AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 2000
REGISTRATION NO.________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE VERMONT WITCH HAZEL CO.
VERMONT 6770 95-40272
(STATE OF PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
4415 PONCA AVENUE, TOLUCA LAKE, CA 91602, 818 766-4640
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE
OF BUSINESS)
DEBORAH DUFFY, 4415 PONCA AVENUE, TOLUCA LAKE, CA 91602, 818 766-4640
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
LAW OFFICES OF LANCE KERR, ESQ.
8833 SUNSET BOULEVARD #200
WEST HOLLYWOOD, CA 90069
(310) 289-4947
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER
THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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, PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF DOLLAR AMOUNT PROPOSED MAXIMUM
OFFERING PROPOSED MAXIMUM SECURITIES TO BE REGISTERED TO BE REGISTERED
PRICE PER UNIT AGGREGATE OFFERING PRICE
(1) COMMON STOCK PAR VALUE 250,000
$250.00 $500,000
125 SHARES PER UNIT AMOUNT OF REGISTRATION FEE COMMON STOCK, PAR VALUE
$132 $2.00
NOTE: (1) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION
FEE.
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
8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
PART 1
PRELIMINARY PROSPECTUS
(SUBJECT TO COMPLETION)
(1.) THE VERMONT WITCH HAZEL CO.
(2.) 250,000 SHARES OF COMMON STOCK
THIS PROSPECTUS RELATES TO THE OFFER AND SALE OF UP TO 250,000 SHARES OF
THE VERMONT WITCH HAZEL CO., A VERMONT CORPORATION (HEREIN VWHC) BY THE
CORPORATION.
(3.) THERE IS CURRENTLY NO PUBLIC MARKET FOR THE SHARES. WE EXPECT OUR
COMMON STOCK WILL BE TRADED ON THE OVER-THE-COUNTER MARKET MAINTAINED BY
MEMBERS OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AFTER THIS
REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
AFTER THE SHARES ARE REGISTERED WE MAY OFFER AND SELL THE SHARES DIRECTLY.
NO BROKER-DEALERS ARE ANTICIPATED TO BE INVOLVED IN THE SALE OF THE
SECURITIES. WE RESERVE THE RIGHT TO ACCEPT OR REJECT, IN WHOLE OR IN PART,
ANY PROPOSED PURCHASE OF THE SHARES.
(4.) THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD READ
"RISK FACTORS", BEGINNING ON PAGE 3, WHICH DESCRIBES CERTAIN FACTORS WHICH
SHOULD BE CAREFULLY CONSIDERED BEFORE YOU PURCHASE ANY SHARES.
(5.) NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL AND COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
(6.) (I) THERE WILL BE A MAXIMUM OF 2,000 UNITS OFFERED AT $250.00 PER
UNIT.
(7.) (I) THIS OFFERING WILL BE SELF UNDERWRITTEN BY THE COMPANY (VWHC)
(II) THE OFFERING IS MADE ON A BEST EFFORTS BASIS AND THE OFFERING WILL
END 90 DAYS FROM THE DATE OF REGISTRATION
(8.)
PRICE TO PUBLIC COMMISSIONS PROCEEDS TO USER
PER UNIT $250.00
TOTAL
TOTAL MINIMUM $ 0.00
TOTAL MAXIMUM $100,000.00
(9.) DATE OF THE PROSPECTUS IS _July 24, 2000______
(10.) OTHER EXPENSES OF THE OFFERING MAY INCLUDE
REGISTRATION FEES, FEDERAL TAXES, STATE TAXES AND FEES, TRUSTEES' AND
TRANSFER AGENTS' FEES, LEGAL, ACCOUNTING, PRINTING AND OR LISTING FEES NOT YET
DETERMINED.
ITEM 2.
AVAILABLE INFORMATION
(A.) WE ARE NOT CURRENTLY SUBJECT TO THE REPORTING REQUIREMENTS OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. UPON THE EFFECTIVENESS OF THE
REGISTRATION STATEMENT, OF WHICH THIS PROSPECTUS IS A PART, WE WILL BE
OBLIGATED TO FILE PERIODIC REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION").
(B.) REPORTS TO SECURITY HOLDERS WILL BE SENT ON ANNUAL BASIS WITHIN 90 DAYS
OF OUR FISCAL YEAR END AND WILL INCLUDE FINANCIAL STATEMENTS.
(C.) WE WILL PROVIDE, WITHOUT CHARGE TO EACH PERSON WHO RECEIVES A
PROSPECTUS UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OF THE
INFORMATION THAT WAS INCORPORATED BY REFERENCE IN THE PROSPECTUS (NOT
INCLUDING EXHIBITS TO THE INFORMATION THAT IS INCORPORATED BY REFERENCE UNLESS
THE EXHIBITS ARE THEMSELVES SPECIFICALLY INCORPORATED BY REFERENCE) AND THE
ADDRESS (INCLUDING TITLE OR DEPARTMENT) AND TELEPHONE NUMBER TO WHICH SUCH A
REQUEST IS TO BE DIRECTED.
(D.) DELIVERY OF PROSPECTUS BY DEALERS. ALL DEALERS EFFECTINGTRANSACTIONS
IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION
MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENT OR SUBSCRIPTIONS.
1
<PAGE>
(F) TABLE OF CONTENTS
PART I
250,000 SHARES OF COMMON STOCK
PRELIMINARY PROSPECTUS 1
SUMMARY OF INFORMATION AND RISK FACTORS 3
USE OF PROCEEDS 3
DETERMINATION OF OFFERING PRICE 4
DILUTION 4
PLAN OFDISTRIBUTION 5
LEGAL PROCEEDINGS 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 6
DESCRIPTION OF SECURITIES 7
INTEREST OF NAMED EXPERTS AND COUNSEL 7
DISCLOSURE OF COMMISSION'S POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIBILITIES 7
ORGANIZATION WITHIN LAST FIVE YEARS 8
DESCRIPTION OF BUSINESS 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 9
DESCRIPTION OF PROPERTY 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 9
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 10
EXECUTIVE COMPENSATION 10
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 10
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 10
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS 10
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 11
RECENT SALES OF UNREGISTERED SECURITIES 11
EXHIBITS 12
UNDERTAKINGS 12
SIGNATURES 13
<PAGE>
ITEM 3.
SUMMARY INFORMATION AND RISK FACTORS
(A) SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION REGARDING OUR COMPANY AND THE SHARES OF COMMON STOCK COVERED BY THIS
REGISTRATION AND OUR FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE
IN THIS PROSPECTUS.
WE ARE A VERMONT CORPORATION THAT MANUFACTURES SKIN CARE AND PET CARE
PRODUCTS. WE MAINTAIN 2 WEB SITES: WWW.VERMONTWITCHHAZEL.COM AND
WWW.VETERINARYWITCHHAZEL.COM. WE WERE INCORPORATED IN 1994 FOR THE PURPOSE OF
MANUFACTURING ALL NATURAL, WITCH HAZEL-BASED SKIN CARE PRODUCTS. IN MARCH OF
1999 WE ADDED A LINE OF ALL NATURAL PET CARE PRODUCTS, TESTED ON HUMANS.
BOTH LINES WERE DESIGNED FOR NATURAL FOODS AND HEALTH STORES, BUT WE ARE NOW
EXPANDING INTO MASS MARKET AND TO DO SO, MUST CHANGE LABELS, FRONT AND BACK,
INCREASE INVENTORY (TO INCLUDE THE NEW LABELS) AND ADOPT AND IMPLEMENT A NEW
STRATEGIC MARKETING PLAN. THE ESTIMATED COST OF IMPLEMENTATION OF ALL PHASES
OF THE MASS MARKETING STRATEGY IS APPROXIMATELY $500,000 WHICH IS TO BE
RAISED THROUGH A PUBLIC OFFERING OF OUR STOCK.
TWO HUNDRED FIFTY THOUSAND (250,000) SHARES OF OUR COMMON STOCK THAT HAVE NEVER
BEEN ISSUED ARE BEING REGISTERED AND ARE BEING OFFERED FOR SALE. THE 250,000
SHARES WILL REPRESENT TWENTY-ONE POINT SEVEN PERCENT (21.7%) OF THE NUMBER OF
ISSUED AND OUTSTANDING SHARES OF THE COMMON STOCK AS OF THE DATE OF THIS
PROSPECTUS. THERE IS NO GUARANTEE THAT EVEN IF ALL THE MONIES ARE RAISED AND ALL
PHASES OF THE STRATEGY ARE COMPLETED THAT THE COMPANY WILL BECOME FINANCIALLY
PROFITABLE.
(A.) OFFERING OF UNITS
UNITS OFFERED - 2,000
MINIMUM NUMBER OF UNITS TO BE SOLD - NO MINIMUM
MAXIMUM NUMBER OF UNITS TO BE SOLD - 2000
UNITS CONSIST OF 125 SHARES OF COMMON STOCK
UNIT PRICE - $250.00
SHARES OUTSTANDING PRIOR TO OFFERING - 1,149,850
USE OF PROCEEDS:
LEGAL
ADMINISTRATIVE ASSISTANT & SECRETARIAL
MARKETING & TRAVEL EXPENSE
FACILITATE STRATEGIC ALLIANCE GROUP
DESIGN & PRINTING
OFFICE LEASEHOLD
MISC. SUPPLIES
SHAREHOLDER RELEASES - MAIL
GENERAL MAIL - INCL. COURIER SERVICES
PHONES/FAX/INTERNET
PUBLIC/INVESTOR RELATIONS
OFFICE EQUIPMENT; LEASE/PURCHASE
FINANCIAL CONFERENCES/SEMINARS
ADVERTISING & BROCHURES
WEBSITE DESIGN AND HOSTING
ACCOUNTING
(B.) ADDRESS AND PHONE NUMBER:
OUR MAIN OFFICE IS LOCATED AT 4415 PONCA AVENUE, TOLUCA LAKE, CA
91602. WE ALSO SUBLEASE WAREHOUSE SPACE IN GLENDALE, CA AND SIMI VALLEY,
CA. TELEPHONE NUMBER IS 818 766-4640.
(C.) RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING RISK
FACTORS SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING US AND
OUR BUSINESS AND FUTURE PROSPECTS BEFORE PURCHASING ANY SHARES OF COMMON
STOCK.
HISTORY OF OPERATIONS
WE WERE INCORPORATED AUGUST 3, 1994 AND HAVE BEEN OPERATING A SKIN CARE
MANUFACTURING BUSINESS SINCE APRIL, 1995. IN OCTOBER 1995 TRADER JOE'S, A
120+STORE CHAIN, PURCHASED CERTAIN PRODUCTS FROM US TO RESELL IN THEIR STORES.
THE RELATIONSHIP LASTED THREE YEARS. OUR PRODUCTS ARE CURRENTLY IN SELECTED
LONGS DRUGS IN CALIFORNIA AND OREGON, AS WELL AS INDEPENDENT HEALTH STORES
NATIONWIDE. IN 1996 WE OPENED TWO TEST STORES, ONE COMPANY-OWNED STORE ON THE
EAST COAST AND ONE INDEPENDENTLY OWNED ON THE WEST COAST, TO INTRODUCE CURRENT
PRODUCTS AND TEST NEW PRODUCTS. THE STORES WERE CLOSED IN 1999 WHEN ALL
PRODUCTS HAD BEEN TESTED AND APPROVED. WE LAUNCHED A WEB SITE IN OCTOBER, 1999
FOR SKIN CARE AND PET CARE AND SEPARATED THEM INTO TWO SITES IN FEBRUARY, 2000.
BOTH SITES CONTAIN ONLINE STORES THROUGH WHICH OUR PRODUCTS ARE SOLD DIRECTLY
TO THE PUBLIC. THE INCOME FROM OPERATIONS HAS NEVER COVERED EXPENSES.
THEREFORE WE HAVE NO HISTORY OF BEING PROFITABLE.
WE NEED ADDITIONAL CAPITAL
WE NEED ADDITIONAL CAPITAL TO PROMOTE OUR WEB SITES THROUGH EXTENSIVE OPT-IN
E-MAIL AND CATALOG CAMPAIGNS AND OUR LABELS HAVE TO BE UPDATED TO ATTRACT MASS
MARKET CHAINS. WE WILL USE THE REMAINING CAPITAL TO INCREASE PRESENT
WAREHOUSE INVENTORY. THERE CAN BE NO ASSURANCE THAT WE WILL BE ABLE TO
SUCCESSFULLY PROMOTE OUR WEB SITES WITH THE E-MAIL CAMPAIGN OR SELL OUR
PRODUCTS TO MASS MARKET CHAINS WITHOUT SUBSTANTIAL AND UNANTICIPATED
COSTS, DELAYS OR OTHER PROBLEMS. WE CURRENTLY HAVE NO AGREEMENT WITH ANY
MASS MARKET CHAIN OR OPT-IN E-MAIL COMPANIES.
VERMONT LAW COULD ADVERSELY AFFECT THE STOCK'S PRICE CERTAIN PROVISIONS OF
VERMONT LAW AND CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND
BYLAWS COULD DELAY OR IMPEDE THE REMOVAL OF INCUMBENT DIRECTORS AND COULD
MAKE IT MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE, OR COULD DISCOURAGE
THIRD PARTIES FROM ATTEMPTING TO ACQUIRE CONTROL OF OUR COMPANY. SUCH
PROVISIONS COULD LIMIT THE PRICE THAT CERTAIN INVESTORS MIGHT BE WILLING TO
PAY IN THE FUTURE FOR SHARES OF OUR COMMON STOCK. THE ARTICLES OF
INCORPORATION AND BYLAWS IMPOSE VARIOUS PROCEDURAL REQUIREMENTS THAT COULD
MAKE IT MORE DIFFICULT FOR SHAREHOLDERS TO EFFECT CERTAIN CORPORATE ACTIONS.
OUR ARTICLES GIVE OUR BOARD OF DIRECTORS (WITHOUT ANY ADDITIONAL AUTHORIZATION
FROM THE SHAREHOLDERS) AUTHORITY TO ISSUE UP TO 100,000 SHARES OF PREFERRED
STOCK FOR VARIOUS CORPORATE PURPOSES. ISSUANCE OF A SUBSTANTIAL NUMBER OF SHARES
OF EITHER COMMON STOCK OR PREFERRED STOCK WOULD DILUTE THE EXISTING SHAREHOLDERS
PERCENTAGE OWNERSHIP OF OUR COMPANY.
INCOMPLETE OR NO FEASIBILITY STUDIES
OUR MANAGEMENT HAS NOT YET DONE A FEASIBILITY STUDY OF THIS PROJECT. OUR
MANAGEMENT'S INTEREST IS BASED SOLELY ON OUR OWN EXPERIENCE. THERE IS NO
GUARANTEE THAT WE HAVE MADE A GOOD JUDGEMENT IN THE FEASIBILITY OF THIS
PROJECT.
DEPENDENCE UPON KEY PERSONNEL.
WE ARE HIGHLY DEPENDENT UPON THE SERVICES OF DEBORAH DUFFY, PRESIDENT AND
DIRECTOR, AND OTHER OFFICERS. THE LOSS OF SERVICES FROM ANYBODY ON THE
MANAGEMENT TEAM WOULD MATERIALLY ADVERSELY AFFECT THE CONDUCT OF OUR BUSINESS
AND THE QUALITY OF THE PROPOSED VENTURES. MANAGEMENT PRESENTLY HAS NO LIFE
INSURANCE POLICIES ON THE LIVES OF ANY OF THE OFFICERS OR DIRECTORS.
COMPETITION.
ALTHOUGH FEW COMPETITORS EXIST IN THE SEGMENT OF THE MARKET WE HAVE TARGETED,
THERE IS NO GUARANTEE THAT COMPETITORS FROM ANOTHER SEGMENT OF THE INDUSTRY,
WITH CONSIDERABLE FINANCIAL HOLDINGS AND INFLUENCE, WILL NOT TRY TO PENETRATE
THIS AS-YET UNTAPPED SEGMENT OF THE INDUSTRY.
NO ASSURANCE OF DISTRIBUTION.
THERE CAN BE NO ASSURANCE THAT WE WILL BE ABLE TO SECURE ADEQUATE DISTRIBUTION
OF OUR PRODUCTS.
WE ARE CURRENTLY IN A NUMBER OF TEST STORES FOR LONGS DRUGS, BUT THERE IS NO
ASSURANCE WE WILL BE CHOSEN BY THE CORPORATE OFFICE FOR DISTRIBUTION IN ALL
400 LONGS DRUG STORES. WITHOUT FULL DISTRIBUTION IN LONGS DRUGS IT WILL BE
DIFFICULT TO REACH OUR PROJECTED GOALS AND/OR BE PICKED UP BY OTHER CHAINS.
WE ARE ALSO RELYING ON DISTRIBUTION COMPANIES TO PLACE OUR PRODUCTS IN STORES
NATIONWIDE. RELIANCE UPON DISTRIBUTION COMPANIES AND/OR RETAILERS CAN SUBJECT
US TO A NUMBER OF SPECIAL RISKS, INCLUDING THE INABILITY OF ONE OR MORE
DISTRIBUTORS TO PROPERLY REMIT FUNDS TO US. ADDITIONALLY, DUE TO ANY
FINANCIAL PROBLEMS WHICH A DISTRIBUTOR OR RETAILER MAY HAVE, IT MAY, FOR ITS
OWN BUSINESS REASONS, BE UNWILLING OR RELUCTANT TO ACTIVELY DISTRIBUTE OUR
PRODUCTS DESPITE CONTRACTUAL COMMITMENTS.
SOLE PRODUCT OF COMPANY.
DURING THE FIRST YEAR OF OPERATION WE WILL NOT ENGAGE IN ANY OTHER
SIGNIFICANT BUSINESS ACTIVITY NOT RELATED TO OUR PRODUCTS AS DESCRIBED IN THIS
REGISTRATION STATEMENT. ACCORDINGLY, OUR SUCCESS WILL BE DEPENDENT UPON THE
SUCCESS OF OUR SKIN AND PET CARE PRODUCTS AND THEIR DISTRIBUTION.
FORWARD LOOKING STATEMENTS.
THE DISCUSSIONS AND INFORMATION IN THIS REGISTRATION STATEMENT MAY CONTAIN
BOTH HISTORICAL AND FORWARD-LOOKING STATEMENTS. TO THE EXTENT THAT THE
REGISTRATION STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING OUR
FINANCIAL CONDITION, OPERATING RESULTS, BUSINESS PROSPECTS OR ANY OTHER ASPECT
OF THE COMPANY, PLEASE BE ADVISED THAT OUR ACTUAL FINANCIAL CONDITION,
OPERATING RESULTS AND BUSINESS PERFORMANCE MAY DIFFER MATERIALLY FROM THAT
PROJECTED OR ESTIMATED BY OUR FORWARD-LOOKING STATEMENTS.
WE HAVE ATTEMPTED TO IDENTIFY, IN CONTEXT, CERTAIN OF THE FACTORS THAT WE
CURRENTLY BELIEVE MAY CAUSE ACTUAL FUTURE EXPERIENCE AND RESULTS TO DIFFER
FROM OUR CURRENT EXPECTATIONS. THE DIFFERENCES MAY BE CAUSED BY A VARIETY OF
FACTORS, INCLUDING BUT NOT LIMITED TO ADVERSE ECONOMIC CONDITIONS, INTENSE
COMPETITION, INCLUDING ENTRY OF NEW COMPETITORS, ADVERSE FEDERAL, STATE AND
LOCAL GOVERNMENT REGULATION, INADEQUATE CAPITAL, UNEXPECTED COSTS, LOWER
REVENUES AND NET INCOME PRICES, FAILURE TO OBTAIN NEW CUSTOMERS, THE RISK OF
LITIGATION AND ADMINISTRATIVE PROCEEDINGS INVOLVING OURSELVES, THE POSSIBLE
ACQUISITION OF NEW BUSINESSES THAT DO NOT PERFORM AS ANTICIPATED, THE POSSIBLE
FLUCTUATION AND VOLATILITY OF OUR OPERATING RESULTS AND FINANCIAL CONDITION,
ADVERSE PUBLICITY AND NEWS COVERAGE, INABILITY TO CARRY OUT MARKETING AND
SALES PLANS, LOSS OF KEY EXECUTIVES, CHANGES IN INTEREST RATES, INFLATIONARY
FACTORS, AND OTHER SPECIFIC RISKS THAT MAY BE ALLUDED TO IN THIS REGISTRATION
STATEMENT OR IN OTHER REPORTS WE MAY HAVE ISSUED.
ITEM 4.
USE OF PROCEEDS
THE NET PROCEEDS OF THE OFFERING ARE TO BE PRIORITIZED IN THE FOLLOWING WAY.
LABELS: FIVE PRODUCTS WILL NEED FRONT AND BACK LABELS. THE COST
OF BOTH FRONT AND BACK LABELS, IN ORDERS OF A MINIMUM OF 25,000 EACH, WILL
COST $12,500. TWO PRODUCTS REQUIRE SILK SCREENING ON TUBES AT A COST OF
FORTY-SIX CENTS EACH. TWENTY-FIVE THOUSAND OF EACH PRODUCT WILL COST
$23,000. FOUR SOAP FLAVORS REQUIRE FOUR SEPARATE BOXES AT A COST OF FOURTEEN
CENTS EACH. TWENTY-FIVE THOUSAND OF EACH BOX WILL COST A TOTAL OF $15,000.
TWO PRODUCTS REQUIRE A WRAP LABEL AT A COST OF SEVEN CENTS EACH. TWENTY-FIVE
THOUSAND EACH OF THE WRAP LABELS WILL COST $3,500. TOTAL COST FOR ALL LABELS
WILL BE $54,000.
INVENTORY: WE WILL REQUIRE NEW INVENTORY OF AT LEAST TEN THOUSAND
EACH OF ALL ITEMS ONCE THE NEW LABELS HAVE BEEN MANUFACTURED AND DELIVERED.
APPROXIMATE TOTAL COST FOR NEW INVENTORY IS $286,000.
ADVERTISING: WE ARE PLANNING AN EXTENSIVE OPT-IN EMAIL AND CATALOG
CAMPAIGN. WE CURRENTLY FURNISH BLACK AND WHITE CATALOGS PER CUSTOMER REQUEST.
USING PROCEEDS FROM THE OFFERING, WE WILL IMPLEMENT A NEW DIRECT MAIL CAMPAIGN
FOR AN UPDATED VERSION OF THE CATALOG. OPT-IN EMAIL COSTS
APPROXIMATELY TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500) PER 10,000 NAMES
WHICH INCLUDES TRACKING INFORMATION, AND SHOWS A RETURN OF 5 TO 10%. DIRECT
MAIL IS CHEAPER BUT HAS A LESSER RETURN OF APPROXIMATELY 1 TO 5%. COSTS OF
NEW CATALOGS, EMAIL AND DIRECT MAIL WILL TOTAL APPROXIMATELY $100,000.
USE OF PROCEEDS IF ALL UNITS ARE SOLD:
SECURITIES AND EXCHANGE COMMISSION FILING FEE $132
ACCOUNTING FEES AND EXPENSES $5,000
LEGAL FEES AND EXPENSES $45,000
PRINTING AND ENGRAVING $3,868
FEES OF TRANSFER AGENT AND REGISTRAR $2,000
PHONES, FAX, INTERNET $1,500
MISCELLANEOUS $2,500
LABELS $54,000
INVENTORY $286,000
ADVERTISING $100,000
TOTAL $500,000
IN THE EVENT NOT ALL UNITS ARE SOLD, THE FUNDS WILL BE USED IN THE FOLLOWING
WAYS:
USE OF PROCEEDS IF 10% OF UNITS ARE SOLD
SECURITIES AND EXCHANGE COMMISSION FILING FEE $132
ACCOUNTING FEES AND EXPENSES $500
LEGAL FEES AND EXPENSES $4,500
PRINTING AND ENGRAVING $868
FEES OF TRANSFER AGENT AND REGISTRAR $200
PHONES, FAX, INTERNET $150
MISCELLANEOUS $250
LABELS $5,400
INVENTORY $28,000
ADVERTISING $10,000
TOTAL $50,000
USE OF PROCEEDS IF 50% OF UNITS ARE SOLD
SECURITIES AND EXCHANGE COMMISSION FILING FEE $132
ACCOUNTING FEES AND EXPENSES $2,500
LEGAL FEES AND EXPENSES $22,500
PRINTING AND ENGRAVING $1,868
FEES OF TRANSFER AGENT AND REGISTRAR $1,000
PHONES, FAX, INTERNET $750
MISCELLANEOUS $1,250
LABELS $28,000
INVENTORY $142,000
ADVERTISING $50,000
TOTAL $250,000
3
<PAGE>
ITEM 5.
DETERMINATION OF OFFERING PRICE
IN DETERMINING THE PRICE FOR OUR PUBLIC OFFERING WE TOOK MANY FACTORS INTO
CONSIDERATION. ALTHOUGH THERE IS NO PUBLIC MARKET FOR OUR STOCK, WE HAVE PRIVAT
ELY SOLD STOCK TO OUR SHAREHOLDERS AT A PRICE IN EXCESS OF $2.00 PER SHARE.
SHOULD ALL SHARES BE SOLD IN THE PUBLIC OFFERING THERE WILL BE LESS THAN
1,400,000 SHARES OUTSTANDING. WE HAVE NO LONG-TERM DEBT.
ITEM 6.
DILUTION
ANY AND ALL STOCK PURCHASED BY OUR MANAGEMENT WAS PURCHASED AT THE SAME PRICE
AS THAT OFFERED TO SHAREHOLDERS.
THIS OFFERING INVOLVES A DILUTION OF NET TANGIBLE BOOK VALUE TO THE EXISTING
SHAREHOLDERS. ASSUMING THE MAXIMUM AMOUNT OF UNITS OFFERED ARE SOLD THE
FOLLOWING TABLE SHOWS THE DILUTION TO PERSONS WHO PURCHASE TO THIS OFFERING.
ASSUMED INITIAL PUBLIC OFFERING PRICE PER SHARE $2.00
PRO FORMA NET TANGIBLE BOOK VALUE PER SHARE AS OF MAY 15, 2000 $0.09
PRO FORMA INCREASE ATTRIBUTABLE TO NEW INVESTORS $0.34
PRO FORMA NET TANGIBLE BOOK VALUE PER SHARE AFTER THE OFFERING $0.43
PRO FORMA DILUTION PER SHARE TO NEW INVESTORS $1.57
TOTAL SHARES TO BE ISSUED AND OUTSTANDING WHEN ALL UNITS ARE SOLD:
1,399,850 SHARES 100%
THE FOLLOWING TABLE SUMMARIZES THE TOTAL NUMBER OF SHARES OF COMMON STOCK
PURCHASED FROM US, THE TOTAL CONSIDERATION PAID TO US AND THE AVERAGE PRICE
PER SHARE PAID BY EXISTING STOCKHOLDERS AND BY NEW INVESTORS, IN EACH CASE
BASED UPON THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF MAY 15, 2000
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C> <C>
EXISTING
STOCKHOLDERS 1,149,850 82.2% $514,110 50.7% $0.47
NEW
INVESTORS 250,000 17.8% $500,000 49.3% $2.00
TOTAL 1,399,850 100% $1,014,110 100%
</TABLE>
4
<PAGE>
ITEM 7.
ITEM 8.
PLAN OF DISTRIBUTION
THIS PROSPECTUS RELATES TO THE OFFER AND SALE OF UP TO 250,000 SHARES OF OUR
COMMON STOCK. WE HAVE REGISTERED THE SHARES FOR SALE TO PROVIDE US WITH
FREELY TRADEABLE SECURITIES. WE WILL RECEIVE ANY PROCEEDS FROM THE SALE
OF THESE SHARES.
WE PLAN TO DISTRIBUTE THE SHARES ON A "BEST EFFORTS" BASIS UTILIZING OUR
OFFICERS AND DIRECTORS. IN DOING SO, WE WILL RELY ON EXCHANGE ACT RULE 3A 4-1
WHICH PERMITS OFFICERS AND DIRECTORS TO SELL WITHOUT REGISTERING AS
BROKERS/DEALERS. WE PLAN TO OFFER THE SECURITIES ON THE COMPANY WEBSITE. IF
OFFERED ON THE WEBSITE THE ANNOUNCEMENT WILL BE LIMITED TO INFORMATION OF A
GENERAL NATURE. THE OFFER WILL BE MADE VIA THE PROSPECTUS WHICH MAY BE
TRANSMITTED BY E-MAIL OR SENT BY MAIL IN PRINTED FORM. NO COMPANY HAS BEEN
ENGAGED AS AN UNDERWRITER.
ITEM 9.
LEGAL PROCEEDINGS
WE ARE NOT A PARTY TO ANY PENDING LITIGATION NOR ARE WE AWARE OF ANY
THREATENED LEGAL PROCEEDING.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
DIRECTORS AND OFFICERS
(A.) THE DIRECTORS AND OFFICERS OF VWHC ARE AS FOLLOWS:
NAME AGE POSITION
DEBORAH DUFFY 57 PRESIDENT, CEO, DIR
RACHEL BRAUN 29 SECRETARY,DIRECTOR
PETER C. CULLEN 58 DIRECTOR
DEBORAH DUFFY MS. DUFFY HAS SERVED AS PRESIDENT, CEO AND A DIRECTOR SINCE
OUR INCORPORATION IN AUGUST OF 1994. MS. DUFFY HAS BEEN COMPENSATED FOR HER
SERVICES TO US DURING THE FISCAL YEARS ENDED DECEMBER 31, 1997, 1998, 1999 AS
REVENUES ALLOWED. DIRECTORS ARE NOT PAID FOR THEIR SERVICES.
RACHEL BRAUN MS. BRAUN HAS SERVED AS A DIRECTOR SINCE OCTOBER OF 1997.
SHE WAS DIRECTOR OF COPYRIGHTS AT BUG MUSIC FROM 1990 TO MAY OF 1998. IN MAY
OF 1998 SHE STARTED HER OWN BUSINESS AND HAS BEEN HIRED AS AN INDEPENDENT
BOOKKEEPER FOR US FROM THAT DATE FORWARD.
PETER C. CULLEN MR. CULLEN IS A VOICE-OVER SPECIALIST WHO HAS MAINTAINED
HIS POSITION IN THE TOP 1% OF HIS FIELD OVER THE PAST FIFTEEN YEARS. IN
SEPTEMBER OF 1996 HE BECAME ONE OF OUR DIRECTORS AND STILL SERVES AS A
DIRECTOR.
NONE OF THE DIRECTORS OF THE COMPANY SERVES AS A DIRECTOR FOR ANY OTHER
REPORTING COMPANY.
(B.) THERE ARE NO OTHER SIGNIFICANT EMPLOYEES.
(C.) MS BRAUN IS THE DAUGHTER OF DEBORAH DUFFY.
ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(A.) THE FOLLOWING TABLE SETS FORTH CERTAIN INFORMATION AS OF MARCH 15,
2000 WITH REGARD TO THE BENEFICIAL OWNERSHIP OF THE COMMON STOCK BY (I) EACH
PERSON KNOWN TO US TO BE THE BENEFICIAL OWNER OF 5% OR MORE OF OUR
OUTSTANDING SHARES; (II) BY THE OFFICERS AND DIRECTORS INDIVIDUALLY AND (III)
BY THE OFFICERS AND DIRECTORS AS A GROUP.
(B.) SECURITY OWNERSHIP OF MANAGEMENT.
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT OWNED PERCENT
COMMON DEBORAH DUFFY PRESIDENT, CEO 696,900 60.6
4415 PONCA AVENUE
TOLUCA LAKE, CA 91602
COMMON PETER C. CULLEN DIRECTOR 232,450 20.2
6
<PAGE>
10421 WOODBRIDGE STREET
TOLUCA LAKE, CA 91602
COMMON RACHEL BRAUN SECRETARY 7,000 1
320 N. FLORENCE
BURBANK, CA 91505
(C.) ALL OFFICERS AND DIRECTORS AS A GROUP 936,350 81.4%
ITEM 12
DESCRIPTION OF SECURITIES
EACH UNIT OFFERED CONSIST OF 125 SHARES OF COMMON STOCK.
WE ARE AUTHORIZED TO ISSUE 250,000 SHARES OF COMMON STOCK, $0.001 PAR VALUE.
AS OF 3/20/00 1,149,850 SHARES WERE ISSUED AND OUTSTANDING.
EACH SHARE OF COMMON STOCK WILL BE ENTITLED TO ONE VOTE, EITHER IN PERSON OR BY
PROXY, ON ALL MATTERS THAT MAY BE VOTED UPON BY THE OWNERS THEREOF AT MEETINGS
OF THE STOCKHOLDERS.
THE HOLDERS OF COMMON STOCK WILL HAVE EQUAL RATABLE RIGHTS TO DIVIDENDS FROM
FUNDS LEGALLY AVAILABLE THEREOF, WHEN, AS AND IF DECLARED BY OUR BOARD OF
DIRECTORS; WILL BE ENTITLED TO SHARE RATABLY IN ALL OF THE ASSETS OF OUR COMPANY
AVAILABLE FOR DISTRIBUTION TO HOLDERS OF COMMON STOCK UPON LIQUIDATION,
DISSOLUTION OR WINDING UP OF THE AFFAIRS OF THE COMPANY; AND WILL NOT HAVE
PREEMPTIVE OR REDEMPTION PROVISION APPLICABLE THERETO.
ALL SHARES OF COMMON STOCK WHICH ARE THE SUBJECT OF THIS OFFERING,
WHEN ISSUED, WILL BE FULLY PAID AND NON-ASSESSABLE, WITH NO PERSONAL LIABILITY
TO THE OWNERSHIP THEREOF.
OUR HOLDERS OF SHARES OF COMMON STOCK DO NOT HAVE CUMULATIVE VOTING RIGHTS.
AT THE COMPLETION OF THIS OFFERING, IF ALL UNITS ARE SOLD, AFFILIATES,
OFFICERS AND/OR DIRECTORS OF OUR COMPANY WILL OWN APPROXIMATELY 67% OF THE
THEN OUTSTANDING COMMON STOCK.
TRANSFER AGENT
OUR TRANSFER AGENT IS SECURITIES TRANSFER CORPORATION, A TEXAS CORPORATION,
2591 DALLAS PKWY #102, FRISCO, TX 75034. TEL: 469-633-0101, FAX: 469-633-0088
ITEM 13.
INTEREST OF NAMED EXPERTS AND COUNSEL
AUDITOR FOR THE COMPANY IS GERALD R. PERLSTEIN, CPA WHO OWNS NO SHARES IN THE
COMPANY
ITEM 14.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
OUR BYLAWS PROVIDE THAT WE WILL INDEMNIFY OUR OFFICERS TO THE FULL EXTENT
AUTHORIZED OR PERMITTED UNDER VERMONT LAW. INSOFAR AS INDEMNIFICATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT MAY BE PERMITTED TO DIRECTORS,
OFFICERS AND CONTROLLING PERSONS OF VWHC PURSUANT TO THE FOREGOING PROVISIONS,
OR OTHERWISE, WE HAVE BEEN ADVISED THAT IN THE OPINION OF THE COMMISSION, SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT
AND IS , THEREFORE, UNENFORCEABLE. IN THE EVENT THAT A CLAIM FOR
INDEMNIFICATION AGAINST SUCH LIABILITIES (OTHER THAN PAYMENT BY US OF EXPENSES
INCURRED OR PAID BY A DIRECTOR, OFFICER OR CONTROLLING PERSON IN CONNECTION
WITH THE SUCCESSFUL DEFENSE OF ANY ACTION, SUIT OR PROCEEDING) IS ASSERTED BY
SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON IN CONNECTION WITH THE SECURITIES
BEING REGISTERED, WE WILL, UNLESS IN THE OPINION OF OUR COUNSEL THE MATTER HAS
BEEN SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE
JURISDICTION THE QUESTION OF WHETHER SUCH INDEMNIFICATION BY IT IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND WILL BE GOVERNED BY THE
FINAL ADJUDICATION OF SUCH ISSUE.
7
<PAGE>
ITEM 15.
ORGANIZATION WITHIN THE LAST FIVE YEARS
(A.) THERE HAVE BEEN NO TRANSACTIONS DURING THE LAST TWO YEARS, NOR ARE THERE
ANY PROPOSED TRANSACTIONS, TO WHICH WE WERE OR WILL BE A PARTY.
ITEM 16.
DESCRIPTION OF BUSINESS
(A.) BUSINESS DEVELOPMENT. VWHC WAS INCORPORATED ON AUGUST 3, 1994 IN THE
STATE OF
VERMONT. IN JULY 1995 WE BEGAN SELLING STOCK THROUGH A PRIVATE OFFERING.
THE PROCEEDS FROM THE OFFERING WERE USED TO EXPAND THE LINES OF PRODUCTS AND
COVER OVERHEAD WHILE WE WERE GROWING. IN SEPTEMBER 1995 A CHAIN OF NATURAL
FOOD STORES, TRADER JOE'S, BEGAN PURCHASING A LIMITED NUMBER OF OUR PRODUCTS
WHICH QUICKLY INCREASED GROSS SALES FROM LESS THAN $10,000 FOR THE FIRST
FISCAL YEAR TO IN EXCESS OF $200,000 FOR FISCAL YEAR ENDING JULY 31, 1997.
IN MAY OF 1999 THE RELATIONSHIP WITH TRADER JOE'S WAS SEVERED, AND THE RESULT
HAS BEEN A DRAMATIC DECREASE IN GROSS SALES FOR FISCAL YEAR ENDING JULY 31,
1999. OUR FIRST THREE PERIODS OF FISCAL YEAR 1999/2000 ARE CONSIDERABLY LESS
THAN THOSE OF THE SAME PERIODS OF THE PREVIOUS YEAR. HOWEVER, WE ARE
CURRENTLY IN TEN TEST STORES FOR LONGS DRUGS WITH EXCELLENT SALES FOR THOSE
STORES. WE EXPECT TO BE PICKED UP FOR ALL 400 LONGS DRUGS DURING THE OCTOBER
REVIEW, BUT THERE IS NO GUARANTEE THAT THIS WILL OCCUR.
WE HAVE EXPANDED THE SKIN CARE LINE FROM SIX PRODUCTS IN 1995 TO FOURTEEN,
ADDED A PET CARE LINE WITH FOUR PRODUCTS, LAUNCHED TWO WEB SITES IN OCTOBER OF
1999 AND FEBRUARY OF 2000, AND COMPLETED THE DESIGN OF NEW MASS MARKET LABELS
FOR THE ENTIRE LINE OF SKIN CARE PRODUCTS.
(B.) BUSINESS OF ISSUER.
(1.) VWHC MANUFACTURES AND DISTRIBUTES A LINE OF ALL NATURAL WITCH
HAZEL-BASED SKIN CARE AND ALL NATURAL VETERINARY WITCH HAZEL-BASED PET CARE
PRODUCTS. THE CLEANSER/TONER IS PHARMACEUTICAL GRADE WITCH HAZEL, THE
HIGHEST GRADE OF COSMETIC WITCH HAZEL ON THE MARKET. WE USE THIS WITCH HAZEL
AS THE BASE FOR ALL OUR OTHER PRODUCTS WHICH INCLUDE A UNIQUE, ONE-OF-A-KIND
PROTECTIVE GEL (PROPRIETARY) USED TO HELP REDUCE THE APPEARANCE OF ACNE,
BLEMISHES, COLD SORES, ETC. AND HELP PROTECT CUTS AND BITES BY LAYING DOWN A
WATER SOLUBLE BARRIER; AN ALL PURPOSE SKIN & BEAUTY GEL (PROPRIETARY) THAT
GENTLY REMOVES MAKE-UP, SOOTHES ITCHING OF INSECT BITES, CLEANSES, AND SOOTHES
ITCHING AND BURNING OF HEMORRHOIDS; FOUR HAND MADE MOISTURIZING SOAPS
(PROPRIETARY); WITCH HAZEL & ALOE FACE PADS TO SOOTHE TIRED EYES, REMOVE
MAKE-UP, TONE SKIN; WITCH HAZEL & ALOE TOWELETTES (PROPRIETARY) TO CLEANSE
SKIN, COOL AND SOOTHE; 3-IN-1 SHAVE FOAM AND REFILL (PROPRIETARY), SHAVE FOAM,
MOISTURIZER AND AFTER SHAVE COMBINED IN A NON-AEROSOL, REFILLABLE CANISTER.
THE PET PRODUCTS, "TESTED ON HUMANS" CONSIST OF VETERINARY WITCH HAZEL, A
NATURAL FLY SPRAY AND COAT CLEANSER; VETERINARY SKIN & COAT GEL (PROPRIETARY),
TO SOOTHE AND RELIEVE ITCHING FROM INSECT BITES, GRASS ALLERGIES, ETC.;
VETERINARY PROTECTIVE GEL (PROPRIETARY), TO HELP PROTECT OPEN SORES, CUTS,
WOUNDS, INSECT BITES, ETC. BY LAYING DOWN A WATER SOLUBLE BARRIER AGAINST DIRT
AND FLYING INSECTS; VETERINARY SKIN & EAR PADS (PROPRIETARY), LARGE SOFT PADS
PRE-MOISTENED WITH VETERINARY WITCH HAZEL TO CLEANSE AND SOOTHE EARS AND DEEP
WRINKLES THAT ARE NOT EXPOSED TO SUN.
(2.) ALTHOUGH WE DISTRIBUTE MOST OF THE PRODUCTS OURSELVES, WE ALSO USE AN
INDEPENDENT ALL NATURAL DISTRIBUTOR, GINSENG CO., THAT WHOLESALES THROUGHOUT
THE SOUTHWEST.
(3.) THERE IS NO PUBLICLY ANNOUNCED NEW PRODUCT. (4.) WE ARE THE ONLY SKIN
CARE COMPANY IN THE UNITED STATES WHOSE ENTIRE LINE CONTAINS WITCH HAZEL. WE
ARE KNOWN FOR USING THE HIGHEST GRADE COSMETIC WITCH HAZEL ON THE MARKET
TODAY AND MANUFACTURING PRODUCTS THAT ARE CONSISTENTLY THE HIGHEST QUALITY
IN THEIR PRODUCT GROUP. WE ALSO MANUFACTURE PRODUCTS THAT ARE
UNIQUE AND PROPRIETARY AND HAVE NO KNOWN COMPETITION IN THE HEALTH AND BEAUTY
FIELD.
(5.) RAW MATERIALS ARE READILY AVAILABLE FOR ALL OUR PRODUCTS AND WE UTILIZE
THE RESOURCES OF SOME OF THE LARGEST SUPPLIERS/MANUFACTURERS IN THE COUNTRY;
AMERICAN DISTILLING WITCH HAZEL
NICE-PAK TOWELETTES
TRICOR-BRAUN BOTTLES AND CAPS
CCL LABELS
AMERICAN WHOLESALE PKG BOXES AND SHIPPERS
AIRSPRAY FOAMERS
(6.) BETWEEN SEPTEMBER 1995 AND MAY 1999 OUR INCOME WAS
BASED ALMOST ENTIRELY ON THE SALES TO TRADER JOE'S. THE TERMINATION OF THAT
RELATIONSHIP GREATLY REDUCED THE INCOME TO THE COMPANY. WE DECIDED TO CHANGE
VENUES AND CONCENTRATE ON MASS MARKET IN ORDER TO INCREASE THE NUMBER OF
CUSTOMERS AND REDUCE OR ELIMINATE THE RISK OF HAVING TO DEPEND ON ONE OR TWO
MAJOR CUSTOMERS.
(7.) THE VERMONT WITCH HAZEL CO. IS A REGISTERED TRADEMARK OF THE COMPANY.
8
<PAGE>
(8.) COSMETICS DO NOT REQUIRE GOVERNMENT TESTING OR FDA APPROVAL.
(9.) GOVERNMENTAL REGULATIONS DO NOT HAVE ANY EFFECT ON OUR BUSINESS.
(10.) OUR PRESIDENT IS AND HAS BEEN IN CHARGE OF RESEARCH AND DEVELOPMENT AND
HAS KEPT THE COST UNDER 2% OF OUR GROSS REVENUES FOR THE PAST THREE FISCAL
YEARS.
(11.) WE HAVE INCURRED NO COST OR SUFFERED ANY ILL EFFECTS FROM FEDERAL, STATE
OR LOCAL ENVIRONMENTAL LAWS BECAUSE WE ARE AN ALL NATURAL COMPANY WHO
CONTRACTS MANUFACTURING OF ALL OUR PRODUCTS TO OTHER COMPANIES WHO ARE IN
COMPLIANCE WITH ALL REGULATIONS.
(12.) WE CURRENTLY EMPLOYEE ONE FULL TIME EMPLOYEE, DEBORAH DUFFY.
ITEM 17.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(B.) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(1)FULL FISCAL YEARS. OUR FISCAL YEAR BEGINS ON AUGUST 1 AND ENDS
JULY 31. IN SEPTEMBER OF 1996 WE OPENED A GENERAL STORE IN WINDSOR, VERMONT.
THE STORE WAS USED TO DEBUT NEW PRODUCTS AND OBTAIN CUSTOMERS' REACTION TO
THOSE PRODUCTS, BUT IT ALSO CARRIED MANY OTHER HAND MADE ITEMS AND CRAFTS MADE
IN VERMONT. THE STORE WAS LOCATED IN A BUILDING WE OWNED AND WE DID NOT PAY
RENT. THE CONCEPT WAS TO EVENTUALLY FRANCHISE THE VERMONT WITCH HAZEL CO. &
GENERAL STORE, ONCE OPERATIONS BEGAN TO SHOW A PROFIT. WE MAINTAINED THE
STORE FOR THREE YEARS, BUT IT WAS NEVER PROFITABLE AND WAS CLOSED IN MAY OF
1999.
DURING THAT SAME PERIOD A WEST COAST CHAIN OF NATURAL FOOD STORES, TRADER JOE'S
, CARRIED OUR FACE PADS AND TESTED TWO OTHER PRODUCTS, TOWELETTES AND CITRUS
SHAVE FOAM. THE INCOME FROM TRADER JOE'S WAS THE MAIN SOURCE OF OUR REVENUE,
AND GROSS SALES IN FISCAL YEAR 1997/1998 WAS IN EXCESS OF $300,000. BECAUSE
THE STORE WAS SUCH AN EXPENSIVE DRAIN ON FINANCIAL RESOURCES, THE GROSS INCOME
WAS NOT ENOUGH TO COVER OUR EXPENSES (NET LOSS FOR FISCAL YEAR 1997/1999 WAS
$116,540), AND WE WERE FORCED TO SELL STOCK IN ORDER TO REMAIN VIABLE.
IN MAY OF 1999, AT THE SAME TIME OPERATIONS WERE SHUT DOWN ON OUR STORE,
TRADER JOE'S REPLACED THE HEALTH AND BEAUTY BUYER AND SHE IN TURN CANCELED ALL
FUTURE PURCHASES OF OUR FACE PADS AND REPLACED THEM WITH A TEA TREE OIL PAD
MADE BY DESERT ESSENCE. TEA TREE OIL IS QUITE CAUSTIC AND AN ENTIRELY
DIFFERENT PRODUCT THAN WITCH HAZEL. THE LOSS IN REVENUES IN FISCAL YEAR
1998/1999 FROM THE CLOSURE OF THE STORE AND THE LOSS OF TRADER JOE'S RESULTED
IN OUR GROSS SALES DROPPING TO $155,000 WITH A NET LOSS THAT YEAR OF
$169,893. WE WERE FORCED TO SELL EVEN MORE STOCK IN ORDER TO SURVIVE. THE
MAJORITY OF SHARES WERE SOLD TO DEBORAH DUFFY, OUR PRESIDENT AND CEO, AND
PETER C. CULLEN, ONE OF OUR DIRECTORS.
OUR RELATIONSHIP WITH TRADER JOE'S, THOUGH CANCELED IN 1999, PROVIDED US WITH
TWO VERY POSITIVE NET RESULTS:
AN EXTENSIVE E-MAIL AND DIRECT MAIL LIST OF TRADER JOE'S CUSTOMERS WHO
WERE UPSET THEY COULD NO LONGER PURCHASE OUR PRODUCTS FROM THEIR LOCAL STORE
AND DID NOT LIKE THE REPLACEMENT PRODUCT,
HUNDREDS OF TESTIMONIAL LETTERS (FROM TRADER JOE'S CUSTOMERS) WHICH WE USED TO
CONVINCE LONGS DRUGS TO TRY OUR PRODUCTS IN SIX OF THEIR STORES. LONGS DRUGS
REVIEW AND APPROVAL OF NEW PRODUCTS FOR THEIR CHAIN OF 400 STORES WILL BE
COMPLETE IN OCTOBER, 2000. WE HAVE CONTACTED EVERYONE ON OUR MAILING LIST,
WITHIN THE AREAS OF THE TEST STORES, AND NOTIFIED THEM OUR PRODUCTS WERE
AVAILABLE IN THEIR AREA. AS OF THE DATE OF THIS PROSPECTUS, THE TEST STORES
ARE EXCEEDING THEIR REQUIRED SALES AND WILL BE A CANDIDATE FOR ALL 400 STORES
DURING THE OCTOBER REVIEW.
ALTHOUGH CHANCES ARE EXCELLENT WE WILL BE APPROVED FOR THE ENTIRE CHAIN, THERE
IS NO GUARANTEE THIS WILL HAPPEN. THE CURRENT LABELS WERE DESIGNED FOR TRADER
JOE'S AND OTHER NATURAL STORES AND MUST BE REPLACED WITH LABELS DESIGNED FOR
MASS MARKET (LONGS). ONCE THE LABELS HAVE BEEN MANUFACTURED, ENOUGH NEW
INVENTORY TO FILL AN ORDER FOR 400 STORES WILL ALSO HAVE TO BE MANUFACTURED.
WE ARE LOOKING TO THE PUBLIC OFFERING TO RAISE THE FUNDS TO COMPLETE THE
LABELS AND THE NEW INVENTORY.
IF WE SUCCESSFULLY SELL THE ENTIRE OFFERING, MANUFACTURE THE NEW LABELS AND
INVENTORY AND WE ARE PICKED UP BY LONGS DRUGS FOR ALL 400 STORES, THERE IS
STILL NO GUARANTEE THE PRODUCTS WILL SELL THROUGH AND WE WILL RECEIVE A FOLLOW
UP ORDER.
WE WERE VERY SUCCESSFUL IN BRINGING TRADER JOE'S CUSTOMERS INTO THE SIX LONGS
DRUGS TEST STORES VIA E-MAIL AND DIRECT MAIL, AND THE REMAINING FUNDS FROM THE
PUBLIC OFFERING WILL BE USED TO FINANCE ANOTHER E-MAIL AND DIRECT MAIL
CAMPAIGN FOR ALL 400 STORES. WE BELIEVE THIS CAMPAIGN WILL BE AS SUCCESSFUL
AS THE FIRST AND LONGS WILL RE-ORDER.
THE MOST DIFFICULT ASPECT OF MASS MARKET IS FINDING A CHAIN WHO IS WILLING TO
TAKE A NEW PRODUCT FROM A NEW COMPANY WITH A VERY SMALL ADVERTISING BUDGET.
THE SECOND MOST DIFFICULT ASPECT OF MASS MARKET IS SELLING THROUGH. ONCE WE
HAVE BEEN SUCCESSFUL IN ONE CHAIN (LONGS) IT IS REASONABLE, BUT NOT ASSURED,
9
<PAGE>
THAT OTHER CHAINS WILL FOLLOW SUIT. WE INTEND TO BE VERY CIRCUMSPECT IN OUR
CHOICE OF CHAINS TO WHICH WE WILL APPLY. MANY CHAINS CHARGE "SLOTTING FEES"
FOR EACH PRODUCT, SOME DO NOT PAY ON TIME AND MANY ACTUALLY TAKE UP TO 120
DAYS TO PAY A 30 DAY INVOICE. THERE ARE ALSO MANY INSTANCES OF CHAINS TAKING
DEDUCTIONS FROM INVOICES FOR REASONS THAT DO NOT APPLY. WE ARE VERY AWARE OF
CHAINS THAT ARE PROBLEMATIC IN THESE AREAS AND WILL ACT ACCORDINGLY.
(2.) INTERIM PERIODS. CURRENT FISCAL YEAR END IS JULY 31, 2000. GROSS
SALES FOR ARE LESS THAN HALF FOR THE PERIOD OF AUGUST 1, 1999 THROUGH THE DATE
OF THIS PROSPECTUS THAN FOR THE COMPARABLE INTERIM PERIOD OF THE PRECEDING
YEAR. THIS IS ATTRIBUTABLE TO NOT HAVING ANY ORDERS FROM TRADER JOE'S.
HOWEVER, DURING THIS INTERIM PERIOD WE HAVE REDESIGNED OUR SKIN CARE WEB SITE,
WWW.VERMONTWITCHHAZEL.COM, AND LAUNCHED A NEW WEB SITE FOR PET CARE,
WWW.VETERINARYWITCHHAZEL.COM.
WEB SITE SALES ACCOUNT FOR MORE THAN HALF OUR CURRENT INCOME FOR THIS INTERIM
PERIOD AND ARE GROWING STEADILY AS WORD OF THE SITES HAS SPREAD. VIRTUALLY
ALL THE TOP TEN SEARCH ENGINES NOW LIST THE VERMONT WITCH HAZEL CO. IN FIRST
OR SECOND PLACE ON PAGE ONE FOR "WITCH HAZEL" AND THE KEY WORDS "ACNE/BLEMISH
CONTROL" AND "SENSITIVE SKIN" AND "SHAVE FOAM" WILL ALSO BRING UP THE VERMONT
WITCH HAZEL CO. ON THE FIRST OR SECOND PAGE OF A MAJORITY OF TOP TEN SEARCH
ENGINES. WE WILL BE ACTIVELY PROMOTING THE WEB SITE THROUGH RE-SUBMISSIONS,
E-MAIL, AND LINKS.
ITEM 18.
DESCRIPTION OF PROPERTY
(A.) WE CURRENTLY OWN NO REAL PROPERTY. WE CURRENTLY LEASE OFFICES AT
4415 PONCA AVENUE, TOLUCA LAKE, CA, WAREHOUSE SPACE AT 1819 DANA STREET IN
GLENDALE, CA, AND WAREHOUSE SPACE AT 3935 HERITAGE OAK COURT, SIMI VALLEY,
CA. OFFICE LEASE IS $500 PER MONTH ON A MONTH TO MONTH BASIS . WAREHOUSE RENT
IN GLENDALE IS $500 PER MONTH. SIMI RENT IS $5.00 PER PALLET WHICH CURRENTLY
AMOUNTS TO ABOUT $350 PER MONTH. ALL RENTALS ARE MONTH TO MONTH.
(B.) WE CURRENTLY HAVE NO INVESTMENTS IN REAL ESTATE MORTGAGES OR SECURITIES.
ITEM 19.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(A.) THERE HAVE BEEN NO TRANSACTIONS DURING THE LAST TWO YEARS, NOR ARE THERE
ANY PROPOSED TRANSACTIONS, TO WHICH WE WERE OR ARE TO BE A PARTY.
ITEM 20.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
THERE IS CURRENTLY NO PUBLIC MARKET FOR OUR STOCK.
ITEM 21.
EXECUTIVE COMPENSATION
(A.) WE HAVE ONLY ONE EMPLOYEE, DEBORAH DUFFY, PRESIDENT AND CEO. MS. DUFFY
RECEIVES $1040.00 EVERY TWO WEEKS AS INCOME ALLOWS. WHEN INCOME IS NOT
SUFFICIENT TO PAY MS. DUFFY'S SALARY, THE PAYMENTS ARE ACCRUED AND PAID AT A
LATER TIME. IN SOME INSTANCES, WHEN THERE HAS NOT BEEN SUFFICIENT INCOME OVER
A PROTRACTED PERIOD OF TIME, MS. DUFFY HAS TAKEN COMPANY SHARES, AT THE SAME
COST AS THOSE SOLD TO SHAREHOLDERS, IN LIEU OF SALARY. MS. DUFFY HOLDS NO
OPTIONS OR WARRANTS FOR FUTURE SHARES AND WE, AT THIS DATE, ARE CURRENT ON ALL
SALARY PAYMENTS.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION
(A) (B) (C)
<S> <C> <C>
DEBORAH DUFFY 1997 $ 31,000
PRESIDENT 1998 $ 21,667
1999 $ 27,040
</TABLE>
DIRECTORS ARE NOT, NOR HAVE THEY EVER BEEN, COMPENSATED FOR THEIR DUTIES AS
DIRECTORS.
ITEM 22.
FINANCIAL STATEMENTS
THE VERMONT WITCH HAZEL COMPANY
FINANCIAL STATEMENTS
Information:
PERIOD-TYPE YEAR
FISCAL-YEAR-END JULY -31-2000
PERIOD-END APRIL- 30-2000
CASH 1862
SECURITIES 0
RECEIVABLES 1489
ALLOWANCES 0
INVENTORY 116,206
CURRENT ASSETS 119,557
FF & E 6141
DEPRECIATION 6141
TOTAL ASSETS 119,557
CURRENT - LIABILITIES 12,234
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 584,292
OTHER-SE 476,969
TOTAL - LIABILITY-AND-EQUITY 119,557
SALES 24,100
TOTAL-REVENUES 31,030
CGS 21,418
OTHER EXPENSES 173,050
LOSS PROVISION 0
INTEREST EXPENSE 0
INCOME PRETAX (163,438)
INCOME-TAX 0
INCOME CONTINUING (163,438)
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME (163,438)
EPS-PRIMARY (.15)
EPS-DILUTED (.15)
<PAGE>
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999, AND 1998
WITH INDEPENDENT AUDITOR'S REPORT
THE VERMONT WITCH HAZEL COMPANY
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999, AND 1998
INDEPENDENT AUDITOR'S REPORT F1
FINANCIAL STATEMENTS:
BALANCE SHEETS F2
STATEMENTS OF OPERATIONS F3
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) F4
STATEMENTS OF CASH FLOWS F6
NOTES TO FINANCIAL STATEMENTS F7
<PAGE>
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
THE VERMONT WITCH HAZEL COMPANY
TOLUCA LAKE, CALIFORNIA
I HAVE AUDITED THE ACCOMPANYING STATEMENTS OF FINANCIAL POSITION OF THE VERMONT
WITCH HAZEL COMPANY AS OF JANUARY 31, 2000, JULY 31, 1999 AND 1998 AND THE
RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS' EQUITY (DEFICIT), AND CASH FLOWS
FOR THE SIX MONTHS AND YEARS THEN ENDED. 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 AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS.
THOSE STANDARDS REQUIRE THAT I PLAN AND PERFORM THE AUDIT TO OBTAIN REASONABLE
ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL
MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING
THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS. AN AUDIT ALSO INCLUDES
ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY
MANAGEMENT, AS WELL AS EVALUATING THE OVERALL FINANCIAL STATEMENT PRESENTATION.
I BELIEVE THAT MY AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY, IN ALL
MATERIAL RESPECTS, THE FINANCIAL POSITION OF THE VERMONT WITCH HAZEL COMPANY AS
OF JANUARY 31, 2000, JULY 31, 1999 AND 1998 AND THE RESULTS OF ITS OPERATIONS,
STOCKHOLDERS' EQUITY (DEFICIT) AND CASH FLOWS FOR THE SIX MONTHS AND YEARS THEN
ENDED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
THE ACCOMPANYING FINANCIAL STATEMENTS HAVE BEEN PREPARED ASSUMING THAT THE
COMPANY WILL CONTINUE AS A GOING CONCERN. AS DISCUSSED IN NOTE 9 TO THE
FINANCIAL STATEMENTS, THE COMPANY HAS EXPERIENCED OPERATING LOSSES OVER THE PAST
FIVE AND ONE-HALF YEAR (SINCE INCEPTION), RESULTING IN A DEFICIT EQUITY
POSITION. THE COMPANY'S FINANCIAL POSITION AND OPERATING RESULTS RAISE
SUBSTANTIAL DOUBT ABOUT ITS ABILITY TO CONTINUE AS A GOING CONCERN.
MANAGEMENT'S PLANS IN REGARD TO THESE MATTERS ARE DESCRIBED IN NOTE 10. THE
FINANCIAL STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS THAT MIGHT RESULT FROM THE
OUTCOME OF THIS UNCERTAINTY.
LOS ANGELES, CALIFORNIA
MARCH 16, 2000
F1
<PAGE>
<TABLE>
<CAPTION>
THE VERMONT WITCH HAZEL COMPANY
BALANCE SHEETS
ASSETS
JANUARY JULY JULY
31, 2000 31, 1999 31, 1998
<S> <C> <C> <C>
CURRENT ASSETS:
CASH $ 5,209 $ 199 $ 4,165
ACCOUNTS RECEIVABLE 1,833 1,078 496
PREPAID EXPENSES 0 0 15,740
INVENTORY 116,253 127,384 148,623
TOTAL CURRENT ASSETS 123,295 128,661 169,024
FIXED ASSETS: 0 96,447 96,447
LAND AND BUILDING 6,141 6,141 6,141
FURNITURE AND EQUIPMENT 6,141 102,588 102,588
5,987 15,758 11,282
LESS: ACCUMULATED DEPRECIATION 154 86,830 91,306
OTHER ASSETS - NET 0 0 1,652
$ 123,449 $ 215,491 $ 261,982
TOTAL ASSETS
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<S> <C> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE 13,954 36,362 20,947
ACCRUED LIABILITIES 28,613 27,553 21,857
CONVERTIBLE NOTES PAYABLE 128,000 125,600 90,000
MORTGAGE PAYABLE, SHORT TERM 0 1,380 1,380
TOTAL CURRENT LIABILITIES 170,567 190,895 134,184
MORTGAGE PAYABLE, LONG TERM 0 72,326 73,829
TOTAL LIABILITIES 170,567 263,221 208,013
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY (DEFICIT)
PREFERRED STOCK - NO PAR VALUE
AUTHORIZED 100,000 SHARES
ISSUED AND OUTSTANDING - NONE
COMMON STOCK - NO PAR VALUE
AUTHORIZED 1,000,000 SHARES
ISSUED AND OUTSTANDING - 927,850 SHARES
IN 2000, 839,600 SHARES IN 1999, AND
818,500 SHARES IN 1998 354,050 265,800 200,800
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<TABLE>
<CAPTION>
THE VERMONT WITCH HAZEL COMPANY
BALANCE SHEETS CONTINUED
JANUARY JULY JULY
<S> <C> <C> <C>
31, 2000 31, 1999 31, 1998
(146,831)
RETAINED DEFICIT (401,168) (313,530)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (47,118) (47,730) 53,969
$ 123,449 $ 215,491 $ 261,982
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<TABLE>
<CAPTION>
F2
<PAGE>
THE VERMONT WITCH HAZEL COMPANY
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
JANUARY JULY JULY
<S> <C> <C> <C>
31, 2000 31, 1999 31, 1998
SALES $ 16,842 $ 155,425 $ 300,635
COST OF SALES 10,466 97,832 241,228
GROSS PROFIT 6,376 57,593 59,407
RENT AND OTHER INCOME 8,390 9,013 10,750
LOSS ON DISCONTINUED OPERATIONS AND
SALE OF LAND AND BUILDING (1,460) (30,546) 0
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (100,944) (202,759) (187,988)
$ (87,638) $(166,699) $(117,831)
NET LOSS
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING: 883,725 829,050 814,700
$ (0.10) $ (0.20) $ (0.14)
NET LOSS PER COMMON SHARE
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<TABLE>
<CAPTION>
F3
<PAGE>
THE VERMONT WITCH HAZEL COMPANY
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
TOTAL
COMMON STOCK ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT DEFICIT EQUITY (DEFICIT)
<S> <C> <C> <C>
BALANCE JULY 31, 1997
(UNAUDITED) 810,900 $180,800 $ (29,000) $ 151,800
ISSUANCE OF COMMON SHARES
FOR CASH 7,600 20,000 20,000
NET LOSS FOR PERIOD (117,831) (117,831)
BALANCE JULY 31, 1998 818,500 200,800 (146,831) 53,969
ISSUANCE OF COMMON SHARES
FOR CASH 21,100 65,000 65,000
NET LOSS FOR PERIOD (166,699) (166,699)
BALANCE JULY 31, 1999 839,600 265,800 (313,530) (47,730)
ISSUANCE OF COMMON SHARES
FOR CASH 61,250 61,250 61,250
ISSUANCE OF COMMON SHARES
FOR SERVICES 27,000 27,000 27,000
NET LOSS FOR PERIOD (87,638) (87,638)
927,850 $354,050 $ (401,168) $ (47,118)
BALANCE JANUARY 31, 2000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<TABLE>
<CAPTION>
F4
<PAGE>
THE VERMONT WITCH HAZEL COMPANY
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
JANUARY JULY JULY
31, 2000 31, 1999 31, 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS FOR THE PERIODS $ (87,638) $(166,699) $(117,831)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
USED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 2,238 6,128 6,136
ISSUANCE OF STOCK FOR SERVICES 27,000 0 0
(INCREASE)/DECREASE IN ACCOUNTS RECEIVABLE (755) (582) 17,491
(INCREASE)/DECREASE IN PREPAID EXPENSES 0 15,740 (1,021)
(INCREASE)/DECREASE IN INVENTORY 11,131 21,239 45,940
(INCREASE)/DECREASE IN OTHER ASSETS 0 0 6,465
INCREASE/(DECREASE) IN ACCOUNTS PAYABLE (22,408) 15,415 (48,917)
INCREASE/(DECREASE) IN ACCRUED LIABILITIES 1,060 5,696 15,989
NET CASH USED IN OPERATING ACTIVITIES (69,372) (103,063) (75,748)
CASH FLOWS FROM INVESTING ACTIVITIES:
SALE OF FIXED ASSETS, NET 84,438 0 0
NET CASH USED IN INVESTING ACTIVITIES 84,438 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM ISSUANCE OF COMMON STOCK 61,250 65,000 20,000
PROCEEDS FROM BORROWINGS 2,400 35,600 50,000
REDUCTION OF MORTGAGE PRINCIPAL (73,706) (1,503) 247
NET CASH PROVIDED BY FINANCING ACTIVITIES (10,056) 99,097 70,247
NET INCREASE (DECREASED) IN CASH 5,010 (3,966) (5,501)
CASH BALANCE, BEGINNING OF PERIOD 199 4,165 9,666
$ 5,209 $ 199 $ 4,165
CASH BALANCE, END OF PERIOD
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
F5
<PAGE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
A. ORGANIZATION AND BUSINESS:
THE VERMONT WITCH HAZEL COMPANY (VWHC OR THE "COMPANY") CREATES AND
MARKETS SKIN CARE AND PET CARE PRODUCTS. THE COMPANY MANUFACTURES AND
DISTRIBUTES A LINE OF WITCH HAZEL BASED NATURAL, HYPOALLERGENIC SOAPS, CLEANSERS
AND OTHER SKIN AIDS FOR PEOPLE WHO PREFER NATURAL AND ENVIRONMENTALLY FRIENDLY
PRODUCTS. THE COMPANY PRESENTLY MAINTAINS TWO INTERNET WEB SITES TO ADVERTISE
AND MARKET ITS PRODUCTS.
VWHC WAS INCORPORATED IN THE STATE OF VERMONT ON AUGUST 3, 1994 AS
WITCH HAZEL COMPANY. ON OCTOBER 4, 1994 IT WAS RENAMED VERMONT WITCH HAZEL CO.
AND ON SEPTEMBER 16, 1996 IT WAS RENAMED THE VERMONT WITCH HAZEL COMPANY. ON
NOVEMBER 1, 1994 THE COMPANY REGISTERED TO CONDUCT BUSINESS IN THE STATE OF
CALIFORNIA.
B. PROPERTY AND EQUIPMENT:
PROPERTY AND EQUIPMENT ARE STATED AT COST. THE ASSETS ARE DEPRECIATED
USING THE STRAIGHT-LINE METHOD OVER THEIR ESTIMATED USEFUL LIVES OF FORTY YEARS
FOR NON-RESIDENTIAL REAL PROPERTY, TEN YEARS FOR PROPERTY IMPROVEMENTS AND FIVE
YEARS FOR FURNITURE AND EQUIPMENT. IT IS THE POLICY OF THE COMPANY TO
CAPITALIZE SIGNIFICANT IMPROVEMENTS AND TO EXPENSE REPAIRS AND MAINTENANCE.
DEPRECIATION EXPENSE FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND FOR
THE YEARS ENDED JULY 31, 1999 AND 1998 WERE:
2,000 1999 1998
BUILDING $982 $1,964 $1,964
IMPROVEMENTS 642 1,284 1,284
FURNITURE AND EQUIPMENT 614 1,228
1,228
TOTAL $2,238 $4,476 $4,476
C. INTANGIBLE ASSETS:
INTANGIBLE ASSETS, PRINCIPALLY ORGANIZATION COSTS, ARE AMORTIZED OVER
A PERIOD OF FIVE YEARS. AMORTIZATION FOR THE SIX MONTHS ENDED JANUARY 31, 2000
AND FOR THE YEARS ENDED JULY 31, 1999 AND 1998 WAS NONE, $1,652 AND $1,660,
RESPECTIVELY.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS CONTINUED
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
D. LOSS PER SHARE:
LOSS PER SHARE OF COMMON STOCK IS COMPUTED USING THE WEIGHTED NUMBER
OF COMMON SHARES OUTSTANDING DURING THE PERIODS SHOWN. COMMON STOCK EQUIVALENTS
ARE NOT INCLUDED IN THE DETERMINATION OF THE WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, AS THEY WOULD BE ANTIDILUTIVE.
E. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
IN 1997, THE FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) ISSUED
STATEMENTS NO. 130, REPORTING COMPREHENSIVE INCOME AND NO. 131, DISCLOSURES
ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. THE COMPANY'S ADOPTION
OF THESE STATEMENTS HAD NO MATERIAL IMPACT ON THE ACCOMPANYING FINANCIAL
STATEMENTS.
F. IMPAIRMENTS OF LONG LIVED ASSETS
THE COMPANY EVALUATES ITS LONG-LIVED ASSETS BY MEASURING THE CARRYING
AMOUNT OF THE ASSETS AGAINST THE ESTIMATED UNDISCOUNTED FUTURE CASH FLOWS
ASSOCIATED WITH THEM. IF SUCH EVALUATIONS INDICATE THE FUTURE UNDISCOUNTED CASH
FLOWS OF CERTAIN LONG-LIVED ASSETS ARE NOT SUFFICIENT TO RECOVER THE CARRYING
VALUE OF SUCH ASSETS; THE ASSETS ARE ADJUSTED TO THEIR FAIR VALUES. NO
ADJUSTMENT TO THE CARRYING VALUES OF THE ASSETS HAS BEEN MADE.
G. STATEMENT OF CASH FLOWS
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION IS AS FOLLOWS:
CASH PAID DURING THE PERIODS FOR:
2,000 1999 1998
INTEREST 0 0 0
INCOME TAXES 0 $1,600 $1,600
H. USE OF ESTIMATES:
THE PREPARATION OF THE FINANCIAL STATEMENTS IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO MAKE ESTIMATES
AND ASSUMPTIONS THAT EFFECT REPORTED AMOUNTS OF ASSETS AND LIABILITIES AT THE
DATE OF THE FINANCIAL STATEMENTS, AND REVENUES AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM ESTIMATES AND ASSUMPTIONS MADE.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS CONTINUED
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
I. FISCAL YEAR AND BASIS OF OPERATION:
THE COMPANY OPERATES ON A FISCAL YEAR ENDING JULY 31. THE COMPANY
PREPARES ITS FINANCIAL STATEMENTS AND FEDERAL AND STATE INCOME TAX RETURNS ON AN
ACCRUAL BASIS.
J. UNAUDITED FINANCIAL STATEMENTS:
IN THE OPINION OF MANAGEMENT, THE UNAUDITED FINANCIAL STATEMENTS FOR
THE PERIOD AUGUST 4, 1994 (DATE OF INCEPTION) THROUGH JULY 31, 1997, NOT
PRESENTED HEREIN, WERE PREPARED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, ON A BASIS CONSISTENT WITH AUDITED FINANCIAL STATEMENTS.
2. CONVERTIBLE NOTES PAYABLE
<TABLE>
<CAPTION>
THE FOLLOWING TABLE SUMMARIZED INFORMATION ABOUT CONVERTIBLE NOTES PAYABLE AT JANUARY 31,
2000, JULY 31, 1999 AND JULY 31, 1998:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MATURITY INTEREST SHARES IF CONVERSION AMOUNT OF
DATES RATE CONVERTED RATE NOTES
JANUARY 31, 2000 DEMAND 12% 128,000 $1.00 $128,000
JULY 31, 1999 DEMAND 12% 125,600 $1.00 $125,600
JULY 31, 1998 DEMAND 12% 90,000 $1.00 $90,000
</TABLE>
SEE SUBSEQUENT EVENT NOTE RE: CONVERSION OF NOTES PAYABLE.
AT JANUARY 31, 2000 AND AT JULY 31, 1999 AND 1998, ACCRUED INTEREST ON THE
CONVERTIBLE NOTES PAYABLE OF APPROXIMATELY $28,242, $20,664 AND $9,024,
RESPECTIVELY, IS INCLUDED IN THE ACCRUED LIABILITIES ON THE BALANCE SHEET.
3. CAPITAL STRUCTURE
UPON INCORPORATION THE COMPANY WAS AUTHORIZED TO ISSUE 100 SHARES OF COMMON
STOCK. ON JULY 24, 1995 THE CORPORATION AMENDED ITS ARTICLES OF INCORPORATION
TO AUTHORIZE THE ISSUANCE OF TWO CLASSES OF STOCK, COMMON AND PREFERRED. THE
AUTHORIZED COMMON STOCK WAS INCREASED TO 1,000,000 SHARES, AND THE AUTHORIZED
PREFERRED STOCK IS 100,000 SHARES. EACH TYPE RETAINS NO PAR VALUE.
ON NOVEMBER 8, 1999 THE BOARD OF DIRECTORS AGREED TO INCREASE THE TOTAL
NUMBER OF THE COMPANY'S AUTHORIZED COMMON SHARES TO 10,000,000 SHARES. ON
FEBRUARY 20, 2000 THE ARTICLES OF INCORPORATION WERE AMENDED TO REFLECT THIS
INCREASE.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS CONTINUED
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
4. INCOME TAXES
INCOME TAXES ARE PROVIDED PURSUANT TO SFAS NO. 109 ACCOUNTING FOR INCOME
TAXES. THE STATEMENT REQUIRES THE USE OF AN ASSET AND LIABILITY APPROACH FOR
FINANCIAL REPORTING FOR INCOME TAXES. IF IT IS MORE LIKELY THAN NOT THAT SOME
PORTION OR ALL OF A DEFERRED TAX ASSET WILL NOT BE REALIZED, A VALUATION
ALLOWANCE IS RECOGNIZED. NO TAX BENEFIT OF THE COMPANY'S NET OPERATING LOSS
CARRYFORWARD HAS BEEN RECORDED AS IT IS MORE LIKELY THAN NOT THAT THE
CARRYFORWARD WILL EXPIRE UNUSED. ACCORDINGLY, THE TAX BENEFIT OF THE LOSS
CARRYFORWARD HAS BEEN OFFSET BY A VALUATION ALLOWANCE OF THE SAME AMOUNT. THUS,
THE COMPANY HAS NOT RECORDED AN ASSET OR LIABILITY IN ACCORDANCE WITH SFAS NO.
109.
THE INCOME TAX EXPENSE INCURRED BY THE COMPANY FOR THE PERIODS IS
ATTRIBUTABLE TO THE CALIFORNIA MINIMUM TAX INCURRED BY CORPORATIONS DOING
BUSINESS IN CALIFORNIA.
THE COMPANY HAS APPROXIMATELY $401,000 OF LOSS CARRYFORWARDS AVAILABLE TO
REDUCE FUTURE TAX LIABILITY THROUGH THE YEAR 2019.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
THE COMPANY HAS USED MARKET INFORMATION FOR SIMILAR INSTRUMENTS AND APPLIED
JUDGMENT TO ESTIMATE FAIR VALUE OF FINANCIAL INSTRUMENTS. AT JANUARY 31, 2000,
JULY 31, 1999 AND 1998, THE FAIR VALUE OF CASH, ACCOUNTS RECEIVABLE, NOTES
PAYABLE AND ACCOUNTS PAYABLE APPROXIMATED CARRYING VALUES BECAUSE OF THE
SHORT-TERM NATURE OF THESE INSTRUMENTS.
6. ACQUISITION AND SALE OF LAND AND BUILDING
IN NOVEMBER 1997, THE MAJORITY STOCKHOLDER SOLD A SMALL COMMERCIAL BUILDING
IN WINDSOR, VERMONT TO THE COMPANY FOR $5,000 IN CASH AND THE ASSUMPTION OF THE
EXISTING MORTGAGE OF APPROXIMATELY $79,000. VWHC OPENED A COMPANY STORE IN A
PORTION OF THAT BUILDING. ON JANUARY 28, 2000 THE COMPANY SOLD THE STRUCTURE
FOR APPROXIMATELY $92,000. UPON REFLECTION OF CLOSING EXPENSES AND THE COST
BASIS OF THE STRUCTURE THE COMPANY INCURRED A LOSS ON THE SALE OF APPROXIMATELY
$1,460.
7. DISCONTINUED BUSINESS
DURING 1997 THE COMPANY OPENED TWO RETAIL STORES. THE FIRST WAS THE
COMPANY STORE IN VERMONT, WHEREAS THE SECOND WAS A NON-COMPANY OWNED STORE,
OWNED BY THE TWO MAJORITY STOCKHOLDERS OF THE COMPANY LOCATED IN TOLUCA LAKE,
CALIFORNIA. IN JANUARY 1999 THE COMPANY TOOK OVER THE EXISTING LEASE OF THE
NON-COMPANY OWNED STORE FOR THE PERIOD UNTIL ITS EXPIRATION IN MAY 1999 AT A
COST OF $742 PER MONTH. ALSO, DURING 1999 THE COMPANY CLOSED THE VERMONT STORE
AND RENTED THE FACILITIES TO NON-RELATED PARTIES. THE CLOSURE OF THE TWO STORES
RESULTED IN A ONE-TIME WRITE OFF OF DISCARDED INVENTORY, UNCOLLECTIBLE
RECEIVABLES AND OTHER COSTS OF APPROXIMATELY $30,546.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS CONTINUED
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
8. COMMITMENTS AND CONTINGENCIES
A. LEASES:
THE COMPANY PRESENTLY LEASES ITS MAIN OFFICE FACILITIES FROM ITS
MAJORITY STOCKHOLDER ON A MONTH TO MONTH BASIS, AT A COST OF $500 PER MONTH.
THE COMPANY PRESENTLY LEASES ITS WAREHOUSE FACILITIES ON A MONTH TO MONTH BASIS,
AT A COST OF $500 PER MONTH. PRIOR YEARS RENTAL EXPENSE REFLECT THE USE OF
LARGER FACILITIES. THERE IS NO DETERMINABLE FUTURE COSTS, EXCEPT ON A MONTH TO
MONTH BASIS.
RENT EXPENSE FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND FOR THE
YEARS ENDED JULY 31, 1999 AND 1998, WAS $7,730, $17,549 AND $26,330,
RESPECTIVELY.
THE COMPANY IS NOT PRESENTLY INVOLVED IN ANY LITIGATION.
9. GOING CONCERN
THE COMPANY HAS EXPERIENCED OPERATING LOSSES SINCE INCEPTION PRIMARILY
CAUSED BY ITS CONTINUED DEVELOPMENT AND MARKETING COSTS. AS SHOWN IN THE
ACCOMPANYING FINANCIAL STATEMENTS, THE COMPANY INCURRED A NET LOSS OF $87,638
DURING THE SIX MONTHS ENDED JANUARY 31, 2000. AS OF THAT DATE, THE COMPANY'S
CURRENT LIABILITIES EXCEEDED ITS CURRENT ASSETS BY $47,272, AND ITS
STOCKHOLDERS' DEFICIT WAS $47,118. THESE FACTORS CREATE AN UNCERTAINTY ABOUT
THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN. THE MANAGEMENT OF THE
COMPANY INTEND TO PURSUE VARIOUS MEANS OF OBTAINING ADDITIONAL CAPITAL. THE
FINANCIAL STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS THAT MIGHT BE NECESSARY IF
THE COMPANY IS UNABLE TO CONTINUE AS A GOING CONCERN. CONTINUATION OF THE
COMPANY AS A GOING CONCERN IS DEPENDENT ON THE COMPANY CONTINUING TO RAISE
CAPITAL, DEVELOP SIGNIFICANT REVENUE AND ULTIMATELY ATTAINING PROFITABLE
OPERATIONS.
10. SUBSEQUENT EVENTS
A. CONVERSION OF NOTES PAYABLE:
DURING MARCH 2000 THE HOLDERS OF ALL THE CONVERTIBLE NOTES
PAYABLE EXERCISED THEIR OPTION TO CONVERT AT THE EXERCISED PRICE OF $1.00 PER
SHARE. THIS RESULTED IN THE ISSUANCE OF 128,000 SHARES OF COMMON STOCK.
B. ISSUANCE OF ADDITIONAL SHARES:
DURING FEBRUARY AND MARCH 2000, 68,000 SHARES OF COMMON STOCK
WERE SOLD, AND 4,000 SHARES WERE ISSUED FOR SERVICES.
THE VERMONT WITCH HAZEL COMPANY
NOTES TO FINANCIAL STATEMENTS CONTINUED
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
C. PROPOSED SALE TO THE PUBLIC:
THE COMPANY HAS PROPOSED TO FILE A FORM SB-2 WITH THE SECURITIES
AND EXCHANGE COMMISSION SO AS TO REGISTER THE PROPOSED SALE OF THE COMPANY'S
COMMON STOCK TO THE PUBLIC. THE COMPANY PROPOSES TO SELL 250,000 SHARES OF ITS
COMMON STOCK AT $2.00 PER SHARE.
F6
<PAGE>
ITEM 23.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
NONE.
PART II- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
WE HAVE NO CONTRACT OR ARRANGEMENT THAT INSURES OR INDEMNIFIES A CONTROLLING
PERSON, DIRECTOR OR OFFICER OF THE COMPANY WHICH AFFECTS HIS OR HER LIABILITY
IN THAT CAPACITY. OUR BYLAWS PROVIDE FOR SUCH INDEMNIFICATION, SUBJECT TO
APPLICABLE LAW.
10
IF AVAILABLE AT A REASONABLE COST, WE MAY PURCHASE AND MAINTAIN INSURANCE
AGAINST ANY LIABILITY INCURRED BY OUR OFFICERS AND DIRECTORS IN DEFENSE OF ANY
ACTIONS TO WHICH THEY ARE MADE PARTIES BY REASON OF THEIR POSITIONS AS
OFFICERS AND DIRECTORS.
ITEM 25.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
EXPENSES IN CONNECTION WITH THE PUBLIC OFFERING OF SECURITIES BY THE SELLING
SHAREHOLDERS PURSUANT TO THIS REGISTRATION STATEMENT ARE AS FOLLOWS:
SECURITIES AND EXCHANGE COMMISSION FILING FEE $132
ACCOUNTING FEES AND EXPENSES $5,000
LEGAL FEES AND EXPENSES $45,000
PRINTING AND ENGRAVING $3,000
FEES OF TRANSFER AGENT AND REGISTRAR $2,000
BLUE SKY FEES AND EXPENSES $1,500
MISCELLANEOUS $500
TOTAL $57,132
ESTIMATED
ITEM 26.
RECENT SALES OF UNREGISTERED SECURITIES
BETWEEN AUGUST 22, 1995 AND APRIL 6, 2000 WE ISSUED AND SOLD 1,149,850 SHARES
OF OUR COMMON STOCK TO 26 FOUNDERS AND PRIVATE INVESTORS FOR CASH
CONSIDERATION AND SERVICES VALUED AT $514,110. SEVENTEEN INVESTORS WERE
ACCREDITED. THE COMPANY PAID $2,000 AS COMMISSIONS TO TWO PERSONS AS FEES FOR
REFERRING INVESTORS TO THE COMPANY. OTHER THAN THE FINDERS FEES NONE OF THE
FOREGOING TRANSACTIONS INVOLVED ANY UNDERWRITERS, UNDERWRITING DISCOUNTS OR
COMMISSIONS, OR ANY PUBLIC OFFERING. OUR COMPANY HAS BEEN ADVISED THAT EACH
TRANSACTION WAS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT BY VIRTUE OF SECTION 4 (2) THEREOF AND REGULATION D PROMULGATED
THEREUNDER. THE RECIPIENTS IN SUCH TRANSACTION REPRESENTED THEIR INTENTION TO
ACQUIRE THE SECURITIES FOR INVESTMENT ONLY AND NOT WITH A VIEW TO OR FOR SALE
IN CONNECTION WITH ANY DISTRIBUTION THEREOF. APPROPRIATE LEGENDS WERE AFFIXED
TO THE SHARE CERTIFICATES ISSUED IN SUCH TRANSACTIONS. ALL RECIPIENTS HAD
ADEQUATE ACCESS, THROUGH THEIR RELATIONSHIPS WITH THE COMPANY, TO OBTAIN
INFORMATION ABOUT THE COMPANY.
11
F7
<PAGE>
ITEM 27.
EXHIBITS
EXHIBIT
NO. EXHIBIT NAME
3.1 ARTICLES OF INCORPORATION WITH AMENDMENTS
3.2 BY-LAWS WITH AMENDMENTS
4.2 SPECIMEN COMMON STOCK CERTIFICATE
5.1 OPINION OF LANCE N. KERR LAW OFFICE
23.1 CONSENT OF GERALD R. PERLSTEIN, CPA, INDEPENDENT AUDITOR
23.2 CONSENT OF LANCE N. KERR LAW OFFICE (INCLUDED IN EXHIBIT 5.1)
27.1 FINANCIAL DATA SCHEDULE
ITEM 28.
UNDERTAKINGS.
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
(1.) TO FILE, DURING ANY PERIOD IN WHICH IT OFFERS OR SALES ARE BEING MADE, A
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT: (I) TO INCLUDE ANY
PROSPECTUS REQUIRED UNDER SECTION 10(A)(3) OF THE SECURITIES ACT; (II) REFLECT
IN THE PROSPECTUS ANY FACTS OR EVENTS, WHICH, INDIVIDUALLY OR TOGETHER,
REPRESENT A FUNDAMENTAL CHANGE IN THE INFORMATION IN THE REGISTRATION
STATEMENT; AND (III) INCLUDE ANY ADDITIONAL OR CHANGED MATERIAL INFORMATION ON
THE PLAN OF DISTRIBUTION. NOTWITHSTANDING THE FOREGOING, ANY INCREASE OR
DECREASE IN THE VOLUME OF THE SECURITIES OFFERED (IF THE TOTAL DOLLAR VALUE OF
SECURITIES OFFERED WOULD NOT EXCEED THAT WHICH WAS REGISTERED) AND ANY
DEVIATION FROM THE LOW OR HIGH END OF THE ESTIMATED MAXIMUM OFFERING RANGE MAY
BE REFLECTED IN THE FORM OF PROSPECTUS FILED WITH THE COMMISSION PURSUANT TO
RULE 424(B) IF, IN THE AGGREGATE, THE CHANGES IN VOLUME AND PRICE REPRESENT NO
MORE THAN A 20% CHANGE IN THE MAXIMUM AGGREGATE OFFERING PRICE SET FORTH IN
THE CALCULATION OF REGISTRATION FEE TABLE IN THE EFFECTIVE REGISTRATION
STATEMENT
(2.) FOR DETERMINING LIABILITY UNDER THE SECURITIES ACT, TO TREAT EACH SUCH
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 BON
FIDE OFFERING.
(3.) TO FILE A POST-EFFECTIVE AMENDMENT TO REMOVE FROM REGISTRATION ANY OF
THE SECURITIES THAT REMAIN UNSOLD AT THE END OF THE OFFERING.
12
<PAGE>
(4.) INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE, THE REGISTRANT
HAS BEEN ADVISED THAT, IN THE OPINION OF THE COMMISSION, SUCH INDEMNIFICATION
IS AGAINST PUBLIC POLICY, AS EXPRESSED IN THE SECURITIES ACT AND IS,
THEREFORE, UNENFORCEABLE. IN THE EVENT THAT A CLAIM FOR INDEMNIFICATION
AGAINST SUCH LIABILITIES (OTHER THAN THE PAYMENT BY THE REGISTRANT OF EXPENSES
INCURRED OR PAID BY A DIRECTOR, OFFICER OR CONTROLLING PERSON OF THE
REGISTRANT IN THE SUCCESSFUL DEFENSE OF ANY ACTION, SUIT OR PROCEEDING) IS
ASSERTED BY SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON IN CONNECTION WITH
THE SHARES OF COMMON STOCK BEING REGISTERED, THE REGISTRANT WILL, UNLESS IN
THE OPINION OF ITS COUNSEL THE MATTER HAS BEEN SETTLED BY CONTROLLING
PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE JURISDICTION THE QUESTION WHETHER
SUCH INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE
SECURITIES ACT AND WILL BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH ISSUE.
(5.) 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 403A AND CONTAINED IN THE 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.
II-2
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM SB-2 AND AUTHORIZED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON THE 15 DAY OF MARCH,
2000.
______________________________
THE VERMONT WITCH HAZEL CO.
DEBORAH DUFFY, PRESIDENT
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT WAS SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES
AND ON THE DATE STATED.
JULY 24, 2000
________________________________
DEBORAH DUFFY, PRESIDENT/DIRECTOR
________________________________
RACHEL BRAUN, SECRETARY/DIRECTOR
13
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