REGISTRATION NO.333-32564
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
Amendment #3 Form SB - 2
Amended Form SB - 2 REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
XUNANTUNICH INC.
(Exact name of registrant as specified in its charter)
Nevada 0273 76-0602960
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
21112 123rd Avenue, Maple Ridge, BC V2X 4B4 CANADA
(604 ) 467-9116
(Address, including zip code, and telephone number, including
area code,
of registrant's principal executive offices)
Agent for Service:
With a Copy to:
David Young Christopher J. Moran, Jr.
XUNANTUNICH INC. Inc. Attorney at Law
3E - 2775 Fir Street 4625 Clary Lake Drive
Vancouver, BC V2X 4B4 Canada Roswell, Georgia 30075
(604) 734 3546 (770) 518-9542 (770) 518-9640 Fax
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to
the public:
Approximate date of commencement of proposed sale to
the public:As soon as practicable after the effective
date of this registration statement.
As soon as practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this form
are to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, check the following box. [x]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount Maximum Maximum Amount of
Title of to be Offering Aggregate Registration
each Class Registered Price Offering
of per unit price Fee
Securities
to
be
registered
Common 1,510,000 $ .20 per $302,000.00 $ 84.56
stock shares share
No exchange or over-the-counter market exists for XUNANTUNICH
INC. common stock. The average price paid for XUNANTUNICH INC.
common stock was $.0004 per share.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to such section 8(a), may
determine.
SUBJECT TO COMPLETION
Prospectus
, 2000
XUNANTUNICH INC.
1,510,000 Shares of Common Stock
to be sold by the registrant as issuer and by current
shareholders
This is the initial public offering of common stock of
Xunantunich Inc. and no public market currently exists for these
shares. Xunantunich Inc. is offering for sale up to one million
shares of its common stock on a "self-underwritten" best efforts
basis at a price of $0.20 per share for a period of one hundred
and eighty days from the date of this prospectus.
The price for the common shares offered was set arbitrarily by us
and does not relate to earnings, book value or any other
established method of valuation; there are no provisions for the
return of funds if only a small number of shares are sold and no
minimum subscription amount has been set and no commissions will
be paid for the sale of the 1,000,000 shares offered by
Xunantunich Inc.
Concurrently with this offering, selling shareholders are selling
510,000 shares at $.20 per share.
This investment involves a high degree of risk. See "Risk
Factors" beginning on page 5.
Neither the SEC nor any state securities commission has approved
or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. The SEC has not made any
recommendations that you buy or not buy the shares. Any
representation to the contrary is a criminal offense.
We will amend and complete the information in this prospectus.
Although we are permitted by US federal securities law to offer
these securities using this prospectus, we may not sell them or
accept your offer to buy them until the documentation filed with
the SEC relating to these securities has been declared effective
by the SEC. This prospectus is not an offer to sell these
securities or our solicitation of your offer to buy these
securities in any jurisdiction where that would not be permitted
or legal.
TABLE OF CONTENTS
XUNANTUNICH INC.
Summary Information and Risk Factors.................. 5
Use of Proceeds............................. 7
Determination of Offering Price...................... 7
Dilution.............................. 8
Selling Security Holders......................... 8
Plan of Distribution........................... 9
Legal Proceedings............................ 10
Directors, Executive Officers, Promoters and Control
Persons.......................................... 10
Security Ownership of Certain Beneficial Owners and
Management...................................... 11
Description of Securities........................ 12
Disclosure of the Commission Position on the Indemnification
for Securities Act Liabilities........................ 14
Organization Within Last Five Years.................. 14
Description of Business........................ 14
Management's Discussion and Analysis or Plan of
Operation........................................... 24
Description of Property......................... 25
Certain Relationships and Related Transactions............... 25
Market for Common Equity and Related Shareholder
Matters.................................................... 26
Executive Compensation...................................... 26
Financial Statements........................................ 27
Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure....................... 40
PART I - SUMMARY INFORMATION AND RISK FACTORS.
Prospectus Summary.
Xunantunich Inc. is a corporation formed under the laws of the
State of Nevada on April 2, 1999 whose principal executive
offices are located in Vancouver, British Columbia, Canada.
The primary objective of the business is designed to market high-
quality, low-cost vitamins, minerals, nutritional supplements,
and other health and fitness products to medical professionals,
alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and
fitness professionals, school and other fund raising programs and
other similar types of customers via the Internet for sale to
their clients. Our license covers the distribution rights for
the Province of Alberta, Canada. Xunantunich Inc. is in the
development stage and has had no revenues.
Name, Address, and Telephone Number of Registrant
Xunantunich Inc.
Fir Street, Suite 3E
Vancouver, BC V2X 4B4, CANADA
(604) 467-7982
The Offering
- Price per share offered $0.20
- common stock offered by the company 1,000,000 shares
- common stock offered by selling shareholders 510,000 shares
- common stock to be outstanding after
the offering 6,000,000 shares
(assuming all shares are sold)
- use of proceeds - to fund marketing and setting up of
dealers to handle line of vitamins and mineral supplements.
Risk Factors
We have had losses since inception and expect such losses to
continue for the foreseeable future.
Xunantunich Inc. has never had any revenues. Costs are incurred
to set up the business plan and to get into business. While the
licensor, Vitamineralherb.com ('Vita") has set up the master web
page and organized the processing of purchases, we must provide
our own accounting systems and sales planning including finding
and hiring good, reliable sales people. These efforts will use
our cash reserves. We will not have any substantial cash
reserves until this Offering is complete. If this Offering is
not completed, we will not be able to get into business. This
could have a serious affect on the price of our stock.
Once we get into business and sales begin, we still expect to
lose money for a considerable period. We will record losses
until our profits from sales exceed our expenses. If we do not
accomplish this, any and all funds that we have in reserve will
be used up. You should consider these facts carefully before you
invest.
We expect to need additional financing and such financing may not
be available.
Xunantunich Inc. does not have sufficient capital to properly get
into business, to respond to new technical developments or
competition or to take advantage of unexpected opportunities.
Such items as special marketing programs, the development of new
services or opportunities to acquire complimentary businesses
require capital. Our success, if any, of establishing the
business, creation of sales and follow-up service depends upon
new capital through this offering. Management estimates that our
minimum expenses for the first twelve months of operation will be
$96,250. That figure represents approximately 50% of the
proceeds from this offering. If the offering is fully subscribed
to and after the costs of this offering are deducted, we would
have approximately $50,000 in working capital.
Should this offering be unsuccessful we would be faced with
several options:
- cease operations and go out of business completely;
- begin looking for additional capital on terms that are
acceptable;
- bring in additional capital that involves a change of
control; or
- seek an acquisition candidate that seeks access to the
public marketplace and sources of financing, complete a merge or
reverse takeover and probably enter into a completely different
line of business.
You should be aware of one fact: if this offering is unsuccessful
we will be unable to implement our business plan unless and until
a new source of acceptable financing is found.
No other source of capital has been approached and we do not have
any other sources readily available. If other sources are
available we have no idea whether capital can be obtained on
terms and conditions that are acceptable. Further, any such
financing may be upon terms that result in dilution or
considerable lessening of value of the shares currently held by
Xunantunich, Inc. shareholders.
We are totally dependent on one supplier and one website and any
difficulties with these could seriously affect our chances of
success.
Vitamineralherb.com, the licensor is both the supplier of all of
our products and our customers, if any, access to those products.
If for any reason the licensor has a problem, whether it be
technical, financial or a default under their agreement with
their supplier(s) it will have a direct affect on our sales and
revenues, if any. Any permanent disruption of
Vitamineralherb.com's ability to supply us with products or an
ordering method via the Internet would put us out of business and
at the very least cause a major reorganization to secure new
products and a new website. The affect on the value of our
common stock would be very negative. Some points of specific
concern are:
- we have only one supplier;
- we have only one ordering facility: the
Vitamineralherb.com website;
- Vita mineralherb.com has only one suppler; and
- Vitamineralherb.com is dependent on many licensees getting
into business and being successful.
Use of Proceeds
Table 1 - Sale of 100% of Table 2 -Sale of 50% of
Issuer stock offered: Issuer stock offered:
Legal Fees $30,000 $30,000
Accounting 10,000 10,000
Electronic filing and printing 5,000 5,000
Start up costs (office equipment, telephone
system, computers and software) 60,000 40,000
Recruiting and salaries 45,000 15,000
Working Capital 50,000 0
Total 200,000 100,000
We have estimated that we will have approximately $50,000
working capital if this offering is fully subscribed to. This
money will be used for contingency and/or additional
unanticipated expenses of getting the business started. This
money may or may not be enough to run the business until sales
revenues can take over. If it is not enough we will be forced to
look for more funding. No arrangements have been made for this
funding.
Determination of Offering Price
The offering price of this issue was set in a purely arbitrary
manner. We determined the amount of money needed to start the
business; added a contingency amount; allowed for printing, legal
and accounting costs and possible commissions if a Broker/Dealer
should become involved with the sale to the public of this issue.
We also took into account the resultant number of shares in the
"float", i.e. the number of shares available to be traded. The
final consideration was the perceived market capitalization (the
theoretical total worth of the shares of Xunantunich Inc. if they
were all sold at a specific price at the same time).
Dilution
Xunantunich Inc., prior to this offering has 5,000,000 shares of
stock issued and outstanding. 510,000 shares of this amount are
being qualified for sale by present shareholders as part of this
registration statement.
The following table illustrates the difference between prices
paid by present shareholders and subscribers to this offering.
<TABLE>
<CAPTION>
Percentage Percentage Percentage Percentage
of Consideration of Consideration of Shares of Shares
Price Paid 50% Subscription 100% Subscription Held - 50% Held - 100%
<S> <C> <C> <C> <C> <C>
Present
Shareholders 0.001 02.48 01.26 90.91 83.34
Subscribers 0.20 97.52 98.74 09.09 16.66
</TABLE>
The following table will show the net tangible value of the
shares before and after shares are subscribed in this offering.
Before After 50% After 100%
Offering of Offering of Offering
- Net tangible book value .0005 $.0010 $.033
- Increase in net NA $.0005 $.033
tangible book value
- Dilution factor NA $.1995 $.167
The above table indicates that the net tangible book value of
Xunantunich is 1/20 of one cent. If half of this offering is
subscribed to, you would lose 19.95 cents value of the 20 cents
you paid. If all of the offering were completed you would still
lose 16.7 cents of the 20 cents you invested.
Selling security holders
The following are the shareholders for whose accounts the shares
are being offered; the amount of securities owned by such
shareholder prior to this offering; the amount to be offered for
such shareholder's account; and the amount to be owned by such
shareholder following completion of the offering:
Number No.
Number of of Percent
Position of Shares Shares after
Name with Shares Offered After Sale
Company Owned Sale
Rod Albers None 1,000 1,000 -0- -0-
Allison Flechl None 251000 251000 -0- -0-
Kodi Flechl None -0- -0-
1,000 1,000
Michael Flynn None -0- -0-
1,000 1,000
James Fortin None -0- -0-
1,000 1,000
Peter James None -0- -0-
1,000 1,000
Sharon None -0- -0-
Marcotte 1,000 1,000
Al Sanderson None -0- -0-
1,000 1,000
Jeremy None -0-- -0-
Yasenuik 1,000 1,000
Adrienne None -0- -0-
Yasenuik 1,000 1,000
David Young None 250000 250000 -0- -0-
Plan of Distribution
This is a self - underwritten offering. This prospectus is part
of a registration statement that permits the Officers and
Directors of Xunantunich Inc. to sell directly to the public,
with no commission or other remuneration payable. At the
discretion of our Board of Directors, an underwriting contract
may be entered into with one or more Broker/Dealers on a "best
efforts" or firm-commitment basis. In this case, commissions and
expenses within the guidelines of the NASD would be negotiated.
We will be required to halt sales and file a post-effective
amendment to this prospectus outlining the payment to the
broker/dealer(s).
Mark, Michael and Grant Cramer are all licensed to sell
securities in the Province of British Columbia, Canada and as
such will be ineligible to sell any of this offering under Rule
3a4-1 of the Securities Exchange Act of 1934. These securities
will be sold by Florence Cramer.
This prospectus is also part of a registration statement that
enables selling shareholders to sell their shares on a continuous
or delayed basis in the future. Xunantunich Inc. has not
committed to keep the registration statement effective for any
set period of time past the 180 days mentioned above.
While the registration statement is effective, selling
shareholders may sell their shares directly to the public,
without the aid of a broker or dealer, or they may sell their
shares through a broker or dealer. Any commission, fee or other
compensation of a broker or dealer would depend on the brokers or
dealers involved in the transaction.
No public market currently exists for shares of Xunantunich Inc.
common stock. Xunantunich Inc. intends to apply to have its
shares traded on the NASD OTC Bulletin Board.
Legal Proceedings.
We are not aware of any legal proceedings that have been or are
currently being undertaken for or against Xunantunich Inc. nor is
any contemplated
Directors, executive officers, promoters and control persons.
The directors and executive officers currently serving
Xunantunich Inc. are as follows:
Name Age Positions Held and Tenure
Mark Cramer 59 President and
Director since
November, 1999
Florence Cramer 59
Secretary/Treasurer and
Director since November/99
Michael Cramer 34 Vice President and
Director
Since December, 1999
Grant Cramer 28 Director since
December/99
The directors named above will serve until the first annual
meeting of Xunantunich Inc. stockholders. Thereafter, directors
will be elected for one-year terms at the annual stockholders'
meeting. Officers will hold their positions at the pleasure of
the Board of Directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no
arrangement or understanding between the directors and officers
of Xunantunich Inc. and any other person pursuant to which any
director or officer was or is to be selected as a director or
officer.
Biographical information
Mark Cramer. Mr. Cramer, Xunantunich Inc.'s President, has
served as an officer and director since November, 1999. Since
1988, Mr. Cramer has been actively involved as a Financial
Consultant in the Province of British Columbia, Canada. He holds
a Masters Degree from Simon Fraser University, holds life and
mutual funds licenses. Mr. Cramer is the principal shareholder
in IDF Financial Services, Inc., a securities dealer, through
which he has obtained registration to sell securities in the
Province of British Columbia, only. He has a Chartered Financial
Planning degree. He is President, Chairman and major shareholder
in Comprehensive Financial Services, Inc., a full-service
financial planning and consulting company. He is also President
and Chairman of River Ranch Resort Corp., a full service facility
catering to hunters, fishermen, snowmobilers and nature lovers.
In 1987, Mr. Cramer retired after a twenty-five year career as
teacher, principal and Administrative Assistant to the
Superintendent of Schools, District #57, British Columbia.
Florence Cramer. Mrs. Cramer, Xunantunich Inc.'s
Secretary/Treasurer has served as an officer and director since
November, 1999. She has a multi-year background as a Life
Underwriter and Financial Planner. She formed Comprehensive
Financial Services in 1987 and currently serves as a director and
Secretary/Treasurer of that Company. Mrs. Cramer holds a diploma
in Office Administration .
Michael Cramer. Mr. Cramer, Xunantunich Inc.'s Vice President
has served as an officer and director since December, 1999.
Since 1985 he has been involved in the financial services field
holding Life Insurance and Mutual Fund licenses as well as being
registered to sell securities in the Province of British Columbia
through the family-owned company, IDF Financial Services, Inc.
He also has earned a Professional Financial Planning designation
and serves as director and Vice President of Comprehensive
Financial Services Inc.
Grant Cramer. Mr. Cramer has served as a director of Xunantunich
Inc. since December, 1999. He is currently a director of
Comprehensive Financial Services Inc. and IDF Financial Services
Inc. He has a substantial background in hiring and training
Financial Planners and holds a Professional Financial Planning
designation and is registered to sell securities in the Province
of British Columbia through the family-owned firm, IDF Financial
Services, Inc.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this
registration statement, the number of shares of Common Stock
owned of record and beneficially by executive officers, directors
and persons who hold 5.0% or more of the outstanding Common Stock
of Xunantunich Inc.. Also included are the shares held by all
executive officers and directors as a group.
Number of Percent of
Shares Owned
Name and Address Beneficially Class Owned
Mark Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,915,000 38.30
Michael Cramer*
2408 Panorama Place
Prince George, BC V2K 4T9 Canada 1,350,000 27.00
Florence Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,000,000 20.00
Grant Cramer*
#202 - 8636 Laurel Street
Vancouver, BC V6P 3V6 Canada 225,000 04.50
All directors and executive
Officers as a group (4 persons) 4,490,000 89.80%
* All of the officers and directors of Xunantunich Inc. are
related. Florence Cramer, Xunantunich Inc.'s Secretary/Treasurer
and Director is the wife of Mark Cramer, Xunantunich Inc.
President and director. Both Michael Cramer, Vice President and
director and Grant Cramer, director are the adult sons of Mark
and Florence Cramer. All of the officers and directors of
Xunantunich Inc. have independent means and incomes and state
categorically that they are not holding any shares beneficially
for any other person.
The persons listed are the sole officers and directors of
Xunantunich Inc.
Conflicts of Interest
The officers and directors will only devote a portion of their
time to the affairs of Xunantunich Inc.. There will be occasions
when the time requirements of the business conflict with the
demands of their other business and investment activities. We
may need to employ additional personnel. If this happens, we
cannot be sure that good people will be available and if they are
available, we can get them at a price we can afford.
There is no procedure in place, which would allow any of the
Cramers to resolve potential conflicts in an arms-length fashion.
We must rely on them to use their discretion to resolve these
conflicts.
Description of securities
Common Stock.
The Articles of Incorporation of Xunantunich Inc. authorize the
issuance of 100,000,000 shares of Common Stock. Each holder of
record of Common Stock is entitled to 1 vote for each share held
on all matters properly submitted to the stockholders for their
vote. The Articles of Incorporation do not permit cumulative
voting for the election of directors.
Holders of Common Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors out of
legally available funds. In the event of liquidation,
dissolution or winding up of the affairs of the Xunantunich Inc.,
holders are entitled to receive, ratably, the net assets
available to stockholders after distribution is made to the
preferred shareholders, if any.
Holders of Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when issued will be
duly authorized, validly issued, fully paid, and non assessable.
If additional shares of Xunantunich Inc. Common Stock are issued,
the relative interests of then existing stockholders may be
diluted.
Preferred Stock
The Articles of Incorporation of Xunantunich Inc. authorize the
issuance of 10,000,000 shares of preferred stock. The Board of
Directors is authorized to issue preferred shares from time to
time in series and is further authorized to establish such
series, to fix and determine the variations in the relative
rights and preferences as Common Stock. No preferred stock has
been issued by Xunantunich Inc.
Transfer Agent
Xunantunich Inc. is currently serving as its own transfer agent,
and plans to continue to serve in that capacity until such time
as management believes it is necessary or appropriate to employ
an independent transfer agent in order to facilitate the creation
of a public trading market for its securities. Should
Xunantunich Inc. securities be quoted on any exchange or OTC
quotation system or application is made to have the securities
quoted, an independent transfer agent will be appointed.
Indemnification of Officers and Directors
As permitted by Nevada law, Xunantunich Inc.'s Articles of
Incorporation provide that Xunantunich Inc. will indemnify its
directors and officers against expenses and liabilities they
incur to defend, settle or satisfy any civil or criminal action
brought against them on account of their being or having been
Company directors or officers, unless, in any such action, they
are adjudged to have acted with gross negligence or willful
misconduct.
Exclusion of Liabilities
Pursuant to the laws of the State of Nevada, Xunantunich Inc.'s
Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any
breach of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law, acts in violation of Section 7-106-401 of the
Nevada Business Corporation Act, or any transaction from which a
director receives an improper personal benefit. This exclusion
of liability does not limit any right, which a director may have
to be indemnified, and does not affect any director's liability
under federal or applicable state securities laws.
Disclosure of Commission position on indemnification for
Securities Act liabilities
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling Xunantunich Inc. pursuant to provisions of
the State of Nevada, Xunantunich Inc. has been informed that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act
and is, therefore, unenforceable.
Organization within the last five years
Xunantunich Inc. was incorporated in the State of Nevada on April
2, 1999 and is in the early stages of development. From
inception the only activities of Xunantunich Inc. have been the
development of its business plan and the preparation for this
registration statement. It has no revenues nor does it have any
expectation of revenues until the completion of this offering and
the commencement of business.
Description of business
On April 5, 1999 Xunantunich Inc. received from David R.
Mortenson & Associates of Alvin, Texas, the rights to distribute
and produce, in the states of Arizona and Nevada, an oxygen
enriched water product for fish farming, aquaculture,
mariculture, poultry raising, and for treating animal waste from
dairies, feedlots of all kinds, and for other similar uses.
These production and distribution rights were received from
Mortenson in exchange for 2,000,000 shares of common stock.
Mortenson acquired these rights from the inventors of the
product, N. W. Technologies, Inc. under a distribution agreement.
Several months later the contract granting David R. Mortenson &
Associates rights to the technology was withdrawn. Mortenson
sued N.W. Technologies Inc. in Harris County Court, Houston
Texas.
To compensate for the possibility that we could lose our
principal asset and the obvious delay that this dispute and court
action has caused, David R. Mortenson & Associates has agreed to
suspend all financial requirements that are due or will be due in
the future until the dispute with NW is resolved. They have also
agreed to grant an alternative license to Xunantunich Inc. for
the distribution of vitamin and herbal supplements for the
Province of Alberta, Canada. This license will enable us to
create a business plan and start the process of getting into
business.
The License.
Xunantunich Inc. has a three year license to market and sell
vitamins, minerals, nutritional supplements, and other health and
fitness products to medical professionals, alternative health
professionals, martial arts studios and instructors, sports and
fitness trainers, other health and fitness professionals, school
and other fund raising programs and other similar types of
customers. All of these individuals and organizations will
order their products via the Internet for sale to their clients.
The license will be automatically renewed unless Xunantunich Inc.
or Vitamineralherb.com gives the other notice of its intent not
to renew.
As a licensee of Vitamineralherb.com, Xunantunich Inc.
eliminates the need to develop products, store inventory, build
and maintain a website, establish banking liaisons, and develop a
fulfillment system, thereby enabling us to focus strictly on
marketing and sales. Xunantunich Inc. plans to target health and
fitness professionals in Alberta who wish to offer health and
fitness products to their customers.
Xunantunich Inc. (and its customers) will have access to all
products offered on the Vitamineralherb.com website, as well as
the ability to order custom-formulated and custom-labeled
products. Vitamineralherb.com sets the price for products based
on the manufacturer's price, plus a markup which provides a 10%
commission to Vitamineralherb.com and a profit for Xunantunich
Inc.
Three different labeling options are available to customers:
- products may be ordered with the manufacturer's standard
label with no customization.
- the fitness or health professional may customize the labels
by adding its name, address, and phone number to the standard
label. In most cases, these labels would be a standardized label
with product information and a place on the label for the wording
"Distributed by." This gives these health and fitness
professionals a competitive edge.
- labels may be completely customized for the health or
fitness professional.
When a fitness or health professional becomes a client,
Xunantunich Inc.'s salesperson will show the client how to access
the Vitamineralherb.com website. The client is assigned an
identification number that identifies it by territory,
salesperson, and business name, address, and other pertinent
information. The health or fitness professional may then order
the products it desires directly through the Vitamineralherb.com
website, paying for the purchase with a credit card, electronic
check ("e-check"), or debit card. All products are shipped by the
manufacturer directly to the professional or its clients.
Xunantunich Inc. is not obliged to purchase and maintain a large
inventory, an order desk or shipping department. This method of
doing business, which only a short time ago would be unthinkable
is now a preferred way of shopping (whether wholesale or retail)
for a large segment of the population of North America.
The website is maintained by Vita and each licensee pays an
annual website maintenance fee of $500. All financial
transactions are handled by Vita's Internet clearing bank. The
Vitamineralherb.com webmaster downloads e-mail orders several
times a day, checks with clearing bank for payment and then
submits the product order and electronic payment to International
Formulation and Manufacturing. Vitamineralherb.com then forwards
the money due Xunantunich Inc. via electronic funds transfer.
Vita's software tracks all sales through the customer's
identification number, and at month end, e-mails to Xunantunich
Inc. a detailed report including sales commissions.
Vitamineralherb.com has indicated that it will use e-commerce
advertising such as banner ads on major servers and websites, as
well as attempting to insure that all major search engines pick
Vitamineralherb.com first. All sales originating from the website
to customers located in Alberta will automatically be assigned to
Xunantunich Inc.
The Territory.
The Province of Alberta, Canada reached a population of 3,000,000
this year and is considered to be one of the most prosperous
jurisdictions in the country. The two major cities, Calgary and
Edmonton, the provincial capital have populations of 950,000 and
850,000 respectively. The Province of Alberta has had a balanced
budget for several years and recently a law was passed that
required the province to be debt free by the year 2005. They
have also announced that provincial income taxes will be
eliminated in the next several years.
The principal industries in Alberta are agriculture, producing
grain, oil seeds and cattle; oil and gas; coal mining and
tourism. Alberta produces a large majority of fossil fuels in
Canada and are large exporters to the USA of oil and natural gas.
High quality smelting coal is shipped to Japan and Korea. The
province is the home of two famous national parks, Banff and
Jasper.
Our research has indicated that there are nearly 6,000 health
professionals, martial arts instructors, fitness centers and
personal trainers in Alberta
Background on the Manufacturer and Distributor.
On June 9, 1999, Vitamineralherb.com entered into a manufacturing
agreement with International Formulation and Manufacturing Inc. a
nutraceuticals manufacturing firm, located in San Diego,
California, USA. International Formulation and Manufacturing has
been a contract manufacturer of vitamin, mineral, nutritional
supplement, and alternative health products for various marketing
organizations for approximately six years. International
Formulation and Manufacturing does no retail marketing.
In addition to a line of standard products, International
Formulation and Manufacturing is able to manufacture custom
blended products for customers. International Formulation and
Manufacturing also has the capability to supply privately labeled
products for Xunantunich Inc. customers at a minimal added cost.
Vitamineralherb.com has just begun developing its vitamin
marketing and distributorship business.
Implementation of the business plan.
Xunantunich Inc.'s business plan is to determine the feasibility
of selling Vitamineralherb.com products to targeted markets. We
will conduct research into the various potential target markets
during the next six to twelve months. Should Xunantunich Inc.
determine that its business plan is feasible, it intends to
employ salespeople to call on medical professionals, alternative
health professionals, martial arts studios and instructors,
sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other
similar types of customers to interest these professionals in
selling to their clients high-quality, low-cost vitamins,
minerals, nutritional supplements, and other health and fitness
products. These professionals would sell the products to their
clients and order them through the Internet.
Milestones:
1. Confirmation of Market. Management of Xunantunich Inc. has
already begun to implement the first stage of the business plan.
We intend to retain Mr. Edward Best of dealbuzz.com Inc. to do a
marketing survey of the Province of Alberta. Mr. Best recently
completed a sampling of 200 potential clients in the boroughs of
Brooklyn, Queens and the Bronx, New York City considered by many
to be one of the hardest and most competitive markets in the
world. The results were very encouraging. 38% of the 200
potential customers contacted responded positively. Mr. Best
estimates that it will take some 30 days to complete his sampling
of our market. Our cost will be $1,500.
2. Establishment of an office. One administration office is
planned for the whole province. Sales people would office in
their own homes. The one office that we would establish would
act as a coordinating and business office, looking after sales
support, book keeping and payroll. We estimate that office space
will cost in the neighborhood of $16 per square foot including
taxes and insurance. We estimate that we will require about
1,000 square feet initially.
3. Recruiting of sales people. We estimate that we will
require two sales people to cover the Province of Alberta;
one headquartered in the city of Calgary covering the south
half of the province and the other in Edmonton, the
Provincial Capitol. Sales people will be provided with a
basic draw against commissions of $1,000 per month. Our
plan is have them initially cover the two major cites,
thereby keeping expenses to a minimum. From Calgary and
Edmonton, the secondary cities of Red Deer, Lethbridge Peace
River and Lloydminster will be covered. Rural Alberta with
hundreds of small towns and villages will be pre-qualified
by telephone and then paid a sales call. Cost of recruiting
is estimated at $3,000.
4 Advertising. We envision advertising of our products and
services as a very low-keyed approach. We believe that direct
mail is the best and most cost effective method of reaching our
potential clients. Due to the fact that we are targeting a
fairly narrow segment of the population as potential retailers, a
well-designed mail piece and cover letter with follow up by
telephone should be adequate to introduce us to our potential
clients. Design and production of a mailing piece is estimated
at $7,000.
5. Generation of Revenues. Management of Xunantunich believes
that a planned, slow-but-steady growth pattern will serve the
organization in the best fashion. By keeping costs low and
concentrating first on the major centers, we believe that we can
generate revenues in a fairly short time. Initial order will
provide a comparatively large purchase by the retailer. After
that the distributors will order product as they require it. We
believe that the initial surge of orders will provide enough cash
flow to keep from using our working capital too rapidly and that
we will be able to reach a break-even point or a small profit
position before our capital is used up..
If the net proceeds received from this offering are not enough to
accomplish those things we will have to obtain additional
financing through an additional offering or through capital
contributions by current shareholders. No commitments to provide
additional funds have been made by management or shareholders.
You cannot be sure that any additional funds will be available on
terms acceptable to Xunantunich Inc. or at all. Xunantunich
Inc. expects to begin earning revenues shortly after a sales
force is in place.
Growth of the Internet and electronic commerce.
The Internet has become an increasingly significant medium for
communication, information and commerce. According to NUA
Internet Surveys, as of February 2000, there were approximately
275.5 million Internet users worldwide. At the IDC Internet
Executive Forum held on September 28-29, 1999, IDC stated that in
1999 US $109 billion in purchases were impacted by the Internet.
IDC's vice president, Sean Kaldor, indicated that figure is
expected to increase more than ten-fold over the next five years
to US $1.3 trillion in 2003, with $842 million completed directly
over the Web. Xunantunich Inc. believes that this dramatic
growth presents significant opportunities for online retailers.
We have assembled some of the available data regarding Internet
commerce that will be a portion of the information that is to be
digested in order to complete our study as to feasibility.
Web Commerce: 1996 $2.6 billion
2000 $220 billion
Web Users: 1996 28 million
2000 175 million
(Source: Ziff Davis)
Nearly one trillion will be spent on Information Technology (IT)
in 2000, representing about 60 percent of all capital spending
compared to just 10% of all capital spending in 1980.
(Source: NUA)
Nearly half of US Internet users have purchased a product or
service online.
(Source: A. C. Nielsen-May 11, 2000)
Consumers who have used the Internet since 1995 spend an average
of $ 388 per transaction while those who have been online for a
year only spend an average of $ 187 per transaction. The
equivalent figure for those who have been using the Internet
since 1997 is $ 298.
(Source: National Association of Business Economics)
An estimated 120 million Internet users, or 40 percent of the
total number online, have already made an online purchase,
according to a study from the Angus Reid Group. Over 50 % of all
online transactions were made in the USA. US users made an
average of 7 purchases in the three months before the survey,
spending an average of $828. The worldwide average spent by an
individual in the same period was less than $500.
75% of online shoppers in the US and Canada pay for e-commerce
purchases by credit card. Direct bank drafts, bank transfers and
cash on delivery are the other most favored payments methods. 93%
of Internet shoppers around the world said they were "somewhat
satisfied" or "extremely satisfied" with their online shopping
experience.
(Source: Angus Reid Group)
Internet advertising revenue more than doubled in 1999, coming to
a year-end total of $ 4.62 billion.
(Source: Internet Advertising Bureau [IAB])
AS OF MARCH, 2000 THERE WERE A WORLD-WIDE TOTAL OF 304,360,000
INTERNET CONNECTIONS. THE BREAKDOWN IS AS FOLLOWS:
Africa 2,589,000
Asia/Pacific 68,900,000
Europe 83,350,000
Middle East 1,900,000
USA & Canada 136,860,000
South Africa 10,740,000
(Source: Various; Methodology - Compiled by: Nua Internet
Surveys)
Financial results from the first quarter of this year show that
while Amazon nearly doubled its revenue, it sustained bigger
losses than during the same period last year. Despite this,
sales were up 95 percent from USD294 million in 1999 to USD574
million in 2000.
(Source: Reuters)
Global e-commerce will be worth 7.0 trillion dollars by 2004. 50%
of global sales will come from the US.
(Source: Forrester)
The vitamin, supplement, mineral and alternative health product
market.
In recent years, a growing awareness of vitamins, herbs, and
other dietary supplements by the general public has created a
whole new segment in the field of medicine and health care
products. According to Jupiter Communications, online sales of
such products are expected to be US $434 million in the year
2003, up from $1 million in 1998. Xunantunich Inc. believes that
several factors are driving this growth, including a rapidly
growing segment of the population that is concerned with aging
and disease, a growing interest in preventative health care,
favorable consumer attitudes toward alternative health products
and a favorable regulatory statute, the Dietary Supplement Health
and Education Act of 1994.
The removal of most, if not all import duties, under the NAFTA
accord enables Xunantunich Inc. to import its goods without undue
trouble or delay. Some of sources relied upon for product will
undoubtedly be located in Canada and will be easily available to
Canadian customers as well as being exported to the United
States.
The electronic commerce industry is new, rapidly evolving and
intensely competitive, and Xunantunich Inc. expects competition
to intensify in the future. Barriers to entry are minimal and
current and new competitors can launch sites at a relatively low
cost. In addition, the vitamin supplement, mineral and
alternative health product market is very competitive and highly
fragmented, with no clear dominant leader and increasing public
and commercial attention.
Xunantunich Inc.'s competitors can be divided into several groups
including:
- traditional vitamins, supplements, minerals and alternative
health products retailers;
- the online retail initiatives of several traditional
vitamins, supplements, minerals and alternative health products
retailers;
- online retailers of pharmaceutical and other health-related
products
that also carry vitamins, supplements, minerals and
alternative health products;
- independent online retailers specializing in vitamins,
supplements, minerals and alternative health products;
- mail-order and catalog retailers of vitamins, supplements,
minerals and alternative health products, some of which have
already developed online retail outlets; and
- direct sales organizations, retail drugstore chains, health
food store merchants, mass market retail chains and various
manufacturers of alternative health products.
Many of Xunantunich Inc.'s potential competitors have longer
operating histories, larger customer or user base, greater brand
recognition and significantly greater financial, marketing and
other resources than we have. In addition, an online retailer
may be acquired by, receive investments from, or enter into other
commercial relationships with, larger, well-established and well-
financed companies as use of the Internet and other electronic
services increases.
Competitors have and may continue to have aggressive pricing
policies and devote substantially more resources to website and
systems development than Xunantunich Inc. does. Increased
competition may result in reduced operating margins and loss of
market share.
Xunantunich Inc. believes that the principal competitive factors
in its market are:
- ability to attract and retain customers;
- breadth of product selection;
- product pricing;
- ability to customize products and labeling;
- quality and responsiveness of customer service.
Xunantunich Inc. believes that it can compete favorably on these
factors. However, we will have no control over how successful our
competitors are in addressing these factors. In addition,
Xunantunich Inc. online competitors can duplicate many of the
products or services offered on the Vitamineralherb.com site.
Xunantunich Inc. believes that traditional retailers of vitamins,
supplements, minerals and other alternative health products face
several challenges in succeeding:
- Lack of convenience and personalized service. Traditional
retailers have
limited store hours and locations. Traditional retailers
are also unable to provide consumers with product advice
tailored to their particular situation.
- Limited product assortment. The capital and real estate
intensive nature of store-based retailers limit the product
selection that can be economically offered in each store
location.
- Lack of Customer Loyalty. Although the larger traditional
retailers often attract customers, many of these customers are
only one-time users. People are often attracted to the name
brands, but find the products too expensive.
- the multilevel structure of some marketing organizations
mandates high prices.
As a result of the foregoing limitations, Xunantunich Inc.
believes there is significant unmet demand for a shopping channel
like that of Vita that can provide consumers of vitamins,
supplements, minerals and other alternative health products with
a broad array of products and a convenient and private shopping
experience.
Xunantunich Inc. hopes to attract and retain consumers through
the following key attributes of its business:
- Broad Expandable Product Assortment. Xunantunich Inc.'s
product selection is substantially larger than that offered by
store-based retailers.
- Low Product Prices. Product prices can be kept low due to
volume purchases through Xunantunich Inc.'s affiliation with
Vitamineralherb.com and other licensees. Our not having an
inventory, warehouse space and need for limited administration
will also make our prices lower.. All products are shipped from
International Formulation and Manufacturing's
inventory.
- Accessibility to Customized Products. At minimal cost,
health and fitness practitioners may offer their customers
customized products.
- Access to Personalized Programs. Health or fitness
professional can tailor vitamin and dietary supplement regimes to
their clients.
Regulatory Environment.
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Xunantunich Inc. sells in Canada
are or may be subject to regulation by Health Canada which
administers the Food and Drugs Act along with relevant regulation
thereto. Regulated products include herbal remedies, natural
health remedies, functional foods and nutraceuticals. Health
Canada regulates the formulation, manufacture, labeling and
distribution of foods, including dietary supplements, cosmetics
and over-the-counter or homeopathic drugs. Under the Food and
Drugs Act, a variety of enforcement actions are available to
Health Canada against marketers of unapproved drugs or
"adulterated" or "misbranded" products. These include: criminal
prosecution; injunctions to stop the sale of a company's
products; seizure of products; adverse publicity "voluntary"
recalls and labeling changes.
The Consumer Packaging and Labeling Act, as administered by
Industry Canada, requires that certain information labeling be
presented in a prescribed manner on all foods, drugs, dietary
supplements and cosmetics. A product may be deemed an unapproved
drug and "misbranded" if it bears improper claims or improper
labeling.
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Xunantunich Inc. sells may also
be subject to regulation by one or more U.S. federal agencies,
including the Food and Drug Administration, the Federal Trade
Commission, the United States Department of Agriculture and the
Environmental Protection Agency. These activities also may be
regulated by various agencies of the states, localities and
foreign countries in which consumers reside.
The Food and Drug Administration, in particular, regulates the
formulation, manufacture, labeling and distribution of foods,
including dietary supplements, cosmetics and over-the- counter or
homeopathic drugs.
Food and Drug Administration regulations require that certain
informational labeling be presented in a prescribed manner on all
foods, drugs, dietary supplements and cosmetics.
The Food and Drug Administration has indicated that claims or
statements made on a company's website about dietary supplements
may constitute "labeling" and thus be subject to regulation by
the Food and Drug Administration.
It is possible that the statements presented in connection with
product descriptions on Xunantunich Inc.'s site may be determined
by the Food and Drug Administration to be drug claims rather than
nutritional statements. Some of Xunantunich Inc.'s suppliers may
incorporate objectionable statements directly in their product
names or on their products' labels, or otherwise fail to comply
with applicable manufacturing, labeling and registration
requirements for over-the-counter or homeopathic drugs or dietary
supplements. As a result, Vitamineralherb.com may have to remove
or modify some statements, products or labeling from its website.
Xunantunich Inc. cannot predict the nature of any future Canadian
or U.S. laws and regulations nor can it determine what effect
additional governmental regulations or administrative orders
would have on our business in the future. Although the regulation
of dietary supplements is less restrictive than that of drugs and
food additives Xunantunich Inc. cannot assure you that the
current statutory scheme and regulations applicable to dietary
supplements will remain less restrictive.
Any laws, regulations, enforcement policies, interpretations or
applications applicable to Xunantunich Inc.'s business could
require the reformulation of certain products to meet new
standards, the recall or dropping of certain products, additional
record keeping, expanded documentation of the properties of
certain products, expanded or different labeling.
Regulation of the Internet.
In general, existing laws and regulations apply to the Internet.
The precise applicability of these laws and regulations to the
Internet is sometimes uncertain. The vast majority of such laws
were adopted prior to the Internet and do not address the unique
issues of the Internet or electronic commerce.
Numerous federal and state government agencies have already
demonstrated significant activity in promoting consumer
protection on the Internet. Due to the increasing use of the
Internet as a medium for commerce and communication, it is
possible that new laws and regulations could be passed with
respect to the Internet. These new laws and regulations could
cover issues such as user privacy, freedom of expression,
advertising, pricing, content and quality of products and
services, taxation, intellectual property rights and information
security. The adoption of such laws or regulations and the
applicability of existing laws and regulations to the Internet
may slow the growth of Internet use and result in a decline in
Xunantunich Inc.'s sales.
A number of legislative proposals have been made at the federal,
state and local level, and by foreign governments, that would
impose additional taxes on the sale of goods and services over
the Internet, and some states have taken measures to tax Internet-
related activities. Although Congress recently placed a three-
year moratorium on new state and local taxes on Internet access
or on discriminatory taxes on electronic commerce, existing state
or local laws were expressly excepted from this moratorium. Once
this moratorium is lifted, some type of federal and/or state
taxes may be imposed upon Internet commerce. Such legislation or
other attempts at regulating commerce over the Internet may
substantially impair growth and, as a result have a negative
affect on our business.
Employees.
Xunantunich Inc. is a development stage company and currently has
no employees. Xunantunich Inc. is currently managed by Mark,
Florence, Michael and Grant Cramer, its officers and directors.
Xunantunich Inc. looks to the Cramers for their management and
financial skills and talents. For a complete discussion of the
Cramer family's experience, please see "Directors and Executive
Officers." Management plans to use consultants, attorneys and
accountants as necessary and does not plan to engage any full-
time employees in the near future other than sales people to set
up accounts.
Available Information and Reports to Securities Holders.
Xunantunich Inc. has filed with the Securities and Exchange
Commission a registration statement on Form SB-2 with respect to
the common stock offered by this prospectus. This prospectus,
which constitutes a part of the registration statement, does not
contain all of the information set forth in the registration
statement or the exhibits and schedules which are part of the
registration statement. For further information with respect to
Xunantunich Inc. and its common stock, see the registration
statement and the exhibits and schedules thereto. Any document
Xunantunich Inc. files may be read and copied at the Commission's
Public Reference Room located at 450 Fifth Street N.W.,
Washington D.C. 20549, and the public reference rooms in New
York, New York, and Chicago, Illinois. Please call the Commission
at 1-800-SEC-0330 for further information about the public
reference rooms. Xunantunich Inc.'s filings with the Commission
are also available to the public from the Commission's website at
http://www.sec.gov.
Upon completion of this offering, Xunantunich Inc. will become
subject to the information and periodic reporting requirements of
the Securities Exchange Act of 1934 and, accordingly, will file
periodic reports, proxy statements and other information with the
Commission. Such periodic reports, proxy statements and other
information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the
Commission referred to above.
Forward looking statements.
You should not rely on forward-looking statements in this
prospectus. This prospectus contains forward-looking statements
that involve risks and uncertainties. We use words such as
anticipates", "believes", "plans", "expects", "future", "intends"
and similar expressions to identify these forward-looking
statements. Actual results could differ materially from those
anticipated in these forward-looking statements for many reasons.
Management's Discussion and Analysis Or Plan Of Operation.
Upon the completion of all or part of the sale of shares
contained in this offering, Xunantunich Inc. intends to proceed
as quickly as possible to do an in-depth feasibility study and if
and when that study proves the project to be feasible, hire one
or more sales representatives to present its service to potential
customers. Geography is an obstacle that must be dealt with.
The Province of Alberta is very large, making adequate coverage
by one salesperson virtually impossible. A minimum of two
representatives will be necessary. After opening accounts, these
representatives will be necessary to service existing customers.
Research has indicated that this servicing or detailing of
already established accounts results in larger increases in
reorders of product.
Estimated expenses for the next twelve months are as follows:
US dollars Cdn.dollars
Two sales persons (draw against commissions)
@ $1000 per month* 36,000 54,000
Administration 12,000 18,000
Employee benefits 16,000 24,000
Office rent 12,000 18,000
Office supplies ( including furniture) 10,000 15,000
Development stage costs (including
recruiting costs) 1,000 1,500
Website maintenance
500 750
Contingency (10%) 8,750 $ 13,125
Total first year expenses
96,250 144,375
* All figures shown are in United States and Canadian dollars. A
conversion rate of 1.5 was used.
If the proposed offering proceeds are not received, operations
would be scaled down. One sales person would be hired instead of
two; administration would be handled by an officer and director
at no cost. The same officer and director would supply office
space during the start-up process. Growth would be much slower
and Xunantunich Inc. would not be able to rent office space and
hire administrative help until sales volumes and gross profits
were large enough. If no funds are received from this offering,
management would be forced to decide whether or not to proceed
with the business and either delay starting or cancel the project
completely.
Description of property.
Xunantunich Inc. maintains a mailing address at the office of one
of its shareholders, but otherwise does not maintain an office.
We pay no rent and own no real estate.
Certain Relationships and Related Transactions
Prior to the date of this registration statement Xunantunich
issued to ten individuals a total of 2,000,000 shares of common
stock in consideration of acquiring the rights to manufacture and
market an oxygen-enhanced product for use in aquaculture, fish
and poultry farming and the bioremediation of waste ponds and
lagoons in the states of Arizona and Nevada. Mortenson acquired
these rights from the inventors of the product, N.W. Technologies
Inc. under a distribution agreement.
In December, 1999 N.W. Technologies unilaterally canceled its
contract and distribution agreement with David R. Mortenson and
Associates. Mortenson and several of the concerns that have an
interest in the technology through distribution agreements with
Mortenson, have filed suit in Harris County court, Texas against
N.W. Technologies Inc, its officers and directors and several
other individuals and concerns involved with the cancellation
and withdrawal.
Xunantunich is not withdrawing from its from its agreement with
Mortenson for the distribution and manufacture of the oxygen-
enhanced products, nor has it any intention of doing so at the
present time. All obligations under that agreement have been
suspended until the lawsuit is resolved.
In order to avoid litigation with Xunantunich and to protect our
shareholders Mortenson granted a distribution territory for an
Internet based vitamin and health supplement company. The
company, Vitamineralherb.com, is located San Diego, California.
There was no charge for this distribution territory that is for
the Province of Alberta, Canada.
Market for common equity and related stockholder matters.
Xunantunich Inc. is a development stage company that is still in
the beginning stages of implementing its business plan. No
market currently exists for the common stock. Upon completion of
all or part of the offering of common shares contained in this
registration statement, it is the intention of Xunantunich Inc.
to apply for a trading symbol and a listing to have its shares
quoted on the NASD OTC Bulletin Board. There can be no assurance
that any part of this offering will be subscribed to and if all
or part of the offering is subscribed to, that the request of
Xunantunich Inc. to have the price of its stock quoted on the OTC
Bulletin Board will be granted. You should take all of the above
facts into consideration before making a decision to purchase any
amount of Xunantunich Inc. stock.
Executive compensation.
No officer or director of Xunantunich Inc. has received any
remuneration. Although there is no current plan in existence, it
is possible that Xunantunich Inc. will adopt a plan to pay or
accrue compensation to its officers and directors for services
related to the implementation of the business plan. See "Certain
Relationships and Related Transactions". Xunantunich Inc. has no
stock option, retirement, pension or profit-sharing programs for
the benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more such
programs in the future.
XUNANTUNICH, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
INTERIM FINANCIAL STATEMENTS
(PREPARED BY MANAGEMENT)
AS AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
XUNANTUNICH INC.
BALANCE SHEETS
AS AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(PREPARED BY MANAGEMENT)
ASSETS
SEPTEMBER DECEMBER
30, 2000 31, 1999
UNAUDITED AUDITED
CURRENT ASSETS:
CASH $ 117 $ 0
TOTAL CURRENT ASSETS 117 0
OTHER ASSETS
LICENSE RIGHTS 0 0
TOTAL ASSETS 117 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: 0 0
TOTAL CURRENT LIABILITIES 0 0
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par
Value; 100,000,000 shares
Authorized, and 5,100,000 (5,000,000)
Shares Issued and outstanding 2,600 2,500
ADDITIONAL PAID-IN CAPITAL 11,934 34
(DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE) (12,417) (534)
DEEMED DIVIDEND RE: LICENSE ( 2,000) (2,000)
TOTAL STOCKHOLDERS' EQUITY 2,117 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 117 0
XUNANTUNICH INC.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND FOR THE PERIOD
APRIL 2, 1999 (INCEPTION) TO DECEMBER, 31, 1999
(PREPARED BY MANAGEMENT)
SEPTEMBER DECEMBER
30, 2000 31, 1999
UNAUDITED AUDITED
REVENUES: 0 0
OPERATING EXPENSES:
FEES 0 165
TAXES AND LICENSES 0 320
OFFICE EXPENSE 383 49
LEGAL AND ACCOUNTING FEES 10,000 0
CONSULTING FEES 1,500 0
TOTAL OPERATING EXPENSES 11,883 534
NET (LOSS) FOR THE PERIOD (11,883) (534)
NET (LOSS) PER SHARE (0.00) (0.00)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,100,000 5,000,000
XUNANUTUNICH, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2000 AND THE PERIOD
APRIL 2, 1999 (INCEPTION) THROUGH DECEMBER 31, 2000
(PREPARED BY MANAGEMENT)
SEPTEMBER DECEMBER
30, 2000 31, 1999
UNAUDITED AUDITED
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
NET INCOME (LOSS) (11,883) (534)
CASH FLOWS FROM (TO)
INVESTING ACTIVITIES:
PURCHASE OF LICENSE RIGHTS 0 (2,000)
CASH FLOWS FROM (TO)
FINANCING ACTIVITIES:
ISSUANCE OF COMMON STOCK 12,000 2,534
NET INCREASE (DECREASE) IN CASH 117 0
______ _______
CASH, BEGINNING OF PERIOD 0 0
CASH, END OF PERIOD 117 0
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with US Securities and Exchange Commission ("SEC")
requirements for interim financial statements. Therefore, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. The financial statements should be read in conjunction
with the year ended December 31, 1999 financial statements of
Xunantunich Inc. ("Registrant") included in the Form SB-2 filed
with the SEC by the Registrant.
The results of operations for the interim period shown in this
report are not necessarily indicative of the results to be
expected for the full year. In the opinion of management, the
information contained herein reflects all adjustments necessary to
make the results of operations for the interim periods a fair
statement of such operation. All such adjustments are of a normal
recurring nature.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
AUDIT REPORT
December 31, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
XUNANTUNICH, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant.................. 34
Balance Sheet, December 31, 1999 ......................... 35
Statement of Operations, for the
Period April 2, 1999 (Inception)
Through December 31, 1999................................. 36
Statement of Stockholders' Equity
(Deficit), April 2, 1999 (Inception)
Through December 31, 1999................................. 37
Statement of Cash Flows for the
Period From April 2, 1999 (Inception)
Through December 31, 1999 ................................ 38
Notes to Financial Statements............................ 39& 40
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
(303) 782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Xunantunich, Inc.
21112 123rd Avenue
Maple Ridge, British Columbia V2X4B4
Canada
I have audited the accompanying Balance Sheet of Xunantunich, Inc.
(A Development Stage Enterprise) as of December 31, 1999 and the
Statements of Operations, Stockholders' Equity, and Cash Flows for
the period April 2, 1999 (Inception) through December 31, 1999.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audits.
My audit was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the
audits to obtain reasonable assurance as to 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. I believe that my audit provides a
reasonable basis for our opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Xunantunich, Inc.(a development stage enterprise) as of December
31, 1999, and the results of its operations and changes in its
cash flows for the period from April 2, 1999 (Inception) through
December 31, 1999, in conformity with generally accepted
accounting principles.
Janet Loss, C.P.A., P.C.
February 29, 2000
XUNANTUNICH, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS $ 0
OTHER ASSETS:
License Rights 0
TOTAL ASSETS 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES 0
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value;
100,000,000 shares Authorized, and
5,000,000 shares Issued and outstanding 2,500
Additional Paid-In Capital 34
Deemed Dividend re: Purchase of
License Rights (2,000)
Deficit accumulated during the development stage (534)
Total Stockholders' Equity (Deficit) 0
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY 0
The accompanying notes are an integral part of the financial
statements.
XUNANTUNICH INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period April 2, 1999 (Inception)
For the Period April 2, 1999 (Inception)Through December 31, 1999
Through December 31, 1999
REVENUES: $ 0
OPERATING EXPENSES:
Fees $ 165
Taxes and Licenses 320
Office Expenses 49
TOTAL OPERATING EXPENSES 534
NET (LOSS) $ ( 534)
NET (LOSS) PER SHARE (0.0000)
Weighted Average Number of
Common Shares Outstanding 5,000,000
Common Shares Outstanding 5,000,000
The accompanying notes are an integral part of the financial
statements.
XUNANTUNICH INC.
(a Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period April 2, 1999 through December 31, 1999
<TABLE>
<CAPTION>
(Deficit)
Common Accumulated
Stock Common Additional Total
Number of Stock Paid-in During Stockholder
Shares Amount Capital the Equity
Development
Stage
<S> <C> <C> <C> <C> <C>
April 2, 1999
Issuance of
Common Stock for 500,000 500 34 0 534
Cash
April 2, 1999
Issuance of 2000000 2000 0 0 2,000
Common Stock For
License Rights
Issuance of Common 0
Stock 0 0 (2,000) (2,000)
For Deemed Dividend
November 24, 1999
Issuance of Common
Stock 2500000
For 2 - 1 Split 0 0 0 0
Deficit for the
Period From
May 27, 1999 0
(Inception) 0 0 (534) (534)
Through December 31,
1999
Balance December 31, 5000000 2,500 34 (2,534) 0
1999
The Accompanying Notes Are An Integral Part Of These Financial
Statements
XUNANTUNICH INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Period April 2, 1999 (Inception)
Through December 31, 1999For the Period April 2, 1999 (Inception)
Through December 31, 1999
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
Net Income (Loss) $ (534)
CASH FLOWS FROM INVESTING ACTIVITIES:
License Rights 0
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Issuance of Common Stocks 2,534
Deemed Dividend re: License Rights (2,000)
Increase (Decrease) in Cash $ 0
Increase (Decrease) in Cash $ 0
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $ 0
The accompanying notes are an integral part of the financial
statements.
The accompanying notes are an integral part of the financial
statements.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE I - ORGANIZATION AND HISTORY
The Company is a Nevada Corporation and the Company has been in
the development stage since its formation on April 2, 1999.
The Company's only activities have been organizational, directed
at acquiring its principle assets, raising its initial capital
and developing its business plan.
On April 2, 1999, Xunantunich Inc. issued 500,000 shares of
common stock to the officers and directors as founders' shares in
return for the time, effort and expenditures to organize and form
the corporation. On April 28, 1999 Xunantunich Inc. issued
2,000,000 shares of common stock at a price of $0.001 per share
in return for the water treatment rights for the states of
Arizona and Nevada and the development of the business plan.
These shares were issued pursuant to Rule 504 of Regulation D.
On November 24, 1999 all 2,500,000 shares of common stock of
Xunantunich Inc. were purchased by the present shareholders.
They immediately effected a two - to - one forward split for a
total of 5,000,000 issued and outstanding shares
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since inception.
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, cash on deposit,
and highly liquid investments with maturities generally of three
months or less. At December 31, 1999, there are no cash
equivalents.
YEAR END
The Company has elected to have a fiscal year ended December 31.
USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts
of assets and liabilities at the date of financial statements, as
Ill as revenues and expenses reported for the periods presented.
The Company regularly assesses these estimates and, while actual
results may differ management believes that the estimates are
reasonable.
NOTE III - RELATED PARTY TRANACTIONS
Dorothy Mortenson is the wife of David R. Mortenson. She is the
original incorporator of the Company and served as Corporate
Secretary until January 17, 2000 when her shares were purchased
by present management. David R. Mortenson is a principal in both
David R. Mortenson and Associates and VitaMineralHerb.com.
The Company has entered into an agreement made effective July 1,
1999 with David R. Mortenson & Associates (Grantor) to receive
the rights to distribute the water treatment products developed
by NW Technologies, Inc. for the State of Pennsylvania. Minimum
purchase requirements were $125,000 the first year and $175,000
the second year.
On July 6, 1999 the Company filed a Form D pursuant to Section
3(b) of the Securities Act of 1933 and Rule 504 promulgated
thereunder, with the Securities and Exchange Commission
registering the issuance of 200,000 shares of common stock to
each of the ten general partners of David R. Mortenson and
Associates, a Texas general Partnership. The shares were issued
at a price of $0.001 per share being the par value per share for
a total of $2,000 in exchange for the water remediation license.
The water remediation license is recorded a cost of $NIL, being
the original cost of the license to David R. Mortenson and
Associates. The difference between the issue price of the shares
and the cost of the license is recorded as a deemed dividend.
The agreement with David R. Mortenson & Associates was entered
into by previous management.
NOTE IV - SUBSEQUENT EVENTS
In December, 1999 N.W. Technologies, Inc. unilaterally cancelled
its contract with David Mortenson & Associates. Early in the
year 2000 David Mortenson & Associates laid suit against N.W.
Technologies, Inc. in Harris County Court, Texas.
In the opinion of management, the Company has no direct or
indirect interest in the Texas lawsuit
In a letter dated January 5, 2000 David Mortenson & Associates
suspended all present and future payments under the License
Agreement until their dispute with N.W. Technologies is resolved.
Due to the dispute regarding the water remediation license, David
R. Mortenson and Associates gave and additional license to the
Company on January 20, 2000. The license is to distribute
vitamins, minerals, herbs and other health products and
supplements via the Internet. The license calls for a 10% add-on
for all products purchased and an annual $500 website maintenance
fee. The effective date of the License Agreement was January 3,
2000. The license is for an initial three years from the
effective date and is automatically renewable unless either party
to the license agreement gives ninety days written notice of non-
renewal prior to expiration date. No amounts have been recorded
in these financial statements regarding the granting of the
license.
Dorothy Mortenson is the wife of David R. Mortenson. She is an
original incorporator of the Company and served as Corporate
Secretary until January 17, 2000 when her shares were purchased
by present management. David R. Mortenson is a principal in both
David Mortenson & Associates and VitaMineralHerb.com. Neither
Mr. nor Mrs. Mortenson own or have owned any of the Company's
securities since January 17, 2000. Outside of his association
with VitaMineralHerb.com, Mr. Mortenson has no connection with
Paragon Polaris. As a result, management considers that he is at
arms length with the Company.
To date Xunantunich Inc. has spent a total of $12,500, including
$ 9,000 legal and preparation fees for the registration
statement; $1,500 in accounting fees; $1,500 in Consulting (Edgar
Filing Fees) and $500 miscellaneous office expenses. These
costs are all expensed as they occurred.
Changes in and Disagreements with Accountants on Accounting and
Financial disclosure.
There have been no changes in and/or disagreements with Janet
Loss, C.P.A., P.C. on accounting and financial disclosure
matters.
PART II - Information Not Required in Prospectus
Item 24. Indemnification of directors and officers.
Pursuant to Nevada law, a corporation may indemnify a person who
is a party or threatened to be made a party to an action, suit or
proceeding by reason of the fact that he or she is an officer,
director, employee or agent of the corporation, against such
person's costs and expenses incurred in connection with such
action so long as he/she has acted in good faith and in a manner
which he/she reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, in the case of criminal
actions, had no reasonable cause to believe his or her conduct
was unlawful. Nevada law requires a corporation to indemnify any
such person who is successful on the merits or defense of such
action against costs and expenses actually and reasonably
incurred in connection with the action.
The bylaws of Xunantunich Inc. filed as Exhibit 3.2, provide that
Xunantunich Inc. will indemnify its officers and directors for
costs and expenses incurred in connection with the defense of
actions, suits, or proceedings against them on account of their
being or having been directors or officers of Xunantunich Inc.,
absent a finding of negligence or misconduct in office. The
Bylaws also permit Xunantunich Inc. to maintain insurance on
behalf of its officers, directors, employees and agents against
any liability asserted against and incurred by that person
whether or not Xunantunich Inc. has the power to indemnify such
person against liability for any of those acts.
Item 25. Other expenses of issuance and distribution.
Expenses incurred or (expected) relating to this Registration
Statement and distribution are as follows:
Legal fees $ 9,500.00
Accounting 1,500.00
(Edgar filing and
Printing) 4,000.00
TOTAL $15,000.00
To date Xunantunich Inc. has spent a total of $12,500 for office
expenses and legal and accounting fees.
Item 26. Recent sales of unregistered securities.
Set forth below is information regarding the issuance and sales
of Xunantunich Inc. securities without registration since its
formation. No such sales involved the use of an underwriter, no
advertising or public solicitation were involved, the securities
bear a restrictive legend and no commissions were paid in
connection with the sale of any securities.
On April 2, 1999, Xunantunich Inc. issued 500,000 shares of
common stock to the officers and directors as founders' shares in
return for the time, effort and expenditures to organize and form
the corporation. On April 28, 1999 Xunantunich Inc. issued
200,000 shares of common stock each to ten individuals for a
total of 2,000,000 shares in return for the water treatment
rights for the states of Arizona and Nevada and the development
of the business plan. These securities were issued in reliance
upon the exemption contained in Section 4(2) of the Securities
Act of 1933 and in reliance upon Regulation S. These securities
were issued to the promoters of the company, bear a restrictive
legend and were issued solely to citizens of Canada. In
addition, the 200,000 shares issued for the water treatment
rights were issued in reliance on Section 3(b) of the Securities
Act of 1933 and Rule 504 of regulation D promulgated thereunder.
On August 17, 1999, the Board of Directors of Xunantunich Inc.
filed an amendment to its Articles of Incorporation with the
state of Nevada increasing the authorized capital to 100,000,000
shares of common stock.
On November 24, 1999 all 2,500,000 shares of common stock of
Xunantunich Inc. were purchased by the present shareholders.
(***** Don -Price - Exemption? Did they acquire their shares
directly from the issuer or from other selling shareholders such
as Mortenson?) They immediately effected a two - to - one forward
split for a total of 5,000,000 issued and outstanding shares
On April 30, 2000 100,000 shares of common stock at a price of
$0.10 per share were issued for cash. This capital was spent on
preparation and amending this registrations statement and
updating of financial statements.
Item 27. Exhibits.
The following exhibits are filed as part of this Registration
Statement;
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Opinion re: Legality
10.1 License Agreement*
10.2 Assignment of License Agreement*
10.3 License Agreement-Water*
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (See Exhibit 5.1)
27 unaudited interim
27.1 Audited
* Previously filed
Item 28. Undertakings
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered
(c) To include any additional or changed material
information to the plan of distribution.
2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement
of the securities offered and the offering of the securities
at that time to be the initial bona fide offering.
3) file a post-effective amendment to remove from
registration any of the securities being registered, which
remain unsold at the end of the offering.
4) For determining any liability under the Securities Act, to
treat the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act as part of this registration statement as of the time the
Commission declared it effective.
5) For determining any liability under the Securities Act to
treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities
offered and the offering of the securities at that time as the
initial bona fide Offering of those Securities.
Signatures
Signatures
In accordance with the requirements of the Securities Act of1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Prince George, Province of British Columbia, Canada
On November 27, 2000
(Registrant) Xunantunich Inc.
By: /S/ Mark Cramer
Mark Cramer, President.
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the date stated.
By: /S/ Mark Cramer
Mark Cramer, President
Date: November 27, 2000
By: /S/ Florence Cramer
Florence Cramer, Secretary/Treasurer
Date: November 27, 2000
By: /S/ Michael Cramer
Michael Cramer, Vice President
Date: November 27, 2000
By: /S/ Grant Cramer
Grant Cramer, Director
Date: November 27, 2000
EXHIBIT 5.1
OPINION RE: LEGALITY
ARTHUR J. FROST, LTD.
Arthur J. Frost, Esq.
7549 W. Heatherbrae Drive
Phoenix, Arizona 85033
(623) 849-2050
(623) 873-1799 Facsimile
August 20, 2000
Xunantunich Inc.
21112 123rd Avenue
Maple Ridge, BC V2X 4B4
Canada
Re: Xunanunich Inc. Registration Statement on Form SB-2
Ladies and Gentlemen:
I have acted as counsel for Xunantunich Inc., a Nevada
corporation (the "Company"), in connection with the preparation
of the registration statement on Form SB-2 (the "Registration
Statement") filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as
amended (the "Act"), relating to the public offering (the
"Offering") of up to 1,500,000 shares (the "Shares") of the
Company's common stock, $.001 par value (the "Common Stock").
In rendering the opinion set forth below, I have reviewed (a) the
Registration Statement and the exhibits thereto; (b) the
Company's Articles of Incorporation; (c) the Company's Bylaws;
(d) certain records of the Company's corporate proceedings as
reflected in its minute books; and (e) such statutes, records and
other documents as we have deemed relevant. In my examination, I
have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and conformity
with the originals of all documents submitted to us as copies
thereof. In addition, I have made such other examinations of law
and fact as we have deemed relevant in order to form a basis for
the opinion hereinafter expressed.
Based upon the foregoing, I am of the opinion that the Shares are
validly issued, fully paid and non-assessable.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement
Very truly yours,
/s/ Arthur J. Frost
Arthur J. Frost
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780S. Bellaire
Suite 500
Denver, CO 80210
The Board of Directors
XUNANTUNICH, INC.
3E - 2775 Fir Street
Vancouver, BC V6K 1P1 Canada
Dear Sirs:
This letter will authorize you to include the Audit of
your company dated December 31,1999 and the Audit Report
dated February 29, 2000 in the Registration Statement
currently under review with the Securities and Exchange
Commission.
Yours Truly,
S/S Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
November 28, 2000
XUNANTUNICH INC.
</TABLE>
