market will develop, or if a market does develop, that it will
continue. As a result, an investment in our common stock may be totally
illiquid.
THE PRESIDENT WILL NOT BE DEVOTING FULL TIME AND MAY NOT ALWAYS BE ABLE
TO DEVOTE TIME TO POWER MARKETING AS NECESSARY. WE MAY MISS MARKET OR
INVESTMENT OPPORTUNITIES IF THE PRESIDENT CANNOT DEVOTE TIME WHEN
OPPORTUNITIES ARISE. The president has other interests which could give rise
to conflicts of interest in the amount of time devoted to Power Marketing. The
other interests include his own investments in securities and real estate.
There is no assurance these conflicts will be resolved favorably to Power
Marketing. Power Marketing does not have any other managerial personnel and
will be dependent upon this individual. Unavailability of the services of this
person could have a material adverse impact upon Power Marketing.
DILUTION
You will suffer substantial dilution in the purchase price of your stock
compared to the net tangible book value per share immediately after the
purchase. The exact amount of dilution will vary depending upon the number of
warrants exercised.
Dilution is the difference between the warrant exercise price of $1.00
per share, and the net tangible book value per share of common stock
immediately after its purchase. Net tangible book value per share is
calculated by subtracting total liabilities from total assets less intangible
assets, and then dividing by the number of shares of common stock then
outstanding. Based on the March 31, 2000, financial statements of Power
Marketing, net tangible book value was $42,980 or about $.03 per common share.
Before exercise of any warrants, 1,250,000 shares of common stock are
outstanding.
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If all warrants get exercised, which is not assured or likely, 2,500,000
shares of common stock will then be outstanding. The estimated pro forma net
tangible book value, which gives effect to receipt of the net proceeds from
exercise and issuance of the underlying shares of common stock, but does not
take into consideration any other changes in net tangible book value after
March 31, 2000, would then be $1,277,980 or about $.51 per share. This would
result in dilution to persons exercising warrants of $.49 per share, or 49% of
the exercise price of $1.00 per share. Net tangible book value per share
would increase to the benefit of present stockholders from $.03 before the
offering to $.51 after the offering, or an increase of $.48 per share due to
exercise of the warrants.
If less than all the warrants get exercised, dilution to the exercising
warrant holders will be greater than the amount shown. The fewer warrants
exercised, the greater dilution will be on the warrants that are exercised.
If none or only a few warrants get exercised, shares of common stock then
outstanding will not increase significantly, but net tangible book value will
decrease by the amount of offering expenses incurred in excess of any proceeds
received. This would result in dilution to persons exercising warrants of as
much as $.98 per share, or 98% of the exercise price of $1.00 per share.
The following table shows the estimated net tangible book value per
share before and after exercise of the warrants and dilution to persons
purchasing the underlying common stock, assuming none or only a few warrants
get exercised, then alternatively assuming all the warrants get exercised.
<TABLE>
<S> <C> <C> <C> <C>
Exercise of: none or only a fewwarrants all of the warrants
Warrant exercise $1.00 $1.00
price/share
Before exercise $.03 $.03
Change due to warrant (.01) .48
exercise
Pro forma after exercise .02 .51
Dilution $ .98 $ .49
</TABLE>
Dilution will range somewhere in between these amounts if more than a
few but fewer than all warrants get exercised.
COMPARATIVE DATA
The following chart shows prices paid for, and proportionate ownership
in Power Marketing represented by, common stock purchased since inception by
initial shareholders and other present shareholders, compared to the price
that will be paid and proportionate ownership represented by common stock that
will be acquired by exercising warrant holders, assuming all warrants are
exercised.
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<TABLE>
<S> <C> <C> <C> <C> <C>
Shares PercentCash Paid Percent Avg
Owned Price/share
Initial 1,000,000 40% $ 33,500 2.5% $ .0335
Shareholders
Other Shareholders 250,000 10% $ 50,000 3.8% $ .20
Warrant Holders 1,250,000 50% $1,250,000 93.7% $1.00
</TABLE>
USE OF PROCEEDS
The proceeds from the sale of the shares of common stock underlying the
warrants at the exercise price of $1.00 per share will vary from zero to
$1,250,000 depending upon the total number of warrants exercised. We do not
know if all or any warrants will be exercised. Since there is no assurance
that all or any warrants will be exercised nor any requirement that any
minimum number of the warrants be exercised, there are no escrow provisions.
Any proceeds that are received will be immediately available to be used by us.
If all warrants get exercised, which is not assured or likely, we would
receive gross proceeds of $1,250,000. Regardless of the number of warrants
exercised, we expect to incur offering expenses estimated at $15,000 for
legal, accounting, printing and other costs in connection with the offering.
If only nominal proceeds are received or any amount less than 15,000 warrants
get exercised, proceeds will not be sufficient to defray offering expenses,
and no proceeds will be available for other uses. If all or any amount
greater than 15,000 warrants get exercised, any proceeds in excess of offering
expenses will be used first to provide additional working capital to cover any
other business expenses, including the lease of storage space, other overhead
expenses and fulfillment of reporting obligations, which are not expected to
exceed $10,000. These proceeds have not been more specifically allocated
because the exact uses of the proceeds will depend on the amounts received and
the timing of receipt. The balance of proceeds, which will vary from zero to
about $1,225,000 depending upon the number of warrants exercised, will be used
to purchase additional vintages of select wines for wine investing.
MARKET INFORMATION & DIVIDEND POLICY
Our common stock has been quoted under the symbol PMKT on the Electronic
Bulletin Board known as the OTCBB, which is maintained by the National
Association of Securities Dealers, Inc., but has not been traded in the over-
the-counter market. The only bid quotation on the OTCBB has been $.01. This
quotation represents interdealer prices, without retail markup, markdown or
commissions, and may not represent actual transactions. As of March 14, 2000,
there were about 100 record holders of our common stock.
You are not assured you will be able to sell your common stock in the
future at a price which equals or exceeds the exercise price. The exercise
price of the warrants was arbitrarily determined by us and set at a level
substantially in excess of prices recently paid for securities of the same
class. The price bears no relationship to our assets, book value, net worth
or other economic or recognized criteria of value. In no event should the
exercise price be regarded as an indicator of any future market price of our
securities.
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Our common stock is considered a low priced security under rules
promulgated by the Securities and Exchange Commission. Under these rules,
broker-dealers participating in transactions in these securities must first
deliver a risk disclosure document which describes risks associated with these
stocks, broker-dealers' duties, customers' rights and remedies, market and
other information, and make suitability determinations approving the customers
for these stock transactions based on financial situation, investment
experience and objectives. Broker-dealers must also disclose these
restrictions in writing, provide monthly account statements to customers, and
obtain specific written consent of each customer. With these restrictions,
the likely effect of designation as a low priced stock is to decrease the
willingness of broker-dealers to make a market for the stock, to decrease the
liquidity of the stock and increase the transaction cost of sales and
purchases of these stocks compared to other securities.
DIVIDEND POLICY
Power Marketing has not previously paid any cash dividends on common
stock and does not anticipate or contemplate paying dividends on common stock
in the foreseeable future. Our present intention is to utilize all available
funds for the development of our business. The only restrictions that limit
the ability to pay dividends on common equity or that are likely to do so in
the future, are those restrictions imposed by law. Under Delaware corporate
law, a corporation may declare and pay dividends only out of its surplus, as
defined, or if there is no surplus, out of its net profits for the fiscal year
in which the dividend is declared and/or the preceding fiscal year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with
our financial statements and the notes associated with them contained
elsewhere in this prospectus. This discussion should not be construed to
imply that the results discussed in this prospectus will necessarily continue
into the future or that any conclusion reached in this prospectus will
necessarily be indicative of actual operating results in the future. The
discussion represents only the best present assessment of management.
PLAN OF OPERATIONS.
Management's plan of operation for the next twelve months is to continue
using existing capital and any funds from exercise of warrants in this
offering, which are its sources of liquidity, to acquire additional inventory
of select wines to hold for investment and resale, and also to provide general
working capital during the next twelve months. Under this plan of operations
Power Marketing has no specific capital commitments and the timing of capital
expenditures for wine investing will depend upon the receipt of additional
funds from warrant exercise or elsewhere, none of which is assured. The time
frame for revenue generating activities and cash flows is also not assured or
known and will depend upon the timing of sale of the wines, and receipt of the
proceeds from these sales. We do not presently anticipate that we will have to
raise additional funds within the next twelve months, but we have not
determined how long beyond that existing capital can satisfy any cash
requirements. While we do not anticipate any need to raise additional
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capital, we believe Power Marketing will have the opportunity to invest
whatever additional funds may be received from the exercise of warrants in
purchasing additional vintages of investment grade wines. If we do not receive
sufficient funds to carry out the full plan of operations, Power Marketing
will modify operations and reduce the amount spent purchasing additional
vintages of investment grade wines, to the extent these funds are needed to
cover other business expenses, including the lease of storage space, other
overhead expenses, and fulfillment of our reporting obligations. We do not
anticipate any capital commitments for product research and development or
significant purchases of plant or equipment, or any change in the number of
employees.
In November, 1999, we purchased one hundred cases of investment grade
champagne from an affiliated company, at the affiliate's cost, for a note
payable in the amount of $115,830, due in 6 months with interest at 6% per
annum. We intend, but are not assured of being able, to repay the note upon
sale of the wine from sale proceeds. If that is not possible, management
intends to loan Power Marketing the money to repay the original note, until it
can sell the wine.
We also sold 250,000 shares of common stock in a non public offering, at
$.20 per share, and raised gross proceeds of $50,000. We later purchased
several different vintages of investment grade wines at a cost of $37,741.
BUSINESS
HISTORY AND DEVELOPMENT OF POWER MARKETING
Power Marketing, Inc., a development stage company, was incorporated
under the laws of the State of Delaware on August 1, 1995. In connection with
its organization, the founder contributed $28,500 cash to initially capitalize
Power Marketing in exchange for 950,000 shares of common stock.
On September 19, 1995, Power Marketing commenced a public offering in
reliance upon Rule 504 of Regulation D, promulgated by the U.S. Securities &
Exchange Commission under the Securities Act of 1933. 50,000 shares of common
stock were offered and sold and the offering closed in October, 1995.
Power Marketing was initially formed to engage in the infomercial
business marketing hair products. This business was not successful and
operations were eventually discontinued. In November-December, 1999,
management of Power Marketing decided to engage in the business of wine
investing, and raised additional capital for this purpose. Power Marketing
sold 250,000 shares of common stock in a non public offering, at $.20 per
share, and raised gross proceeds of $50,000. This increased the total issued
and outstanding common stock to 1,250,000 shares.
INDUSTRY BACKGROUND
Power Marketing intends to take advantage of what management believes
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is a money making opportunity that can be realized through buying, selling and
investing in select vintages of wines. Management's beliefs are based in part
on information in publications like an August 16, 1995 article in Las Vegas
Review Journal and an article in the May, 1995 issue of Inc. magazine. The
philosophy is simple; buy California's and France's premier red wines when
they are first released and hold them for investment, appreciation and later
resale, then sell the wines after a 12 to 24 month period. Based on advice of
our supplier, management believes, but cannot assure that the appreciation of
the wines will generally be greatest within this period. We will then take
any proceeds from investment, roll it over, and reinvest in the next release
of the wines. We also invest in select vintages of champagne and other
sparkling wines which our supplier has advised us are top ranked, such as 1990
Dom Perignon, and will hold them for investment, appreciation and later resale
whenever aging and anticipation of demand results in an increase in value
sufficient to realize a good return on investment.
Power Marketing intends to purchase the actual wines directly from
suppliers rather than purchasing futures contracts, and will not be purchasing
futures contracts. Management surveyed wine suppliers on the Internet and is
aware of companies that supply wines for various purposes including
investment, from which Power Marketing acquires the wines it holds for
investment. These companies conduct research regarding the world's top wines
and will provide educated recommendations to management about the specific
wines that can be purchased for investment and are likely to appreciate in
value over time. These companies buy and sell wines held for investment from
collectors and charge a commission of 10% to 15% for the services. They also
typically provide for a fee suitable temperature controlled storage facilities
in which to keep the wines while they age. Power Marketing intends to
purchase and hold the wines for investment appreciation and eventual resale
rather than selling wines on a retail basis.
Wine investing, or using wines as an investment vehicle, is based on the
principle of aging. The wine-making process is accomplished by allowing the
juice of perfectly ripe grapes to ferment over time. Fermentation is effected
over time periods varying from days to weeks or even longer. During
fermentation, the wine is not bottled or released for sale to the public, but
is stored in wooden barrels or other fermentation vats or tanks. Generally,
fermentation continues until all sugar in the juice has been converted to
alcohol. Even after fermentation and the wine has been bottled and released
for sale to the public, some wines are believed by professional connoisseurs
to benefit further from the aging process. For the better, more age-worthy
wines, the wine continues to undergo organic change as it ages in the bottle,
and this may continue for many years before the wine is considered fully
mature and aged to perfection. As a result, these wines have the potential to
become more valuable with the passage of time. Most investment grade wines
are red wines, because white wines generally do not benefit from aging. Aging
allows a fine red wine, on the other hand, to develop distinctive traits which
are highly valued by collectors and other connoisseurs. Select vintages of
other wines, such as champagne, may also benefit from the aging process enough
to become investment grade wines, if they are or become a top ranked vintage.
For instance, our supplier, Nevada Wine Company has advised us that 1990 Dom
Perignon champagne is generally considered to be a top ranked vintage of
champagne. As a result of this aging process, the vintages of wines that are
sought after as investment grade wines may increase several times in value as
they are aged over a period of years, especially if the wines achieve a
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"First Growth" or top ranked classification as they are aged.
A second factor upon which wine investing is based is anticipation of
demand, and the timing of demand, for such vintages. Because of the aging
factor, those vintages of red wine, champagne and other wines which become the
most highly sought after achieve such status only after having been "aged to
perfection" for a number of years. Obviously, at that point in time, the
supply of such vintages is fixed and cannot be further increased, even though
the demand is continuing to increase. Combined with the fact of general
increases in demand which will occur at various times as a result of certain
events such as celebrations and other festivities, the potential exists for
significant increases over time in the value of the most highly sought after
vintages, if the demand continues to increase, since the supply is fixed.
Power Marketing has purchased its wine investments mostly through Nevada
Wine Company, using the recommendations, brokerage, marketing, storage and
other services provided by that company. Management selected Nevada Wine
Company from its survey, based on a comparison of prices and services offered.
Management does not presently intend to use other suppliers and other than
Nevada Wine Company, does not intend to use or rely on outside consultants to
conduct operations. Nevada Wine Company is not affiliated with Power
Marketing or its principals. Nevada Wine Company is a Las Vegas based company
that supplies the market with wine for many large and small businesses and
also sells many of the world's finest wines to collectors who purchase and
hold wines for their investment value, or to others who just want a good
bottle of wine to drink. These wines range from good inexpensive wine to
wines worth hundreds of dollars. In December, 1999, Power Marketing used the
proceeds of its recently completed offering to purchase several vintages of
investment grade wines, which it is holding at the temperature controlled
storage facilities maintained by Nevada Wine Company in Las Vegas.
Power Marketing also intends to resell its wine investments through
Nevada Wine Company, using the recommendations, brokerage, licensing and other
services provided by Nevada Wine Company, a wine broker-dealer licensed for
the sale of alcoholic beverages. If Power Marketing resells its wine
investments through Nevada Wine Company, management has been advised by Nevada
Wine Company that any licensing requirements for the sale of alcoholic
beverages will be handled by them as part of their services. The market for
wine resales is composed of collectors who purchase and hold wines for their
investment value, or others who just want a good bottle of wine to drink.
Power Marketing will have to continue to hold its wine investments
indefinitely and will only be able to sell when we become aware through our
supplier or otherwise of opportunities to sell. The following table shows the
wine investments Power Marketing has purchased so far.
<TABLE>
<S> <C> <C> <C>
Description Bottles Price/unit Total
1996 Pahlmeyer Red Table 18 $65.00 $1,170.00
1996 Quintessa Cabernet 120 75 9,000
1996 Opus One 24 130 3,120
1995 Berringer Reserve Cabernet 60 60 3,600
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1997 Diamond Creek GravelyMeadow 24 120 2,880
1997 Diamond Creek Red RockTerrace 24 120 2,880
1997 Diamond Creek 24 120 2,880
Volcanic Hill
1995 Silver Oak Alex 24 60 1,440
1996 Lokoya Cabernet 11 125 1,375
1997 Dow Port 36 55 1,980
1997 Taylor Port 36 78 2,808
1997 Fonsecs Port 36 78 2,808
1997 Del Dotto 36 50 1,800
1990 Dom Perignon (champagne) 1,200 96.53 115,830.00
Balance December 31, 1999 1,673$1,232.53$153,571.00
</TABLE>
There is absolutely no assurance that Power Marketing will be successful
in this venture. Management has little or no prior experience in this
business or industry and will have to rely on the advice of others.
Management believes that any additional funds that may be received from
exercise of warrants can be used to increase the amounts of purchases or
investments Power Marketing can make.
COMPETITION
The wine industry is a multibillion dollar industry worldwide with many
producers, wholesalers, retailers and consumers. Power Marketing's
competitive position within the industry is insignificant. Power Marketing
will compete in the purchase of wines with all other consumers who purchase
wines, whether for consumption or investment. Management has very limited
personal knowledge of wine and must rely on others for dependable advice at
the time of purchase. Power Marketing also has no marketing expertise or
distribution facilities and is not licensed to engage in the retail sale of
alcoholic beverages, and must rely on others to handle the sale in a brokerage
capacity. The business of buying, selling and investing in fine wines is
intensely competitive, with many companies and other persons who may have
greater technical expertise, financial resources and marketing capabilities
than Power Marketing. We are aware that there are many collectors and other
persons who invest in wines and will compete directly with us. There is no
assurance we will be able to overcome competitive disadvantages we face as a
small, start up company with limited capital. We will only be able to invest
to the extent of our limited capital and sell when we become aware through our
supplier or otherwise of opportunities to invest or sell. If we cannot
compete effectively, regardless of the success of this offering, we will not
succeed.
EMPLOYEES
As of the date of this prospectus, Power Marketing has no full-time
employees. Because we are using the services provided by Nevada Wine Company,
only a minimal amount of management time is needed. No full-time employees
are presently needed.
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FACILITIES
Power Marketing has no office facilities and does not presently
anticipate the need to lease commercial office space or facilities, but for
the time being uses the address of the president as the business address. We
may lease commercial office facilities at such time in the future as our
operations have developed to the point where the facilities are needed, but we
have no commitments or arrangements for any facilities, and there is no
assurance regarding the future availability of commercial office facilities or
terms on which we may be able to lease facilities in the future, nor any
assurance regarding lengthh of time the present arrangement may continue. In
connection with the purchase of an inventory of wines to hold for investment
and resale, Power Marketing has leased from third parties or otherwise paid
for the use of temperature controlled or otherwise suitable storage facilities
for the wines.
AVAILABLE INFORMATION
We filed a registration statement on Form SB-2 with the United States
Securities and Exchange Commission, under the Securities Act of 1933, covering
the securities in this offering. As permitted by rules and regulations of the
Commission, this prospectus does not contain all of the information in the
registration statement. For further information regarding both Power
Marketing and the securities in this offering, we refer you to the
registration statement, including all exhibits and schedules, which may be
inspected without charge at the public reference facilities of the
Commission's Washington, D.C. office, 450 Fifth Street, N.W., Washington, D.C.
20549. Copies may be obtained upon request and payment of prescribed fees.
As of the date of this prospectus, we became subject to the information
requirements of the Securities Exchange Act of 1934. Accordingly, we will
file reports and other information with the Commission. These materials will
be available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: New York
Regional Office, 75 Park Place, New York, New York 10007; Chicago Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of the
material may be obtained from the public reference section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The Commission maintains an Internet Web
site located at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers that file
reports electronically with the Commission. The site is accessible by the
public through any Internet access service provider.
Copies of our annual, quarterly and other reports filed with the
Commission, starting with the quarterly report for the first quarter ended
after the date of this prospectus, due 45 days after the end of the quarter,
will also be available upon request, without charge, by writing Power
Marketing, Inc., 311 South State Street, Suite 460, Salt Lake City, Utah
84111.
13
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table shows directors, executive officers and other
significant employees, their ages, and all offices and positions with Power
Marketing. Each director is elected for a period of one year and serves until
his successor is duly elected by the stockholders and qualifies. Officers and
other employees serve at the will of the board of directors.
<TABLE>
<S> <C> <C>
Term Served Positions
Name of Director Age As Director/Officer With Company
Lynn Dixon 53 Since President, Secretary-
inception Treasurer & Director
</TABLE>
This individual serves as the sole officer and director. A brief
description of his positions, duties, background and business experience
follows:
LYNN DIXON. Mr. Dixon graduated with a B.S. Degree in business from
Utah State University in 1969. From 1969 through 1972, he was employed at
Thiokol Chemical Corporation as a cost accountant. From 1972 through 1979, he
was employed as a stock broker with Olsen and Company, a stock brokerage firm
in Salt Lake City, Utah. From 1979 to the present, Mr. Dixon has devoted his
full time to managing his own investments in securities and real estate,
including commercial, residential and agricultural real estate investments in
undeveloped ground as well as income producing properties, mutual funds and
other securities investments, both debt and equity, in companies listed on
exchanges such as AMEX or traded over-the-counter and listed on NASDAQ and the
OTCBB. Mr. Dixon served as President of Winthrop Industries during the past
five years until November 1999, when it went through a change in control.
Winthrop Industries was also engaged at that time in the business of wine
investing. Mr. Dixon will devote less than 10% of his time to Power Marketing.
There are no arrangements or understandings regarding the length of time
a director is to serve in that capacity.
EXECUTIVE COMPENSATION
Power Marketing has not paid any compensation to its executive officer
and director to date. We have no employment agreement with nor key man life
insurance on management. Management is entitled to reimbursement of any out of
pocket expenses reasonably and actually incurred on our behalf. The officer
does not devote full time or a significant amount of time to the affairs of
Power Marketing, is not a full time employee and does not receive any salary
or wage. There is no assurance regarding the length of time that this
arrangement may continue, nor any assurance that the services of the officer
will continue to be availabl for any specified length of time.
14
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table contains stock ownership information about officers
or directors, and other stockholders who we know to be beneficial owners of
more that 5% of our stock. A beneficial owner of stock is any person who has
or shares the power to decide how to vote or whether to dispose of the stock.
<TABLE>
<S> <C> <C> <C>
Title of Amount & Nature of % of
Name and Address Class Beneficial Ownership Class
Lynn Dixon Common 1,025,700 shares 82%
311 S. State, #460
SLC, UT 84111
All officers and Common 1,025,700 shares 82%
directors as a group
(1person)
</TABLE>
The foregoing amounts include all shares these persons may be considered
to beneficially own regardless of the form of ownership.
CERTAIN TRANSACTIONS
In connection with the organization, the founder contributed $28,500
cash to initially capitalize Power Marketing in exchange for 950,000 shares of
common stock.
During November 1999, Power Marketing purchased for a price of $115,830,
champagne to hold as an investment. The champagne was purchased with a note
payable for $115,830 from Winthrop Industries, a company that subsequently
went through a change in control and became known as Compass Knowledge.
However, at the time of the purchase, this company was affiliated with Power
Marketing through common control. The note is held by Compass Knowledge, is
due in 6 months and provides for interest at 6% per annum. Power Marketing
purchased the champagne from Winthrop, at the same price that Winthrop had
paid to purchase it from a third party.
CONFLICTS OF INTEREST
Other than as described in this prospectus we do not expect to have
significant further dealings with affiliates. However, if there are dealings
the parties will attempt to deal on terms competitive in the market and on the
same terms that either party would deal with a third person. Presently none
of the officers and directors have any transactions which they contemplate
entering into with Power Marketing, aside from the matters described in this
prospectus.
Management will attempt to resolve any conflicts of interest that may
arise in favor of Power Marketing. Failure to do so could result in fiduciary
liability to management.
15
<PAGE>
INDEMNIFICATION AND LIMITATION OF LIABILITY OF MANAGEMENT
The General Corporation Law of Delaware permits provisions in the
articles which limit liability of directors for breach of fiduciary duty to
certain specified circumstances, namely,
bullet breach of the director's duty of loyalty to the corporation or its
stockholders;
bullet acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law;
bullet unlawful stock purchases, redemptions or payment of dividends; or
bullet any transaction from which the director derived an improper personal
benefit.
Our articles limit liability of directors to the full extent permitted by
Delaware law. With these exceptions this eliminates personal liability of a
director to Power Marketing or its shareholders, for monetary damages for
breach of fiduciary duty. Therefore a director cannot be held liable for
damages to Power Marketing or its shareholders for gross negligence or lack of
due care in carrying out his fiduciary duties as a director. Delaware law
permits indemnification if a director or officer acts in good faith in a
manner reasonably believed to be in, or not opposed to, the best interests of
the corporation. A director or officer must be indemnified as to any matter
in which he defends himself successfully. Indemnification is prohibited as to
any matter in which the director or officer is adjudged liable to the
corporation.
This will limit your ability as shareholders to hold officers and
directors liable and collect monetary damages for breaches of fiduciary duty,
and requires us to indemnify officers and directors to the full extent
permitted by law. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons under these provisions or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission, indemnification is against
public policy as expressed in the Act and is unenforceable.
DESCRIPTION OF SECURITIES
COMMON STOCK
We are presently authorized to issue 50,000,000 shares of common stock.
Power Marketing presently has 1,250,000 shares of common stock outstanding and
has reserved from its authorized but unissued shares a sufficient number of
shares of common stock for issuance of the shares offered in this offering.
The shares of common stock to be issued on completion of the offering will be,
when issued according to the terms of the offering, fully paid and non-
assessable.
The holders of common stock, including the shares offered in this
offering, are entitled to equal dividends and distributions, per share, on the
common stock when, as and if declared by the board of directors from funds
legally available for that. No holder of any shares of common stock has a
pre-emptive right to subscribe for any securities nor are any common shares
subject to redemption or convertible into other securities. Upon liquidation,
dissolution or winding up, and after payment of creditors and preferred
stockholders, if any, the assets will be divided pro-rata on a share-for-share
basis among the holders of the shares of common stock. All shares of common
stock now outstanding are fully paid, validly issued and non-assessable. Each
16
<PAGE>
share of common stock is entitled to one vote on the election of any director
or any other matter upon which shareholders are required or permitted to vote.
Holders of our common stock do not have cumulative voting rights, so that the
holders of more than 50% of the combined shares voting for the election of
directors may elect all of the directors, if they choose to do so and, in that
event, the holders of the remaining shares will not be able to elect any
members to the board of directors.
Issuance of additional common stock in the future will reduce your
proportionate ownership and voting power. Directors can issue additional
common stock, without shareholder approval to the extent authorized. We are
authorized to issue 50,000,000 shares of common stock.
PREFERRED STOCK
We are also presently authorized to issue 500,000 shares of preferred
stock. Under our articles of incorporation, the board of directors has the
power, without further action by the holders of the common stock, to designate
the relative rights and preferences of the preferred stock, and issue the
preferred stock in one or more series as designated by the board of directors.
The designation of rights and preferences could include preferences as to
liquidation, redemption and conversion rights, voting rights, dividends or
other preferences, any of which may be dilutive of the interest of the holders
of the common stock or the preferred stock of any other series. The board of
directors effects a designation of each series of preferred stock by filing
with the Delaware Secretary of State a Certificate of Designation defining the
rights and preferences of each series. Documents so filed are matters of
public record and may be examined according to procedures of the Delaware
Secretary of State, or copies may be obtained from Power Marketing. The board
of directors has not designated any series or issued any shares of preferred
stock.
The ability of directors, without stockholder approval, to issue
additional shares of preferred stock could be used as anti-takeover measures.
Anti-takeover measures may result in you receiving less for your stock than
you otherwise might. The issuance of preferred stock creates additional
securities with dividend and liquidation preferences over common stock, and
may have the effect of delaying or preventing a change in control without
further shareholder action and may adversely effect the rights and powers,
including voting rights, of the holders of common stock. In certain
circumstances, the issuance of preferred stock could depress the market price
of the common stock.
WARRANTS
Power Marketing has declared a distribution of 1,250,000 common stock
purchase warrants to shareholders of record as of July 10, 2000. The warrants
are exercisable at $1.00 per share, on or before June 30, 2002, upon
effectiveness of registration of the warrants and underlying shares.
(a) Power Marketing may redeem all or a portion of the warrants,
at $.01 per warrant, at any time upon 30 days' prior written notice to
the warrant holders. The warrants may be redeemed whether or not a
17
<PAGE>
current registration statement is effective. Any warrant holder who
does not exercise his warrants before the redemption date, as set forth
on the notice of redemption, will forfeit his right to purchase the
shares of common stock underlying the warrants, and after the redemption
date any outstanding warrants referred to in the notice will become void
and be canceled. If not redeemed, the warrants will expire at the
conclusion of the exercise period unless extended by us.
(b) Power Marketing may at any time, and from time to time,
extend the exercise period of the warrants provided that written notice
of the extension is given to the warrant holders before the expiration
date. Also, Power Marketing may, at any time, reduce the exercise price
by written notification to the holders. We do not presently contemplate
any extensions of the exercise period or reduction in the exercise price
of the warrants.
(c) The warrants contain anti-dilution provisions on the
occurrence of stock splits or stock dividends. The anti-dilution
provisions do not apply in the event of a merger or acquisition. In the
event of liquidation, dissolution or winding-up, warrant holders will
not be entitled to participate in the assets. Warrant holders have no
voting, preemptive, liquidation or other rights of a stockholder, and no
dividends may be declared on the warrants.
(d) The warrants may be exercised by surrendering to Power
Marketing, a warrant certificate evidencing the warrants to be
exercised, together with the exercise form duly completed and executed,
and paying the exercise price per share in cash or check payable to
Power Marketing. Stock certificates will be issued as soon as
practicable.
(e) The warrants will not be exercisable unless the warrants and
the shares of common stock underlying the warrants are registered or
otherwise qualified in applicable jurisdictions.
(f) The warrants will be nontransferable by their terms, cannot
be transferred without the consent of Power Marketing and will be
stamped with a restrictive legend.
YOU CANNOT TRANSFER AND MAY NOT EVEN BE ABLE TO EXERCISE YOUR WARRANTS.
Warrants are nontransferable, and can only be exercised, if exercise is
permitted under the securities laws of your state, and only while this
prospectus is current and the registration statement remains effective. We
intend to update the prospectus as necessary to keep it current and maintain
federal and state registration or qualification for the exercise, but may not
always do so. Whether a current prospectus is effective or not, warrants are
redeemable for $.01 per warrant at any time. If redeemed when no current
prospectus is effective, you will have no opportunity to exercise the
warrants, but will be compelled to accept the nominal redemption price.
18
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Of the 1,250,000 shares of our common stock outstanding before the
exercise of any warrants, 52,100 shares are currently freely tradeable. In
addition, except for shares held by an "affiliate" of Power Marketing, the
shares of common stock underlying the warrants will also be freely tradeable
into the public market immediately upon issuance. Sales of substantial
amounts of this common stock in the public market could depress the market
price of the common stock. Furthermore, all of the remaining shares of common
stock presently outstanding are restricted and/or affiliate securities which
are not freely tradeable, but may in the future be sold, under Rule 144, into
any public market that may exist for the common stock. Of these restricted
and/or affiliate securities, 947,900 shares could be sold under Rule 144 now;
250,000 shares could be sold under Rule 144 beginning February 1, 2001. Future
sales by current shareholders could depress the market prices of the common
stock in any market. For purposes of Rule 144, an "affiliate" of an issuer is
a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the issuer.
In general, under Rule 144 as currently in effect, a person or group of
persons whose shares are aggregated, including affiliates of an issuer, can
sell within any three-month period, an amount of restricted securities that
does not exceed the greater of 1% of the total number of outstanding shares of
the same class, or if the stock becomes quoted on NASDAQ or a stock exchange,
the reported average weekly trading volume during the four calendar weeks
preceding the sale; provided, that at least one year has elapsed since the
restricted securities being sold were acquired from the issuer or any
affiliate of the issuer, and provided further that certain other conditions
are also satisfied. If at least two years have elapsed since the restricted
securities were acquired from the issuer or an affiliate of the issuer, a
person who has not been an affiliate of the issuer for at least three months
can sell restricted shares under Rule 144 without regard to any limitations on
the amount.
PLAN OF DISTRIBUTION
This prospectus and the registration statement of which it is part
relate to the offer and sale of 1,250,000 shares of common stock to be issued
upon the exercise of the warrants at an exercise price of $1.00 per share.
The warrants are being distributed as a dividend on the common stock to all
the shareholders of record as of July 10, 2000. The record date for warrant
distribution follows the effective date of this prospectus to allow time for
the required notice to the NASD to be timely filed at least ten days in
advance of the record date. The warrants are exercisable until June 30, 2002,
if this prospectus is still current or has been updated.
The offering will be managed by Power Marketing without an underwriter,
and the shares are being offered and sold by the President of Power Marketing,
Lynn Dixon, without any discount, sales commissions or other compensation
being paid to anyone in connection with the offering. Power Marketing will
pay the costs of preparing, mailing and distributing this prospectus to the
holders of the warrants. Brokers, nominees, fiduciaries and other custodians
19
<PAGE>
are requested to forward copies of this prospectus to the beneficial owners of
securities held of record by them, and the custodians will be reimbursed for
their expenses.
There is no assurance that all or any shares will be sold, nor any
requirement, or escrow provisions to assure that, any minimum amount of
warrants will be exercised. All funds received upon the exercise of any
warrants will be immediately available for our use.
EXERCISE PROCEDURES
The warrants may be exercised in whole or in part by presentation of the
warrant certificate, with the purchase form on the reverse side filled out and
signed at the bottom, together with payment of the exercise price and any
applicable taxes at the principal office of Interwest Stock Transfer Co., 1981
East 4800 South, Suite 100, Salt Lake City, Utah 84117. Payment of the
exercise price shall be made in currency of the United States of America in
cash or by cashier's or certified check payable to the order of "Power
Marketing, Inc., Warrant Exercise Account."
All holders of warrants will be given an independent right to exercise
their purchase rights. If, as and when properly completed and duly executed
notices of exercise are received by the transfer agent and/or warrant agent,
together with the certificates being surrendered and full payment of the
exercise price in cleared funds, the checks or other funds will be delivered
to Power Marketing and the transfer agent and/or warrant agent will promptly
issue certificates for the underlying common stock. It is presently estimated
that certificates for the shares of common stock will be available for
delivery in Salt Lake City, Utah at the close of business on the tenth
business day after the receipt of all required documents and funds.
LEGAL MATTERS
Management knows of no material litigation that is pending or threatened
against Power Marketing. The validity of the issuance of the shares offered
in this offering will be passed upon for Power Marketing by Thomas G. Kimble &
Associates, Salt Lake City, Utah.
EXPERTS
The financial statements of Power Marketing for the years ended December
31, 1999 and 1998 which are included in this prospectus have been examined by
Pritchett, Siler & Hardy, P.C., independent certified public accountants, as
indicated in their report, and are included in this prospectus in reliance on
the report given upon the authority of that firm as experts in accounting and
auditing.
20
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONTENTS
PAGE
Accountants' Review Report 1
Unaudited Condensed Balance Sheets,
March 31, 2000 and December 31, 1999 2
Unaudited Condensed Statements of Operations,
for the three months ended March 31, 2000
and 1999 and for the period from inception
on August 1, 1995 through March 31, 2000 3
Unaudited Condensed Statements of Cash Flows,
for the three months ended March 31, 2000
and 1999 and for the period from inception
on August 1, 1995 through March 31, 2000 4
Notes to Unaudited Condensed Financial Statements 5 - 7
<PAGE>
ACCOUNTANTS' REVIEW REPORT
Board of Directors
POWER MARKETING, INC.
Salt Lake City, Utah
We have reviewed the accompanying condensed balance sheet of
Power Marketing, Inc. [a development stage company] as of March
31, 2000 and the related condensed statements of operations and
cash flows for the three months ended March 31, 2000 and for the
period from inception on August 1, 1995 through March 31, 2000.
These financial statements are the responsibility of the
Company's management. All information included in these financial
statements is the representation of management of Power
Marketing, Inc.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that Power Marketing, Inc. will continue as a going concern. As
discussed in Note 7 to the financial statements Power Marketing,
Inc. has incurred losses since its inception and has not yet been
successful in establishing profitable operations, raising
substantial doubt about its ability to continue as a going
concern. Management's plans in regards to these matters are also
described in Note 7. 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 4, 2000
Salt Lake City, Utah
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountants' Review Report]
ASSETS
March 31, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ 3,347 $ 12,356
Prepaid expenses 5,000 -
Investment 153,571 153,571
___________ ___________
Total Current Assets 161,918 165,927
___________ ___________
$ 161,918 $ 165,927
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable-related party $ 500 $ 500
Note payable-related party 115,830 115,830
Accrued interest-related party 2,608 876
___________ ___________
Total Current Liabilities 118,938 117,206
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
500,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,250,000 shares issued and
outstanding 1,250 1,250
Additional paid-in capital 77,300 77,300
Deficit accumulated during the
development stage (35,570) (29,829)
___________ ___________
Total Stockholders' Equity 42,980 48,721
____________ ____________
$ 161,918 $ 165,927
____________ ____________
Note: The balance sheet at December 31, 1999 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.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountants' Review Report]
For the Three From Inception on
Months Ended August 1, 1995
March 31, Through
_______________________ March 31,
2000 1999 2000
__________ __________ ___________
REVENUE $ - $ - $ -
EXPENSES:
General and administrative 4,009 53 14,706
__________ __________ ___________
Total Expenses 4,009 53 14,706
__________ __________ ___________
LOSS BEFORE OTHER INCOME
(EXPENSE) (4,009) (53) (14,706)
__________ __________ ___________
OTHER INCOME (EXPENSE):
Interest Expense (1,732) - (2,608)
Interest Income - - 44
__________ __________ ___________
Total Other Income(Expense) (1,732) - (2,564)
__________ __________ ___________
LOSS BEFORE INCOME TAXES (5,741) (53) (17,270)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ __________ ___________
(LOSS) FROM CONTINUING
OPERATIONS (5,741) (53) (17,270)
__________ __________ ___________
DISCONTINUED OPERATIONS:
(Loss) from operations of discontinued
hair product marketing operations - - (18,990)
Gain on disposition of hair product
marketing operations - - 690
__________ __________ ___________
LOSS FROM DISCONTINUED
OPERATIONS - - (18,300)
__________ __________ ___________
NET LOSS $ (5,741) $ (53) $ (35,570)
__________ __________ ___________
LOSS PER COMMON SHARE:
Continuing operations $ (.00) $ (.00) $ (.02)
Discontinued operations (.00) (.00) (.02)
__________ __________ ___________
Loss Per Common Share $ (.00) $ (.00) $ (.04)
__________ __________ ___________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountants' Review Report]
From Inception on
For the Three Months Ended August 1,1995
March 31, Through
____________ ___________ March 31,
2000 1999 2000
____________ ____________ ____________
Cash Flows from Operating
Activities:
Net loss $ (5,741) $ (53) $ (35,570)
Adjustments to reconcile
net (loss) to net cash
used by operations:
Amortization - - 500
Changes in assets and
liabilities:
Increase in accounts
payable-related - - 500
Increase in prepaid
expenses (5,000) - (5,000)
Increase in accrued
interest-related 1,732 - 2,608
____________ ____________ ____________
Net Cash Provided
(Used) by Operating
Activities (9,009) (53) (36,962)
____________ ____________ ____________
Cash Flows from Investing
Activities:
Organization costs - - (500)
Purchase of investment - - (153,571)
____________ ____________ ____________
Net Cash Provided
(Used) by
Investing Activities - - (154,071)
____________ ____________ ____________
Cash Flows from Financing
Activities:
Proceeds from sale of
common stock - - 83,500
Payment of stock offering
costs - - (4,950)
Proceeds from note
payable-related party - - 115,830
____________ ____________ ____________
Net Cash Provided
by Financing
Activities - - 194,380
____________ ____________ ____________
Net Increase (Decrease)
in Cash (9,009) 53 3,347
Cash at Beginning of
Period 12,356 1,089 -
____________ ____________ ____________
Cash at End of Period $ 3,347 $ 1,036 $ 3,347
____________ ____________ ____________
Supplemental Disclosures
of Cash Flow information:
Cash paid during the
period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule
of Non-Cash Investing
and Financing Activities:
For the Three Months Ended March 31, 2000:
None
For the Three Months Ended March 31, 1999:
None
The accompanying notes are an integral part of these unaudited
condensed financial statement.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Delaware on August 1, 1995. The Company is considered a
development stage company as defined in SFAS No. 7. The Company
was formed to engage in the business of television marketing of
hair products. During 1996, the Company discontinued the
marketing of hair products and is currently considering other
business opportunities or potential business acquisitions.
During 1999, the Company purchased champagne as an investment,
but is still seeking other potential business ventures. 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 March
31, 2000 and 1999 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 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 December 31, 1999 audited financial
statements. The results of operations for the periods ended
March 31, 2000 are not necessarily indicative of the operating
results for the full year.
(Loss) Per Common Share - The computation of loss per common
share is based on the weighted average number of shares
outstanding during the period presented.
Investment - Investments in wine and champagne are carried at the
lower of cost or market value.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
Statement of Cash Flows - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135 "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others, " and SFAS No. 137, " Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133)," were recently issued. SFAS No. 132, 133,
134, 135, 136, and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
<PAGE> POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During September, 1995, in connection with its
organization, the Company issued 950,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $28,500 (or $.03 per share). During
October, 1995, the Company made a public offering of 50,000 of
its previously authorized but unissued common stock. Total
proceeds from the public sale of stock amounted to $5,000.
Direct offering costs offset against the proceeds were $4,950.
During December 1999, the Company issued 250,000 shares of its
previously authorized but unissued common stock. Total proceeds
from the sale of stock amounted to $50,000 (or $.20 per share).
Preferred Stock - The Company has authorized 500,000 shares of
preferred stock, $.001 per value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
December 31, 1999 and 1998.
NOTE 3 - INVESTMENT
During November 1999 the Company acquired champagne from an
entity that at the time was related to a significant shareholder
of the Company. The champagne was acquired for $115,830 which
was the carryover cost basis of the related entity. A note
payable in the amount of $115,830 was given as consideration for
the champagne.
During December 1999 the Company paid cash of $37,741 to purchase
wine as an investment. The wine was purchased from an unrelated
entity.
NOTE 4 - NOTE PAYABLE - RELATED PARTY
On November 15, 1999 the Company purchased $115,830 of its
investment in champagne from an entity controlled by a
shareholder of the Company for a note payable in the amount of
$115,830. The note is due in 6 months and provides for interest
at 6% per annum.
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 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.
The Company has available at March 31, 2000, unused operating
loss carryforwards of approximately $35,000 which may be applied
against future taxable income and which expire in various years
from 2010 through 2019. 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
amount of the loss carryforwards and, therefore, no deferred tax
asset has been recognized for the loss carryforwards. The net
deferred tax assets are approximately $12,000 as of March 31,
2000, with an offsetting valuation allowance of the same amount
resulting in a change in the valuation allowance of approximately
$2,000 during the three months ended March 31, 2000.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - Officers and directors have not devoted
any significant time to the Company's operations nor has the
Company paid any compensation to its officers and directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his office as a mailing address, as needed, at no
expense to the Company.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since inception, has
expended most of its working capital and has not yet been
successful in establishing profitable 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 additional funds through loans, or through
additional sales of its
common stock or through the acquisition of other companies.
There is no assurance that the Company will be successful in
raising this additional capital.
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share for the periods presented.
From Inception on
For the Three Months Ended August 1,1995
March 31, Through
____________ ___________ March 31,
2000 1999 2000
____________ ____________ ____________
Loss from continuing
operations available
to common shareholders
(numerator) $ (5,741) $ (53) $ (17,270)
____________ ____________ ____________
Loss from
discontinued
operations
(numerator) $ - - $ (18,300)
____________ ____________ ____________
Weighted average
number of common
shares outstanding
used in loss per
share calculation
for the period
(denominator) 1,250,000 1,000,000 1,014,847
____________ ____________ ____________
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report 1
- Balance Sheets, December 31, 1999 and 1998 2
- Statements of Operations, for the years ended
December 31, 1999 and 1998, and from
inception on August 1, 1995 through
December 31, 1999 3
- Statement of Stockholders' Equity, from
inception on August 1, 1995 through
December 31, 1999 4
- Statements of Cash Flows, for the years ended
December 31, 1999 and 1998, and from
inception on August 1, 1995 through
December 31, 1999 5
- Notes to Financial Statements 6 - 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
POWER MARKETING, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheets of Power Marketing, Inc. [a
development stage company] at December 31, 1999 and 1998, and the related
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1999 and 1998 and for the period from inception on August
1, 1995 through December 31, 1999. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide 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 Power Marketing, Inc. as of
December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years ended December 31, 1999 and 1998, and for the period from
inception through December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed Note 8 to the financial
statements, the Company has suffered losses since inception and has not yet
been successful in establishing profitable operations, raising substantial
doubt about its ability to continue as a going concern. Management's plans
in regards to these matters are also described in Note 8. 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.
January 12, 2000
Salt Lake City, UT
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
BALANCE SHEETS
ASSETS
December 31,
___________________________
1999 1998
____________ ____________
CURRENT ASSETS:
Cash in bank $ 12,356 $ 1,089
Investment 153,571 -
____________ ____________
Total Current Assets 165,927 1,089
ORGANIZATION COSTS, net - 167
____________ ____________
$ 165,927 $ 1,256
____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable-related party $ 500 $ -
Accounts payable - 53
Note payable-related party 115,830 -
Accrued interest-related party 876 -
____________ ____________
Total Current Liabilities 117,206 53
____________ ____________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
500,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,250,000 and 1,000,000 shares issued and
outstanding, respectively 1,250 1,000
Additional paid-in capital 77,300 27,550
Deficit accumulated during the
development stage (29,829) (27,347)
____________ ____________
Total Stockholders' Equity 48,721 1,203
____________ ____________
$ 165,927 $ 1,256
____________ ____________
The accompanying notes are an integral part of these financial statement.
-2-
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
From Inception on
For the Year Ended August 1, 1995
December 31, Through
_______________________ December 31,
1999 1998 1999
__________ __________ ___________
REVENUE $ - $ - $ -
EXPENSES:
General and administrative 1,606 1,348 10,697
__________ __________ ___________
Total Expenses 1,606 1,348 10,697
__________ __________ ___________
LOSS BEFORE OTHER INCOME
(EXPENSE) (1,606) (1,348) (10,697)
__________ __________ ___________
OTHER INCOME (EXPENSE):
Interest Expense (876) - (876)
Interest Income - - 44
__________ __________ ___________
Total Other Income (876) - (832)
__________ __________ ___________
LOSS BEFORE INCOME TAXES (2,482) (1,348) (11,529)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ __________ ___________
(LOSS) FROM CONTINUING
OPERATIONS (2,482) (1,348) (11,529)
__________ __________ ___________
DISCONTINUED OPERATIONS:
(Loss) from operations of
discontinued hair product
marketing operations - - (18,990)
Gain on disposition of hair
product marketing operations - - 690
__________ __________ ___________
LOSS FROM DISCONTINUED
OPERATIONS - - (18,300)
__________ __________ ___________
NET LOSS $(2,482) $(1,348) $(29,829)
__________ __________ ___________
LOSS PER COMMON SHARE:
Continuing operations $ (.00) $ (.00) $ (.01)
Discontinued operations (.00) (.00) (.02)
__________ __________ ___________
Loss Per Common Share $ (.00) $ (.00) $ (.03)
__________ __________ ___________
-3-
<PAGE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON AUGUST 1, 1995
THROUGH DECEMBER 31, 1999
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
________________ ______________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_______ ________ ______________ ________ _________
BALANCE, August 1, 1995 - $ - - $ - $ - $ -
Issuance of 950,000 shares
common stock for cash,
September 15, 1995 at $.03
per share - - 950,000 950 27,550 -
Issuance of 50,000 shares
of common stock for cash,
October 4, 1995 at $.10
per share, net of offering
costs - - 50,000 50 - -
Net loss for the period
ended December 31, 1995 - - - - - (23,780)
_______ _______ _________ _______ ________ __________
BALANCE, December 31, 1995 - - 1,000,000 1,000 27,550 (23,780)
Net loss for the year ended
December 31, 1996 - - - - - (51)
_______ _______ _________ _______ ________ __________
BALANCE, December 31, 1996 - - 1,000,000 1,000 27,550 (23,831)
Net loss for the year ended
December 31, 1997 - - - - - (2,168)
_______ _______ _________ _______ ________ __________
BALANCE, December 31, 1997 - - 1,000,000 1,000 27,550 (25,999)
Net loss for the year ended
December 31, 1998 - - - - - (1,348)
_______ _______ _________ _______ ________ __________
BALANCE, December 31, 1998 - - 1,000,000 1,000 27,550 (27,347)
Issuance of 250,000 shares
of common stock for
cash at .20 per share - - 250,000 250 49,750 -
Net loss for the year ended
December 31, 1999 - - - - - (2,482)
_______ _______ _________ _______ ________ __________
BALANCE, December 31, 1999 - $ - 1,250,000 $1,250 $ 77,300 $ (29,829)
_______ _______ _________ _______ ________ __________
The accompanying notes are an integral part of this financial statement.
-4-
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
From Inception on
For the Year Ended August 1, 1995
December 31, Through
___________________________ December 31,
1999 1998 1999
____________ _______________ ____________
Cash Flows from Operating
Activities:
Net loss $ (2,482) $ (1,348) $ (29,829)
Adjustments to reconcile net (loss)
to net cash used by operations:
Amortization 167 100 500
Changes in assets and liabilities:
Increase (decrease) in
accounts payable (53) 53 -
Increase in
accounts payable-related 500 - 500
Increase in accrued
interest-related 876 - 876
___________ ______________ _____________
Net Cash Provided (Used) by
Operating Activities (992) (1,195) (27,953)
___________ ______________ _____________
Cash Flows from Investing Activities:
Organization costs - - (500)
Purchase of investment (153,571) - (153,571)
___________ ______________ _____________
Net Cash Provided (Used) by
Investing Activities (153,571) - (154,071)
___________ ______________ _____________
Cash Flows from Financing Activities:
Proceeds from sale of common stock 50,000 - 83,500
Payment of stock offering costs - - (4,950)
Proceeds from note
payable-related party 115,830 - 115,830
___________ ______________ _____________
Net Cash Provided by
Financing Activities 165,830 - 194,380
___________ ______________ _____________
Net Increase (Decrease) in Cash 11,267 (1,195) 12,356
Cash at Beginning of Period 1,089 2,284 -
___________ ______________ _____________
Cash at End of Period $ 12,356 $ 1,089 $ 12,356
___________ ______________ _____________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Non-Cash Investing and Financing Activities:
For the Year Ended December 31, 1999:
None
For the Year Ended December 31, 1998:
None
The accompanying notes are an integral part of these financial statement.
-5-
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of
Delaware on August 1, 1995. The Company is considered a development stage
company as defined in SFAS No. 7. The Company was formed to engage in the
business of television marketing of hair products. During 1996, the Company
discontinued the marketing of hair products and is currently considering
other business opportunities or potential business acquisitions. During
1999, the Company purchased champagne as an investment, but is still seeking
other potential business ventures. 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.
Organization Costs - The Company is amortizing its organization costs, which
reflect amounts expended to organize the Company, over sixty [60] months
using the straight line method. Amortization expense for 1999 and 1998 was
$167 and $100.
(Loss) Per Common Share - The computation of loss per common share is based
on the weighted average number of shares outstanding during the period
presented.
Investment - Investments in wine and champagne are carried at the lower of
cost or market value.
Accounting Estimates - Te preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimated by management.
Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", SFAS No. 134, "Accounting for Mortgage-
Backed Securities." and SFAS No. 135, "Rescission of FASB Statement No. 75
and Technical Corrections" were recently issued. SFAS No. 132, 133, 134 and
135 have no current applicability to the Company or their effect on the
financial statements would not have been significant
NOTE 2 - CAPITAL STOCK
Common Stock - During September, 1995, in connection with its organization,
the Company issued 950,000 shares of its previously authorized, but unissued
common stock. Total proceeds from the sale of stock amounted to $28,500 (or
$.03 per share). During October, 1995, the Company made a public offering of
50,000 of its previously authorized but unissued common stock. Total
proceeds from the public sale of stock amounted to $5,000. Direct offering
costs offset against the proceeds were $4,950.
During December 1999, the Company issued 250,000 shares of its previously
authorized but unissued common stock. Total proceeds from the sale of stock
amounted to $50,000 (or $.20 per share)
Preferred Stock - The Company has authorized 250,000 shares of preferred
stock, $.001 per value, with such rights, preferences and designations and to
be issued in such series as determined by the Board of Directors. No shares
are issued and outstanding at December 31, 1999 and 1998.
-6-
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INVESTMENT
During November 1999 the Company acquired champagne from an entity that at the
time was related to a significant shareholder of the Company. The champagne
was acquired for $115,830 which was the carryover cost basis of the related
entity. A note payable in the amount of $115,830 was given as consideration
for the champagne.
During December 1999 the Company paid cash of $37,741 to purchase wine as an
investment. The wine was purchased from an unrelated entity.
NOTE 4 - NOTE PAYABLE - RELATED PARTY
On November 15, 1999 the Company purchased $115,830 of its investment in
champagne from an entity controlled by a shareholder of the Company for a note
payable in the amount of $115,830. The note is due in 6 months and provides
for interest at 6% per annum.
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
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.
The Company has available at December 31, 1999, unused operating loss
carryforwards of approximately $29,000 which may be applied against future
taxable income and which expire in various years from 2010 through 2018. 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 amount of the loss
carryforwards and, therefore, no deferred tax asset has been recognized for
the loss carryforwards. The net deferred tax assets are approximately $9,900
and $9,200 as of December 31, 1999 and 1998, respectively, with an offsetting
valuation allowance at each year end of the same amount resulting in a change
in the valuation allowance of approximately $700 during 1999.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - Officers and directors have not devoted any
significant time to the Company's operations nor has the Company paid any
compensation to its officers and directors.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his office
as a mailing address, as needed, at no expense to the Company.
NOTE 7 - DEVELOPMENT STAGE COMPANY
The Company was formed with a very specific business plan. The Company
expended virtually all of its working capital in a relatively short time
period and was not successful in establishing on-going profitable operations.
Consequently, the Company discontinued its operations of engaging in
television marketing. The Company currently has no on-going operations.
-7-
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of
the Company as a going concern. However, the Company has incurred losses
since inception, has expended most of its working capital and has not yet
been successful in establishing profitable 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 additional funds
through loans, or through additional sales of its
common stock or through the acquisition of other companies. There is no
assurance that the Company will be successful in raising this additional
capital.
NOTE 9 - EARNINGS PER SHARE
The following data shows the amounts used in computing loss per share for the
periods presented.
For the From Inception
Year Ended on August 1,
December 31, 1995 Through
_________________ December 31,
1999 1998 1999
________ ________ _____________
Loss from continuing operations
available to common shareholders
(numerator) $(2,482) $ (1,348) $ (11,529)
________ ________ _____________
Loss from discontinued operations
(numerator) $ - $ - $ (18,300)
________ ________ _____________
Weighted average number of
common shares outstanding used
in loss per share calculation for
the period (denominator) 1,015,753 1,000,000 1,001,581
_________ ________ _____________
-8-
<PAGE>
No dealer, salesman or other person
is authorized to give any
information or to make any
representations other than those
contained in this prospectus in
connection with the offer made in
this offering. If given or made,
the information or representations
must not be relied upon as having
been authorized by Power Marketing.
This prospectus does not constitute
an offer to sell or a solicitation
of an offer to buy any of the
securities covered in this offering,
in any jurisdiction or to any person
to whom it is unlawful to make the
offer or solicitation in the
jurisdiction. Neither the delivery
of this prospectus nor any sale made
hereunder shall, in any
circumstances, create any
implication that there has been no
change in the affairs of Power
Marketing since the date of this
prospectus.
Until September 20, 2000, 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.
POWER MARKETING, INC.
1,250,000 warrants
1,250,000 shares
Common stock purchase warrants
and common stock
PROSPECTUS
June 22, 2000
<PAGE>
