As filed with the Securities and Exchange Commission on March 8, 1999
Registration No. 333-69415
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pre-effective Amendment 1
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
BALANCED LIVING, INC.
(Exact name of registrant as specified in its charter)
Colorado 8299 87-0575577
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
organization)
6375 South Highland Drive, Suite D
Salt Lake City, Utah 84121
(801) 424-1624
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JEANNENE BARHAM
President and Chief Financial Officer
Balanced Living, Inc.
6375 South Highland Drive, Suite D
Salt Lake City, Utah 84121
(801) 424-1624
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies To:
A. ROBERT THORUP, ESQ.
RAY, QUINNEY & NEBEKER
79 South Main Street
Salt Lake City, Utah 84111
(801) 323-3359
(fax) (801) 532-7543
Approximate date of commencement of proposed sale of the securities to the
Public: As soon as practicable after the Effective Time of this
Registration Statement.
CALCULATION OF REGISTRATION FEE
Title of each Amount to Proposed Proposed Amount of
class of to be Maximum offering Maximum aggregate registration
securities to registered price per share offering price fee
be registered
common stock 250,000 - - -
units
common stock 250,000 $2.00 $500,000 $147.50
($0.001 par shares
value)
Class A 250,000 $3.00 $750,000 $221.25
Warrants and warrants
underlying and under-
common stock lying shares
Class B 250,000 $5.00 $1,250,000 $368.75
Warrants and warrants
underlying and under-
common stock lying shares
Class C 250,000 $10.00 $2,500,000 $652.50
Warrants and warrants
underlying and under-
common stock lying shares
TOTAL $1,390.00
<PAGE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its Effective Time 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.
ii
<PAGE>
P R O S P E C T U S
250,000 Units $2.00 per Unit
Each Unit Consists of One Share of Common Stock,
And One Each of a Class A Warrant, a Class B Warrant, and a Class C
Warrant.
BALANCED LIVING, INC.
A Colorado Corporation
[LOGO]
- Balanced Living, Inc. is a new Colorado corporation engaged in the
personal development business, and offers seminars, books and
related personal development products to its clients. All of its
current activities are conducted in its wholly owned subsidiary, The
Balanced Woman, Inc.
- These securities have not been approved or disapproved by the
Securities and Exchange Commission, or any state securities agency,
nor has any federal or state regulatory agency passed upon the
accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
This offering involves
a significant degree of risk.
Investors need to read the section called
"Risk of this Investment" found at page 3
of this prospectus.
- The Offering
Per Unit Total
-------- -----
Public Price $2.00 $500,000
Underwriting discounts
and commissions $0.20 $50,000
----- -------
Proceeds to Balanced Living $1.80 $450,000
- There is no minimum offering. Balanced Living will accept and
spend any Investor money submitted for an accepted purchase of
units.
- Net proceeds to the Balance Living will be less the $450,000 in
the event the offering is only partially completed. This creates a
much higher risk to the earlier investors.
- An Investor's purchase of units must not exceed 10% of that
Investor's net worth.
- Warrants
- Class A Warrants allow the purchase of one (1) share of
common stock for $3.00
- Class B Warrants allow the purchase of one (1) share of
common stock for $5.00
- Class C Warrants allow the purchase of one (1) share of
common stock for $10.00.
- All of the Warrants are valid until December 31, 2003, when
they will expire.
- There is no public market for Balanced Living common stock.
- This offering will continue until subscriptions for all units are
received, until October 1, 1999 or until Balanced Living terminates
the offering, whichever first occurs.
The Date of this Prospectus is March , 1999
-COVER PAGE-
<PAGE>
[Inside Front Cover]
No person has been authorized to give any information or to make any
representations in connection with this offering other than those
contained in this prospectus and, if given or made, that information
and representations must not be relied on as having been authorized by
Balanced Living. This prospectus is not an offer to sell or a
solicitation of an offer to buy any of the securities it offers to any
person in any jurisdiction in which that offer or solicitation is
unlawful. Neither the delivery of this prospectus nor any sale
hereunder shall, under any circumstances, create any implication that
the information in this prospectus is correct as of any date later
than the date of this prospectus.
Notice to New York Residents
The attorney General of the State of New York has not passed on or
endorsed the merits of this offering. Any representations to the
contrary is unlawful.
[This Space Left Blank Intentionally]
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PROSPECTUS SUMMARY FOR BALANCED LIVING
This is a brief summary of the
information in this prospectus. We
encourage you to read the entire
prospectus before you decide
whether and how much to invest in
the units.
- - Balanced Living
Balanced Living, Inc.
("Balanced Living") is a newly
formed Colorado corporation with no
operating history and under the
management of persons with limited
experience in starting and
successfully developing a new
company. The business of Balanced
Living initially will be conducted
through its wholly owned
subsidiary, The Balanced Woman,
Inc., ("Balanced Woman") also a
relatively new Colorado
corporation.
Balanced Living was organized
by women for the benefit of women,
and to function as part of the
personal growth/life management
industry (a rapid growing industry
designed to provide self-help and
self-improvement-related products
and services to individuals). It
offers seminars, personal growth
experiences and products that
assist women in living more
balanced and purposeful lives.
- - Balanced Living's Financial
History and Current Position
Balanced Living was formed on
July 1, 1998 and acquired Balanced
Woman on July 14, 1998. Balanced
Woman was formed on January 26,
1998. Balanced Living earned
revenues of $15,614 (through
November 30, 1998) and experienced
a net loss of ($241,130) as of
November 30, 1998. At November 30,
1998, Balanced Living had cash on
hand of $7.614 and a net worth of
($241,130) .
- - What is Balanced Living, Inc.
Balanced Living will earn
revenue for the following:
- Seminars.
- Products.
- Circles of Women.
For detailed information
about these activities see
"Information About Balanced Living"
page 13.
- - How will Balanced Living use the
Net Proceeds of this offering?
Balanced Living estimates
that it will have $417,923
available from this offering after
expenses if the total offering is
sold. Any funds raised through
this offering will be used to
implement the seminars and products
described above, including salaries
and expenses of the management team
during the start-up period. See
"Use of Proceeds"
- - Becoming a Shareholder
You must complete and sign a
Subscription Agreement and submit
that with your investment money.
If your investment is not more than
ten percent of your net worth you
will be accepted as a Shareholder.
When your subscription has been
accepted, you will receive a
countersigned copy of your
Subscription Agreement and an
acknowledgment letter along with
your share certificates.
[This Space is Left Blank Intentionally]
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RISK FACTORS
An investment in the units involves a high degree of risk and
should only be made by persons who can afford to lose up to their
entire investment. Before purchasing units, you should consider
carefully the following risk factors, in addition to the other
information in this prospectus.
RISKS INHERENT IN BALANCED LIVING
- - Balanced Living's Limited
Operating History.
Balanced Living was formed in
July 1998, and is in the
development stages of its business
plan. It has no significant
assets, has just begun business
operations, and considers 1998 and
early 1999 to be a period of
research and development. There is
no assurance that upon completion
of this offering Balanced Living
will be able to continue
successfully implementing its
business plan or that it will ever
operate profitably.
- - Balanced Living's Limited
Capital and Need for Additional
Capital.
With the exception of
approximately $300,000 borrowed
from the founders and a few private
investors, Balanced Living has no
significant assets or operating
capital. Balanced Living's auditors
deem Balanced Living a going
concern and Balanced Living is
totally dependent upon receipt of
the proceeds of this offering to
provide the working capital
necessary to continue the
development of its business. Even
so, upon successful completion of
the offering , the working capital
available to Balanced Living will
be limited. Balanced Living 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 to move Balanced Living
to internal funding and
profitability, Balanced Living may
need to seek additional financing
from commercial lenders or other
sources, including additional sales
of equity, for which it presently
has no commitments or arrangements.
- - Balanced Living's Limited
Management.
Balanced Living will be
substantially dependent upon its
current management team, only 2 of
which are employees. (See
"Management"). Other key personnel
are functioning as independent
contractors and are involved with
other businesses. Balanced Living
also relies heavily on the
training, teaching methods, and
curriculum of Rose Blackham.
Currently, Ms. Blackham is the sole
facilitator of Balanced Living's
seminars. The stability of
Balanced Living would be
significantly compromised if Ms.
Blackham were unable or unwilling
to perform these responsibilities.
Balanced Living does not carry key
person life insurance with respect
to any employee and has no
employment agreements.
- - Balanced Living's Conflicts of
Interest and Non-Arms-Length
Transactions.
Many of the services and goods
acquired by Balanced Living have
been and will likely come from
sources connected in some way with
members of Balanced Living's
management team. For example,
members of management have supplied
operating capital to Balanced
Living and may do so in the future
by means of loans or purchases of
equity. Some members of the
management team have other
interests which could give rise to
conflicts with respect to the
amount of time devoted to Balanced
Living. There is no assurance such
conflicts of time and interests
will be resolved favorably to
Balanced Living.
- - Risks of Insufficient Funding
for Balanced Living and
Unavailability of such
Financing.
Balanced Living has earned only
limited revenues to date and is
entirely dependent upon the
proceeds of this offering to
continue operations relating to its
prospective business. There is no
assurance that Balanced Living will
raise the amount of this offering.
The failure to substantially
complete this offering puts the
success of Balance Living in
jeopardy. Investors are not
entitled to the return of their
investment if less than the full
offering is sold.
Although Balanced Living
believes that the proceeds of this
offering will be sufficient to
implement its business plan,
Balanced Living cannot ascertain
with any degree of certainty the
future capital requirements for the
full development and production of
its seminars, products and
inventory.
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<PAGE>
There can be no assurance
that additional financing will be
available to Balanced Living
on acceptable terms, if at all.
- - Balanced Living's Year 2000
Risks.
Balanced Living faces risks from
the Year 2000 computer problem in
three areas:
- its own computer systems;
- its appliances and
equipment with embedded
chips; and
- the possibly non-compliant
systems of its third party
vendors and service
providers.
While Balanced Living believes
that its own computerized
information processing systems are
"Y2K" compliant with four digit
dating and recognizing 2000 as a
leap year, it is still in the early
stages of assessing its non-
computer equipment for non-
compliant embedded chips. Balanced
Living is also in the very earliest
stages of assessing and
communicating with its key vendors
and service providers to determine
their Y2K compliance. In a worst
case scenario, Balanced Living may
not be able to present its seminars
because of disruptions in
transportation systems, building
locations, or utility services. In
the event of significant economic
turmoil from Y2K occurrences, the
demand for Balanced Living's
seminars and products may be
significantly reduced. Suppliers
of its private label products may
not be able to ship sufficient
quantities to meet Balanced
Living's needs. Balanced Living's
own offices may be closed by
equipment or utility failures or
possible civil unrest.
RISKS RELATED TO THE NATURE OF BALANCED LIVING'S BUSINESS
- - Balanced Living's Uncertain
Market Acceptance.
Balanced Living's business plan
is based upon the experience of the
"Balanced Woman" Seminars given to
date and the observed market
acceptance of related products and
services. There are no assurances
of general market acceptance of
Balanced Living's products and
services. Balanced Living's
business will be subject to all the
risks associated with the packaging
and introduction of new seminars
and product lines for sale into the
competitive self- improvement
seminar market.
- - Balanced Living's Intellectual
Property Risks.
Balanced Living relies primarily
on copyright laws and employee and
third party nondisclosure
agreements to protect its
intellectual property, but Balanced
Living has not yet registered
copyrights in any of its materials.
Unauthorized copying of its
products and services could damage
Balanced Living significantly.
Although Balanced Living is not
aware that any of its products and
services are materially infringing
the rights of others, it is
possible they are. If so, Balanced
Living could have to modify its
products and services, at
substantial possible cost.
Balanced Living might be subject to
lawsuits if it is alleged that it
is infringing on the property
rights of others.
- - Balanced Living's Economic
Situation.
Balanced Living provides
products and services that are not
essential to the support of life.
In the event of significant
economic downturns in the United
States or the World caused by any
or all of a number of potential
causes, the demand for Balanced
Living's seminars and products may
be significantly reduced.
RISKS RELATED TO BALANCED LIVING'S OFFERING
- - Best Efforts offering/No Prior
Firm Commitments for Balanced
Living.
The units are offered on a "best
efforts basis" with no underwriter
assistance or firm commitment from
any investor or dealer.
Benefits to Present Balanced
Living Shareholders; Continued
Control.
The 600,000 presently
outstanding shares of Balanced
Living's common stock (not
including any shares underlying
stock options or warrants) were
purchased by the founders of
Balanced Living for a total
aggregate consideration of $3,000.
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<PAGE>
Immediately after completion of
this offering, assuming the full
$500,000 is sold, the two current
shareholders, Jeannene Barham and
Rose Blackham, will own 71% of the
then outstanding common stock, for
which they will have paid an
average $0.005 per share; and
Investors in this offering will own
the other 29%, for which they will
have paid $2.00 per share (without
regard to the warrants included in
the units). Thus, Investors in
this offering will contribute to
capital of Balanced Living a
disproportionately greater
percentage than the current
shareholders. Moreover, the
current shareholders will continue
to control Balanced Living through
their majority common share voting
ability. See "Dilution".
- - Broad Discretion to Use Offering
Proceeds.
Management will have wide
discretion as to the allocation,
priority and timing of the
allocation and spending of funds
raised from this offering. The use
of the proceeds of the offering may
vary significantly from those
outlined in this Prospectus
depending on numerous factors,
including the success that Balanced
Living has testing and marketing
its products. Investors purchasing
the units will be entrusting their
funds to Balanced Living's
management, upon whose judgement
the Investors must depend. (See
"Use of Proceeds" and "Management")
- - Arbitrary Determination of
Offering Price.
The public offering price of
the units offered hereby was
arbitrarily determined by Balanced
Living without the advice of an
underwriter. The price bears no
relationship to Balanced Living's
assets, book value, net worth or
other recognized criterion of
value. In no event should the
public offering price be regarded
as an indicator of any future
market price of the units.
- - There May Not Be A Public
Trading Market.
Prior to this offering, there
was no public market for Balanced
Living's common stock, and the
offering price for the units was
determined arbitrarily by the Board
of Directors. See "Plan of
Distribution - Determination of
offering Price."
Balanced Living does not
currently meet the numerical
requirements (such as income,
stockholders' equity and number of
public shares outstanding) to have
its shares listed on a United
States stock exchange or quoted on
the NASDAQ over-the-counter market.
As soon as it meets those
requirements, Balanced Living
intends to apply for a trading
listing such that its common stock
can be followed on public
information services over the
Internet or in the financial trade
publications. Until any listing,
Balanced Living has not yet decided
whether to utilize the provisions
of Rule 15c2-11 under the
Securities Exchange Act to enable
limited public trading in its
common stock. It is unlikely that
sufficient shares will be
outstanding in the foreseeable
future to support a public market
in Balanced Living's common stock.
The price of the units, after the
completion of this offering, can
vary due to general economic
conditions and forecasts, Balanced
Living's general business
condition, the release of Balanced
Living's financial reports and
sales of shares, which were
outstanding prior to this offering.
See "Units Eligible For Future
Resale."
- - Balanced Living's State Blue Sky
Registration; Restricted Resales
of the Securities.
Balanced Living has not made
application to register the
Securities in any states except:
- California
- Colorado
- New York
- Utah
Balanced Living will seek to
obtain an exemption from
registration to offer the units in
various state jurisdictions and may
also make additional application to
register the units in some states.
Purchasers of units in this
offering must be residents of such
jurisdictions which either provide
an applicable exemption or in which
the units are registered. In order
to prevent resale transactions in
violations of states' securities
laws, public stockholders may only
engage in resale transactions in
the units in such jurisdictions in
which an applicable exemption is
available or a blue sky application
has been filed and accepted. As a
matter of notice to the holders
thereof, the common Stock and
Warrant certificates will contain
information with respect to resale
of the securities. Further
Balanced Living will advise its
market makers, if any, of such
restriction on resale.
Such restriction on resales may
limit the ability of investors to
resell the units purchased in this
offering.
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<PAGE>
Several additional states may
permit secondary market sales of
the units:
- Once or after certain
financial and other
information with respect to
Balanced Living is published
in a recognized securities
manual such as Standard &
Poor's Corporation Records.
- After a certain period has
elapsed from the date hereof.
- Pursuant to exemptions
applicable to certain
investors.
- Some Units Owned By Earlier
Investors Could Be Sold After
The Offering, Affecting The
Resale Price.
The owners of 600,000 shares of
Balanced Living's common stock will
be able to sell 100,000 of these
shares any time after July 1, 1999;
and 500,000 shares at any time
after July 14, 1999, assuming a
public market exists at such times.
Whenever any shares of Balanced
Living's common stock are sold, it
could cause the share price to go
down and might keep it from rising.
See "Units Eligible for Future
Resale."
- - Statutory And Charter
Limitations Could Deter An
Acquisition Of Balanced Living.
The laws under which Balanced
Living is chartered deny voting
rights to persons trying to acquire
control, subject to approval by the
other shareholders. Balanced
Living's articles of incorporation
and bylaws also contain provisions,
which allow shareholders to
increase the quorum or voting
requirement for shareholders.
These provisions would make it
relatively difficult to authorize a
merger or other business
combination, to change the board of
directors or to amend charter
provisions. This could deter an
acquisition of Balanced Living that
might otherwise be of benefit to
shareholders who are not part of
management. See "Description of
Common Stock."
- - The "Penny Stock" Rules Could
Make Selling Balanced Living
Units More Difficult.
Balanced Living's common stock
might be defined as a "penny stock"
pursuant to Rule 3a51-1 under the
Securities and Exchange of Act if:
- The shares were to be traded
at a price less than $5.00
per share.
- Balanced Living had not yet
met certain financial size
and volume levels.
- The shares were not
registered on a national
securities exchange or quoted
on the NASDAQ system.
A "penny stock" is subject to
Rules 15g-1 through 15g-10 of the
Securities and Exchange Commission.
Those rules require securities
broker-dealers, before effecting
transactions in any "penny stock,":
- To deliver to the customer,
and obtain a written receipt
for a disclosure document set
forth in Rule 15g-10. (Rule
15g-2)
- To disclose certain price
information about the stock
(Rule 15g-3)
- To disclose the amount of
compensation received by the
broker-dealer (Rule 15g-4) or
any "associated person" of
the broker-dealer (Rule 15g-5)
- To send monthly statements to
customers with market and
price information about the
"penny stock." (Rule 15g-6)
Balanced Living's common stock
could also become subject to Rule
15g-9, which requires the broker-
dealer, in some circumstances, to
approve the "penny stock"
purchasers account under certain
standards and deliver written
statements to the customer with
information specified in the rules.
(Rule 15g-9) These additional
broker-dealers from effecting
transactions and limit the ability
of purchasers in this offering to
sell their shares into any
secondary market for Balanced
Living's common stock.
- - Balanced Living's Officers' And
Directors' Liabilities Are
Limited.
Balanced Living's articles of
incorporation provide that Balanced
Living will indemnify any officer,
director or former officer or
director, to the full extent
permitted by law. This could
include indemnification for
liabilities under securities laws
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<PAGE>
enacted for shareowner protection,
although, in the opinion of the
federal Securities and Exchange
Commission, that indemnification is
against public policy.
- - Balanced Living's Officers or
Directors May Purchase Up To 20%
of the Units in this Offering.
Balanced Living may make sales
of units to officers and Directors
of Balanced Living and that such
persons may purchase up to 50,000
of the units offered hereby,
although they have made no
commitment to do so. Such
purchases shall be made for
investment purposes only and in a
manner consistent with a public
offering of Balanced Living's
units. Such purchases will
increase the percentage of
securities being held by the
officers and Directors.
- - Effect of Purchases of Balanced
Living Units By Officers,
Directors and Affiliates.
Officers and Directors of
Balanced Living may purchase units
sold in this offering under the
same terms and conditions as the
public investors. Such purchases,
if made, will be in compliance with
rule 10b-6 and be for investment
purposes only and not for
redistribution (i.e., no present
intention to distribute or resell
the securities). To the extent of
any such purchases for investment
purposes only, a portion of the
units from this offering will not
enter the "public float." (The
public float is the amount of free-
trading securities, which are
immediately resalable in the
trading market.) Such reduction
means that there are less
securities for the public investors
to purchase and resell and may
cause a lack of liquidity in any
trading of Balanced Living's
shares.
Also, such a reduction in the
public float may make possible the
commitment of public investors in
the absence of public demand for
the offering
USE OF PROCEEDS
The uses of the proceeds available to Balanced Living from the sale
of the units in this offering are estimated below, assuming that all
of the units are sold. There is no assurance that all of the units
will be sold. Balanced Living expects to use the net proceeds over
the coming 12-month period for general corporate purposes, primarily
as outlined below, assuming various levels of success of the offering.
$500,000 $250,000 $100,000
raised % raised % raised %
------ ---- ------- ---- ------- ----
Offering Expenses $82,077 16.4% $57,077 22.8% $42,077 42.1%
Salaries 120,000 24% 98,000 39% 18,000 18%
Marketing and
Advertising 43,300 8.7% 21,650 8.7% 8,660 8.7%
Inventory 91,427 18.3% 25,000 10% 18,000 18%
R&D 9,650 1.9% * 0% * 0%
Working Capital 153,546 30.7% 48,273 19.3% 13,263 13.2%
TOTAL $500,000 100% $250,000 100% $100,000 100%
* Research and Development will be put on hold until sufficient revenues
are generated to continue research and development of new products.
As outlined in the table above, management will decrease the amount
of proceeds used for each of the above estimated expenses (except for
R&D) according to the total monies raised in the offering.
Offering Expenses. These include legal counsel fees and costs,
accounting fees and costs, printing costs, mailing and travel
expenses, and related costs. This amount also includes a reserve for
possible commissions payable to registered broker dealers who may be
asked to assist in the offer and sale of the units. A maximum of
$50,000 is reserved for this purpose and management believes that no
broker dealer assistance likely will be required.
Salaries. These amounts include what Balanced Living estimates it
will take to maintain three full-time employees over the next 12
months.
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<PAGE>
Marketing and Advertising. These amounts represent what Balanced
Living estimates it will cost to purchase and print advertising
brochures, mailing lists, postage, advertisements printed in
magazines, newspapers, or tabloids, and the cost of paying commissions
to independent sales representative.
Inventory. These amounts consist of Balanced Living's stock of
participant seminar materials and The Balanced Woman products which it
sells at the seminars. These include:
- "The Balanced Woman" CD
- The Balanced Woman Knows (Book)
- "The Balanced Woman" Bookmarks
- The Balanced Woman Jewel Cards
- "The Balanced Woman" Fortune Cookie Greeting Cards
- The "Picture This" Packet
- Elements Bath Products (Purchased whole sale and resold by
Balanced Living)
- "Sarah's Smile" Beanie Baby Doll
- Participant's seminar materials includes a gift box, 3 guide
books, and a journal
Research & Development Expenses. These amounts represent what it the
Balanced Living expects the expenses associated with the development,
design, and initial production of new products or seminar materials to
be.
Working Capital. These amounts represent what Balanced Living
estimates it will take to cover its operating expenses not associated
with any of the above listed uses. It will cover office supplies,
referral fees, telephones, office equipment, rents, professional fees,
insurance liability/casualty and workers comp, repairs and maintenance
and other expenses associated with the day-to-day operations of
Balanced Living. As proceeds are received, and not used for offering
expenses, marketing and advertising, salaries, R&D, and Iventory they
would be added to cash bank balances, increasing working capital. None
of the proceeds raised hereby will be used to make any loans to
Balanced Living's promoters, management or their affiliates or
associates of any of Balanced Living's shareholders.
Balanced Living has not and does not presently intend to impose any
limits or other restrictions on the amount or circumstances under
which any of such transactions may occur except, that none of Balanced
Living's officers, directors or their affiliates shall receive any
personal financial gain from the proceeds of this offering except for
reimbursement for out-of-pocket offering expenses. No assurance can
be given that any of such potential conflicts of interest will be
resolved in favor of Balanced Living or will otherwise not cause
Balanced Living to lose potential opportunities.
DILUTION
The following table shows, on a pro forma basis as of November 30,
1998, the difference between existing shareholders (not including
existing options to buy shares) and new Investors purchasing units in
this offering (without respect to the Warrants).
SHARES TOTAL AVERAGE PRICE
PURCHASED CONSIDERATION PER SHARE
NUMBER PERCENT AMOUNT PERCENT
Existing
Shareowners 600,000(1) 71% $3,000 0.6% $0.005
New Investors 250,000(2) 29% $500,000 99.4% $2.000
Total 100.0% $503,000 100.0%
_________________
(1) Does not include options or warrants now outstanding.
(2) Does not include the Class A, Class B or Class C Warrants included in
the units.
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On November 30, 1998, Balanced Living had a net book value of
($233,130), or ($0.39) per share (based on 600,000 shares
outstanding). The net tangible book value per share is equal to
Balanced Living's total tangible assets, less its total liabilities
and divided by its total number of shares of common stock outstanding.
After giving effect to the sale of the units at the public offering
price of $2.00 per Unit, and the application of the estimated net
offering proceeds, the pro forma net tangible book value of Balanced
Living, as of November 30, 1998, would have been $184,793, or $0.22
per share, respectively. This represents an immediate increase in net
tangible book value of $0.61 per share or approximately 153% to
existing shareowners, and an immediate dilution of $1.78 per share or
approximately 90% to new Investors purchasing shares in this offering.
The following table illustrates the per share dilution in net tangible
book value per share to new Investors:
Public offering price per Unit $2.00
Pro forma net tangible book value ($0.39)
per share as of November 30, 1998
Increase per share attributed to $0.61
investors in this offering
Pro forma net tangible book value $0.22
per share as of November 30, 1998,
after this offering
Net tangible book value dilution $1.78
per share to new investors
Assuming only a minimum of 50,000 units offered are sold there would
be a total of 650,000 common shares issued and outstanding. The net
proceeds to Balanced Living after deducting offering costs of $42,077
would be $57,923. Adding the net proceeds to the net tangible book
value, the total net tangible book value of Balanced Living would be
($175,207). Dividing the net worth of Balanced Living by the number of
shares outstanding discloses a per share book value of approximately
($.27) per share. Therefore, the shareholders who purchased pursuant
to the offering will suffer an immediate dilution of $2.27 or
approximately 114% and the present shareholders will receive an
immediate book value increase of $0.12 per share or approximately 30%.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results
Balanced Living is a new enterprise and a development stage
company. Its revenues to date have been marginal, and there is no
prior year or quarter period to effectively compare operating results.
As of November 30, 1998, Balanced Living was operating at a loss.
Balanced Living anticipates becoming profitable in 1999, although
there can be no assurance of this result. Although Balanced Living
presented its seminars to approximately 360 people in 1998, the
majority of these persons were complimentary participants used to
evaluate for development purposes and build reputation of referrals.
This is typical for a seminar start-up company and accounts for the
relatively low level of revenue earned in 1998.
Plan Of Operations
Balanced Living's plan of operation for the next 12 months is to
raise funds through the offering, present the "Balanced Woman"
seminars, train additional facilitators, advertise and market its
seminars and products and continue to research and develop new
products and seminar materials. In addition to providing capital to
help defray the cost of salaries, marketing, advertising, inventory,
and research and development, management believes that a principal use
of the offering proceeds will be to provide initial working capital to
continue operations until
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sufficient revenues are generated to cover such operating expenditures. Balance
Living will need to immediately look to raise additional funds if any amount
less than the maximum amount of this offering is raised. Funding for less
then the maximum amount will severely hamper Balanced Livings ability to
continue the development of new products and seminar materials and limit the
Balanced Living's expansion into other market areas.
Balanced Living's Business Plan Progress
The information in this prospectus other than historical information
is "forward looking information" presenting management's beliefs and
estimates about the future. These beliefs, plans and estimates are
subject to significant risks. See "Risk Factors."
Many national women's magazines, i.e., such as, "Women's Day,
"McCalls", and "Self Magazine" have published personal growth articles
such as the importance of nurturing your body, mind, and spirit. Dr.
Andrew Weil's best selling book, Spontaneous Healing, also speaks of
the need to nurture our body, mind, and spirit for good health and
well-being which is a key component of personal growth. Oprah
Winfrey's talk show this past year and up to the present time has
featured experts and guest who specialize in personal growth for
women, having identified this as a rapidly growing area of interest
for women. As stated on the New York Times web site on February 8,
1999, www.nytimes.com, in the technology segment: "Microsoft is set to
introduce a new web site for women hoping to capture what many feel is
the fastest growing market on the internet." Internet sites such as
www.allaboutwomen.com devote much of their home page to personal
growth and self-care subject matter.
Balanced Living has reviewed many studies found in articles placed
in magazines such as "McCalls, March 1998", "Self Magazine", 1998 and
"Inc. Magazine", May 19, 1998 and "Fast Company Magazine"
February/March, 1999 , an issue in which an article that is titled
"Balancing Act, Ten Ways to Get a Life", covers and supports Balanced
Living's entire curriculum. Each of Balanced Woman's seven principles
is studied in this articles and these articles are showing that women
are placing a high value on meaningful, life enhancing products that
focus on:
- Relationships and networking
- Relevant factual information
- Time efficiency management
- Reputation and support
- Brand loyalty, and
- The opinion of others.
In June of 1998, Gateway to the Women's Network stated on its web
page http://www.//Women'sNetwork.com that in 1997 women spent $80.3
billion on these self-improvement products and services. These
expenditures included self-help books, personal services, journals,
and other related personal growth products.
Balanced Living is positioned to offer a series of three seminars,
multiple products and other services to re-enforce and support seminar
participants. As a result of Balanced Living's first developmental
year, a market appeal has been established for the Balance Living
seminars and products. This experience has proven that word-of-mouth
advertising, relationship marketing, which is based on personal
contacts with a potential customer due to an existing relationship or
a referral from a satisfied customer is a strong influencing factor in
Balanced Living's growth and market penetration.
During 1998, Balanced Living designed and produced seminar
curriculum and participant materials, and launched seminars in Salt
Lake City and Newport Beach. Twelve seminars were taught, averaging
thirty women per seminar.
Balanced Living currently has seven customized Balanced Woman
products, including:
- A short "affirmation book" called A Balanced Woman Knows
- "Balanced Woman Collection" CD
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- "Picture This" Packet
- Balanced Woman bookmarks
- Seven Balanced Woman Principles "Jewel Cards"
- "Balanced Woman" T-Shirts
- "Sarah Smiles" bean bag doll
Balanced Living is also selling self-care products, which are
purchased at wholesale and sold at 100% mark-up. Products sales at
seminars are steadily increasing, ranging at $3.70 per person in the
first seminars to a current level of over $10.25 per person, compared
with Balanced Living's own $7.50 per person target for the first year.
Balanced Living's plan of operation for 1999 includes increasing the
number of customers served in Salt Lake City and Orange County, as
well as, expanding the number of seminar cities to include Denver, Los
Angeles and Seattle. Balanced Living aims to increase the number of
participants to an average of forty in each seminar. A target average
of five seminars will be presented each month for a target total of
sixty seminars to be taught in 1999. Balanced Living's average
participant fee income is planned to increase from $100 (due to
introductory specials) to an average seminar fee of $175.
Balanced Living intends to add two independent contractors to
facilitate seminars, each of whom will be paid a teaching fee for each
seminar taught. Each trainer will complete an extensive train-the-
trainer program by April 1, 1999, and will be prepared to facilitate
seminars for the remainder of 1999. Gross seminar income is planned
to average $8,000 per seminar, bringing in approximately $40,000 per
month, beginning in the second quarter of 1999. We hope to complete
the presentation of sixty (60) seminars in 1999, bringing in an
approximate total seminar revenue of $480,000. Projected product
sales revenue of $183,000 will be in addition to the projected
$480,000 in seminar revenues, bringing total Company projected 1999
revenues to $663,000.
Balanced Living projects direct seminar expenses to average $2,700
per seminar, for a total average of $13,500 in such projected expenses
each month. The overall Company projected expense budget for 1999 is
$472,800. This results in a projected 1999 profit of $190,200. (This
budget includes salaries for four full time and two part-time
employees.)
Assuming the success of this Offering, eight new products will be
added to Balanced Living's product line in 1999. These products will
include:
- A new full-size hard cover book called The Balanced Woman
- "The Balanced Woman Journal"
- "The Dumping Book", a woman's clearing journal
- Meditation CD (2)
- "Balanced Woman" Seminar cassette series
- "Sara" Coloring Book
- "What" Box
Balanced Living will also be purchasing an "inner-child" CD at
wholesale and selling it at retail at the seminars. Balanced Living
will maintain an average of 50% mark-up on all products it distributes
at its seminars.
The foregoing forward-looking statements could be negatively
impacted by an inability to recruit, hire, and retain skilled seminar
facilitators, or a copyright infringement of Balanced Living's unique
curriculum materials and products and resulting litigation, as well as
the failure to raise a substantial portion of this Offering. The risks
discussed earlier in this Prospectus (See "Risks", at page 3) could
also negatively effect Balanced Living's ability to meet its
projection in 1999. To combat these potentially harmful conditions,
Balanced Living has secured the assistance of an intellectual rights
attorney and is taking every measure possible to protect and copyright
all materials. Because skilled trainers will be key to Balanced
Living's growth, time and attention is being placed into recruitment
efforts. There is already an adequate pool of candidates from which
to select.
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Liquidity And Capital Resources
Balanced Living requires the investor capital to continue the
development of its business plan. While it has been able to borrow
needed operating capital from its founders to date, these sources have
indicated an unwillingness to continue to advance funds to the
Company. Balanced Living will depend on the funds to be raised in
this offering to stay in business and to implement its business plan.
If there is insufficient capital raised in this offering, Balanced
Living will be left to attempt to raise investor capital through other
offerings or placements at different prices or configurations.
Balanced Living has limited cash funds and may not be able to retain
the needed professional assistance if another offering were necessary
because this offering failed.
INFORMATION ABOUT BALANCED LIVING
An Overview Of Balanced Living
Balanced Living produces and presents values-oriented/personal
growth seminars and products aimed at women. Balanced Living operates
through its wholly owned subsidiary, Balanced Woman. Balanced Woman
earns revenues and profits from its seminars, products and service
offerings.
Upon completion of this offering, Balanced Living will become
subject to the informational filing requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). Balance Living
expects to file all required annual and quarterly reports. Balanced
Living intends to furnish its shareowners with annual reports
containing financial statements audited by an independent public
accounting firm after the end of its fiscal year on December 31.
Balanced Living 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, Balanced Living will
follow a policy of retaining all of its earnings, if any, to finance
development and expansion of its business.
History And Development Of Balanced Living
Balanced Living was incorporated in Colorado, on July 1, 1998.
Balanced Living's corporate offices are located at 6375 South Highland
Drive, Suite D, Salt Lake City, Utah 84121. Balanced Living's
telephone and fax numbers are:
- Voice: (801) 424-1624
- Facsimile: (801) 424-1626
Balanced Living was formed to be a holding company and financing
vehicle for Balanced Woman, and perhaps other companies or projects.
On July 14, 1998, Balanced Living acquired all of the outstanding
shares of common stock of Balanced Woman in exchange for shares of the
common stock of Balanced Living in a tax free exchange with the
shareholders of Balanced Woman shown on Balanced Woman's records at
that date. Currently Balanced Living has no other business plan than
to function as the holding company and financial support for Balanced
Woman.
The business concept for Balanced Woman was conceived in 1997 when
several of the founders of Balanced Living attended a seminar
presented by Rose Blackham in Orange County, California. Ms. Blackham
had previously taught this program in California and Colorado for
several years. After experiencing the positive response of the thirty
participants at the Orange County seminar, Ms. Blackham and the other
attending founders of Balanced Living conceived the concept of a
seminar company.
Balanced Woman was formed as a Colorado corporation in January 1998
as a company owned, managed and developed by women to provide services
and products that would support and assist women. The ten founders of
Balanced Living provided seed capital, and the first pilot seminar was
organized and presented by Balanced
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Woman in February 1998 in Salt Lake City, Utah.
In June 1998, Balanced Woman presented a seminar outside of the Salt
Lake City market by organizing a seminar in Newport Beach, California.
Balanced Woman perceived positive response from the Newport Beach
seminar, and management felt that its business concept was showing
market acceptance.
Balanced Living is now actively engaged in program refinement and
product development. Balanced Living is currently testing seven
products in the marketplace. During the remainder of 1999, Balanced
Woman plans to continue to test seminar formats, varying the seminar
hours, venues, and pricing structures. The curricula, pricing and
marketing systems will be fine-tuned as research continues.
Balanced Living's Business Model
Balanced Living teaches a curriculum and offers products and
services that are based on Balanced Woman's Seven Principles of
Balance:
- The Sacred
- Self-Care
- Relationships
- Play
- Home/Career
- Financial Serenity
- Personal Vision.
The product and service line includes seminars, membership-based
Circles of Women, and "Balanced Woman" Products. Balanced Living also
publishes a bi-monthly newsletter, which can be purchased through an
annual subscription or as part of the Circles of Women membership
package.
What follows is a brief description of Balanced Living's primary
service and product offerings:
Seminars
Balanced Woman currently offers a series of three seminars based on
The Seven Balanced Woman Principles. Seminar I is a one-day program;
Seminar II and III are both two and one-half day programs which teach
the participants more in depth how to implement the principles into
their daily lives. The Balanced Family, Balanced Relationships, and
The Balanced Man, as well as other related seminars, will be developed
and presented as an extension of The Balanced Living curriculum within
one to three years.
Wholesale/Retail Products
Balanced Living has created seven unique and innovative products
that invite women to actively share and live Balanced Woman
principles. Each product has a meaningful purpose and has been
created to support women in living the Seven Balanced Woman
principles.
Circles of Women
The Circles of Women membership has been established to provide a
supportive and nurturing setting in which eight to twelve women come
together monthly to be encouraged and supported in living Balanced
Woman Principles and to be motivated to express their personal vision.
Business Plan
Balanced Living has successfully launched two of its "Balanced Woman
Seminar" series, a one-day session and a two and half day seminar, and
is selling a full-range of "Balanced Woman" products to seminar
participants.
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Catalog, direct sales, and wholesale sales to retail
outlets and boutiques are still in planning and negotiation as of the
date of this Prospectus.
Market.
The primary market for Balanced Living's services and products
includes women in all walks of life. The women's personal growth/life
management market has increased dramatically in the last 10 years. See
"Business Plan Progress."
Marketing Plan.
Balanced Living's marketing strategy has been designed with a
multiple approaches. For example, through relationship marketing,
which is based on personal contacts with a potential customer due to
an existing relationship or a referral from a satisfied customer,
Balanced Living has achieved a high percentage of seminar sales. This
strategy saves on marketing expenditures.
Mass marketing (advertising to women throughout the general public,
instead of to a more narrow group or specific type of women) and
vertical marketing (entails advertising or selling to a specific group
of women within a specific industry; for example women who are real
estate agents, or women who belong to a specific organization or
association) promotions are made more effective because of cross
marketing relationships (advertising or selling products or services
in multiple ways. For example, a customer who subscribes to Balanced
Living's newsletter will receive invitations to attend Balanced Living
seminars, and all of Balanced Living's products will include
information about Balanced Living's seminar series). Balanced Living
is forming alliances with chambers of commerce, women's associations,
key business affiliations, and independent sales associates.
Advertising and Publicity
Balanced Living recognizes that a key to its success is becoming a
widely known name. To accomplish this goal, Balanced Living is
designing its product offerings and advertising brochures with common
themes, logos and styles. These products and services will be
marketed at and also sold separately from "Balanced Woman" seminars,
thus taking advantage of bookstores and gift shop advertising
opportunities.
Seminar Related
Balanced Living has joined and/or will join the chamber of commerce
in each of our business markets. In Salt Lake City, Balanced Living
is participating in the Chamber of Commerce Women's Forum. This will
increase our visibility and exposure within the business community and
leverage our business potential across the state. Balance Living will
try to repeat this model in other cities and states. Balanced Living
is also actively participating in local women's business associations
and business networks. Balanced Living has begun networking with
several potential seminar-sponsoring organizations, and anticipates
having a large number of local and national sponsoring companies with
special women interests, who will financially sponsor and endorse our
seminars, conferences and events.
Product Related
Management of Balanced Living has met with and are negotiating with
Advantage Publishers Group in San Diego, Ca., discussing and planning
the development and publication of Balanced Living's first book, The
Balanced Woman.
Several consultants and contract development firms have been
contacted to negotiate the arrangements for the design, development,
and production of Balanced Living's products scheduled within the
first phase product line. Management is also working with several
women's datebook planner companies to begin plans for production of
Balanced Living's customized datebook planner schedule for the second
line of products.
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Several individuals with experience in retailing women's apparel and
self-care products have contacted Balanced Living and are interested
in contracting for the "private labeling" of products for Balanced
Living.
Customer Base
Balanced Living's current customer base is made up of a broad
segment of the women's market. Products and services are designed to
appeal equally to women from a wide range of lifestyles. Seminar
evaluations consistently receive positive responses from a wide
variety of market segments, income levels, educational and
professional backgrounds. As its customer-base grows, Balanced Living
will collect, compile, and analyze customer characteristics, enabling
them to create a very detailed and specific customer profile for each
of the service and product lines we produce and offer.
Current Products & Services
Balanced Living is positioned to offer a three-part seminar series
based on:
- Seven specific principles
- Proprietary products that will support and reinforce "Balanced
Woman" principles
- "Circle of Women" memberships, designed to bring women
together monthly in small groups in a safe and nurturing
environment, to share, support, and connect.
Product offerings include:
- Books
- Tapes
- Music CD's
- Self-care products
- Games
- Jewelry
- Apparel
For instance, the "Balanced Woman Collection", a CD of the music
played throughout the first seminar has proven popular. Also, the
full-sized hardcover The Balanced Woman book is expected to be
published by winter 1999.
Seminars
Currently Balanced Living is offering its seminars through the
facilitation of Rose Blackham, a founder of Balanced Woman. Growth in
revenues from Balanced Living Seminars will come from multiple
facilitators in multiple locations. The "Balanced Woman Training
Academy", a "train-the-trainer" program is designed to train, develop
and certify high-quality, effective and inspiring trainers to
facilitate each of the seminars will leverage the curriculum and allow
for many more seminars than could be possible thorough Ms. Blackham
alone.
Products
Fifteen Balanced Living products are now being designed and in
various stages of completion and production, of which, seven are
currently being offered for sale at seminars and through other
marketing methods. Management has targeted winter 1999 to have
completed and published The Balanced Woman, a book that will
compliment Balanced Living seminars as well as provide independent
revenue opportunity. By this same date, management intends to
complete and produce all of the initial 15 items in its product line.
In addition to the customized products developed and produced by
Balanced Living, products will also be purchased from other sources
and sold with the private "Balanced Woman" label through various
distribution channels, including retail outlets, web sites,
catalogues, etc.
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Circles of Women
One of the keys to maximizing on-going revenues from "Balanced
Woman" Seminars is the "Circles of Women" program, providing on-going
mentoring and support to women who wish to continue a program of life
change as started at a seminar. Management has launched the first
Balanced Living "Circle of Women" in the Salt Lake City market, and
intends to have created the materials and systems necessary to support
Circles of Women in several new market areas, including Southern
California by June 1999.
Balanced Living's Competition
The financial and personal development information industry, while
large, is highly fragmented into many niches with some competitors
being successful in only certain niches, and with no company having
acquired dominance in the industry.
Many competitors have products and services that are marketed as
being similar, but Balanced Living believes that its customers can
quickly distinguish the difference between its products and services
and those of competitors. Balanced Living believes that its strong
testimonial base of satisfied customers is a growing competitive
advantage.
Balanced Living competes primarily with a large number of privately-
and publicly owned, educational and publishing companies providing
personal and financial development information through a variety of
media. Some competitors have greater financial, marketing,
distribution, technical and other resources than the Company. Some
examples of competitors in this general personal development market
are:
- Anthony Robbins & Associates
- Nightingale-Conant Corporation
- Franklin-Covey, Inc.
- American Marketing Systems, Inc.
- David G. Phillips Publishing Company, Inc.
- Agora, Inc.
- Ted Nicholas & Associates, Inc.
- Whitney Leadership Group
- The Hume Group, Inc.
Balanced Living's Operations
Accounting, purchasing, inventory control, scheduling, order
processing, warehousing and shipping activities for Balanced Living
are still under design and development, and exist in only the most
rudimentary levels. Balanced Living expects that, independent
contractors working for Balanced Living will perform production and
major vendor initial shipments. Balanced Living will maintain an
order flow computer record-keeping system to monitor customer
fulfillment and cross selling. This computer system will handle order
entry, order processing, picking, billing, accounts receivable,
accounts payable, general ledger, inventory control, catalog
management and analysis and mailing list management. Subject to
credit terms and product availability, orders will typically be
shipped to customers within a short time of receiving an order. Third
party contractors will print and assemble Balanced Living's audio and
videotapes, manuals, transcripts, newsletters, software, inserts and
the boxes in which the products are shipped.
Legal Proceedings
As of the date of this Prospectus, there is no pending litigation
involving Balanced Living.
Government Regulation
Balanced Living's business is subject to regulation under the
federal Telemarketing and Consumer Fraud and
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Abuse Prevention Act and state laws applicable to consumer protection and
telemarketing activities. See "Risk Factors." Management believes that it is
in substantial compliance with all of the foregoing federal and state
laws and the regulations promulgated thereunder. Any claim that the
Company is not in compliance could result in judgments or consent
agreements that required Balanced Living to modify its marketing
program. In the worst cases, enforcement of fraud laws can result in
forcing a business to close and to subject the business and its
management and employees to be subject to criminal prosecution and
civil damage actions.
Balanced Living's Employees
As of December 31, 1998, Balanced Living had three full-time
employees, Jeannene Barham, Deborah Smith, and Lisa Hawthorne and no
part-time employees. Employees are not represented by a labor union
and are not subject to any collective bargaining arrangement.
Balanced Living has never experienced a work stoppage and we believe
that it has good relations with its employees and contractors.
Balanced Living's Independent Contractors
Balanced Living also uses two independent contractors (Teri Sundh
for sales and marketing; and Tammy Houchen for clerical work). The
independent contractors are otherwise employed and may engage in
actions outside of Balanced Living. Ms. Rose Blackham (See "Management
of Balanced Living", below) takes no compensation from Balanced
Living; and is neither a employee or independent contractor and may
engage in actions outside of Balanced Living.
Balanced Living's Properties
Balanced Living rents the space in which its headquarters is located
at 6375 South Highland Drive, Suite D, Salt Lake City, Utah 84121.
This space contains two offices and a reception area, and comprises
approximately 600 square feet. It is occupied entirely by both
Balanced Living and Balanced Woman. This space is under lease by
Balanced Living for a ten (10) month period at $600 per month.
Management believes that this space will provide adequate office space
to meet Balanced Living's needs for the foreseeable future. The
independent contractors used by Balanced Living, as well as many of
its officers, work out of home based offices and keep limited
supporting files and other work for Balanced Living at their personal
residences.
MANAGEMENT OF BALANCED LIVING
The following persons are the current executive officers and
directors of Balanced Living.
NAME AGE POSITION
Jeannene N. Barham 61 President, Secretary/Treasurer
and sole Director of Balanced
Living and of Balanced Woman
Directors of Balanced Living are elected by the shareholders
annually, or as needed by the Board of Directors to fill vacancies.
Jeannene N. Barham is a founder of Balanced Living and of Balanced
Woman, and has held her current position since the inception of
Balanced Living and of Balanced Woman. During the last five years,
Ms. Barham has been director of public relations for the Focus Foundation,
a non-profit entity organized to help at-risk children. Between 1979
and 1990 she was Vice President of Marketing and Operations at The
Charles Hobbs Corp. (time management seminars and products). She is
active in community affairs, and currently serves as National
President of the Lambda Delta Sigma sorority. Ms. Barham is the sister
of Rose Blackham
Other Key Personnel And Independent Contractors
Rose N. Blackham is a founder of Balanced Living and of Balanced
Woman, and has held her current
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position since the inception of the Company and of Balanced Woman. During the
last five years, Ms. Blackham has conducted management training and personal
growth seminars as an independent contractor and consultant. She has been
involved in the management training and personal development industry for
over twenty (20) years. Ms. Blackham is the originator of
"Balanced Woman" concept and is the senior facilitator for "Balanced
Woman" seminars. Balanced Living regards Ms. Blackham as a visionary
leader and presenter, and she was one of the founders of Balanced
Living.
The loss of Ms. Blackham's counsel and services would have a
material adverse impact on the Balanced Living. Ms. Blackham is the
sister of Jeannene Barham.
Lisa Hawthorne is a founder of Balanced Living and of Balanced Woman
and she assists with program and product development. During the past
five years she was employed full time by Franklin Quest, Co., first as
International Operations Manager, and later as Director of Management
and Employee Training and Development.
Teri Sundh is a founder of Balanced Living and of Balanced Woman,
and has assisted with developing the sales and marketing strategy for
Balanced Living and Balanced Woman as an independent contractor.
During the last five years, Ms. Sundh has worked as Vice President of
Public Seminars for Franklin Quest, Co. and as a consultant for
numerous other seminar training companies. Ms. Sundh continues to do
consulting work for various training companies.
Balanced Living's Executive Compensation
Neither Balanced Living nor Balanced Woman has been in existence
for a full year, and neither has paid compensation to anyone for such
a period. The following table sets forth the aggregate (total)
compensation paid to the Chief Executive Officer of Balanced Living,
and to any other executive officer paid $100,000 or more during the
entire period of Balanced Woman's existence to the date of this
Prospectus.
(a) (b) (c) (d)
NAME AND YEAR SALARY BONUS
PRINCIPAL POSITION ($) ($)
Jeannene N. Barham, Since inception to 48,000.00 0
President and Chief March 1, 1999
Executive Officer
Explanation of Columns:
(c) SALARY: Total base salary earned during applicable period.
(d) BONUS: Any incentive award paid for results achieved during the
applicable period. Any amounts deferred at the election of the
executive are included in the reported amounts.
Balanced Living's Employment Agreements
No officer or employee of Balanced Living has an employment
agreement with Balanced Living at this time. If Balanced Living's
business plan proves initially successful, management intends to
recommend to the Board of Directors that the President and all key
employees be covered by employment agreements and non-compete
provisions.
Balanced Living's Long Term Incentive Plan
In January 1998, the Board of Directors of Balanced Living adopted
and the present stockholders approved, a
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1998 Stock Option Plan, ("1998 Plan"). The 1998 Plan authorizes the granting of
awards of up to 1,000,000 shares of common stock to Balanced Living's key
employees, officers, directors, consultants, advisors, and sales
representatives. Awards consist of stock options (both non-qualified
options and options intended to qualify as "Incentive" stock options
under Section 422 of the Internal Revenue Code of 1986, as amended),
restricted stock awards, deferred stock awards, stock appreciation
rights and other stock-based awards, as described in the 1998 Plan.
The 1998 Plan is administered by the Board of Directors which
determines the persons to whom awards will be granted, the number of
awards to be granted and the specific terms of each grant, including
the vesting thereof, subject to the provisions of the 1998 Plan. In
connection with qualified stock options, the exercise price of each
option may not be less than 100% of the fair market value of the
common stock on the date of grant (or 110% of the fair market value in
the case of a grantee holding more than 10% of the outstanding stock
of Balanced Living). The aggregate fair market value of shares for
which qualified stock options are exercisable for the first time by
such employee during any calendar year may not exceed $100,000. Non-
qualified stock options granted under the 1998 Plan may be granted at
a price determined by the Board of Directors, not to be less than the
fair market value of the common stock on the date of grant.
The 1998 Plan also contains certain change in control provisions
which could cause options and other awards to become immediately
exercisable and restrictions and deferral limitations applicable to
other awards to lapse in the event any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, including
a "group" as defined in Section 13(d), but excluding certain stockholders
of Balanced Living, became the beneficial owners of more than 25% of Balanced
Living's outstanding shares of common stock.
Balanced Living's Options And Restricted Stock Grants
The Founders of Balanced Living purchased stock options from the
Company for $500 for each 50,000 share stock option. Pursuant to such
options each Founder has been granted:
- An option to purchase up to an aggregate of 50,000 shares of
common stock at an exercise price of $1.00 per share.
- An option that has a duration of five years from date of vesting.
- An option providing for the vesting of 10,000 shares each year
for the first five years.
- An option in which shares of the option are subject to
adjustments in the event of Balanced Living's declaration of:
- Stock dividends
- Stock splits
- Reclassification
- Occurrence of other similar events.
Balanced Living has reserved 500,000 shares of common stock for
issuance of the Options and the Board of Directors will administer the
Options. At July 31, 1998, 450,000 Options were issued and 50,000 more
were issued November 4, 1998.
No shares of common stock have been granted to any employee or
contractor to date. Balanced Living has agreed to compensate Rose
Blackham for her services to Balanced Living in shares of restricted
common stock in amounts to be negotiated with the Board of Directors.
Shares of restricted stock are restricted in that, they are
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<PAGE>
subject to the resale restrictions of Rule 144 of the Securities and Exchange
Commission and possible vesting requirements imposed by Balanced
Living.
Balanced Living's Director Compensation
Balanced Living has no arrangements pursuant to which directors
have been compensated to date. No such director compensation has been
paid. Balanced Living has no plans to pay directors' compensation.
BALANCED LIVING'S PRINCIPAL SHAREHOLDERS
The following table shows certain information known to Balanced
Living regarding the beneficial ownership of Balanced Living's common
stock as of November 30, 1998, and as adjusted to reflect the shares
being sold through this offering, for:
- Each shareholder known by Balanced Living to own beneficially 5%
or more of the outstanding shares of its common stock.
- Each director.
- All directors and executive officers as a group.
Balanced Living believes that these beneficial owners, based on
information they have furnished, have sole investment and voting power
with respect to their shares, subject to community property laws where
applicable.
Name Class of Before the After the
Security offering(1) offering(2)
(Percent of class) (Percent of class)
Jeannene Barham common stock 300,000 (50%) 300,000 (35.5%)
Rose Blackham common stock 300,000 (50%) 300,000 (35.5%)
All directors common stock 300,000 (50%) 300,000 (35.5%)
and executive
officers as a
group (1 person)
________________________
(1) Includes any shares that any person or group has the right to acquire
anytime before November 30, 1998, pursuant to options or other rights.
(2) Assumes all 250,000 shares from the offering were sold and outstanding at
November 30, 1998.
CERTAIN TRANSACTIONS
There have been no material transactions between Balanced Living
and any affiliated person nor are any presently contemplated. All
transactions between Balanced Living or Balanced Woman and their
officers, directors, and principal shareowners and their affiliates
will be approved by a majority of the disinterested Directors of
Balanced Living, who do not have an interest in the transaction and
who had access, at Balanced Living's expense, to Balanced Living's or
independent legal counsel, and will be on terms no less favorable to
Balanced Living than could be obtained from unrelated third parties.
Ten women who assisted in forming Balanced Living acquired stock
options covering a total of 500,000 shares of Balanced Living common
stock at an exercise price of $1.00 per share. These options are for
50,000 shares each and vest over a five year period with 10,000 shares
vesting for each option holder each year, assuming goals outlined in
the option agreements are meet. The 10 Founders of Balanced Living
are:
- Rose Blackham
- Jeannene Barham
-21-
<PAGE>
- Terri Sundh
- Lisa Hawthorne
- Linda Ford
- Carole F. Madsen
- Gail Showalter Soderling
- Carol N. Jensen
- Barbara Ann Curl
- Keri McQuire
DESCRIPTION OF THE SECURITIES OF BALANCED LIVING
The Balanced Living Units
The units are specially created for the purposes of this offering.
Each Unit consists of one (1) share of common stock, and one each of
the Class A, Class B and Class C Warrants, described below.
Balanced Living's Preferred Stock
Balanced Living has 10,000,000 shares of preferred stock authorized,
of which none are currently issued and outstanding. The board of
directors is permitted to issue preferred stock in series with
differing preferences and rights.
Balanced Living's Common Stock
The authorized capital stock of Balanced Living consists of
50,000,000 shares of common stock, $0.001 par value (the "Common
Stock"), of which 600,000 shares were issued and outstanding on July
31, 1998. There were 2 holders of the common stock as of July 31,
1998.
Holders of the common stock are entitled to one vote per share on
all matters submitted to a vote of shareholders of Balanced Living and
may not cumulate votes for the election of directors. Holders of the
common stock have the right to receive dividends when, as, and if
declared by the Board of Directors from funds legally available
therefor. Upon liquidation of Balanced Living, holders of common
stock are entitled to share pro rata in any assets available for the
distribution to shareholders after payment of all obligations of
Balanced Living. Holders of common stock have no preemptive rights and
have no rights to convert their common stock into any other
securities.
All shares of common stock have equal rights and preferences. All
shares of common stock now outstanding are fully paid for and non-
assessable.
Balanced Living has never paid a cash dividend on the common stock.
Balanced Living currently intends to retain all earnings, if any, to
increase the capital of Balanced Living to effect planned expansion
activities and to pay dividends only when it is prudent to do so and
Balanced Living's performance justifies such action. Holders of Common
Stock are entitled to receive dividends out of funds legally available
therefor when, as and if declared by Balanced Living's Board of
Directors.
Description Of Balanced Living's Warrants
Balanced Living has issued three classes of common stock purchase
warrants for inclusion in the units offered in this offering.
- Class A Redeemable Warrants allow the purchase of one (1) share
of Common Stock for $3.00.
- Class B Redeemable Warrants allow the same one (1) share
purchase, but at $5.00 per common share.
- Class C Redeemable Warrants allow the purchase of one (1) share
of Balanced Living common stock for $10.00. (When referred to
together, "the Warrants".)
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<PAGE>
All of the Warrants are valid until December 31, 2003, when they
will expire.
All of the Warrants provide that Balanced Living is not obligated to
deliver shares of common stock pursuant to the exercise of a Warrant
unless a registration statement under the Securities Act of 1933, as
amended, with respect to the common stock underlying that Warrant is
effective at the Securities and Exchange Commission. Balanced Living
has filed a registration statement in connection with this offering,
and will use its best efforts to keep that registration statement, or
a replacement registration statement, current and effective as long as
the Warrants are outstanding and exercisable. There are costs
associated with keeping such a registration statement effective and
current. There can be no assurance that the Company will be able at all times
to maintain an effective registration statement covering the
Warrants.
Balanced Living believes that the Warrants are qualified in those
states where the units themselves have been qualified by registration
or exemption from registration. The attempted exercise of a Warrant
in a state where such exercise would be unlawful will not be honored.
The number of shares of common stock that may be acquired through
exercise of the Warrants (now one (1) share per Warrant) will be
adjusted for all then outstanding and unexercised Warrants to give
effect to any recapitalization, stock dividend or stock split taking
place at Balanced Living with the respect to the outstanding common
stock. Such adjustments will be made by Balanced Living, as
appropriate and notice of such adjustments will be mailed to all
record holders of the Warrants then outstanding.
The Warrants may be redeemed by Balanced Living, in all or only in
part, at a redemption price of $0.01 per Warrant at any time after one
(1) year from the issue date of the Warrant, if the public market
price for Balanced Living's common stock (if there is any such market)
equals or exceeds the exercise price for the particular Warrant.
Notice of any such redemption will be given at least 30 days before
the date fixed for redemption. Any Warrant selected for redemption
that is still outstanding and unexercised on and after the date fixed
for redemption will cease to have the rights of a Warrant and will
become only a right to receive the $.01 per Warrant redemption price.
Warrants are freely transferable, subject to requirements of
applicable securities laws. Balanced Living has entered into a
Warrant Agreement with its transfer agent, Interwest Transfer of Salt
Lake City, Utah, to supervise the transfer and exercise of the
Warrants. The form of this Warrant Agreement was filed as an exhibit
to the registration statement of which this Prospectus is a part.
LIMITATIONS ON OFFICERS AND DIRECTORS LIABILITY AND INDEMNIFICATION
Balanced Living's articles of incorporation provide that the Company
will indemnify any officer, director or former officer or director, to
the full extent permitted by law. This could include indemnification
for liabilities under securities laws enacted for shareowner
protection. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of Balanced Living pursuant to the
foregoing provisions, or otherwise, we have 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.
BALANCED LIVING'S TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the common stock will be
Interwest Transfer Company, Inc., 1981 E. 4800 South, Suite 100, Salt
Lake City, Utah 84117 (801) 272-9294.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, assuming the sale of all 250,000
units being offered, Balanced Living will have outstanding 850,000
shares of common stock, not including the 665,000 shares now covered
by warrants
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<PAGE>
and options, or the assumed total of 750,000 shares covered by the Class A,
Class B and Class C warrants included in the units. Of the outstanding
shares, the shares of common stock sold in this offering will be freely
tradable without restriction or further registration under the Securities
Act, except for any shares purchased by an "affiliate" of Balanced Living,
which will be subject to the resale limitations of Rule 144 adopted under the
Securities Act. All of the 600,000 shares that are held by exist
similar arrangement.
In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who has beneficially owned shares
for at least one year, including "affiliates" as that term is defined
under the Securities Act, is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of:
Act, is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of:
- One percent (1%) of the then outstanding shares of the common
stock
- The average weekly trading volume in the common stock during the
four calendar weeks immediately preceding the date on which the
notice of sale is filed with the Commission.
Sales under Rule 144 are subject to certain requirements relating
to manner of sale, notice and availability of certain current public
information about Balanced Living. A person (or persons whose shares
are aggregated) who is not deemed to have been an "affiliate" of
Balanced Living at any time during the 90 days immediately preceding
the sale and who has beneficially owned shares for at least two years
is entitled to sell such shares under Rule 144(k) without regard to
these limitations.
Balanced Living's common stock is not listed or quoted on any
organized exchange or other trading market, nor has Balanced Living
applied for a formal listing or quotation. Balanced Living does not
currently meet the numerical requirements to have its shares listed on
a United States stock exchange or quoted on the NASDAQ over-the-
counter market. A trading market may not develop or be sustained.
The post-offering fair value of Balanced Living's common stock,
whether or not any secondary trading market develops, is variable and
may be impacted by the business and financial condition of Balanced
Living, as well as factors beyond Balanced Living's control. Sales of
substantial amounts of shares in any public market could cause lower
market prices and even make it difficult for Balanced Living to raise
capital through a future offering of its equity securities.
PLAN OF DISTRIBUTION FOR THIS OFFERING
No Broker-Dealer Or Selling Agent
Now Planned
Balanced Living is offering
250,000 units of Balanced Living's
securities through Ms. Jeannene
Barham on a "best-efforts" basis.
Each Unit consists of:
- one (1) share of $.001 par
value common stock
- one (1) Class A common stock
Purchase Warrant
- one (1) Class B common stock
Purchase Warrant
- one (1) Class C Common Stock
Purchase Warrant
at a total purchase price of $2.00
per Unit. The offering will be
managed by the Ms. Barham without
any underwriter, and without any
underwriting discounts or sales
commissions. Jeannene Barham will
receive no sales commissions or
other compensation, except for
reimbursement of expenses actually
incurred on behalf of Balanced
Living for such activities. In
connection with her efforts, she
will rely on the "safe harbor"
provisions of Rule 3a4-1 of the
Securities and Exchange Act of 1934
(the "1934 Act"). Generally
speaking, Rule 3a4-1 provides an
exemption from the broker/dealer
registration requirements of the
1934 Act for associated persons of
an issuer. There is no minimum
offering, therefore all
subscriptions will be paid directly
to Balanced Living upon receipt.
No one, including Balanced
Living, has made any commitment to
purchase any or all of the units,
except as noted below with respect
to the settlement of certain note
obligations of Balanced Living to
its founders and certain initial
investors.
Rather, Ms. Barham will use her
best efforts to find purchasers for
the units.
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<PAGE>
Balanced Living retains the
right to utilize the services of
broker/dealers ("Participating
Broker/Dealers") who are members of
the National Association of
Securities Dealers, Inc. ("NASD")to
offer and sell the units. Balanced
Living reserves the right to pay
commissions in connection with
sales effectuated through
participating Broker/Dealers in an
amount not to exceed 10% of the
sales price for sale effectuated by
them. Prior to the involvement of
any Participating Broker/Dealer in
the offering, Balanced Living must
obtain a no objection position from
the NASD regarding any contemplated
compensation and arrangements. In
view of the Commission's Division
of Corporation Finance any
Participating Broker/Dealer that
sells securities in this offering
will be deemed an underwriter as
defined in Section 2(11) of the
Securities Act of 1933, as amended.
Further, Balanced Living will amend
the Prospectus and the registration
statement of which it is a part by
post-effective amendment to
identify a selected Participating
Broker/Dealer.
Balanced Living reserves the
right to reject any subscription in
full or in part and to terminate
the offering at any time.
Officers, directors present
shareholders of Balanced Living and
persons associated with them may be
sold some of the units. However,
officers, directors and their
affiliates shall not be permitted
to purchase more than 20% of the
units sold hereunder and such
purchases will be held for
investment and not for resale. In
addition, no proceeds from this
offering will be used to finance
any such purchases.
Balanced Living presently has a
total of $255,000 in unsecured
notes payable to founders and
initial investors. The first of
these notes will come due August 1,
1999. The holders of these notes
have the right to demand payment of
their notes early in order to
purchase units in this offering.
These note holders have expressed a
present intention to exercise this
right and invest the full amount of
these notes into this offering.
This would result in these founders
and related investors purchasing
127,500 units.
EXPERTS
The Consolidated balance sheets of Balanced Living, Inc. as of July
31, 1998 and the related statements of operations, stockholders'
deficit and cash flows for the period ended July 31, 1998, included in
this Prospectus, have been included herein in reliance on the report
of Pritchett, Siler & Hardy, P.C. independent certified public
accountants, given on the authority of that firm as experts in
accounting and auditing.
LEGAL MATTERS
Ray Quinney & Nebeker PC has passed on certain legal matters for
Balanced Woman and for Balanced Living in connection with this
offering. No attorney at Ray Quinney & Nebeker is related by blood or
otherwise to any affiliate of Balanced Living or of Balanced Woman,
nor does any attorney at Ray Quinney & Nebeker beneficially own any of
the securities of Balanced Living or of Balanced Woman.
WHERE CAN YOU FIND ADDITIONAL INFORMATION
A Registration Statement on Form SB-2, including amendments thereto,
relating to the shares offered hereby has been filed with the
Securities and Exchange Commission. This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any contract or other document
referred to are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. For further information
with respect to Balanced Living and the shares offered hereby,
reference is made to such Registration Statement, exhibits and
schedules. A copy of the Registration Statement may be inspected by
anyone without charge at the Commission's principal office located at:
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<PAGE>
- Securities and Exchange Commission
450 Fifth Street, N.W.,
Washington, D.C. 20549
- Northeast Regional Office
Securities and Exchange Commission
7 World Trade Center, 13th Floor,
New York, New York, 10048
- Midwest Regional Office
Securities and Exchange Commission
Northwest Atrium Center,
500 West Madison Street,
Chicago, Illinois 60661-2511
Copies of all or any part thereof may be obtained from the Public
Reference Branch of the Commission upon the payment of certain fees
prescribed by the Commission. The Commission also maintains a site on
the World Wide Web at http://www.sec.gov that contains information
regarding registrants that file electronically with the Commission.
[THIS SPACE LEFT BLANK INTENTIONALLY]
FINANCIALS
BALANCED LIVING, INC.
[A Development Stage Company]
UNAUDITED CONSOLIDATED BALANCE SHEET
ASSETS
November 30,
1998
_____________
CURRENT ASSETS:
Cash in bank $ 7,614
Inventory 18,049
Prepaid assets 600
___________
Total Current Assets 26,263
EQUIPMENT, net 3,318
___________
$ 29,581
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ -
Accounts payable - related party 471
Notes payable - related party 255,000
Accrued liabilities 7,240
___________
Total Current Liabilities 262,711
___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
600,000 shares issued and outstanding 600
Paid in capital 7,400
Deficit accumulated during the
development stage (241,130)
___________
Total Stockholders' Equity (Deficit) (233,130)
___________
$ 29,581
___________
F-1
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Period From Inception
from August 1, on January 26,
1998 Through 1998 Through
November 30, 1998 November 30, 1998
_____________ _____________
REVENUE $ 9,147 $ 15,614
COST OF SALES 6,364 20,129
_____________ _____________
GROSS PROFIT (LOSS) 2,783 (4,515)
_____________ _____________
EXPENSES:
General and administrative 98,970 224,313
_____________ _____________
OPERATING LOSS (96,187) (228,828)
OTHER INCOME (EXPENSE):
Interest income 18 18
Interest expense (7,523) (12,320)
_____________ _____________
LOSS BEFORE INCOME TAXES (103,692) (241,130)
CURRENT TAX EXPENSE - -
DEFERRED TAX EXPENSE - -
_____________ _____________
NET LOSS $ (103,692) $ (241,130)
_____________ _____________
LOSS PER COMMON SHARE:
Basic loss per share $ (.17) $ (.40)
_____________ _____________
Weighted average shares
outstanding 600,000 600,000
_____________ _____________
F-2
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FROM INCEPTION ON JANUARY 26, 1998
THROUGH NOVEMBER 30, 1998
Deficit
Accumulated
Common Stock During the
___________________ Paid in Development
Shares Amount Capital Stage
________ _________ _________ _________
BALANCE, January 26, 1998 - $ - $ - $ -
Issuance of 100,000 shares
common stock for cash,
February 10, 1998 at
$.01 per share 100,000 100 900 -
Effect of reorganization
of Balanced Living through
the issuance of 500,000
shares of common stock
to acquire "The Balanced
Woman, Inc." pursuant
to agreement and plan
reorganization on
July 14, 1998 500,000 500 1,500 -
Consideration received for
the grant of 450,000
non-qualified stock
options, at $.01 per
underlying share of stock - - 4,500 -
Net loss for the period
ended July 31, 1998 - - - (137,438)
_________ _________ _________ _________
BALANCE, July 31, 1998 600,000 600 6,900 (137,438)
Consideration received
for the grant of 50,000
non-qualified stock
options, at $.01 per
underlying share of
stock - - 500 -
Net loss for the period
ended November 30, 1998 - - - (103,692)
_________ _________ _________ _________
BALANCE, November 30, 1998 600,000 $ 600 $ 7,400 $(241,130)
_________ _________ _________ _________
F-3
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Period From Inception
from August 1, on January 26,
1998 Through 1998 Through
November 30, 1998 November 30, 1998
_______________ _______________
Cash Flows Used by Operating Activities:
Net loss $ (103,692) $ (241,130)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 177 318
Changes in assets and liabilities:
Decrease in shareholder advance
receivable 1,000 -
Increase in inventory (3,278) (18,049)
Increase in prepaid assets - (600)
Decrease in accounts payable (6,242) -
Increase in accounts payable -
related party - 471
Increase in accrued liabilities 4,276 7,240
_______________ _______________
Net Cash Used by Operating
Activities (107,759) (251,750)
_______________ _______________
Cash Flows Used by Investing Activities:
Equipment purchases (563) (3,636)
_______________ _______________
Net Cash Used by Investing
Activities (563) (3,636)
_______________ _______________
Cash Flows Provided by Financing Activities:
Proceeds from options granted 500 5,000
Proceeds from common stock issuance - 3,000
Proceeds from notes payable issuance 95,000 255,000
_______________ _______________
Net Cash Provided by Financing
Activities 95,500 263,000
_______________ _______________
Net Increase (Decrease) in Cash (12,822) 7,614
Cash at Beginning of Period 20,436 -
_______________ _______________
Cash at End of Period $ 7,614 $ 7,614
_______________ _______________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ 6,625 $ 8,458
Income taxes $ - $ -
Supplemental schedule of Noncash Investing and Financing Activities:
For the period ended November 30, 1998:
Balanced Living entered into a reorganization with The Balanced
Woman, Inc. wherein the shareholders of The Balanced Woman
retained 500,000 shares of stock in Balanced Living.
F-4
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTE TO UNAUDTITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by Balanced Living
without audit. In the opinion of management, all adjustments necessary to
present fairly the financial position, results of operations and cash flows
at November 30, 1998 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The results of operations for the
interim periods ended November 30, 1998 are not necessarily indicative of
the operating results for the full year.
F-5
BALANCED LIVING, INC.
[A Development Stage Company]
CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1998
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
BALANCED LIVING, INC.
[A Development Stage Company]
F-6
<PAGE>
CONTENTS
PAGE
- Independent Auditors' Report 1
- Consolidated Balance Sheet, July 31, 1998 2
- Consolidated Statement of Operations, from
inception on January 26, 1998 through
July 31, 1998 3
- Consolidated Statement of Stockholders'
Deficit, from inception on January 26, 1998
through July 31, 1998 4
- Consolidated Statement of Cash Flows, from
inception on January 26, 1998 through
July 31, 1998 5
- Notes to Consolidated Financial Statements 6 - 12
F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
BALANCED LIVING, INC.
Sandy, Utah
We have audited the accompanying consolidated balance sheet of
Balanced Living, Inc. and The Balanced Woman, Inc., its only
subsidiary [a development stage company] at July 31, 1998, and
the related consolidated statements of operations, stockholders'
deficit and cash flows from inception on January 26, 1998 through
July 31, 1998. 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 consolidated financial statements audited by
us present fairly, in all material respects, the consolidated
financial position of Balanced Living, Inc. and Subsidiary as of
July 31, 1998, and the consolidated results of their operations
and their cash flows for the period from inception through July
31, 1998, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 13 to the financial statements, the Company was only
recently formed and has not yet established profitable
operations, has incurred losses through July 31, 1998 amounting
to $137,438, has current liabilities in excess of current assets
and has a stockholders deficit. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans in regards to these matters are also described
in Note 13. The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
August 7, 1998
F-8
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONSOLIDATED BALANCE SHEET
ASSETS
July 31,
1998
_____________
CURRENT ASSETS:
Cash in bank $ 20,436
Shareholder advance receivable 1,000
Inventory 14,771
Prepaid assets 600
___________
Total Current Assets 36,807
EQUIPMENT, net 2,932
___________
$ 39,739
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 6,242
Accounts payable - related party 471
Notes payable - related party 160,000
Accrued liabilities 2,964
___________
Total Current Liabilities 169,677
___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
600,000 shares issued and outstanding 600
Paid in capital 6,900
Deficit accumulated during the
development stage (137,438)
___________
Total Stockholders' Equity (Deficit) (129,938)
___________
$ 39,739
___________
The accompanying notes are an integral part of these financial
statements.
F-9
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONSOLIDATED STATEMENT OF OPERATIONS
From Inception
on January 26,
1998 Through
July 31, 1998
_______________
REVENUE $ 6,467
COST OF SALES 13,765
_____________
GROSS PROFIT (LOSS) (7,298)
_____________
EXPENSES:
General and administrative 125,343
_____________
OPERATING LOSS (132,641)
OTHER INCOME (EXPENSE):
Interest expense (4,797)
_____________
LOSS BEFORE INCOME TAXES (137,438)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
_____________
NET LOSS $ (137,438)
_____________
LOSS PER COMMON SHARE:
Basic loss per share $ (.23)
_____________
Diluted loss per share $ (.23)
_____________
The accompanying notes are an integral part of these financial
statements.
F-10
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FROM THE DATE OF INCEPTION ON JANUARY 26, 1998
THROUGH JULY 31, 1998
[RESTATED]
Deficit
Accumulated
Common Stock During the
______________________ Paid in Development
Shares Amount Capital Stage
______________________________________________
BALANCE, January 26, 1998 - $ - $ - $ -
Issuance of 100,000 shares
common stock for cash,
February 10, 1998 at
$.01 per share 100,000 100 900 -
Effect of reorganization of
the Company through the
issuance of 500,000 shares
of common stock to acquire
"The Balanced Woman, Inc."
pursuant to agreement and
plan reorganization on
July 14, 1998 500,000 500 1,500 -
Consideration received for
the grant of 450,000 non-
qualified stock options,
at $.01 per underlying
share of stock - - 4,500 -
Net loss for the period
ended July 31, 1998 - - - (137,438)
______________________________________________
BALANCE, July 31, 1998 600,000 $ 600 $ 6,900 $ (137,438)
______________________________________________
The accompanying notes are an integral part of these financial
statements.
F-11
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONSOLIDATED STATEMENT OF CASH FLOWS
From Inception
on January 26
1998 Through
July 31, 1998
__________________
Cash Flows Used by Operating Activities:
Net loss $ (137,438)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 141
Changes in assets and liabilities:
Increase in shareholder advance receivable (1,000)
Increase in inventory (14,771)
Increase in prepaid assets (600)
Increase in accounts payable 6,242
Increase in accounts payable - related party 471
Increase in accrued liabilities 2,964
________________
Net Cash Used by Operating Activities (143,991)
________________
Cash Flows Used by Investing Activities:
Equipment purchases (3,073)
________________
Net Cash Used by Investing Activities (3,073)
________________
Cash Flows Provided by Financing Activities:
Proceeds from options granted 4,500
Proceeds from common stock issuance 3,000
Proceeds from notes payable issuance 160,000
________________
Net Cash Provided by Financing Activities 167,500
________________
Net Increase in Cash 20,436
Cash at Beginning of Period -
________________
Cash at End of Period $ 20,436
________________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ 1,833
Income taxes $ -
Supplemental schedule of Noncash Investing and Financing
Activities:
For the period ended July 31, 1998:
The Company entered into a reorganization with The Balanced
Woman, Inc. wherein the shareholders of The Balanced Woman
retained 500,000 shares of stock in the Company.
The accompanying notes are an integral part of these financial
statements.
F-12
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Balanced Woman, Inc. ("Subsidiary") was
organized under the laws of the State of Colorado on January 26,
1998. During July, 1998 the Company was reorganized through a
stock for stock exchange with Balanced Living, Inc. ("Parent")
[See Note 2]. Balanced Living, Inc. a Colorado corporation, was
organized on July 1, 1998. The Company has not raised
significant revenue from planned principal operations and is
considered a development stage company as defined in SFAS No. 7.
The Company is engaged in the business of holding motivational
seminars, and selling books and other motivational products. 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.
The company expects to adopt December 31st as its fiscal year end.
Consolidation - The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, The
Balanced Woman, Inc. All significant intercompany transactions
have been eliminated in consolidation.
Inventories - Inventories are stated at the lower of cost or
market. Cost is determined by the first-in, first-out method.
Equipment - Equipment is carried at cost and is depreciated over
the estimated useful life of the equipment using the straight
line method.
Revenue Recognition - The Company's revenue comes from holding
motivational seminars and selling motivational products (books,
cards, CD's, etc.). Revenue is recognized when the services are
rendered or the product is delivered.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with FASB 128 "Earnings Per
Share".
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.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Fair Value of Financial Instruments - Management estimates that
the carrying value of financial instruments on the consolidated
financial statements approximates their fair values.
Restatement - The financial statements have been restated to
reflect the reorganization of the Company pursuant to a stock for
stock exchange [See Note 2]. All references to common stock and
the numbers of shares issued and outstanding have been restated
to reflect the shares of common stock issued in the
reorganization.
F-13
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - BUSINESS REORGANIZATION
On July 14, 1998 the Company entered into an Agreement and Plan
of Reorganization wherein Parent acquired all the issued and
outstanding shares of common stock of Subsidiary in a stock for
stock exchange. Parent issued 500,000 shares of common stock in
the exchange. Parent and Subsidiary had similar ownership at the
time of reorganization and were considered to be entities under
common control. Accordingly, the reorganization has been
recorded in a manner similar to a pooling of interests.
NOTE 3 - INVENTORIES
Inventories consisted of finished goods in the amount of $14,771
at July 31, 1998.
NOTE 4 - EQUIPMENT
Equipment consists of the following:
Estimated
Useful Lives July 31,
in Years 1998
___________ __________
Office equipment 5 - 7 $ 3,073
__________
3,073
Accumulated depreciation (141)
__________
$ 2,932
__________
Depreciation expense for the period ended July 31, 1998 was $141.
NOTE 5 - NOTES PAYABLE
During March, 1998, the Company issued subordinated demand notes
payable to various officers, shareholders, and consultants in the
amount of $160,000. The notes bear interest at a rate of 10% per
annum with quarterly interest payments, the notes are due on
March 1, 1999. Note-holders can demand payment of the unpaid
principal plus accrued interest in order to purchase other equity
opportunities in the Company of equal value at any time prior
to the maturity date. As of July 31, 1998, interest payments have
been made in the amount of $1,833. The notes are subordinated by
80,000 warrants to purchase one share of the Company's stock
at $1 per share [See Note 6].
Subsequent to July, 1998, the Company raised an additional
$65,000 through issuing additional subordinated demand notes
payable, $25,000 of which came from a private investor. Warrants
for 32,500 shares of common stock were included in the
transaction.
F-14
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - CAPITAL STOCK
Common Stock - In connection with its acquisition of Subsidiary
on July 14, 1998, the Company issued 500,000 shares of its
previously authorized, but unissued common stock [See Note 2].
The Subsidiary had previously been funded with $2,000.
During January, 1998, the Company issued 100,000 shares of common
stock in connection with the organization of the Company at $.01
per share. Total proceeds amounted to $1,000.
Stock Warrants - During March, 1998, Subsidiary issued 80,000
common stock warrants to various officers, directors and
consultants in conjunction with the issuance of subordinated
notes payable [See Note 5]. Due to the reorganization of the
company [See note 2], the warrants of Subsidiary were cancelled,
and re-issued under the same terms by Parent during July, 1998.
Each warrant grants the holder the right to purchase one share of
the Company's common stock at a price of $1 per share. The
warrants may be exercised at any time prior to March 1, 2003. An
additional 32,500 warrants were issued subsequent to July, 1998.
Stock Option Plan - During January, 1998 the Company implemented
its 1998 stock option plan. The plan provides for 1,000,000
shares of common stock to be reserved for issuance to officers,
directors, employees and consultants as employment incentives.
As of July 31, 1998, no options have been issued under the plan.
Options granted vest over a five year period and are exercisable
at $1 per share. As of July 31, 1998 no options had vested.
Non-Qualified Stock Options - As of July 31, 1998, the Company
has issued a total of 450,000 options outside of the 1998 stock
option plan to various officers, directors and consultants of the
Company. These options are exercisable at $1 per share, and vest
over a five-year period, based upon certain conditions specified
in the option agreement. The options expire five years from the
date of vesting. As of July 31, 1998, no options had vested. An
additional 50,000 non-qualified options were issued subsequent to
July 31, 1998.
A summary of the status of the options granted under the
Company's stock option plans and other agreements at July 31,
1998 and changes during the period then ended is presented in the
table below:
1998
____________________________
Weighted Average
Shares Exercise Price
__________________________
Outstanding at
beginning of period - $ -
Granted 450,000 1.00
Exercised - -
Forfeited - -
Canceled - -
__________________________
Outstanding at
end of Period 450,000 $ 1.00
__________________________
Exercisable at
end of period - $ 1.00
__________________________
Weighted average
fair value of
options granted 450,000 $ -
__________________________
F-15
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - CAPITAL STOCK [Continued]
The fair value of each option granted is estimated on the date
granted using the Black-Scholes option pricing model with the
following weighted-average assumptions used for grants during
the period ended July 31, 1998: risk-free interest rate of
4.879%, expected dividend yield of 0%, expected life of 5
years, and expected volatility of 0%.
A summary of the status of the options outstanding under the
Company's stock option plans and other agreements at July 31,
1998 is presented below:
Options Outstanding Options Exercisable
________________________________ ____________________
Weighted Weighted Weighted
Range of Average Average Average
Exercise Number Remaining Exercise Number Exercise
Prices Outstanding Contractual Price Exercisable Price
Life
_______ ___________ __________ ________ __________ ________
$1.00 450,000 5 years $1.00 0 $1.00
The Company accounts for its option plans and other option
agreements under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related
interpretations. Accordingly, since all options granted were
granted with exercise prices at market value or above, no
compensation cost has been recognized in the accompanying
financial statements. Had compensation cost for these options
been determined based on the fair value at the grant dates for
awards under these plans and other option agreements
consistent with the method prescribed by Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation", the Company's net income and earnings per
common share would have been the proforma amounts as indicated
below:
Period Ended
July 31,
1998
____________
Net Loss As reported $ (137,438)
Proforma $ (137,438)
Loss per share As reported $ (.23)
Proforma $ (.23)
NOTE 7 - 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 31, 1998 the Company has
available unused operating loss carryforwards of approximately
$137,000, which may be applied against future taxable income and
which expire in 2013.
F-16
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - INCOME TAXES [Continued]
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $47,000 as of July 31, 1998 with an
offsetting valuation allowance of the same amount resulting in a
change in the valuation allowance of approximately $47,000 during
1998.
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share for the period ended July 31, 1998.
Weighted-Average
Loss Shares Per-Share
(Numerator) (Denominator) Amount
___________ _______________ _________
Basic loss per share
Net loss $ (137,438) 600,000 $ (.23)
_________
Effect of dilutive
securities
Warrants - -
Options - -
___________ _______________
Diluted loss per share
Net loss + assumed
conversions $ (137,438) 600,000 $ (.23)
___________ _______________ _________
The Company had at July 31, 1998, options and warrants to
purchase 450,000 and 80,000 shares of common stock ,
respectively, at prices of $1.00 per share, that were not
included in the computation of diluted loss per share because
their effect was anti-dilutive (the exercise price of the
options and warrants was greater than the average market price
of the common shares).
NOTE 9 - COMMITMENTS
The Company has agreed to compensate a majority shareholder of,
and independent contractor to, the Company for her services to
the Company in shares of the Company's restricted common stock.
The exact number of shares has yet to be negotiated with the
board of directors of the Company, and may be subject to vesting
rights imposed by the Company. No amounts have been accrued in
the accompanying financial statements for this agreement to issue
stock.
F-17
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SUB-LEASE AGREEMENT
During July, 1998, Balanced Living entered into an agreement to
sub-lease office space. The term of the lease is 10.5 months,
with no option to renew. The agreement terminates on June 1,
1999. Total base rent amounts to $6,300 and is due in monthly
installments of $600. As of July 31, 1998 the Company had
paid its first month's rent of $600 plus a security deposit of
$600.
NOTE 11 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company paid $20,000 in salary to
the Company's President/Secretary-Treasurer during the period
ended July 31, 1998.
Shareholder Advance - During the period ended July 31, 1998, the
Company made advances to the President/Secretary-Treasurer of the
Company totaling $1,000. The advances are non-interest bearing
and were subsequently repaid in full.
Accounts Payable - As of July 31, 1998 the Company owed $471 to
an option/warrant holder and consultant to the Company for
amounts paid on behalf of the Company for operating expenses and
inventory.
Notes Payable - As of July 31, 1998 the Company had outstanding
subordinated demand notes payable to various officers, directors,
shareholders and consultants totaling $160,000 [See Note 5]. Of
the notes, $10,000 were issued to the Company's
President/Secretary-Treasurer, and $50,000 were issued to a
majority shareholder.
Stock Warrants - During the period ended July 31, 1998, the
Company issued 80,000 common stock warrants to various officers,
directors and consultants [See Note 6]. Of the 80,000 warrants,
5,000 were issued to the Company's President/Secretary-Treasurer,
and 25,000 were issued to a majority shareholder.
Stock Options - During the period ended July 31, 1998, The
Company issued 450,000 stock options to various officers,
directors and consultants [See Note 6]. Of the 450,000 options,
50,000 were issued to the Company's President/Secretary-
Treasurer, and 50,000 were issued to a majority shareholder.
NOTE 12 - 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.
F-18
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles which
contemplate continuation of the Company as a going concern.
However, the Company was only recently formed, has not yet
established profitable operations, has incurred significant
losses since inception, and has a stockholder's deficit. The
Company also has current liabilities in excess of current assets
(a working capital deficiency). These factors raise substantial
doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise
additional funds through loans and/or through additional sales of
its common stock which funds will be used to assist in
establishing on-going operations. There is no assurance that the
Company will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of
these uncertainties.
NOTE 14 - SUBSEQUENT EVENTS
Proposed Public offering of Common Stock - the Company plans to
file a registration statement with the United States Securities
and Exchange Commission on Form SB-2 under the Securities Act of
1933. The Company proposes to sell 250,000 "units" at a price of
$2 per Unit, which price has been arbitrarily determined by the
Company. Each Unit consists of one share of the Company's $.001
par value common stock sold at $2 per share, one "Class A
Warrant" to purchase one share of common stock at $3 per share,
one "Class B Warrant" to purchase one share of common stock at $5
per share, and one "Class C Warrant" to purchase one share of
common stock at $10 per share. All warrants issued under the
offering will expire on December 31, 2003. The warrants are
callable if, after one year from the issuance date, public
trading develops and trading occurs for at least 20 consecutive
days. The warrants are callable at $.01 per warrant upon 30 days
notice by the Company to warrant holders. The units will be
offered and sold by officers 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. If a
registered broker dealer is used in selling any of the units, a
10% sales commission will be paid to those broker dealers who
assist in selling the units. The Company has not incurred any
stock offering costs as of July 31, 1998, but any such costs will
be netted against the proceeds of the proposed public offering.
Subordinated Demand Notes-Payable - Subsequent to July, 1998 the
Company issued additional subordinated demand notes payable for
proceeds totaling $95,000. Warrants for 47,500 shares of common
stock were also issued in the transaction.
Stock Options - Subsequent to July, 1998 the Company issued
additional non-qualified stock options for the purchase of 50,000
shares of common stock. The options will vest over a five year
period and are exercisable at $1 per share.
F-19
<PAGE>
No dealer, salesman or other person
is authorized to give any
information or to make any
representations other than those
contained in this Prospectus in
connection with the offer made
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 Balanced
Living since the date hereof.
TABLE OF CONTENTS
Item Page
Prospectus Summary 3
Risk Factors 4
Risks Inherent in Balanced
Living 4
Risks Related to the Nature of
Balanced Living's Business 5
Risks Related to Balanced
Living's Offering 5
Use of Proceeds 8
Dilution 9
Management's Discussion & Analysis
of Financial Condition and
Results of Operations 11
Information About Balanced Living 13
Management of Balanced Living 18
Balanced Living's Principal
Shareholders 21
Certain Transactions 21
Description of Common Stock of
Balanced Living 22
Shares Eligible for Future Sale 23
Balanced Living's Plan of
Distribution 24
Experts 25
Legal Matters 25
Where Can You Find Additional
Information 25
Balance Living's Financial
Statements Notes to Financial
Statements F-1
Balanced
Living,
Inc.
250,000
Common Stock Units
PROSPECTUS
March , 1999
-BACK COVER PAGE-
<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 registrant are insured or indemnified in any manner against any
liability which they may incur in such capacity are as follows:
Section 7-109-102 of the Colorado Code grants authority to a
Colorado corporation to indemnify officers and directors as follows:
(1) Except as provided in subsection (4), below, a corporation
may indemnify a person made a party to a proceeding because the person
is or was a director against liability incurred in the proceeding if:
(a) The person conducted himself or herself in good faith; and
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with
the corporation, that his or her conduct was in the
corporation's best interests; and
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
(2) Indemnification is appropriate as to a director's conduct
with respect to an employee benefit plan for a purpose the director
reasonably believed to be in the interests of the participants in or
beneficiaries of the plan is conduct that satisfies the requirement of
subparagraph (II) of paragraph (b) of (1), above. A director's
conduct with respect to an employee benefit plan for a purpose that
the director did not reasonably believe to be in the interests of the
participants in or beneficiaries of the plan shall be deemed not to
satisfy the requirements of paragraph (a) of (1), above.
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did not
meet the statutory standard of conduct.
(4) A corporation may not indemnify a director:
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) In connection with any other proceeding charging that the
director derived an improper personal benefit, whether or not
involving action in an official capacity, in which proceeding the
director was adjudged liable on the basis that he or she derived
an improper personal benefit.
(5) Indemnification must be limited to reasonable expenses
incurred in connection with the proceeding.
(6) The articles of incorporation, the bylaws or an agreement
made by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in
advance of the final disposition of the action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that he is not entitled to be indemnified by
the corporation. The
-28-
<PAGE>
provisions of this subsection do not affect any rights to advancement of
expenses to which corporate personnel other than directors or officers may be
entitled under any contract or otherwise by law.
The registrant's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Colorado
Business Corporation Act.
ITEM 25. Other Expenses of Issuance and Distribution*
The following table sets forth the estimated costs and expenses
to be paid by Balanced Living in connection with the offering
described in the Registration Statement.
Amount
SEC registration fee $ 1,390
Blue sky fees and expenses $ 4,937
Printing and shipping expenses $ 500
Contingent Broker Commissions $ 50,000
Legal fees and expenses $ 20,000
Accounting fees and expenses $ 4,000
Transfer, Escrow and Miscellaneous
expenses $ 1,250
Total $82,077
* All expenses except SEC registration fee are estimated.
ITEM 26. Recent Sales of Unregistered Securities
On July 14, 1998, Balanced Living agreed to issue 250,000 shares
of unregistered common stock to each of Ms. Barham and Ms. Blackham in
exchange for their shares of equal number in The Balanced Woman, Inc.
This offering was conducted in reliance on Section 4(2) of the
Securities Act and state corollary exemptions. Both Ms. Blackham and
Ms. Barham qualifiedas accredited investors at the time of this
transaction and had access to Balanced Living's financials and other
financial, corporate and business information and records.
On July 15, 1998, Balanced Living borrowed $160,000 from seven
persons and in that connection issued a total of 80,000 warrants to
purchase a total of 80,000 shares of Balanced Living's common stock,
at $1.00 per share, to these same persons. Balanced Living believes
that these notes and warrants were issued under the exemption of
Section 4(2) of the Securities Act, and corollary state exemptions.
Each of these persons were sophisticated and knowledgeable, and were
involved with the formation of Balanced Living and had access to
Balanced Living's financials and other financial, corporate and
business information and records. Moreover each of these persons had
the economic ability to lose the enter amount of their investment
without a material adverse effect on their ongoing ability to provide
for their families or their dependents.
On July 1, 1998, 100,000 shares of unregistered Company common
stock were issued to Ms. Barham and Ms. Blackham (50,000 each) in return
for $500.00 each. These shares were issued in reliance on the exemption
found in Section 4(2) of the Securities Act and corollary state
exemptions. Both Ms. Blackham and Ms. Barham were qualified as
accredited investors at the time of this transaction and had access to
Balanced Living's financials and other financial, corporate and
business information and records.
On August 12, 1998, Balanced Living borrowed $25,000 from Jolley
Family Trust and in that connection issued a total of 12,500 warrants
to purchase a total of 12,500 shares of Balanced Living's common
stock, at $1.00 per share to this same investor. Balanced Living
believes that these notes and warrants were issued under the exemption
of Section 4(2) of the Securities Act, and corollary state exemptions.
This investor is sophisticated and knowledgeable, and was involved
with the formation of Balanced Living and had access to Balanced
Living's financials and other financial, corporate and business
information and records. Moreover each of these persons
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<PAGE>
had the economic ability to lose the enter amount of their investment without
a material adverse effect on their ongoing ability to provide for
their families or their dependents.
On August 24, 1998, Balanced Living borrowed $40,000 from Carol N.
Jensen and in that connection issued a total of 20,000 warrants to
purchase a total of 20,000 shares of Balanced Living's common stock,
at $1.00 per share to this same investor. Balanced Living believes
that these notes and warrants were issued under the exemption of
Section 4(2) of the Securities Act, and corollary state exemptions.
This investor is sophisticated and knowledgeable, and was involved
with the formation of Balanced Living and had access to Balanced
Living's financials and other financial, corporate and business
information and records. Moreover each of these persons had the
economic ability to lose the enter amount of their investment without
a material adverse effect on their ongoing ability to provide for
their families or their dependents.
On October 30, 1998, Balanced Living borrowed $25,000 from Rose
Blackham and in that connection issued 12,500 warrants to purchase a
total of 12,500 shares of Balanced Living's common stock, at $1.00 per
share, to same investor. Balanced Living believes that these notes and
warrants were issued under the exemption of Section 4(2) of the
Securities Act, and corollary state exemptions. Ms. Blackham was
qualified as an accredited investors at the time of this transaction
and had access to Balanced Living's financials and other financial,
corporate and business information and records.
On November 4, 1998, Balanced Living borrowed $5,000 from Linda Ford
and in that connection issued a total of 2,500 warrants to purchase a
total of 2,500 shares of Balanced Living's common stock, at $1.00 per
share, to Ms. Ford. Balanced Living believes that these notes and
warrants were issued under the exemption of Section 4(2) of the
Securities Act, and corollary state exemptions. This investor is
sophisticated and knowledgeable, and was involved with the formation
of Balanced Living and had access to Balanced Living's financials and
other financial, corporate and business information and records.
Moreover each of these persons had the economic ability to lose the
enter amount of their investment without a material adverse effect on
their ongoing ability to provide for their families or their
dependents.
On December 4, 1998, Balance Living borrowed $ 40,000 from Kim &
Shannon Lundgren and in that connection issued a total of 20,000
warrants to purchase a total of 20,000 shares of Balanced Living's
common stock, at $1.00 per share, to such investor. Balanced Living
believes that these notes and warrants were issued under the exemption
of Section 4(2) of the Securities Act, and corollary state exemptions.
This investor is accredited and had access to Balanced Living's
financials and other financial, corporate and business information and
records. Moreover each of these persons had the economic ability to
lose the enter amount of their investment without a material adverse
effect on their ongoing ability to provide for their families or their
dependents.
On December 4, 1998, Balance Living borrowed $25,000 from Kent G.
and Marianne C. Stephens and in that connection issued a total of
12,500 warrants to purchase a total of 12,500 shares of Balanced
Living's common stock, at $1.00 per share, to Kent G. and Marianne C.
Stephens. Balanced Living believes that these notes and warrants were
issued under the exemption of Section 4(2) of the Securities Act, and
corollary state exemptions. This investor is sophisticated and
knowledgeable and had access to Balanced Living's financials and other
financial, corporate and business information and records. Moreover
each of these persons had the economic ability to lose the enter
amount of their investment without a material adverse effect on their
ongoing ability to provide for their families or their dependents.
On December 9, 1998, Balanced Living borrowed $10,0000 from Neidda
Shehady and in that connection issued a total of 5,000 warrants to
purchase a total of 5,000 shares of Balanced Living's common stock, at
$1.00 per share, to Ms. Shehady. Balanced Living believes that these
notes and warrants were issued under the exemption of Section 4(2) of
the Securities Act, and corollary state exemptions. This investor is
sophisticated and knowledgeable and had access to Balanced Livings
financials and other financial, corporate and business information and
records. Moreover this investor had the economic ability to lose the
enter amount of their investment without a material adverse effect on
their ongoing ability to provide for their families or their
dependents.
-30-
<PAGE>
ITEM 27. Exhibits
Index SEC Reference
Exhibit No. Document
*3.1 Articles of Incorporation
*3.2 By-Laws
*4.1 Agreement & Plan of Reorganization with The Balanced
Woman, Inc.
*4.2 Stock Option Agreement with Jeannene Barham
*4.3 Stock Option Agreement with Rose Blackham
*4.4 Stock Option Agreement with Terri Sundh
*4.5 Stock Option Agreement with Lisa Hawthorne
*4.6 Stock Option Agreement with Linda Ford
*4.7 Stock Option Agreement with Carole F. Madsen
*4.8 Stock Option Agreement with Gail Showalter Soderling
*4.9 Stock Option Agreement with Carol N. Jensen
*4.10 Stock Option Agreement with Barbara Ann Curl
*4.11 Stock Option Agreement with Keri McGuire.
*4.12 Form of Promissory Note used with private investors
*4.13 Form of Securities Purchase Agreement used with private
investors
*4.14 Form of $1.00 per share Warrants used with private
investors
*5 Opinion on Legality
*10 Stock Option Plan
*21 Subsidiaries of the small business issuer
+24.1 Consent of Pritchett, Siler & Hardy P.C.
*24.2 Consent of Counsel to Issuer (included in Exhibit 5)
*27 Financial Data Schedule
*99.1 Form of Subscription Agreement
*99.2 Form of Class A Warrant
*99.3 Form of Class B Warrant
*99.4 Form of Class C Warrant
*99.5 Form of Warrant Agreement with Trust Agreement
*99.6 Lease Agreement
- -----------------
* Previously filed
+ To be filed by amendment
ITEM 28. Undertakings
Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned Registrant hereby
undertakes to file with the Securities and Exchange Commission such
supplementary and periodic information, documents, and reports as may
be prescribed by any rule or regulation of the Commission heretofore
or hereafter duly adopted pursuant to authority conferred to that
section.
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 its Articles of
Incorporation or provisions of the Nevada Revised Statutes, 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 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 counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question,
whether or not such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
-31-
<PAGE>
The Registrant hereby undertakes to:
(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; (ii) Reflect in the
prospectus any facts or events which, individually or
together, represent a fundamental change in the information
in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and (iii)
Include any additional or changed material information on the
plan of distribution.
(2) For determining 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
has met all of the requirements of filing on Form SB-2 and has
authorized this Registration Statement to be signed on its behalf by
the undersigned, in Salt Lake City, Utah, on March 8, 1999.
Balanced Living, Inc.
By: /s/ Jeannene Barham
Jeannene Barham, Chief Executive Officer,
Director, and President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
Signatures Title Date
/s/ Jeannene Barham Chief Executive Officer March 8, 1999
Jeannene Barham President, Chief Financial
Officer and Director
-32-
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting
part of this Amendment to the Registration Statement on Form SB-2 for
Balanced Living, Inc., of our report dated August 7, 1998, relating to
the July 31, 1998 financial statements of Balanced Living,
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
March 4, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
FINANCIAL DATA SCHEDULE
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 10-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> JAN-26-1998 JAN-26-1998
<PERIOD-END> NOV-30-1998 JUL-31-1998
<CASH> 7,614 20,436
<SECURITIES> 0 0
<RECEIVABLES> 0 1,000
<ALLOWANCES> 600 600
<INVENTORY> 18,049 14,771
<CURRENT-ASSETS> 26,263 36,807
<PP&E> 3,636 3,073
<DEPRECIATION> (318) (141)
<TOTAL-ASSETS> 29,581 39,739
<CURRENT-LIABILITIES> 262,711 169,677
<BONDS> 0 0
0 0
0 0
<COMMON> 600 600
<OTHER-SE> (233,730) (130,538)
<TOTAL-LIABILITY-AND-EQUITY> 29,581 39,739
<SALES> 15,614 6,467
<TOTAL-REVENUES> 15,614 6,467
<CGS> (20,129) (13,765)
<TOTAL-COSTS> (244,442) (139,108)
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (12,302) (4,797)
<INCOME-PRETAX> (241,130) (137,438)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (241,130) (137,438)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (241,130) (137,438)
<EPS-PRIMARY> (.72) (.92)
<EPS-DILUTED> (.72) (.92)
</TABLE>
