<PAGE> 1
As filed with the Securities and Exchange Commission on ________, 1999.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-2/A-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------------------------------------
PICK-UPS PLUS, INC.
-------------------
(Name of Small Business Issuer in its charter)
DELAWARE 6794 31-12440524
- ------------------------ ------------------------- -------------------
(State of Incorporation) (Primary Standard (I.R.S. Employer
Industrial Classification I.D. Number)
Number
3532 Irwin Simpson Road, Mason, OH 45040 (513) 398-4344
-------------------------------------------------------
(Address and telephone number of principal executive offices)
3532 Irwin Simpson Road, Mason, OH 45040
----------------------------------------
(Address of principal place of business)
John Fitzgerald, President
Pick-Ups Plus, Inc.
3532 Irwin Simpson Road
Mason, OH 45040
(513) 398-4344
---------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies to:
Joel Bernstein, Esq., P.A.
11900 Biscayne Blvd., Suite 604
Miami, Florida 33181
(305) 892-1122
Fax:(305) 892-0822
Approximate date of proposed commencement of sale to the public: From time to
time after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed
Amount of Proposed Maximum
Shares Maximum Aggregate Amount of
Title of Each Class of To be Offering Price Offering Registration
Securities to be Registered Registered Per Unit(1) Price Fee
- --------------------------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Common Stock 950,000 (2) $1.00 $950,000 $264.10
======================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee based
upon the warrant exercise price.
(2) These shares are issuable on exercise of Warrants. The number of shares
may be increased by operation of anti-dilution provisions contained in
the Warrants.
We hereby amend the Registration Statement on such date or dates as may
be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Acts 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.
2
<PAGE> 3
PICK-UPS PLUS, INC.
PROSPECTUS
NOVEMBER __, 1999
950,000 shares of common stock
Our common stock does not currently trade on any market.
The shares for this offering are being sold by the selling security holders
named under Plan of Distribution Selling Security Holders.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
3
<PAGE> 4
PROSPECTUS SUMMARY
THE OFFERING
Common stock offered by selling security holders 950,000 shares
Shares of common stock to be outstanding assuming
all shares to which this prospectus relates are sold 7,708,100 shares
OUR COMPANY
We sell franchises for retail stores which sell accessories for trucks and
sports utility vehicles. We also own and operate one store which is the
prototype for our franchise system. We currently have seven franchised locations
operated by independent franchisees.
Our executive offices are located at 3532 Irvin Simpson Road, Mason, Ohio 45040
and our telephone number is: 513-398-4344. We are a Delaware corporation which
was incorporated in 1993.
RISK FACTORS
The risks described below address some of the factors that make an
investment in our common stock risky.
WE HAVE A SHORT OPERATING HISTORY BY WHICH YOU CAN EVALUATE OUR BUSINESS AND
PROSPECTS AND HAD A LOSS IN 1998 AND IN THE NINE MONTHS ENDED SEPTEMBER 30,
1999.
We were incorporated in 1993 and have a limited operating history from
which to evaluate our business and prospects. We had a loss of $13,506 in 1998
and loss of $173,198 in the nine months ended September 30, 1999.
THERE IS NO MARKET FOR OUR COMMON STOCK
Our common stock does not currently trade on any organized securities
market. There is no assurance that it will ever trade. You may not be able to
sell the shares easily if no market develops for the shares.
Risks of Non-Compliance With Securities Laws. Prior to the date of this
Prospectus, the Company obtained financing through the sale of securities
offered pursuant to exemptions under the Securities Act of 1933 with respect to
transactions involving limited offers and sales without registration. If the
Company should fail to comply with each and every one of the requirements of the
available exemptions from registration, the investors may have the right to
rescind their purchase if they so desire. Although the Company believes all such
transactions were made in compliance with all applicable securities laws,
compliance is highly technical. In particular, the Company sold 2,000 shares of
its common stock to two investors for an aggregate of $2,000 after the filing of
the registration statement of which this Prospectus is a part. If such sales
were integrated with the offering of this Prospectus, then such sale of 2,000
shares would violate the Securities Act of 1933 and the investors could seek a
return of their investment plus interest. Although the return of such $2,000
investment plus interest would not have a materially adverse impact on the
Company, if other investors should obtain rescission of their investments, the
Company might be unable to secure the funds to repurchase the interests. In
addition, failure to comply with any of the requirements for exemption under
state securities laws could occasion the same results as a failure to comply
with the above-mentioned federal exemption. The Company and its officers were
not registered as broker/dealers under the Federal or state securities laws.
This could also occasion the same results as a failure to comply with the
registration requirements stated above.
4
<PAGE> 5
USE OF PROCEEDS
No assurance can be given that any or all of our warrants will be
exercised. Accordingly, as far as can be determined as of the date of the
prospectus, the proceeds we will receive upon any exercise of warrants, be used
for general corporate purposes and for working capital which may include payment
of salaries, rent, marketing and opening of additional company owned stores.
Such proceeds would aggregate $950,000 if all the warrants were exercised in
full.
MARKET FOR THE SHARES
There is no public market for our common stock. We will seek to have
our common stock traded on the over-the-counter market and quoted on the OTC
Bulletin Board. There can be no assurance that a market will develop or be
maintained or that our stock will be quoted on the OTC Bulletin Board.
We currently have 38 record holders of our common stock.
DIVIDEND POLICY
We have not paid any dividends on our common stock, and it is not
anticipated that any dividends will be paid in the foreseeable future. The Board
of Directors intends to follow a policy of using retaining earnings, if any, to
finance the growth of the company. The declaration and payment of dividends in
the future will be determined by the Board of Directors in light of conditions
then existing, including the company's earnings, financial condition, capital
requirements and other factors.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Year ended December 31, 1998 compared to year ended December 31, 1997.
The Company recorded a net loss of $13,506 or $.002 per share for
1998 as compared to a net loss of $79,696 for 1997.
REVENUES
On September 30, 1998 the Company acquired ownership of the Pick-Ups
Plus prototype store. Accordingly, revenues and expenses of that store have been
included in the Company's fiscal 1998 operations from that date. The acquisition
was made under purchase method of accounting. The sales at the store from the
date of acquisition were $205,217. Revenues from the Company's franchised
operations was $113,022 in 1998 compared to $25,000 in 1997.
The following table sets forth the components of the Company's
franchise revenues for 1998 and 1997.
1998 1997
---- ----
Franchise Fees $70,000 $25,000
Royalties $43,022 -0-
5
<PAGE> 6
COSTS AND EXPENSES
General administrative and selling expenses increased by $96,038.
Increase is generally made up of the following:
Increased expenses associated with adding the retail store operation
and increased advertising, promotion and legal and professional fees
resulting from expanding operations and preparing for a stock offering.
At September 30, 1998, the Company acquired its existing retail store.
Therefore, the retail sales have increased from $-0- in the nine months ended
September 30, 1998, to $650,709 for the nine months ended September 30, 1999.
Franchise fee and royalty income increased to $99,987 for the nine month period
in 1999, from $68,966 in the same nine month period of 1998. This was due to
both an increase in number of franchise stores open and an increase in the
overall unit sales upon which the royalties are based.
Total selling, general and administrative expenses increased from
$79,605 for the nine months ended September 30, 1998 to $448,680 for the nine
months ended September 30, 1999. Of this increase of $369,075, $160,582 was due
to the operating expenses for the retail store, which was owned for the nine
months in 1999, but was not in the nine months through September 30, 1998.
Other major increases in expenses were due to planned increases in
advertising which resulted in an increased expense of $36,405 in the nine months
ended September 30, 1999. This increase was made to help accelerate the name
recognition of Pick-Ups Plus, Inc. as well as the franchise opportunity.
Salaries were increased in the amount of $76,595. This was due to an
increase of two employees, plus the president of the Company beginning to take
some compensation, whereas, he had not in the first nine months of 1998. The new
employees were in the area of franchise development and accounting.
Travel expense was increased by $31,925 in 1999, compared to 1998.
This was due to increased activity both due to the increase in existing
franchisee's and increased efforts in the development of new franchisees.
Legal and professional expenses were increased by $35,245, due
primarily to expenses relating to the Company preparing for an initial public
offering and the private placement issue authorized by the Company in November,
1998. This was made up of fees to attorneys, auditors and other consultants.
Interest expense increased by $5,727.
Aside from the above-mentioned items, the expenses were up an
additional amount of $22,596 in various general and administrative areas. This
is explained by the Company's continued growth.
Nine months ended September 30, 1999 compared to nine months ended
September 30, 1998.
Revenues for the nine month period ended September 30, 1999 and 1998
were as follows:
1999 1998
-------- ----
Retail sales $650,709 -0-
Franchise fees and royalties 99,987 68,966
LIQUIDITY AND CAPITAL RESOURCES
In March 1999 we secured a $100,000 line of credit from Huntington Bank
which carries interest at 7 1/2% per year and is repayable on November 30, 1999.
We expect to extend this line as needed. This line, along with anticipated cash
flow from our operations, which include sales from our retail store, franchise
fees and royalties, will be adequate to support our operations.
The Company is not aware of any trend or event which would potentially
adversely affect its liquidity. In the event such a trend would develop,
management believes that the Company has sufficient funds available to satisfy
the working capital needs of its business.
6
<PAGE> 7
RISKS ASSOCIATED WITH YEAR 2000 PROBLEM
Computer systems and software used by many companies may need to be
upgraded to accept four digit entries to distinguish 21st century dates from
20th century dates. Like most other companies using computers in their
operations, we need to ensure that its operations will not be adversely impacted
by software or system failures related in the Year 2000 problem. We have
reviewed our internal computer and related information and operational systems
to assure Year 2000 compliance and the consequences of incomplete or untimely
resolution of the Year 2000 problem will not have a material adverse effect on
our business, financial condition and results of operations in any given year.
However, even if our internal systems are not materially affected by the Year
2000 problem, our business, financial condition and results of operations could
be materially adversely affected if the businesses with which we interact are
disrupted by Year 2000 problems. We have discussed this matter with those
businesses with which we are most dependent and have been assured that no
material disruptions are anticipated.
BUSINESS
BACKGROUND
In 1993, Fitzgerald Urethanes, Inc. opened a retail store for trucks
and sports utility vehicle accessories in suburban Cincinnati, Ohio, which did
business as Pick-Ups Plus. John Fitzgerald founded Mr. Pickup Co. in February,
1993 to act as a franchisor of similar stores and changed its name to Pick-Up
Plus, Inc. in 1994. We sold our first franchise, located in Florence, Kentucky,
in 1996. The following year, two more franchises were sold, one in South Bend,
Indiana and the other in Des Moines, Iowa. In 1998, we added three new
franchises, one in Portland, Oregon, and two in Pittsburgh, Pennsylvania. We
currently have seven (7) franchised locations operated by six (6) independent
franchisees.
On September 30, 1998, we acquired the Pick-Ups Plus prototype store
from Mr. Fitzgerald in order to consolidate its operations with that of the
franchise system. We are a Delaware corporation with our executive offices
located at 3532 Irwin Simpson Road, Mason, Ohio 45040. Our telephone number is:
513-398-4344.
OUR FRANCHISE SYSTEM
THE TYPICAL FRANCHISE UNIT. While each store within our franchise
system is unique in many aspects, there are in fact more similarities than
differences from one franchise unit to the next. This section presents an
profile of the "typical" store within the Pick-Ups Plus system.
FACILITIES. The Picks-Ups Plus store is designed and merchandised to be
a "toy store for pick-up truck and sports utility vehicle enthusiasts." Products
are displayed for maximum appeal, profitability, and traffic flow. The typical
store features approximately 4,000 square feet of space, with 1,500 feet devoted
to the retail showroom, 2,000 feet to the installations facility, and 500 feet
for storage, common area, and office use.
PRODUCTS AND SERVICES
ACCESSORIES - With 4,000 square feet of space, the typical Pick-Ups
Plus store offers a variety of merchandise to accessorize trucks and sports
utility vehicles. Popular product categories include: Grille Accessories,
Running Boards, Chrome Light Bars, Fiberglass Fender Flares, Ladder Racks, Bug
Guards, Heavy-duty Floormats, Oversized Visors, Headlight Covers, Toolboxes, Bed
Liners, Caps and Step Bars.
INSTALLATION - Each store's installation service is an important profit
center. Products typically installed by the stores include: Running Boards, Bug
Shields and Tonnue Tops.
STAFFING. The franchisee is on-site during the vast majority of, if not
all, hours of operation. He has the ultimate responsibility over all operations
and direct responsibility for marketing, financing, human
7
<PAGE> 8
resources and purchasing. He also is active with in-store selling,
merchandising, and customer service. The typical owner-operator takes his
compensation in the form of the store's distributed profits.
In addition to the franchisee, a typical store employs three full-time
associates who manage in-store sales and customer service. The sales associates
are trained in customer-oriented selling techniques and must remain
highly-informed regarding all of the stores products and services.
MARKETING AND ADVERTISING. The Company's most important marketing
activities take place within the stores themselves. Products are merchandised
for maximum appeal and in accordance with in-store traffic. Uniformed and highly
trained sales associates remain constantly available to help customers with
product selection, turning browsers into buyers.
Store-level advertising efforts are supplemented by advertisements
developed and placed by the franchiser. Store-initiated advertising utilizes
print media, radio, and local TV.
Pick-Ups Plus stores generate maximum productivity from their client
bases by maintaining detailed information about all past and current customers.
Mailings are sent regularly to these customers promoting new products and
services or other special promotions. Promotional post cards are sent to
acquired lists of new truck and sport utility vehicle owners in the market
areas.
FRANCHISEE FEES. The fee for the rights to establish a Pick-Ups Plus
franchise is $25,000, payable upon the signing of the franchise agreement and
before the commencement of training or franchise operations. Royalties, equal to
6% of the franchisee's previous week's sales, are paid on a weekly basis.
OTHER RESPONSIBILITIES. To insure the success of its franchisees and
the system in general, the Company requires that its franchisees meet certain
additional requirements. These include the allocation of minimum marketing
budgets (at least $1,500 per month or 4% of gross sales, whichever is larger)
and the acquisition of proper insurance coverage (including a minimum of $1
million coverage each for general aggregate, product, and personal injury
coverage).
8
<PAGE> 9
COMPANY SUPPORT
MARKET-TESTED PRODUCTS AND OPERATIONS APPROACH - Since 1993, the
Company and its predecessor company have refined all aspects of store
operations, including merchandising, product/service mix, and promotional
materials. A 187 page operations manual covering all aspects of operations
serves as the franchisee's first source of reference for operational questions.
TRAINING - The Company's franchisees receive 18 days of intensive
training and orientation. Training covers all aspects of operations including:
Store Operations, Ordering Inventory, Inventory Control, Installation of
Products Sold, Store Maintenance and Merchandising (In-Store Training), Office
Procedures, Forms, Ordering Items (In-Store Training), Sales Training, and
Dealing with Customers and Employees.
CONTINUED MANAGEMENT SUPPORT - Support efforts include regular
operational visits and phone consultations from Mr. Fitzgerald and other support
professionals. Helpful management information is also distributed through
regular educational seminars, conferences, bulletins, and newsletters. The
Company hosts a very sophisticated Web Site that all franchisees have access to.
On the Web Site (www.pickups- plus.com), the franchisee can exchange sales tips,
installation tips, information about other franchise stores and managers, and
supplier information. Additionally, the Web Site gives the franchisees the
ability to communicate directly with the franchiser and other franchisees
through an on-line mailbox system.
CONTINUED MARKETING SUPPORT - Franchisees benefit from marketing
developed and placed by the Company. This corporate marketing creates awareness
and positive perceptions that are then amplified by the franchisees' own local
marketing efforts. The Company's franchisees benefit from the affiliation with a
larger, recognizable organization.
BUYING POWER - Through its favorable vendor relationships, the Company
enables its franchisees to purchase items in small quantities at significant
discounts normally reserved for volume purchases. No franchisee is required to
purchase any products from the Company.
9
<PAGE> 10
SITE SELECTION - The Company offers assistance in site selection
includes market analysis, specific site evaluation, and lease negotiation.
STORE OPENING - The Company assists its franchisees in designing,
laying out, and merchandising their stores. It identifies preferred vendors for
fixtures, insurance, and other pre-opening requirements. Finally, the Company
provides on-site store opening assistance for the first week of operations.
FRANCHISE AGREEMENT - The initial term of the franchise agreement is
five (5) years and may be renewed by the franchisee for an additional five (5)
years. The Company may terminate a franchise agreement in the event the
franchisee breaches the terms of the franchise agreement.
STORE LOCATIONS
We have one company-owned store located in Ohio.
The following table sets forth the locations of the franchised stores
as of the date hereof: Number of
State Franchised Stores
----- -----------------
Indiana 2
Oregon 1
Pennsylvania 2
Kentucky 1
Iowa 1
FRANCHISE MARKETING
Our marketing strategy for franchise sales is based on the sale of
individual franchise stores to business-minded individuals. The Company does not
have any area development agreements to open multi- store franchises. We believe
that the market for Pick-ups Plus stores is nationwide. We seek franchisees by
attendance at franchise and business opportunity shows, advertising in national
publications and our World Wide Web site.
10
<PAGE> 11
COMPETITION
Franchising - We compete directly with many other local and national
franchisors which are also seeking to sell their franchises or business
opportunities to prospective franchisees. We are aware of only one other
franchiser of truck accessory stores, Trucking America, Inc. of Winston-Salem,
N.C.
Merchandise - Our franchisees compete against local auto parts stores,
specialized truck accessory stores and national auto parts chains such as
AutoZone, Pep Boys and Discount Auto Parts. Major retailers, such as Wal-Mart,
K-Mart and Sears also offer a limited selection of truck accessories. Truck
enthusiast magazines and catalogs carry extensive advertisements of products
available by mail order. The World Wide Web is a rapidly growing source of
merchandise, including truck accessories.
Our franchisees generally compete on the basis of an extensive product
selection and the availability of installation services.
TRADE NAMES AND SERVICE MARKS
We currently hold a Federal trademark registration for PICK-UPS PLUS
which was issued in 1995. In addition, we hold copyrights in connection with all
of our training manuals and materials which it considers proprietary. We are not
aware of any current use of similar marks.
REGULATION
The offer and sale of franchises is subject to extensive federal and
state laws and substantial regulation under such laws by government agencies,
including the Federal Trade Commission and various state authorities. Pursuant
to FTC regulations, we are required to furnish to prospective franchisees a
current franchise offering disclosure document containing information prescribed
by the FTC. We use Uniform Franchise Offering Circulars to satisfy this
disclosure obligation. In addition, in certain states, we are required to
register or file with such states and to provide prescribed disclosures. We are
required to update its offering disclosure documents to reflect the occurrence
11
<PAGE> 12
of material events. The occurrence of any such events may from time to time
require the Company to cease offering and selling franchises until the
disclosure document relating to such franchising business is updated. There can
be no assurance that we will be able to update its disclosure documents (or in
the case of any newly acquired franchising business, prepare an adequate
disclosure document) or become registered in certain states in a time frame
consistent with its expansion plans, that it will not be required to cease
offering and selling franchises or that we will be able to comply with existing
or future franchise regulation in any particular state, any of which could have
an adverse effect on the Company.
We are also subject to a number of state laws that regulate certain
substantive aspects of the franchiser-franchisee relationship, such as
termination, cancellation or non-renewal of a franchise (including requirements
that "good cause" exist as a basis for such termination and that a franchisee be
given advance notice of and a right to cure a default prior to termination) and
may require the franchiser to deal with its franchisees in good faith, prohibit
interference with the right of free association among franchisees, and regulate
discrimination among franchisees in charges, royalties or fees. If we are unable
to comply with the franchise laws, rules and regulations of a particular state
relating to offers and sales of franchises, we will be unable to engage in
offering or selling franchises in or from such state. Amendments to existing
statutes and regulations, adoption of new statutes and regulations and the
Company's expansion into new states and foreign jurisdictions could require us
to continually alter methods of operations at costs which could be substantial.
We believe that we are in substantial compliance with all of the
foregoing federal and state franchising laws and the regulations promulgated
thereunder and has obtained all licenses and permits necessary for the conduct
of its business. Failure to comply with such laws and regulations in the future
could subject the Company to civil remedies, including fines or injunctions, as
well as possible criminal sanctions, which would have a material adverse effect
on us.
12
<PAGE> 13
Our retail operations and those of its franchisees are also subject
to various federal, state and local laws affecting their retail businesses,
including state and local licensing, labor, wage and hour, zoning, land use,
construction and environmental regulations and various safety and other
standards. The failure of the Company or its franchisees to comply with
applicable regulations could interrupt the operations of the affected franchise
or otherwise adversely affect the franchise or the Company.
EMPLOYEES
As of the date hereof, we employ 7 persons (of which 5 are full-time
employees). None of the Company's employees are covered by a collective
bargaining agreement. We believe that our employee relations are satisfactory.
PROPERTIES
We lease our principal executive office, located in Mason, Ohio, at an
annual rent of $9,600 and with an expiration date of May 2001. The Company-owned
store in Sharonville, Ohio is leased at an annual rent of $26,400 and with an
expiration date of April 1, 2002.
MANAGEMENT
OUR DIRECTORS AND EXECUTIVE OFFICERS ARE:
Name Age Position
---- --- --------
John Fitzgerald 55 President and Director
Sean Fitzgerald 28 Vice President - Store Operations
Erin Schueler 29 Secretary and Franchise Coordinator
Joseph Lamble 58 Director
SEAN FITZGERALD is the son of John Fitzgerald. Erin Schueler is his
daughter.
JOHN FITZGERALD is the founder of the Company, which was incorporated
in 1993, and the founder of its predecessor company, Fitzgerald Urethanes, Inc.,
which was incorporated in May, 1987. A graduate of the University of Ft.
Lauderdale with a Bachelor's in Marketing, he has 30 years experience in sales
and
13
<PAGE> 14
marketing and 15 years experience in management. His experience includes the
following positions: International Urethane Director for H.C. Price from 1976 to
1978; Eastern Sales Manager for Foam Systems from 1978 to 1984; and, Regional
Salesman for Owens-Corning Fiberglass from 1972 to 1976. He owned and operated
Reaction Plastics, a small manufacturing company, which he sold in 1994 to
finance the franchising efforts of the Company. Mr. Fitzgerald is primarily
responsible for coordinating the expansion of the Company. He has direct
responsibility for the management of franchise operations and the supervision of
the company owned store. As such, he is responsible for the development of
marketing strategies and new product lines. He has been President and a director
since 1993.
SEAN FITZGERALD is a graduate of the University of Cincinnati with a
Bachelors degree in Marketing. He has been with the Company and its predecessor
company since its inception in 1993. Mr. Fitzgerald is primarily responsible for
overseeing the daily operations of the company store, training franchisees on
store operations and maintaining ongoing contact with franchisees to assist in
their daily operation. Mr. Fitzgerald also oversees all advertising and
marketing programs for the stores.
ERIN SCHUELER is a graduate of Ohio University with a Bachelors in
Communications. She has been involved with the Company and its predecessor
company since its inception in 1993. As Director of Business Operations, Ms.
Schueler's primary responsibilities include overseeing the daily operations of
the corporate office, accounts payable and receivables, personnel and assisting
with franchise sales, training and maintaining ongoing contact with franchisees
to assist in their business operations.
14
<PAGE> 15
JOSEPH LAMBLE received his MBA from California Coast University. He has
been the CEO of Frannet Mid-America, a national group of franchise consultants
since January 1994. Mr. Lamble coauthored the franchise textbook, FRANCHISING
101, in addition to consulting with many out-placement offices in Indiana. Mr.
Lamble serves on the SCORE chapter of the SBA. He was elected as a Company
director in September 1998.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table set s forth the total compensation paid to our
chief executive officer for the last three completed fiscal years. No executive
officer of the company received compensation of $100,000 or more during any such
year.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION YEAR TOTAL INCOME OTHER ANNUAL OTHER ANNUAL
BONUS COMPENSATION
- --------------------------- ---- ------------ ------------ ------------
<S> <C> <C> <C> <C>
JOHN FITZGERALD, PRESIDENT 1996 $ -0- -0- -0-
1997 $ -0- -0- -0-
1998 $18,000 -0- -0-
</TABLE>
We do not have any long term compensation plans or stock option plans.
DIRECTOR COMPENSATION
No other fees are paid for director services. We paid 25,000 shares
of its common stock to each of Joseph Lamble and Dave McConnell for serving as
directors.
EMPLOYMENT AGREEMENTS
We do not have any written employment agreements.
15
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 5, 1999, the beneficial
ownership of our 6,758,100 outstanding shares of common stock by (1) the only
persons who own of record or are known to own, beneficially, more than 5% of
our common stock; (2) each director and executive officer of the Company; and
(3) all directors and officers as a group.
Number of
Name Shares Percent(1)
---- --------- ----------
John Fitzgerald 5,580,000 82.6%
Sean Fitzgerald 90,000 *
Erin Schueler 50,000 *
Joseph Lamble 25,000 *
All officers and directors
as a group (4 persons) 5,745,000 85.0%
(1) Based upon 6,758,100 shares outstanding as of November 5,
1999.
* Less than 2%.
INDEMNIFICATION
Our Certificate of Incorporation limits the liability of Directors to
the maximum extent permitted by the Delaware General Corporation Law, Delaware
law provides that the directors of the corporation will not be personally liable
to such corporation or its stockholders for monetary damages for breach of their
fiduciary duties as directors, except for liability (i) for any breach of their
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) for unlawful payments of dividends or unlawful stock
16
<PAGE> 17
repurchases or redemptions as provided in Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derives an
improper personal benefit. The Company's By-Laws provide that the Company shall
indemnify its Directors and officers to the fullest extent permitted by Delaware
law and permit the Company to advance expenses to such Directors and officers to
defend any action for which rights of indemnification are provided. The By-Laws
also permit the Company to grant such rights to its employees and agents.
INDEMNIFICATION AGAINST PUBLIC POLICY
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or person controlling the
company, the company has been informed 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 1998, we acquired our franchise system's prototype store
from a corporation owned by John Fitzgerald, our President, a director and
majority shareholder.
The acquisition was for 144,000 shares of our common stock. Mr.
Fitzgerald owned the store since 1993. In addition, we assumed liabilities of
$5,603 as of the closing.
The Company has established a policy that any transactions between the
Company and any officer, director or 10% or greater shareholder will be on
terms at least as favorable as could be obtained from independent third parties.
PLAN OF DISTRIBUTION/SELLING SECURITY HOLDERS
Plan of distribution
The shares offered hereby may be sold from time to time directly by the
selling security holders. Alternatively, these Selling Security Holders may from
time to time offer the shares through underwriters, dealers or agents. The
distribution of the shares by the selling security holders may be effected in
one or more transactions that may take place on the over-the-counter market in
the event a trading market is established on the over-the-counter market,
including:
* ordinary broker's transactions,
17
<PAGE> 18
* privately-negotiated transactions or
* through sales to one or more broker-dealers for resale, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Customary or
specifically negotiated brokerage fees or commissions may be paid by
the selling
security holders in connection with such sales of shares. The shares offered by
the selling security Holders may be sold by one or more of the following
methods, without limitations:
* a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
* purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus;
* ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
* face-to-face transactions between sellers and purchasers without a
broker-dealer.
In effecting sales, brokers or dealers engaged by the selling security
holders may arrange for other brokers or dealers to participate. The selling
security holders and intermediaries through whom such shares are sold may be
deemed "underwriters" within the meaning of the Securities Act of 1933 with
respect to the shares offered, and any profits realized or commissions received
may be deemed underwriting compensation.
At the time a particular offer of shares is made by or on behalf of a
selling security holder, to the extent required, a prospectus will be
distributed which will set forth the number of shares being offered and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, if any, the purchase price paid by any underwriter for shares
purchased from the selling security holder and any discounts, commissions or
concessions allowed or reallowed or paid to dealers and the proposed selling
price to the public.
The following security holders may offer shares of common stock
issuable upon exercise of warrants.
18
<PAGE> 19
None of the selling security holders having any affiliation with the Company
other than as security holders:
<TABLE>
<CAPTION>
NAME NUMBER OF NUMBER OF SHARES NUMBER OF
SHARES AND WHICH MAY BE SHARES TO BE
WARRANTS OFFERED PURSUANT TO OWNED AFTER THE
OWNED THIS PROSPECTUS OFFERING*
<S> <C> <C> <C>
Alan Whitney 36,250 23,750 12,500
Maureen Whitney 36,250 23,750 12,500
Mary Ann Rack 145,000 95,000 50,000
David W. McConnell 72,500 47,500 25,000
Cheryl A. McConnell 72,500 47,500 25,000
Judith A. Taft 145,000 95,000 50,000
Jude T. Fitzgerald 14,500 9,500 5,000
Jean M. Cotter 29,000 19,000 10,000
Regina Daly 14,500 9,500 5,000
George Schwoeppe 29,000 19,000 10,000
Peggy Schwoeppe 29,000 19,000 10,000
Francis J. Smith 72,500 47,500 25,000
Nora C. Smith 72,500 47,500 25,000
Carl G. Chiarenza 29,000 19,000 10,000
Anne Kelly 14,500 9,500 5,000
Brett Butterman 87,000 57,000 30,000
Albert Ipsa 29,000 19,000 10,000
Donald P. Visco, Jr. 21,750 14,250 7,500
Donald P. Visco 21,750 14,250 7,500
Robert A. Eaves 72,500 47,500 25,000
Karen P. Eaves 72,500 47,500 25,000
Edward Roach 36,250 23,750 12,500
Elizabeth J. Cronin 36,250 23,750 12,500
John A. O'Neil 29,000 19,000 10,000
Donna R. O'Neil 29,000 19,000 10,000
Elaine O'Neil 36,250 23,750 12,500
John J. O'Neil 36,250 23,750 12,500
Raymond A. Dufour 36,250 23,750 12,500
Patricia A. Dufour 36,250 23,750 12,500
Dennis Olden 58,000 38,000 20,000
</TABLE>
* Assuming all Shares are sold.
19
<PAGE> 20
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 50,000,000 shares of common stock with $.001
par value. The holders of the common stock are entitled to one vote per each
share held and have the sole right and power to vote on all matters on which a
vote of stockholders is taken. Voting rights are non-cumulative. The holders of
shares of common stock are entitled to receive dividends when, as and if
declared by the Board of Directors, out of funds legally available therefore and
to share pro-rata in any distribution to stockholders. We anticipate that any
earnings will be retained for use in our business for the foreseeable future.
Upon liquidation, dissolution, or winding up of the company, the holders of the
common stock are entitled to receive the net assets held by the company after
distributions to the creditors. The holders of common stock do not have any
preemptive right to subscribe for or purchase any shares of any class of stock.
The outstanding shares of common stock and the shares offered hereby will not be
subject to further call or redemption and will be fully paid and non-assessable.
Preferred Stock
The Board of Directors has the authority to cause the company to issue
without any further vote or action by the stockholders, up to 5,000,000 shares
of preferred stock, in one or more series, and to designate the number of shares
constituting any series, and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, voting rights, rights and terms
of redemption, redemption price or prices and liquidation preferences of such
series. The issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of the company without further
action by the stockholders. The issuance of preferred stock with voting and
conversion rights may adversely affect the voting power of the holders of common
stock, including the loss of voting control. No preferred stock is outstanding
as of the date hereof.
20
<PAGE> 21
LEGAL MATTERS
The validity of the shares offered hereby is being passed upon for the
Company by Joel Bernstein Esq., P.A., Miami, Florida.
EXPERTS
The financial statements as of December 31, 1998, 1997, and 1996 and
for the three years ended December 31, 1998 of Pick-Ups Plus, Inc. and the
financial statements of Fitzgerald Urethanes, Inc. as of December 31, 1997 and
the year then ended appearing in this prospectus and registration statement have
been audited by Robert J. White, CPA, independent certified public accountants,
as set forth in their report thereon appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act with respect to the
securities being offered. This prospectus, filed as a part of the registration
statement, does not contain certain information contained in or annexed as
exhibits to the registration statements. Reference is made to exhibits to the
registration statement for the complete text. For further information with
respect to the Company and the securities hereby offered, reference is made to
the registration statement and to the exhibits filed as part of it, which may be
inspected and copied at the public reference facilities of the commission in
Washington D.C., and at the Commission's regional offices at
* 500 West Madison Street, Chicago, IL 60604;
* 7 World Trade Center, New York, NY 10048;
* and 5757 Wilshire Boulevard, Los Angeles, CA 90034;
* and copies of such material can be obtained from the Public Reference Section
of the Commission, 450 5th Street, N.W., Washington, D.C. 20549, at
prescribed rates and are available on the World Wide Web at:
http://www.sec.gov.
21
<PAGE> 22
PICK-UPS PLUS, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997, 1996
<PAGE> 23
INDEX TO FINANCIAL STATEMENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT 1
BALANCE SHEETS 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF SHAREHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6 - 11
<PAGE> 24
ROBERT L. WHITE
CERTIFIED PUBLIC ACCOUNTANT
988 OHIO PIKE, SUITE #2
CINCINNATI, OHIO 45245
- --------------------------------------------------------------------------------
PHONE (513) 943-1040
FAX (513) 943-7760
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and
Stockholders of Pick-Ups Plus, Inc.
We have audited the accompanying balance sheets of Pick-Ups Plus, Inc. (A
Delaware Corporation) as of December 31, 1998, 1997 and 1996, and the related
statements of operations, shareholders' equity and cash flows for the years then
ended. 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.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to the above present fairly,
in all material respects, the financial position of Pick-Ups Plus, Inc. as of
December 31, 1998, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Robert L. White, CPA
February 20, 1999
1
<PAGE> 25
PICK-UPS PLUS, INC.
BALANCE SHEETS
DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
ASSETS
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Current Assets
Cash in Bank ........................................................ $ 37,113 $ 21 $ 10,710
Accounts Receivable, Less
Allowance for Doubtful Accounts .................................. 35,153 -0- -0-
Of $3,906 for 1998
Inventory ........................................................... 36,630 -0- -0-
--------- --------- ---------
$ 108,896 $ 21 $ 10,710
Property & Equipment
Furniture, Fixtures & Equipment ..................................... 5,000 -0- -0-
Less: Accumulated Depreciation ...................................... (179) -0- -0-
--------- --------- ---------
4,821 -0- -0-
Other Assets
Franchise Development Costs, Net
Of Amortization .................................................. 21,000 29,400 37,800
--------- --------- ---------
Total Assets .................................................... $ 134,717 $ 29,421 $ 48,510
========= ========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable .................................................... $ 4,302 $ -0- $ -0-
Federal Tax Payable ................................................. -0- -0- 2,354
Notes Payable ....................................................... 24,781 35,281 32,320
--------- --------- ---------
Total Liabilities ............................................... $ 29,083 $ 35,281 $ 34,674
Stockholders' Equity
Common Stock, $0.001 Par;
50,000,000 Shares Authorized,
6,744,000 Shares Issued and
Outstanding At December 31, 1998,
6,100,000 Issued and Outstanding
At December 31, 1997 and 1996 ..................................... 6,744 6,100 6,100
Additional Paid In Capital .......................................... 184,356 60,000 -0-
Retained Earnings (Deficit) ......................................... (85,466) (71,960) 7,736
--------- --------- ---------
Total Stockholders' Equity ............................................... 105,634 (5,860) 13,836
--------- --------- ---------
Total Liabilities &
Stockholders' Equity ......................................... $ 134,717 $ 29,421 $ 48,510
========= ========= =========
</TABLE>
See accompanying notes and accountant's report.
2
<PAGE> 26
PICK-UPS PLUS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenue
Retail Sales ............................... $ 205,217 $ -0- $ -0-
Franchise Fees & Royalties ................. 113,022 $ 25,000 $ 47,500
----------- ----------- -----------
$ 318,239 $ 25,000 $ 47,500
Cost of Sales ................................ 128,657 -0- -0-
----------- ----------- -----------
Gross Profit ................................. $ 189,582 $ 25,000 $ 47,500
Selling, General &
Administrative Expenses .................... 203,088 107,050 31,810
----------- ----------- -----------
Total Expenses ............................... 203,088 107,050 31,810
----------- ----------- -----------
Net Income (Loss) Before
Provision for Income Tax ................... $ (13,506) $ (82,050) $ 15,690
Provision (Benefit) For
Income Taxes .............................. -0- (2,354) 2,354
Net Income (Loss) ............................ $ (13,506) $ (79,696) $ 13,336
=========== =========== ===========
Basic & Diluted Earnings (Loss)
Per Common Share .......................... $ (.002) $ (.01) $ .002
Weighted Average Common
Shares Outstanding ......................... 6,184,291 6,100,000 6,100,000
</TABLE>
See accompanying notes and accountant's report.
3
<PAGE> 27
PICK-UPS PLUS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Total
-------------------------- Paid In Earnings Shareholders'
Shares Amount Capital (Deficit) Equity (Deficit)
--------- --------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995 (As restated To Reflect
Recapitalization As Referred
In Note 8) 6,100,000 $ 6,100 $ -0- $ (5,600) $ 500
Net Income 13,336 13,336
--------- --------- ---------- ----------- -------------
Balance at
December 31, 1996 6,100,000 $ 6,100 $ -0- $ 7,736 $ 13,836
Additional Paid In
Capital By Company
Founder 60,000 60,000
Net Loss (79,696) (79,696)
--------- --------- ---------- ----------- -------------
Balance at
December 31, 1997 6,100,000 $ 6,100 $ 60,000 $ (71,960) $ (5,860)
Transfer of Common
Stock To Company
Directors & Officers
By Founder (Note 8) 19,000 19,000
Transfer of Common
Stock For Consulting
Services By Founder (Note 8) 30,000 30,000
Issuance of Common
Stock For Assets
(Note 3) 144,000 144 25,856 26,000
Issuance of Common
Stock For Cash
(Note 7) 500,000 500 49,500 50,000
Net Loss (13,506) (13,506)
--------- --------- ---------- ----------- -------------
Balance at
December 31, 1998 6,744,000 $ 6,744 $ 184,356 $ (85,466) $ 105,634
========= ========= ========== =========== =============
</TABLE>
See accompanying notes and accountant's report.
4
<PAGE> 28
PICK-UPS PLUS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (Loss) For The Year $ (13,506) $ (79,696) $ 13,336
Adjustments To Reconcile Net Income
To Net Cash Provided By (Used In)
Operating Activities:
Depreciation 179 -0- -0-
Amortization 8,400 8,400 4,200
Stock Issued for Compensation (Note 8) 49,000 -0- -0-
(Increase) Decrease In Assets:
Accounts Receivable (35,153) -0- -0-
Increase (Decrease) In Liabilities:
Accounts Payable (11,328) -0- -0-
Federal Taxes Payable -0- (2,354) 2,354
---------- ---------- -----------
TOTAL ADJUSTMENTS 11,098 6,046 6,554
---------- ---------- -----------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (2,408) (73,650) 19,890
---------- ---------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Franchise Development Costs (-0-) -0- (42,000)
---------- ---------- -----------
NET CASH (USED) BY INVESTING
ACTIVITIES -0- -0- (42,000)
---------- ---------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Common Stock Issued for Cash 500 -0- -0-
Paid In Capital Contributed 49,500 60,000 -0-
Proceeds From Notes Payable (10,500) 2,961 32,320
---------- ---------- -----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES 39,500 62,961 (32,320)
---------- ---------- -----------
NET INCREASE (DECREASE)
IN CASH $ 37,092 $ (10,689) $ 10,210
CASH BEGINNING OF PERIOD 21 10,710 500
---------- ---------- -----------
CASH END OF PERIOD $ 37,113 $ 21 $ 10,710
========== ========== ===========
</TABLE>
See accompanying notes and accountant's report.
5
<PAGE> 29
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 1 BUSINESS DESCRIPTION
Pick-Ups Plus, Inc. operates and franchises retail automotive parts and
accessories stores catering to the light truck market, which is the fastest
growing segment of the motor vehicle market in the United States. The Company
has six stores operated by franchisees and one Company owned store. Subject to
the availability of financing, the Company intends to pursue an aggressive
expansion strategy by opening additional company-owned and franchise locations.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Presentation
- --------------------------
The financial statements have been prepared in accordance with generally
accepted accounting principles.
Method of Accounting
- --------------------
The Company uses the accrual method of accounting for financial statement
reporting. Under this method, revenue is recognized when earned and expenses are
recognized when incurred.
Accounts Receivable
- -------------------
The Company uses the allowance method for determining a provision for doubtful
accounts based on analysis of the aging of accounts receivable, past experience
and present market conditions and possible impairment.
Inventory
- ---------
Inventory is valued at the lower of cost or market using the first in - first
out method.
Property & Equipment
- --------------------
Property and equipment are carried at cost. Depreciation of property and
equipment is computed on a straight-line basis, generally over the estimated
useful lives of the assets or, when applicable, the life of the lease, whichever
is shorter.
6
<PAGE> 30
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
Income Taxes
- ------------
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," which requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
temporary difference between the financial statement and tax basis of assets and
liabilities using presently enacted tax rates in effect. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount
expected to be realized.
Net Income (Loss) Per Share
- ---------------------------
The Company computes net income or loss per share in accordance with SFAS No.
128, "Earnings Per Share" which requires dual presentation of basic earnings per
share ("EPS") and diluted EPS.
Basic earnings per share is computed using the weighted average number of common
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average number of common shares and potentially dilutive
shares outstanding during the period. The Company has 950,000 warrants
outstanding at December 31, 1998, which could potentially dilute basic earnings
per share in the future, but have not been included in the computation of
diluted net income per share, as the impact would have been antidilutive for the
periods presented.
Business Risk
- -------------
Business risks include the following:
Competition - Many of the Company's current and potential competitors have
longer operating histories, larger customer bases and greater financial,
marketing and other resources than the Company. Increased competition may result
in reducing operating margins and impact market share.
Risks Associated With Brand Development - The Company intends to continue to
pursue an aggressive brand-enhancement strategy, which will include mass market
and multimedia advertising, promotional programs and public relations
activities. To increase awareness of the Pick-Ups Plus, Inc. brand and expand it
on a wide range of products and services, the Company will need to continue to
spend significant amounts on advertising and promotions. These expenditures may
not result in a sufficient increase in revenues to cover such advertising and
promotions expenses.
7
<PAGE> 31
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
Concentration of Credit Risk
- ----------------------------
Financial instruments which potentially subject the Company to concentrations of
credit risk are principally bank deposits and accounts receivable. Cash and cash
equivalents and bank deposits are deposited with high credit quality financial
institutions. Accounts receivable typically represent credit card purchases and
are derived from the revenues earned from customers in the U.S. and are
denominated in U.S. dollars. Accounts receivable balances are typically settled
through customer credit cards and, as a result, the majority of accounts
receivable are collected upon processing of credit card transactions. The
Company maintains an allowance for uncollectible accounts based upon the
expected collectibility of accounts receivable.
Franchise Operations
- --------------------
Revenues from the sale of franchise operations (Franchise Fees) are generally
recognized, net of allowance for uncollectible amounts, when substantially all
significant services to be provided by the Company have been performed.
Revenues from franchise royalties are generally recognized, net of allowance for
uncollectible amounts when due from franchisees.
Revenue from product sales are recognized when orders are shipped.
The franchisors indirect costs of a regular and recurring nature are expensed as
incurred. In the event the franchisor incurs a direct cost related to franchise
sales for which revenues have not yet been recognized that cost will be deferred
until it can be matched with the income.
The franchise development costs capitalized herein, aggregating $42,000, were
specific identifiable costs incurred with outside parties in developing the
initial franchise system, master agreements and circulars. These costs are being
amortized on a straight-line basis over five years based on the life of a
franchise agreement. Amortization expense for the years ended December 31, 1998,
1997 and 1996 were $8,400, $8,400 and $4.200, respectively.
8
<PAGE> 32
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 3 BUSINESS COMBINATION
Effective September 30, 1998, Pick-Ups Plus, Inc. entered into an asset purchase
agreement with a related party to acquire a retail store in Cincinnati, Ohio,
for 144,000 shares of the Company's common stock and the assumption of certain
obligations totaling approximately $15,630. The Company has recorded the
acquisition using the purchase method of accounting as follows:
Assets acquired $ 41,630
Liabilities assumed 15,630
-------------
Acquisition price of assets $ 26,000
=============
Accordingly, the operations of this retail store are reflected in the financial
statements from the date of acquisition.
The following unaudited pro forma data summarizes the results of operations of
the Company for the year ended December 31, 1998, as if the acquisition had been
completed on January 1, 1998. The pro forma data gives effect to the actual
operating results prior to acquisition. The pro forma results do not purport to
be indicative of the results that would have actually been achieved if the
acquisition had occurred on January 1, 1998, or that may be achieved in the
future.
Sales $ 942,414
Net Income $ 42,617
Basic Net Income Per Share $ .008
NOTE 4 LEASE OBLIGATIONS
The Company is obligated presently for future minimum lease payments for office
and retail space, vehicles and equipment in the following amounts:
1999 $ 24,000
2000 14,412
2001 6,338
2002 3,558
2003 1,840
9
<PAGE> 33
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 5 NOTES PAYABLE
Notes payable consist of the following:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
A demand note payable to a
shareholder. There is currently
no interest being charged. $ 24,781 $ 35,281 $ 32,320
</TABLE>
NOTE 6 RELATED PARTY TRANSACTION
On September 30, 1998, Pick-Ups Plus, Inc. acquired the assets of Fitzgerald
Urethanes, Inc., which consisted of the assets and operations of a Pick-Ups Plus
retail store located in Cincinnati, Ohio. John Fitzgerald, who owns a beneficial
interest of approximately 87% of Pick-Ups Plus, Inc. owned 100% of Fitzgerald
Urethanes, Inc. This was the same transaction spoken to in foregoing Note 3.
NOTE 7 PRIVATE PLACEMENT AND WARRANTS OUTSTANDING
On November 2, 1998, the Company was authorized to issue a private placement of
common stock. The Company was authorized to issue 10,000 units at $5.00 per
unit. Each unit consists of 50 shares of common stock and 95 redeemable stock
purchase warrants. The common stock purchase warrants are exercisable for one
share of common stock at $1.00 per share until November 2, 2000. The Company may
redeem the warrants at $.01 per warrant with 30-day prior written notice if the
common stock bid price equals or exceeds $2.50 per share for ten consecutive
trading days ending on the third day prior to the date on which such notice was
given.
The sale of the 10,000 units had been completed as of December 31, 1998.
NOTE 8 ISSUANCE OF NEW STOCK
In September of 1998, the Company's directors authorized the increase in number
of shares of common stock from one share to fifty million shares at $0.001 par
value per share and five million shares of preferred stock at $1.00 par value
per share (See Note 9). They also authorized a forward stock split of 6,100,000
to 1, which has been reflected retro-actively to the earliest period presented.
Additionally, the directors authorized the Private Placement referred to in Note
7.
As a result, the Company's founder, John Fitzgerald, now owned six million, one
hundred thousand (6,100,000) shares. He then transferred part of his shares to
the following parties:
300,000 Shares were issued to The Southern Companies as part of their
consulting contract to provide certain investment banking services.
10
<PAGE> 34
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
NOTE 8 ISSUANCE OF NEW STOCK
(CONT'D)
190,000 shares were issued to the following Company directors and officers:
Shares
------
Sean Fitzgerald, Director, Vice President 90,000
(John Fitzgerald's son)
Erin Schuler, Director, Corporate Secretary 50,000
(John Fitzgerald's daughter)
David McConnell, Director 25,000
Joseph Lamble, Director 25,000
-------
190,000
=======
In accordance with Accounting Principles Board Opinion Number 25, Interpretation
Number 1, although these shares were transferred by the Company's sole
shareholder, they were deemed to benefit the Company and were therefore
accounted for as such. This resulted in the following compensation being
recorded:
Officers' Salaries $ 9,000
Directors' Fees 10,000
Consulting Fees 30,000
NOTE 9 SUBSEQUENT EVENTS
In January of 1999, subsequent to the balance sheet date, the Corporation (a
Delaware Corporation) submitted and had approved an amendment to its Certificate
of Incorporation to become authorized to issue 50,000,000 shares of Common Stock
with $0.001 par value per share and 5,000,000 shares of Preferred Stock at $1.00
par value per share. The directors authorized this change in September, 1998,
and intended for this amendment to be filed with Delaware immediately
thereafter, but, due to an administrative oversight, the actual filing did not
occur until January, 1999.
11
<PAGE> 35
PICK-UPS PLUS, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
<PAGE> 36
INDEX TO FINANCIAL STATEMENTS
PAGE
----
BALANCE SHEET 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF SHAREHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6 - 10
<PAGE> 37
PICK-UPS PLUS, INC.
BALANCE SHEET
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash $ 1,140
Accounts Receivable, Less: Allowance
for Doubtful Accounts of $14,636 34,152
Inventory 33,156
---------
$ 68,448
Property & Equipment
Furniture, Fixtures & Equipment 5,000
Less: Accumulated Depreciation (764)
---------
4,236
Other Assets
Franchise Development Costs,
Net of Amortization 14,700
Total Assets $ 87,384
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 24,202
Sales Tax Payable 4,385
Notes Payable 115,081
---------
Total Liabilities $ 143,668
Stockholders' Equity
Common Stock, $0.001 Par,
50,000,000 Shares Authorized,
6,758,100 Shares Issued And
Outstanding At September 30, 1999 6,758
Additional Paid In Capital 195,622
Accumulated Deficit (258,664)
---------
Total Stockholders' Equity (Deficit) (56,284)
---------
Total Liabilities &
Stockholders' Equity $ 87,384
=========
</TABLE>
See accompanying notes.
2
<PAGE> 38
PICK-UPS PLUS, INC.
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1999 1998
----------- -----------
Revenue
Retail Sales $ 650,709 $ -0-
Franchise Fees & Royalties 99,987 68,966
----------- -----------
$ 750,696 $ 68,966
Cost of Sales 475,214 -0-
----------- -----------
Gross Profit $ 275,482 $ 68,966
Selling, General &
Administrative Expenses 448,680 79,605
----------- -----------
Total Expenses 448,680 79,605
----------- -----------
Net Loss Before
Provision for Income Tax $ (173,198) $ (10,639)
Provision (Benefit) For
Income Taxes -0- -0-
----------- -----------
Net (Loss) $ (173,198) $ (10,639)
=========== ===========
Basic & Diluted Earnings (Loss)
Per Common Share $ (.03) $ (.002)
Weighted Average Common
Shares Outstanding 6,752,309 6,100,000
See accompanying notes.
3
<PAGE> 39
PICK-UPS PLUS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Total
------------------------------ Paid In Earnings Shareholders'
Shares Amount Capital (Deficit) Equity (Deficit)
---------- ---------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1998 6,744,000 $ 6,744 $ 184,356 $ (85,466) $ 105,634
Issuance of Restricted
Common Stock During The
Nine Months Ended
September 30, 1999 14,100 14 11,266 11,280
Net Loss For The
Nine Months Ended
September 30, 1999 (173,198) (173,198)
---------- ---------- ---------- ---------- ----------
Balance at
September 30, 1999 6,758,100 $ 6,758 $ 195,622 $ (258,664) $ (56,284)
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes.
4
<PAGE> 40
PICK-UPS PLUS, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
1999 1998
---- ----
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (Loss) For The Period $(173,198) $ (10,639)
Adjustments To Reconcile Net Income
To Net Cash Provided By (Used In)
Operating Activities:
Depreciation 584 0
Amortization 6,300 6,300
(Increase) Decrease In Assets:
Accounts Receivable 1,001 (11,103)
Inventory 3,474 0
Increase (Decrease) In Liabilities:
Accounts Payable 19,871 15,205
Sales Tax Payable 4,385
--------- ---------
TOTAL ADJUSTMENTS 35,615 10,402
--------- ---------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (137,583) (237)
--------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Common Stock Issued $ 14 $ 0
Paid In Capital Contributed 11,266 0
Net Proceeds From Notes Payable 90,330 1,329
--------- ---------
NET CASH PROVIDED
BY FINANCING ACTIVITIES 101,610 1,329
--------- ---------
NET INCREASE (DECREASE)
IN CASH $ (35,973) $ 1,092
CASH BEGINNING OF PERIOD 37,113 21
--------- ---------
CASH END OF PERIOD $ 1,140 $ 1,113
========= =========
See accompanying notes.
5
<PAGE> 41
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 1 BUSINESS DESCRIPTION
Pick-Ups Plus, Inc. operates and franchises retail automotive parts and
accessories stores catering to the light truck market, which is the fastest
growing segment of the motor vehicle market in the United States. The Company
has six stores operated by franchisees and one Company owned store. Subject to
the availability of financing, the Company intends to pursue an aggressive
expansion strategy by opening additional company-owned and franchise locations.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Presentation
- --------------------------
The financial statements have been prepared in accordance with generally
accepted accounting principles.
Method of Accounting
- --------------------
The Company uses the accrual method of accounting for financial statement
reporting. Under this method, revenue is recognized when earned and expenses are
recognized when incurred.
Accounts Receivable
- -------------------
The Company used the allowance method for determining a provision for doubtful
accounts based on analysis of the aging of accounts receivable, past experience,
present market conditions and possible impairment.
Inventory
- ---------
Inventory, which was submitted by management of the Company, is valued at the
lower of cost or market using the first in - first out method.
Property & Equipment
- --------------------
Property and equipment are carried at cost. Depreciation of property and
equipment is computed on a straight-line basis, generally over the estimated
useful lives of the assets or, when applicable, the life of the lease, whichever
is shorter.
6
<PAGE> 42
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
Income Taxes
- ------------
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," which requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
temporary difference between the financial statement and tax basis of assets and
liabilities using presently enacted tax rates in effect. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount
expected to be realized.
Net Loss Per Share
- ------------------
The Company computes net income or loss per share in accordance with SFAS No.
128, "Earnings Per Share" which requires dual presentation of basic earnings per
share ("EPS") and diluted EPS.
Basic earnings per share is computed using the weighted average number of common
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average number of common shares and potentially dilutive
shares outstanding during the period. The Company has 950,000 warrants
outstanding at September 30, 1999, which could potentially dilute basic earnings
per share in the future, but have not been included in the computation of
diluted net income per share, as the impact would have been antidilutive for the
periods presented.
Business Risk
- -------------
Business risks include the following:
Competition - Many of the Company's current and potential competitors have
longer operating histories, larger customer bases and greater financial,
marketing and other resources than the Company. Increased competition may result
in reducing operating margins and impact market share.
Risks Associated With Brand Development - The Company intends to continue to
pursue an aggressive brand-enhancement strategy, which will include mass market
and multimedia advertising, promotional programs and public relations
activities. To increase awareness of the Pick-Ups Plus, Inc. brand and expand it
on a wide range of products and services, the Company will need to continue to
spend significant amounts on advertising and promotions. These expenditures may
not result in a sufficient increase in revenues to cover such advertising and
promotions expenses.
7
<PAGE> 43
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
Concentration of Credit Risk
- ----------------------------
Financial instruments which potentially subject the Company to concentrations of
credit risk are principally bank deposits and accounts receivable. Cash and cash
equivalents and bank deposits are deposited with high credit quality financial
institutions. Accounts receivable typically represent credit card purchases and
are derived from the revenues earned from customers in the U.S. and are
denominated in U.S. dollars. Accounts receivable balances are typically settled
through customer credit cards and, as a result, the majority of accounts
receivable are collected upon processing of credit card transactions. The
Company maintains an allowance for uncollectible accounts based upon the
expected collectibility of accounts receivable.
Franchise Operations
- --------------------
Revenues from the sale of franchise operations (Franchise Fees) are generally
recognized, net of allowance for uncollectible amounts, when substantially all
significant services to be provided by the Company have been performed.
Revenues from franchise royalties are generally recognized, net of allowance for
uncollectible amounts when due from franchisees.
Revenue from product sales are recognized when orders are shipped.
The franchisor's indirect costs of a regular and recurring nature are expensed
as incurred. In the event the franchisor incurs a direct cost related to
franchise sales for which revenues have not yet been recognized, that cost will
be deferred until it can be matched with the income.
The franchise development costs capitalized herein, aggregating $42,000, were
specific identifiable costs incurred with outside parties in developing the
initial franchise system, master agreements and circulars. These costs are being
amortized on a straight-line basis over five years based on the life of a
franchise including extensions. Amortization expense for the nine months ended
September 30, 1999 and 1998 were $6,300 for each period.
8
<PAGE> 44
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 3 BUSINESS COMBINATION
Effective September 30, 1998, Pick-Ups Plus, Inc. entered into an asset purchase
agreement with a related party to acquire a retail store in Cincinnati, Ohio,
for 144,000 shares of the Company's common stock and the assumption of certain
obligations totaling approximately $15,630. The Company has recorded the
acquisition using the purchase method of accounting as follows:
Assets acquired $ 41,630
Liabilities assumed 15,630
---------
Acquisition price of assets $ 26,000
=========
Accordingly, the operations of this retail store are reflected in the financial
statements from the date of acquisition.
The following unaudited pro forma data summarizes the results of operations of
the Company for the nine months ended September 30, 1998, as if the acquisition
had been completed on January 1, 1998. The pro forma data gives effect to the
actual operating results prior to acquisition. The pro forma results do not
purport to be indicative of the results that would have actually been achieved
if the acquisition had occurred on January 1, 1998, or that may be achieved in
the future.
Sales $ 679,861
Net Income 7,317
Basic Net Income Per Share $ .001
NOTE 4 LEASE OBLIGATIONS
The Company is obligated presently for future minimum lease payments for office
and retail space, vehicles and equipment in the following amounts:
1999 $ 24,000
2000 14,412
2001 6,338
2002 3,558
2003 1,840
9
<PAGE> 45
PICK-UPS PLUS, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 5 NOTES PAYABLE
Notes payable consist of the following as of September 30:
1999 1998
---- ----
The Company has outstanding a demand
note payable to a shareholder. There is
currently no interest being charged. $ 21,981 $ 36,110
In March, 1999, the Company
secured a line of credit in the amount
of $100,000. To date, $93,100 has
been drawn against this note. It has
an interest rate of seven and one-half
percent per annum. It is secured by the
personal guarantee of the Company's
President, John Fitzgerald and is
renewable November 29, 1999. 93,100 -0-
---------- ----------
$ 115,081 $ 36,110
========== ==========
NOTE 6 PRIVATE PLACEMENT AND WARRANTS OUTSTANDING
On November 2, 1998, the Company was authorized to issue a private placement of
common stock. The Company was authorized to issue 10,000 units at $5.00 per
unit. Each unit consists of 50 shares of common stock and 95 redeemable stock
purchase warrants. The common stock purchase warrants are exercisable for one
share of common stock at $1.00 per share until November 2, 2000. The Company may
redeem the warrants at $.01 per warrant with 30-day prior written notice if the
common stock bid price equals or exceeds $2.50 per share for ten consecutive
trading days ending on the third day prior to the date on which such notice was
given.
The sale of the 10,000 units had been completed as of December 31, 1998.
NOTE 7 ISSUANCE OF NEW STOCK
During the nine months ended September 30, 1999, the Company issued an
additional 14,100 shares of restricted common stock for a cash payment of
$11,280.
10
<PAGE> 46
FITZGERALD URETHANES, INC
FINANCIAL STATEMENTS
DECEMBER 31, 1997
AND
SEPTEMBER 30, 1998 (UNAUDITED)
<PAGE> 47
INDEX TO FINANCIAL STATEMENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT 1
BALANCE SHEETS 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF SHAREHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6 - 8
<PAGE> 48
ROBERT L. WHITE
CERTIFIED PUBLIC ACCOUNTANT
988 OHIO PIKE, SUITE #2
CINCINNATI, OHIO 45245
- --------------------------------------------------------------------------------
PHONE (513) 943-1040
FAX (513) 943-7760
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and
Stockholders of Fitzgerald Urethanes, Inc.
We have audited the accompanying balance sheet of Fitzgerald Urethanes, Inc. as
of December 31, 1997, and the related statements of operations, shareholders'
equity and cash flows for the year then ended. 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.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to the above present fairly,
in all material respects, the financial position of Fitzgerald Urethanes, Inc.
as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Robert L. White, CPA
October 10, 1999
1
<PAGE> 49
FITZGERALD URETHANES, INC.
BALANCE SHEETS
DECEMBER 31, 1997 AND SEPTEMBER 30, 1998
ASSETS
<TABLE>
<CAPTION>
September 30, 1998
1997 (Unaudited)
--------- ------------------
<S> <C> <C>
Current Assets
Cash in Bank $ 4,435 $ 701
Inventory 12,162 36,630
--------- ---------
$ 16,597 $ 37,331
Property & Equipment
Furniture, Fixtures & Equipment 23,841 23,841
Less: Accumulated Depreciation (20,846) (22,325)
--------- ---------
2,995 1,516
--------- ---------
Total Assets $ 19,592 $ 38,847
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 1,244 $ 15,630
Notes Payable 434,208 421,121
--------- ---------
Total Liabilities $ 435,452 $ 436,751
Stockholders' Equity
Common Stock, No Par;
500 Shares Authorized,
1 Share Issued and Outstanding
At December 31, 1997, and
September 30, 1998 500 500
Accumulated Deficit (416,360) (398,404)
--------- ---------
Total Stockholders' Equity (Deficit) (415,860) (397,904)
--------- ---------
Total Liabilities &
Stockholders' Equity $ 19,592 $ 38,847
========= =========
</TABLE>
See accompanying notes and accountant's report.
2
<PAGE> 50
FITZGERALD URETHANES, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
1998
1997 (Unaudited)
-------- -----------
<S> <C> <C>
Revenue
Retail Sales $767,775 $610,895
Cost of Sales 524,338 425,971
-------- --------
Gross Profit $243,437 $184,924
Selling, General &
Administrative Expenses 213,422 166,968
-------- --------
Total Expenses 213,422 166,968
-------- --------
Net Income Before
Provision for Income Tax $ 30,015 $ 17,956
Provision (Benefit) For
Income Taxes (See Note 2) 0 0
-------- --------
Net Income $ 30,015 $ 17,956
======== ========
</TABLE>
See accompanying notes and accountant's report.
3
<PAGE> 51
FITZGERALD URETHANES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Common Stock Accumulated Total
--------------------------- Earnings Shareholders'
Shares Amount (Deficit) Equity (Deficit)
--------- --------- ----------- --------------
<S> <C> <C> <C> <C>
Balance at December 31,
1996 1 $ 500 $(446,375) $(445,875)
Net Income For The Year
Ended December 31, 1997 30,015 30,015
--------- --------- --------- ---------
Balance at
December 31, 1997 1 $ 500 $(416,360) $(415,860)
Net Income For The Nine
Months Ended September
30, 1998 (Unaudited) 17,956 17,956
--------- --------- --------- ---------
Balance at September 30,
1998 (Unaudited) 1 $ 500 $(398,404) $(397,904)
========= ========= ========= =========
</TABLE>
See accompanying notes and accountant's report.
4
<PAGE> 52
FITZGERALD URETHANES, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
1998
1997 (Unaudited)
-------- --------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income For The Period $ 30,015 $ 17,956
Adjustments To Reconcile Net Income
To Net Cash Provided By
Operating Activities:
Depreciation 2,414 1,479
(Increase) Decrease In Assets:
Inventory 395 (24,468)
Increase (Decrease) In Liabilities:
Accounts Payable 1,244 14,386
-------- --------
TOTAL ADJUSTMENTS 4,053 (8,603)
-------- --------
NET CASH PROVIDED
BY OPERATING ACTIVITIES 34,068 9,353
-------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of Property & Equipment (1,246) 0
-------- --------
NET CASH (USED) BY INVESTING
ACTIVITIES (1,246) 0
-------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Reduction of Notes Payable (36,243) (13,087)
-------- --------
NET CASH (USED)
BY FINANCING ACTIVITIES (36,243) (13,087)
-------- --------
NET (DECREASE)
IN CASH $ (3,421) $ (3,734)
CASH BEGINNING OF PERIOD 7,856 4,435
-------- --------
CASH END OF PERIOD $ 4,435 $ 701
======== ========
</TABLE>
See accompanying notes and accountant's report.
5
<PAGE> 53
FITZGERALD URETHANES, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997
AND SEPTEMBER 30, 1998 (UNAUDITED)
NOTE 1 BUSINESS DESCRIPTION
Fitzgerald Urethanes, Inc. operates a franchised retail automotive parts and
accessories store in Cincinnati, Ohio, under the name Pick-Ups Plus, Inc. The
store caters to the light truck market, which is the fastest growing segment of
the motor vehicle market in the United States.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Presentation
- --------------------------
The financial statements have been prepared in accordance with generally
accepted accounting principles.
Method of Accounting
- --------------------
The Company uses the accrual method of accounting for financial statement
reporting. Under this method, revenue is recognized when merchandise is sold and
expenses are recognized when incurred.
Accounts Receivable
- -------------------
The Company uses the allowance method for determining a provision for doubtful
accounts based on analysis of the aging of accounts receivable, past experience
and present market conditions and possible impairment. However, the Company does
not extend credit to the general public and only to a select few vehicle
dealerships. There were no accounts receivable outstanding as of the balance
sheet dates, December 31, 1997, or September 30, 1998.
Inventory
- ---------
Inventory is valued at the lower of cost or market using the first in - first
out method. Inventory as of September 30, 1998, was submitted by management.
Property & Equipment
- --------------------
Property and equipment are carried at cost. Depreciation of property and
equipment is computed on a straight-line basis, generally over the estimated
useful lives of the assets or, when applicable, the life of the lease, whichever
is shorter.
6
<PAGE> 54
FITZGERALD URETHANES, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997
AND SEPTEMBER 30, 1998 (UNAUDITED)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
Income Taxes
- ------------
The Company's directors and shareholders have elected to be taxed as a
Subchapter S Corporation for federal income tax purposes. Accordingly, the
income or loss is passed through and taxed a the individual shareholder level.
Therefore, no provision for taxes are included in these statements.
Concentration of Credit Risk
- ----------------------------
Financial instruments which potentially subject the Company to concentrations of
credit risk are principally bank deposits and accounts receivable. Cash and cash
equivalents and bank deposits are deposited with high credit quality financial
institutions. Accounts receivable typically represent credit card purchases and
are derived from the revenues earned from customers in the U.S. and are
denominated in U.S. dollars. Accounts receivable balances are typically settled
through customer credit cards and, as a result, the majority of accounts
receivable are collected upon processing of credit card transactions. The
Company maintains an allowance for uncollectible accounts based upon the
expected collectibility of accounts receivable. As mentioned above, there were
no accounts receivable outstanding as of the balance sheet dates presented in
these statements.
NOTE 3 BUSINESS COMBINATION
Effective September 30, 1998, Fitzgerald Urethanes, Inc. entered into an
agreement with a related party to sell the assets of its retail store in
Cincinnati, Ohio, for 144,000 shares of the buyer's common stock and the buyer's
assumption of certain obligations totaling approximately $15,630. The buyer also
required all rights to operate the store at the existing location.
NOTE 4 LEASE OBLIGATIONS
Effective with the sale, mentioned in Note 3 above, the buyer also assumed the
Company's obligation for the following future minimum lease payments for retail
space in the following amounts:
1999 $ 24,000
7
<PAGE> 55
FITZGERALD URETHANES, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997
AND SEPTEMBER 30, 1998 (UNAUDITED)
NOTE 5 NOTES PAYABLE
Notes payable consist of the following:
<TABLE>
<CAPTION>
December 31, September 30,
1997 1998 (Unaudited)
-------------- ----------------
<S> <C> <C>
A demand note payable to a
shareholder. There is currently
no interest being charged. $ 434,208 $ 421,121
</TABLE>
8
<PAGE> 56
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesman or other person is authorized to give any
information or make any information or make any representations not
contained in this Prospectus with respect to the offering made hereby.
This Prospectus does not constitute an offer to sell any of the 950,000 Shares of Common Stock
securities offered hereby in any jurisdiction where, or to any person
to whom it is unlawful to make such an offer. Neither the PICK-UPS PLUS, INC.
delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that
there has been no change in the information set forth
herein or in the business of the Company since the date
hereof.
TABLE OF CONTENTS
PROSPECTUS
Prospectus Summary................................................. 4
Risk Factors....................................................... 4
Use of Proceeds.................................................... 5 NOVEMBER __, 1999
Market for the Shares.............................................. 5
Dividend Policy.................................................... 5
Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................................................ 5
Business........................................................... 7
Management.........................................................13
Executive Compensation.............................................15
Security Ownership of certain Beneficial
Owners and Management.............................................16
Indemnification....................................................16
Certain Relationships and Related
Transactions......................................................17
Plan of Distribution/Selling Security Holders......................17
Description of Securities..........................................20
Legal Matters......................................................21
Experts............................................................21
Additional Information.............................................21
Financial Statements............................................... ?
</TABLE>
<PAGE> 57
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is hereby made to the provisions of Section 145 of the
Delaware General Corporation Act which provides for indemnification of directors
and officers under certain circumstances.
Reference is hereby made to Article IV of Registrant"s Amended and
Restated Articles of Incorporation which is filed as Exhibit 3(a).
Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities offered hereby.
Registration Fee $ 264
Printing Expenses* 1,500
Legal Fees and Expenses* 25,000
Accounting Fees and Expenses* 10,000
Blue Sky Fees and Expenses* 3,000
Transfer Agent Fees and Expenses* 1,000
Misc.* 569
-------
Total $41,333
*Estimated
Item 26. RECENT SALES OF UNREGISTERED SECURITIES.
The following provides information of all sales of securities in the
last 3 years which were not registered under the Securities Act of 1933.
In November to December 1998 the Company undertook a private offering
pursuant to Regulation D, Rule 504. The offering consisted of 10,000 Units for
$5.00 per Unit. Each Unit consisted of 50 shares
<PAGE> 58
of common stock and 95 redeemable stock purchase warrants. Each warrant entitles
the holder to purchase 1 share of common stock for $1.00 per share. The Units
were purchased by 30 investors, two of whom were accredited investors and the
balance of whom were sophisticated.
In September 1998 the Company issued 300,000 shares of its common stock
to The Southern Companies, Inc. for consulting services. These shares were
issued pursuant to an exemption from registration under the Securities Act of
1933 pursuant to Section 4(2). We believe the consultant was sophisticated.
In September 1998 the Company issued 144,000 to Fitzgerald Urethanes,
Inc. in consideration for the purchase of the prototype store for the Company's
franchise system. These shares were issued pursuant to an exemption from
registration under the Securities Act of 1933 pursuant to Section 4(2).
In the first half of 1999 we sold 11,100 shares of our common stock to
5 private investors for $11,100. These shares were issued pursuant to an
exemption from registration under the Securities Act of 1933 pursuant to Section
4(2). We believe these investors were sophisticated.
None of the securities discussed above were registered under the
Securities Act of 1933, exemption being claimed in each case pursuant to Section
4(2), Regulation D or as otherwise specified. All of such securities were not
solicitated by advertising or any general solicitation and, except such
securities issued pursuant to Rule 504, contain a restrictive legend.
Item 27. Exhibits.
---------
Exhibit No. Description
- ----------- -----------
3(a) Certificate of Incorporation of the Registrant*
3(b) Amendments to Certificate of Incorporation*
3(c) By-Laws of the Registrant*
3(d) Form of Stock Purchase Warrant expiring February 11, 2000*
5.1 Opinion of Counsel*
6(a) Form of Franchise Agreement*
6(b) Agreement of Lease, premises at Mason, Ohio*
6(c) Lease Agreement, premises at Cincinnati, Ohio*
23 Consent of counsel is contained in Exhibit 5.1*
23.1 Independent Auditors Consent
27 Financial Data Schedule
*Previously filed
<PAGE> 59
Item 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
2. That for the purpose of determining any liability under the
Securities Act of 1935, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
<PAGE> 60
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Mason
and State of Ohio on November 22, 1999.
PICK-UPS PLUS, INC.
By /s/ John Fitzgerald
President/principal executive officer/principal accounting officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/John Fitzgerald, President President and Director, Principal Executive November 22, 1999
John Fitzgerald, President Officer/Principal Accounting Officer
/s/Joseph Lamble Director November 22, 1999
Joseph Lamble
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITOR
I hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form SB-2 of my report dated February 20, 1999
relating to the financial statements of Pick-Ups Plus, Inc. and my report dated
October 10, 1999 relating to the financial statements of Fitzgerald Urethanes,
Inc. appearing in such Prospectus. I also consent to the reference to me under
the heading "Experts" in such Prospectus.
s/Robert L. White
Certified Public Accountant
Cincinnati, Ohio
NOVEMBER 23, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,140
<SECURITIES> 0
<RECEIVABLES> 48,515
<ALLOWANCES> (14,636)
<INVENTORY> 33,156
<CURRENT-ASSETS> 68,448
<PP&E> 5,000
<DEPRECIATION> (764)
<TOTAL-ASSETS> 87,384
<CURRENT-LIABILITIES> 143,668
<BONDS> 0
0
0
<COMMON> 6,758
<OTHER-SE> (63,042)
<TOTAL-LIABILITY-AND-EQUITY> 87,384
<SALES> 750,696
<TOTAL-REVENUES> 750,696
<CGS> 475,214
<TOTAL-COSTS> 923,894
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (173,198)
<INCOME-TAX> 0
<INCOME-CONTINUING> (173,198)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (173,198)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
