U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
GREATESTESCAPES.COM, INC.
(Exact name of registrant as specified in its charter)
NEVADA 98-0224958
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Suite 450-800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6
(Address of registrant's principal executive offices) (Zip Code)
604.683.1688
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which
to be so Registered: Each Class is to be Registered:
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001
(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp, LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile: 949.660.9010
Page 1 of 19
Exhibit Index is specified on Page 18
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Greatestescapes.com, Inc.,
a Nevada corporation
Index to Registration Statement on Form 10-SB
Item Number and Caption Page
1. Description of Business 3
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 4
3. Description of Property 9
4. Security Ownership of Certain Beneficial Owners and Management 9
5. Directors, Executive Officers, Promoters and Control Persons 10
6. Executive Compensation - Remuneration of Directors and Officers 12
7. Certain Relationships and Related Transactions 13
8. Legal Proceedings 14
9. Market for Common Equity and Related Shareholder Matters 14
10. Recent Sales of Unregistered Securities 14
11. Description of Securities 14
12. Indemnification of Officers and Directors 15
13. Financial Statements 15
14. Changes in and Disagreements with Accountants 15
15. Financial Statements and Exhibits 16
5(a) Index to Financial Statements 16
Financial Statements F-1 through F-14
5(b) Index to Exhibits 16
Exhibits E-1 through E-74
Signatures 18
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Item 1. Description of Business.
WebZines are magazines transmitted over the Internet. We publish Victoria
Brooks' Greatest Escapes Travel WebZine a webZine which features travel
opportunities at the Internet address www.greatestescapes.com. Our webZine is
updated every month with new feature stories from professional travel writers
from around the world. We also operate a virtual department store of travel
services and products on the Internet. We anticipate expanding our book
division, Greatestescapes.com Publishing. We are also investigating producing a
related travel-services television program.
Development of Our Company. We are an Internet multi-media publishing
corporation. Our main focus is publishing a monthly travel magazine known as
WebZine on the Internet over the website known as www.greatestescapes.com and
developing our book publishing division known as GreatestEscapes.com Publishing.
We are attempting to develop an on-line department store. Since 1997, the
founders of the Company have been in the process of researching the technology,
design and development of an Internet-based multi-media publishing business.
With Victoria Brooks' unique and interesting writing style combined with 21st
century technology and marketing, we believe we can become an Internet
multi-media success.
Our Offices. We have a records office in Las Vegas, Nevada. We also have an
administration office in Vancouver, British Columbia that consists of 1,200
square feet and is leased for $2,800.00 a month. Finally, we occupy an editorial
office in West Vancouver, British Columbia, which consists of 1,000 square feet
and is provided by Guy Brooks and Victoria Brooks, officers and directors of the
Company. At this time, such space is provided to the Company free of charge. The
Company's administration office is occupied pursuant to a monthly lease with a
non-affiliated person. Our editorial office occupies 20% of Editor-in-Chief
Victoria Brooks and Publisher Guy Brooks' residence. We believe our present
business premises are adequate for our current needs.
Employees. As of May, 2000, we had no employees. From time-to-time, we use the
services of independent contractors and consultants to support product research
and development, marketing, sales and business development. As of the date of
this Memorandum, we utilize the services of approximately 25 part-time and
full-time consultants depending on need.
Our Internet Business. Our WebZine generates revenues through advertising sold
by a commission sales force and marketing agents. We also generate revenues from
our on-line virtual department store, which offers an extensive range of
essential travel products as well as unique and unusual travel-related items and
travel accessories. We receive sales commissions on travel services sold by
external travel providers through our Internet publications. We have also
developed a range of travel books to be distributed both through traditional
bookstores and over the Internet.
History of Victoria Brooks' Greatest Escapes Travel WebZine. First appearing on
the Internet on February 1, 1998, www.greatestescapes.com is updated every month
with new feature stories from professional travel writers from around the world.
There are currently regular contributors from Mexico City, San Francisco,
Ottawa, Texas, and Southern California. These professional writers currently
provide these feature stories at no cost to the Company. We anticipate paying
some or all of these professional travel writers in the future.
Regular monthly "Trips and Tales" include Victoria Brooks' feature stories with
color photos, (i.e., The Havana Camera Caper or Baja Desert Dream); Suzie
Rodriguez's stories from around the world (i.e., 21 Offbeat Things to Do in San
Francisco or The Back Country of the Cote D' Azur); and adventure travel stories
(Open Cockpit over Ottawa- A Capital Adventure). Famous restaurants from around
the world are reviewed with their signature recipes provided, and travel related
book and videos are reviewed. Visitors have access to an extensive range of
travel links broken down geographically and in numerous general categories,
including lists of bed and breakfasts, pet friendly hotels, discount hotel
reservation systems and other information relevant to tourists and business
travelers.
Our website gets about 200,000 hits every month. The popularity of our WebZine
has allowed us to charge hotel properties featured in stories a sponsorship fee.
Additionally, as advertisers want to be included in our WebZine's various
"virtual tour" links, we anticipate generating additional revenues through such
advertising.
Competition. We face competition from other WebZines such as Salon Magazine and
Wanderlust, which have been on the Internet for a few years and enjoy a
substantial following. Although the Internet industry is relatively young there
is great competition for the Internet users' business and there is intense
competition for visitors to a site. Electronic
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commerce, commonly called "e-commerce", is a new and expanding method of buying
and selling products and services, and our competitors which have been on the
Internet longer than the Company may enjoy customer loyalty. Our competitors may
have an advantage over us because they have been in business longer than we
have. Many of our competitors have greater research and development, marketing,
financial and other resources than we have. As a result of their size and the
breadth of their product offerings, certain of these companies have been and
will be able to gain a disproportionate share of the virtual community market.
Our Internet Service Provider. Our Internet service provider is CSP Internet,
one of Canada's leading Internet services providers. CSP Internet provides a
complete range of Internet services, including dial-up connections, business
connections, consulting services, web serving options, web site production and
web advertising.
WebZines, which are magazines transmitted over the Internet, offer significant
advertising benefits to travel service providers. Forrester Research projects
that by 2002, travel sales on the Internet will be worth US$26 billion in the
United States market alone. Our WebZine offers travel service providers with the
opportunity to establish an Internet address or to increase public awareness of
those travel service providers' existing Internet websites. Advertisers can
feature a three-page brochure with a reservation system reference.
Reports to Security Holders. On or about June 26, 2000, we were cleared to be
listed on the Pink Sheets maintained by the National Association of Securities
Dealers, Inc ("NASD"). We are filing this Registration Statement on Form 10-SB
in order to apply for listing on the Over-the-Counter Bulletin Board also
maintained by the NASD. We must "clear comments" (i.e., satisfactorily respond
to all comments on our filing by the NASD and the SEC) with both the NASD and
the Securities and Exchange Commission ("SEC") before we will be cleared to list
our securities on the Over-the-Counter Bulletin Board. This registration
statement will become effective 60 days after it is filed with the SEC. Once
this registration statement becomes effective, the Company will become a
reporting company with the SEC, and will thereafter provide an annual report to
its security holders, which will include audited financial statements. The
public may read and copy any materials filed with the SEC at the SEC's Public
Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. The public may
also obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. The address of that site is
http://www.sec.gov. The Company currently maintains its own Internet address at
www.greatestescapes.com.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
To increase our website traffic, we are developing custom-built search
engine-focused entry pages for all relevant keywords and phrases; extensive
monitoring for maximizing placement on Excite and other major search engines;
customizing its positioning strategies on Yahoo! We also conduct a server log
analysis to better target customers and prospective customers, and we devote
significant resources to website maintenance. We also plan to submit our website
to over 400 secondary Internet search engines. Boris Chow of BO2.com Ltd., has
designed award winning web sites for many companies. He was retained by us to
create a more dynamic appearance for our WebZine. Our re-designed web site
encompasses a number of cutting edge design techniques and Internet navigational
features that we hope will help position our WebZine as a leading Internet
Travel WebZine.
Internet Promotion. As of February 1, 2000, we had appointed a new Internet
marketing firm, AEI Productions, Inc., based in South Florida. AEI will create
positioning strategies with major search engines such as Yahoo!, as well as
continuing to make submissions to secondary Internet search engines.
Multi-Media. The first in what is planned as a series of thematic literary
travel guide books will be available in preferred Canadian book stores in March,
2000 and United States bookstores by September, 2000. We also anticipate
developing a range of DVD/CD-ROMs and a television travel series cross-marketing
our Internet properties.
Virtual Department Store. In January 2000, we signed an agreement with
Authorizenet.com Corporation, in conjunction with Card Service International, to
provide online credit card authorization for our online virtual department
store, which is currently under construction. Products to be offered include
travel adapters, silk sleeping bags, travel lingerie, luggage, portable computer
equipment, sporting goods and equipment, cigars and smoking paraphernalia,
computer software and games, videos, books and book reviews, music on compact
discs, and information on discounts on
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items such as insurance, long distance telephone rates, and travel-related
products.
Banner Advertising. We believe that banner advertising (on either a
"click-through" or page impression basis) is the most popular revenue generator
on the Internet. External agents are being contracted to sell banner ads on
www.greatestescapes.com . Typically advertisers pay approximately $3 to $6 per
1000 page impressions, which we believe is more advantageous to the advertiser
than paying on the same number of "click-throughs" which require the visitor to
actually click on the banner. Page impressions only require the visitor to click
on the page where the banner appears. For example, on a page that receives
1,000,000 hits a month, one banner advertisement on just one page would generate
between $3,000 to $6,000 per month.
Brochure Advertising. Our WebZine is becoming an important travel resource for
travelers planning their trips to various destinations around the world. The
various feature stories obtained from correspondents around the globe enables us
to expand our range of "Tours" offered on the WebZine home page. The "Tours" are
not packaged tours for sale, but rather a display, in one convenient location,
of all previously featured stories, restaurant reviews and brochures on a given
destination. The WebZine's Tours currently include Florida, California, Cuba,
Jamaica, British Columbia, Mexico, Belize, Spa's and France.
We anticipate hiring a commissioned sales force to sell advertising brochures to
tourism-oriented businesses in the geographic locations of the Tours. We take
the local tourism-related business's brochure and publish it in our WebZine,
with text and photographs included. We believe the market for such advertisers
is significant, and includes businesses as diverse as small bike rental shops,
restaurants, bed and breakfasts, hotels, motels, local tour companies, national
or international car rental companies, tourist attractions, airlines, wine and
liquor products and distributors, real estate offices, time share projects,
mutual fund companies, zoo's, aquariums, planetariums, adventure tours,
eco-tours, tennis clubs, horse back riding stables, bowling alleys, casinos, ski
resorts, ski rentals, golf courses, golf rental shops, golf instruction schools,
golf driving ranges, spa resorts, day spas, spa equipment manufacturers and
distributors, spa cream manufacturers and distributors, retail skin products
such as moisturizers, sunblock and massage oils, cooking schools, gourmet food
providers, art galleries and other businesses which rely on tourists.
Advertisers with existing web sites benefit from the increased coverage obtained
from being in our WebZine. Companies which do not have an existing web site or
which have a web site which is undeveloped or unpromoted, which is more common,
are able to establish their own Internet address and Internet presence through
our WebZine. A typical brochure published on our WebZine features a one to
three-page layout which includes references to the advertiser's reservation
system, e-mail and telephone number. The advertiser's online address is
www.greatestescapes.com/advertiser's name. We believe that this is a
cost-effective way for advertisers to acquire an Internet presence without
incurring the high set-up costs and ongoing maintenance fees of creating a web
site.
We currently have an experienced travel product salesman in Vancouver, British
Columbia who is selling our advertising. We anticipate initially marketing our
advertising in Florida, Mexico, Jamaica, eastern Canada and California.
The Growth of E-Commerce. Electronic commerce, or e-commerce, accounted for
nearly $3 billion in transactions in 1998 in North America. Travel related items
are expected to comprise a significant portion of e-commerce, as worldwide
travel related sales are projected to be almost $12 billion by 2002. In 1998,
worldwide travel related sales amounted to approximately $1 billion.
Significantly, the travel industry amounts to annual commerce of approximately
$500 billion. We believe that e-commerce over the Internet will attract an
increasing share of travel industry commerce. According to the Economist,
Internet shopping is rapidly coming of age. Jupiter Communications, a
consultancy that specializes in analyzing the e-commerce market, and its major
rival, Forrester Research, predict that, as more people shop online, more
retailers utilize the Internet and more products are offered. The most popular
purchases tend to be those that need research and are high in value, but, after
a slow start, even groceries are starting to be bought on-line. Moreover,
Forrester Research projects that, by 2002, travel and computer hardware sales
will be worth $26 billion and $10 billion, respectively, in the United States
market alone.
Mail order catalogues revolutionized the way people bought goods in the early
1900's. Television marketing in the 1950's was considered state of the art. The
Company believes that the Internet is the new medium for commerce and
communication. According to a research paper by the Organization for Economic
Co-operation and Development, global electronic commerce is expected to explode
to about a trillion dollars worldwide in the next seven years, from a current
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$26 billion per year. Media reports that during the 1998 Christmas season,
approximately 20 to 25 million people in the United States shopped online.
Our E-Commerce Operations. We are building a virtual department store, Victoria
Brooks' Greatest Escapes Department Store, to sell travel-related products and
services at the WebZine. This virtual department store (its pre-opening address
is www.greatestescapes.com/shop) is starting off as an eight floor virtual
department store selling essential travel items as well as unusual and unique
products and services. We believe that the growing acceptance of e-commerce
represents a substantial opportunity for us to conduct our business over the
Internet. Various industry estimates predict that such Internet e-commerce
transactions are estimated to increase from the 1997 global level of
approximately $12 billion to $426 billion by the year 2002. There can be no
assurance, however, that Internet commerce will continue to expand, or that our
e-commerce operations will be successful.
We already have our own secure server for handling credit card transactions at
its WebZine. The Company will very rarely, if ever, inventory product. Items
will be described along with a small picture of the item on the respective
`floor' of the virtual department store. If a virtual shopper wants more
information, he or she clicks on the icon to acquire additional product
information. To purchase an item, a consumer clicks on the "buy" icon and is
connected to a secure point of purchase.
Products to be sold include travel adapters, silk sleeping bags, travel
lingerie, luggage, portable and traveling computer equipment, sporting goods and
equipment, cigars and smoking paraphernalia, computers, computer software and
games, videos, books and book reviews, music on compact discs, music reviews,
and information on available discounts on items such as insurance, long distance
telephone rates, and travel related products. We anticipate providing department
store "managers" with opportunities to enter into joint ventures with the
Company or to participate on a profit-sharing basis. Travel services will be
sold through external travel providers initially, with the Company receiving
commissions on services sold. A range of private label travel services including
discount "last minute" hotels, airline tickets and cruise ship bookings is
planned to be branded under the name Greatest Escapes. Greatest Escapes
DVD/CD-ROMs will be distributed through traditional retail outlets as well as
www.greatestescapes.com.
Since 1997, the Company's founders have devoted time and resources to make a
product with a wide market appeal. We believe there are three steps in
developing a successful Internet business:
o Develop a product having appeal to the target market, ultimately inspiring
increased user traffic on the website;
o Establish a plan of commerce, thus increasing the opportunity to post
advertisements or banner style ads.
o Develop a strategy for selling products through over the Internet.
We believe we have addressed these three important steps. We believe WebZine is
highly regarded while enjoying moderate success. We have attempted to create an
environment where both travelers and travel service providers can come together
to share the same resources. WebZine is free for travelers. However, travel
service providers pay for advertising.
We hope to have multi-dimensional income streams. We intend to try to position
the Company to benefit from the anticipated growth within the Internet. We hope
that we will be able to earn revenue through:
o Advertising sold by external Internet advertising/marketing consultants.
o An on-line department store which will offer a wide range of travel-related
products.
o Travel services sold through external travel providers, with the Company
receiving a commission on items sold.
o Enhancement of multi-media opportunities by offering a wide range of travel
books. We hope that the travel books will be distributed through
traditional bookstores as well as on www.greatestescapes.com and
www.LiteraryTrips.com
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o A GreatestEscapes.com or LiteraryTrips.com television series which will try
to create greater brand name awareness, provide distribution royalties and
cross-marketing opportunities for the WebZine.
We hope to someday distribute DVD/CD-ROMs through traditional retail outlets as
well as over our website, www.greatestescapes.com.
Literary Travel Guides. During 1999, we created a new division,
GreatestEscapes.com Publishing, to produce traditional print publications. Our
first project, Literary Trips: Following in the Footsteps of Fame, is a thematic
guidebook containing a compilation of approximately 24 destination pieces
(traveler's tales with guidebook information at the end of each piece) on a
destination surrounding a famous literary figure (for example, Ian Fleming in
Jamaica, John Steinbeck in California, Ernest Hemingway in Cuba, Paul Bowles in
Morocco, Graham Greene in Viet Nam, etc.). Each story has 4 to 15 pages of text
with 2 to 7 pages of graphics, photographs, pen-and-ink sketches, and maps. The
book presently has approximately 368 pages. The manuscript was delivered to the
printer, Friesens Printing, located in Manitoba, on January 25, 2000 and is now
in bookstores across Canada and in the United States. The book is also available
in our virtual department store and at www.LiteraryTrips.com.
In December 1999, we signed an agreement with a British Columbia company,
Sandhill Book Marketing Ltd., one of Canada's leading book distributors, to
effectuate the distribution of our titles in Canada. We have entered into a
distribution contract with WORDS Distributing Co., located in Oakland,
California, whereby WORDS Distributing Co. will distribute our titles in the
United States.
Television. We are currently developing a proposal for a 13 part travel
television series, titled Greatest Escapes, which could be sold to networks such
as A & E, TLC, Life, The Travel Network, Discovery, Prime, Women's Television
Network, plus the hundreds of smaller independent stations. Both the television
show and the WebZine would be used to advertise each other, further building and
enforcing the Victoria Brooks Greatest Escapes brand name. If the series is
produced and achieves recognition through North American or European
distribution, the value of advertising on our WebZine would be greatly enhanced.
However, the television production industry is notoriously difficult to enter,
and we have no experience in producing a television series. Therefore, our
development of a television series is highly speculative, and there can be no
assurance that we will successfully produce such a television series.
Potential Acquisitions. We are seeking appropriate acquisition targets to
accelerate growth and revenue projections. Such targets include existing on-line
department stores and Internet travel booking companies. We anticipate that the
ultimate acquisition of a travel service provider will also contribute to our
revenue sources.
Regulation. The Internet has been under increasing scrutiny by various state,
federal and international regulatory agencies. We may be subject to various
existing or proposed forms of government regulations, including restrictions on
interstate telecommunications to promote certain transactions and age-based
content restrictions. Any future violation of, and the cost of compliance with,
these laws and regulations could have a material adverse effect on our business,
financial condition and results of operations.
Third-Party Reliance. We may become dependent upon various third parties for one
or more significant services required for our business. Because the capacity of
those third parties to provide different services we need may be limited for
economic or other reasons, our inability to continue to receive services from
existing providers or to obtain similar services from additional providers could
have a material adverse effect on the Company.
Reliance on Growth and Use of the Internet. The substantial growth in the use of
and interest in the Internet is a recent phenomenon. There can be no assurance
that communication or commerce over the Internet will become more widespread or
that extensive content will continue to be provided over the Internet. The
Internet may not prove to be a viable commercial marketplace for a number of
reasons, including potentially inadequate development of the necessary
infrastructure, such as a reliable network backbone, or timely development and
commercialization of performance improvements, including high speed modems. In
addition, to the extent that the Internet continues to experience significant
growth in the number of users and level of use, there can be no assurance that
the Internet infrastructure will continue to be able to support the demands
placed upon it by such potential growth or that the performance or reliability
of the Web will not be adversely affected by this continued growth. In addition,
the Internet could lose its viability due to delays in the development or
adoption of new standards and protocols required to handle increased levels of
Internet
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activity, or due to increased governmental regulation. Changes in or
insufficient availability of telecommunications services to support the Internet
also could result in slower response times and adversely affect usage of the Web
and the Company's online media properties. If use of the Internet does not
continue to grow, or if the Internet infrastructure does not effectively support
growth that may occur, our business, operating results and financial condition
would be materially and adversely affected.
Regulatory and Market Influences. The Internet is subject to changing political,
economic and regulatory influences that will affect the procurement practices
and operation of Internet directory service organizations. Changes in current
Internet directory service reimbursement systems could result in the need for
unplanned product enhancements, in delays or cancellations, or in the revocation
of endorsement of the services of the Company. Any of these occurrences could
have a material adverse effect on our business, financial condition and results
of operations. During the past several years, various Internet directory service
industries and telecommunications industries have been subject to an increase in
governmental and international regulation. Certain proposals to reform the
telecommunications and Internet service systems are periodically under
consideration by the appropriate regulators. These programs may contain
proposals to increase government involvement in Internet directory services and
otherwise change the operating environment for our customers. We cannot predict
what impact, if any, such factors might have on our business, financial
condition and results of operations. In addition, many Internet directory
service providers are consolidating to create integrated Internet directory
service delivery systems with greater regional market power. As a result, these
emerging systems could have greater bargaining power, which may lead to price
erosion of our products. Our failure to maintain adequate price levels would
have a material adverse effect on our business, financial condition and results
of operations. Other legislative or market-driven reforms could have
unpredictable effects on our business, financial condition and results of
operations.
Liquidity and Capital Resources. We had cash resources of $11,911.00 at February
28, 1999. At February 29, 2000, we had cash resources of $14,090.00. At February
28, 1999, we had total current assets of $11,942.00 and total current
liabilities of $15,460.00. At February 28, 1999, total current liabilities
exceeded total current assets by $3,518.00. At February 29, 2000, we had total
current assets of $20,477.00 and total current liabilities of $23,552.00. At
February 29, 2000, total current liabilities exceeded total current assets by
$3,075.00. The cash and equivalents constitute our present internal sources of
liquidity. Because neither the Company nor its subsidiaries are generating any
significant royalty revenues, our only external source of liquidity is the sale
of our capital stock.
At February 29, 2000, we had cash resources of $14,090.00. We had cash resources
of $8,831.00 at May 31, 2000. At February 2, 2000, we had total current assets
of $17,560.00 and total current liabilities of $23,552.00. At February 29,,
2000, total current liabilities exceeded total current assets by $3,075.00. At
May 31, 2000, we had total current assets of $19,757.00 and total current
liabilities of $30,809.00. At May 31, 2000, total current liabilities exceeded
total current assets by $11,052.00. The cash and equivalents constitute our
present internal sources of liquidity. Because neither the Company nor its
subsidiaries are generating any significant royalty revenues, our only external
source of liquidity is the sale of our capital stock.
Results of Operations. We have not yet realized any significant revenue from
operations, nor do we expect to in the foreseeable future. The net loss from
operations from February 10, 1999 (inception), to February 29, 2000, was
$276,498.00 due primarily to the expenditure of funds for administrative and
general expenses, development of our website and related activities, including,
but not limited to, content development, management fees and professional fees.
We have not yet realized any significant revenue from operations, nor do we
expect to in the foreseeable future. The net loss from operations from February
29, 2000, to May 31, 2000 was $100,546.00 due primarily to the expenditure of
funds for administrative and general expenses, development of our website and
related activities, including, but not limited to, content development,
management fees and professional fees.
In order to address the going concern problem discussed in our financial
statements, we will require additional cash. We will also require additional
cash to implement our business strategies, including cash for (i) payment of
increased operating expenses and (ii) further implementation of those business
strategies. No assurance can be given, however, that we will have access to the
capital markets in the future, or that financing will be available on acceptable
terms to satisfy our cash requirements needed to implement our business
strategies. Our inability to access the capital markets or obtain acceptable
financing could have a material adverse effect on our results of operations and
financial condition and could severely threaten our ability to operate as a
going concern.
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Our forecast of the period of time through which our financial resources will be
adequate to support our operations is a forward-looking statement that involves
risks and uncertainties, and actual results could vary as a result of a number
of factors.
We anticipate that we will need to raise additional capital within the next 12
months in order to continue as a going concern. Such additional capital may be
raised through additional public or private financings, as well as borrowings
and other resources. To the extent that additional capital is raised through the
sale of equity or equity-related securities, the issuance of such securities
could result in dilution of our stockholders. There can be no assurance that
additional funding will be available on favorable terms, if at all. If adequate
funds are not available within the next 12 months, we may be required to curtail
our operations significantly or to obtain funds through entering into
arrangements with collaborative partners or others that may require us to
relinquish rights to certain of our assets that we would not otherwise
relinquish.
We do not anticipate any material expenditures within the next 12 months that
will affect our liquidity. We do not anticipate any significant research and
development within the next 12 months, nor do we anticipate that we will lease
or purchase any significant equipment within the next 12 months. We do not
anticipate a significant change in the number of its employees within the next
12 months. We are not aware of any material commitment or condition that may
affect our liquidity within the next 12 months.
Item 3. Description of Property
Property held by the Company. As of the dates specified in the following table,
the Company held the following property:
Property February 29, 2000 May 31, 2000
-------- ----------------- ------------
Cash $ 14,090.00 $ 8,831.00
Property and Equipment $ 2,916.00 $ 2,697.00
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of June 30, 2000 by (i) each person
or entity known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of common stock, (ii) each of the Company's directors and
named executive officers, and (iii) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Title of Class of Beneficial Owner of Beneficial Owner Percent of Class
-------------- ------------------- ------------------- ----------------
<S> <C> <C> <C>
$.001 Par Value Guy Brooks President and Director 13.8 %
Common Stock 5255 Gulf Place
West Vancouver, B.C. 706,068 common shares (1)
Canada V7W 2V9
$.001 Par Value Victoria Brooks Chief Operating Officer 20.1%
Common Stock 5255 Gulf Place and Director
West Vancouver, B.C. 1,027,000 common shares(2)
Canada V7W 2V9
$.001 Par Value Brian Buchanan Vice President Corporate 5.9%
Common Stock 2876-139A Street Development and Director
White Rock, B.C.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Canada, V4P 2N1 300,000 common shares
$.001 Par Value Shiraz Hussein Treasurer and Director 0.5%
Common Stock 4911 Wintergreen Ave.
Richmond, B.C. 25,000 common shares
Canada V7C 1L4
$.001 Par Value James Henshall Director 0.5%
Common Stock #602-1040 West Georgia St.
Vancouver, B.C. 25,000 common shares
Canada V7C 1L4
$.001 Par Value Duncan Merrin 350,000 common shares 6.8%
Common Stock c/o Oberon Group Ltd.
111 North Bride Road #18-01
Peninsula Plaza,
Singapore 179098
$.001 Par Value Mervyn Zabinsky 375,000 common shares 7.3%
Common Stock 23 Woodwoards Road
Richmond, B.C.
Canada V7E 6G7
</TABLE>
(1) Includes 206,068 shares owned by BBB Consultants Ltd., a company controlled
by Guy Brooks.
(2) All such shares are held in the name of Victoria Brooks Investments Inc., a
company controlled by Victoria Brooks.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("Commission") and generally includes voting
or investment power with respect to securities. In accordance with Commission
rules, shares of the Company's common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of the Company's common stock indicated as
beneficially owned by them.
Changes in Control. Management of the Company is not aware of any arrangements
which may result in "changes in control" as that term is defined by the
provisions of Item 403(c) of Regulation S-B.
Item 5. Directors, Executive Officers, Promoters and Control Persons
Executive Officers of the Company:
Name: Age: Office(s):
----- ---- ----------
Guy Brooks 44 President and Chief Executive Officer
Victoria H. Brooks 49 Chief Operating Officer
Brian Buchanan 51 Vice President
Bill Kaleta 51 Vice President
Shiraz Hussein 52 Treasurer
Board of Directors of the Company:
Name: Age: Title:
----- ---- ------
Victoria H. Brooks 49 Co-Chairman of the Board of Directors
Guy Brooks 44 Co-Chairman of the Board of Directors
10
<PAGE>
Brian Buchanan 51 Director
Shiraz Hussein 52 Director
James Henshall 53 Director
Biographical Information on Company's Officers and Directors:
Victoria Brooks, age 49, is the Chief Operating Officer and a director of the
Company. Mrs. Brooks is also a director of GreatestEscapes.com Holdings Ltd., a
subsidiary of the Company. She is also the Editor-in-Chief of all of our
publications and a partner with Guy Brooks in the creation and development of
GreatestEscapes.com Inc. Mrs. Brooks is a freelance travel writer and
photographer and five-time published guidebook author. Mrs. Brooks is the
creator and co-author of the Kick Start business travel guide series. Together
with her husband Guy, they have had five of their Kick Start guides
published--Vietnam, Indonesia, Malaysia, Hong Kong and Costa Rica. Mrs. Brooks
writes freelance travel pieces for various Canadian and North American
publications. Mrs. Brooks has a degree from Evergreen University in English
Literature and has studied Journalism at Mount Royal College in Calgary,
Alberta, Canada. She is an active member of the prestigious American Society of
Travel Writers, the American Society of Journalists and Authors, the Writers
Union of Canada, the Periodical Writers Association of Canada and the Travel
Media Association of Canada. From 1980 to 1985, Mrs. Brooks worked in sales for
Qualico Calgary. From 1989 to 1992, Mrs. Brooks was the owner of Electric Sox &
Stocks. From 1993 to 1999, Mrs. Brooks was an Editor and Freelance Writer for
Kick Start Publishing.
Guy Brooks, age 44, is the President, Chief Executive Officer and a director of
the Company. Mr. Brooks is also the President and a director of
Greatestescapes.com Holdings Ltd., a subsidiary of the Company. He is also the
Publisher and partner with Victoria in the development of GreatestEscapes.com
Inc. Mr. Brooks has experience in project management and business development of
both private and public companies. He is currently Director of a publicly listed
gold exploration company and a Director of one Internet-related start-up
company. Mr. Brooks studied Journalism at Carleton University. At various times,
Mr. Brooks has held the following professional memberships: Australian Society
of Investment & Financial Advisors; Institute of Company Directors; and Rotary
Club of Perth. From 1990 to 1993, Mr. Brooks was the General Manager of Key to
Asia Consulting. Also from 1990 to 1993, Mr. Brooks was the State General
Manager for The Over 50's Friendly Society. From 1993 to 1999, Mr. Brooks has
been a representative of Regal Capital Investments. From 1993 to 1999, Mr.
Brooks was the Publisher and a partner in Kick Start Publishing. From 1996 to
1997, Mr. Brooks was the President of South East Asia Brewing. From 1997 to
present, Mr. Brooks was Co-Chairman of the Board of Directors and President of
Global Brewing Services. From 1999 to present, Mr. Brooks has been the President
of BBB Consultants Ltd.
Brian Buchanan, age 51, is the Vice President of Corporate Development and a
director of the Company. Mr. Buchanan brings a travel and business experience to
the Company. His has experience in marketing and human resource techniques. Mr.
Buchanan has developed management techniques that we hope will enhance
productivity as well as cultivate valuable relations with local business
associates. His corporate background includes being Vice President and Director
of Marketing for one of Canada's largest Insurance Brokerage companies for nine
years. He is currently President and Chief Executive Officer of The Asia Group
of Companies Holdings Ltd. and President and a Director of a publicly-traded
junior mining company active in Southeast Asia. In 1979, Mr. Buchanan studied
Business Administration at Fraser Valley College. Mr. Buchanan's professional
memberships include the Insurance Council of British Columbia and Sales &
Marketing Executives of Vancouver. From 1983 to 1991, Mr. Buchanan was a Vice
President and a director of TOS Insurance. From 1991 to 1992, Mr. Buchanan was
the General Manager of Southern Cross Agriculture. Also from 1991 to 1993, Mr.
Buchanan was the Insurance Manager at TN Stevens Association. From 1993 to 1994,
Mr. Buchanan was the General Sales Manager of Bow Mac Saturn Saab. From 1994 to
present, Mr. Buchanan has been the President of Asia Group of Companies. From
1995 to present, Mr. Buchanan has been the President of Spire Ventures.
William Kaleta, age 51, is the Chief Information Officer and Vice President
Engineering of the Company. Mr. Kaleta has understanding and knowledge in the
development of computer software for small and large corporations. Previously
with Epost Innovations Inc., a company trading on the Over-the-Counter Bulletin
Board maintained by the National Association of Securities Dealers, Inc.
("CYPOST") as Chief Information Officer and Lead Programmer, he was instrumental
in establishing CYPOST as a leader in their industry. We believe the appointment
of Mr. Kaleta is consistent with our objective to establish Victoria Brooks'
Greatest Escapes Travel WebZine as a popular travel webzine. Mr. Kaleta is
familiar with many of the computer languages.
11
<PAGE>
Shiraz Hussein, age 53, is a director of the Company. In 1969, Mr. Hussein
earned a degree in Business Administration from Filton College in the United
Kingdom. Mr. Hussein is currently a principal of Razzle & Company, a company
which provides accounting services to reporting and non-reporting companies
since October, 1988. Mr. Hussein has been a director of Arcturus Resources Ltd.
and Spire Ventures Ltd., two reporting issuers. He also served as Secretary for
Welcome Opportunities Ltd., a reporting issuer. He has been a director and
officer of the Company since February, 1999.
James Henshall, age 53, has been a director of the Company since 1998. In 1970,
Mr. Henshall earned a law degree at the University of Alberta in Canada. In
1974, Mr. Henshall earned a Bachelor of Arts degree at the University of Western
Ontario in Canada. Mr. Henshall is a member of the Canadian Bar Association as
well as the British Columbia Bar Association. From 1974 to 1978, Mr. Henshall
worked as a Associate Attorney for Russell Dumoulin, in Canada. From 1978 to
1982, Mr. Henshall was a Partner at the law firm of Henshall Cottick. From 1982
to 1987, Mr. Henshall was a Partner with the law firm of Knott Pollard Morgan.
From 1987 to 1995, Mr. Henshall was a Partner with the law firm of Alexander
Holburn. Mr. Henshall currently works as an attorney with C.C. China Capital
International Corp. He is also the Senior Vice President for C.C. China Capital
International Corp.
Other Key Personnel
Katherine Means is a communications professional with 20 years of experience as
a newspaper and magazine reporter, editor and feature writer. Her recent
professional emphasis has been on travel and lifestyle writing. Katherine is
Senior Contributing Editor to the Company's WebZine. Over the past 20 years her
career as a magazine and newspaper editor has taken her to Jakarta and back to
Houston where she now resides. As a freelance writer, Katherine has written for
numerous publications including; Conroe Courier daily newspaper, Ultra Magazine
(a regional lifestyle 4-color monthly magazine), local Houston newspapers,
Adweek, American Automobile Association World, American Express Expression,
Associated Press Special Editions, Body Smart (a health and fitness
publication), Communication Arts, Continental Airlines Profiles, Houston
Advanced Research Center Corollary, Houston Home & Living, Houston Magazine, San
Francisco Review of Books, Singapore Airlines Silver Kris, Southwest Airlines
Spirit, and others. Ms. Means has a Bachelor of Arts in Journalism from Ohio
State University, and completed graduate courses in journalism at The University
of North Texas. She also holds a certificate in publishing from Rice University
and is active in various service organizations.
Suzie Rodriguez is www.greatestescapes.com's Senior Contributing Editor. The
daughter of a United States Air Force officer, she has traveled extensively in
South America, Africa, Japan, Europe and the South Pacific. A freelance writer
whose work has appeared in many national newspapers and magazines, Ms. Rodriguez
is also the author of two books, one of which, Found Meals of the Lost
Generation (published by Faber and Faber), about Americans in Paris in the
1920s, has been translated into five languages. She holds two degrees from
California's Stanford University, has attended the Sorbonne, and is currently at
work on a biography of wealthy salonist and proto-feminist Natalie Clifford
Barney.
Jim Johnson is the Company's "Man about Town" correspondent. Mr. Johnson has
been a freelance travel writer for 15 years, primarily for the travel sections
of Sunday newspapers like the Los Angeles Times, Atlanta Journal-Constitution,
Boston Globe, and smaller papers published in the United States.
Rita Cooke is the Editorial Director of Insider magazine and Editor-in-Chief of
the Creative Alliance Monthly newsletter. She lives in Los Angeles and has also
written 14 screenplays. Ms. Cooke is on the Steering Committee of Cinewomen in
Los Angeles and is currently working on a book titled Screenwriters: From
Inspiration to Action. Ms. Cooke's travel articles have been published in both
national and international publications.
Item 6. Executive Compensation - Remuneration of Directors and Officers.
Any compensation received by officers, directors, and management personnel of
the Company will be determined from time to time by the Board of Directors of
the Company. Officers, directors, and management personnel of the Company will
be reimbursed for any out-of-pocket expenses incurred on behalf of the Company.
Summary Compensation Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to the Company payable to
the Chief Executive Officer of the Company and the other executive officers of
the Company whose total annual salary and bonus is anticipated to exceed $50,000
during the year ending
12
<PAGE>
December 31, 2000. The Board of Directors of the Company may adopt an incentive
stock option plan for its executive officers which would result in additional
compensation.
--------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name and Other Annual All Other
Principal Position Year Salary Bonus ($) Compensation ($) Compensation ($)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Guy Brooks Up to 02/28/1999 None None None None
President, Chief Executive Up to 02/29/2000 $18,000.00 None None None
Officer and Director
--------------------------------------------------------------------------------------------------------------
Victoria Brooks Up to 02/29/1999 None None None None
Chief Operating Officer and Up to 02/29/2000 $18,000.00 None None None
Director
--------------------------------------------------------------------------------------------------------------
Brian Buchanan Up to 02/28/1999 None None None None
Vice President of Corporate Up to 02/29/2000 $16,720.00 None None None
Development and Director
--------------------------------------------------------------------------------------------------------------
</TABLE>
Compensation of Directors. Directors who are also employees of the Company
receive no extra compensation for their service on the Board of Directors of the
Company.
Employment Contracts. The Company has not entered into any employment contracts,
but anticipates entering into employment contracts with certain management and
other key personnel.
Stock Option Plans. The Board of Directors of the Company anticipates adopting a
stock option plan ("Stock Option Plan"). Pursuant to the provisions of the
proposed Stock Option Plan, certain shares of the Company's $.001 par value
common stock will be reserved for issuance upon exercise of options. The Stock
Option Plan will be designed to retain qualified and competent officers,
employees, and directors of the Company. The Company's Board of Directors, or a
committee thereof, shall administer the Stock Option Plan and will be
authorized, in its sole and absolute discretion, to grant options thereunder to
all eligible employees of the Company, including officers and directors (whether
or not employees) of the Company. Options will be granted pursuant to the
provisions of the Stock Option Plan on such terms and at such prices as
determined by the Company's Board of Directors. Options granted under the Stock
Option Plan will be exercisable after the period specified in the option
agreement. Options granted under the Stock Option Plan will not exercisable
after the expiration of 10 years from the date of grant. The Stock Option Plan
will also authorize the Company to make loans to optionees to enable them to
exercise their options. At present, no options have been granted.
Stock Awards Plan. The Company has not adopted a Stock Awards Plan, but may do
so in the future. The terms of any such plan have not been determined.
Item 7. Certain Relationships and Related Transactions
Related Party Transactions. On or about February 9, 1999, we purchased the
intellectual property of Kick Start Publishing, a partnership owned by Victoria
Brooks and Guy Brooks, for $1.00. The intellectual property included our
WebZines, travel names and trade names, and our virtual department store. On
March 19, 1999, Victoria Brooks Investments, Inc. received 1,000,000 shares of
our common stock in a transaction which qualified for the nonpublic offering
exemption under Section 4(2) of the Securities Act of 1933 and which also
qualified for the exemption specified by Regulation S.
We pay consulting and accounting fees to Razzle & Company, a company controlled
by Shiraz Hussein, Treasurer and a director of the Company.
Victoria Brooks, Chief Operating Officer and a director of the Company, has
entered into a contract with us whereby she is paid a fee for supplying content
for our website.
13
<PAGE>
Brian Buchanan, Vice-President of Corporate Development and a director of the
Company, has made loans to the Company. We have agreed to pay such loans when
the funds become available.
We will attempt to resolve any such conflicts of interest in favor of the
Company. The officers and directors of the Company are accountable to the
Company and its shareholders as fiduciaries, which requires that such officers
and directors exercise good faith and integrity in handling our affairs. A
shareholder may be able to institute legal action on behalf of the Company on or
behalf of that shareholder and all other similarly situated shareholders to
recover damages or for other relief in cases of the resolution of conflicts in
any manner prejudicial to the Company.
Item 8. Legal Proceedings
There are no legal actions pending against the Company nor are any such legal
actions contemplated.
Item 9. Market for Common Equity and Related Stockholder Matters
On or about June 26, 2000 we were cleared by the NASD to list our securities on
the Pink Sheets maintained by the NASD. With this Registration Statement on Form
10-SB, we are applying for participation on the OTC Bulletin Board, an
electronic quotation medium for securities traded outside the Nasdaq Stock
Market. There can be no assurance that we will be approved for participation on
the OTC Bulletin Board.
Item 10. Recent Sales of Unregistered Securities
There have been no sales of unregistered securities within the last three (3)
years which would be required to be disclosed pursuant to Item 701 of Regulation
S-B, except for the following:
On February 25, 1999, Victoria Brooks paid $5,000.00 for 1,000,000 shares of our
common stock. Such shares were issued in reliance upon the exemption from
registration and prospectus delivery requirements of Regulation S.
On or about February 26, 1999, Guy Brooks, Brian Buchanan, Shiraz Hussein and
James Henshall, all officers and/or directors of the Company, purchased 850,000
shares of our common stock for $.005 per share for a total of $4,250. The
transactions qualified for the non-public offering exemption specified by
Section 4(2) of the Securities Act of 1933 and Rule 504 of Regulation D.
Also on February 26, 1999, 13 shareholders paid $.005 per share for 2,610,000
shares of our common stock for a total of $13,050 under the exemption provided
by Rule 504 of Regulation D.
On or about April 2, 1999, 16 shareholders paid $99,249.90, or $.15 per share,
for 661,666 shares of our common stock under an offering exempt for registration
pursuant to Rule 504 of Regulation D.
On or about June 14, 1999, 9 shareholders paid $150,825, or $.25 per share, for
603,300 shares of our common stock under an exemption from registration
specified by Regulation S.
Item 11. Description of Securities
The Company is authorized to issue 200,000,000 shares of common stock, $.001 par
value, each share of common stock having equal rights and preferences, including
voting privileges. The Company is not authorized to issue shares of preferred
stock. As of June 30, 2000, there were 5,121,666 shares of the Company's common
stock issued and outstanding.
The shares of $.001 par value common stock of the Company constitute equity
interests in the Company entitling each shareholder to a pro rata share of cash
distributions made to shareholders, including dividend payments. The holders of
the Company's common stock are entitled to one vote for each share of record on
all matters to be voted on by shareholders. There is no cumulative voting with
respect to the election of directors of the Company or any other matter, with
the result that the holders of more than 50% of the shares voted for the
election of those directors can elect all of the
14
<PAGE>
Directors. The holders of the Company's common stock are entitled to receive
dividends when, as and if declared by the Company's Board of Directors from
funds legally available therefor; provided, however, that cash dividends are at
the sole discretion of the Company's Board of Directors. In the event of
liquidation, dissolution or winding up of the Company, the holders of common
stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of liabilities of the Company and after
provision has been made for each class of stock, if any, having preference in
relation to the Company's common stock. Holders of the shares of Company's
common stock have no conversion, preemptive or other subscription rights, and
there are no redemption provisions applicable to the Company's common stock. All
of the outstanding shares of Company's common stock are duly authorized, validly
issued, fully paid and non-assessable.
Item 12. Indemnification of Directors and Officers
Currently, we do not have a provision in either our Articles of Incorporation or
Bylaws limiting the liability of our officers and directors. We may, in the
future and with shareholders' consent, amend our Articles of Incorporation to
limit the liability of the Company's officers and directors. In such a case, our
officers and directors will not be liable to the Company for monetary damages
occurring because of a breach of their fiduciary duty as officers and directors
in certain circumstances. Such limitation will not affect liability for any
breach of an officer's or director's duty to the Company or the Company's
shareholders (i) with respect to approval by the officer or director of any
transaction from which he or she derives an improper personal benefit, (ii) with
respect to acts or omissions involving an absence of good faith, that he or she
believes to be contrary to the best interests of the Company or the Company's
shareholders, that involve intentional misconduct or a knowing and culpable
violation of law, that constitute an unexcused pattern of inattention that
amounts to an abdication of his or her duty to the Company or our shareholders,
or that indicate a reckless disregard for his or her duty to the Company or the
Company's shareholders in circumstances in which he or she was or should have
been aware, in the ordinary course of performing his or her duties, of a risk of
serious injury to the Company or the Company's shareholders, or (iii) based on
transactions between the Company and the Company's officers and directors or
another corporation with interrelated officers or directors or on improper
distributions, loans or guaranties pursuant to applicable sections of the
General Corporation Law of Nevada. Such limitation of liability does not affect
the availability of equitable remedies such as injunctive relief or rescission.
Indemnification Agreements. We anticipate that the Company will enter into
indemnification agreements with each of the Company's directors and executive
officers pursuant to which the Company shall indemnify each such director and
officer for all expenses and liabilities, including criminal monetary judgments,
penalties and fines, incurred by each such director and officer in connection
with any criminal or civil action brought or threatened against such director
and officer because of such director and officer being or having been an
executive officer or director of the Company. To be entitled to indemnification
by the Company, such person must have acted in good faith and in a manner such
person believed to be in the best interests of the Company and, with respect to
criminal actions, such director and officer must have had no reasonable cause to
believe his or her conduct was unlawful.
DISCLOSURE OF OPINION OF SECURITIES AND EXCHANGE COMISSION REGARDING
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
INSOFAR AS INDEMNIFICATION FOR LIABILITIES OCCURRING PURSUANT TO THE SECURITIES
ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
COMPANY PURSUANT TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT
IT IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT OF
1933 AND IS, THEREFORE, UNENFORCEABLE.
Item 13. Financial Statements
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Registration Statement, Form 10-SB (see Item 15 below).
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
15
<PAGE>
There have been no changes in or disagreements with the Company's accountants
since the formation of the Company required to be disclosed pursuant to Item 304
of Regulation S-B.
Item 15. Financial Statements and Exhibits
(a) Index to Financial Statements. Page
Audited Financial Statements of the Company:
Auditors Report F-1
Balance Sheet as at February 28, 1999 and February 29, 2000 F-2
Statement of Operations F-3
Statement of Stockholders' Deficit F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 through F-8
Unaudited (Auditor Reviewed) Financial Statements:
Independent Accountant's Report F-9
Balance Sheet as at May 31, 2000 and February 29, 2000 F-10
Statement of Operations for Three Months Ended May 31, 2000 F-11
Statement of Stockholders' Deficit from February 10, 1999
to May 31, 2000 F-12
Statement of Cash Flows for Three Months Ended May 31, 2000 F-13
Notes to Financial Statements F-14
(b) Index to Exhibits.
Copies of the following documents are filed with this Registration Statement,
Form 10-SB as exhibits:
Exhibits Page
1 Corporate Charter E-1
2 Articles of Incorporation E-2 through E-4
3 Bylaws E-5 through E-15
4 Intellectual Property Assignment Between Kick
Start Publishing and Greatestescapes.com E-16 through E-17
5 Public Relations Agreement Between Between Kathleen
Carney & Associates and Greatestescapes.com E-18 through E-19
16
<PAGE>
6 Distribution Agreement Between WORDS Distributing
and Greatescapes.com Publishing E-20 through E-32
7 Supplier Agreement Between Organic Buckwheat Pillow
Products of Canada & USA and Greatestescapes.com E-33 through E-40
8 Supplier Agreement Between Microsoie, Inc.
and Greatestescapes.com E-41 through E-48
9 Supplier Agreement Between Ulysses Press
and Greatestescapes.com E-49 through E-57
10 Supplier Agreement Between SunDreamer
and Greatestescapes.com E-58 through E-65
11 Supplier Agreement Between Attart Industries, Inc.
and Greatestescapes.com E-66 through E-73
12 Financial Data Schedule E-74
17
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Financial Statements
(U.S. Dollars)
February 29, 2000 and February 28, 1999
INDEX Page
Report of Independent Chartered Accountants 1
Financial Statements
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Deficit 4
Statements of Cash Flows 5
Notes to the Financial Statements 6-8
<PAGE>
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
GREATESTESCAPES.COM INC. (A Development Stage Company)
We have audited the accompanying balance sheets of Greatestescapes.com Inc. as
at February 29, 2000 and February 28, 1999 and the related statements of
operations, shareholders' deficit and cash flows for the year, the initial 19
day period and the period from inception, February 10, 1999 through February 29,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at February 29, 2000 and
February 28, 1999 and the results of its operations and the cash flows for the
year, the initial 19 day period and the period from inception February 10, 1999
through February 29, 2000 in conformity with generally accepted accounting
principles in the United States.
/s/ Pannell Kerr Forster
Chartered Accountants
Vancouver, Canada
May 4, 2000
F-1
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Balance Sheets
(U.S. Dollars)
February 29, February 28,
2000 1999
--------------------------------------------------------------------------------
Assets
Current
Cash $ 14,090 $ 11,911
Account receivable 3,470 30
--------------------------------------------------------------------------------
17,560 11,941
Property and Equipment (note 3) 2,916 0
Other (note 4) 1 1
--------------------------------------------------------------------------------
$ 20,477 $ 11,942
================================================================================
Liability
Current
Accounts payable $ 23,552 $ 15,460
--------------------------------------------------------------------------------
Commitment (note 7)
Stockholders' Deficit
Common Stock, $0.001 par value; 200,000,000
shares authorized, 5,121,666 (1999 - 4,460,000)
shares issued and outstanding 5,122 4,460
Additional Paid-In Capital 116,428 17,840
Share Subscriptions 150,825 0
Other Comprehensive Income 1,048 0
Accumulated Deficit (276,498) (25,818)
--------------------------------------------------------------------------------
(3,075) (3,518)
--------------------------------------------------------------------------------
$ 20,477 $ 11,942
================================================================================
See notes to financial statements.
F-2
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Operations
(U.S. Dollars)
Period
from Inception
Initial 19 Day February 10,
Year Ended Period Ended 1999 Through
February 29, February 28, February 29,
2000 1999 2000
--------------------------------------------------------------------------------
Expenses
Administrative and general 24,294 0 24,294
Advertising and promotion 14,798 0 14,798
Bank charges 374 75 449
Corporate development 24,720 0 24,720
Depreciation 515 0 515
Designers, editors and writers 37,999 0 37,999
Investor relations 4,065 0 4,065
Management fees 36,000 0 36,000
Office 8,337 0 8,337
Printing and reproductions 11,051 0 11,051
Professional fees 35,778 25,417 61,195
Regulatory fees 7,990 0 7,990
Telephone 3,815 326 4,141
Website development 40,944 0 40,944
--------------------------------------------------------------------------------
Net Loss for Period $ 250,680 $ 25,818 $ 276,498
================================================================================
Net Loss Per Share $ 0.05 $ 0.01
================================================================================
Weighted Average Number
of Shares Outstanding 4,620,738 4,460,000
================================================================================
See notes to financial statements.
F-3
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
(U.S. Dollars)
<TABLE>
<CAPTION>
Additional Other Total
Common Stock Paid-In Share Comprehensive Accumulated Stockholders'
Number Amount Capital Subscriptions Income Deficit Deficit
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 10, 1999
(Inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common
Stock 4,460,000 4,460 17,840 0 0 0 22,300
Net Loss 0 0 0 0 0 (25,818) (25,818)
---------------------------------------------------------------------------------------------------------------------------------
Balance,
February 28, 1999 4,460,000 4,460 17,840 0 0 (25,818) (3,518)
Issuance of Common
Stock 661,666 662 98,588 0 0 0 99,250
Share Subscriptions
Received 0 0 0 150,825 0 0 150,825
Other Comprehensive
Income 0 0 0 0 1,048 0 1,048
Net Loss 0 0 0 0 0 (250,680) (250,680)
---------------------------------------------------------------------------------------------------------------------------------
Balance,
February 29, 2000 5,121,666 $ 5,122 $ 116,428 $ 150,825 $ 1,048 $(276,498) $ (3,075)
=================================================================================================================================
</TABLE>
See notes to financial statements.
F-4
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Cash Flows
(U.S. Dollars)
<TABLE>
<CAPTION>
Period
Initial from Inception
19 Day February 10,
Year Ended Period Ended 1999 Through
February 29, February 28, February 29,
2000 1999 2000
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net loss $(250,680) $ (25,818) $(276,498)
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation 515 0 515
Changes in operating assets and liabilities
Account receivable (3,440) (30) (3,470)
Accounts payable 8,092 15,460 23,552
--------------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities (245,513) (10,388) (255,901)
--------------------------------------------------------------------------------------------------
Investing Activities
Acquisition of intellectual property 0 (1) (1)
Acquisition of property and equipment (3,431) 0 (3,431)
--------------------------------------------------------------------------------------------------
Net Cash Used by Investing Activities (3,431) (1) (3,432)
--------------------------------------------------------------------------------------------------
Financing Activities
Share subscriptions received 150,825 0 150,825
Issuance of common stock 99,250 22,300 121,550
--------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 250,075 22,300 272,375
--------------------------------------------------------------------------------------------------
Effect of Foreign Currency Translation on Cash 1,048 0 1,048
--------------------------------------------------------------------------------------------------
Cash Inflow 2,179 11,911 14,090
Cash, Beginning of Period 11,911 0 0
--------------------------------------------------------------------------------------------------
Cash, End of Period $ 14,090 $ 11,911 $ 14,090
==================================================================================================
</TABLE>
See notes to financial statements.
F-5
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
1. BACKGROUND AND BUSINESS
The Company was incorporated on February 10, 1999 under the laws of the
State of Nevada. The Company is in the development stage as more fully
defined in statement No. 7. of the Financial Accounting Standards Board.
The Company intends to operate as a multi media travel related publishing
enterprise. The Company markets and will market travel-related products
based on the content of its print publications as well as its digital
Internet magazine. Products will include a wide range of goods including
books, individual stories and hundreds of items in its online store
www.GreatestEscapesStore.com. The Company intends developing other travel
products to be sold and distributed through its on-line department store,
two websites www.GreatestEscapesStore.com and www.LiteraryTrips.com and
other more traditional outlets.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Property and equipment
Property and equipment are carried at cost less accumulated
depreciation. Depreciation of property and equipment are calculated as
follows:
Equipment and furniture - 30% Declining balance
(b) Foreign currency translation
Amounts recorded in foreign currency are translated into U.S. dollars
as follows:
(i) Current assets and current liabilities, at the rate of exchange
in effect at the balance sheet date;
(ii) Expenses at the average rate of exchange for the period
Gains arising from this translation of foreign currency are accounted
for as other comprehensive income shown as a separate component of
stockholders' deficit.
(c) Net loss per share
Net loss per share computations are based on the weighted average
number of common shares outstanding during the year.
(d) Financial instruments
The Company's financial instruments consist of cash, account
receivable and accounts payable. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant
interest, currency or credit risk.
F-6
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES
(e) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates and would impact future results of
operations and cash flows.
3. PROPERTY AND EQUIPMENT
2000 1999
--------------------------------------------------------------------------------
Accumulated
Cost Depreciation Net Net
--------------------------------------------------------------------------------
Equipment and
furniture $ 3,431 $ 515 $ 2,916 $ 0
================================================================================
4. OTHER ASSET
During the initial 19 day period ended February 28, 1999, the Company
purchased intellectual property from Kick Start Publishing (a
Proprietorship) for consideration of $1.00 cash. This intellectual property
includes any trademark, travel names, associated registrations, etc.
specifically relating to Greatest Escapes Travel Report and Greatest
Escapes Travel Webzine.
5. RELATED PARTY TRANSACTIONS
During the year ended February 29, 2000, the Company paid related parties
$89,706 in administration, corporate development, management and
professional fees. The above transactions were completed in the normal
course of operations on normal market terms and were recorded at fair
market value as estimated by management.
6. INCOME TAXES
A deferred tax asset stemming from the Company's net operating loss carry
forward, has been reduced by a valuation account to zero due to
uncertainties regarding the utilization of the deferred assets. At February
29, 2000, the Company has available a net operating loss carry forward of
approximately $270,000 which it may use to offset future federal taxable
income. The net operating loss carry forward if not utilized, will begin to
expire in 2014.
F-7
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
7. COMMITMENT
During the year ended February 29, 2000, the Company entered into a
marketing agreement with Net Media, an unrelated third party. The Company
agreed to compensate Net Media for services rendered with the following:
i) 50,000 common shares of the Company;
ii) 20% sales commission on all advertising placed and/or contracted
directly or indirectly by Net Media for the Company and their
affiliates;
iii) 20% production commission on all required material;
iv) $5,000 monthly draw against production and sales commissions earned;
and,
v) 8-10% on on-line product and service sales introduced by Net Media
(unless otherwise agreed prior to listing the product or service).
Subsequent to the year end, the Company terminated its agreement with Net
Media for non- performance. It is management's opinion that amounts paid to
the date of this report will satisfy the Company's obligations under the
agreement.
F-8
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Financial Statements
(U.S. Dollars)
May 31, 2000 and February 29, 2000
(Unaudited)
INDEX Page
Independent Accountant's Report 1
Financial Statements
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Deficit 4
Statements of Cash Flows 5
Notes to the Financial Statements 6
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying interim financial statements of
Greatestescapes.com Inc. as at May 31, 2000, and for the three month period then
ended. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
date and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying statements for them to be in conformity with
generally accepted accounting principles.
/s/ Pannell Kerr Forster
Chartered Accountants
Vancouver, Canada
July 15, 2000
F-9
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Balance Sheets
(U.S. Dollars)
(Unaudited)
May 31, February 29,
2000 2000
--------------------------------------------------------------------------------
Assets
Current
Cash $ 8,831 $ 14,090
Account receivable 10,926 3,470
--------------------------------------------------------------------------------
Total Current Assets 19,757 17,560
Property and Equipment 2,697 2,916
Other 1 1
--------------------------------------------------------------------------------
Total Assets $ 22,455 $ 20,477
================================================================================
Liability
Current
Accounts payable and accrued liabilities $ 30,809 $ 23,552
--------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock, $0.001 par value; 200,000,000 shares
authorized, 5,121,666 shares issued and outstanding 5,122 5,122
Additional Paid-In Capital 116,428 116,428
Share Subscriptions 246,800 150,825
Other Comprehensive Income 340 1,048
Accumulated Deficit (377,044) (276,498)
--------------------------------------------------------------------------------
Total Stockholders' Deficit (8,354) (3,075)
--------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 22,455 $ 20,477
================================================================================
See notes to financial statements.
F-10
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Operations
(U.S. Dollars)
(Unaudited)
Period
from Inception
February 10,
1999 Through
Three Months Ended May 31, May 31,
2000 1999 2000
--------------------------------------------------------------------------------
Expenses
Administrative and general $ 6,750 $ 3,726 $ 31,044
Advertising and promotion 1,736 0 16,534
Bank charges 342 69 791
Corporate development 6,000 8,720 30,720
Depreciation 219 0 734
Designers, editors and writers 6,280 1,544 44,279
Investor relations 7,125 3,028 11,190
Management fees 5,597 24,000 41,597
Office 2,093 2,663 10,430
Printing and reproductions 4,923 443 15,974
Professional fees 45,516 8,194 106,711
Regulatory fees 990 6,465 8,980
Telephone 1,635 895 5,776
Website development 11,340 3,365 52,284
--------------------------------------------------------------------------------
Net Loss for Period $ 100,546 $ 63,112 $ 377,044
================================================================================
Net Loss Per Share $ 0.02 $ 0.01
================================================================================
Weighted Average Number of
Shares Outstanding 5,121,666 4,576,393
================================================================================
See notes to financial statements.
F-11
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
Period from Inception to May 31, 2000
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Additional Other Total
Common Stock Paid-In Share Comprehensive Accumulated Stockholders'
Number Amount Capital Subscriptions Income Deficit Deficit
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 10, 1999
(Inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common
Stock 4,460,000 4,460 17,840 0 0 0 22,300
Net Loss 0 0 0 0 0 (25,818) (25,818)
------------------------------------------------------------------------------------------------------------------------------------
Balance,
February 28, 1999 4,460,000 4,460 17,840 0 0 (25,818) (3,518)
Issuance of Common
Stock 661,666 662 98,588 0 0 0 99,250
Share Subscriptions
Received 0 0 0 150,825 0 0 150,825
Other Comprehensive
Income 0 0 0 0 1,048 0 1,048
Net Loss 0 0 0 0 0 (250,680) (250,680)
------------------------------------------------------------------------------------------------------------------------------------
Balance,
February 29, 2000 5,121,666 5,122 116,428 150,825 1,048 (276,498) (3,075)
Share Subscriptions
Received 0 0 0 95,975 0 0 95,975
Other Comprehensive Income 0 0 0 0 (708) 0 (708)
Net Loss 0 0 0 0 0 (100,546) (100,546)
------------------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 2000 5,121,666 $ 5,122 $ 116,428 $ 246,800 $ 340 $(377,044) $ (8,354)
====================================================================================================================================
</TABLE>
See notes to financial statements.
F-12
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Statements of Cash Flows
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Period
from Inception
February 10,
1999 Through
Three Months Ended May 31, May 31,
2000 1999 2000
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net loss $(100,546) $ (63,112) $(377,044)
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation 219 0 734
Changes in operating assets and liabilities
Account receivable (7,456) (883) (10,926)
Accounts payable 7,257 (10,052) 30,809
------------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities (100,526) (74,047) (356,427)
------------------------------------------------------------------------------------------------
Investing Activities
Acquisition of intellectual property 0 0 (1)
Acquisition of property and equipment 0 (2,377) (3,431)
------------------------------------------------------------------------------------------------
Net Cash Used by Investing Activities 0 (2,377) (3,432)
------------------------------------------------------------------------------------------------
Financing Activities
Share subscriptions received 95,975 0 246,800
Issuance of common stock 0 99,250 121,550
------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 95,975 99,250 368,350
------------------------------------------------------------------------------------------------
Effect of Foreign Currency
Translation on Cash (708) (223) 340
------------------------------------------------------------------------------------------------
Cash Inflow (Outflow) (5,259) 22,603 8,831
Cash, Beginning of Period 14,090 11,911 0
------------------------------------------------------------------------------------------------
Cash, End of Period $ 8,831 $ 34,514 $ 8,831
================================================================================================
</TABLE>
See notes to financial statements.
F-13
<PAGE>
GREATESTESCAPES.COM INC.
(A Development Stage Company)
Notes to Financial Statements
Three Months Ended May 31, 2000
(U.S. Dollars)
(Unaudited)
1. BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with
generally accepted accounting principles in the United States for interim
financial information. These financial statements are condensed and do not
include all disclosures required for annual financial statements. The
organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the
Company's February 29, 2000 audited financial statements.
In the opinion of the Company's management, these financial statements
reflect all adjustments necessary to present fairly the Company's financial
position at May 31, 2000, the results of operations and its cash flows for
the three months ended May 31, 2000 and 1999. The results of operations for
the three months ended May 31, 2000 are not necessarily indicative of the
results to be expected for the entire fiscal year.
2. COMPARATIVE FIGURES
Operating results for the three month period ended May 31, 1999 were not
audited or reviewed.
F-14
<PAGE>
SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange Act
of 1934, the Company has duly caused this Registration Statement on Form 10-SB
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Vancouver, British Columbia, on August ___, 2000.
Greatestescapes.com, Inc.,
a Nevada corporation
By: /s/ Guy Brooks
---------------------------
Guy Brooks
Its: President
