As filed with the Securities and Exchange Commission on August 9, 1996
Registration No. 33-
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HEALTH BUILDERS INTERNATIONAL, INC.
(Name of small business issuer in its charter)
Delaware (State or other jurisdiction of incorporation or organization)
5960 (Primary Standard Industrial Classification Code Number)
Applied For (I.R.S. Employer Identification No.)
2077 Elderberry Way, Sandy, Utah 84092 (801) 553-8972
(Address and telephone number of principal executive
offices and place of business)
L. Dee Hall, 2077 Elderberry Way, Sandy, Utah 84092 (801) 553-8972
(Name, address and telephone number of agent for service)
Copies to:
Thomas G. Kimble & Van L. Butler
THOMAS G. KIMBLE & ASSOCIATES (801) 531-0066
311 South State Street, Suite 440, Salt Lake City, Utah 84111
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this registration statement.
_______________________________________________________________________________
CALCULATION OF REGISTRATION FEE
Title of Each Class|Amount to be|Proposed Maximum |Proposed Maximum|Amount
of Securities to be|Registered |Offering Price/Unit|Aggregate Price |of fee
Registered
Common Stock 500,000 $ .20 $ 100,000 $100.00
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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 the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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500,000 Shares
HEALTH BUILDERS INTERNATIONAL, INC.
Common Stock
Health Builders International, Inc. (the "Company"), is offering, on a
"best efforts, minimum-maximum" basis, up to 500,000 shares of its $.001 par
value common stock, (the "Shares") to the public at a price of $.20 per Share.
Prior to this offering, there has been no public market for the Shares.
The Shares will not be listed on an exchange or quoted on the NASDAQ system
upon completion of this offering and there can be no assurance that a market
will develop or, if a market should develop, that it will continue. The
initial public offering price has been arbitrarily determined by the Company
and bears no relationship to assets, shareholders' equity or any other
recognized criteria of value.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL AND IMMEDIATE
DILUTION AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD TO RISK THE
LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Price to Commissions & Proceeds to
Public(1) Discounts(1)(2) Company (2)
Per Share $.20 $.028 $.172
Total Minimum $ 50,000 $ 7,000 $ 43,000
Total Maximum $ 100,000 $14,000 $ 86,000
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(1) The offering price is payable in cash upon subscription. The offering
will be managed by the Company and the Shares will be offered and sold by
the officers of the Company, without any discounts or other commissions.
Licensed NASD Broker-dealers may also participate and receive a commission
of up to 14% of the offering price on sales made by them. See "Plan of
Distribution."
(2) Proceeds to the Company are shown assuming payment of commissions to
licensed NASD broker-dealers with respect to all shares sold, but before
deducting other offering expenses payable by the Company for legal and
accounting fees and printing costs.
(3) Proceeds will be deposited no later than noon of the next business day
after receipt into an escrow account with Brighton Bank, 311 South State
Street, Salt Lake City, Utah 84111, pending receipt of subscriptions for
at least $50,000. If subscriptions for a minimum of 250,000 Shares have
not been received within 120 days from the date hereof (unless extended by
the Company for up to 60 additional days), all proceeds will be promptly
refunded to subscribers without interest thereon or deduction therefrom.
Subscribers will have no right to return or use of their funds during the
offering period, which may last up to 180 days.
The Shares are being offered by the Company subject to prior sale, receipt
and acceptance by the Company, approval of certain matters by counsel, and
certain other conditions. The Company reserves the right to withdraw or cancel
such offer and reject any order, in whole or in part.
The date of this Prospectus is , 1996
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AVAILABLE INFORMATION
The Company has filed with the United States Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2, under the
Securities Act of 1933, as amended (the "Securities Act), with respect to the
securities offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information contained
in the Registration Statement. For further information regarding both the
Company and the Securities offered hereby, reference is made to the
Registration Statement, including all exhibits and schedules thereto, 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 from the Washington, D.C. office upon request
and payment of the prescribed fee.
As of the date of this Prospectus, the Company became subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(The "Exchange Act") and, in accordance therewith, will file reports and other
information with the Commission. Reports and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act 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 such 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.
Copies of the Company's Annual, Quarterly and other Reports which will be
filed by the Company with the Commission commencing with the Quarterly Report
for the first quarter ended after the date of this Prospectus (due 45 days
after the end of such quarter) will also be available upon request, without
charge, by writing Health Builders International, Inc., 2077 Elderberry Way,
Sandy, Utah 84092.
UNTIL [90 DAYS AFTER THE DATE OF THIS PROSPECTUS], ALL DEALERS EFFECTING
TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY STATE SECURITIES
COMMISSION OR OTHER STATE REGULATORY AUTHORITY, AND NO SUCH REGULATORY
AUTHORITY HAS PASSED UPON THE TERMS OF THIS OFFERING OR APPROVED THE MERITS
THEREOF. INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THIS OFFERING IN EVALUATING THE MERITS AND RISKS OF THE OFFERING AND
MAKING AN INVESTMENT DECISION.
THIS PROSPECTUS SHOULD BE READ IN ITS ENTIRETY BY ANY PROSPECTIVE INVESTOR
PRIOR TO HIS OR HER INVESTMENT.
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PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more detailed information
appearing elsewhere in the Prospectus.
The Company
Health Builders International, Inc. (the "Company") was recently
incorporated under the laws of the State of Delaware on July 3, 1996. The
Company has not commenced active business operations and is considered a
development stage company. The Company was formed to establish a training and
distribution center for the development of multi-level marketing networks in
the health and nutrition industry, to train and assist people involved in
network marketing for various health and nutrition companies in recruiting, and
also to provide customized mailing and fax services. The Company's business
strategy is to capitalize on the increasing use of multi-level marketing by
health and nutrition companies, by providing training services and otherwise
assisting people to become successfully involved in multi-level marketing. See
"Business."
The Company's mailing address and telephone number of its principal
executive offices are 2077 Elderberry Way, Sandy, Utah 84092. (801) 553-8972.
The Offering
Securities offered
500,000 Shares of Common Stock, $.001 par value ("Common Stock") of the
Company. See "Description of Securities".
Offering Price
$.20 Per Share.
Plan of Distribution
The offering will be managed by the Company and the Shares will be offered and
sold by the officers of the Company, without any discounts or other
commissions. Licensed NASD Broker-dealers may also participate and receive
commissions of up to 14% of the offering price on sales made by them. Offering
proceeds will be escrowed pending completion or termination of the offering.
The offering will terminate 120 days from the date hereof (or 180 days if
extended by the Company for an additional 60 days), and funds held in escrow
will be promptly returned to subscribers, without interest thereon or deduction
therefrom, unless the offering is completed on or before that date upon receipt
of subscriptions for at least the minimum offering amount ($50,000). See "Plan
of Distribution."
Escrow Agent
Brighton Bank, 311 South State Street, Salt Lake City, Utah 84111 will serve as
escrow agent for receipt of the proceeds from this offering.
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Transfer Agent
Interwest Transfer Co., Inc., 1981 East 4800 South, Suite 100, P.O. Box 17136,
Salt Lake City, Utah 84117, (801) 272-9294, has agreed to serve as transfer
agent and registrar for the Company's outstanding securities upon completion of
the offering.
Securities Outstanding
The Company is authorized to issue up to 50,000,000 shares of Common Stock and
presently has 2,000,000 shares of Common Stock issued and outstanding. Upon
completion of this offering, if all Shares offered herein are sold, 2,500,000
shares of Common Stock will then be issued and outstanding; 2,250,000 Shares
will be issued and outstanding if only the minimum number of Shares offered
herein are sold. In addition, the Company is authorized to issue up to 500,000
shares of Preferred Stock in one or more series with such rights and
preferences as the Board of Directors may designate. The sole Director has not
designated any such series and no preferred shares are presently issued and
outstanding.
Risk Factors
The Company is a start up company with no operating history; consequently, an
investment in the Company is highly speculative. Investors will suffer
substantial dilution in the book value per share of the Common Stock compared
to the purchase price. In seeking to implement its proposed business, the
Company could incur substantial losses during the development stage, and
require additional funding for which it has no commitments. Management has
other interests which may conflict with the interests of the Company. Until
such time, if ever, that the Company generates sufficient revenue to pay a
salary to management, management will not be employed full time and will only
devote a minimal amount of time to the affairs of the Company. No person
should invest in the Company who cannot afford to risk loss of their entire
investment. See "Risk Factors."
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RISK FACTORS
The securities being offered hereby involve a high degree of risk.
Prospective investors should carefully consider the following risk factors
before investing in the Company.
Risks Inherent in a New Start Up Company
No Operating History. The Company was only recently incorporated, has no
significant assets, no history of operations and is considered to be a
development stage enterprise. There is absolutely no assurance that the
Company will be able, upon completion of this offering, to successfully
implement its proposed business or that it will ever operate profitably.
Dependence Upon Part Time Management/Business and Time Conflicts. As
compared to many other public companies, the Company does not have a depth of
managerial and technical personnel. Management of the Company has only limited
experience with the business proposed to be engaged in by the Company.
Furthermore, the officers of the Company will not be employed full time, at
least initially, and are involved with other businesses and have other
interests which could give rise to conflicts of interest with respect to the
business of and amount of time devoted to the Company. There is no assurance
such conflicts will be resolved favorably to the Company. See "Certain
Transactions - Conflicts of Interest".
Limited Liability of Management. The Company has adopted provisions to
its Articles of Incorporation and Bylaws which limit the liability of Officers
and Directors and provide for indemnification by the Company of Officers and
Directors to the full extent permitted by Delaware corporate law, which
generally provides that officers and directors shall have no personal liability
to a Company or its stockholders for monetary damages for breaches of their
fiduciary duties as officers and directors, except for breaches of their duties
of loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, acts involving unlawful payment of
dividends or unlawful stock purchases or redemptions, or any transaction from
which an officer or director derives an improper personal benefit. Such
provisions substantially limit the shareholders' ability to hold officers and
directors liable for breaches of fiduciary duty, and may require the Company to
indemnify its officers and directors. See "Certain Transactions - Conflicts of
Interest".
No Dividends. The Company does not currently intend to pay cash dividends
on its Common Stock and does not anticipate paying such dividends at any time
in the foreseeable future. At present, the Company will follow a policy of
retaining all of its earnings, if any, to finance development and expansion of
its business. See "Dividend Policy."
Limited Capital/Need for Additional Capital. The Company presently has no
significant operating capital and is totally dependent upon receipt of the
proceeds of this offering to provide the minimum capital necessary to commence
its proposed business. Upon completion of the offering, the amount of capital
available to the Company will still be extremely limited, especially if only
the minimum amount of the offering is raised. The Company has no commitments
for additional cash funding beyond the proceeds expected to be received from
this offering. In the event that the proceeds from this offering are not
sufficient, the Company may need to seek additional financing from commercial
lenders or other sources, for which it presently has no commitments or
arrangements.
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Risks Related to the Nature of the Proposed Business
Benefits to Management. All of the officers are presently involved
personally or through controlled entities in large multi-level marketing
organizations or networks with extensive sales downlines comprising thousands
of people who distribute the health and nutrition products of various companies
engaged in such business. Management intends to recruit people in these
networks as potential trainees and users of the Company's products and
services. Management believes that this arrangement will be mutually
beneficial to the Company and themselves, in that the Company will benefit from
the pool of potential recruits to its services, and these organizations will
benefit from any improved marketing effectiveness of its members who use the
Company's training and other services.
Government Regulation. Although the Company itself will not be engaged
directly in multi level marketing of health and nutrition products for any
company, the multi level marketing and health and nutrition industries are both
subject to extensive regulations relating to, inter alia, product claims and
marketing methods. As part of the process of training and otherwise assisting
others to be effective as multi level marketing representatives, management of
the Company must maintain an awareness of applicable regulatory requirements to
avoid causing a violation of any such requirements.
Risks Related to the Offering
Best Efforts Offering/No Firm Commitment. The Shares are offered by the
Company on a "best efforts, minimum-maximum basis"; there is no underwriter and
no firm commitment from anyone to purchase all or any of the Shares offered.
No assurance can be given that all or any of the Shares will be sold. However,
escrow provisions have been made to insure that if subscriptions for a minimum
of 250,000 Shares are not received within the offering period, plus any
extensions, all funds received will be promptly refunded to subscribers,
without interest thereon or deduction therefrom. During the offering period,
which could last up to 180 days, subscribers will receive no interest on their
funds nor have any use or right to return of the funds.
Continuation of Control by Present Shareholders. Upon completion of this
offering, present shareholders will own a majority of the total outstanding
securities and will have absolute voting control of the Company. Investors in
this offering will have no ability to remove, control or direct such
management. Only one third of the outstanding shares is required to constitute
a quorum at any stockholders' meeting, and action may be taken by a majority of
the voting power present at a meeting, or may be taken without a meeting by
written consent of stockholders holding a majority of the total voting power.
See "Principal Stockholders" and "Description of Securities."
Benefits to Present Stockholders/Disproportionate Risks. The present
stockholders of the Company, paid $10,000 cash for the 2,000,000 shares of the
Company's Common Stock which are presently outstanding. If all 500,000 Shares
offered herein are sold, immediately after completion of the offering, present
stockholders will still own 80% of the then outstanding Common Stock.
Investors in this offering will own the other 20%, for which they will have
paid $100,000 cash. If only the minimum number of Shares offered is sold,
present stockholders will own of 89% the then outstanding Common Stock.
Investors in this offering will own the other 11%, for which they will have
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paid $50,000 cash. Thus, the cash contributed to capital of the Company by
investors in this offering is disproportionately greater than the Common Stock
ownership percentage they receive. Present stockholders will benefit from a
greater share of the Company if successful, while investors in this offering
risk a greater loss of cash invested if the Company is not successful. See
"Comparative Data."
Dilution. Investors in this offering will suffer substantial dilution in
the purchase price of the Shares compared to the net tangible book value per
share immediately after the offering. See "Dilution."
Lack of Underwriter Participation. Because the Company has not engaged
the services of an Underwriter with respect to this offering, the independent
due diligence review of the Company, its affairs and financial condition, which
would ordinarily be performed by an underwriter and its legal counsel, has not
been performed with respect to the Company and investors will not have the
benefit of an underwriter's independent due diligence review.
Potential Issuance of Additional Common and Preferred Stock. The Company
is authorized to issue up to 50,000,000 shares of Common Stock, of which only
2,500,000 shares at most will be issued and outstanding upon completion of this
offering. The Board of Directors of the Company will have the ability, without
seeking shareholder approval, to issue additional shares of Common Stock in the
future for such consideration as the Board of Directors may consider
sufficient. The issuance of additional Common Stock in the future will reduce
the proportionate ownership and voting power of the Common Stock offered
hereby. The Company is also authorized to issue up to 500,000 shares of
preferred stock, the rights and preferences of which may be designated in
series by the Board of Directors. Such designations may be made without
shareholder approval. The Board of Directors has not designated any series or
issued any shares of preferred stock. The designation and issuance of series
of preferred stock in the future would create additional securities which would
have dividend and liquidation preferences over the Common Stock offered hereby.
See "Description of Securities."
Shares Eligible for Future Sale. All shares of Common Stock presently
outstanding are restricted securities and/or securities held by affiliates
which are not presently eligible, but may in the future be eligible to sell,
pursuant to Rule 144, in any public market that may develop for the Common
Stock. Future sales by current shareholders could depress the market prices of
the Common Stock in any such market. See "Shares Eligible for Future Sale".
Arbitrary Determination of Offering Price. The public offering price of
the Shares of Common Stock offered hereby was arbitrarily determined by
management of the Company and was set at a level substantially in excess of the
price recently paid by present shareholders for securities of the same class.
The price bears no relationship to the Company's assets, book value, net worth
or other economic or recognized criteria of value. In no event should the
public offering price be regarded as an indicator of any future market price of
the Company's securities.
No Assurance of a Liquid Public Market for Securities. There has been no
public market for the Shares prior to the offering made hereby. The Shares
will not be listed on an exchange or quoted on the NASDAQ system upon
completion of this offering and there can be no assurance any market will
develop for the securities or that if a market does develop, that it will
continue. There can also be no assurance as to the depth or liquidity of any
market for Common Stock or the prices at which holders may be able to sell the
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securities. As a result, an investment in the Shares may be totally illiquid
and investors may not be able to liquidate their investment readily or at all
when they need or desire to sell.
Volatility of Stock Prices. In the event a public market does develop for
the Shares, market prices will be influenced by many factors, and will be
subject to significant fluctuation in response to variations in operating
results of the Company and other factors such as investor perceptions of the
Company, supply and demand, interest rates, general economic conditions and
those specific to the industry, international political conditions,
developments with regard to the Company's activities, future financial
condition and management.
Applicability of Penny Stock Risk Disclosure Requirements. The securities
of the Company will be considered a "penny stock" as that term is defined in
rules promulgated under the Exchange Act. Under these rules, broker-dealers
participating in transactions in penny stocks must first deliver a risk
disclosure document which describes the risks associated with penny stocks, the
broker-dealer's duties, the customer's rights and remedies, and certain market
and other information, and make a suitability determination approving the
customer for penny stock transactions based on the customer's financial
situation, investment experience and objectives. Broker-dealers must also
disclose these restrictions in writing to the customer, obtain the specific
written consent of the customer, and provide monthly account statements to the
customer. With these restrictions, the likely effect of designation as a penny
stock will be to decrease the willingness of broker-dealers to make a market,
to decrease the liquidity of the stock and increase the transaction cost of
sales and purchases as compared to other securities not so designated. See
"Plan of Distribution."
DILUTION
Dilution is the difference between the public offering price of $.20 per
share for the Common Stock offered herein, and the net tangible book value per
share of the Common Stock immediately after its purchase. The Company's net
tangible book value per share is calculated by subtracting the Company's total
liabilities from its total assets less any intangible assets, and then dividing
by the number of shares then outstanding.
The net tangible book value of the Company prior to the offering, based on
the July 17, 1996 date of inception financial statements, was $9,000 or
approximately $.005 per common share. Prior to selling any shares in this
offering, the Company has 2,000,000 shares of Common Stock outstanding.
If all Shares offered herein are sold, the Company will have 2,500,000
shares outstanding upon completion of the offering. The post offering pro
forma net tangible book value of the Company, which gives effect to receipt of
the net proceeds from the offering (assuming payment of a sales commission on
all shares sold) and issuance of the additional Shares of Common Stock in the
offering, but does not take into consideration any other changes in the net
tangible book value of the Company after July 17, 1996, will be $83,000 or
approximately $.033 per share. This would result in dilution to investors in
this offering of $.167 per share, or 83.5% from the public offering price of
$.20 per share. Net tangible book value per share would increase to the
benefit of present stockholders from $.005 prior to the offering to $.033 after
the offering, or an increase of $.028 per share attributable to purchase of the
Shares by investors in this offering.
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If only the minimum number of Shares is sold, the Company will have
2,250,000 Shares outstanding upon completion of the offering. The post
offering pro forma net tangible book value of the Company will be $40,000 or
approximately $.018 per share. This would result in dilution to investors in
this offering of $.182 per share, or 91% from the public offering price of $.20
per share. Net tangible book value per share would increase to the benefit of
present stockholders from $.005 prior to the offering to $.018 after the
offering, or an increase of $.013 per share attributable to the purchase of the
Shares by investors in this offering.
The following table sets forth the estimated net tangible book value
("NTBV") per share after the offering and the dilution to persons purchasing
Shares based on the foregoing minimum and maximum offering assumptions.
Minimum Maximum
Public offering price/share $.20 $.20
NTBV/share prior to offering $.005 $.005
Increase attributable to new investors .013 .028
----- -----
Post offering pro forma NTBV/share .018 .033
---- ----
Dilution $.182 $.167
COMPARATIVE DATA
The following charts illustrate the pro forma proportionate ownership in
the Company, upon completion of the offering under alternative minimum and
maximum offering assumptions, of present stockholders and of investors in this
offering, compared to the relative amounts paid and contributed to capital of
the Company by present stockholders and by investors in this offering, assuming
no changes in net tangible book value other than those resulting from the
offering.
MINIMUM OFFERING Shares Owned Percent Cash Paid Percent Per share
Present Shareholders 2,000,000 89% $ 10,000 16.7% $0.005
New Investors 250,000 11% $ 50,000 83.3% $0.20
MAXIMUM OFFERING Shares Owned Percent Cash Paid Percent Per share
Present Shareholders 2,000,000 80% $ 10,000 9% $0.005
New Investors 500,000 20% $100,000 91% $0.20
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 500,000 Shares
offered hereby at a public offering price of $.20 per Share will vary depending
upon the total number of Shares sold and the amount of any commissions paid to
licensed NASD broker-dealers in connection with such sales. Regardless of the
amount of any commissions paid, the Company also expects to incur other
offering expenses estimated at $12,000 for legal, accounting, printing and
other costs in connection with the offering. The following table sets forth
gross and net proceeds, alternatively under the minimum and maximum offering,
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assuming that commissions are paid with respect to all sales, and management's
present estimate of the allocation and prioritization of net proceeds expected
to be received from this offering. Actual receipts and expenditures may vary
from these estimates. Pending use, the Company will invest the net proceeds in
investment-grade, short-term, interest bearing securities.
Minimum Offering Maximum Offering
Gross Proceeds $ 50,000 $100,000
Commissions (1) 7,000 14,000
Other Offering Expenses (2) 12,000 12,000
NET OFFERING PROCEEDS $ 31,000 $ 74,000
Compensation (3) $ 18,000 $ 36,000
Office Equipment (4) 2,000 2,000
Operating Expenses & Working Capital (5) 11,000 36,000
TOTAL $ 31,000 $ 74,000
(1) The foregoing amount assumes payment of sales commissions with respect to
all Shares sold. The Company will pay a commission of up to 14% of the
offering price to any licensed NASD Broker-dealers who participate in the
offering, but only with respect to sales made by them. To the extent that
sales are made by the officers of the Company without the payment of any
sales commission or discount, the amount allocated above for the payment
of commissions will be reallocated and used as additional working capital
for the Company's operations.
(2) Regardless of the number of Shares sold in the offering and the amount of
any commissions paid, the Company will incur other offering expenses for
legal and accounting fees and costs, printing and transfer agent costs,
filing fees, etc.
(3) Although management will not receive any regular salary or wage initially,
the Company intends to hire a full time secretary, a part time manager and
other part time help, and anticipates incurring approximately $1,500 per
month in payroll costs. The amount allocated would cover such expenses
for approximately one to two years, depending on the total amount raised
in the offering.
(4) The Company intends to acquire various office equipment, including copy,
fax and postage and other machines.
(5) The Company anticipates incurring approximately $1,000 to $1,250 per month
in operating expenses for phone, postage, advertising, travel and office
supplies.
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MANAGEMENT'S PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and the notes associated with
them contained elsewhere in this prospectus.
Plan of Operations.
The Company was only recently incorporated on July 3, 1996. The Company
has not commenced planned principal operations and is considered a development
stage company. The Company has no significant assets, no active business
operations nor any results therefrom. To date, activities have been limited to
organizational matters and the preparation and filing of the registration
statement of which this prospectus is a part.
Management's plan of operation for the next twelve months is first to
raise funds from this offering. If the offering is successful, the Company
intends to use the proceeds primarily to acquire office equipment, hire
employees and cover the payroll costs and otherwise provide operating capital
during the start up period of operations until the Company can begin generating
revenues from operations to thereafter cover ongoing expenses. The Company is
totally dependent upon the successful completion of this offering and receipt
of at least the minimum amount of proceeds therefrom, of which there is no
assurance, for the ability to commence its intended business operations.
Inasmuch as there is no assurance that this offering will be successful
and that the Company will receive any net proceeds therefrom, the Company has
not entered into any contractual commitments and will not do so unless and
until the offering is completed. Therefore there is absolutely no assurance
that the Company will be able, with the proceeds of this offering, to
successfully commence proposed business operations. At this time, no
assurances can be given with respect to the timing of commencement of
operations or the length of time after commencement that it will be necessary
to fund operations from proceeds of this offering.
Depending on the total amount raised in the offering, management believes
that the net proceeds from the offering will provide working capital for one to
two years after commencement of operations, during which time management
anticipates that the Company will begin generating sufficient revenues to cover
ongoing expenses. However, there is absolutely no assurance of this. If the
Company is unsuccessful, investors will have lost their money and management
will not attempt to pursue further efforts with respect to such business, and
it is unlikely the Company would have the financial ability to do so in any
event. Instead management will call a shareholders meeting to decide whether
to liquidate the Company or what direction the Company will pursue, if any.
However, the Company presently has no plans, commitments or arrangements with
respect to any other potential business venture and there is no assurance the
Company could become involved with any other business venture, especially any
business venture requiring significant capital.
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BUSINESS
History of the Company
Health Builders International, Inc. (the "Company") was recently
incorporated under the laws of the State of Delaware on July 3, 1996. The
Company has not commenced business operations and is considered a development
stage company. To date, activities have been limited to organizational matters
and the preparation and filing of the registration statement of which this
prospectus is a part. In connection with the organization of the Company, the
founding shareholders of the Company contributed an aggregate of $10,000 cash
to capitalize the Company in exchange for 2,000,000 shares of Common Stock.
The Company has no significant assets, and is totally dependent upon the
successful completion of this offering and receipt of the proceeds therefrom,
of which there is no assurance, for the ability to commence its proposed
business operations.
Proposed Business of the Company
The Company was formed for the purpose of engaging in the business of
providing training and other related services for multi level marketing
representatives. The Company was formed to establish a training and
distribution center for the development of multi-level marketing networks in
the health and nutrition industry, to train and assist people involved in
network marketing for various health and nutrition companies in recruiting, and
also to provide customized mailing and fax services.
The individual members of management of the Company are all involved in
multi level marketing organizations, as distributors for various companies in
the health and nutrition industry, which market their products through multi
level or network marketing. Based on their experience with multi level
marketing, management believes that a substantial need exists for training of
multi level marketing representatives or distributors and potential recruits,
to show them how to be more effective in recruiting others to become consumers
and distributors of the products, and also to provide customized mailing and
fax services to assist marketing representatives to recruit others on a mass
solicitation basis.
Management believes that some of the best companies within the multi level
marketing industry are companies involved in the health and nutrition industry,
taking advantage of the health wave that is taking place in North America.
Management believes that the multi level marketing system is ideally suited to
marketing health and nutrition products because sales of such products are
strengthened by ongoing personal contact between retail consumers and
distributors, most if not all of whom are also users of the products being
marketed. The Company's business strategy is to capitalize on the increasing
use of multi-level marketing by health and nutrition companies, by providing
training services and otherwise assisting people to become successfully
involved in multi-level marketing.
Marketing Methods
Management intends to market the proposed products and services to be
provided by the Company primarily to the distributors and other multi level
marketing representatives in the sales downlines of the multi level marketing
organizations which the members of management are affiliated with. Based on
the number of marketing representatives currently in all the organizations
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which the individual members of management are affiliated with, this represents
a pool of potential trainees and users of the services of the Company in excess
of fifteen thousand people. Management intends to direct its recruiting
efforts on behalf of the Company toward this group of people, and will make
them aware of the products and services of the Company through the personal,
telephone, mailing and other contacts that regularly occur in the course of the
multi level marketing conducted through these organizations. Management will
use the opportunity of these contacts to solicit such persons on behalf of the
Company to use the Company's products and services.
Management believes that this arrangement will be mutually beneficial to
the Company and themselves, in that the Company will benefit from the pool of
potential recruits to its services, and these organizations will benefit from
any improved marketing effectiveness of its members who use the Company's
training and other services.
Products and Services
Once an individual has joined one or more of the multi level marketing
organizations sponsored by the members of management of the Company, they will
solicit such persons to take advantage of the services to be provided by the
Company, to help them succeed in multi level marketing by providing the
following services:
1. The Company has designed direct mail programs for each of the health
and nutrition companies that the members of management are affiliated with
as distributors. Each new member will be asked to provide a list of 50 to
100 names of acquaintances that the Company will mail an information
package to. This can be done with or without using the name of the new
member.
2. The Company will provide a voice mail system that the individuals
receiving the information package will asked be to respond to. When they
call the toll free number for additional information, they will hear a
recorded message from a successful leader in that particular company. The
message will help them to understand the potential of true financial and
time freedom that can be realized through the multi level marketing
program that exists in that particular company. They will then be asked
to leave their name and phone number in order for someone to contact them
personally.
3. The Company will provide a fax on demand service that will also be
made available to the contacts to receive additional information about the
Company.
4. After the initial information package has been sent and the screening
process has taken place, the new member will then be contacted with the
names of acquaintances who have responded positively and are seriously
interested in the opportunity.
5. The members of management will then make themselves available to help
the new member contact those who have expressed an interest, on a 3 way
conference call or in some instances in person, to solicit them to join
the multi level marketing organization downline from the new member.
6. The members of management will also provide weekly and monthly
training seminars that will help the members learn how to motivate and
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work with their downline organizations as they are developing. These will
be hands on seminars taught by people who have actually succeeded in the
multi level marketing industry.
7. The Company will also provide direct mail services for any type of
promotion that members may want to use as their organizations mature.
8. Computer profiling, metabolic profiles, fat testing and support groups
will also be made available by or through the Company.
Management presently intends to charge an annual fee of $49.95 to register
and actively use the services of the Company on an ongoing basis. The annual
fee will be collected each year on the anniversary date of the client's initial
sign up. If a person is also signing up as a new member of a multi level
marketing organization at the same time, fees may also be incurred to the multi
level marketing company that the person joins. Other charges by the Company
will be for the mass mailings, fax and other services provided by the Company,
which will be charged for on an as used basis. Fees will be set in amounts
necessary to recover the actual cost of materials and postage incurred for such
services plus a profit of 10%-20% to the Company. There will also be
additional fees charged for computer profiling, metabolic profiles and
counseling, fat testing, and ongoing support group participation for specific
health concerns. and weight management.
Government Regulation.
Although the Company itself will not be engaged directly in multi level
marketing of health and nutrition products for any company, the Company's
business is directly related to and dependent on both the multi level marketing
and health and nutrition industries, which are both subject to extensive
regulations relating to, inter alia, product claims and marketing methods. As
part of the process of training and otherwise assisting others to be effective
as multi level marketing representatives, management of the Company must
maintain an awareness of applicable regulatory requirements to avoid causing a
violation of any such requirements.
Multi Level Marketing. The multi level marketing system is subject to a
number of federal and state regulations administered by the Federal Trade
Commission and various state agencies as well as regulations in foreign markets
administered by foreign agencies. Regulations applicable to multi level
marketing organizations have a general purpose of ensuring that solicitation
emphasizes product sales and that product sales are ultimately made to retail
consumers (as opposed to other distributors) who consume the products, and that
advancement within the multi level marketing structure is based on sales of the
products rather than investments in the organizations or other non-retail sales
related criteria. In some instances, the emphasis placed in solicitation
efforts and other marketing methods employed by distributors, including persons
the Company trains or otherwise assists, could influence regulatory
determinations of whether such regulatory requirements have been complied with.
Product Claims and Advertising. Advertisements and claims made with
respect to products, whether made by a multi level marketing company itself or
by the multi level marketing distributors, are strictly regulated. With
respect to health and nutrition companies, the products offered by such
companies are generally formulated using only herbal or other natural
ingredients classified by regulatory agencies such as the Food and Drug
Administration as being safe for consumption without further pre-market
clinical testing. A principal focus of regulations applicable to such products
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is to generally prohibit the making of therapeutic claims. The making of
impermissible therapeutic claims by distributors, including persons the Company
trains or otherwise assists, could result in reclassification subjecting
products to stricter regulations, or other sanctions.
Physical Facilities and Employees
The Company presently has no office facilities but for the time being will
use the home office facilities of Dee Hall, its President, in Sandy, Utah, on a
rent free basis as its principal place of business. Management does not intend
to seek other office arrangements immediately upon completion of the offering,
but will seek such arrangements at such time in the future as the Company's
business requires more extensive facilities, which is not anticipated in the
immediate future. The Company may use a portion of the proceeds of this
offering for such purpose, if and as needed.
The Company presently has no salaried employees, but upon completion of
the offering management anticipates the need to hire employees, including a
full time secretary, part time Manager and other part time help. The officers
of the Company will not be employed full time initially and will not receive a
regular salary, wage or other cash compensation for their time, unless and
until the Company's business operations develop to the point where a full time
or other extensive time commitment is required.
MANAGEMENT
Executive Officers, Directors and Significant Employees
The following table sets forth the directors and executive officers of the
Company, their ages, term served and all offices and positions with the
Company. A director is elected for a period of one year and thereafter serves
until his or her successor is duly elected by the stockholders and qualifies.
Officers and other employees serve at the will of the Board of Directors.
Name of Director Age Term Served Positions with Company
L. Dee Hall 51 Since inception President, Treasurer & Director
Glen Hatch 60 Since inception Vice President
Robert Blackley 60 Since inception Secretary
These individuals will serve as management of the Company. A brief
description of their background and business experience is as follows:
L. Dee Hall will serve as President, Treasurer and Director of the
Company. He and his wife have been involved in network marketing for the past
eight years, and have built multi-level marketing organizations in NuSkin
International, Brite Music (Dee was National Sales Manager for Brite) and Body
Wise International. They currently have a sales downline for over 13,000
people in Body Wise and Dee is a member of the Body Wise Executive Leadership
Council. Their organization generated over $500,000 in revenues last year.
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Glen Hatch will serve as Vice President of the Company. He has been
involved in direct sales for over 20 years and has established many successful
sales organizations. He is currently the President of Camper World, Inc. He
also has a large marketing organization in USANA, INC. and is a member of the
USANA top ten.
Robert Blackley will serve as Secretary of the Company. He and his wife
have built successful marketing organizations in NuSkin International, Santa
Rosa Gold, Accelerated Financial and Body Wise, and have also been involved in
real estate development for over ten years. They are currently directors in
Rexall Showcase.
The directors hold no directorships in any other companies subject to the
reporting requirements of the Securities Exchange Act of 1934.
Executive Compensation
The Company was only recently incorporated, has not yet commenced planned
operations and has not paid any compensation to its executive officers or
director to date.
Proposed Compensation. The officers of the Company will not be employed
full time initially and will not receive a regular salary, wage or other cash
compensation for their time, unless and until the Company's business operations
develop to the point where a full time or other extensive time commitment is
required. The officers will be entitled to reimbursement of any out of pocket
expenses reasonably and actually incurred on behalf of the Company.
CERTAIN TRANSACTIONS
In connection with the organization of the Company, its founding
shareholders paid an aggregate of $10,000 cash to purchase 2,000,000 shares of
Common Stock of the Company. See "Principal Shareholders."
It is contemplated that the Company may enter into certain transactions
with officers, directors or affiliates of the Company which may involve
conflicts of interest in that they will not be arms' length transactions.
These transactions include the following:
The Company presently has no office facilities but for the time being will
use as its business address the home of Dee Hall on a rent free basis, until
such time as the business operations of the Company may require more extensive
facilities and the Company has the financial ability to rent commercial office
space. There is presently no formal written agreement for the use of such
facilities, and no assurance that such facilities will be available to the
Company on such a basis for any specific length of time.
The Company has no formal written employment agreement or other contracts
with its officers, and there is no assurance that the services to be provided
by them, and facilities to be provided by Mr. Hall, will be available for any
specific length of time in the future. Mr. Hall anticipates initially devoting
up to approximately 20% of his time to the affairs of the Company, and the
other officers intend to devote approximately 5% of their time to the Company.
If and when the business operations of the Company increase and a more
extensive time commitment is needed, Mr. Hall and the other officers are
prepared to devote more time to the Company, in the event that becomes
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necessary. The amounts of compensation and other terms of any full time
employment arrangements with the Company would be determined if and when such
arrangements become necessary.
All of the officers are presently involved personally or through
controlled entities in large multi-level marketing organizations or networks
with extensive sales downlines comprising thousands of people who distribute
the health and nutrition products of various companies engaged in such
business. Management intends to recruit people in these networks as potential
trainees and users of the Company's products and services. Management believes
that this arrangement will be mutually beneficial to the Company and
themselves, in that the Company will benefit from the pool of potential
recruits to its services, and these organizations will benefit from any
improved marketing effectiveness of its members who use the Company's training
and other services.
Conflicts of Interest
Other than as described herein the Company is not expected to have
significant further dealings with affiliates. However, if there are such
dealings the parties will attempt to deal on terms competitive in the market
and on the same terms that either party would deal with an unrelated third
person. Presently no officer or director of the Company has any transactions
which they contemplate entering into with the Company, aside from the matters
described herein.
Management will attempt to resolve any conflicts of interest that may
arise in favor of the Company. Failure to do so could result in fiduciary
liability to management.
Indemnification and Limitation of Liability
The general corporation law of Delaware permits provisions in the
articles, by-laws or resolutions approved by shareholders which limit liability
of directors and officers for breach of fiduciary duty to certain specified
circumstances, namely, breaches of their duties of loyalty, acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of law, acts involving unlawful payment of dividends or unlawful stock
purchases or redemptions, or any transaction from which a director or officer
derives an improper personal benefit. The Company's by-laws indemnify its
officers and directors to the full extent permitted by Delaware law. The
by-laws with these exceptions eliminate any personal liability of an officer or
director to the Company or its shareholders for monetary damages for the breach
of fiduciary duty and therefore an officer or director cannot be held liable
for damages to the Company or its shareholders for gross negligence or lack of
due care in carrying out his or her fiduciary duties. The Company's Articles
provide for indemnification to the full extent permitted under law which
includes all liability, damages and costs or expenses arising from or in
connection with service for, employment by, or other affiliation with the
Company to the maximum extent and under all circumstances permitted by law.
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 or she successfully defends himself or herself.
Indemnification is prohibited as to any matter in which the director or officer
is adjudged liable to the corporation. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers, and controlling persons of the Company pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of
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the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock with respect to each
director of the Company, each person known to the Company to be the beneficial
owner of more than five percent (5%) of said securities, and all directors and
executive officers of the Company as a group:
Title Amount and Nature of Percent % After
Name and Address of Class Beneficial Ownership of Class Offering
L. Dee Hall Common 900,000 shares 45% 36%
2077 Elderberry Way
Sandy, UT 84092
Glen Hatch Common 200,000 shares 10% 8%
263 E. 3900 S.
Salt Lake City, UT 84107
Robert Blackley Common 200,000 shares 10% 8%
263 E. 3900 S.
Salt Lake City, UT 84107
All officers and directors Common 1,300,000 shares 65% 52%
as a group (3 persons)
Reed Jensen Common 700,000 shares 35% 28%
4348 Butternut Road
Salt Lake City, UT 84124
Prior to the sale of any Shares in this offering, these individuals are
the only shareholders of the Company. After offering percentages are
calculated assuming sale of all Shares in this offering. The foregoing amounts
include all shares these persons are deemed to beneficially own regardless of
the form of ownership. See "Certain Transactions."
DESCRIPTION OF SECURITIES
The following statements are qualified in their entirety by reference to
the detailed provisions of the Company's Articles of Incorporation and Bylaws,
copies of which will be furnished to an investor upon written request. The
Shares registered pursuant to the registration statement of which this
prospectus is a part are shares of Common Stock, all of the same class and
entitled to the same rights and privileges as all other shares of Common Stock.
Common Stock
The Company is presently authorized to issue 50,000,000 shares of $.001
par value Common Stock. The holders of common stock, including the Shares
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offered hereby, are entitled to equal dividends and distributions, per share,
with respect to the common stock when, as and if declared by the Board of
Directors from funds legally available therefor. No holder of any shares of
common stock has a pre-emptive right to subscribe for any securities of the
Company nor are any common shares subject to redemption or convertible into
other securities of the Company. Upon liquidation, dissolution or winding up
of the Company, 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 share of
common stock is entitled to one vote with respect to the election of any
director or any other matter upon which shareholders are required or permitted
to vote. Holders of the Company's 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.
The Company has reserved from its authorized but unissued shares a
sufficient number of shares of Common Stock for issuance of the Shares offered
hereby. The shares of Common Stock issuable on completion of the offering will
be, when issued in accordance with the terms of the offering, fully paid and
non-assessable. During the pendency of the offering, subscribers will have no
rights as stockholders of the Company until the offering has been completed and
the Shares have been issued to them.
Preferred Stock
The Company is also presently authorized to issue 500,000 shares of $.001
par value Preferred Stock. Under the Company's Articles of Incorporation, as
amended, 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 such 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 issuance of Preferred Stock may have
the effect of delaying or preventing a change in control of the Company 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. 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 such
series. Documents so filed are matters of public record and may be examined in
accordance with procedures of the Delaware Secretary of State, or copies
thereof may be obtained from the Company.
Transfer Agent
Interwest Transfer Co., Inc. 1981 East 4800 South, Suite 100, P.O. Box
17136, Salt Lake City, Utah 84117, (801) 272-9294, has agreed to serve as
transfer agent and registrar for the Company's outstanding securities upon
completion of the offering.
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Dividend Policy
The Company 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. It is the present intention of management to utilize all
available funds for the development of the Company's business. There is no
assurance that the Company will ever have excess funds available for the
payment of dividends. The only legal 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 State laws. Under Delaware corporate law, no
dividends or other distributions may be made which would render the Company
insolvent or reduce assets to less than the sum of its liabilities plus the
amount needed to satisfy any outstanding liquidation preferences.
SHARES ELIGIBLE FOR FUTURE SALE
All 2,000,000 shares of Common Stock currently outstanding are "restricted
securities," as that term is defined under Rule 144 promulgated under the
Securities Act of 1933, as amended, in that such shares were issued and sold by
the Company without registration, in private transactions not involving a
public offering, and/or are securities held by affiliates. Although such
restricted and affiliate securities are not presently tradeable in any public
market which may develop for the Common Stock, such securities may in the
future be publicly sold into any such market, if such a market should develop,
in accordance with the provisions of Rule 144. In general, under Rule 144 as
currently in effect, a nonaffiliated person (or group of persons whose share
are aggregated), can sell restricted securities, and affiliates of the Company
can sell restricted and other securities, in amounts that do not exceed within
any three-month period, 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 two years have elapsed since
the restricted securities being sold were acquired from the Company or any
affiliate of the Company, and provided further that certain other conditions
are also satisfied. If at least three years have elapsed since restricted
securities were acquired from the Company or an affiliate of the Company, a
person who has not been an affiliate of the Company for at least three months
is entitled to sell such restricted shares under Rule 144 without regard to any
limitations on the amount.
PLAN OF DISTRIBUTION
The Company is offering up to 500,000 Shares of its $.001 par value Common
Stock to the public on a "best efforts, 250,000 shares minimum, 500,000 shares
maximum" basis, at a price of $.20 per share. The offering will be managed by
the Company without an underwriter. The Company may enter into agreements with
securities broker-dealers who are members of the National Association of
Securities Dealers, Inc. (NASD), whereby these broker-dealers will be involved
in the sale of the Shares and will be paid a commission by the Company of up to
14% of the offering price of the Shares sold by them. In addition, the Shares
will be offered and sold by the officer of the Company, 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 such activities. This will be deemed to be a "parallel
distribution" and will not involve any reallocations between NASD members and
non-members. The Company will not compensate any of its officers or directors
for sale of securities hereunder but may pay a finders fee (not to exceed 14%)
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to other persons who introduce investors, where no sales commission is paid and
such payment is permitted under applicable state law.
There is no assurance that all or any of the Shares will be sold. If the
Company fails to receive subscriptions for a minimum of 250,000 Shares within
120 days from the date of this Prospectus (or 180 days if extended by the
Company), the offering will be terminated and any subscription payments
received will be promptly refunded within 5 days to subscribers, without any
deduction therefrom or any interest thereon. If subscriptions for at least the
minimum amount are received within such period, funds will not be returned to
investors and the Company may continue the offering until such periods expires
or subscriptions for all 500,000 Shares have been received, whichever occurs
first. All subscription payments should be made payable to Brighton Bank as
Escrow Agent for the Company. The Company and any participating broker-dealers
will mail or otherwise forward all subscription payments received, by noon of
the next business day following receipt, to Brighton Bank at 311 South State
Street, Salt Lake City, Utah 84111 for deposit into the escrow account being
maintained by Brighton Bank as escrow agent for the Company, pending receipt of
subscriptions for at least a minimum of 250,000 Shares or expiration of the
offering period, whichever occurs first. Subscription payments will only be
disbursed from the escrow account to the Company if at least 250,000 Shares are
sold, or if not sold, for the purpose of refunding subscription payments to the
subscribers. Subscribers will have no right to return or use of their funds
during the offering period, which may last up to 180 days.
LEGAL MATTERS
To the knowledge of management, there is no material litigation pending or
threatened against the Company. The validity of the issuance of the Shares
offered hereby will be passed upon for the Company by Thomas G. Kimble &
Associates, Salt Lake City, Utah.
EXPERTS
The consolidated financial statements of Health Builders International,
Inc. as of July 3, 1996, included in this Prospectus have been examined by
Pritchett, Siler & Hardy, independent certified public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance on such report given upon the authority of that firm as experts in
accounting and auditing.
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HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
JULY 17, 1996
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
CONTENTS
PAGE
_ Independent Auditors' Report 1
_ Balance Sheet, July 17, 1996 2
_ Statement of Operations, from inception
on July 3, 1996 through July 17, 1996 3
_ Statement of Stockholders' Equity,
from inception on July 3, 1996 through
July 17, 1996 4
_ Statement of Cash Flows, from inception
on July 3, 1996 through July 17, 1996 5
_ Notes to Financial Statements 6 - 7
<PAGE>
PRITCHETT, SILER & HARDY, P.C.
430 East 400 South
Salt Lake City, Utah 84111
(801) 328-2727
INDEPENDENT AUDITORS' REPORT
Board of Directors
HEALTH BUILDERS INTERNATIONAL, INC.
Sandy, Utah
We have audited the accompanying balance sheet of Health Builders
International, Inc. [a development stage company] at July 17,
1996, and the related statements of operations, stockholders'
equity and cash flows from inception on July 3, 1996 through July
17, 1996. 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. 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
Health Builders International, Inc. as of July 17, 1996, and the
results of its operations and its cash flows for the period from
inception through July 17, 1996, in conformity with generally
accepted accounting principles.
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
July 23, 1996
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
July 17,
1996
_____________
CURRENT ASSETS:
Cash in bank $ 9,000
ORGANIZATION COSTS, net 1,000
___________
$ 10,000
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ -
___________
Total Current Liabilities -
___________
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,
2,000,000 shares issued and
outstanding 2,000
Capital in excess of par value 8,000
Deficit accumulated during the
development stage -
___________
Total Stockholders' Equity 10,000
___________
$ 10,000
___________
The accompanying notes are an integral part of this financial
statement.
PAGE 2
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HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on July 3,
1996 Through
July 17, 1996
_________________
REVENUE $ -
_____________
EXPENSES -
_____________
LOSS BEFORE INCOME TAXES -
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
_____________
NET LOSS $ -
_____________
LOSS PER COMMON SHARE $ (.00)
_____________
The accompanying notes are an integral part of this financial
statement.
PAGE 3
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HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JULY 3, 1996
THROUGH JULY 17, 1996
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
_______________ ____________ Excess of Development
Shares Amount Shares Amount Par Value Stage
________ ______ ______ ______ _________ ___________
BALANCE, July 3, 1996 - $ - - $ - $ - $ -
Issuance of 2,000,000 shares
common stock for cash,
July 17, 1996 at $.005
per share - - 2,000,000 2,000 8,000 -
Net loss for the period
ended July 17, 1996 - - - - - -
__________ ______ ________ _______ ______ _________
BALANCE, July 17, 1996 - $ - 2,000,000 $2,000 $8,000 $ -
__________ ______ ________ _______ _______ _________
The accompanying notes are an integral part of this financial
statement.
PAGE 4
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
From Inception
on July 3,
1996 Through
July 17, 1996
__________________
Cash Flows to Operating
Activities:
Net loss $ -
Adjustments to reconcile net
loss to net cash used by
operating activities:
Non-cash expenses -
________________
Net Cash Flows to Operating
Activities -
________________
Cash Flows to Investing Activities -
Payments for organization costs (1,000)
________________
Net Cash to Investing Activities (1,000)
________________
Cash Flows from Financing
Activities:
Proceeds from common stock issuance 10,000
________________
Net Cash from Financing
Activities 10,000
________________
Net Cash Flow Activity 9,000
Cash at Beginning of Period -
________________
Cash at End of Period $ 9,000
________________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental schedule of Noncash Investing and Financing
Activities:
For the period ended July 17, 1996:
None
The accompanying notes are an integral part of this financial
statement.
PAGE 5
<PAGE>
HEALTH BUILDERS INTERNATIONAL, 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 July 3, 1996. The Company has not commenced
planned principal operations and is considered a development
stage company as defined in SFAS No. 7. The Company is planning
to engage in the business of establishing a training and
distribution center for the development of multi-level marketing
networks in the health and nutrition industry, to train and
assist people involved in network marketing for various health
and nutrition companies in recruiting, and also to provide
customized mailing and fax services. 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.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented.
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.
NOTE 2 - CAPITAL STOCK
Common Stock - During July, 1996, in connection with its
organization, the Company issued 2,000,000 shares of its
previously authorized, but unissued common stock. Total proceeds
from the sale of stock amounted to $10,000 (or $.005 per share).
Preferred Stock - The Company has authorized 500,000 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 are issued and outstanding at
July 17, 1996.
NOTE 3 - 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. At July 17, 1996 there were no
material deferred tax assets or liabilities, current or deferred
tax expense, or net operating loss carryforwards.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any
compensation to its officers and directors.
PAGE 6
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)
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 home as a mailing address, as needed, at no
expense to the Company.
NOTE 5 - DEVELOPMENT STAGE COMPANY
The Company was formed with a very specific business plan.
However, the possibility exists that the Company could expend
virtually all of its working capital in a relatively short time
period and may not be successful in establishing on-going
profitable operations.
NOTE 6 - SUBSEQUENT EVENTS
Proposed Public Offering of Common Stock - The Company is
proposing to make a public offering of 500,000 shares of its
previously authorized but unissued common stock. The Company
plans to file with the United States Securities and Exchange
Commission a registration statement on Form SB-2 under the
Securities Act of 1933. An offering price of $.20 per share has
arbitrarily been determined by the Company. The offering will be
managed by the Company without any underwriter. The shares will
be offered and sold by an officer of the Company, 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. The Company has not incurred any stock offering costs
as of July 17, 1996, but any such costs will be netted against
the proceeds of the proposed public stock offering.
PAGE 7
<PAGE>
[OUTSIDE BACK COVER PAGE BEGINS HERE]
No dealer, salesman or other person is authorized to give any information or to
make any representations other that those contained in this Prospectus in
connection with the offer made hereby. If given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities covered hereby in any
jurisdiction or to any person to whom it is unlawful to make such offer or
solicitation in such 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 the Company since the date
hereof.
TABLE OF CONTENTS Page
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
COMPARATIVE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
MANAGEMENT'S PLAN OF OPERATION . . . . . . . . . . . . . . . . . . . . . . . 11
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SHARES ELIGIBLE FOR FUTURE SALE. . . . . . . . . . . . . . . . . . . . . . . 20
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .See Index
HEALTH BUILDERS
INTERNATIONAL, INC.
500,000 Shares
Common Stock
PROSPECTUS
, 1996
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. Indemnification of Directors and Officers
The statutes, charter provisions, bylaws, contracts or other
arrangements under which controlling persons, directors or
officers of the issuer are insured or indemnified in any manner
against any liability which they may incur in such capacity are
as follows:
1. Section 145 of the Delaware General Corporation Law provides
that each corporation shall have the following powers:
(a) A corporation may indemnify any person who was or is a party
or is threatened to be made 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 the corporation) by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' 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 which he reasonably believed
to be in or not opposed to the best interests of the corporation,
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, 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 or not opposed to the best interests
of the corporation, and that, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) A corporation may 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 the corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys' 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
which he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged liable to the
<PAGE>
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be made
(1) by majority vote of directors who were not parties to such
action, suit or proceeding, even though less than a quorum, or
(2) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (3)
by the stockholders;
(e) Expenses (including attorneys' fees) incurred by an officer
or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay the amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other
employees and agents may be paid upon such terms and conditions,
if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, other subsections of this section shall
not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
<PAGE>
employee 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 the corporation would
have the power to indemnify him against such liability under this
section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of the employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to this section shall, unless otherwise
provided when authorized or ratified, continues as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and
administrators of such a person.
2. The Issuer's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the
Delaware General Corporation Law. The bylaws provide for
indemnification in accordance with the foregoing statutory
provisions.
<PAGE>
ITEM 25. Other Expenses of Issuance and Distribution*
The following table sets forth all estimated costs and expenses,
other than underwriting discounts, commissions and expense
allowances, payable by the issuer in connection with the maximum
offering for the securities included in this registration
statement:
Amount
SEC registration fee $ 100.00
Blue sky fees and expenses 1,000.00
Printing and shipping expenses 300.00
Legal fees and expenses 10,000.00
Accounting fees and expenses 500.00
Transfer and Miscellaneous expenses 100.00
-----------
Total $ 12,000.00
* All expenses are estimated except the Commission filing fee.
ITEM 26. Recent Sales of Unregistered Securities
In connection with the organization of the Company, its founding
shareholders paid an aggregate of $10,000 cash to purchase
2,000,000 shares of Common Stock of the Company. These
transactions were not registered under the Securities Act of 1933
(the "Act") in reliance on the exemption from registration in
Section 4(2) of the Act. The securities were offered and sold
without any general solicitation to persons affiliated with the
Issuer as founding shareholders, are subject to the resale
provisions of Rule 144 and may not be sold or transferred without
registration except in accordance with Rule 144. Certificates
representing the securities will bear such a legend.
ITEM 27. Exhibits Index
SEC No. Document Exhibit No.
3 Articles of Incorporation 3.1
3 By-Laws 3.3
4 Common Stock Specimen Certificate 4.1
5,24 Opinion & Consent of Counsel 5.1 & 24.1
23 Consent of Accountants 23.1
27 Financial Data Schedule 27.1
<PAGE>
ITEM 28. Undertakings
The issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) Include any additional or changed material information on
the plan of distribution; and
(iii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement.
(2) For determining any liability under the Securities Act,
treat each post-effective amendment as a new Registration
Statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering.
(3) 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 registrant pursuant to the
foregoing provisions, or otherwise, the registrant 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. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant 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
registrant 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 Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the issuer certifies that it has reasonable grounds to
believe that it meets all of the requirements of filing on Form
SB-2 and authorized this Registration Statement to be signed on
its behalf by the undersigned, in the City of Salt Lake , State
of Utah, on August 6th , 1996.
HEALTH BUILDERS INTERNATIONAL, INC.
By: /s/ L. Dee Hall
President (Chief Executive and Financial Officer)
KNOW ALL MEN BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Thomas G. Kimble
or Van L. Butler, the undersigned's true and lawful attorney-in-fact and
agent with full power of substitution and
resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all exhibits
thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact
and agent, full power and authority to do and perform
each and every act and thing, requisite and necessary to be done
in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his
substitutes, may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of
1933, this Registration Statement was signed by the following
persons in the capacities and on the dates indicated.
Signature: /s/ L. Dee Hall
Title: President & Director (Chief Executive and Financial
Officer)
Date: August 6th , 1996
CERTIFICATE OF INCORPORATION
OF
HEALTH BUILDERS INTERNATIONAL, INC.
FIRST: The name of this corporation shall be:
HEALTH BUILDERS INTERNATIONAL, INC.
SECOND: Its registered office in the State of Delaware is to
be located at 1013 Centre Road, in the City of Wilmington, County
of New Castle and its registered agent at such address is
CORPORATION SERVICE COMPANY.
THIRD: The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which this
corporation is authorized to issue is:
(a) Common. 50,000,000 shares of Common Stock having a
par value of $.001 per share:
(b) Preferred. 500,000 shares of Preferred stock having
a par value of $.001 per share and to be issued in such series
and to have such rights, preferences, and designation as
determined by the Board of Directors of the Corporation.
FIFTH: The name and address of the incorporator is as
follows:
Jane S. Krayer
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
SIXTH: The Board of Directors shall have the power to amend
or repeal the by-laws.
SEVENTH: No director shall be personally liable to the
Corporation or its stockholders for monetary damages from any
breach of fiduciary duty by such director as a director.
Notwithstanding the foregoing sentence, a director shall be liable
to the extent provided by applicable law, (i) for breach of the
directory's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this
Article Seventh shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with
respect to any acts or omissions of such director occurring prior
to such amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this
certificate of incorporation this third day of July, A.D., 1996.
/s/Jane S. Krayer
Jane S. Krayer
Incorporator
BY-LAWS
OF
HEALTH BUILDERS INTERNATIONAL, INC.
ARTICLE I - OFFICES
Section 1. The registered office of the corporation in the
State of Delaware shall be at 1013 Centre Road, Wilmington,
Delaware 19805-1297.
The registered agent in charge thereof shall be CSC Networks.
Section 2. The corporation may also have offices at such
other places as the Board of Directors may from time to time
appoint or the business of the corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the
registered office of the corporation in this state or at such
place, either within or without this state, as may be selected from
time to time by the Board of Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the
stockholders shall be held on such date as is determined by the
Board of Directors for the purpose of electing directors and for
the transaction of such other business as may properly be brought
before the meeting.
Section 3. ELECTION OF DIRECTORS: Elections of the directors
of the corporation shall be by written ballot.
Section 4. SPECIAL MEETINGS: Special meetings of the
stockholders may be called at any time by the President, or the
Board of Directors, or stockholders entitled to cast at least
one-fifth of the votes which all stockholders are entitled to cast
at the particular meeting. At any time, upon written request of
any person or persons who have duly called a special meeting, it
shall be the duty of the Secretary to fix the date of the meeting,
to be held not more than sixty days after receipt of the request,
and to give due notice thereof. If the Secretary shall neglect or
refuse to fix the date of the meeting and give notice thereof, the
person or persons calling the meeting may do so.
Business transacted at all special meetings shall be confined
to the objects stated in the call and matters germane thereto,
unless all stockholders entitled to vote are present and consent.
Written notice of a special meeting of stockholders stating
the time and place and object thereof, shall be given to each
stockholder entitled to vote thereat at least ten days before such
meeting, unless a greater period of notice is required by statute
in a particular case.
Section 5. QUORUM: A majority of the outstanding shares of
the corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of stockholders. If
a majority of the outstanding shares entitled to vote is
represented at a meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The stockholders
present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum.
Section 6. PROXIES: Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize another
person or persons to act for him by proxy, but no such proxy shall
be voted or acted upon after three years from its date, unless the
proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if, and only as long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A
proxy may be made irrevocable regardless of whether the interest
with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. All proxies shall be filed
with the Secretary of the meeting before being voted upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders are
required or permitted to take any action at a meeting, a written
notice of the meeting shall be given which shall state the place,
date and hour of the meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called.
Unless otherwise provided by law, written notice of any
meeting shall be given not less than ten nor more than sixty days
before the date of the meeting to each stockholder entitled to vote
at such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action required
to be taken at any annual or special meeting of stockholders of a
corporation, or any action which may be taken at any annual or
special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented
in writing.
Section 9. LIST OF STOCKHOLDERS: The officer who has charge
of the stock ledger of the corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged
in alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder. No share of stock upon which any installment is due
and unpaid shall be voted at any meeting. The list shall be open
to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is
present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall
be managed by its Board of Directors, no less than one in number or
such other minimum number as is required by law. The directors
need not be residents of this state or stockholders in the
corporation. They shall be elected by the stockholders of the
corporation or in the case of a vacancy by remaining directors, and
each director shall be elected for the term of one year, and until
his successor shall be elected and shall qualify or until his
earlier resignation or removal.
Section 2. REGULAR MEETINGS: Regular meetings of the Board
shall be held without notice other than this by-law immediately
after, and at the same place as, the annual meeting of
stockholders. The directors may provide, by resolution, the time
and place for the holding of additional regular meetings without
other notice than such resolution.
Section 3. SPECIAL MEETINGS: Special Meetings of the Board
may be called by the President or any director upon two day notice.
The person or persons authorized to call special meetings of the
directors may fix the place for holding any special meeting of the
directors called by them.
Section 4. QUORUM: A majority of the total number of
directors shall constitute a quorum for the transaction of
business.
Section 5. CONSENT IN LIEU OF MEETING: Any action required
or permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting if all
members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee. The Board of
Directors may hold its meetings, and have an office or offices,
outside of this state.
Section 6. CONFERENCE TELEPHONE: One or more directors may
participate in a meeting of the Board, of a committee of the Board
or of the stockholders, by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other; participation in
this manner shall constitute presence in person at such meeting.
Section 7. COMPENSATION: Directors as such, shall not
receive any stated salary for their services, but by resolution of
the Board, a fixed sum and expenses of attendance, if any, may be
allowed for attendance at each regular or special meeting of the
Board provided, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 8. REMOVAL: Any director or the entire Board of
Directors may be removed, with or without cause, by the holders of
a majority of the shares then entitled to vote at an election of
directors, except that when cumulative voting is permitted, if less
than the entire Board is to be removed, no director may be removed
without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election
of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is
a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be
chosen by the directors and shall be a President, Secretary and
Treasurer. The Board of Directors may also choose a Chairman, one
or more Vice Presidents and such other officers as it shall deem
necessary. Any number of offices may be held by the same person.
Section 2. SALARIES: Salaries of all officers and agents of
the corporation shall be fixed by the Board of Directors.
Section 3. TERM OF OFFICE: The officers of the corporation
shall hold office for one year and until their successors are
chosen and have qualified. Any officer or agent elected or
appointed by the Board may be removed by the Board of Directors
whenever in its judgment the best interest of the corporation will
be served thereby.
Section 4. PRESIDENT: The President shall be the chief
executive officer of the corporation; he shall preside at all
meetings of the stockholders and directors; he shall have general
and active management of the business of the corporation, shall see
that all orders and resolutions of the Board are carried into
effect, subject, however, to the right of the directors to delegate
any specific powers, except such as may be by statute exclusively
conferred on the President, to any other officer or officers of the
corporation. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation. He shall be
EX-OFFICIO a member of all committees, and shall have the general
power and duties of supervision and management usually vested in
the office of President of a corporation.
Section 5. SECRETARY: The Secretary shall attend all
sessions of the Board and all meetings of the stockholders and act
as clerk thereof, and record all the votes of the corporation and
the minutes of all its transactions in a book to be kept for that
purpose, and shall perform like duties for all committees of the
Board of Directors when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and of the Board
of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or President, and under whose
supervision he shall be. He shall keep in safe custody the
corporate seal of the corporation, and when authorized by the
Board, affix the same to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation, and shall keep the moneys of the corporation in a
separate account to the credit of the corporation. He shall
disburse the funds of the corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall
render to the President and directors, at the regular meetings of
the Board, or whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the
corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, shall be
filled by the Board of Directors. Vacancies and newly created
directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in
office, although less than a quorum, or by a sole remaining
director. If at any time, by reason of death or resignation or
other cause, the corporation should have no directors in office,
then any officer or any stockholder or an executor, administrator,
trustee or guardian of a stockholder, or other fiduciary entrusted
with like responsibility for the person or estate of a stockholder,
may call a special meeting of stockholders in accordance with the
provisions of these By-Laws.
Section 2. RESIGNATIONS EFFECTIVE AT FUTURE DATE: When one
or more directors shall resign from the Board, effective at a
future date, a majority of the directors then in office, including
those who have so resigned, shall have power to fill such vacancy
or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by
attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours
for business to inspect for any proper purpose the corporation's
stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper
purpose shall mean a purpose reasonably related to such person's
interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection,
the demand under oath shall be accompanied by a power of attorney
or such other writing which authorizes the attorney or other agent
to so act on behalf of the stockholder. The demand under oath
shall be directed to the corporation at its registered office in
this state or at its principal place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be
numbered and registered in the share ledger and transfer books of
the corporation as they are issued. They shall bear the corporate
seal and shall be signed by the president.
Section 2. TRANSFERS: Transfers of shares shall be made on
the books of the corporation upon surrender of the certificates
therefor, endorsed by the person named in the certificate or by
attorney, lawfully constituted in writing. No transfer shall be
made which is inconsistent with law.
Section 3. LOST CERTIFICATE: The corporation may issue a new
certificate of stock in the place of any certificate theretofore
signed by it, alleged to have been lost, stolen or destroyed, and
the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative to give the
corporation a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss, theft
or destruction of any such certificate or the issuance of such new
certificate.
Section 4. RECORD DATE: In order that the corporation may
determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than
sixty days prior to any other action. If no record date is fixed:
(a) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall
be the day on which the first written consent is expressed.
(c) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
Section 5. DIVIDENDS: The Board of Directors may declare and
pay dividends upon the outstanding shares of the corporation, from
time to time and to such extent as they deem advisable, in the
manner and upon the terms and conditions provided by statute and
the Certificate of Incorporation.
Section 6. RESERVES: Before payment of any dividend there
may be set aside out of the net profits of the corporation such sum
or sums as the directors, from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the
directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in the
manner in which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. CHECKS: All checks or demands for money and notes
of the corporation shall be signed by such officer or officers as
the Board of Directors may from time to time designate.
Section 2. FISCAL YEAR: The fiscal year shall begin on the
first day of January.
Section 3. NOTICE: Whenever written notice is required to be
given to any person, it may be given to such person, either
personally or by sending a copy thereof through the mail, or by
telegram, charges prepaid, to his address appearing on the books of
the corporation, or supplied by him to the corporation for the
purpose of notice. If the notice is sent by mail or by telegraph,
it shall be deemed to have been given to the person entitled
thereto when deposited in the United States mail or with a
telegraph office for transmission to such person. Such notice
shall specify the place, day and hour of the meeting and, in the
case of a special meeting of stockholders, the general nature of
the business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written notice is
required by statute, or by the Certificate or the By-Laws of this
corporation a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such
notice. Except in the case of a special meeting of stockholders,
neither the business to be transacted at nor the purpose of the
meeting need be specified in the waiver of notice of such meeting.
Attendance of a person either in person or by proxy, at any meeting
shall constitute a waiver of notice of such meeting, except where
a person attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting was not
lawfully called or convened.
Section 5. DISALLOWED COMPENSATION: Any payments made to an
officer or employee of the corporation such as a salary,
commission, bonus, interest, rent, travel or entertainment expense
incurred by him, which shall be disallowed in whole or in part as
a deductible expense by the Internal Revenue Service, shall be
reimbursed by such officer or employee to the corporation to the
full extent of such disallowance. It shall be the duty of the
directors, as a Board, to enforce payment of each such amount
disallowed. In lieu of payment by the officer or employee, subject
to the determination of the directors, proportionate amounts may be
withheld from his future compensation payments until the amount
owed to the corporation has been recovered.
Section 6. RESIGNATIONS: Any director or other officer may
resign at any time, such resignation to be in writing and to take
effect from the time of its receipt by the corporation, unless some
time be fixed in the resignation and then from that date. The
acceptance of a resignation shall not be required to make it
effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall
present at each annual meeting a full and complete statement of the
business and affairs of the corporation for the preceding year.
Such statement shall be prepared and presented in whatever manner
the Board of Directors shall deem advisable and need not be
verified by a Certified Public Accountant.
ARTICLE XI - INDEMNIFICATION AND INSURANCE:
Section 1. (a) RIGHT TO INDEMNIFICATION. Each person who was
or is made a party or is threatened to be made a party or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of
whom he or she is the legal representative, is or was a director or
officer, of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in
paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or
part thereof) initiated by such person only if such proceeding (or
part thereof) was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this
Section shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending
any such proceeding in advance of its final disposition: provided,
however, that, if the Delaware General Corporation Law requires,
the payment of such expenses incurred by a director or officer in
his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while
a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the corporation of
an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified
under this Section or otherwise. The Corporation may, by action of
its Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) RIGHT OF CLAIMANT TO BRING SUIT:
If a claim under paragraph (a) of this Section is not paid in
full by the Corporation within thirty days after a written claim
has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the Delaware
General Corporation law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that the claimant has not met such
applicable standard or conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable
standard or conduct.
(c) Notwithstanding any limitation to the contrary
contained in sub-paragraphs (a) and 8 (b) of this section, the
corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented,indemnify any and all persons
whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters
referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any By-law,
agreement, vote of stockholders or disinterested Directors or
otherwise, 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 director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(d) INSURANCE:
The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture,
trust or other enterprise against any such expense, liability or
loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under
the Del General Corporation Law.
ARTICLE XII - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the
vote of directors.
V9bylaws.hbi
[Stock Certificate Border Graphics]
Not Valid Unless Countersigned by Transfer Agent
Incorporated Under the Laws of the State of Delaware
Number Shares
[No. of Cert] [No. of Shares]
HEALTH BUILDERS INTERNATIONAL, INC.
Authorized Shares: 50,000,000
Par Value: $.001
THIS CERTIFIES THAT [Name of Shareholder]
IS THE RECORD HOLDER OF [Number of Shares]
HEALTH BUILDERS INTERNATIONAL, INC.
transferable on the books of the Corporation in person or by duly
authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by
the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.
Dated: [date of Certificate]
/s/L. Dee Hall /s/L. Dee Hall
Secretary President
[Graphic of Corporate Seal]
[Border Graphics]
Interwest Transfer Co. Inc. P.O. Box 17136/Salt Lake City, Utah
84117
Countersigned & Registered ______________________________
August 5, 1996
Board of Directors
Health Builders International, Inc.
2077 Elderberry Way
Sandy, Utah 84092
Re: Opinion and Consent of Counsel with respect to
Registration Statement on Form SB-2
TO WHOM IT MAY CONCERN:
You have requested the opinion and consent of this law firm, as
counsel, with respect to the proposed issuance and public
distribution of certain securities of the Company pursuant to the
filing of a registration statement on Form SB-2 with the Securities
and Exchange Commission.
The proposed offering and public distribution relates to 500,000
shares of Common Stock, $.001 par value to be offered and sold to
the public at a price of $.20 per share. It is our opinion that
the shares of Common Stock will, when issued in accordance with the
terms and conditions set forth in the registration statement, be
duly authorized, validly issued, fully paid and nonassessable
shares of common stock of the Company in accordance with the
corporation laws of the State of Delaware.
We hereby consent to be named as counsel for the Company in the
registration statement and prospectus included therein.
Sincerely yours,
THOMAS G. KIMBLE & ASSOCIATES
/s/ Van L. Butler
Van L. Butler
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form SB-2 for Health Builders International, Inc.,
of our report dated July 23, 1996, relating to the July 17,1996
financial statements of Health Builders International, Inc.,
which appears in such Prospectus. We also consent to the reference to us
under the heading "Experts".
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
August 8, 1996
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<LEGEND>
This schedule contains summary financial information extracted from the
interim financial statements as of July 17, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-03-1996
<PERIOD-END> JUL-17-1996
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<SECURITIES> 0
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0
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