TWINVIEW, INC.
573 East 300 South
Salt Lake City, Utah 84102
150,000 Shares Minimum/350,000 Shares Maximum
Common Stock
This is Twinview's initial public offering. We are offering a minimum of
150,000 shares and a maximum of 350,000 shares of common stock. The public
offering price is $1.00 per share.
We intend to apply for a listing on the OTC bulletin board.
Investing in our common stock involves risks which are described in the
"Risk factors" section beginning on page 2 of this prospectus.
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.
The shares are being sold by our officers and directors in a
self-underwritten offering with a minimum offering amount of 150,000 shares.
If the minimum offering proceeds of $150,000 have not been received from the
sale of the shares within 90 days from the date of this prospectus, unless
extended by us for up to an additional 30 days, your investment will be
promptly returned to you without interest and without any deduction. To
purchase shares in this offering, you must purchase at least 100 shares. The
offering may be terminated by us prior to September 9, 2000.
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Price to
Public Commissions Proceeds to Company
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Per Share $1.00 $0.06 $0.94
Minimum $150,000 $9,000 $141,000
Maximum $350,000 $21,000 $329,000
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The date of this prospectus is May 12, 2000
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Table of Contents
Section Page
Prospectus summary.....................................................1
Risk factors...........................................................2
Risks related to our financial condition 2
We have no operating history so it will
be difficult for you to evaluate an
investment in our common stock..............................2
Our independent auditor has expressed
doubt concerning our ability to
continue as a going concern. Unless
we raise additional capital to
address this problem we may be unable
to continue in business ....................................2
Risks related to our business ....................................2
Our current managers have no experience
in managing a specialty coffee store
business. We need to hire experienced
managers to assist the business ............................2
Our directors and officers will only devote
part time efforts to this business due to
other business interests they have. They
may be unable to devote the time necessary
to fully develop the business...............................3
Risks related to this offering....................................3
There is no assurance that the $150,000
minimum offering amount in this self-
underwritten offering will be sold.
Any funds you invest may be unavailable
for up to 120 days..........................................3
Forward-looking statements.............................................3
Dilution...............................................................4
Use of proceeds........................................................6
Capitalization.........................................................8
Business...............................................................9
Management.............................................................21
Executive compensation.................................................22
Certain relationships and related party
transactions..........................................................23
Security ownership of management and principal
Shareholders..........................................................24
Management's discussion and analysis or plan
of operations.........................................................26
Terms of offering and plan of distribution.............................31
Description of securities..............................................35
Legal proceedings......................................................42
iii
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Transfer agent.........................................................42
Experts................................................................42
Financial statements...................................................43
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Prospectus summary
Our business
We were formed for the purpose of designing, constructing, and operating
a retail drive-through specialty coffee store in Salt Lake City, Utah.
Corporate information
Our principal executive offices are located at 573 East 300 South, Salt
Lake City, Utah 84102. Our telephone number at that location is (801)
531-1867.
The offering
Common stock offered by us: 150,000 shares minimum
350,000 shares maximum
Common stock to be outstanding 800,000 shares minimum
after the offering: 1,000,000 shares maximum
Use of proceeds: - for construction of coffee house
building and improvements;
- for purchase of necessary equipment
and personal property;
- for sales and marketing expenses;
- for rent;
- for inventory;
- for employee compensation;
- for possible acquisitions; and
- for working capital.
The information described above is based on the shares outstanding as of
May 2, 2000. The total number of shares that we assume will be outstanding
after the offering includes 275,000 shares of common stock to be issued upon
conversion of our Series A preferred stock to shares of our common stock on a
1 for 1 share basis at some time in the future.
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Unless otherwise indicated, all information in this prospectus reflects
the conversion of all 275,000 outstanding shares of our Series A preferred
stock into 275,000 shares of our common stock which shall occur on or before
March 22, 2001.
References in this prospectus to "we," "our" and "us" refer to Twinview,
Inc.
Risk factors
Risks related to our financial condition
We have no operating history so it will be difficult for you to evaluate
an investment in our common stock.
We have no operating history. We were formed on November 5, 1998, and
since that time our business activities have been limited to raising funds and
searching for a suitable location for our proposed specialty coffee store.
There is no assurance we will be successful in the construction, operations,
and profitability of our proposed specialty retail drive-through store. We
have not yet commenced our primary business purpose. We have no customers as
yet, and we will not have any customers until the proposed retail store is
constructed, staffed, supplied and operated. We have had no revenue to date.
Our independent auditor has expressed doubt concerning our ability to
continue as a going concern. Unless we raise additional capital to
address this problem we may be unable to continue in business.
As disclosed in Note 3 to our financial statements included in this
prospectus, we do not have an established source of revenues sufficient to
cover our operating costs to allow us to continue as a going concern. Our
ability to continue as a going concern is dependent upon our ability to
complete this offering successfully and/or to raise additional capital through
other means.
Risks related to our business
Our current managers have no experience in managing a specialty coffee
store business. We need to hire experienced managers to assist the
business.
None of our present management has had prior experience in managing or
operating a specialty coffee store as we propose to
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do. We intend to locate and hire one or more managers with significant prior
experience. We believe that having experienced managers will assist the
business in running more efficiently and in attracting and retaining
customers. We currently have no commitment to hire any experienced managers,
but we believe that persons with prior management experience may be located
and hired in the Salt Lake City, Utah area.
Our directors and officers will only devote part time efforts to this
business due to other business interests they have. They may be unable
to devote the time necessary to fully develop the business.
The amount of time which our officers and directors will devote to our
business will be limited. They may be unable to devote the time necessary to
fully develop the business, due to the fact that they devote time to other
business interests they have. Our directors and officers also serve as
officers, directors, controlling shareholders and/or partners of other
entities engaged in a variety of businesses. Thus, there exists potential
conflicts of interest including, among other things, time, effort and
corporate opportunity involved in participation with such other business
entities. It is not anticipated that any of such other business interests
will be ones that are, or will be, in competition with us.
Risks related to this offering
There is no assurance that the $150,000 minimum offering amount in this
self-underwritten offering will be sold. Any funds you invest may be
unavailable for up to 120 days.
The shares are being sold by our officers and directors in a
self-underwritten offering with a minimum offering amount of 150,000 shares.
No individual or firm is committed to purchase or take down any of the shares.
There is no assurance that any portion of the shares will be sold. You could
invest money for as long as 120 days and have your investment returned without
interest. Anytime after the minimum amount is received prior to termination
of the offering, the escrowed funds will be transmitted to us and shares will
then be issued and no refunds will be made to you thereafter.
Forward-looking statements
Many statements made in this prospectus under the captions "Prospectus
summary," "Risk factors," "Management's discussion and analysis or plan of
operations", "Business" and elsewhere are
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forward-looking statements that are not based on historical facts. Because
these forward-looking statements involve risks and uncertainties, there are
important factors that could cause actual results to differ materially from
those expressed or implied by these forward-looking statements, including
those discussed under "Risk factors."
The forward-looking statements made in this prospectus are based on
events through the date on which the statements are made.
Dilution
For purposes of computing dilution in the net tangible book value of our
common stock, and for general ownership, control and voting purposes described
in this section of the prospectus, all shares of Series A preferred stock have
been treated as having been converted to shares of our common stock on a 1 for
1 share basis. The following table summarizes the comparative ownership and
capital contributions of existing common stock shareholders and investors in
this offering as of December 31, 1999:
Shares owned Total consideration Average
--------------------- -------------------- price per
Number % Amount % share
---------- ---------- ----------- --------- ----------
Present
shareholders
Minimum offering 650,000 81.25% $232,853 60.82% $ .36
Maximum offering 650,000 65.00% $232,853 39.95% $ .36
New investors
Minimum offering 150,000 18.75% $150,000 39.18% $1.00
Maximum offering 350,000 35.00% $350,000 60.05% $1.00
The table appearing above has been prepared assuming that none of the
present shareholders purchases additional shares in this offering. It assumes
that all outstanding shares of Series A preferred stock are converted to
shares of common stock on a 1 for 1 share basis, and it includes $19,103 cost
of architectural plans contributed by initial shareholders.
Our pro forma net tangible book value as of December 31, 1999 was
$172,740 or approximately $0.266 per share. Pro Forma
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net tangible book value per share represents our total tangible assets less
our total liabilities divided by the number of shares of our common stock
outstanding. For purposes of calculating dilution, all shares of Series A
preferred stock have been treated as having been converted to shares of common
stock on a 1 for 1 share basis.
Pro forma net tangible book value dilution per share represents the
difference between the amount paid per share by purchasers of common stock in
this offering and the pro forma net tangible book value per share of common
stock as adjusted to give effect to this offering.
After giving effect to the sale of the minimum offering of 150,000 shares
of common stock offered at $1.00 per share, and assuming conversion of the
Series A preferred stock to common stock on a 1 for 1 share basis, our as
adjusted net tangible book value as of December 31, 1999 would have been
approximately $293,740 or approximately $0.367 per share of common stock. This
represents an immediate increase in pro forma net tangible book value of
approximately $0.101 per share to existing shareholders and an immediate
dilution of approximately $0.633 per share to new investors in this offering.
After giving effect to the sale of the maximum 350,000 shares of common
stock offered at $1.00 per share, our adjusted net tangible book value as of
December 31, 1999 would have been approximately $481,740 or approximately
$0.482 per share of common stock. This represents an immediate increase in pro
forma net tangible book value of approximately $0.216 per share to existing
shareholders and an immediate dilution of approximately $0.518 per share to
new investors in this offering. The following table illustrates the dilution
per share to new investors as of December 31, 1999:
Assumes Assumes
minimum maximum
offering offering
--------- ---------
Initial public offering price $1.00 $1.00
per share
Pro forma net tangible book $0.266 $0.266
value per share as of
December 31, 1999
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Pro-forma net tangible book $0.101 $0.216
value increase per share
attributable to new
shareholders
As adjusted net tangible book $0.367 $0.482
value per share after offering
Dilution per share to new $0.633 $0.518
shareholders
______________________
For a description of the conversion rights, redemption rights and
liquidation preference of Series A preferred stock see "Description of
securities."
Use of proceeds
The net proceeds to be realized by us from this offering, after deducting
potential maximum commissions of $9,000 to $21,000 and offering related
expenses of $20,000 is approximately $121,000 if the minimum number of shares
is sold and $309,000 if the maximum number of shares is sold. In the event
licensed broker-dealers participate in this offering, commissions of up to 6%
may be paid to the broker dealers on sales made by them.
The first $70,000 will be used in addition to approximately $150,000 of
the net proceeds of our 1999 private placement offering to acquire a lease of
real property, construct the proposed specialty coffee store building and to
purchase necessary equipment and personal property. We propose to use the net
proceeds as follows:
Assuming sale of Assuming sale of
Description minimum offering maximum offering
_____________________________________________________________________________
Construction of $ 20,000 $ 20,000
building
Acquire lease and $ 50,000 $ 50,000
purchase equipment
and personal
property
Sales and $ 5,000 $ 10,000
marketing expenses
Rent $ 12,000 $ 24,000
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Inventory $ 10,000 $ 20,000
Employee
compensation $ 20,000 $ 40,000
Reserve for $ -0- $110,000
possible expansion
of the business
Working capital
reserve $ 4,000 $ 35,000
Total $121,000 $309,000
We have obtained building estimates to construct the coffee store
building and improvements ranging from approximately $152,000 to $185,000, and
we believe we will be able to complete the construction for approximately
$165,000, most of which will be paid from existing funds.
In the event the maximum offering amount is raised, funds are allocated
for possible business expansion purposes. This includes possible acquisitions
of complementary businesses or possibly opening a second location. We
presently have no commitments or agreements, and we are not involved in any
negotiations, with respect to any expansion plans or acquisitions.
The working capital reserve may be used for general corporate purposes to
operate, manage and maintain the specialty coffee store.
The amounts set forth in the use of proceeds table merely indicate the
proposed use of proceeds, and actual expenditures may vary substantially from
these estimates depending upon market and economic conditions once operations
are commenced. We may, in the future, seek additional funds through loans or
other financing arrangements.
Pending expenditures of the proceeds of this offering, we may make
temporary investments in money market accounts, insured certificates of
deposit and/or in insured banking accounts.
We presently do not pay our officers and directors any amount of salary.
In the event we are successful in completing this offering, we propose to then
begin paying our officers
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approximately $35.00 per hour for future services while they work part time
for us. Any full time employees, including officers if they work full time,
will be paid salaries competitive in the industry, subject to our ability to
do so.
Capitalization
The following table sets forth our capitalization as of December 31,
1999:
- on an actual basis; and
- on a pro forma basis to reflect the sale of the minimum and maximum
amount of securities in this offering after payment of related commissions and
offering expenses:
As of After After
December 31, minimum maximum
1999 offering offering
------------- ---------- ---------
Debt: $ 4,562 $ 4,562 $ 4,562
Stockholders Equity:
- - Preferred Stock, $0.0001 par value, $ 28 $ 28 $ 28
2,500,000 shares authorized; 275,000
shares issued and outstanding
- -Common Stock, $0.0001 par value, $ 38 $ 53 $ 73
17,500,000 shares, authorized;
375,000 shares issued and outstanding,
525,000 shares as adjusted for the
minimum offering and 725,000 shares
as adjusted for the maximum offering
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Additional Paid-in Capital $ 219,233 $ 369,218 $569,198
Deficit Accumulated During $ (46,559) $ (75,493) $(87,493)
the Development Stage
- -Total Shareholder's Equity $ 172,740 $ 293,740 $481,740
---------- ---------- ---------
Total Capitalization $ 191,377 $ 312,377 $500,377
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Business
Introduction
We are a newly formed, developmental stage company, and we have not yet
engaged in our proposed business. Although our officers and directors have
had no prior experience in our proposed business, they have had experience in
numerous unrelated businesses. From their personal experience over the years
in the Salt Lake City area with various other companies, management believes
that the establishment of a new retail drive-through coffee store at an
appropriate location may be a successful business venture. A brief discussion
of our management's plans follows.
Twinview, Inc.; its history and organization
Twinview, Inc. was incorporated in the State of Delaware on November 5,
1998. We intend to construct and operate a drive-through retail specialty
coffee store in Salt Lake City, Utah through our wholly owned subsidiary, Cafe
Detour, L.L.C., a Utah limited liability company formed in November 1998.
Cafe Detour, L.L.C. has not yet commenced principal business operations.
It is our intention to identify an appropriate business location, secure
a lease of the property upon which the coffee store building is to be built,
and then construct the proposed retail drive-through coffee store on the
property, following the successful completion of this securities offering.
Our proposed business is to operate the specialty coffee store. After this
offering has been completed, we believe it will take approximately one or two
months to complete site selection and obtain a lease, and another
approximately four to six months to complete construction and furnishing of
our proposed store and to
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hire and train employees before the store will begin its operations.
We have had a reputable architectural firm design, draft and complete
detailed working drawings or blue prints of a proposed retail drive-through
coffee store. The plans will be submitted to the appropriate government
agencies in Salt Lake City, Utah for review and approval once a location for
the retail coffee shop has been secured.
The architectural firm was selected for its experience in designing some
of the recently completed retail coffee stores with which we must compete. It
recently designed, submitted and received approval of four Starbucks(R)Coffee
Inc. Salt Lake City locations. All of the above locations are operating
stores as of the date of this prospectus.
The architectural firm has experience in the design of drive through
retail coffee stores similar to our proposed store. By their nature of
operation, drive-through coffee stores are confined in space. The efficiency
of design is critical. Our design provides for two traffic lanes on each side
of the building. It allows six automobiles on each side of the structure to
bring customers onto the premises. We believe this design is the most
practical and efficient for any intersection corner location which we are
seeking.
The importance for universal design attributes to be incorporated into
the building's structural design has been stressed. These principles, when
incorporated into a comprehensive set of plans, can be used at other similar
locations. Our initial plan is to construct a retail coffee store at one
location. In the event that the initial store is successful, then we may
attempt to expand our business by adding additional stores at other locations
in the future. Should this occur, we believe our architectural plans may be
used for future locations with minor expense for modifications to suit each
building site.
We believe that practical considerations in the design process as well as
the importance of planning in design for efficient operation have been
addressed. Another consideration in constructing a new building and creating
a new site is the appropriate blending of new structures within existing
neighborhoods. We believe our design for our retail coffee drive-through
store is one which will be acceptable in a variety of neighborhoods.
Management believes our proposed structure is architecturally pleasing in its
design, physical aspects and
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practical application. We believe our proposed structure enhances and
beautifies the site location and will be a welcome addition to the area
selected.
We believe the growth and vitality of the Salt Lake valley area will
enhance our growth opportunities and chances for a successful retail
operation. Management believes that as population grows in a given area there
is additional economic room for competing businesses to enter the market.
There is no guarantee that current growth rates will continue. They may
decline without warning.
Management believes that Salt Lake City has and will continue to be a
good location for the successful operation of a retail drive-through coffee
store. The officers and directors of Twinview, Inc. have substantial business
contacts in the greater Salt Lake City area and believe that this will aid us
in our business efforts.
Critical site location
We believe the location selected for our drive-through retail coffee store
will be crucial to our success. Our site selection study was performed by Mr.
John Girvan. It focused on traffic flow into and out of the Salt Lake City
downtown core area from the east bench, and the northeast and southeast
suburban neighborhoods of residential Salt Lake City.
We are looking at several site locations which are available for lease
and which meet our search criteria including convenient access from arterial
streets towards the downtown core of Salt Lake City. We are concentrating our
location search to the area east of and slightly south of the downtown core
area of Salt Lake City, Utah primarily between 100 South Street and 2100 South
Street and between 400 East Street and 1300 East Street. Once we select a
site, we will attempt to negotiate a suitable lease of the land upon which the
store will be built. If we are unable to negotiate acceptable lease terms
with the property owner, we will seek an alternate site. No assurance can be
given that we will be able to secure acceptable lease terms on a suitable
site.
Traffic flow
Our morning traffic flow target is those vehicles carrying professional
persons residing in the east bench, and the northeast and southeast suburban
areas of Salt Lake City traveling to work in the downtown area of Salt Lake
City.
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Optimum sales hours
Through our research and study of our competitors' businesses we believe
peak revenue hours during weekdays will be in the morning hours and the
afternoon hours, specifically from 6 a.m. through 11:00 a.m. in the morning
and from 3:00 p.m. through 6:00 p.m. in the afternoon. We believe we will be
able to identify and respond quickly to demand changes and traffic volume flow
with regards to labor and product supply.
Weekend business
Through our research and by observing competitors' businesses, we believe
that business during weekend business hours will be fairly constant, although
less than during week days.
Our proposed site search area enjoys a fairly constant flow of traffic
during weekends. Liberty Park experiences a substantial increase in use by the
members of the Salt Lake City community during weekends and is within our site
search area. Seasonal trends in park use have a direct effect on the numbers
of community residents using the park, and on potential customers for our
proposed business. Retail business from both pedestrians and customers
driving to and from Liberty Park during spring, summer and fall would
presumably be higher than in the winter months. However, there is no
guarantee of any substantial business coming from patrons of Liberty Park
during any seasonal time of year.
Financing
We are dependent upon raising capital through this offering to commence
our proposed business. We believe equity financing is in our best interest to
enhance our prospects for success. Our assets are extremely limited, and we
do not anticipate that we will be able to secure a lease on suitable property,
construct the proposed coffee house building and commence active business
operations without the proceeds from this offering. We have no significant
debt at present and we have no plans to acquire debt in the immediate future.
However, there is no assurance that we will not acquire debt in future, and
may require infusions of cash from time to time through equity or debt.
Property lease for proposed site location
We do not plan to purchase real property for our proposed retail coffee
store site location. We believe leasing property
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for our proposed project is preferable since it will allow us to commence
business with a smaller capital investment. We have identified several
properties which we believe are suitable for our proposed retail location and
we have had lease discussions with the owner of one possible property
location. We will be thorough in our due diligence research to attempt to
verify that any property we lease will be free and clear of environmental
hazards, buried fuel tanks, liens and unacceptable encumbrances and other
liabilities. We intend to have any final lease agreement reviewed by our
legal counsel.
Construction phase
After a minimum of $150,000 has been raised in this offering, and
once we have obtained a lease on a suitable location, the construction phase
of our business plan will begin. This will involve obtaining necessary
governmental approvals for building permits, etc., and building the actual
coffee store building and surrounding improvements. We have received
estimates to build from reputable and bonded construction firms local to the
Salt Lake City area ranging from approximately $152,000 to $185,000 to
complete our proposed retail drive-through coffee store per architectural
plans submitted to those companies by us. As we move closer to successful
completion of this offering we plan to select one of the general contracting
firms with which we have received a bid.
Construction: time to completion
We believe, based on discussions with our architectural firm that a
realistic time to complete our construction and to commence business is 90-120
days from the date construction is commenced. However, construction projects
can be delayed or stopped indefinitely for many reasons not within our
control; specifically but not limited to acts of God, adverse weather
conditions, labor strikes, changes in government regulation and law, etc. We
can not guarantee timely completion of our proposed building project.
Construction phase: completion
Upon completion of the construction phase of our planned coffee store
building, we intend to hire staff, train new employees, begin to advertise and
commence business at our new facility.
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Attracting experienced employees
Management has interviewed potential employees with prior work experience
from other retail coffee store locations. We believe we will be able to
attract experienced and competent labor to fill required positions at
appropriate wage and expense levels.
Proposed products
We plan to offer a full range of appropriate and select premium products
at our proposed retail drive-through coffee store. Our proposed store should
be classified as a "specialty" retailer since our proposed products differ
from a common "coffee shop". Our primary customers will arrive at our
location in automobiles. It is in our interests and the customers' desires to
facilitate sales as efficiently and as quickly as possible. We have fashioned
our proposed products and designed our proposed building and necessary
equipment accordingly. Our proposed products will be accentuated to demand
and time of day. Specifically, coffee and specialty coffee products will be
the base mainstay of our proposed product line.
Beverages
We propose that our beverages will include:
- decaffeinated and caffeinated freshly ground whole bean coffees of
different and assorted flavors;
- specialty coffee drinks including:
* cappuccino,
* latte,
* breve,
* espresso,
* mocha lattes, and
* mocha breves;
- iced coffee products;
- flavored additives including low calorie milk;
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- teas of various flavors and origins including:
* caffeinated, and
* herbal;
- hot chocolate;
- bottled mineral water;
- select bottled flavored soft drinks;
- specialty Italian flavoring for both hot and cold beverages; and
- specialty slushed iced flavored drinks.
Baked products
We plan to offer a delicious line of freshly baked pastries and rolls,
cakes and cookies as well as traditional specialty coffee store pastries such
as Biscotti and Italian pastries. We plan to remain vigilant and attentive to
customers' desires regarding products we will offer in the future and
seasonally.
Sandwiches and salads
We intend to offer specialty sandwiches and salads on an experimental and
seasonal basis. We believe that selected specialty food products are in
demand when coupled with the convenience of location to customers and
drive-through design of our proposed store. We intend to focus this approach
on potential business coming from patrons using Liberty Park in the spring,
summer and fall months, although we will remain vigilant regarding additions
and subtractions to our product line remaining sensitive to customer demand,
volume, and profit margin considerations.
We believe we will be able to react quickly to changing product demand.
However, there is no assurance that we will be accurate in assessing customer
demand for specific products or that we will be successful in marketing those
products profitably.
Seasonality of product mix
The Salt Lake City area has four distinct and different seasons which
must be observed in relation to seasonally changing
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customer demands in product desires and seasonally changing customer habits.
National statistics indicate that consumption of coffee in North America
varies with the seasons of the year. However, these statistics may be
misleading as they do not differentiate between all coffee consumed and
specialty coffee and related products consumed. Through our observations and
study efforts, we believe there is a difference in coffee and coffee products
consumption trends on a seasonal basis in the Salt Lake City area. We also
believe that while general coffee consumption fluctuates seasonally, the
consumption of specialty coffee drinks fluctuates seasonally as well. As an
example, during warmer weather regular patrons of our competitors' stores
consume more iced coffee beverages than they normally would in the colder
months.
Product suppliers
We will have access to numerous suppliers of our proposed products. None
of our proposed products are rare or in short supply at this time. We do not
foresee becoming dependent upon one or a few suppliers for delivery and
procurement of our proposed products. Our proposed products are not
classified as critical or special and are not rare or exotic. Coffee
fluctuates in price as any commodity does through the natural forces of supply
and demand.
For our price forecasts of supplies we use long term price trends and
posted average yearly prices of the commodities we propose to utilize. For
our proposed specialty baked goods there are a number of suppliers in the
greater Salt Lake City area. We intend to use specific suppliers on a trial
basis. We may post prices paid to suppliers conspicuously and in plain view
at our delivery acceptance door to foster a competitive spirit among our
suppliers.
Marketing
Customer incentives
We plan to offer customers incentives to become regular patrons of our
store. These incentives may include but not be limited to competitive
pricing, a coffee punch card and consistent quality products.
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Competitive pricing
Competitive pricing of our proposed products relative to competitors'
products will be important to our success. We have observed that local
pricing of related specialty coffee products in the Salt Lake City area are
higher than in the Seattle, Washington area where competition is brisk and
vibrant, and the number of specialty coffee stores is much higher than in the
Salt Lake City area.
We believe that specialty coffee stores in the Salt Lake City area are
enjoying a higher profit margin on their product offerings than they would if
there were more stores competing, as evidenced in the Seattle area. We have
no plans to slash prices upon entering the specialty coffee retail industry in
the Salt Lake City area. However, we believe there is room to discount prices
below that of our competition; at least in the beginning weeks of our initial
debut in the market. Also, we feel that as more competition enters the
specialty coffee market profit margins may decline.
Coffee punch card
We intend to initially offer a coffee punch card to customers. Frequent
patron volume discount punch cards are a common, but not consistently used,
means of promoting customer loyalty in the specialty coffee retail industry in
the Salt Lake City area. The coffee punch card is usually a business card
sized piece of stiff paper with the offering company's logo or name printed
upon the surface with approximately 10 boxes printed upon the surface of the
card.
The card is punched each time a minimum required purchase is made. When
the customer's punch card has been punched the required number of times, the
customer is entitled to one unit of representative product free of charge, and
offered another punch card. This is a price discount on a volume basis, and
we believe it is effective in returning customers to the establishment that
originally issued the card.
Consistent quality products
We believe the best incentive to customer loyalty is consistent quality
products at fair competitive prices. We believe that many of our proposed
customers will patronize our store only once per day in the morning on their
way to work. It is extremely important to us that we can deliver a consistent
quality product to that customer every morning. Consistent
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quality, convenience and fair competitive pricing are universal and historical
reasons customers return to retail establishments. We believe we must deliver
our customers these qualities to succeed.
Possible future business expansion
In the event our initial store is successful, and provided that we are
able to obtain additional required financing, we plan to expand our number of
retail specialty coffee stores in the Greater Salt Lake City area. This may
include expanding into the Interstate 15 corridor area extending northward to
the City of Ogden, Utah and its environs and southward to the city of Spanish
Fork, Utah and its environs, and other potentially suitable locations.
We believe we can benefit from economies of scale in purchasing products
in volume for multiple store locations while the stores in this described area
would be considered clustered with regard to close proximity of each other for
delivery, service and management considerations. We also believe we may
benefit from increased brand name recognition and customer loyalty by
expanding. Our expansion plan includes utilizing ground leases to secure each
real property site location. No assurance can be given that our business
will be profitable and that we will be able to expand to additional locations.
Assuming our proposed business is profitable, and we are able to expand
profitability in the Salt Lake Valley area, then we could expand further on a
regional basis. Any regional expansion would commence only when we believe
such expansion is appropriate. The factors we deem important in this decision
will include, but not be limited to, the following factors:
- the profitability of our then existing establishment(s);
- our ability to acquire additional financing needed for expansion;
- our ability to acquire acceptable leasehold interests in suitable site
locations;
- national and regional economic considerations such as interest rates,
unemployment rates, population growth and economic health of any and all
potential expansion areas.
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Capital requirements for expansion of business
In our discretion, we may seek capital for expansion or other business
purposes through different sources including, but not limited to:
- capital markets in the form of equity financing or debt financing;
- mergers and/or acquisitions; and
- strategic relationships with other companies including, but not limited
to, our competition.
We presently have no commitment for any such financing, and we can give
no assurance that we will be able to obtain any additional financing.
Competition
Competition in the specialty coffee industry can be intense. There is
significant competition in the Salt Lake City area, but it is not as intense
as it is in other areas of the country where there are more specialty coffee
stores densely located, and where prices are lower. All of our present
competitors are established, operating and have loyal clientele returning to
their stores repeatedly to buy their products. Some of our competitors have a
multiple year operating history and have a distinct competitive advantage over
our planned entry into the specialty retail coffee industry within the Salt
Lake City area. We will compete directly with companies which have
substantially greater financial resources, experience and more substantial
marketing organizations than we do.
If we fail to successfully promote and develop an awareness of our
Twinview brand name, or encounter legal obstacles which prevent our continued
use of our brand name, our revenues and the value of your investment could be
materially adversely affected. We believe that building awareness of our brand
name is critical to achieving acceptance of our business. Brand recognition
is a key differentiating factor among specialty coffee houses. In order to
build and maintain brand awareness, we must succeed in our marketing efforts,
and provide high quality services and products. Failure to successfully build
and maintain awareness of our brand name could reduce the value of your
investment.
Some or all of our competitors have their stores located in competitively
viable locations within Salt Lake City. These
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economically viable locations and their customers' familiarity with their
locations are a real competitive advantage over our proposed entry into the
retail specialty coffee business in the Salt Lake City area. Some or all of
our competitors enjoy name brand recognition associated with the products they
offer their customers. One competitor is STARBUCKS COFFEE COMPANY
INCORPORATED which enjoys the benefits of a national name brand. It operates
numerous locations in the Salt Lake City area.
Following is a list describing the number of stores of many of our
competitors located within or near our proposed site search area:
GREATER SALT LAKE AREA WITHIN FIVE
NAME NUMBER OF STORES MILES DRIVE-THROUGH
- ----- ----------------- ------------ --------------
Bad Ass Coffee Company 2 1 YES (1)
Beans and Brew 4 2 NO
Cafe Espresso 2 1 YES (2)
Java Hut 3 1 YES (3)
Millcreek Coffee Roasters 3 1 NO
Squirrel Brothers 1 1 YES (1)
Salt Lake Roasting Company 1 1 NO
Starbucks(R) Coffee Company
Incorporated 4 2 NO
We recognize that we will face substantial competition in establishing
our proposed retail drive-coffee store in the Salt Lake City area. We believe
we will be able to compete successfully. We intend to compete on the basis of
price quality of products, and product mix, as well as by using a
drive-through design which saves customers time. However there is no
guarantee or assurance we will be able to successfully compete or survive
financially given the competition that exists, in the specialty coffee retail
environment within the Salt Lake City area.
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Management
All officers of Twinview serve at the pleasure of the board of directors.
All officers will hold office until the next annual meeting of the board of
directors. There is no person who is expected to make any significant
contribution to the business of Twinview other than the current officers and
directors. We do not have employment agreements with any of our officers or
directors.
The officers and directors of Twinview each have over 10 years of
management experience in businesses unrelated to the type of business proposed
by us. We believe that the diverse areas in which the officers and directors
acquired their experience is important in building a well rounded management
base. Our management has extensive experience in the following areas:
- sales;
- marketing;
- computer hardware;
- investment and capital markets;
- accounting; and
- operations.
The officers and directors have spent various amounts of time
investigating the specialty retail coffee business in Salt Lake City. Their
management experience includes real property development, natural resource
development, management of a video game software publishing company, and
management of both publicly and privately held companies.
Following the completion of this offering Mr. Girvan intends to devote
substantially full time efforts to Twinview, Inc. through the construction
phase and through approximately the first six months of the store's
operations. He anticipates that he will then reduce his time commitment to
Twinview, Inc. to approximately 20 hours per week. Mr. Hogle intends to
devote approximately 25-30 hours per week to Twinview, Inc. during the
construction phase and through the first six month's of the store's
operations. He anticipates that his time commitment to Twinview, Inc. will
then decrease to approximately 20 hours per week.
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In the event that our business is successful and we are able to increase
the number of our store locations, then Messrs. Hogle and Girvan may increase
their respective time commitments to Twinview, Inc.
Patrick K. Hogle - President, and Director. Mr. Patrick K. Hogle, age
38, has served as the president and as a director of Twinview, Inc. since
its inception in November 1998. Mr. Hogle has served as Vice President and a
director of Electro Brain International Corp., a publicly held video game
publisher, since March 1990. Mr. Hogle has been a co-manager and co-owner of
JHCRPN, LLC, a privately held limited liability company actively involved in
the brine shrimp egg industry since approximately January, 1995. Mr Hogle was
a registered securities sales person from approximately 1983 until
approximately January, 1991. Mr. Hogle has spent many years co-managing a
family owned business of which he is part owner.
John S. Girvan - Secretary/Treasurer and Director. Mr. Girvan, age 49,
has served as Secretary, Treasurer and as a director of Twinview, Inc. since
its inception in November 1998. Since approximately January 1995, Mr. Girvan
has been a co-manager and co-owner of JHCRPN, LLC, a privately held limited
liability company actively involved in the brine shrimp egg industry. Between
1973 and January 1995, Mr. Girvan worked in the commercial fishing industry in
the northern Pacific Ocean and the Bering Sea as a captain and owner of
fishing vessels. Mr. Girvan has spent most of his professional career in the
finding and procurement of various natural resources, including wild Alaska
seafood products and wild artemia salina: a brine shrimp cyst indigenous to
the Great Salt Lake in Utah, used in the aquaculture industry world wide as a
wild fish food product. Mr. Girvan also has a background in contracting and
construction in the northwest United States. Mr. Girvan has been a self
employed entrepreneur most of his adult life.
Executive compensation
As of the date of this prospectus, none of our officers or directors have
received any cash compensation from Twinview, Inc., except:
- through the payment of rent as described in the "Certain relationships
and related party transactions" section of this prospectus;
- Mr. Girvan has received approximately $3,500 for past services; and
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- Mr. Hogle has received approximately $2,000 for past services.
Following a successful completion of this offering, and while the
officers and directors are working part-time for Twinview they will be
compensated at a fair, equitable and competitive hourly rate. If and when the
officers and directors ever become full-time employees of Twinview they may be
compensated with salaries that are competitive in the industry.
Summary compensation table
There were no stock awards, restricted stock awards, stock options, stock
appreciation rights, long-term incentive plan compensation or similar rights
granted to any of our officers or directors. None of our officers or
directors presently holds directly any stock options or stock purchase rights.
We have no retirement, pension profit sharing, or other plan covering any of
our officers and directors.
Stock option plans
As of the date of this offering, we have no outstanding stock options
held directly by our officers or directors, and we have adopted no formal
stock option plans for our officers, directors and/or employees. We reserve
the right to adopt one or more stock options plans in the future. As of the
date of this offering, we have no plans to issue additional shares of our
common or preferred stock or options to acquire the same to our officers,
directors or their affiliates or associates.
Certain relationships and related party transactions
Related party transactions
Office rent
We pay rent of $100 per month for office space to three of our principal
shareholders, one of which, Mr. Hogle, is an officer and director of Twinview,
Inc. Our office consists of one room with approximately 120 square feet and a
telephone, and access to other common areas which include the use of a fax
machine, photocopy machine and conference room. The lease arrangement is on a
month to month basis. The building in which our office is located is owned
directly or indirectly by Patrick K. Hogle, Claire A. Singleton and RP II,
Ltd., principal shareholders of Twinview, Inc.
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Purchase of common stock
The architectural plans for the proposed building were acquired from our
four principal shareholders at their actual cost. Mr. Hogle is the general
partner and primary owner of Buckaroo, Ltd. Mr. Girvan is the general partner
and primary owner of JGPG Ltd. The four principal shareholders of Twinview,
Inc. each acquired 93,750 shares of common stock. Together they contributed
architectural plans which cost $19,103 and a total of $7,500 cash to Twinview,
Inc. for their shares of common stock.
Future construction of coffee store building
We propose that the construction of the coffee store building will be
contracted and over seen either by an independent contractor or by Mr. Girvan,
a principal shareholder and officer and director. If Mr. Girvan provides
general contractor services in connection with the construction of our
proposed coffee house, Mr. Girvan will receive a reasonable payment of up to
15% of the total cost of construction and completion of the coffee store and
premises.
Resolving conflicts of interest
The board of directors has determined that its directors are to disclose
all conflicts of interest and all corporate opportunities to the entire board
of directors. Any transaction involving a conflict of interest engaged in by
Twinview, Inc. shall be on terms not less favorable than that which could be
obtained from an unrelated third party. A director will only be allowed to
pursue a corporate opportunity in the event it is first disclosed to the board
of directors and the board determines that Twinview, Inc. shall not pursue the
corporate opportunity.
Security ownership of management
and principal shareholders
As of May 2, 2000 there were 375,000 shares of Twinview, Inc.'s common
stock issued and outstanding and 275,000 shares of Twinview, Inc.'s Series A
preferred stock issued and outstanding. Series A preferred stock is
convertible to common stock on a 1 for 1 share basis, and has been treated as
having been converted to shares of common stock in the table below. The
following table sets forth, as of May 2, 2000, the common stock ownership of
each person known by us to be the beneficial owner of 5% or more of Twinview,
Inc.'s common stock. It also sets forth, as of May 2, 2000, the common stock
ownership of each director and executive
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officer of Twinview, Inc., and all of our officers and directors as a group.
Each person has sole voting and investment power with respect to the shares
shown.
Percentage of outstanding shares
of common stock
After After
No. of Before minimum maximum
shares offering offering offering
_____________________________________________________________________________
Buckaroo, Ltd. 93,750 14.4% 11.7% 9.4%
220 Kearns Bldg
Salt Lake City,
Utah 84101
JGPG Ltd. 93,750 14.4% 11.7% 9.4%
1494 E. 3350 So.
Salt Lake City,
Utah 84106
Claire A. Singleton 111,750 17.2% 14.0% 11.2%
573 E. 300 South
Salt Lake City,
Utah 84102
RP II, Ltd. 107,750 16.6% 13.5% 10.8%
573 E. 300 South
Salt Lake City,
Utah 84102
The 2 officers 187,500 28.8% 23.4% 18.8%
and directors
as a group
The table assumes that all shares of Series A preferred stock that have
been sold by Twinview, Inc. have been converted to shares of common stock on a
1 for 1 share basis. In the event Twinview, Inc. redeems all outstanding
shares of Series A preferred stock prior to this conversion, then each of the
four principal stockholders would own between 17.9% and 21.3% of the
outstanding shares of common stock if the minimum offering is sold and between
12.9% and 15.4% of the outstanding shares of common stock if the maximum
offering is sold.
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Buckaroo, Ltd. is a Utah partnership principally owned by Patrick K.
Hogle who is the general partner. Mr. Hogle's brothers own small minority
interests in Buckaroo, Ltd.
JGPG Ltd. is a Utah partnership principally owned by John S. Girvan who
is the general partner, and his son Peter Girvan.
Claire A. Singleton is the mother of Ronald A. Johnson. Mr. Johnson is
the general partner and a principal partner of RP II, Ltd.
RP II, Ltd. is a Utah partnership principally owned by Ronald A. Johnson
who is the general partner, and his son Parker Johnson. Ronald A. Johnson is
the son of Claire A. Singleton.
All common shares held by the officers, directors and principal
shareholders listed above are "restricted or control securities" and are
subject to limitations on resale. The shares may be sold in compliance with
the requirements of Rule 144, after a minimum one year holding period has been
met. All of the common shares held by the officers, directors and principal
shareholders were issued in November 1998. There are no contractual
arrangements or pledges of Twinview, Inc.'s securities, known to us, which may
at a subsequent date result in a change of control of Twinview, Inc.
Rule 13d-3 generally provides that beneficial owners of securities
include any person who directly or indirectly has or shares, voting power
and/or investment power with respect to such securities; and any person who
has the right to acquire beneficial ownership of such security within 60 days.
Any securities not outstanding which are subject to such options,
warrants or conversion privileges exercisable within 60 days are treated as
outstanding for the purpose of computing the percentage of outstanding
securities owned by that person. But such securities are not treated as
outstanding for the purpose of computing the percentage of the class owned by
any other person.
Management's discussion and analysis or plan of operations
Overview
Twinview, a development stage company, was formed on November 5, 1998, to
engage in the retail drive-through coffee business. Specifically, we intend
to obtain a lease on real property in Salt Lake City, Utah, construct a
building and develop the associated site location of our proposed retail
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drive-through coffee store per our architectural plans. Twinview, Inc. will
then commence operation of the proposed business.
We intend to offer our products in an efficient and timely manner to our
customers. We intend to offer our customers quality, delicious products at
fair and competitive prices. We intend to compete vigorously in the specialty
coffee industry within the Salt Lake City area.
Plan of operation
During the next 12 months, our plan of operation consists of the following:
- Attempt to raise $150,000 or more in this offering;
- Acquire a lease on suitable property within the proposed site area;
- Construct the proposed coffee house building and other related
improvements on the site which is eventually selected;
- Adequately furnish the coffee house building with equipment necessary
to the business;
- Hire and train approximately nine or ten employees;
- Commence business operations; and
- Work towards making the business profitable.
Accomplishing our 12 month plan of operations is dependent on Twinview, Inc.
being able to raise $150,000 or more by successfully completing this offering.
Becoming profitable will also depend on additional factors, some of which are
beyond our control. As of the date of this prospectus we have no commitments
for any portion of this offering.
Our current cash is sufficient to pay all the expenses of this offering.
Management's discussion and analysis of financial condition and results of
operation
Our activities to date have been limited to our formation, property site
study, the completion of a private placement of
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275,000 shares of our Series A preferred stock for $206,250 in gross offering
proceeds, and the preparation of this offering.
Liquidity and capital reserves
Presently our liquid resources are sufficient to pay all of the costs of
this offering and to pay for most, of the construction costs of our proposed
building. We are dependent on completing this offering successfully in order
to obtain the funding necessary to implement our business plan described
above. Our auditors have issued a "going concern" opinion in Note 3 of our
audited financial statements which forms a part of this prospectus, indicating
that we do not have an established source of revenues sufficient to cover our
operating costs and to allow us to continue as a going concern. It is our
intent to complete this offering to provide us with the funds to build and
operate a coffee house.
To the extent we are able to obtain substantial capital for our use and
purposes from this offering, we will be able to move out of the planning and
pre-implementation stage and proceed with our business plan.
Our business plan requires substantial funding which we are seeking
through this offering. If we successfully complete the minimum offering but
raise less than the maximum offering, we do not expect to seek debt financing.
The officers and directors decided at the time of incorporation that
Twinview, Inc. would offer shares of our Series A preferred stock and shares
of our common stock in an attempt to finance our initial capital needs. We
have successfully completed and closed the sale of shares of Series A
preferred stock as reflected in our financial statements.
Together with existing funds, the net proceeds from the sale of the
minimum offering as outlined within this prospectus, we believe we will have
sufficient working capital to meet anticipated capital needs for the next 12
months. After that, additional funds will need to be generated either from
internal operations or obtained from equity or debt financing, for which we
have no commitments.
Since we can provide no assurance that our efforts in this offering will
be successful, we intend to actively pursue other financing or funding
opportunities. Agreements for these types of financing arrangements will only
be entered into if, in our
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opinion, they provide a less expensive and/or more stable form of financing or
funding.
Employees
As of the date of this prospectus, we have no full time employees. Our
daily business affairs have been carried out by our officers and directors who
provide services on a part-time as needed basis. We anticipate that we will
begin having full time employees as soon as the specialty coffee store has
been constructed and furnished, and that it will take approximately two or
three full time employees and approximately seven or eight part time employees
to properly staff the coffee house once it is completed.
Revenue
We have had no revenues from operations. In the event this offering is
successful we anticipate we will be able to complete our proposed construction
project and begin operation of our retail location. We do not anticipate
generating any revenues, other than nominal interest on its cash balance,
until the proposed drive-through retail coffee store has been built, furnished
and our retail specialty coffee business has been commenced.
Cost of operations
Our only operating costs to this point in time have been those costs
incurred in connection with Twinview, Inc.'s formation, minimal office rent
expenses, and the legal, accounting, printing, and related costs associated
with our private placement offering and this offering.
Gross profits
We have had no revenues and no gross or net profits as of the date of
this prospectus.
Federal, state and local regulations
There are no special federal, state or local laws regulating the proposed
type of general business retailing that we plan to engage in and there are no
special licenses or permits required other than a general business license and
public health certificate for food handling which we will obtain. We intend
to apply for a general business license once this offering is
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complete, and we intend to apply for a public health certificate for food
handling prior to opening the store for business.
General business factors
We believe that future periods may be impacted by general economic
conditions and various competitive factors including competition from other
businesses providing similar products. Additionally, results could also be
affected in any given period by circumstantial revenue fluctuations, business
interruptions or unplanned for costs associated with events outside our
control.
Other considerations that could have potentially significant impacts upon
our operations include: delays in the construction phase of our planned
structure and site development, changes in governmental laws or regulations
concerning zoning or land use, market demand for our products, availability
of capital resources and timing of expenditures in anticipation of increased
sales, to name a few.
External factors - competition
We face significant and formidable competition from other companies
engaged in the same type of business. Competitors range from highly organized
and well financed national store chains to single store individually owned
family enterprises. We face competition with established, financially sound
organizations with loyal clientele and name brand recognition.
There is also no assurance that our proposed products will meet with
public acceptance. However, we believe that our proposed business can become
successful, and achieve significant name recognition in the local marketplace.
Considerations potentially impacting the business
In the event we successfully complete the maximum offering, we will be
able to implement our immediate 12 month business plan and we could also seek
and consider new opportunities. We would be better positioned to take
advantage of any new opportunities as they may arise.
Other considerations that can have a potentially significant impact on
our operations include:
- inability to attract return customers;
- changes in governmental regulations;
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- market demand for our proposed products and services;
- the ability to develop and maintain helpful relationships providing
favorable terms and opportunities;
- the timely availability of capital;
- financial difficulties;
- unexpected cancellation of services; and
- general economic conditions.
General and administrative
It is anticipated that our general and administrative costs will consist
primarily of expenses associated with developing our proposed retail location
and, upon completion of the construction phase, costs associated with
management of operations of our proposed retail store.
Provision for income taxes
No provision, or benefit, for income taxes has been made. In the opinion
of management, future benefits arising from utilization of the net loss carry
forward cannot be reasonably estimated. No deferred asset has been
established.
Net income (loss) from operations
From inception through December 31, 1999, we have incurred a net loss
from operations of approximately $46,559.00.
Terms of offering and plan of distribution
Selling the shares of the offering
Twinview, Inc. will sell shares of its common stock according to this
prospectus directly to any and all suitable investors in approved states in
which these securities are registered or are exempt from registration. This
is a self-underwritten offering with a minimum offering amount of 150,000
shares. Our officers and directors, John S. Girvan and Patrick K. Hogle will
sell the shares. They will not receive commissions or other offering
remuneration of any kind for selling shares in this offering.
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We may enter into an agency agreement with one or more registered
broker-dealers or registered sales agents for the sale of shares, in which
event we may pay participating registered broker-dealers or registered sales
agents commissions of up to 6% of the offering price of shares actually sold
by them. The agency agreement will likely include provisions for mutual
indemnification against some civil liabilities, including liabilities arising
under the Securities Act of 1933.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
according to the provisions described above, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
unenforceable.
In the event a claim for indemnification against such liabilities other
than the payment by us of expenses incurred or paid by any of our directors,
officers or controlling persons 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 sold in this offering, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
No one has committed to purchase or take down any of the shares offered.
In the event that the minimum number of 150,000 shares having a gross
subscription price of $150,000 are not sold within 90 days from the date of
this prospectus, unless extended by us for up to an additional 30 days, all
proceeds raised will be promptly returned to investors without paying interest
and without deducting any expenses of the offering. Proceeds from the sale of
the shares will be placed in escrow with Brighton Bank, 311 South State
Street, Salt Lake City, Utah 84111, no later than noon of the next business
day following receipt.
You will not have the use of your funds, will not earn interest on funds
in escrow, and will not be able to obtain return of funds placed in escrow
unless and until the offering period expires, which could last up to 120 days.
In order to purchase shares in this offering, you must subscribe to
purchase a minimum of at least 100 shares. No maximum purchase amount has
been set by us.
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The shares are offered subject to prior sale, when, as, and if delivered
to and accepted by us, and subject to approval of some matters by legal
counsel. We reserve the right to withdraw, cancel or modify such offer and to
reject any offer in whole or in part. Delivery of the shares will be made to
investors promptly upon acceptance of cash and the satisfaction of escrow
conditions relating to completion of the minimum offering amount.
The offering price was arbitrarily determined; no public market
As of the date of this prospectus, there is no public market for our
common stock. The offering price of the shares was determined arbitrarily by
us. It was not based on any established criteria of value. In determining the
offering price and the number of shares to be offered, we considered such
factors as our financial condition, our potential for profit and the general
condition of the securities market. The offering price of $1.00 per share was
decided on by us because we believe that the price of $1.00 per share will be
the easiest price at which to sell the shares.
The offering price should not be considered an indication of the actual
value of us or our shares of common stock. The price bears no relation to our
assets, book value, earnings or net worth or any other traditional criterion
of value. The price of the common stock that will prevail in any market that
develops after the offering may be higher or lower than the price you paid.
There is also no assurance that an active market will ever develop in our
securities. You may not be able to resell any shares you purchased in this
offering following this offering. Our common stock and our Series A preferred
stock have never been traded on any exchange or market prior to this offering.
It has been privately held. Additionally, the 1 for 1 share conversion ratio
that applies when shares of Series A preferred stock are converted to shares
of common stock was arbitrarily determined by us, and bears no relation to our
assets, book value, earnings or net worth or any other traditional criterion
of value.
OTC bulletin board
We intend to apply to have our shares approved for trading on the OTC
bulletin board. We have received verbal assurances from Alpine Securities
Corp. of Salt Lake City, Utah that it will act as a market maker in our shares
following this offering.
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Dividends
We have never paid dividends on our Series A preferred stock or our
common stock. The board of directors presently intends to pursue a policy of
retaining earnings, if any, for use in our operations and to finance expansion
of our business. The Series A preferred stock bears no dividend. Any
declaration and payment of dividends in the future, of which there can be no
assurance, will be determined by our board of directors in light of conditions
then existing, including our earnings, financial condition, capital
requirements and other factors. There are presently no dividends which are
accrued or owing with respect to our outstanding stock. No assurance can be
given that dividends will ever be declared or paid on our common stock in the
future.
How to subscribe
If you desire to subscribe for shares in this offering, you must complete
a subscription agreement and pay the entire subscription amount in wire
transferred funds, cash, check or money order upon subscribing. You must
deliver the subscription agreement directly to Mr. Hogle or Mr. Girvan.
Checks must be made payable to "Brighton Bank, Escrow Agent for Twinview,
Inc.", until you are notified that the minimum offering has been achieved, and
then funds may be made payable directly to "Twinview, Inc."
By signing the subscription agreement you are making a binding offer to
buy shares. The subscription agreement also constitutes your agreement to
indemnify us against liabilities incurred because of any misstatements and
omissions you make in the subscription agreement. All subscriptions are
subject to acceptance by us.
You are urged to consult your own counsel and accountant with respect to
the merits of an investment in the shares.
Purchases by officers, directors and principal shareholders
Our officers, directors and principal shareholders and persons associated
with them may purchase some of the shares being offered according to this
prospectus, not to exceed 33% of the shares sold in this offering. They may
purchase shares in order to satisfy the 150,000 share minimum, provided that
their combined purchases do not exceed 33% of the shares sold. Any securities
purchased by our officers, directors, and principal shareholders will be
purchased for investment purposes only and not for the purpose of
redistribution. Moreover, it is not
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intended that the proceeds from this offering will be utilized, directly or
indirectly, to enable anyone, including officers and directors, to purchase
the shares offered.
Purchases of shares by officers and directors will result in management
increasing its control of Twinview, Inc. Consequently, this offering could
close with a greater percentage of shares being held by present management and
with lesser participation by the other investors than would otherwise be the
case.
Description of securities
Our authorized capital stock consists of 17,500,000 shares of $.0001 par
value common stock and 2,500,000 shares of $.0001 par value voting preferred
stock. All shares have equal voting rights and are not assessable. Voting
rights are not cumulative. The holders of more than 50% of the voting stock
could, if they chose to do so, elect all of the directors.
Common stock
Upon liquidation, dissolution or winding up of Twinview, and after the
payment of liabilities and satisfaction of all claims by shareholders of our
preferred stock, our assets will be distributed pro rata to the holders of the
common stock. The holders of the common stock do not have preemptive rights to
subscribe for any additional securities and they have no right to require us
to redeem or purchase their shares. The shares of common stock presently
outstanding are, and the shares of common stock which may be sold in future
will be, upon issuance, fully paid and nonassessable.
Holders of our common stock are entitled to share equally in dividends
when, as and if declared by the board of directors, out of funds legally
available for that purpose after payment of any dividends to the holders of
our preferred stock. We have not paid any cash dividends on our common stock,
and it is unlikely that any such dividends will be declared in the foreseeable
future.
We presently have a total of 375,000 shares of our common stock issued
and outstanding which are held by 4 shareholders.
Preferred stock
Twinview is authorized to issue 2,500,000 shares of preferred stock,
$.0001 par value. The preferred stock may be issued in series from time to
time with such designation, rights,
-35-
<PAGE>
preferences and limitations as our board of directors may determine by
resolution. The rights, preferences and limitations of separate series of
preferred stock may differ with respect to such matters as may be determined
by the board of directors, including, without limitation:
- the rate of dividends;
- amounts payable on liquidation;
- sinking fund provisions, if any;
- conversion rights, if any; and
- voting rights.
The potential exists that preferred stock might be issued which would
grant dividend preferences and liquidation preferences to preferred
shareholders over common shareholders. Twinview has no present plans to issue
blank check preferred stock.
We recently completed a private placement sale of 275,000 shares of our
Series A preferred stock. We received approximately $206,250.00 as a result
of this sale of shares. These shares are held by 23 shareholders.
Unless the nature of a particular transaction and applicable statutes
require such approval, the board of directors has the authority to issue
preferred shares without shareholder approval. The issuance of preferred stock
may have the affect of delaying or preventing a change in control of Twinview
without any further action by shareholders.
Series A preferred stock
Our board of directors approved a Certificate of Designation of Rights,
Preferences and Number of Shares of Series A Convertible Stock, a copy of
which has been filed with the U.S. Securities and Exchange Commission as an
exhibit to our registration statement. This certificate is referred to in
this prospectus as the "Series A Designation." The Series A Designation
establishes one series of convertible preferred stock, consisting of an
aggregate of 275,000 shares which is designated as the "Series A preferred
stock." A summary of the rights and preferences of the Series A preferred
stock is provided below.
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<PAGE>
No cash dividends shall be paid on the Series A preferred stock. In the
event of any liquidation, dissolution or winding up of Twinview, the holders
of the Series A preferred stock shall be entitled to receive the amount of
$0.75 per share, prior and in preference to any distribution of any of the
assets or surplus funds of Twinview to the holders of the common stock. The
Series A preferred stock liquidation preference amount of $0.75 per share,
will be adjusted proportionately for any stock splits, combinations or similar
events.
Subject to our right to redeem any outstanding shares of Series A
preferred stock, Series A preferred stockholders shall have the right at any
time prior to March 22, 2001, to convert any shares of Series A preferred
stock held by them into fully paid and nonassessable whole shares of common
stock on a 1 for 1 share basis. In order to exercise this conversion right, a
Series A preferred stockholder must provide us with a written notice of
conversion as described in the Series A Designation, and surrender the Series
A preferred stock certificate(s) properly endorsed with a medallion signature
guarantee.
A medallion signature guarantee may be obtained through securities
brokerage firms and some banks. The company providing the medallion signature
guarantee is supposed to verify that persons endorsing the stock certificate
is the registered owner of the shares represented by the stock certificate.
Upon our receipt of a stockholder's written notice to convert any shares
of the Series A preferred stock together with a properly endorsed and properly
guaranteed stock certificate, we shall have 30 days within which to mail the
registered holder a notice of redemption. We may choose to redeem any or all
of the shares surrendered for conversion at the cash redemption price of $1.25
per share. If we elect to redeem more than 75% of the shares surrendered for
voluntary conversion by any stockholder, the stockholder may object by sending
written notice of objection to us within 10 days following the holder's
receipt of our notice of redemption.
Should the stockholder properly object, the stockholder will be allowed
to convert all of his or her shares of Series A preferred stock in excess of
75% of the amount surrendered for conversion. We must pay the cash redemption
price, out of funds legally available for that purpose, to the holder within
30 days following the mailing of the notice of redemption.
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<PAGE>
On March 22, 2001, all outstanding shares of our Series A preferred stock
shall be deemed to be automatically converted to shares of our common stock on
a 1 for 1 share basis.We may voluntarily redeem at any time prior to March 22,
2001, any or all shares of Series A preferred stock then outstanding if and to
the extent that we have funds legally available for that purpose. If we elect
to redeem more than 75% of the Series A preferred stock held by any particular
stockholder, the stockholder may object by sending written notice of objection
to us within 10 days following the holder's receipt of our notice of
redemption.
Should the stockholder properly object, we will only be permitted to
redeem a maximum of 75% of the shares of Series A preferred stock held by an
objecting stockholder. In the event of a voluntary redemption by us, the
Series A preferred stock to be redeemed shall be redeemed by paying for each
share in cash the sum of a $1.25. The redemption price will be adjusted
proportionately for any stock splits, combinations or other similar events.
Generally, the holders of common stock and Series A preferred stock shall
vote together as a class on all matters to be voted on by the stockholders.
Each holder of Series A preferred stock shall be entitled to one vote for each
share of common stock which would be issuable upon conversion of all the
shares of Series A preferred stock held by such holder on the record date for
the determination of stockholders entitled to vote.
Without the prior consent of the holders of more than 50% of the
outstanding shares of Series A preferred stock and common stock voting
together as a single class, except where a larger percentage is required by
law or our certificate of incorporation, we shall not:
- pay or declare dividends or distributions on shares of common stock;
- authorize or issue any securities which would be on a parity with or
have any preference or priorities superior to the Series A preferred stock as
to dividends or assets;
- amend, alter or repeal any provision of our certificate of
incorporation, the Series A Designation or our By-Laws in any manner which
would adversely affect the preferences,
-38-
<PAGE>
qualifications, special or relative rights or privileges of the Series A
preferred stock;
- enter into any agreement, arrangement or understanding which is
inconsistent with the rights of the Series A preferred stock or conflict with
the rights, privileges and powers, or the restrictions provided for the
benefit of the Series A preferred stock;
- consent to any dissolution, liquidation or winding up of Twinview, or
merge or consolidate with any other entity except in a transaction which (1)
we are the surviving corporation, and (2) the merger or consolidation does not
violate any other restrictive covenant binding on us.
Except as otherwise required by law or provided in the Series A
Designation, any term of the Series A Designation may be amended and any term
may be waived only with the written consent of holders of not less than 75% of
the combined voting interests of the shares of Series A preferred stock and
common stock.
Restrictions on transfer of shares
The shares of Series A preferred stock that have been sold by us have not
been registered or qualified under the Securities Act of 1933, or the
securities law of any state or other jurisdiction. Their sale or transfer has
been appropriately restricted.
Upon conversion of the shares of Series A preferred stock there shall be
issued to the holder of the shares an equal number of shares of our common
stock, $.0001 par value. These shares shall also be restricted. They may not
be sold without first being registered under federal and/or state securities
laws, unless sold according to appropriate exemptions from those laws. A
notation will be made on our stock transfer records so that transfers of such
shares of our common stock will not be made without compliance with these
restrictions.
Rule 144(d) requires that restricted shares be held for a minimum of one
year before they can be resold under Rule 144. For this purpose the time
during which the shares of Series A preferred stock are held shall be combined
with the time the shares of common stock into which the shares become
converted are held. Resales of shares of common stock may be possible under
Rule 144 beginning as early as March 2000, subject to compliance with the
other provisions of Rule 144.
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<PAGE>
In the case of any share exchange, capital reorganization or
reclassification in which the common stock is converted into other securities
or property, we will make appropriate provisions so that the holder of each
share of Series A preferred stock will have equivalent conversion rights.
No market for our shares
As of the date of this prospectus and for the foreseeable future there is
no public or private market for our shares. In the event we are successful in
raising capital through this offering there will still be only a limited
market for our shares. Only in the event that we are successful in making
this initial public offering of our common stock do we anticipate that we will
ever have any public market for our securities. In the event there is no
market for our shares, you could suffer a total loss of all monies paid to us
for our shares. No assurance can be given that we will be able to
successfully complete this initial public offering of our common stock and
develop and sustain a public market for our common stock.
Effect of penny stock reform act and rule 15g-9: possible inability to sell
our securities in any secondary market
The shares will be subject to the Penny Stock Reform Act.
(a) Penny Stock Reform Act. In October 1990 Congress enacted the Penny
Stock Reform Act of 1990 to counter fraudulent practices common in penny stock
transactions. Under Rule 3a51-1 of the Exchange Act a security will be defined
as a "penny stock" unless it is:
- listed on approved national securities exchanges;
- a security registered or approved for registration and traded on a
national securities exchange that meets specific guidelines, where the trade
is effected through the facilities of that national exchange;
- a security listed on NASDAQ;
- a security of an issuer that meets minimum financial requirements; or
- a security with a price of at least $5.00 per share in the
transaction in question or that has a bid quotation, as defined in the Rule,
of at least $5.00 per share.
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<PAGE>
Broker-dealer practices in connection with transactions in "penny
stocks" are regulated by penny stock rules adopted by the Securities and
Exchange Commission. The penny stock rules require a broker-dealer, prior to
a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account.
In addition, the penny stock rules generally require that prior to a
transaction in a penny stock the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. We anticipate that following a successful completion of this
offering, our shares of common stock will be subject to the penny stock rules.
Under the Penny Stock Reform Act, brokers and/or dealers, prior to
effecting a transaction in a penny stock, will be required to provide
investors with written disclosure documents containing information concerning
various aspects involved in the market for penny stocks as well as specific
information about the subject security and the transaction involving the
purchase and sale of that security. Subsequent to the transaction, the broker
will be required to deliver monthly or quarterly statements containing
specific information about the subject security. These added disclosure
requirements will most likely negatively affect the ability of purchasers
herein to sell their securities in any secondary market.
(b) Rule 15g-9 promulgated under the Exchange Act imposes
additional sales practice requirements on broker-dealers who sell penny stocks
to persons other than established customers. For transactions covered by the
rule, the broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may also affect the ability of
purchasers in this offering to sell their securities in any secondary market.
-41-
<PAGE>>
Possible issuance of additional securities
We may need additional financing to grow our proposed business. IF we
are able to raise additional funds and we do so by issuing equity securities,
you may experience significant dilution of your ownership interest and holders
of the new securities issued may have rights senior to those of the holders of
our common stock. If we obtain additional financing by issuing debt
securities, the terms of these securities could restrict or prevent us from
paying dividends and could limit our flexibility in making business decisions.
In this case, the value of your investment could be reduced.
Other provisions
The shares of common stock offered by this prospectus when issued, will
be duly and validly issued, fully paid and nonassessable.
You will have no preemptive rights with respect to any shares of our
capital stock or any other securities convertible into our common stock or
rights or options to purchase any such shares.
Legal proceedings
There are no legal proceedings or pending litigation to which we are a
party or against any of our officers or directors as a result of their
capacities with Twinview, and we are not aware of any threat of such
litigation. We are not aware of any proceeding involving us that a
governmental authority may be contemplating.
Transfer agent
Twinview has retained OTC Stock Transfer, 231 East 2100 South Salt Lake
City, Utah 84105 as transfer agent for our Series A preferred stock and our
common stock.
Experts
The financial statements as of December 31, 1999 and December 31, 1998
and for the periods then ended included in this prospectus, have been audited
by Jones, Jensen & Company, LLC independent public accountants, as stated in
their report appearing herein and have been so included in reliance upon such
report given upon the authority of that firm as experts in accounting and
auditing.
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<PAGE>
Financial statements
Our audited financial statements which consist of audited balance sheets
as of December 31, 1999 and December 31, 1998, and audited related statements
of operations, stockholders' equity and cash flows from inception on November
5, 1998 through December 31, 1999 and accompanying foot notes appear on the
following pages.
[The remainder of this page has intentionally been left blank.]
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<PAGE>
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
<PAGE> 44
C O N T E N T S
Independent Auditors' Report.............................................. 3
Consolidated Balance Sheet................................................ 4
Consolidated Statements of Operations..................................... 5
Consolidated Statements of Stockholders' Equity ........................... 6
Consolidated Statements of Cash Flows ..................................... 7
Notes to the Consolidated Financial Statements............................ 8
<PAGE> 45
JONES, JENSEN & COMPANY, LLC
Certified Public Accountants and Consultants
50 South Main Street, Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Twinview, Inc. and Subsidiary
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying consolidated balance sheet of Twinview, Inc.
and Subsidiary (a development stage company) (the Company) as of December 31,
1999 and the related consolidated statements of operations, stockholders'
equity and cash flows for the year ended December 31, 1999, from inception on
November 5, 1998 through December 31, 1998 and cumulative from inception on
November 5, 1998 through December 31, 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated 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 consolidated financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Twinview,
Inc. and Subsidiary (a development stage company) as of December 31, 1999 and
the consolidated results of their operations and their cash flows for the year
ended December 31, 1999, from inception on November 5, 1998 through December
31, 1998 and cumulative from inception on November 5, 1998 through December
31, 1999 in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to
the consolidated financial statements, the Company is a development stage
company with no significant operating results to date, which raises
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 3.
The consolidated financial statements do not include any adjustments that
might result from the outcome of the uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
March 13, 2000
F-3
<PAGE> 46
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
December 31,
1999
--------------
CURRENT ASSETS
Cash $ 158,199
--------------
Total Current Assets 158,199
--------------
FIXED ASSETS (Note 4) 19,127
--------------
TOTAL ASSETS $ 177,326
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,562
--------------
Total Current Liabilities 4,562
--------------
STOCKHOLDERS' EQUITY
Preferred stock; $0.0001 par value, 2,500,000 shares
authorized; 275,000 shares issued and outstanding 28
Common stock; $0.0001 par value, 17,500,000 shares
authorized; 375,000 shares issued and outstanding 38
Additional paid-in capital 219,233
Deficit accumulated during the development stage (46,535)
--------------
Total Stockholders' Equity 172,764
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,326
==============
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
<PAGE> 47
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Operations
Cumulative
From From
Inception on Inception on
For the November 5, November 5,
Year Ended 1998 Through 1998 Through
December 31, December 31, December 31,
1999 1998 1999
------------- ------------- ------------
REVENUE $ - $ - $ -
------------- ------------- ------------
EXPENSES
General and administrative 41,057 6,478 47,535
------------- ------------- ------------
Total Expenses 41,057 6,478 47,535
------------- ------------- ------------
OTHER INCOME
Interest income 1,000 - 1,000
------------- ------------- ------------
Total Other Income 1,000 - 1,000
------------- ------------- ------------
NET LOSS $ (40,057) $ (6,478) $ (46,535)
============= ============= ============
BASIC LOSS PER SHARE $ (0.11) $ (0.02)
============= =============
BASIC WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING 375,000 375,000
============= =============
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
<PAGE> 48
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on November 5, 1998 through December 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid-In Development
Shares Amount Shares Amount Capital Stage
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at inception on
November 5, 1998 - $ - - $ - $ - $ -
Common stock issued for cash
at approximately $0.071
per share - - 106,626 12 7,488 -
Common stock issued for
property at approximately
$0.071 per share - - 268,374 26 19,101 -
Net loss from inception on
November 5, 1998 through
December 31, 1998 - - - - - (6,478)
---------- ---------- ---------- ---------- ---------- -----------
Balance, December 31, 1998 - - 375,000 38 26,589 (6,478)
Preferred stock issued for cash
at $0.75 per share 275,000 28 - - 206,222 -
Stock offering costs - - - - (13,578) -
Net loss for the year ended
December 31, 1999 - - - - - (40,057)
---------- ---------- ---------- ---------- ---------- -----------
Balance, December 31, 1999 275,000 $ 28 375,000 $ 38 $ 219,233 $ (46,535)
========== ========== ========== ========== ========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
F-6
</TABLE>
<PAGE> 49
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Cumulative
From From
Inception on Inception on
For the November 5, November 5,
Year Ended 1998 Through 1998 Through
December 31, December 31, December 31,
1999 1998 1999
------------- ------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (40,057) $ (6,478) $ (46,535)
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable (7,722) 12,284 4,562
------------- ------------- ------------
Net Cash Provided (Used) by
Operating Activities (47,779) 5,806 (41,973)
------------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------------- ------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock offering costs (3,348) (10,230) (13,578)
Common and preferred stock issued for cash 206,250 7,500 213,750
------------- ------------- ------------
Net Cash Provided by Financing Activities 202,902 (2,730) 200,172
------------- ------------- ------------
NET INCREASE IN CASH 155,123 3,076 158,199
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 3,076 - -
------------- ------------- ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 158,199 $ 3,076 $ 158,199
============= ============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid For:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for property $ - $ 19,127 $ 19,127
The accompanying notes are an integral part of these consolidated
financial statements.
F-7
</TABLE>
<PAGE> 50
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - NATURE OF ORGANIZATION
The consolidated financial statements presented are those of Twinview, Inc.
and its wholly-owned subsidiary, Cafe' Detour, L.L.C. Collectively, they are
referred herein as "the Company". The Company was organized under the laws of
the State of Delaware on November 5, 1998. The Company was organized for the
purpose of marketing beverage products. On November 25, 1998, the Company
formed Cafe' Detour, L.L.C. as a wholly-owned subsidiary. Cafe' Detour will
be the operating company for a coffeehouse when the construction is completed.
As of December 31, 1999, Cafe' Detour, L.L.C. had not commenced operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The consolidated financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
b. Provision for Taxes
At December 31, 1999, the Company had net operating loss carryforwards of
approximately $46,000 that may be offset against future taxable income through
2015. No tax benefit has been reported in the consolidated financial
statements because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the loss carryforwards are offset by a valuation allowance of the same amount.
c. Use of Estimates
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
<PAGE> 51
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period of the
financial statements. The Company's preferred shares have been excluded from
the basic net loss per share calculation as they are antidilutive.
For the Year Ended
December 31, 1999
--------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------------
$ (40,057) 375,000 $ (0.11)
=========== ============= ============
From Inception on
November 5, 1998 Through
December 31, 1999
---------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
------------ -------------- -----------
$ (6,478) 375,000 $ (0.02)
============ ============== ===========
f. Principles of Consolidation
The accompanying consolidated financial statements include those of Twinview,
Inc. and its wholly-owned subsidiary, Cafe' Detour, LLC. All significant
intercompany accounts and transactions have been eliminated.
g. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition policies
will be determined when principal operations begin.
NOTE 3 - GOING CONCERN
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company does not have an established
source of revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. The Company recently completed a private
placement offering of its series A preferred stock, and now intends to build
and operate a coffeehouse.
<PAGE> 52
TWINVIEW, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 4 - FIXED ASSETS
Fixed assets are made up of architectural plans to be used in the construction
of a building and are recorded at cost. Major additions and improvements are
capitalized and minor repairs are expensed when incurred. Depreciation will
be computed using the straight-line method when construction of the building
is complete.
NOTE 5 - PRIVATE PLACEMENT OFFERING
On June 21, 1999, the Company completed a private placement offering in which
they issued 275,000 shares of its series A preferred stock at $0.75 per
share. The costs incurred with the offering have been charged against the
proceeds of the offering.
NOTE 6 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 1999, the Company paid $27,302 as
consideration for consulting services rendered by related parties.
<PAGE> 53
EXHIBIT A
Subscription Agreement
TWINVIEW, INC.
Common Stock
1. SUBSCRIPTION. Effective the ______day of ___________ , 2000, the
undersigned hereby applies to purchase the number of shares stated below of
the common stock, $.0001 par value of Twinview, Inc., such purchase being made
in accordance with the terms and conditions of the prospectus, dated
___________, 2000 according to which the shares have been offered to the
undersigned. This subscription may be accepted or rejected in whole or in
part by Twinview, Inc. We have the right, exercisable in our sole and
absolute discretion, to accept subscriptions in any order we may determine.
2. REPRESENTATIONS BY UNDERSIGNED. The undersigned represents and
warrants the following to be true and correct:
(a) the undersigned has received the prospectus.
(b) the undersigned acknowledges and understands that no U.S. federal
or state agency, nor any governmental agency of any other jurisdiction,
has made any recommendation or endorsement of the shares;
(c) the undersigned recognizes that Twinview, Inc. is newly formed,
has no history of operations, revenues or profits and that acquisition of
the shares as an investment involves a high degree of risk;
(d) if an individual, the undersigned is 21 years of age or over and
is a bona fide resident of the state set forth in the residence address
which such individual has set forth below; and
(e) all of the representations of the undersigned herein are true and
accurate, and Twinview, Inc. and the officers and directors of Twinview,
Inc. will and may, without further investigation, rely on such
representations.
<PAGE> 54
3. PAYMENT OF SUBSCRIPTION. The amount of the undersigned's
subscription is set forth below and the undersigned encloses payment of such
amount herewith by a check, cashier's check or wired funds transfer, payable
to "Brighton Bank, escrow agent for Twinview, Inc.," unless the minimum
offering as described in the prospectus has been met and the undersigned has
been instructed by Twinview, Inc. to make such instrument or payment payable
to Twinview, Inc. The undersigned hereby authorizes and directs the officers
and directors of Twinview, Inc. to deliver this subscription agreement to
Twinview, Inc. and pay the funds delivered herewith to Twinview, Inc., to the
extent that the undersigned's subscription has been accepted.
The undersigned recognizes that if the subscription is rejected in whole,
the funds delivered herewith will be returned to the undersigned as soon as
practicable without interest or deduction, which investment is subject to the
discretion of the officers and directors of Twinview, Inc. If the
undersigned's subscription is rejected in part, the funds delivered herewith
will, to the extent the subscription is so rejected, be returned to the
undersigned promptly without interest or deduction.
4. CONTINUING ACCURACY OF REPRESENTATIONS. The undersigned agrees to
notify Twinview, Inc. immediately if any of the statements described above
made herein shall become untrue. Until such notification is given, Twinview,
Inc. and its officers and directors will be entitled to rely on the accuracy
of the information set forth herein.
5. OWNERSHIP. The undersigned's interest will be owned and should by
shown on Twinview, Inc.'s records as follows:
Name: _______________________________________________________________________
Name: _______________________________________________________________________
6. SUBSCRIPTION QUANTITY. The undersigned does hereby subscribe for
___________________________________________ shares of Twinview, Inc.'s common
stock at a price of $1.00 per Share, for a total subscription price of $______
________________________________, which amount is enclosed.
IN WITNESS WHEREOF, the undersigned has executed this subscription
agreement.
_________________________ __________________________________
Name of Subscriber Social Security or Tax I.D. Number
<PAGE> 55
__________________________________ __________________________________
Name of Additional Social Security or Tax I.D.
Subscriber Number of Additional Subscriber
(if more than one)
__________________________________ __________________________________
Residence Address Mailing Address (if different from
Residence Address)
__________________________________ _________________________________
City and State Zip Code City and State Zip Code
__________________________________ _________________________________
Home Telephone Number Business Telephone Number and Area Code
and Area Code
Form of Ownership:
(Circle One)
Individual JTROS Tenants Community Custodian Trustee
Ownership (all in Common Property
parties (both (one
must sign) parties signature
must sign) required)
Authorized Signature of Authorized Signature of
Subscriber Additional Subscriber
__________________________________ _____________________________________
<PAGE> 56
Until August 10, 2000, all dealers that effect transactions in these
securities, whether or not participating in the offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
No person is authorized to give any information or to make any
representation other than those contained in this prospectus, and if given or
made, such information or representation must not be relied upon as having
been authorized. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the shares offered
by this prospectus or an offer to sell or a solicitation of an offer to buy
the shares in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction
____________________________________
350,000 shares maximum
150,000 shares minimum
TWINVIEW, INC.
Common stock
________________________
Prospectus
________________________
May 12, 2000
Twinview, Inc.
573 East 300 South
Salt Lake City, Utah 84102
(801) 531-1867
<PAGE>
